Freedom Possible – Let’s Get Started | DO 66

Freedom Possible

Financial StrugglesOn this episode, Matt begins a new series on creating financial freedom, The Freedom Possible Series.  He covers the dismal state of current financial affairs of the American people and why nothing will improve for those who fail to open their eyes and start doing something differently.

This isn’t theory.  These are the actual strategies Matt employed to change his thought process and exit the “rat race” forever.  The Freedom Possible Series is going to explain exactly how he did it, but more importantly, how you can do it too.

Best of all, Matt will explain how you can achieve this goal in a fraction of the time that society says you can, so that you can enjoy that freedom during the most active years of your life.  If you want systematic and practical advice on how to improve your financial situation and ultimately reach the goal of financial freedom, turn your speakers up and get your notepad ready.

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5 Important Lessons from the Episode:

1   According to a study by USA Today, 97% of today’s 65 year olds don’t have enough discretionary income to write a $600 check.  If you want to be on the other side of that statistic, you must learn to make money and make it work for you.
 
2   Although Matt’s career success has been inspirational to tens of thousands of people around the world, many career failures peppered his journey to financial achievement. Just before starting his uphill journey, Matt was bagging groceries at the age of 34.
 
3   You must change your focus from creating money and saving it to creating cashflow and enjoying it. This paradigm shift will shatter your current monetary conditioning and will set you on the path to financial independence.
 
4   In today’s uncertain economy, accumulation, retirement plans, traditional savings, and social insurance programs will not lead to financial freedom for the majority of people. In fact, when inflation is taken into account, most people who follow this recommended financial plan will not even be able to afford to stop working in their old age.
 
5   You must take responsibility for your own financial health and stop dutifully following outdated advice. You must make your money work for you rather than spending your life working for money.

 

What You’ll Learn:

  • Why it is critically important for you to have mentors and to choose them wisely.
  • Why in the game of financial freedom, what you don’t know will hurt you.
  • How you can break free from the rat race by working smart for your money.
  • The reason why you haven’t achieved the financial independence that you desire; and
  • How one shift in thinking can almost guarantee that financial freedom.
  • Why hitting rock bottom may be the best thing to happen to you; and
  • How to convert your frustration about current circumstances into the determination needed to turn your situation around.
  • Why true decision, or an absolute resolve to transform, is essential to success.
  • The book that Matt highly recommends everyone read, and how it drastically shifted his mindset about money.
  • Why you do not need to make and save a lot of money to be financially free.
  • What passive income is and how it can change your financial outlook.
  • What two of the three major traps of the accumulation mindset are; and
  • How they can all stop you from ever reaching financial independence.
  • Why your 401k will never make you rich and is unlikely to cover even your minimum monthly expenses.
  • Why the equity in your home may be losing you money; and
  • How to time the paying off of your home mortgage so that you can leverage your “equity money” to work for you before you retire.
  • Why a mindset of scarcity could be keeping you from the financial freedom that you most desire.
  • What the best investment for everyone is, and why it is the only investment that can make your dreams a reality.

Quotes:

  I noticed that my poor dad was not poor because of the amount of money he earned, which was significant, but because of his thoughts and actions.  As a young boy having two fathers, I became acutely aware of being careful which thoughts I chose to adopt as my own.  Whom should I listen to – my rich dad or my poor dad?” – Robert Kiyosaki
 
  We need a system that encourages more personal responsibility and provides more control and safety for you.  We need tools for outpacing inflation, beating burdensome taxation, transcending market volatility, and producing a residual income.” – Matt Theriault

 

Resources Mentioned in this Podcast:

  • Get started on your own “do over” by downloading “The 3 Pillars of Creating the Ultimate Do Over” at FreeDoOver.com
  • Rich Dad Poor Dad by Robert Kiyosaki

Thanks!

Thank you so much for joining us on this episode of the Your Do Over podcast.  Please subscribe to the podcast so that you will get instant access to our new episodes.

If you found this podcast helpful, please take a few minutes to leave us a positive review in iTunes.  Your reviews help to improve our search rankings so that we can spread the love.  If you would like to leave a message on the Do Over Hotline, please call 1-888-885-9514 to ask Matt a question or make a suggestion about anything you’d like.  Thank you!

