Dollars and Sense


Three Angels Broadcasting Network

Program transcript

Participants: Yvonne Lewis (Host), Ryan Mack


Series Code: DAS

Program Code: DAS000017S

00:01 What is money for?
00:03 Is it a helpful resource to use for good?
00:06 Or is the love of it the root of all evil?
00:09 Actually, it's both.
00:10 But God may have a different definition of success.
00:14 Real success doesn't come overnight.
00:17 It takes hard work and faithful planning.
00:21 To use your dollars well,
00:22 it takes more than a little sense.
00:27 Hello, and welcome to Dollars and Sense.
00:29 My name is Yvonne Lewis.
00:31 I'm your co-host for this program.
00:33 And our primary host is Ryan Mack,
00:35 financial literacy expert.
00:37 Hey, Ryan. How is it going?
00:39 It's going great. Praise God.
00:41 We've been doing all these programs.
00:42 I'm learning so much.
00:44 Our viewers, I know are learning so much.
00:46 And today, we have a really special topic.
00:49 Very special topic, it's all about budgeting.
00:51 Okay.
00:52 Budgeting, make sure
00:54 it's the driver of a financial plan.
00:56 I mean, outside of crisis which you base
00:59 your financial strategy on because without a budget,
01:02 you don't know how much you can put to tithe,
01:05 you don't know what you can put into your new business
01:08 or your home, you don't know
01:09 how much you can put into your college savings plan,
01:10 how much you can put into the stocks or bonds
01:12 or real estate, all of that.
01:14 You don't know anything unless you know
01:16 exactly what you're earning and how much you're spending.
01:19 So all of these things are tied together with budget.
01:21 We'll have a very thorough discussion today
01:23 about budgeting.
01:24 Oh, that's great.
01:26 I need to know about it because, you know,
01:27 a lot of times you think,
01:29 "Oh, man, I need to make out a budget."
01:31 And when you do, you just see where your money is going.
01:35 You actually take control of your money
01:38 instead of your money controlling you.
01:39 And nowadays, budgeting is even easier
01:41 because of all the technology.
01:43 They have phone applications, they have different software
01:46 you can use on your computers.
01:49 So all of these things, it's easier now.
01:50 And you can... there's banking online.
01:53 So essentially now you're knowing exactly
01:54 what moneys are coming in and out by looking online.
01:57 So it's just an easier way to budget so we can fulfill
02:00 what God actually wants us to do.
02:02 That's great.
02:03 And we can go back to the Word to get the principles.
02:05 Exactly.
02:07 You have principles for budgeting
02:08 in the Word, don't we?
02:10 Absolutely. Let's hear it.
02:11 And I have some here, I have some principles.
02:13 The first verse I wanted to check out is Proverbs 3:9.
02:17 And that says, "Honor the Lord with thy substance,
02:19 and with the firstfruits of all thine increase."
02:22 That to me relates to tithing, right.
02:24 You have to give God your firstfruits.
02:26 And you don't know what your firstfruits are
02:28 unless you know what you're making.
02:30 You can't tithe unless you know what you're earning.
02:32 This comes from budgeting.
02:34 And you know, a lot of individuals say,
02:35 "Ryan should you tithe if you're not making
02:37 that much money?"
02:38 I said, "Well, you know what, the less money you make
02:40 the more you need to budget.
02:41 And if you're actually tithing you can actually...
02:43 It helps you to allocate and figure out exactly
02:45 how much money you have coming in."
02:47 This is the way we honor God.
02:48 This is the way we praise Him
02:50 and sow seeds into our ministries
02:52 that's doing so much for us
02:54 for all the things that He's done for us.
02:56 And a budget helps us do that.
02:59 So the second verse I have is 1 Corinthians 4:2, right?
03:03 And that says, "Moreover, it is required of stewards
03:06 that they be found trustworthy."
03:09 So again, these are not our resources.
03:12 Every dollar you have
03:13 and everything we own belongs to God.
03:16 And God is just allowing us to just hold on to them
03:19 and be a steward over them.
03:21 So a budget is just one more thing
03:23 that we can do to make sure
03:25 that we're showing God that we are trustworthy.
03:27 We can be trustworthy of exactly what He's given us.
03:30 You know, that's a really good point, Ryan,
03:32 because being a steward is being a manager.
03:34 Yes. And if God...
03:37 If we're going to...
