Episode 1 – Wealth Principles 1 Mindset

[00:00:49] Welcome to the podcast! I’m so excited that you joined me today. I’m excited to launch this podcast and to teach all the information that I’ve been learning over the past 20 years, and just get that over to you, and help you out. 

[00:01:04]We’re gonna start with the first four episodes – they are going to be a sort of little mini masterclass on wealth principles, principles that I learned that help you to be able to grow your wealth and really get your finances in a place where you want them to be. 

[00:01:20] Wealth principle number one is mindset. This is crucial to getting to where you want to be, and I’ve found that mindset is 90% of it.

[00:01:32] If you can figure out how to get your mind right and how to take out any past weirdness you have about money, you are gonna be a whole lot further along. 

[00:01:42] Did you know that 78% of Americans are broke, which means nearly 8 out of 10 of your neighbors don’t even have a thousand dollars in the bank.

[00:01:54] I’ve lived like that before. And I have had times in my life when it was really difficult, and we didn’t have more than a thousand dollars in the bank. We were living paycheck to paycheck, and I hated it. I just hated living like that. I hated having that fear of we’re not sure if we’re gonna be able to make ends meet.

[00:02:12] We’re not sure if we’re gonna be able to pay the bills. There were so many times in our early marriage that we were just struggling and we did not have the money to make ends meet. We had to make choices, right? When you’re in a situation like that, you really have to make different choices where you drive the really old beater car because that’s all you could afford. Where you bike to work because you can’t afford a car or you buy everything second-hand, which is what we did for years.

[00:02:40] But, one of the things is that we were stuck in this mindset that “life happens to me” instead of the mindset of “I create my life”. This is a really interesting concept when you think about the idea that life just happens to you and you have no control over your life. 

[00:02:56] Now to a degree, there might be some things that happen that you definitely don’t have control over – you get in a wreck, or someone in your family gets really sick; stuff like that does happen, right? There are times when life throws you a curve ball. However, if you can really adopt this mindset of you create your life, you do have control over where you’re going in life. You do have control over the choices that you make and the way that you think about the situations that happen to you.

[00:03:28] So think about this. We had a situation where we woke up in the middle of the night at 3:00 AM to a fire outside of our window. It was terrifying. We both jumped out of bed, sprinted outside – in our underwear, of course – grabbed the hose, and hosed it down. We were able to save our home.

[00:03:48] But in, so doing, we lost a bunch of animals, a bunch of baby animals, and it was devastating. It was just absolutely devastating. I spent the rest of the night awake, just sobbing about this and thinking “Why does this happen? Why do things like this happen?” And then I realized, actually I need to change my mindset here.

[00:04:06] I need to just simply be grateful that it wasn’t worse, that my whole house didn’t burn down, that my children were safe. That’s where you get to this place, and you have to decide that, yes, things happen. But how I react to them is more important than what exactly happens.

[00:04:23] Let’s talk about this in money; what does this look like when we’re talking about money? Does life just happen to you where you just make this much money, and that’s all you’re gonna be able to make, and you’ll just hope that you can get a promotion. Maybe you’ll get a 3% raise every year, right? Or, are you diligently creating the type of income that you want to have and that you think would be good for your family?

[00:04:45] Let’s talk about a tale of two investors. Both started with $25,000. One was confused. They didn’t really know what to do, so they followed the advice of the first financial advisor that they met because they didn’t know anything about money and they thought “I’m just bad with money”.

[00:05:02] They put their money into a diversified mutual fund in the stock market thinking, “oh yeah, well, diversification I’ve heard that’s a good idea. I’ll make sure to diversify my money”. The other person read lots of books on investing. They attended some meetups about investing, and they got advice from multiple successful investors.

[00:05:22] After six months of educating themself, this person joined a group of investors and invested in an apartment building with her $25,000.

