Step two of my seven-step strategy to build wealth is a doozy. Are you ready for this? Listen on Apple Podcasts or Spotify!
About Indestructible Wealth: I’m Jack Gibson. I’m your wealth strategist and I’m here to help you make some money. The Indestructible Wealth Podcast is for young entrepreneurs who want to make, keep and grow wealth to enjoy now, and for years to come.
Episode #4 – Accelerate Your Investable Dollars to Hyperdrive Growth
Podcast Episode Transcripts:
Disclaimer: Transcripts were generated automatically and may contain inaccuracies and errors.
Welcome to the Indestructible Wealth Podcast. This is the place where we help young entrepreneurs to make keep and grow wealth that you can enjoy now and for years to come. I’m your host Jack Gibson, a senior or serial entrepreneur, founder of multiple seven and eight figure of businesses, and wealth building strategies. Each week I’m gonna share you my tips, resources and secrets, to help you create a plan and build the life you’ve dreamed of.
I know a lot of listeners out there are attempting to build their wealth for the very first time. Which is always the most difficult stage by far in the entire process. It goes back to pretty much the only thing that I remember from seventh grade science class but has application to every area of life including wealth. It’s the law of inertia. Which simply means an object wants to stay and rest or motion and less an outside force causes a change.
The most amount of energy is taken up in the beginning of any endeavor. So your bank account wants to stay at zero unless you the outside force cause that change. Just think about how hard it is sometimes just to get to the gym. But once your there and your moving you wonder why you had such a hard time starting. Establishing that foot hold, and getting the wealth energy moving when you don’t have any as a challenge. So let’s debunk the traditional thinking that you can get wealthy by saving ten percent of your income. It’s so much easier to go fast than to go slow as success love speed.
Today were going to talk about the keep part of make keep and growing wealth. I wanna help you build wealth as fast as possible so you can enjoy it while you’re young and healthy and not put off the things you wanna do until your 65 or older. Today we’ll dive into my thoughts around keeping and expanding your investable dollars, the challenge is that you’ll have along the way and how do we accelerate the compunding of your funds to live like no one else. So that later, you can live like no one else. If you’re looking to keep and put to work your harder and dollars today’s podcast is for you.
Welcome back to the indestructible wealth show, I’m your host Jack Gibson, and I got a follow up with the story last Friday where I skipped out on church to go play an illegal underground poker game on good Friday. Now, don’t judge me, okay? Cause I did go to church on Sunday, and I dig in on the service streaming while I was playing poker uhm, I put the put the headset on, got to fire it up on YouTube and all my buddies, you know that I play without them, they’re like more like frenemies, right? We get along but our goal is to extract as much money from each other as humanly possible so I consider that more of a, a frenemy. And by the way, it’s not illegal okay, I’m just embellishing the story so just fucking go with it okay, don’t judge me, just go with it, it’s makes for better story. So, playing the whole time that I’m on the church service app and I’m watching it streaming I’m like freaking unbeatable, everything was going my way, I was up like three grand or something and it was everybody was all the guys I hope that they’re serious but like I need that church app okay, whatever your watching I need, I need it. Oh my God, you do, you guys do, you degenerate gamblers, you need more Jesus in your life, there’s no doubt. No judgement, okay, everybody’s got to come to that conclusion on their own. I get this incredible win streak for this hour I’m up three I’m on top of the world like Gods on my side. Soon as I log off, BOOM! Shit hits the fan, I go downhill I don’t know I, I lost, I lose some money, I don’t know I can’t even remember think I lost like three grand or something.
So that was a big swing but you know what, I’m gonna talk about on a future episode is volatility is the price you gotta pay for outsized gains, and when I play that game, I can make big money quick and I can also lose money quick. So can’t wait to share that episode with you guys. Today we’re gonna talk about step two in the seven step strategic plan and this is the step where you don’t particularly want to hear it, and I understand why. Stay with me and don’t turn off the seven steps cause this are the steps that you don’t like it. Because this is the critical step to building wealth fast.