03:38 If we want God to give us big things,
03:40 how can God trust us with the big things
03:43 if He can't trust us with little things?
03:45 So we need to have a budget so we can see...
03:47 See, I'm feeling convicted now.
03:49 I'm going to go home and make a budget.
03:52 And in one website, we can do it.
03:54 I'll get into it later, its'
03:56 as I always advocate that site.
03:57 You can go to the site, it's free.
04:00 And it helps you just to really put a lot of your expenses down
04:03 on a technology.
04:04 So it's just a great tool to use.
04:06 Yeah, that's good.
04:07 So another scripture I have is 2 Corinthians 9:6.
04:11 It says, "The point is this, whoever sows sparingly
04:14 will also reaps sparingly, and who ever sows bountifully
04:18 will also reap bountifully."
04:20 So I mean, you reap what you sow.
04:21 Okay.
04:23 But again, in order for us to give,
04:24 in order for us to make sure that we are giving,
04:27 we have to know exactly how much we're making.
04:29 We have to know much can we afford to sow, right?
04:33 What is 10%?
04:35 How much can we give and gift to our favorite ministry.
04:38 You know, when they donated to Dare to Dream.
04:41 You know, they have to go in their budget.
04:43 You should have
04:44 a philanthropic part of your budget.
04:46 So when they donate to Dare to Dream
04:47 and other good ministries doing good work,
04:49 they know exactly how much is coming out.
04:52 And maybe you don't automatically withdraw,
04:54 they should be able to budget those things.
04:55 Right.
04:57 And then finally one more which is my favorite verse
04:59 on how budgeting really comes together
05:01 is Proverbs 6:6 through 8 that says,
05:05 "Go to the ant, thou sluggard, consider her ways,
05:07 and be wise.
05:09 Without having any chief officer or ruler,
05:11 she prepares her bread in the summer
05:14 and gathers her food in harvest."
05:17 So the ant is budgeting, right?
05:20 The ant is budgeting
05:21 and the ant knows how to budget.
05:22 They go and they rob your picnic
05:25 and all that stuff that they bring in from the picnic,
05:27 they budget and they prepare for the harvest, right?
05:31 I mean, so if the ant can do it, we can do it too.
05:34 And so overall, I think it's just
05:37 there's a simple process I really just wanted
05:39 to get into to talk about budgeting in this three steps
05:43 of how to go about budgeting, right?
05:45 Okay, good.
05:46 The first step to budget is to put together
05:50 an estimated budget.
05:52 You know, many individuals, they will start out
05:54 and they figure out, okay,
05:55 how much do you think you're spending.
05:57 And some people just really don't know.
05:59 You might have an indication by looking at your pay slip
06:01 of what your revenue coming in,
06:03 but do you have any other revenue sources coming in?
06:05 Sometimes business owners have
06:07 multiple revenue streams coming in.
06:09 Sometimes individuals who are freelancers
06:11 have multiple sources of revenue coming in.
06:13 So they don't know exactly how much money coming in.
06:15 Or if you're retired, you have pensions
06:16 and social security and all that stuff.
06:18 Exactly.
06:19 And expenses, we really have a hard time
06:23 trying to figure out what expenses are coming in.
06:25 Some expenses are fixed, some expenses are variable.
06:28 I mean, we might know what is your phone bill
06:31 every single month, do we have an indication,
06:33 do we have any overcharges, do we have any expenses from,
06:37 you know, cable bills, and light bills,
06:39 and electric bills, and gas bills,
06:41 all these things vary from time to time.
06:43 How much money are you paying back
06:45 on your student loans or anything.
06:47 All those things, we have to put down on paper
06:49 to figure out exactly what is, but we have to estimate those.
06:52 So when you're budgeting, you then will put down
06:56 the approximate amount as opposed to an exact figure
07:01 because it might vary?
07:02 Well, the first part is the estimated budget, so.
07:05 Right.
07:07 You know, usually, let's just say it's on a Monday
07:09 and you're putting together your budget.
07:11 You don't know, you know, you might have forgotten,
07:13 you don't necessarily know but this is a process.
07:15 So you estimate, it's a guesstimate.
07:18 This is how much I'm thinking I'm spending,
07:20 but then you get it exact by doing that 30-day
07:23 spending diary over the next 30 days.
07:26 So over the next 30 days, you really just go through...
07:28 If you throw a penny in a well, you write that down
07:31 and you put it down in your budget.
07:32 And you really just get exactly
07:34 how much came out of your pocket.
