Humans are many things… and when it comes to financing, we are frequently inconsistent and make poor choices out of fear or (worse) panic. Want to hack your way to indestructible wealth? Automation is key. In this episode, I offer perhaps the simplest methods to grow your wealth. Please like, subscribe, and leave a review if this episode offers you value. (Hint: It will.)
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Protect Yourself From Yourself (Financially) Through Automations
In this episode, I want to talk to you guys about automation. If you don’t have to think about it, there’s no chance you’ll forget to do it or, worse, change your mind and deliberately not do it. Once the decision is out of your hands, there’s no way you can be tempted into doing the wrong thing. I call this protecting yourself from yourself.
Have you ever heard the saying you’re your own worst enemy? When it comes to finances, you are your own worst enemy. I often think about the people that have stolen or defrauded money from me over the years, and it pales in comparison to the thief in my own mind. We, as humans, are greedy and fearful, consistently inconsistent, emotionally up and down, indecisive, and impulsive.
To be able to amass wealth, you have to be consistent. I know you know this. You need to be consistent about being consistent. The problem is you’re not wired for this. You’re human. When assets start going up in price, you get the Fear Of Missing Out and call it FOMO, and then you buy. When those same assets drop quickly, you panic, think the sky is falling, and it’s going to zero, and you sell out. You get a hold of some money from a nice sale, a raise, a bonus, or an inheritance, and immediately think about all the things that you can buy with it, so you go out and buy them.
There is one way, though, that you can virtually guarantee that you will be consistent no matter what. You make one decision, then make that decision automatic. Over the years, training events have played a crucial role in the growth of my direct sales company. We are adamant, and we firmly believe that it’s imperative that anybody that desires to have success at any level, whether it be a few hundred dollars a month or more, that they need to be plugging into our monthly or since after Corona, we’ve slowed down on our events, sometimes they’re every other month or quarterly.When it comes to finances, you are indeed your own worst enemy. Click To Tweet
We ask our direct sales reps to consider making one decision for the entire year for all the events instead of making the individual decision each month that there’s a training. It takes a lot of stress off, allows you to be fully invested, committed, and figure out how to get to the event, and make the arrangements and the sacrifices no matter what. There’s no better way than to invest in yourself as far as growing your financial skills, financial net worth, and income. There’s nothing that will ever be investing into your own skillsets to increase your earning power. I’ve said that many times and I’ll say it a hundred times more.
This applies to a lot of other areas, too, of finance. When I first decided to start giving generously to our church, I wrote a check and placed it in the collection bucket. I committed to giving 10% of our income, and it was hard to write those checks. We were saving up for our dream home, and every time I wrote a check, it hurt. It felt like every time I wrote it, I was moving our family further away from getting out of the somewhat cramped house we were in and into the biggest state we’ve always wanted.
Some of you don’t have any idea what they are or look like. You’re probably saying, “Is that Venmo?” No, you handwrite out the check and mail it or hand it to somebody. Sometimes my left hand had to force my right hand to drop that check in the collection bucket. Sometimes, I simply forget and miss a month. When you miss a month, it’s extremely difficult to write a catch-up check. I rarely doubled up my check if I missed a month. It was too damn hard.
I’m a big advocate of coaches. I talked about the importance of having coaches and mentors in your life. As you continue to grow your financial means, net worth, and income, you’ll have greater access and ability to bring coaches into your life. My pastor, I don’t have to pay him, but he’s my spiritual coach. What I often do, especially in times when I’m in duress and I do find myself in challenging circumstances more often than I’d like to. I told him how I was being financially attacked by two different people. He asked me if I was a faithful tither and I said, “Yes, I tithe, but I’m not exactly consistent or I can’t say that I’m 100% faithful each month. I wanted to be. I had that strong desire to be, but I wasn’t getting it done.”
One of the things that he told me was, “If you are a faithful tither, God told us that he would rebuke the devourer.” From the context, you can get the meaning behind this, but what that means is that you’ll be protected from any and all people and evil that will come at you and attack you. I don’t know about you, but I’d like the protection that comes with rebuking the devourer.
Looking back on how I handled my taxes, which are automatically deducted every month. Now, my accountant set that up for me. If you don’t do it on a monthly basis for your business, you may want to look at it on a quarterly basis so that you don’t get yourself in trouble and owe a huge lump sum at the end of the year. That’s a tough situation to be in. You also don’t want to overpay because that means that you loan your money to the government interest-free, and then that’s money that you didn’t have to utilize and grow your wealth as well.
It turns out that my church has an app where you can set up recurring automatic drafts right from your bank account. The problem that a lot of us experience as entrepreneurs is that we own businesses, and we don’t know what we’re going to make from month to month. The further along or the more experience and longevity that we have in our business, the more that we know what we’re going to make, but if you’re in the early stages, especially of growing a business, it can be very volatile and swing quite a bit from month to month or even from quarter to quarter. Business is typically cyclical. We do have seasons within a year.