[00:05:30] Five years later, the stock market investor had gained $11,000. That’s assuming they got 8% per year, which is a stretch because we all know how the stock market is: sometimes it’s way up, and sometimes it’s way down. It’s really hard to predict a steady income of 8% per year, but we’re gonna go with it. The real estate investor increased her investment by an additional $25,000, thereby doubling it. Was she just lucky? Well, perhaps, but she also created that luck by putting in the effort.

[00:06:07] So if we talk about luck for a minute, you can look at people and say, “Wow, they’re just lucky”, “Man, how did they get that lucky break in life?”.

[00:06:14] One day my daughter came home from school at the end of the school year, just elated. She burst into the house and said “Mom, I won AirPods!”

[00:06:23] I was like, wait, what? You won AirPods? And these were AirPod Pros no less. She won them at school, and I said “Dang, I don’t even have AirPod Pros! How did you get AirPod Pros?”. I don’t even have any, and it was really funny because I was jealous, right? I’m thinking “Man, she’s lucky. That’s crazy!”.

[00:06:46] I asked her a little bit more about how she was able to win those. Well, it turns out there was a reading competition, and the competition was simple – it was read 20 books over the course of the school year. Every book has to be at least a hundred pages, and if you read 20 books that are at least a hundred pages each, you will be entered into a drawing to win some cool prizes at the end of the year. None of the kids knew what the prizes would be; they just knew that they had to read 20 books. 

[00:07:17] Well, how many kids do you think actually read the 20 books? Not very many. What happened for my daughter was that she put in the effort – and it’s a big effort, right, for fifth graders to read 20 books that are a hundred pages each it can be a big effort. 

[00:07:33] She accomplished that goal, thereby putting herself in a position to win the AirPods. She could never have been lucky enough to win them had she not put in the work. Luck really is a combination of work and effort, and then being in the right place at the right time.

[00:07:56] She created that opportunity. Effort creates opportunity for you. Now, luck may come in if you get the opportunity, or if you don’t get it, but if you work really hard on creating lucky opportunities for yourself, I guarantee you are gonna be lucky as well. 

[00:08:14] When we’re talking about mindset make sure you’re focused on the idea that you create your life. Life doesn’t just happen to us. Things around us happen, and we create how we react to them and the decisions we make after that. 

[00:08:28] Let’s talk about the money game for a minute. You want to play to win. You don’t wanna play to not lose.

[00:08:38] I was a soccer coach for many, many years, and in soccer, we always had a saying, and it was “win to win”. The first win was focused on winning every 50/50 ball. Every time a ball goes in the air, and it’s not being controlled by any one person, that’s a 50/50 ball. Somebody has to go and get that ball.

[00:09:01] Statistically speaking, if our team won all the 50/50 balls, we would win the game. The focus was not on the end, right? It wasn’t focused on actually winning the soccer game; it was focused on winning the micro steps. Winning the small parts of the game. We had to win that ball hundreds of times over the course of 90 minutes to actually win the game.

[00:09:30] This is the same thing in the money game. You must focus on the small micro steps. You have to budget. You have to pay yourself first; you have to do all of these little things that seem boring and mundane and not very exciting in order to actually become a millionaire. You can’t just focus on wishing and hoping that you’re gonna be a millionaire, saying “Well someday I’ll be a millionaire”.

[00:09:56] No. You have to “win to win”. You have to win the day, win the moment to actually win the game – win the money game. An interesting thing is if you’re a football fan, they say that in football “great offense gets you to the big game, but great defense wins it”. This is a really interesting concept.

[00:10:16] You think about this in money. As you are growing your wealth, you must play offense to even get to where you’ll have a million dollars, to even make it so you will be in the big game. 

[00:10:29] If you’re not playing offense, if you’re not taking risks, if you’re not studying and investing and learning about how money works and you’re just like, “ah, I don’t know that seems too hard for me”, you’re not gonna make it to the big game.

[00:10:42] Once you make it to the big game, now things switch because you have to play defense. You have to protect that money that you have accumulated. That’s the interesting thing about great offense; you’ve gotta play great offense at first until you get to that million, and then you play defense to keep it and sustain it.