07:35 Now if it's Christmas time, a birthday season,
07:39 you might not want to do
07:41 your 30-day spending diary then
07:42 because that probably doesn't indicate a good amount
07:46 of how much you'll be spending on a regular basis.
07:49 You know, so maybe you might want to do it 30 days
07:52 but then make for the next month
07:53 to start that 30 days but regardless
07:55 when you dealt that 30 days, then you do it actual budget.
07:59 How much did you spend on your gas bill,
08:02 your electric bill, your heat, all those types of things.
08:05 You write that down in a budget
08:07 and then you try to stick to it.
08:09 I mean again, using or different websites,
08:12 they have different software.
08:13 Free software you can use over the internet
08:16 that you can just insert all your expenditures
08:18 and your revenue on a regular basis
08:20 and then you try to follow those things.
08:21 Okay.
08:23 So now once we've done that, I want to start to talk about
08:26 some ways that we can, that we might bust our budget,
08:30 okay, because it's a lot of things out there
08:33 that bust our budget and makes us spend money
08:36 in irresponsible way.
08:39 So these are budget busters? Budget buster, yes. Okay.
08:43 And we'll talk about some sales strategies first.
08:45 So now, you ever saw the chaos that exists on Black Friday?
08:51 Oh, yeah.
08:53 When every Black Friday, people are, you know,
08:56 literally people have died on Black Friday sales.
09:00 Well, this is a sale strategy.
09:02 And the sales individuals, the retailers,
09:07 they want this type of excitement.
09:09 They want individuals waiting out at three, four,
09:12 five in the morning waiting on that next sale.
09:15 And the bottom line is that, you know,
09:17 most Black Friday sales have occurred at least once
09:20 during the duration of the year.
09:23 But this is on Black Friday.
09:24 So it has to be different than the other days of the year.
09:27 So those prices have happened at other times.
09:32 Yes.
09:33 But they pump up Black Friday.
09:35 This is the day because you'll never see
09:38 another sale for the rest of your life.
09:40 And this is the last day you're going to see this sale.
09:42 So they'll have these sales on Black Friday
09:45 to get that excitement.
09:46 And that excitement brings attention.
09:48 And the goal of any marketer is to get attention.
09:50 So we have to start looking into the psychology of how
09:52 they're getting into our pockets, right?
09:54 So the Black Friday sale is just one of those things
09:57 when you see different shoe lines,
09:59 individuals waiting in lines for various shoes.
10:02 That's a sales strategy.
10:03 And what they'll do is they'll actually,
10:05 when people wait in line for, let's say Nike shoes,
10:08 they'll wait in line and when they get...
10:11 They might release them on, I think on a Monday or Tuesday
10:13 or whatever popular day of the week it is that
10:15 they normally release the new shoes,
10:18 when they have this long line,
10:20 they purposely don't open the door.
10:22 When they get there, they'll decrease
10:23 the amount of supply in actual shoes.
10:27 You will think...
10:29 Logic would say, well, not marketing logic
10:31 or revenue logic, but you say they should have more shoes
10:34 because they should have more available.
10:36 No, they want to make sure that there is a huge demand
10:40 for what they are offering.
10:42 So when you get to the front of the line,
10:44 and you have a size 10.
10:45 And you say, you know,
10:47 let me have a size 10 or 11 shoe,
10:49 and they're sold out, a minute,
10:51 that psychology says that I'm going to be
10:53 the first person in line to come back.
10:56 People actually get mad that they can't spend
10:58 $150, $200 for a pair of shoes.
11:01 They get upset.
11:02 And think about the psychology and it's actually
11:05 a brilliant psychology to get into the minds of individuals.
11:08 People are mad that they can't give you
11:10 $200 of their money.
11:12 I mean, think about that.
11:13 That is just amazing to me. Yes.
11:16 The psychology says the next time they have a sale,
11:20 I'm going to be the first person in line.
11:22 You're going to take my money
11:23 whether you like it or not, right?
11:25 And it's just crazy. Yeah.
11:27 It's about the value that the psychology
11:30 behind putting a certain value on that shoe.
11:34 Exactly. And that's a sales strategy.
11:36 So then you see the lines get longer and longer
11:39 and longer and longer.
11:41 And so the impulse sale strategies,
11:43 it's very easy.
11:45 The sales strategy, individuals will go out
11:48 and they will mark up a sweater or what have you,
11:52 maybe you know, they might be selling $400
11:54 but it's marked up from 10 with which they bought it.