So step two, Title, Choose to live well below means, so you can save over sixty percent of your income. Now, just calm down because we’re not talking about right now, you’re not gonna freaking save sixty percent of your income right now, I’m sure of that, okay, unless you go to ramen noodles, you know go downgrade your house, sell off your cars, you know, you’re gonna have to make significant lifestyle changes in all likelihood. Cuz you’re probably spending about as much as you’re making right now if you are the typical American. So, you know I’m gonna say this again because is worth repeating, saving ten percent and earning ten percent off the ten percent that you save, is a sure fire plan that have any real wealth until you’re at least 65 and that’s if you start early like, 18, 19, 20 years old.
You know the sad part about this plan for most people they’re heavily invested in mutual funds which after fees and actual returns only earns 6 percent. I’m gonna do another show we’re going to dive into average returns that they promote versus actual returns and how this is mispresented and the numbers do not fucking lie. In order to get the sixty percent of your income being saved and invested, you know, your not gonna get there from reducing your current spending now, you can get partway there, but your not gonna get all the way there. So, you know you need to look at the big 3 we’re gonna talk about the big three today but the main focus to reiterate step one should be increasing your income while simultaneously not increasing your spending. Let me repeat that again because it’s very important, your main focus should be increasing your income while simultaneously not increasing your spending, so you make more fucking money don’t spend every last dime. Okay.
So in order to prevent yourself from automatically increasing your spending, you need to put some parameters in place to protect yourself from yourself. We all need to protect ourselves from ourselves, we all do stupid shit, we all spend more than we really should, okay, its human nature. So this is why we have automations set up for my savings, my taxes and my charitable giving. When my income goes up, I increase these sweeps, so essentially the money is just swept into into these separate accounts. When my income goes up, all I do is increase these three automatic sweeps from my bank account. So that way maybe next month when I’m feeling a bit down, when I feel like I need to go out to buy something to make myself feel better, I can’t.
Your brain needs feel good dopamine hits quite often, you know dopamine is that feel good chemical. That’s what you check your social media posts for likes, comments and shares. Every time you got likes, comments and shares you release a little bit of dopamine and it feels good. You’re looking for that pure good emotion you do the same thing and go on a buying spree and so you can get that dopamine hit, if you don’t have that self governing check in place. If you don’t understand what’s going on what causes almost all people to go out and and spend 10 percent over their income. And I think that, this is for a future episode we need to talk about the dopamine hit and all the neuro transmitters that go on in your brain and why you do some of the things you do cause you’re almost programmed you know from 10,000 years of recorded human history so their are some survival mechanisms in place too that are there still with us today. Now I’m gonna tell you it’s not even remotely possible to save 60 percent of your income right now, you’ve got the burdens of modern American life. You’ve got your home expenses, mortgage, utilities tax, property taxes, maintenance, repairs, then you got your auto loan, fuel either gas or electric, insurance, repairs, food, Entertainment, Netflix, movies, games, alcohol, marijuana, gambling, concerts, sporting events, and then you got all your health care visits, your health insurance and the self-care, counseling, gym membership, exercise equipment, massages, pedicure, facials, right, and then taking vacations, and there’s children’s education, extracurricular activities, you know, I’m not even talking about all the monthly subscriptions, you probably got Spotify, the app store, Amazon prime, Costco, Sams Club, Internet porn, no I’m not talking about you, just people you know. You know, then you got your Starbucks habit, your $5 latte habit that you gonna have right, and you got all your incidentals, and your appliances always break, and on and on and on right, is that anyone why you have trouble saving money I mean you have a high probability of being pretty broke with that amount, that list.
Was there really anything on that list that I just talked about that you’re not currently spending money on as an American, probably not. I mean maybe there’s a couple of things the marijuana, the internet porn, maybe not all your doing that, but, there’s a quite few on there that your that your parting money with every month just for you to function as an American. So, it’s no wonder that you don’t give the charity or type of the guy, being, you know, you know how you gonna do it, I can’t squeeze blood out of a proverbial turn up. Investing, yeah uhm, yeah that sounds really good uhm I’ll do that later, like uhm much later.