Podcast Transcript:

(Voice Over): During an era where countless people, businesses and organizations are feeling the pinch, running out of time, running out of money, losing confidence, feeling as if life is unfair, praying for another chance. Unless something is done, life is going to pass them by. Fortunately in the nick of time, there is a now a place where the ignored, underestimated and unknown steps producing results and making life work are revealed. Save your career, save your business, save your health, save your relationships, save your life. Get from where you are to where you want to be faster, and with greater ease than you ever thought possible. Say hello to your Do Over.

Matt Theriault: Welcome, this is episode 66 of the Your Do Over podcast and this is Matt, the Do Over Guy, Theriault. And this is the podcast that will show you how to start over. It will help you identify whatever it is that didn’t work for you the first time or didn’t work for you the last time. This is your chance to Do Over, to learn from your past mistakes, to learn from others past mistakes.

So that you can build a life of peace and joy and love and blessings in abundance and enjoy that life during the most active years of your life. And to help you get a jumpstart on your Do Over, you can download the Three Pillars of Creating the Ultimate Do Over for free at FreeDoOver.com. There you’re going to download this 55-minute mp3 audio program that I created just for you to help you start your Do Over and help you start it right.

As we get started today, I want to express a quick yet sincere thank you to some people that shared their comments about the show with me over at iTunes. This comes from TexasLoo, the headline is “Awesome action steps, five stars.” “Thanks Matt, your action plans are phenomenal. Truly blessed to have your podcasts.” Texas Loo, thank you very much for sharing that with me. Sam Rebello, “I did it, five stars.” “Dear Matt, thanks your persistence in bringing this valuable podcasts and instilling positivity in my daily routine. Your motivation is infectious and I can’t help but to listen and execute.”

Awesome Sam, thank you for sharing that with me. Fishnet Tofu, “Thank you, five stars.” “Thanks for putting this together and getting me to ask myself the right questions and thinking about things in a new way.”

Fishnet Tofu, you are very, very welcome. And then this one, “Do over” is the headline. “One star, absolute mindless dribble. Don’t waste your time.” That comes from JD1357911. Well, JD thank you for sharing your opinion as well.

Hey this show, it’s not for everybody and I’m okay with that. So thanks for your comments, keep them coming and another way that you can participate here at this show is by calling the Do Over Hotline at 1888-885-9514 and you can ask me a question there about anything. Whether it’s about something I said here on this show, something you’re struggling with, a suggestion of a topic for a future episode, whatever you want.

Call 1-888-885-9514, 1888-885-9514 and leave me your message there, okay? I got this one. This message on the Do Over Hotline about our last episode, Episode 65: How To Become More Likeable.

Allen: Hi Matt, this is Allen from Auber. I love the most featured episode about five ways to become more likeable. It’s very refreshing. Mind you. A lot of parties, a lot of friends and how my friends are a lot of fun people and it was awesome.

I just want to make a quick comment on, I think it was your fourth thing to get people to like you is to be yourself is really important. I think that’s true but I think one thing you should add to that is not necessarily be yourself but be your best self.

And I think the right way to explain that is maybe some of the situations that is on the bad situations that we get in ourselves is in is because we were being ourselves but we weren’t necessarily being the best self that we could be.

If you’re a slob or a narcissist and that’s what you think yourself is, you’re not going to go anywhere and lie. You’ll be like okay; well you need to change yourself to be your best self.

I’m not saying, hey you know that 5-hour energy commercial where the guy is on the couch and he is not doing anything.  Then another one of them appears, he really have this hot girlfriend and like, if you drink this thing, you can be your best self.  This is the stuff that you could be your best if you did that.

And so I think it’s kind of cool to ask is you know how can you change yourself to be your best self?  It is still be genuine but you know you kind of let go of those that habits that are still part of yourself even if you go to bed.

But hey, join us for the rest of the show and you know I hope that maybe that would be clear to you maybe but thanks. I’ll talk to you later.  ‘Bye.

Matt:  Awesome.  Thank you for that message.  And thank you for listening. I think you said your name is Allen.  It was a little difficult to understand but thank you. I agree with you.

You absolutely want to be your best self. You owe that to yourself.  And if you’re true to yourself in that way, that would certainly contribute to your likeability.  That’s what our last episode was all about.