11:57 But there's mark way up to $100 but then they'll say,
12:00 they'll mark it down to $50 and have a 50% of blowout sale.
12:04 Oh my goodness, it's 50% off, I have to go.
12:07 But they're still making 500% profit.
12:10 And this is a simple basic strategy.
12:12 So that's what I call the bogus sales strategy.
12:15 Then they'll have the guilt sales strategy, right?
12:18 The guilt sale strategy is very good where you walk
12:21 into a store and they might, you know, you try on some shoes
12:25 and all of a sudden, you want to try on some more shoes.
12:29 Well, then the person has to go in the back and get you.
12:31 And they come out and they're acting busy,
12:34 and all this stuff.
12:36 And they come out, here's the other shoe.
12:38 Oh, I'm sorry. I'll be right there.
12:39 I'll be right there. Here's your other shoe.
12:41 And all men, heaven forbid that you have to go back
12:44 and have them go back in the back room once more
12:48 because that's just, oh my goodness,
12:49 that's just too much to bear.
12:51 So they go back, and they come out,
12:53 and they're working hard, they're all sweaty.
12:54 And it's, oh my goodness, I had to go way in the back
12:56 and get these shoes.
12:58 And they want you.
12:59 They have salesmen is about have them trial
13:01 as many shoes as possible because they understand
13:03 the more shoes that individuals try on,
13:05 the more they feel guilty
13:07 that they haven't actually bought a pair of shoes.
13:09 So it increases your feeling of obligation.
13:11 Exactly.
13:13 Like I need to buy these shoes
13:14 because I worked the salesperson to death.
13:16 Exactly. And that's actual strategy.
13:19 They actually talk about yes, we want you,
13:22 we want you to act busy, and come out,
13:24 and roll your sleeves up, and all these things.
13:27 I mean, when individuals have chips and things to offer,
13:31 and they have water
13:32 and they want you to feel comfortable.
13:33 Well, you had all my free water,
13:35 why don't you buy some blouse?
13:37 Or you had all my free potato chips,
13:38 why don't you buy a shirt?
13:40 You know, so it's like these are the things
13:42 that they want to feel guilty.
13:43 It's just that little bit to just feel just guilty enough
13:47 to buy that stuff, right?
13:49 That's interesting. So now they have...
13:51 Here's the impulse sales strategy.
13:53 The impulse sales strategy, this is actually a sneaky one
13:56 where what they'll do is if there's two, like to say.
13:59 Let's say Macys, right?
14:01 When I was in New York,
14:02 there was many Macy's around New York.
14:03 Right.
14:05 There's a Macy's in Brooklyn, there's a Macy's in the Bronx.
14:07 They've done their research, they know that the people
14:09 in the Bronx Macy's don't go to shop at the one in Brooklyn
14:12 and vice versa.
14:14 So normally you go to the same Macy's
14:15 in the same neighborhood.
14:17 Right.
14:18 So what they'll do is they'll switch, you know,
14:20 they'll have a sale at Brooklyn,
14:23 in the Brooklyn Macy's about this sweater,
14:26 and then they'll take that particular sweater
14:28 and they'll ship it up to the Bronx.
14:30 So they'll be a decrease supply in the place
14:33 they'll have the sale.
14:34 So when you go to the Brooklyn Macy's,
14:37 you look around and there's no sweater left.
14:39 "Oh, wait, where's the sweater?
14:40 It was in sale and I have..."
14:42 "Oh, sold out, sorry. It's already sold out."
14:44 So now you're in the store and so the goal is just
14:48 to get you there, the only goal is to get you in the store.
14:51 In the other store across down,
14:52 so the Brooklyn one and the Bronx one...
14:54 Yeah, so the Brooklyn...
14:56 Brooklyn customer goes to the Bronx store.
14:59 No, the Brooklyn customer goes to the Brooklyn store,
15:02 they don't have any sweaters left.
15:04 Got you.
15:05 So now they're upset saying, "Where's the sweater?"
15:07 And the similar way as the Nike, you get there,
15:10 there's no sweater, you're upset now saying,
15:13 "Doggone it, I should have been the first one when I saw that
15:16 so I should have acted sooner,"
15:17 because you're thinking that they sold out.
15:19 But now the trick is you're in the store
15:22 and that's all they need.
15:24 Once you're in the store, they can sell you,
15:25 they can do all this and that.
