Participants: Yvonne Lewis (Host), Ryan Mack
Series Code: DAS
Program Code: DAS000017S
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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' mint.com 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 mint.com 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 fincalc.com 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 dollarsandsense@3abn.org 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