I had to simply take my best baseline guess. I set the minimum draft up that I knew based on trends would likely hit and then fill the remainder if I came up short. I’d give a lump sum towards the end of the year. I set that up many months ago and I haven’t missed yet. Guess how many months I’ve missed paying my taxes? Zero. It’s the same thing with my savings account, which is for us, it’s our high cash value whole life policy. That’s where we save our cash. It’s set on automatic debit, and I’ve not missed a payment for a couple of years on that policy or savings account. Win, win, and win. Those are the big three, in my opinion, your taxes, savings account, and charitable giving. Those are the three most important things that I fund every single month.The more you can remove yourself from the equation, the better off you'll be. Click To Tweet
In the book, The Automatic Millionaire, the author makes an incredible case for small amounts of money that you’re potentially spending on frivolous everyday things like a double latte and diverting that spending into an automatic investing plan into the stock market. For example, $100 a month invested with an 8% return in 40 years will be $351,428. If you took $10 a day or $300 a month with a 10% return, you’d have $1,897,000 in 40 years. Small amounts invested consistently compound into larger amounts over a very long period of time.
If you picked up what I’ve been dropping on you so far, you’ll realize that this plan isn’t so much what I promote. I’m not against this plan at all. It should be a part of your plan. It’s a fantastic plan. This is a perfect plan for lots of people to follow, and maybe even you, especially if you’re a below-average earner and very patient. You can put your money in and forget about it, and end up with some crazy wealth.
I’m not a big fan because I want to retire young. I have done that, so I want to help you to do the same. In order to do this, you can’t do it on small amounts making small returns, but automation is still very critical to helping you make it happen. The more that you can remove yourself from the equation, the better off you’ll be.
I’ve covered automating your taxes and your charitable giving so when it comes to my savings and investing plan, I set up the high cash value whole-life policy. These policies are a commitment because if you cancel or what they call surrender, you will lose money, especially if you cancel within the first five years, your policy hasn’t grown enough to cover the initial cost of the insurance, which is the insurance side of the policy is the death benefit. That’s what’s paid out to your heirs should you pass unexpectedly.
The way that you fund these is through the automatic and automatic draft each month. It forces me to set aside money for my future. At the same time, it gives me options on where I want to direct it. I can borrow against my policy at any time and use that to fund investments when a great opportunity presents itself. I can say yes because I simply call my agent and have a wire within a week. There are no loan applications, credit checks, or questions asked. As long as I have the cash value inside my policy, I can borrow it.
A situation that came up, how can I possibly predict that China would ban Bitcoin mining where 70% of all the world’s mining took place? It created a massive liquidation event for all of the machines. When I heard the news, I didn’t immediately think, “Opportunity is knocking,” but when my mining partner, Adam, messaged me and said, “I found a source for these Bitcoin mining machines that seems legitimate.” We mined Ethereum together for the past few years and have done that very successfully.
I was not expecting that. I hadn’t planned for it. Most of my funds were tied up in other projects, but I kept my whole life cash value on tap because those opportunities will arise that I haven’t thought about or forecasted. They were not on my radar. You want to strike while the iron is hot. If I hadn’t made that one decision and automated this plan, when this incredible opportunity popped up, I would not have been able to act.
As far as the details of how you go about setting up your accounts and setting up automation, that’s very much going to depend on what you decide to do for your particular automation of your plan. Anything and everything that you want to automate, with today’s technology, can absolutely be automated. If you want to automate a small amount of money to go into each month to go into your online brokerage account to buy index funds, the total stock market index, where you’re essentially betting on the whole market, you can absolutely do that.
If you want to set up a whole-life cash value policy, the way they get funded is automatic debits each month on a certain date from your checking account. If you want to donate to a charity and you have a charity that you’re very passionate about, and you feel it helps you fulfill your sense of purpose in your life and how you are designed by God to be while you’re here, then you can certainly set up an automatic draft to do that each month.
We love the Young Life Program. It’s a program across the nation that helps to minister to high school students. That’s a fantastic place for us to support and put our money. We set it up to where it comes out automatically each and every month. This is one of the most important things that you can do to build wealth, then make the decision, and you’ll figure out how to get it done and where it makes sense for you to do it.
The more things in your life that you can automate, the simpler your life will be, and the less decision fatigue that you’re going to have as well. Decision fatigue is very real. It’s draining and taxing on your body and your physical energy when you have so many decisions that you have to make each and every day that are somewhat stressful that it taxes your body. You want to be eliminating as many decisions that you can automate as possible. I hope this helped you, guys.