Today we’re going to talk about the greatest secret to wealth creation ever known to many. Stay tuned.
From Philadelphia, the home of the Liberty Bell, Financial Freedom Radio starts now. Here’s your host, Raymond Jewell.
Welcome back to FinancialFreedomRadio.com. My name is Ray Jewell and I’ll be your host for the next 15 to 20 minutes. I’m up here in the beautiful smoky mountains in a camper. So if you see some wires hanging here, it’s the internet connections and everything. So bear with us, but hopefully, everything will come through okay. We also invite you to like, share, and ring the bell for future shows. When you subscribe and ring the bell on YouTube, we will send you an advanced notice when we put this show up. So let’s bring in our producer. Steve, good morning.
Good morning Ray. How are you? Enjoying your camping trip?
It’s wonderful up here. It’s so beautiful. I figured that in social distancing, I’m just distancing with my wife as I would in my house and get out of the heat down there.
You’re getting away from everyone up there in the mountains.
There are people here and they all wear masks so that’s interesting. In restaurants, when we go in, they wear a mask and when they serve you, they’re social distancing.
I’m amazed at the technology we have that you could be sitting in a mobile home in the middle of the mountains and we can still do this show and give content for our viewers.
It’s a motor home, there’s a difference.
Is it on wheels? Does it go from one place to another?
Mobile homes don’t have a motor.
Ironically, mobile homes don’t move if you think about it.
That’s true. We’re going to talk about something that is near and dear to your heart. One of the secrets to creating wealth that many people are not doing and they can do very easily. So we’re going to talk about it today. One of the big issues that we face is we are taught to consume at an early age. We are bombarded by advertisements. We are bombarded by sales and all sorts of techniques through technology to get us to part with our money. What occurs is we end up spending money. It’s a very sad state when people don’t save. If they would just start saving at a young age, they would actually end up having enough wealth later on in life to retire on. Instead, most people end up retiring on mainly social security and that’s supposed to be a supplement. That’s not a retirement plan. Let’s talk about the secret. The secret is saving. If people would save, if you start out at age 21 and you started just saving $100 a week or a hundred dollars a month for that effect, you’d end up at 3 or 4 percent rate of return with maybe 5% rate of return. You can get that now and you’d end up with a couple hundred thousand dollars which is a good start. As you start earning more money, you start saving more.
I can remember watching a fella on tv. His name was Robert Shuler. He talked about 10% savings and 10% tithing, he was a preacher. I looked at it, he lined up ten grapefruits on his podium. He said this is your total income. He took away one and he said can you live off that. There’s nine up there. Sure. So I said, yeah. I’m saying this in my mind. So he took away another one and said can you live off that. Yeah, I can live off that. He took away another one and then there was 7. I said wait a minute, now you’re pushing it. The point is that he was talking about tithing and he was talking about saving. 10% and save 10%. Without getting into the spiritual side of it, let’s just talk about the saving. So if you save 10%, you’ll have plenty left. If you start out doing that at an early age, you will end up with a sizable amount of money later on in life just by saving 10% of what you bring in.
It’s about building a habit.
That’s right. You do that, right?
Yeah, it wasn’t easy. We’re living in a consumption world where everyone wants everything and they want it now and instant gratification. It is a challenge, but it’s like anything, it’s like exercising, it’s like dieting. Once you build the habit, it becomes second nature and you don’t even think about it.
Right. When you listen to Financial Planners, a lot of financial planners will talk to you about getting out of debt first. What they’re failing to tell the consumer is when you’re spending time getting out of debt, which probably will never happen because they’re probably not savers. You lose time. If you continue to save and then focused on getting out of debt, at some point in time, you might have enough saved where you could possibly pay off your debt or you would have paid it down. You never lose that momentum of savings. We have only one exponential curve in our life. We start out at a young age, we grow, we have a certain amount of time that we will work for somebody, or we will run our own business, and then it’s over. So the problem with the American consumer or the individual is they don’t save. That’s the secret. There’s nothing magic about it. It’s the secret. If you get into that habit over time, no matter what your income is and you live in your means, no matter what your income is, you will end up with a sizable amount of money later on.
