Greg :
40% of your money is going to taxes. Now. You're like, you never see my paycheck. Well, let me tell you something. Your paycheck takes out 25%, okay? But then when you go to the store, do they charge you tax? How about your cell phone bill? They charge you tax there. How about your community that you live in? They charge you tax there. You guys, you're getting charged state tax, you're getting charged local tax, you're getting charged Medicare tax. You're getting charged all these different taxes.
Greg :
Even on when you go to restaurants, when you have food, you go to Dunkin'donuts, you're getting taxed on so many things. It's anywhere between 40% to 50% of your money is being set aside for the tax ban. This is Secrets for success. Welcome to the Secrets for Success Podcast. I'm your host, Greg Tod. Thank you as always, for joining me. Today we're going to talk money. Money.
Greg :
There was not one class that I took in primary school, middle school, high school, undergrad that talked about money and the importance of how to manage your money and why it is important for you to make good money and how to use your money so that you can break free of the time for money trap. I want you all to understand a couple of things. I'm going to really just share with you all things that I have paid money for to learn and to educate myself on so that I could basically have the freedom that I have today. And today I work hard, but I work hard because I want to work hard today. And I just feel very honored that I'm able to have the impact that I can have on people and be able to do it in the way that I want to do it. And that freedom has only happened because of me understanding the things that I'm going to teach you on today's podcast. So today's podcast is, I don't know if you want to call it Financial Management 101, but this is extremely important stuff. Now, I want to tell you guys, one of the first events that I've been to that was a personal development event that I paid money for was through a guy named T Harve Eckert.
Greg :
And I think it was called Secrets of the Millionaire Mind. Can't remember if it was 2011 or twelve, but what I'm going to share with you all right now is basically the premise of how he taught us to become millionaires. And it was crazy because day one of the event was like, I don't know, I wasn't used to a whole bunch of mindset stuff. I'm just like, just talking all these different things. I'm like, where are the tactics and all the things that he talked about on day one? The mindset was exactly what I needed to hear. Because we're so funny about not wanting to hear anything about money, because we've never been trained on any of this stuff. The only thing we've ever learned with numbers is, like, X plus Y to the 13th power or PI to the. Like, I can't even remember, what the heck.
Greg :
But all that crap with algebra, geometry, all that stuff is garbage. It's crap. And it's all things just to confuse your mind on what's really important. And what's important is for you all to understand what I'm about to teach you. First thing I want you all to understand is a 30 40 30 rule. 30. 40% of your money needs. If you're trying to become someone that is financially free, this is the goal of where you should try to aspire to be.
Greg :
30% of your money should go to you, spending it on the things that you need. I know this is not going to be popular. I know you all will hate me for this because you're probably going to be like, I can't do that. Well, this is the reason why you got to start thinking of, how can I earn more money? 30% of your money should go to your daily, monthly, weekly living expenses. 30%. So if you're making $100,000 a year, $30,000 is what it should be. That's what it should be. Why? Because 40% of your money goes to taxes.
Greg :
Especially if you don't have a business, 40% of your money is going to taxes. Now, you're like, you never see my paycheck. Well, let me tell you something. Your paycheck takes out 25%. But then when you go to the store, do they charge you tax? How about your cell phone bill? They charge you tax there. How about your community that you live in? They charge you tax there. You guys, you're getting charged state tax, you're getting charged local tax, you're getting charged Medicare tax, you're getting charged all these different taxes. Even on when you go to restaurants, when you have food, you go to Dunkin donuts.
Greg :
You're getting taxed on so many things, it's anywhere between 40% to 50% of your money is being set aside for the tax ban. Okay, so 40% of your income needs to be put away for taxes. I can tell you there are so many people that have gone to the pokey or have gone to not very good places because they never set aside money for the tax man. Now, if you're like, hey, I got a regular job, and they're taking out most of my money for taxes, okay, your amount might be a little bit less, but you still need to start to put away money for taxes. And if that money happens to be around later on in the year, then I'll tell you what to do with it.
Greg :
All right?