15:27 But all the sweaters that you wanted to buy,
15:29 they're up in the Bronx.
15:30 You're not going to go up in the Bronx
15:31 but you're gonna pay full price on other things
15:34 make sure they get more of your money.
15:36 And they do that all day long to make sure
15:38 they can get people into the store, right?
15:42 So...
15:43 All these little tricks. These little tricks, right?
15:45 Of course, they have
15:47 the credit card discount strategy
15:48 where individuals go in, they get to the front
15:51 and they say, "Did you find everything you need today?"
15:54 Oh, yeah. "Oh, yeah.
15:55 I found everything very nice."
15:57 "Okay, well, do you want to credit card?"
16:00 "Oh, no, no, I don't..."
16:01 "Well, you get a 10% off." "Oh, really?"
16:06 "How much did you spend?" "Well, I only spent $50."
16:09 "Well, if you spent $100, you get 10% off."
16:12 And it's a strategy that
16:13 if you spend X amount of dollars,
16:15 you get a discount.
16:16 So you've actually you spent 50 originally
16:18 or you planned on it
16:19 but now you have to spend 100 to get 10% off.
16:23 Now you're spending 90
16:24 but you think you got a discount.
16:26 So these are the little tricks of strategies
16:28 that people use and I'll get on...
16:31 And then the lower strategy is always, it's easy one,
16:33 you walking pass the store, they've done research on
16:36 aromas and smells and scents.
16:38 So as you walk by...
16:40 Remember those cartoons? Yeah, yeah.
16:42 You see the wafting aroma.
16:45 And then they start doing this like the old Popeye cartoon
16:47 so they start doing that.
16:48 So they start going down and it's like, "Wow," you know,
16:51 and the music, they research the type of music
16:54 and which areas to play the type of music.
16:56 So all these things together
16:58 just make people get in to the store.
17:01 And that's just the bottom line.
17:03 So again, but and then also another budget buster
17:06 is what we do for ourselves with our emotions, right?
17:09 Never shop if you're too happy.
17:12 You just won the basketball game
17:13 so now you want to go shopping and celebrate with the fellows,
17:16 usually go out to eat or something like that.
17:18 Never shop if you're sad.
17:20 You know, good things to do if you're sad essentially
17:22 just make sure you can exercise,
17:25 you know, prayer, work, get to work, community service,
17:30 I mean, I know of individuals who have been sad or down
17:33 to get involved and actually give in to something...
17:35 Absolutely. Is a great way to do it.
17:37 And you're actually giving back,
17:39 you're not spending any money, you're spending your time.
17:41 So there's a great way to go about doing it.
17:44 Absolutely.
17:45 Never shop if you're bored
17:47 and never shop if you're too anxious, okay?
17:49 So they say, again, obviously if you're hungry never shop
17:52 and go to the store.
17:53 Right.
17:55 So always write a list before you go to the store.
17:56 The person who writes a list, you stick to the list,
17:59 you'll spend less money.
18:00 So that's always been proven.
18:01 So these are just emotional busters
18:04 that make us spend more money, so.
18:07 That's some good stuff, because, you know, you don't,
18:09 when you go to the store,
18:11 for me when I go to the store I'm thinking,
18:13 "Okay, I have to get this, this, this."
18:15 I don't want to stay in there forever.
18:17 But they do have all of those little things,
18:20 you smell the fragrances, you know,
18:23 all of the little subliminal ways
18:26 of getting your attention.
18:28 So I have a way that you can use your budget
18:30 to calculate your finish line.
18:32 Okay.
18:33 The finish line or what lot of finance folks call,
18:36 the magic number.
18:38 This is what you're striving to get to,
18:41 this is the ultimate number of what you're trying to get to.
18:44 And essentially this is five easy steps, okay,
18:48 that you can just...
18:50 And I urge you all to write these down
18:52 and use this opportunity to just go
18:55 and calculate your own finish line
18:57 because I want people to walk away
18:59 with something here, right?
19:00 The first step is you have to have a budget
19:02 and use the budget to calculate your monthly expenses, okay.
19:06 When I say, "Where you trying to get to,"
19:07 I mean, when you're retired how much should you have saved
19:12 to make sure that you can sustain yourself
19:15 for the rest of your life.
19:17 Right. That's the magic number.
19:18 The goal of, it's all about financial independence.
19:23 Making sure that we can live, even if we didn't have to work,
19:26 we should always be working at something.