Now, as you’re going through that period of savings, you want to do it smart. You don’t want to listen to the financial institutions trying to get you to invest with them under their terms because there are too many inefficiencies and then you can end up losing your money or you will lose a lot of it. Markets go up and down and they love to put you in markets. Markets are like elevators, they go up and down. You end up losing. When you try to recover, you’ve got to make up for lost ground when you really shouldn’t have lost and you should be just continuing to grow. It’s a compounding of interest in your favor instead of the financial institution’s favor.
The secret is saving. One of the important things that people tend to overlook is when you save, you’ve got to eliminate greed. I know that’s hard, but you’ve got to eliminate greed. I’ve been a saver all my life. For those of you who know my story or who don’t, we went through a rough patch in the ‘90s and bankrupt a company and ended up having to start over. Fortunately, I was a saver and I kept that momentum going and I used vehicles to save the money that required me to make a monthly payment and have that money grow. Otherwise, I wouldn’t be able to be up here in the beautiful smoky mountains, in this magnificent countryside and have the time I’m having. I wouldn’t be able to live the retirement life I have. There are places you can put your money, but you must do it smartly and you must be aware of the losses that could occur.
Remember the other day, Steve. We talked about the perfect financial product which is life insurance. I used life insurance as my vehicle. Remember that show?
I do. It was a good show.
Remember what you said?
The whole idea behind the whole life policy is amazing. You borrow money from yourself, you pay yourself. When I first met you, you introduced me to the concept of whole life with a book. I don’t remember who wrote it, but it was called Be Your Own Banker. Do you remember that?
The idea behind that was if you have a whole life policy, you basically have your own bank. You put money in, you take money out, but you’re taking money from yourself and you’re paying yourself that. You can’t find a flaw with the vehicle.
That’s one little piece of the leap process. It’s called a bank on yourself. Nelson Nash wrote that book years and years ago. A lot of people are reading it, but it’s one piece. When you look at the whole model, you can see where that piece fits in, but there are other things you can do within the model that allows you to keep your wealth while it’s growing and use it. The more you use your money yourself and pay yourself back, the more you’re eliminating the bank. That’s more of an advanced type of process. What we want to talk about is just the simplicity of saving. If people have trouble saving, then you need a vehicle to put your money in every month and do that religiously.
Back to what I opened the show, I was, the secret to creating wealth and being successful is saving. I don’t care how you cut it. You have to be able to save. If you’re not going to do that, you might as well just turn this video off and not listen to us anymore because the secret is saving.
I’m going to chime in there for a second. The secret is saving, but at a deeper more philosophical level, it’s about learning to live within your means. A lot of people struggle with in their means. Once you can live within your means, the challenge then steps to living below your means. I used to tell people this story when I was working. People would say, “Hey do you think we’re going to get a raise this year?” I’m like “I don’t want a raise.” If I get a raise, that means I have to recalculate everything. I would tell them if I get a raise, I’m still not changing my lifestyle. All the money that I’m going to be getting extra is just going right into the savings because I’ve gotten myself to a point where I can live on a certain amount of money and anything else goes right into savings. One of the things you said I just want to make sure we’re clear on. If you’re starting with young people who are making, I know my daughter fresh out of college was making $12, $13 an hour. For her to save $100 a month would be a challenge. It’s a better goal for young people to set themselves to save a percentage of their money. I always say try for 30%, but if you can’t do 30%, start with 10, get used to 10 then go to 15, and just gradually…It’s easy. You cut out one Starbucks a week and you can save that money. It’s not difficult, but it’s better to start with percentages then it is to start with physical dollar amounts. $100 to you is a meal. $100 to a kid that’s in high school or in college, that’s like a week’s worth of pay.
