EP46 The NOT SO SEXY Secret to building wealth
**Warning** This is going to tick some people off! It is sort of an in your face episode talking about the only 2 things that YOU need to do in your life right now to start building wealth.
I dive into the NOT SO SEXY secret to building long term wealth. I’m talking wealth that allows you to do what you want, when you want, with who you want for the rest of your life!
This is something available to you regardless of your current situation, but only if you are willing to be truthful and honest with yourself and implement some simple-long term disciplines into your life.
[0:00:14.4] KC: Welcome to The Business of Life Podcast. Keith Callahan here, your host and today, we’re talking about the not so sexy secret to building long term wealth. What I mean by long term wealth is building a life for yourself that you have income coming in consistently that you have the money to be able to do what you want, when you want with who you want. That was one of the dreams for me when I started my own business. I wanted to have the freedom, to have the freedom of time to not be able to go to a job.
I want to share with you two ways, really simple ways. One of the things that I like to focus on in life is to break down the complicated and make it super simple. I want to share with you, this is going to be a very in your face, this is going to be really uncomfortable for some people but it’s also very true, it’s very simple and I believe that anything that’s complicated isn’t worth spending time on. I believe that everything in life can be made very simple.
I want to share with you, you have the ability to create long term wealth in your life. There’s two ways to do that, its super, super simple. The first way is through finding some type of venue that allows you to generate a large source of income on a daily, monthly, weekly basis without you having to trade time for dollars. Most people refer to this as passive income. If you write a book that’s passive income, if you have a business that you don’t have to be there for the business to run, that’s passive income.
Passive income is, you’re not trading hours for dollars, you’re building something that allows you to get paid over and over again. If you have enough money that you can invest all your money in the stock market and you make a weekly or a monthly dividend check from that, that’s passive income. Here is the second half of it. The second half of it is reducing and eliminating your debts. That’s the piece that most of us don’t like to focus on.
We’re in a “give me, give me, give me now” society. We’re in a society that we max out our credit cards, we take out student loans, we take out car loans, we take out home loans, we take out home equity lines of credit. Everybody’s trying to keep up with the Jones, we’re trying to keep up with those people who are — they have these flashy things, they have this things that our egos that we have this wants and desires that we think are going to make us happy.
© 2016 The Business of Life 1
BOL 46 Transcript
I’ll tell you, this is going to be an in your face podcast episode. Here is the deal; the Jones are broke. The people that are spending all of this stuff, all of this flashy things that are making, that they have this big, beautiful bold life right? Or they want you to think it’s that way on the outside but they’re broke, they’re living paycheck to paycheck, they have the beautiful car, the beautiful house, maybe the kids are in the private schools but they’re broke. That is what has turned in to the American dream. That’s what it now is.
That’s not going to be what happens for you. Your life doesn’t have to be that way because I’m going to talk about getting control of your expenses, but I want to start with a story. So a lot of you know that I work with Beachbody and when I first got involved with beach body, I’ll be honest, I heard a lot of negative things from the network marketing industry and I was very skeptical when I first joined but I decided that I really wanted — like I decided that I wanted to do this and I found a lot of success right from the beginning.
I created that passive income. So I built up a business with Beachbody, helped enough people, taught enough people how to become successful in this that we built up this huge team of people doing this and I could literally take a year off, two years or three years if I wanted to and my income would stay the same. So I built up that passive income, that’s not the part of the story that I want to share with you.
The part of the story that I want to share with you is, I got to go on a free trip and during this free trip, we went to Atlantis down in the Bahamas. Down there we had two kids at that time, it was my daughter Dakota and our daughter Daphne, and Daphne was a new born. I remember this because we were invited to go to dinner with Jeff Hill, he’s the senior vice president, I don’t know? One of those big titles, he basically runs the Team Beachbody.
So got to go out to dinner with him and got to pick his brain a little bit and being new in this industry, I wanted to know — I had had the success and I wanted to know what are the pitfalls? This is an industry that we’ve heard of people coming in to money, we’ve heard of the rags to riches type stories and we were now one of those, my wife and I were now one of those.
© 2016 The Business of Life 2
BOL 46 Transcript
We had two years earlier, we had just filed bankruptcy and here we were in this beautiful restaurant in Atlantis, going to dinner with Jeff Hill and a couple of other leaders and this really fancy, swaggy restaurant and we’ve got, our income has totally changed, but I wanted to know, not what people have done to achieve success, how do people get knocked off the top?
How do people, if they achieve success, what are the pitfalls, what are the things to watch out for? And you know what his number one thing was? It was that once that happens, they continue to increase their lifestyle to match their income. And then if their income goes down, they’re stuck with expenses that are higher than they can afford. I thought about that a little bit.
