That's what we are diving into today.
I'm not a financial advisor nor an investment advisor - I am merely teaching you the changes I made in life with the system I applied that has completely transformed my personal financial portfolio.
My goal is to have you leave with the knowledge and system to be a master of your own finances with a plan to crush your debt and stack cash for the rest of yo' life.
Three years ago, I lost everything financially, found myself living in my car and living off breakfast burritos working two jobs.
What happened? - I financed a business with credit cards. STUPID. Especially if your cash reserves and cash flow don’t even come close to the amount you finance. The risk is massive and if you fail, it will cripple you.
The company who “franchised” me their model got shut down by the FTC, yes the Federal Trade Commission. These are the guys who also told me to finance the business with multiple credit cards 😑
That $70K I invested with them and their promise of making money online, just poof, disappeared and now I was stuck with about $5K a month in credit card payments (with interest) making $0 in return from the company with no chance of any return from the company, and only about a $4500 monthly income total working both jobs without any of my other living expenses included.
This is called drowning.
After lots of failed strategizing, advice, and thinking of how I can tackle this mountain of debt while drowning, I eventually filed for bankruptcy and accepted the loss.
I learned a massive lesson.
The goal is to fail hard, fast. But your choices, response, and what you learn/apply after the big fail - are what sets the next direction of life.
Since then I have made changes and implemented some financial principles that have allowed me to thrive.
I may not be a billionaire (yet) but shit-taki mushrooms, at the beginning of 2021 I had about $1000 to my name, no savings, no emergency fund, small ROTH IRA investment (only because someone helped me 5 years ago set it up), no other investments, and living month to month on money.
Now starting 2022 - I’ve been able to save a $5000 emergency fund, have about $10,000 invested ($5000 coming from 2021), and continue to save/invest $1000+ per month all within a year's change.
That’s called Progress, my friend. And that is what life is all about.
So how did I do this? What changes did I make in order to bounce back? Below are the changes I made and what worked for me and I hope you can take something away that can help elevate you too.
First and foremost, people who want to make a change think they need to change the WHATS and HOWS in their life to achieve the results. Which is not enough. I needed to change WHO I was in order to have the WHATS and HOWS work to successfully achieve these results in my life.
I am a successful investor. I am financially fit. I am a master of my finances. These identity changes shifted the way I approached my finances and situation because someone who is a "successful investor" tracks their money and investments.
I raised my standards- and got clear on what those look like - then changed who I am. “You are currently living at your lowest standards, not your highest dreams.”
70% of income goes to Life Expenses
Of the 70%:
20% of income goes to Savings / Investing
Of that 20%:
See ELEVATED FINANCE WALKTHROUGH BELOW
10% of income is given away
I use the app Qapital and set Rules to automatically transfer these percentages to my Goals (Emergency Savings, 3-month expenses).
The older I get, the less I f&*%s I give about what people think about me, where I am at in my life, and what I am doing with my life. Before I was all about trying to maintain an image and project it out to the world. Now, my pocket full of f&*%s is empty. Now that it’s empty, my bank account grows, my mental health is beautiful, and life continues to provide opportunities that pull me up to new heights.
I made the changes necessary to live below my means and live by the 70/20/10 principle. All of these changes called for a battle with the EGO, so be prepared, but I can say once you walk out victorious, life only goes up and so does the bank account!
What Are Your Goals?
Ex.
What is your monthly take-home income? (after taxes)
Monthly Income $4000
What are your Monthly Debt Payments? And totals?
CC#1: $1000 debt - $100 monthly payment
CC #2: $500 debt - $50 monthly payment
Car payment: $400 monthly payment
Student Loans: $500 monthly payment
Total monthly Debt Payment = $1,050
70/20/10 PRINCIPLE
70% = $2800 Living Expenses Budget
20% = $800 - Transfer first thing when you’re paid
10% = $400 - Transfer first thing when you’re paid
—————————
✅#1 GOAL - Save $640 in cash per month until $2500 is hit (4 months), Invest $160 per month
✅#2 GOAL - Debt Free
20% Of $4000 Monthly Income = $800 —> 80/20 Save/Invest
CC#1: $1000 debt - $100 monthly payment
CC #2: $500 debt - $50 monthly payment
Car: $400 monthly payment
Student Loans: $500 monthly payment
****ALL extra cash intake or pay increase (bonuses, dividends, gifts) you receive in the year go directly to the Saving/Investing/Giving 70/20/10 rule. Use this to determine how much more your monthly payments can go up as you’re crushing your debt. Do not increase your living expenses!
Example $1000 gift:
- $800 goes towards a saving goal or to a debt payment - all goals met? Invest all of it, put towards saving something you want - just don’t blow it. $200+ goes towards investing. Always Be Investing.
✅#3 Goal - Now you can save $1690 per month ($640 + $1,050 previous monthly debt payments) until $8500 is hit.
✅#4 Goal - OPTIONS, Lifestyle 2.0 - Reassess your 70/20/10 Principle. Save to buy shit you like or want, Invest more (my recommendation), if and only IF all your saving goals are reached and debt-free can you now consider upgrading your lifestyle.
Once again, these principles are what work successfully for me.
Take what you want, apply, test, gather feedback and optimize them in your own life.
The most important change for me was handling my finances. Like my mentor says, “There’s a lot of broke people and I don’t want you to be one of them.”
That statement stands true behind me as well.
Thanks for reading 🙏
Keep going,
Kyle
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