Right. Well again, 10% a month. That’s going to give you 90% to live on. Once you get into that habit, the amazing part of it is you end up saving more because saving becomes a habit. What do they say? Habits are like cables. It takes 30 days to break them. If you don’t break them, you’ll constantly be consuming more than you save. That’s the problem people fall into. They consume more than they make. When you consume more than you make, you can’t save. It’s a struggle. So you go into debt because the financial institutions are going to persuade you to follow what they tell you. Run up your credit cards or use your credit cards to pay off debts. That’s the craziest thing. Run up debt to pay off debt. Does that make any sense to you?
No. There are really only two solutions. You either decrease your debt or increase your income. If you’re underwater, if you’re living beyond your means, those are your two things. You gotta stop spending more than you make or you’ve got to make more than you spend.
The philosophy of trying to make more than you spend will make you nuts. What is the biggest cause of divorce nowadays? It’s over money. Saving 10% is a great start. Don’t let anybody sway you from it. The financial planners of the world don’t address the savings first. If people aren’t going to save, I don’t want to talk to them. That’s key to building wealth. You have to have that mentality.
I’m gonna chime in here also with another. You always do these shows from a philosophical point of view. I like to attack them from a practical point of view.
You’re the conscious of the man.
Well, I’m closer to the man than you are JP Moneybags. My point is the best way to do it is very simple. When you’re done watching this show, go Google banks that have high-interest rates. I went with Goldman Sachs. They have no minimum. You can start at $10, it doesn’t matter. Put something in the savings account. If you direct deposit on your paycheck, you can very easily go to your hr person or your manager, whoever. You can get a change on your direct deposit and have some of that money go right into the savings account. All you need is the routing number and the account number. Right there at the paycheck level, have them take 10% of your paycheck, and you can do it by percentages. Just say put this much into the savings account. That way, when you get your paycheck, you don’t even see the money. If you put it in a savings account, you are limited to the number of times per month you can take the money without paying a penalty. So there’s one thing to talk about it and one thing to actually do it. Those are practical steps that I did. Those are practical steps that my children have done. This is something you can do as soon as you’re done with this show is start on this path.
If you have any questions, go to RaymondJewell.com/meet. I’ll give you a 15-30 minute phone call and talk to you about it and help you along if you need that help. RaymondJewell.com/Meet and you’ll see my schedule and create a space int he schedule, give me your phone number and confirm it before we send out a confirmation. So make sure you confirm it. Otherwise, I won’t call you. You can get some personal help, but as Steve said. Go to Google Savings Accounts and Interest Rates. You’ll find that there are some out there. If you want a higher rate of return, we could work with you on that. That’s a good start.
This gets the ball rolling. This at least starts the process.
Right. So to wrap this up, to summarize it and give you the cliff notes of it, savings is important. Save at least 10% of your monthly income before taxes. You could probably save anything. After taxes, it doesn’t matter. You save 10% and put that in the savings account and don’t touch it. Stop running up debt. You’ve got to save first and then get rid of your debt. If you do it the other way around, you’re going to miss time. Time is a factor in all of our lives. We only have a certain amount of it. If we don’t pay attention to that exponential curve of life and start at an early age, it’s really tough to play catchup. I know. I did it. It sometimes created some tough times, but we made it through. In retrospect, I’m glad we did. So I want to thank you all for coming and downloading. Please share this with your friends. We build our show on referrals. Please give the link, financialfreedomradio.com to your friends or YouTube.com/FinancialFreedomRadio. Again, I want to thank you all for coming and listening. We’ll see you back here next week. FinancialFreedomRadio.com. Take care, God Bless.
Thanks for listening! Please remember to subscribe to the podcast. If you want to learn how to create real sustainable wealth like the extremely rich people do, or maybe you just want to sustain the wealth you already have, you need to check out Dr. Ray’s new book “Why the Rich are Rich”. Ray’s been coaching clients for 35 years and has completely unlocked the secret strategies that rich people use day in and day out to grow and sustain their wealth, regardless of what’s going on in the economy. His book is completely free, and you can get it by going to https://whythericharerich.com and entering your email address. Again, that’s https://whythericharerich.com. Head over there now.