[00:11:03] The next mindset that you’ve gotta break through is scarcity mindset. This is something I struggled with for a long, long time. Scarcity mindset is simply put, you believe that there are a limited amount of resources out there and that in order to grow my pile bigger, I have to steal from someone else’s pile.

[00:11:27] That is far from the truth, and it’s taken me a long time to get there. The truth is there is an unlimited amount of resources out in the world. No matter how big my pile grows, it does not affect how big Susie’s pile grows.

[00:11:44] For example, Susie can go out there, and she can collect and collect and collect, and her pile can grow in accordance with how much work she puts into growing her pile. I have the opportunity to do the same. This is the same with money. Money is abundant, and it’s out there, right? It’s out there for everybody. 

[00:12:00] When I was a child, we would go huckleberry picking, and it was really fun to go huckleberry picking.

[00:12:06] We’d go once a year when the huckleberries were on. And I tell you what; it did not matter how much I put in my bucket – there were millions more huckleberries to pick. I just kept picking and picking and picking and whoever picked the most got a prize at the end of the day. My dad would give us a candy bar for whoever picked the most.

[00:12:27] We all had the same opportunity to go out and pick and grow our buckets and our piles as big as we could and then there was a prize at the end for the winner. 

[00:12:36] You gotta think about money as being abundant, right? It’s out there. You just have to figure out how to find it and how to keep it. Those are the things that I’m gonna teach you on this podcast. 

[00:12:48] The last one is “thinking big versus thinking small”. Sometimes it’s hard to think big. Sometimes when I think big I get overwhelmed. If I were to think about it in terms of money and say I want to have $10 million someday, that gets overwhelming to me. But if you can break that down it makes a difference. If you’re thinking big like that, if you’re thinking, “I want to accumulate $10 million, so I can do good with this money”. I can create more impact in the world than I could if I only had a hundred thousand dollars, for example.

[00:13:22] If you’re thinking about trying to achieve that type of goal, a big goal, you’re gonna make different decisions than if you were just thinking about a small goal.

[00:13:32] I met a woman the other day, and her goal is to impact 1 million women in the real estate investing space. When she said a million women, I thought “oh boy!” because I have very similar aspirations.

[00:13:48] I want to help other women to also grow their wealth and to learn how to do that and to understand how to take control of their finances and their money. But when I was thinking about it, I thought “Well, if I could have a hundred women, that would be awesome”. Here I am thinking small; I’m thinking about a hundred women.

[00:14:06] She says she wants to impact a million women. The reason she did that is because she says it makes her think much bigger. Makes her think “Okay. I have got to get on bigger stages. I have to have a bigger platform. I have to have a bigger podcast. Here are all these things that I need to do in order to reach that goal of impacting a million women”.

[00:14:28] I really encourage you to think big try and take these wealth principles as we are discussing them and learning about them, and write down a goal that’s gonna make you uncomfortable. Here’s something that I did at a conference recently. The lady speaking had us write down the answer to “How much money did you make from your investments last year?”

[00:14:46] I wrote my number down. She said, okay, now I want you to multiply that number by 10. Once I multiplied that number by 10 she said “that’s your new goal”. Immediately that made me feel uncomfortable because I was like, whoa, that is a big number! I even thought to myself “Do I even want to go after that number?”

[00:15:06] That’s just crazy. I feel like I’d have to go crazy in order to get to that number. But then she said “You know what, it’s not as hard to get to that number as you think it is, right? It’s just your brain. It’s just your mindset”. If you can switch your mindset onto believing that you could 10 X your investment income within five to 10 years. You’d get there, right? Your brain will automatically create pathways and search for ways to make it, which is something that’s so cool about our brains.

[00:15:35] That’s wealth principle number one. The next episode will be wealth principle number two, where we’re gonna talk about discipline. I’ll see you at the next one!