It was about five things you can do to become more likeable.  The reason I covered that was first, it’s good information to have if you’re struggling with that type of thing. And second, people tend to do business with people that they know, like, and have confidence in their competence.

That’s where being likeable can play a major role in your life particularly your professional life because people do business with people that they know, like, and have confidence in their competence.

But of those three, if people really like you, you can be a little lacking on the other two. You’ll at least get a shot at the business and maybe even a second chance or two. I mean face it people like to be around people that they like that includes the times when they’re doing business whether that’s as the customer or the vendor.

Since this is the case, I thought this is a good lead in for the next few podcasts that are coming your way of which I am dubbing “Freedom Possible.”  This is the Freedom Possible series specifically financial freedom.

I’m going to share with you some ideas that you might have heard before or some that might be totally new to you.  These ideas are all around financial freedom.

And initially I’ll go over a bit of why you don’t have the financial freedom that you want. Then I’m going to move into what’s actually possible for you financially that will always tends to blow people’s minds when they discover what’s really possible for them.

And then I’m going to go and I’m going to take you from the realm of possibility to the realm of probability.  I’m going to give you some things to do real world practical things that you can do to positively impact your finances of which done consistently and persistently will lead you to your financial freedom in a fraction of the 40 to 50 years we’ve all been taught that it’s going to take if it ever happens at all.

So that’s what is up for you over the next few episodes: The Freedom Possible series.  So I want to open with this quote, “I noticed that my poor dad was not poor because of the amount he earned which was significant but because of his thoughts and actions.  As a young boy having two fathers, I became acutely aware of being careful.  Which thoughts I chose to adopt as my own. Whom should I listen to: my rich dad or my poor dad?”

You probably guessed that came from Robert Kiyosaki from his book, Rich Dad, Poor Dad.  So if you haven’t read that book, I highly recommend it. it changed my life.  It turned everything upside down for me in a good way because I wasn’t standing up in the right way in the first place.

So the turning upside down put me on the right track so Rich Dad, Poor Dad by Robert Kiyosaki.  If you haven’t got the book, I highly recommend it.  Why would I open up with this quote from Robert Kiyosaki?

Well in a nutshell, I chose that quote hoping that you would gain an understanding of just how important it is to choose your mentors and to choose your mentors wisely.  And hwy is this so important?  Well you must choose wisely because what you don’t know will hurt you.  what you don’t know will hurt you in this instance.

To make matters worse, you wont even feel the pain of that hurt until it’s too late.  We’re going to get in to what I mean by that in a minute but first I want to discuss what is possible for you financially.

That something is financial freedom and a comfortable retirement.  Tragically those two possibilities are impossible for 97% of the population based on the road that they’re traveling.

97%. I mean isn’t that amazing?  It’s like everybody. Unfortunately, it’s not just my opinion or a statistic that I just, you know, I pulled randomly out of thin air.  You know that came from the Department of Health and Human Services.

According to them, 95% of the population will reach the retirement age of 65 either dead or dead broke. 95%.  To make matters worse, 97% of today’s 65-year olds don’t enough discretion or income to write a $600 check.

There is absolutely no reason for you to end up in that 95% or that 97% statistic. There’s no reason for it. I share those statistics with you o prove we have a serious problem. You see we just don’t have a clue as to how to make money.

I’m sure there’s a small portion of the population that does know how to make money but guess what? They don’t have a clue as how to keep or make it work for them.  And because they lack this understanding, they must continue to work the greater portions of their lives instead of enjoying the most active and lively years of their lives.

Now let me make myself clear.  I’m not saying that there’s anything wrong with work. Nothing wrong with work. In our society, there’s nobility in an honest day’s work.  Many people love their work.

Instead what I want to draw your attention to is the fact whether you enjoy your work or not, the fact is you must work. You don’t have a choice. You must work because you don’t have any other options. That’s just the society that you live in.

You must work because that’s what produces your income. We live in a world where we need income. We need money. Money is important. It’s very important. In the way that it serves us, it’s nothing in our society that replaces money.

I mean it puts the clothes on our back.  It puts the food in our stomachs. It puts the roof on our head.  Money pays the hospital bills. It pays for our recreation. And it allows us to provide all of those things for the people in our lives that we love.