It’s no wondering my crypto posts on Facebook about taking advantage of opportunity, now, get 0 responses but when I post a pic of my puppy my feed blows up, HA-HA-HA. It’s like crickets I post about, men you got to the crypto right now this is a window of opportunity were not gonna see it in our lifetime and crickets, HA-HA, oh men, Alright, I digress. So let’s face it, you really need to cut back, I mean you you probably do to a certain extent, but your main focus you got to increase your income guys. Your focus should be providing more value for other human beings, period. And it’s pretty tough when you’re fighting for survival. But, but that’s your only way out.
So, if we really being real with ourselves, you know you have no business buying the 50 or 80,000 dollar Escalade, when you hit 6 figures for the first time I mean, yeah you think you deserve it, you earned it, but all in reality you are in a business so you don’t really net out that much quite yet. So, calm down your ego and your desire to prove your status to society and dig in to build responsibly with your money.
So what’s most important for you in this particular step, is reducing the biggest expense by far over the course of your lifetime which are your taxes. You’re gonna spend more on taxes than any other expenses by a huge margin, so we need to be strategic and not just rely on our Accountants on how to figure out how reduce your our taxes. Now, a lot of people say, they argue with what I’m about to tell you, I’m telling you, when you start hitting over a 6 figure income, then you got to start really looking at a tax strategy team. Now, people say, well I have and accountant and I wanna tell you and I wanna say that they’re not the same thing!
Now, let me just give you a simple, let me give you a simple quiz, real quick. Okay, you don’t have to write anything down I’m sure you’re driving or maybe in the gym, wherever you listening to this. Do you know what the Augusta rule is? Do you know about the pay your kids tax deduction? Do you know what the conservation easement tax deduction is, okay, are you guys with me? Have any of you done any of those? Okay, number 4, Do you know what the 6000 pound vehicle deduction is, so, is there any of those 4 that register for you? If you say no, then your accountant hasn’t told you about them, and they’re 4 very legitimate very legal and moral deduction that you could be taking advantage of. They don’t make sense if you’re not making enough money a couple of these don’t make sense. But you need to think about, start thinking about that strategy team. Now, I’m gonna give an example let’s talk, I’m gonna give you the Augusta rule, essentially what this rule says that you can utilize your home for business meetings up to 12 times around a calendar year and you’ll be able to deduct these meetings from your corporate taxes. So essentially you set up a corporation, the corporation is where you run your business income and expenses through and that corporation is gonna pay you personally to rent out the use of your home for a business meeting. Now, as you can figure out, this strategy doesn’t work for employees because you don’t own a business. This is why I adamantly encourage everyone on my platform that they should be desire to build wealth have to have at least a side business. So what you do is you call your local conference centers and you get three quotes for renting their conference room for a day, you take the average of the three quotes and that rental number. You’ll need to have a business meeting and take meeting minutes for example you know, you can have board meeting with your spouse, you can have your business partners there, you can do a team strategy session, or even a business social like a party right. And effectively you’re renting your home out from your business entity. Your business takes the expense deduction and pays you the rent money, but again, the kicker is you don’t have to personally claim the rental income, a rental payment from your corporation as income giving you a potential 10,000 dollars additional tax deduction with no actual money spent from my house hold. So, it stays within my house, it just switches accounts. Depending on your taxes, this could save up to 5,000 per year in taxes.
If you’d like the exact paper work that was created and given to me by my strategy team, I going to give you what called an ethical bribe. I bribe, look you all bribe your kids you know, we all bribe our kids, okay unless maybe you’re on the cover of parent of the year magazine or whatever the fuck that magazine is, I’m definitely not, okay. So, I bribe my kids with, you know, we used to bribe our kids with treats to get them to do what we want. We bribe our dogs with treats cause it’s the only way to get her to come inside sometimes cause she loves treats. So, you know like look this is bribe so I’m just being forthcoming what I’m about to tell you. Now, I believed that my show is a five star show I think this shit is really good what I’m doing right here on this platform I think it’s good okay. I’m very highly biased so be forthcoming with me as well. All you need to do is give me a five star review on google and iTunes and stitcher and post a comment like say how great the show is, how valuable and what it’s done for you like in your own words you know I’m not gonna tell you what to say there. How it has impacted you. And then send a screenshot of that to [email protected] and we’ll send you all the docs you need for free so you can properly document this deduction and one thing I do wanna say I’m not a tax professional, I’m not an accountant, I’m not licensed on those areas. So you need to absolutely run this by your Accountant or your professionals. I am not, I mean I’m professional to some extent but not in that capacity, right.