I’ll be honest with you, within this industry, there’s a lot of leaders that I’ve watched and that’s what they do. I’ll be honest, we bought a new house, we bought a new car, we bought two new cars but our house is almost paid off now. We own the two cars outright, we paid off all of our student loans.
We reduced our debt when everyone else is going out and they’re buying fancier, and fancier, and flashier, and fancier. I’m not concerned about that. I’ve worked hard enough on myself and this is the piece that’s going to sting a lot of people. I’ve worked hard enough on myself that I don’t need the fancy car, the fancy home, the fancy clothes, the fancy trips to feel good about who I am.
A lot of those people you take their money away and their life’s going to be destroyed. So I don’t know where you are on your journey, I hope if you’re listening to this podcast, I hope that you know one thing, I hope that you know that the big, beautiful, bold life that I talk about, I want to make one thing clear. This podcast isn’t about money, it’s not about becoming rich, it’s not about becoming wealthy, but I prefer to have money versus not have money.
Why? Because I can do so much more. I can do so much more for my family, I can do so much more for society, I have so much more freedom of time to be able to do what I want and when I want with who I want. You have that ability, no matter what industry you’re in, it’s just a matter of looking at that through a different lens, it’s looking at it and thinking about, “How can I create passive income in this industry?” Then once we create that passive income, once you have that success at the highest levels, how grounded are you?
© 2016 The Business of Life 3
BOL 46 Transcript
How grounded are you that you’re not going to spend everything you’ve got. How grounded are you now? Are you spending more than you’re making, do you know how much you’re spending on a monthly basis versus how much you’re making? Are you under the illusion that that’s just the way it is, that you can’t change it? But you have the home loan and you have the car loans and you have the credit card debt and you keep taking out more and charging more, and charging more.
So when Jeff Hill shared that with me, I was grateful that prior to starting over we got to the point that we had to file bankruptcy, and you know what? Best thing that ever happened because those tough lessons are lessons that you don’t forget. I’m sharing this podcast and I’m sharing these basic simple things about money, about finance, about building wealth so you don’t have to go through these painful lessons.
I want to ask you a question, do you know what the two biggest expenses are that you’ll ever incur in your life, the average person? I want you to list two. What do you think the two biggest expenses are that you’re ever going to incur in your life? I’m going to give you the answer in a second but I want you to come up with your two. Really think about it. What are the two biggest expense you’re going to incur on your life?
I’m going to give you the answer now. Taxes, probably your number one expense and interest. A lot of people might answer mortgage or car payment or stuff like that, it’s interest. The mortgage isn’t bad, the interest you pay on it, that’s what we’re talking about, the interest that you pay on a car loan. See a lot of people think that, “Oh if I buy this car,” — I had this woman once, a friend of mine and she just finished her car payment and she posted on Facebook, “So psyched that I just finished my car payments, now I can go get a new one.”
That’s the way we live right? “Now that I don’t have a payment, now that I own this car outright, now that I’ve eliminated a large portion of my monthly obligation, I’m going to go get a new monthly obligation and it’s probably going to be even more than my last one.” If you want to create long term wealth in your life, it’s more about eliminating your monthly obligations than making more and more money.
© 2016 The Business of Life 4
BOL 46 Transcript
Let me repeat that; If you want to create long term wealth in your life, the secret, the secret of people who are creating and sustaining wealth over time eliminate their expenses, they limit, they reduce down how much it cost them to live on a monthly basis. She could have gone and got the new car but what if instead of getting the new car, she took that $300 a month that she’s now not paying to the car and started doubling up on her credit card payment, started making an extra $300 a month on her credit card payment.
And then what if once that credit card payment that she was paying a couple of hundred dollars plus the $300, now she’s paying $500 a year or two later, that’s all gone, her car is still running, she doesn’t have a monthly payment on that and what if she started making $500 a month to return mortgage and paying down an extra $500 a month. Because she wasn’t worried about the Jones’, she wasn’t worried about getting the new fancy car, getting the new fancy, like all this stuff.
I’m not talking about living like scrappy and not having nice stuff, I’m talking about creating freedom in your life. You’ve got 50, 60 70 years left to your life, do you want to be a slave to your monthly payments? Do you want to be 60, 70 years old and still have that mortgage payment, still have that car payment, still be in debt? Or do you want that freedom? Do you want that long term wealth? Do you want to create that for yourself?