Money is important. It is not the root of all evil.  It’s a misquote from the Bible.  The Bible doesn’t say that.  Unfortunately, people just don’t realize that. They just take that and they hold on to that.

But having said that, let me be clear by saying that money is not everything either.  It is however a necessity.  You do need it so it’s important to know how to make it and more importantly, it’s important to know how to keep it.

You know each of us have a fine knit time here on earth. We can spend that time imprisoned by working hard for money or we can live freely by working smart for it.  that’s what this series is all about. It’s about providing you with options.  Options of how to earn your income.

You know options they lead to freedom. Without options, freedom is impossible.  Retirement is possible. So here’s my promise to you. when I complete this series and if you complete it with me, you will understand why you’ve been struggling. You know I have a clear understanding on why you are struggling.

And you’ll know why you’re going to continue to struggle unless you change this one specific thing.  I’m going to show you why you’re not making the financial progress that you want.

I’m going to show you why you haven’t been getting the results that you want. I’m going to show you what you’re going to do about it.  I’m going to show you how you can guarantee your own financial freedom.

I’m also going to share with you the proof of what I’m talking about. I’m going to show you proof that it works.  On top of that, I’m going to show you exactly why it works so you don’t have to take my word for it. It’s not my opinion. You’re going to understand clearly as to what to do and why you’re doing it and why you can have faith in it that it’s going to work.

But before you know we go any further, I want to share a little bit about my story with you and some I’ve shared but most of this I have it. I’m sharing this because I really want you to understand that you always have hope and a choice no matter where you stand financially in your life right now.

Wherever you are right now, you absolutely have hope. You have a choice. You know people may look at me today and see me living the life of my dreams: doing what I want, when I want, speaking at events across the country, impacting lives, and coaching people to living the lives of their dreams. People see that.

They may see these things and think that it must’ve come so easy for me but believe me it’s not easy.  It certainly didn’t come easy.  You know before I have all of these success, there is an extraordinary amount of failure. After you know I got out of the Marine Corps after Operation Desert Storm concluded. I spent the next 15 years of my life thriving in the music industry.

I did really well for myself. I loved what I was doing. It hardly seemed like work. I was compensated very well for it and then the digital downloading of music came along.  It completely destroyed my business as well as a considerable portion of the music industry.

I mean the writing was on the wall. I ignored it. I held on as long as I could doing the same thing over and over and over and expecting a different result.  An unwillingness to change and foolish pride that led me to a very uncomfortable end.

So at the age of 33, I had to start life over from scratch.  I had to do over.  That was my first failure and it was a big one. I had some intermediate success but ultimately it was a failure when I look in hindsight. You know it was a really big one.

And after that initial failure, I then proceeded to fail just about anything in everything that I tried. It seemed I was good at only one thing and technology, technological advancements has essentially rendered that one thing obviously at least with regard to making a living from it. I’ve been supporting myself.

And unfortunately I didn’t have a plan B. I didn’t know how to do anything else.  You know to find a solution to my failures, I spent money. I spent more money then I spent even more money looking for the answers. I tried you know I’ve talked about it.

I tried a multi level marketing. I’ve looked at franchises. I tried online opportunities for making money. Each and every time it was just one failure after another.  There were some bouts in there with you know moderate success but there were all short lived.

You know after a little over a year of trying all these different things at 34 years old now, I found myself bagging groceries.  That’s what I had come down to. I couldn’t believe where I ended up.

You know I looked in the mirror one morning and I just said, “Dude, you’re poor.” Believe me. I did not like being poor.  After you have made a lot of money before and then you lose it, being poor I can imagine at least from my experience I think was even worst than the situation I was in before1 ever made money.

And you know after working on the weekends, I would attend these Get Rich Quick seminars ranging from I don’t know $97 with of course there are free ones.  I paid $97 although there are $5000 programs.

Actually accumulated a little bit of personal debt with friends and family while attending these seminars. Do you know what that end result was for me? None of it worked. None of it worked for me.

I hit rock bottom.  Feeling pretty bad. Feeling pretty low.  Then one day I was attending to a lady and her groceries at my check out line, when she pulled out her credit card to pay her for her groceries. An ATM receipt fell out of her wallet.  I couldn’t help but look.