Greg :
30% of your money should be for the things that you're spending your money on. That is your car, that's your house, your apartment, your living, food, et cetera. That's where it should be. 40% of your money should be set aside for taxes, especially if you are a business owner, and the other 30% of your money should be for you building an asset. Now, I remember when I heard that for the first time, I was like, by the way, I had a business at that time. I was like, there's no way in hell I can do that 30%. I couldn't even live off of that for, like, two weeks, okay? So I was like, there's no way I'm doing that. But once I said, you know what? This guy obviously knows some.
Greg :
Something that I don't know, I started to realize I got to find a way to make more money. And my brain started to work on, okay, what can I do? And how could I live if I was only using 30% of my money? So 30% is what you're spending your money on. That's your everyday expenses. 40% should be set aside for taxes, and the other 30% needs to be set aside for building an asset. So let me tell you, When I started, that was like $200 for me, a paycheck. That's what it was. And you're not going to be able to buy a house with $200. But what ended up happening, actually, it was even less than $200.
Greg :
It was like $100, and I was saving up probably about $200 a month. So what I started doing is I started putting $100 every pay period, and I started putting that away, and I was putting it in an IRA, okay? That's what I initially did, all right? And at my job, they had a matching IRA, right? And that's what I started doing. So what I mean by matching is that whatever I put in, they put in the same amount. And basically my money was doubling, all right? Little by little by little. And then I moved it over to a. Then it was the same thing. Just little by little, little by little, my money started doubling.
Greg :
Right.
Greg :
And basically what that allowed to have happened for me is it allowed for me to be able to build enough money to where when it was time for me to do my first investment, I had money to be able to fund that investment.
Greg :
Okay?
Greg :
Now, the first time I did an investment, I did the next thing that I'm going to talk about, which is I was willing to borrow. Okay, but we'll talk about that in a second. But basically, that's the thing. You got to start getting into an investment mindset. You've got to start to put aside money. Even if it's $10 a paycheck, $25 a paycheck, $50 a paycheck, you got to start putting aside that 30% and to build yourself up to 30% of money that is going to allow you to be able to actually have an asset. An asset is something that makes you money without you having to do physical work.
Greg :
Right.
Greg :
I'm going to give you some examples. There are certain areas in the United States where you can actually buy parking meters. You can buy parking meters. I know this is silly, but I didn't even understand this was a thing. You can buy parking meters where it might be part of the cities, but you can actually invest in parking meters. And the amount of money you get, 50% of it.
Greg :
Okay?
Greg :
That's one thing. There are ATMs that you can buy. And I know this is like, what? But these are all things that are not just your typical stocks, 401 Ks, IRAS. There are so many ways that you can take your money and use that money to make you money, whether you're there or not. Right now, today, I'm able to do stuff like vacation rental properties. But that's not something you're going to be able to do out the gate.
Greg :
Okay?
Greg :
That's not something you're going to be able to do. But you really need to start to train yourself on how to actually start to build assets, things that make you money without you physically having to actually do work in exchange for the money.
Greg :
Right?
Greg :
It's a mindset. It's just a perspective that you need to have.
Greg :
All right?
Greg :
So that's a 30, 40 30 rule. Extremely important for you all to understand.
Greg :
All right?
Greg :
That's number one. If you know me, you know that I hate clutter and I love efficiency and a one stop shop. And that's the reason why I am so excited that SSHC has partnered with JaneApp. JaneApp is a complete practice management software that does your online booking for clients, schedules your clients, allows your clients to come in, you can do your documentation, take their payments and everything in between. If you're doing subscription, if you're doing packages, you're doing solution based offers. JNapp holds all those things in their platform and it's seamless and efficient and it is clean. And I can tell you right now, my clients have said nothing but amazing things about Jane App. What's even better is that it's not just for therapists.
Greg :
They work with so many different healthcare disciplines from chiropractors, mental health counselors, anyone that has a practice, they can basically take care of you. So I highly recommend for you guys to use Jane App. I actually have a code SSHC one MO that you can use to get a free trial of Jane App. Go check it out. Number two is understand the power of borrow. Now, there's good debt and there is bad debt, right? Bad debt. Let's talk about that first. And when you're borrowing on bad debt, that's not smart.
Greg :
Bad debt is when you are going into debt for something that doesn't have the potential to make you money. So if you're going to the upcoming Drake concert and you're putting that on your credit card, that's bad debt. That's something that you only pay for if you have the money.