Taxes we don’t really have that much control over. To a certain degree, we do, depending on what state you live in, the state taxes are different but for the most part, taxes are taxes right? We’re going to incur those. We do have a choice with the amount of interest we’re paying though. There’s a lot of people that go into a lot of detail on this, Dave Ramsey, although I think he’s a little bit of a mean guy. I wonder if he’s listening to this? You can be a little bit nicer but he’s mean to people. But if you check out his stuff, it’s awesome.
He has awesome programs on paying down your debt, awesome books on paying down your debt. On how to do this on your current income. Because a lot of us are under this confusing guys that we don’t have any extra money to pay down the debt but we buy our Dunkin’ Donuts and we buy our Starbucks every single morning and we go out to lunch and we buy the extra liquor, all that stuff, right? But we don’t have any extra money. So he really dives deep into that.
© 2016 The Business of Life 5
BOL 46 Transcript
I’m going to keep this episode short today but I want you to think about are you willing to take control of your finances? Are you willing to say, “Enough is enough with the over spending, with the spending money that you don’t have.” Oh it just aggravates me so much because you don’t have to do that to yourself. You don’t have to fall prey to the big mass media marketing machine that tells you that you need the new car, that tells you that you need the new clothes, that you need the vacation, that you need the bigger house, that you need the better furniture.
You don’t need it if you can’t afford it. Sometimes we’re going through life so blindly that we’re not even paying attention to it. You want the freedom, you want the beauty, you want that big, beautiful, bold life to be able to do what you want, when you want with who you want. The first thing you have to do is get control of your expenses.
We all have this vision, we all have this vision that once we start making this amount, once we start making that amount, I’ll tell you what, if you’re not paying down your debt with what you’re making right now, you’re not going to do it when you make more money because you’re going to increase your expenses. Tough love but that’s truth.
I have friends that make $10,000 a week right now and they’re in massive debt, they live week to week, paycheck to paycheck and I know you’re on the other line saying, “That is crazy!” You know why that is? This is a simple philosophy, it’s just different numbers than you may have right now. It’s because when they were making $500 a week, they spent $550 a week.
Then they made a thousand and they increased their expenses, now they could get the new car, now they could get the nicer house, now they could go out to dinner more, now they could take more vacations. Live below your means, self-control, and restraint. I’m going to challenge you, go check out Dave Ramsey’s stuff. Read some of the stuff by Robert Kiyosaki, he talks more about the income side of things. Learn about it, take control of it yourself.
The not so sexy secret to building long term wealth is super simple. It’s finding a way to create passive income and/or reducing your obligations. Every single person listening to this show right now can start today with a plan to reduce your monthly obligations. It’s a must to creating long term wealth. You want it? Start reducing your monthly obligations, stop buying all the toys, all the extra stuff until you can actually afford to pay cash.
© 2016 The Business of Life 6
BOL 46 Transcript
There’s one debt that I believe that you should hold if you choose to and it’s a mortgage. If you have a car payment, if you have student loans, if you have credit card payments, if you have payments on all your toys, why? Pay that down and get to the point that you pay cash for everything except for your home loan.
All right guys, this is and has been an opinionated, definitely opinionated, something I obviously feel strong about as you can hear when I’m going through this episode. But listen, I love you guys, I love the opportunity to be able to be on this end of the relationship, teaching something that I have gone through myself. I’m so passionate about this because I made the mistake over and over myself. Finally once I had kids, once I got married, I said, “Enough is enough, it’s time to draw the line in the sand.”
No longer am I going to be sweating it at the end of every month worrying about if I have enough money to pay my bills, making all the excuses why it’s not working, blaming the economy, blaming my job, blaming this, blaming next presidential candidate or whatever, right? It’s you. It’s none of that other stuff, it’s you. You’ve created it. The question is, are you going to stick in it? Are you going to stay with it? Or are you going to say, “Enough is enough,” look at the facts, look at things honestly, learn about this. Again, Dave Ramsey, super simple, super easy, I don’t get an affiliate commission or anything like that but it works. Are you going to take that control?
Much love you guys, I appreciate so much taking the time to listen in every single week, nothing more that I would rather get than five years from now, you send me a message and say, “You know what Keith? I listened to that podcast episode and I’m debt free except for my mortgage right now.” Every single person listening here right now has the ability to do that. Open your mind to the possibilities, get to work on it, stop trying to keep up with the Jones’ because the Jones’ are broke and you’re going to be broke if you keep trying to keep up with them.
All right you guys, see you next time. Much love, Peace.
[0:20:41] ANNOUNCER: Thank you for listening to the Business of Life Podcast. Apply what you learn today and you’ll be one step closer to creating the life you love to live.
© 2016 The Business of Life 7
BOL 46 Transcript
© 2016 The Business of Life 8