And I’ve told the story many times. It’s pretty emotional for me. My eyes were, I went, my eyes were drawn straight to the balance line.  That balance read $2056. I’ll never forget that number.

Here’s the kicker. It wasn’t the large amount of money in her account that actually caught my eye. It was the total amount, the dollar figure, that made me stop in my shoes but it wasn’t the amount of money.

It was that specific number. Why was that number significant?  You see that number on the balance line was the amount of money $250,000 to be exact. That when I was in the music business that would trigger the time it as for me to make a bank transfer.

And it happened to be the exact amount that I had in my bank account just before I started my downhill slide in that business.  With ultimately you know the bottom falling out completely.

And seeing that number just had made me sick to my stomach. I knew right then and there while I was bagging groceries that I would never see that amount in my bank account again.

I would never see that again if I continue to follow the path I was on and didn’t change what I was doing.  You know after seeing that receipt, I asked the store manager if I can take a break. I went out to the parking lot. I got in my car. I placed my head on the steering wheel and I began to cry uncontrollably.

I don’t know if you ever had a moment like that but you feel pretty helpless.  You don’t even know why, you know why you’re crying but you couldn’t stop if you wanted to.

After about 20 minutes or so, you know, something just happened. Something clicked. I simply stopped crying and I said to myself, enough is enough.  I’m better than this.

You know what?  I’m through waiting for break. I’m done with this. I’m finished waiting for someone to give me a helping hand.  I will no longer be a whiner. I will no longer allow myself any excuses.

And this moment was in an epiphany of epic proportions. I made a stand and I made a decision to turn my life around right then and there.  I didn’t know how it’s going to turn my life around but that didn’t matter.

I made a decision. I promised to myself to do it.  My mother has always said where there’s a will, there’s a way.  I mean by the grace of God, I had just found the will.  It just clicked.

Enough is enough.  You know my excitement over this epiphany, it gave me a newfound energy and a newfound ambition.  I was so overcome that I shared my story, a newly found passion with anyone in everyone that would listen.

And while sharing my story, you know, someone introduced me to Rich Dad, Poor Dad by Robert Kiyosaki.  I read it cover to cover.  I read it again and again. I was hooked.

Among countless things that I learned from that book and there were many. The one thing that reached out and grabbed me, the turning point was when I finally realized that I didn’t need to make and save a lot of money to be financially free.

I mean that single idea, it went against everything that I was taught my entire life.  You know according to Kiyosaki, all I needed to do was to make sure that I created enough money coming in each and every month.

Money that came in whether I went to work or not to pay for my expenses. And that would make me financially free. I don’t need to make and save a bunch of money. I don’t need to go out back in the music business and strive to get that hit record or sell millions of records and make a lot of money. I don’t need to do that.

All I needed to do was to create enough money coming in each and every month passively money that came in whether I went to work or not to cover my expenses and that would make me financially free.

And this was the first time I had heard of or heard the expression “passive income.” And it was when I made the decision to adopt this idea of passive income with complete commitment that I, that’s how it’s going to achieve my financial freedom.

It’s going to change my whole line of thinking. In this commitment, it helped me achieve this freedom at a fraction of the time it would’ve taken me to earn and save the millions of dollars that I previously thought that I needed to save and earn or to earn and save.

I’m going to share more about how I did this. I’m going to share with you exactly how I did this later.  But more importantly, I’m going to show you how you can do it too. All right?

I know you’re anxious to get to these details. I understand how excited you are to learn how to achieve financial freedom and how to create a life where you have the option to retire anytime that you decide that you want to retire.

But before we go there, you need to understand a few important concepts.  I urge not to underestimate the importance of this lesson I’m about to share with you. I mean your entire success as a freedom achiever depends on it.

If you struggle with the concepts presented in this first lesson, I want to discourage from listening to the next one. Just stop. If you don’t get it, rewind and listen again.

And send me an email or drop a question on our, on the Do Over hotline so we can clear that out for you.  I mean this series really goes against the grain of popular culture and investment advice.

For you know, for many of you implementing the strategies and practices in this series will require a fundamental shift in mindset. It’s a hurdle that often bounces people off the path.

