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.

WHO:

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.”

The 70/20/10 Principle 

70% of income goes to Life Expenses 

Of the 70%:

• 60% goes to everyday expenses (rent, groceries, car payments, insurance, etc) Expenses that take care of the necessities.
• 10% goes to luxuries (dining out, shopping, travel, whatever tickles your fancy, enjoy life)

20% of income goes to Savings / Investing

Of that 20%:

• 80% goes to Savings - until specific goals are met. (Emergency fund, 3 months living expenses)
• 20% goes right into investments (Equities, Funds, Crypto, Real Estate, etc)
• Once those savings goals are met - take the 80% that was going into savings and add that cash on top of debt payments you are trying to pay off. Still invest the 20%.

 See ELEVATED FINANCE WALKTHROUGH BELOW

10% of income is given away

• This is the most important. If you do not give, you are living from a place of lacking instead of a place of abundance.  
• Trust me, life is SO much more incredible when you live from a place of abundance. Put into a separate account with a card - use it as your giving card. Look for opportunities to help others or tithe. 
• Plus, one of the laws of nature is in full effect here.

I use the app Qapital and set Rules to automatically transfer these percentages to my Goals (Emergency Savings, 3-month expenses).  

Lifestyle Change - 2.0 Version of yourself

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!

ELEVATED FINANCE WALKTHROUGH 

What Are Your Goals? 

Ex.

1. $2500 - $5000 Emergency Fund
2. Debt Free
3. $8500ish Three Months living expenses 
4. OPTIONS - This is what you get in Lifestyle 2.0 (Get clear on what that looks like and costs) - another video and post coming soon.

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

• $1,050 Debt Payments
• $800 Rent (20% MAX of monthly income) 
• $100 Insurance 
• $500 Groceries
• $70 Gas 
• $280 Budget Luxuries (10% of $2800) 

20% = $800  - Transfer first thing when you’re paid

• 80% = $640 CASH
• 20% = $160 INVEST

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 

THE COMPOUND CRUSH DEBT PLAN

20% Of $4000 Monthly Income = $800 —> 80/20 Save/Invest

•  80% = $640 (SAVE --> NOW USED TO CRUSH DEBT) 
•  20% = $160 (ALWAYS BE INVESTING) 

CC#1: $1000 debt - $100 monthly payment

• Normal Payment $100 
• ADD $640 (The 80% of the 20% saving/investing) 
• New month debt payment = $740 p/m until paid off

CC #2: $500 debt - $50 monthly payment 

• Normal Payment $50
• ADD $100 CC#1 Payment + $640 
• New month debt payment = $790 p/m until paid off

Car: $400 monthly payment

• Normal Payment $400
• ADD $100 CC#1 Payment + CC#2 $50 Payment + $640  
• New month debt payment = $1,190 p/m until paid off

Student Loans: $500 monthly payment

• Normal Payment $500
• ADD CC#1 $100 + CC#2 $50 + Car $400 + $640 
• New month debt payment = $1690 p/m until paid off

****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. 

Final Notes: 

• Adjust the 70/20/10 principle only on a yearly basis. Why? Once the principle is set, it is set. This helps control unnecessary spending, premature lifestyle upgrade, and bad financial habits.

• Remember ALL extra cash intake or pay increase (bonuses, dividends, gifts) you receive in the year go directly to a Saving/Investing/Giving which still follows the 70/20/10 principle, you of course have the freedom on how to divide this cash up but do not use it to increase your lifestyle. Use this to determine how much more your monthly payments can go up as you’re crushing your debt. (Example $1000 gift - $800 goes towards saving goal or to debt payment, $200 goes towards investing) 

• Do not increase your living expenses by prematurely increasing your lifestyle! I shoot for the 3 Rule, only upgrade every 3 years or if income has 3x

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