19:27 I'm a firm believer that we should never really retire.
19:31 But, you know, I think
19:33 retirement is more of a worldly term
19:35 because if you're really passionate about something,
19:38 it doesn't go because
19:39 you're not making any income from it.
19:41 So we should all be working on something
19:42 even if we're volunteering.
19:43 But if you didn't have to work, right,
19:46 then you should be able to budget in such a way
19:49 that you saved X amount of dollars
19:51 and you can live off your savings
19:53 for the rest of your life.
19:55 That's a magic number that we should all be trying
19:57 to work towards, okay?
19:58 So the first step is to essentially calculate
20:01 your budget to discern your monthly expenses.
20:04 How much your expenses are there?
20:05 Three thousand dollars a month,
20:06 is it fifteen hundred dollars a month?
20:08 Whatever your expenses are
20:09 but unless you have a budget, you don't know.
20:11 Right.
20:12 The second step is to take your monthly expenses,
20:15 times about 12, that makes your yearly expenses.
20:19 So now, you know, now obviously if you are 30, 40 years old,
20:25 your expenses are gonna go down slightly.
20:27 So you want to figure out exactly
20:29 what would your monthly expenses be
20:30 during retirement.
20:32 The more you have your monthly expenses,
20:33 obviously the more you're going to have to save.
20:35 So that's more of a, I guess, more of a liberal way
20:37 to calculating your retirement to say, "Hey, I want to retire.
20:40 I want to, probably want to do it up," you know.
20:42 So a lot of times when I was putting together
20:44 financial plans, I would reduce
20:46 their current expenses by maybe 20%.
20:50 But some individuals say, "No, I want 100%
20:52 because I really want to have a full retirement
20:54 or you know what, do it by 30%
20:56 because I'm going to live a whole lot meager
20:58 and I want to save more."
21:00 So it really all depends on your lifestyle if you,
21:02 as we talked about in the other show,
21:03 have written down your goals and what you really want to do.
21:06 So, again, step two, multiply that by 12.
21:08 Now, step three, divide that yearly total
21:13 by a conservative rate of return, okay?
21:16 This conservative rate of return usually,
21:19 now if someone says 8%
21:21 is a conservative rate of return,
21:22 that's not conservative, okay.
21:24 You might, 5%, that's a rate of return that you may
21:29 or may not get every year more than likely
21:31 between 2 to 3% is a very conservative rate of return.
21:34 But if you divide your yearly expenses
21:37 by the conservative rate of return,
21:38 essentially what you're gonna get
21:40 is exactly the total amount of money that you have,
21:43 if you times that total amount of money
21:46 by that rate of return, that's gonna give you a salary
21:48 that you can live on from your expenditures.
21:51 So that's going to be able to cover all your expenses
21:54 and so, and that's the magic number.
21:57 So once you've done that, divided it by...
21:59 now you subtract.
22:00 Step four is subtract your current level of savings
22:04 from that large number.
22:05 Let's just say, you've calculated, you know,
22:09 "Okay, Ryan, $500,000 is my magic number
22:14 and I have to get to $500,000 and, you know,
22:17 but I've already saved, 50."
22:20 So now that number is $450,000, right?
22:24 So now you take that, that's now $450,000 away,
22:28 you have to go step five.
22:29 You go to a website like, FINCALC,
22:32 and say how long is it going to take
22:36 based on my current budget to get to that $450,000?
22:42 And that's the plan that you work on for the rest,
22:45 every single day you need to write that number down,
22:49 you need to put it on a vision board
22:51 and you need to say,
22:52 "This is a number that when I retire,
22:54 I'm gonna have to have
22:56 at least this amount of money in my account.
22:57 So I have to start working to that right now, today."
23:00 And everything else, you start planning all around that, okay?
23:03 And that's your magic number.
23:05 So now as we do that there are gonna be things, again,
23:08 that consumption is 70% of our GDP,
23:12 gross domestic product.
23:15 So as we have to start understanding
23:17 exactly how we're spending our money
23:19 and what we're spending our money on.
23:22 So I've just got a few, I know you read,
23:25 Millionaire Next Door, I think it's a great book.
23:28 And I wanted to give a couple of examples of what,
23:32 how much money we could actually save
23:35 by spending money on things that we could actually,
23:37 that were actually less expensive, right?
23:40 So now, let's talk about a suit, right.
23:43 Someone might say a designer suit,
23:46 some people might spend as much as $2,500 on a suit.