But for those who can make this shift, doors are open.  Barriers collapse and the road to prosperity it reveals itself in high definition. The path to financial freedom becomes crystal clear.

This clarity is often the most underrated and frequently ignored function of achieving financial freedom so stay with me. Stay with me and clarity will be yours.

You know America has a monumental problem.  This series is going to offer the solution.  That’s my commitment.  I call this problem the “accumulation mindset.”  We’ve been entrenched in this flawed, industrial-aged mindset for the last century.

You know corporations with vested interest bombard us with evidence of why we should accept and perpetuated.  Most people don’t even realize that you are bombarded with messages that you should hold on and embrace for dear life this accumulation mindset. The media drowns us with one-sided advice designed to promote just that.

Thus we have developed a certain perception of retirement dictating how we define safe and risky investment strategies and business strategies as well.  Just the mere definitions of these strategies can be trapped in and in themselves, which prevent you from ever achieving your financial goals.

So the first trap is the 401k.  You know we’ve been trained to think that the road to retirement involves working at the same job for 30 years contributing to or even maxing out a 401k or some other qualified plan, diversifying your portfolio, and waiting.

We work, we wait, and we count on the market to bring us the returns we need to build a large nest egg that allows us to live off the interest during our retirement years.  That’s the whole goal.  To create that nest egg so big that it generates enough interest and allows us to live.

This system, the accumulation mindset, it’s both outdated and it is broken.  Actually it has never really worked.  I mean it hasn’t work for the vast majority of workers. For the statistic I shared with you earlier, it’s hardly working for anyone at all today.

It’s failing 97% of the population for sure.  I have to say that 3% that are succeeding aren’t getting there with the 401k. You know as the global economy’s future becomes increasingly uncertain and we continue to live longer, this accumulation retirement plan’s chances for success only get dimmer with time.

Even if we assume perfect market conditions, will traditional savings plans be enough?  I don’t know. I mean I almost, everyone I pose that question to answers no. If that’s the case then why do we continue contributing to something that we already know is broken?

We got our heads in the sand. We don’t want to acknowledge and accept that it’s broken.  But why do we do that? Why do we do that?  I mean the answer is easy. I’m going to get to that in a moment.

You know for most individuals, the annual retirement income will provide only a small fraction of what is needed to maintain the current standard of living during retirement.

When I sit down with the people that I meet with to discuss these calculations and even when I add social security to the mix, they come to the sad realization they will be forced to live off a third or less of what they have been accustomed to over the course of their working lives. A third.

Furthermore when you add inflation to the calculations, the projections are even more bleak.  It’s clear to see how this system is broken and it’s simply impossible. It’s impossible for most people to accumulate enough money to make it work.

For example, how much cash do you think you’d need in that 401k to generate just $4,000 of monthly cash flow? How much do you need in that 401k just to generate $4,000 of monthly cash flow for yourself in retirement?

And I used that number, that $4,000, as it represents the average monthly household income in America.  That’s the average household income in America – $4,000 of which is on the decline by the way. That’s a whole other story.

But what is it? How much cash do you need in that 401k to be average?  Quit squinting and you can drop the calculator. You don’t use it. I’ll give you the answer.  Using 4% yield most financial planners tell 401k owners to expect in retirement, just using that 4% that they say that you’re going to get. To be average, you would need to retire with a minimum 401k balance of $1.2 million.

That’s what you need. $1.2 million using that 4% that most financial planners use as their guideline.  The median 401k balance at retirement right now, the median 401k balance at retirement age for this average American that we’re speaking of get this. Are you ready?

$97,588.  $97,588 for the average 401k balance at retirement.  Then they need one point too to maintain their lifestyle and their average balance is $97,000. Almost $98,000. Around that will be generous.

But we’re not talking about you, right? No. We’re not talking about you.  You’re not average.  You’re among society’s affluent.  Right? You’re in 6-figure income bracket.

Well get this.  If I’m speaking to you, Mr. 6-figure, Mrs. 6-figure income earners.  The median 401k balance at retirement age for Americans that earn over $100,000 a year, their medium is a whopping $350,000.  $350,576 to be exact.