Greg :
All right?
Greg :
If you're going to go get a Louis Vuitton bag and you aren't, I don't even see any reason why you need a damn Louis Vuitton bag.
Greg :
Okay? All right?
Greg :
But if you don't got that, that's not good debt. That's bad debt.
Greg :
All right?
Greg :
If you're going on vacation and you're going into debt to go on a vacation, that's just for entertainment, that is bad debt. When you're going into debt to be able to learn a skill, when you're going into debt to be able to buy a tool that has the ability to make you money, when you're going into debt to network with people that have the ability to make you money, you're going into debt to learn something that is going to allow you to be able to impact more people and eventually make more income, that is good debt. If you are going into debt for building a home that is going to make you money because you're going to rent out that home that has the potential to be good debt.
Greg :
All right?
Greg :
So you must understand that a lot of times you need debt in order to allow you to be able to accelerate the ability to start the process of building an asset. For me in 2005, I did not have any money. I did not have any rich parents. I didn't have that. But what I did had is.
Greg :
I.
Greg :
Had access to something to where I was able to go into debt for, so that it allowed me to build a business. Now, I went into $180,000 worth of debt on an asset that I had, which is my home. How did I get my home? I borrowed. I borrowed money to get the home, and then the home appreciated, and then I borrowed off of it again. I used that $180,000 that I was able to pull from the home to be able to start another asset, which was my business. My business has gone on to make me over $35 million in that particular business. So it was a Good investment.
Greg :
Right?
Greg :
Now, I want to tell you of that $180,000. I did two other investments. I did an investment on a brand new construction home that was a townhouse.
Greg :
All right?
Greg :
I ended up having a short sale of that townhouse, right? It didn't work out. I used $20,000 of that $180,000 to go into doing forex currency trading. And guess what? It ended up being a Ponzi scheme that did not work out. But all I needed was one of them to work out, and one of them went to make me now $35 million over the course of the span of the business. So that is how you want to look at debt. A lot of times, we don't make enough money to earn our way into being able to save, to build an asset. So a lot of times, you got to borrow. You got to borrow.
Greg :
And that's what I've learned to do. And here's the last thing I'll just say. And that kind of goes to point number one. And point number two, if you want to understand financial management, why don't you look at people that have actually made money? They obviously know something about financial management. And not just that they've made money, but they've made money and been able to do it over a period of time.
Greg :
All right?
Greg :
The way that I grew up is I thought that the only way I was ever going to get rich and the only way I was ever going to attain wealth is if I was either a baller, I was selling dope, or I was an actor or an actress, because that's all I saw, right? That's all I knew. So I'm five foot six, right? So, all right, I ain't going to be no baller. Okay, I can't act, barely go five words without stuttering, right? And I ain't going to sound no dope because I don't want to go to the pokey. Right? So I knew that. Wait a minute. Okay, I can't be those people. So is there another way? There is another way, and it's doing the things that I just said.
Greg :
All right?
Greg :
Now, if you're like, man, that's going to mean I'm going to have to make some changes. Yeah, you might have to make some changes.
Greg :
Right.
Greg :
And that means that, for me, I would have loved to have stayed in South Florida, but doing the 30 40 30 rule, there was no way I was going to be able to stay in South Florida and make that happen. I knew I had to come to a place where things were a lot cheaper. I knew for me I wasn't going to be able to have a two bedroom or three bedroom apartment. So we had to downsize to a one bedroom apartment. So we could actually start by building our first asset. Our one bedroom apartment at that time was under $800. It wasn't in the nicest neighborhood. But guess what? That's what allowed us to be able to do the 30 40 30 rule.
Greg :
And back then, I didn't even understand the rule, but I was inherently doing it because I realized that I needed to always make more money than I was spending. And that is the key. That is the key. Make more money than you spend, borrow only for good debt, and build assets by following the 30 40 30 rule. I wish somebody would explain that to me. I wish somebody would explain that when I was in college. I wish somebody would explain that when I was in high school or middle school, I just explained it to you. Use that and also follow what wealthy people do.
Greg :
Do more of that, and I'm telling you, you will be on your pathway to getting the wealth.
Greg :
All right, till next time.