23:50 Now, do you remember how much Millionaire Next Door said,
23:53 average millionaire spent their entire life,
23:56 the most they've ever spent on a suit,
23:59 you remember how much it was?
24:00 It was only $399 and that's the most they've ever spent.
24:04 They've polled a lot of millionaires,
24:07 and they polled all these millionaires have said,
24:08 "How much have you ever spent on a suit?"
24:11 The most that they were able to say was $399,
24:14 that's the most.
24:15 So most of the time, they say, an 100, $200,
24:17 they buy them off the rack, they don't get them tailored
24:20 and all, fit it all that fancy matches,
24:22 but they just $399.
24:24 So now 2,500 for the fancy smashy designer suit
24:30 versus $399, that's a $2,101 difference.
24:35 Wow.
24:36 That saved for 30 years, if you're saving money on suits
24:40 in savings at an 8% return.
24:45 That's a lot of money just by making sure you don't buy
24:47 suits or buy suits that are,
24:50 that the world says we should buy
24:51 the fancy smashy suits.
24:53 Right, right. So shoes.
24:56 Good pair designer shoes might cost $575.
25:01 Well, if you buy the most that an average millionaire
25:05 has ever spent on shoes is $140.
25:08 So...
25:09 Are these men or women, or both?
25:11 These are men shoes here. Okay.
25:12 So I should have looked up at women shoes...
25:15 Because, you know, I'm thinking...
25:16 I know, I was thinking, I don't know about you.
25:18 I don't know how the women millionaires think.
25:22 But I would imagine from what I've seen, people tend to,
25:28 when they have a lot of money they tend to spend less.
25:30 Right. Yeah, they do, they do.
25:32 And, you know,
25:33 the first millionaire I ever met,
25:35 he was worth about a half a billion.
25:38 And he was dressed like he just rolled out of the bed.
25:41 And I met him, he had island.
25:44 My father's friend said,
25:46 "Ryan, do you know who that is?"
25:47 He said, "Do you see all these 50 foot yachts,"
25:49 he said, "He owns all this.
25:50 You see, he owned the dock, he owns all the property
25:53 with the dock, he owns all the stores,
25:55 the fancy stores and all that land,
25:57 all that real estate, he owned all of it."
25:59 And I was only 12 and I said,
26:00 "Well, he's not dressed that nice,
26:02 he can't be worth that much."
26:04 And I didn't know. Right.
26:05 I didn't know and, I mean let it.
26:08 The individual who's rich but acts like they're poor
26:13 will forever be rich but the individual who is poor
26:16 but tries to act like they're rich
26:17 will forever be poor.
26:18 That's right.
26:20 And so that was the first time I ever got that life lesson.
26:22 And so shoes $575 versus the most
26:26 that a millionaire would pay on shoes is $140.
26:29 That's a $435 savings, that over 30 years
26:32 and 8% is $50,000 or $49,000.
26:35 So that's just basic savings that we can have
26:38 by just making sure that we're spending money,
26:41 our money in the right place
26:42 at the right time using the budget.
26:44 And so, I mean, I just can't say enough
26:48 that we have to make sure that we're spending money
26:50 according to what God's plan is for us
26:52 but not what the world's plan wants us to do
26:55 which squanders us and makes us broke.
26:57 Right, right.
26:59 On that note, I mean, that...
27:00 What better note is there
27:02 to close on except your takeaway.
27:04 Absolutely.
27:05 Let's check it out. All right.
27:07 Sounds good.
27:14 In Luke 14:28, Jesus says, "For which of you,
27:17 desiring to build a tower, does not first sit down
27:20 and count the cost,
27:21 whether he has enough to complete it?"
27:23 We as Christians should all be using Christ resources
27:26 to build towers of righteousness,
27:28 retirement, a new home, a new business,
27:30 college savings for our children,
27:32 tithing to your church, giving to feed the homeless
27:35 and donate to your favorite ministry like this one,
27:37 Dare to Dream on all righteous towers.
27:40 But all need to be calculated with your budget.
27:42 No matter your income, start building today
27:44 to build your tower tomorrow.
27:46 As always, if we at Dollars and Sense can help you,
27:48 please email me at
27:52 or chat with us
27:53 on the Dare to Dream network Facebook page.
27:55 Until next time be the change you want to see,
27:57 and remember the purpose of life is a life of purpose.
28:00 Be blessed.


Revised 2021-05-20