Now that, for the 6-figure income earners, that’s not even within shouting distance of the 7-figure balance that you need to be just average.  Under average circumstances, you’ll be living on less than two thirds of the income you’ve lived off during your working years.

Two-thirds.  You would be living off a third. I don’t know if I’d said that correctly but you’ll be living off a third of which you’re living off of during your working years.  So that’s the first trap that has people heading straight toward poverty.

They don’t even know it.  they think they’re doing everything right. They’re doing what they’re being told to do by the professionals, by the experts as 97% of Americans are experiencing at age 65.

They’re discovering that although that they did everything right, it wasn’t enough. Not even close.  In fact, they only made it, they only made the journey 30% of the way. They fell 60% short of their goals.  So the 401k, big trap. It’s a big trap number 1.

Let’s discuss the second trap that keeps you from reaching your goal of financial freedom.  And that second trap, it’s your homes equity.  Your home’s equity. In addition to stuffing your money into risky investments like your 401k, another problem with the accumulation mindset is that it promotes misguided strategies for paying off home.

More specifically, accumulators, they often sign up for mortgages lasting you know 15 to 30 years. Then attempt to pay off their homes from their job income alone.  Now while I do advocate that people pay off their homes, there’s a much better way of doing so than what we’re traditionally taught.

It’s true when we rush to pay off our homes, we build more equity however this also results in us allowing more of our assets to lie dormant.  Here’s what I mean by this. suppose your home is worth $300,000 and you owe $200,000.

Having $100,000 of home equity might feel good.  And it might look really good on your balance sheet.  But what good is this dormant stagnant $100,000 actually doing for you?  What return is it generating for you?

You know if we go by the 75-year inflation average, your return on your home equity is a negative.  3.6% and negative 3.6%. I mean what difference would it make on your family finances if you could take that $100,000 from a negative 3.6% and shift it into an annual return of more 50%.

If you have even $1 of home equity, what are you earning on that bank account of bricks so to speak?  Let me go ahead and answer that for you.  You’re not earning anything.  In fact, you’re losing money.

Now let me once again clarify something. I’m a firm believer that everyone should pay off his or her home. I’m not telling you that you should not do so.  However I am inviting you to consider the order in which you pay it off.

With a slight shift in your thinking, you can actually pay off your home quicker and potentially have hundreds of thousands maybe even millions of dollars left over.  We’re going to get to that.

But you see here’s irony that I found as it pertains to paying off your home prior to retirement.  People who pay off their homes before reaching retirement typically end up selling or refinancing the home in order to have the money that they need to live on anyway.

This is true on today than probably ever before.  Unfortunately I meet many individuals that tied up their greatest asset, gave themselves nothing to invest, then ended up working much longer than they had to otherwise.

This is when you prematurely retire your money. Specifically they prematurely retire their money while they continue to work when they could’ve been working side by side with their money cutting their working years at least in half.

So what’s the point of paying off your home if you haven’t yet built up enough residual income to support you and your family. Why would you shove those dollars under the equity mattress without leveraging them to work for you first?

I mean if you’re really serious about paying off your home then I encourage you to implement what I am going to teach in this series for 5 years just do it for 5 years and you’ll be able to pay it off a few times over.

Once again I really want you to understand that I’m not advocating an either or situation instead this is more of an issue of timing.  I mean of course there are many. Some of them household name experts or financial gurus who continue to teach this broken outdated advice regarding accumulation vehicles and home equity.

Now don’t get me wrong. I’m all for discipline saving and financial responsibility but I reject the idea that financial independence comes from living frugally.  Handing off your money to institutions and praying that they’ll take good care of it.

The practice of putting into accounts that we don’t understand and that we have little control over is silly.  It’s financial suicide.  It’s horrifying.  You know at best, it’s a financial Russian roulette at best.

Believe me, one of the chambers is not a good best case scenario.  Depending on a nebulous, volatile, and fickle market to secure your financial future is gambling. It’s not investing.

Competing with inflation means that most people are lucky to earn 1% or 2% annual returns on their retirement funds. It’s obvious that something more practical and much more likely to succeed is needed.

We need a system that encourages more personal responsibility and provides more control and safety for you. We need tools for outpacing inflation, beating burdensome taxation, and transcending market volatility and producing a residual income.