So, look other thing you need to do I’ve said this before but I’m gonna say it again, like calm down on your cars guys. Look, I was making I’m not gonna tell you what I was making cause I’m not gonna divulge that on a public platform but we do earn pretty strong and this is a few years ago which my earning power has significantly increased since then. But I was driving a used Mercedes Benz E350 which I already drove up to 135,000 miles and I can easily get a $100,000 car you guys I mean no problem. It would have been responsible as we have the earning power to do it and it would have been small percentage however okay, listen, I didn’t want to pillage my investment account. I wanted to use the money that I saved from driving the used car that is paid off, that was very low maintenance, they only build foreign cars like a Benz to last. I could have driven that through 400,000 miles that isn’t a problem on that car.
So I took the money and I invested it instead and then, the income from those investments generated cash flow, then I used that money to then go out and buy the $100,000 Tesla self-driving car with all the bells and whistles zero to sixty and like you know 1 second or, something crazy right. That’s like 3.6 seconds or something, I don’t really care I don’t really utilize that feature that much, it’s fun when your passing people I mean passing just standing still but otherwise is really not that useful. So, look, calm yourself down on your car purchase, if you’ve got a car that’s way too expensive, figure out a way to get rid of that, go buy a value used car. One of these used foreign cars which hold their value and are high quality. You can drive those things you know to the moon and back, that’s my suggestion.
The only thing I wanna caution on you is your house right. Right now, I mean I don’t know where the markets gonna go, the markets is super, super saucy right now. In our area my buddy Matt, he’s a realtor, he put an offer on a house that was listed for 480k, he put an offer in for 500k and he didn’t get it, and this is happening all across America it’s crazy. The prices are just going through the roof I mean part of that is because the government is holding down interest rates artificially low, so, people can get loans on much more a house that what they normally could afford because the interest rates are so low. You know I don’t think this is sustainable personally, so why don’t you go and buy something that is real super affordable and just bank that extra money so that you can create your investing, you can invest up to 60 percent of your income instead of spending it on a house, and, the bigger the house you guys I promise you for what I’ve experienced in this house right now, the costs go up dramatically. Heating and cooling, and all the power, all the bells and whistles and then like shit breaks more often the bigger the house and its more expensive to fix. Fixing a roof on a 5500 square foot house versus 1200-1600 square foot house that’s a significant difference so, you know you got to discipline yourself and not try to worry about keeping up with the Joneses.
Living like no one else now so that you can live like no one else later you can be financially free, and you can do what you wanna do with who you wanna do it, when you wanna do it that’s what this all about. So you’ve got to calm those your desires down, and make sure your very conscious about the big 3, you’ve got to be very conscious and disciplined.
On the next episode we’re gonna talk you about debt, what debt should you pay off, what debt should you embrace, what debts are really super terrible, and which one’s are really good for you to build wealth. I’m gonna give you a story of how I use debt to take a $12,000 cash investment to over $83,000 in five years, I’m gonna tell you exactly how I did that, lay out the numbers for you guys in terms of how to grow and build wealth. Alright thanks for joining us at Indestructible Wealth, here we go!
That’s a wrap for this episode on the Indestructible wealth podcast. Before we part ways, I wanna help you to take advantage of two incredible tax saving strategies that could help you save a lot of money all you have to do is leave me a five star review if I’ve earned it and comment in iTunes, Stitcher, Or wherever you tune in. After you done that simple steps just email a screenshot of [email protected] and I’ll send you everything you need to save money on your taxes for years to come. If you like to dive deeper into your own wealth building strategy, check us out at myindestructiblewealth.com and follow along on my social media. Also, please share this podcast with anyone who’s looking for guidance on their own wealth building journey. Until next time, remember our mission here is to help you make, keep, and grow wealth you can enjoy now and for years to come.