What’s really needed rather than more or different products and strategies is a fundamental shift in your mindset.  Critical shift, it occurs as individuals choose the creative power of abundance over the limiting mindset of scarcity.

The shift that occurs as we learn to create opportunity rather than waiting for an opportunity to happen or waiting for the market to take care of us.  Creating opportunity manifests as exponential growth when you learn to make money work for you rather than you working for your money

You don’t need a lot of money for it to start working for you either.  I mean it happens as we take direct responsibility for our financial health and realize that we as individuals are our own best investment.

You are your own best investment.  There’s no hot stock or trending mutual fund that is going to give you lasting wealth. No expert or guru or institution cares more about your money than you do.

You are your best investment.  You are the only one who can take charge and make your dreams a reality. And guess what?  You can do it rather easily an quickly also but to do so you must simply avoid three financial traps that have ensnared 97% of today’s 65-year old and render them completely dependent, dependent on church, family, or state or in some cases all of the above. All three.

So those are two big traps you’ll have to avoid. The first step to avoiding them is to just by shifting your mindset, shifting your focus from making money to creating residual income.

Stop focusing on making money and start focusing on creating a residual income.  You know the irony is the entire objective of the 401k is to save enough money so that it pays a residual income. We work, work, work and save, save, save for 40 to 50 years focused on attaining a number big enough to pay us the residual income that will afford a conquerable lifestyle during our golden years.

What if we shifted our focus away from that big number, that big number we’re striving to save inside that 401k? what if we shifted our focus form that big number and we focused on the residual income number?

Meaning instead of focusing on saving $1.2 million like our example to be average, instead of focusing on that $1.2 million, focus on creating $4,000 of residual income.  And then just forget about the saving the $1.2 million altogether. Forget about that number.

I mean which one sounds like an easier not to mention a faster achievement?  Saving $1.2 million of cash or creating $4,000 cash flowing into your bank account each and every month.

$1.2 million of cash, $4,000 of cash flow.  The $4,000 of monthly cash flow sounds infinitely easier to create, doesn’t it?  Well why don’t more people do it then?

That’s a very good question. I’ve thought about the answer.  There really can be only three reasons.  Either they don’t know or they don’t know how or they don’t believe it will work.

That’s okay.  Those are the three reasons. Either they don’t know to even shift their focus or they do know to shift their focus hey don’t know how to implement it and how to follow up with that what actions to take to follow up with that focus or  they may have shifted their focus maybe they know what actions it take but they don’t believe it will work.

That’s okay. No problem.  So if you don’t know, now you know.  Now you know.  I just told you. If you don’t know how, that’s okay too.  Stick around because I am going to teach you how.

And if you don’t believe it will work, it’s okay. I’m going to prove it to you but unfortunately knowing of and knowing how to produce residual income with the outmost belief if you know about it, you know how to produce it and you got the outmost belief that it will work. That’s typically not enough to free you from this trap.

This next trap.  This third trap of which I’m going to lead off with on the next episode.  Okay? It’s a little bit of doom and gloom here but you’ve got to understand where you are right now.

I’m going to leave you. I will throw you the life preserver and it’s going to be up for you to grab it but we got one more trap because even if you are aware of the 401k trap.  You’re aware of the home equity trap. Even if you’re under, if you understand I’ve talked about that it’s easier $4,000 of cash flow than it is to save $1.2 million.

Even if you’re with me 100% and you get all of that and you agree with me 100%, it’s not enough. There’s a third trap. It’s where it gets everybody. I’m going to lead off the next episode with this third trap.

Okay? Think about what we talked about today. Just know that good news is coming.  All right? That’s it for today.  God loves you and so do I. I am Matt, the Do Over guy. I will see you on the next episode of your Do Over.

(Voice Over):  Thank you for tuning in to your Do Over where the ignored, underestimated, and unknown steps to producing results and making life work are revealed. Remember, knowledge is potential power.

Take action on what you learned today. This is not learn over, it’s your do over.  To view the resources, reference in today’s show, and to retrieve the complete show transcript, visit www.TheDoOverGuy.com.  Stay connected with Matt, the Do Over guy, Theriault on Twitter @TheDoOverGuy. On Facebook, www.facebook.com/DoOverGuru.

[End of Transcript]

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