Are you looking to become financially free? Clay Clark and Paul Hood, CPA explain the 4 steps that you must take if you want to achieve financial and time freedom during this lifetime.
STEP 1 – Cut your expenses by 3% by automating your savings
STEP 2 – Increase your income by at least 3% (Beat your boss to work every day)
STEP 3 – Commit to automatically investing 3% of your revenue
STEP 4 – Get compound interest working for you!
Yes, yes and yes. Thrive nation. On today’s show we are talking about how to automate your savings, how to automate your savings with Tulsa’s number one CPA in every way. He’s always organic, so don’t panic. I introduced to you Paul Hood. How are you sir? I’m amazing clay. It’s a great morning. I’m excited about life. Things are going great. We’re working. We’re, we got more work than we can handle, but we’re wanting more and the way we get more is by helping other people get what they want. We don’t get to do on today’s show is we’re going to be talking about how to automate your success. Yes. I think a lot of people, a lot of people are out there driving through life, driving around without a gps. You right? Why? Well, because they don’t, it doesn’t really matter if you have a gps, if you don’t know where you want to go.
Okay, so let’s, let’s say, Paul, that we know where we want to go. Okay. All right. I’m not asking for the location of your, of your new chateau that you’re building, but it’s in Kuwait to somewhere, somewhere. Okay. So if we were to punch in the coordinates, boop, boop, boop, boop on our GPS device, right? I know most people have a Google maps app they use, they probably don’t type in a booboo, but sounds like a phone or r two d two but the point is you punch in the address, right? You Punch it in and it tells you turn by turn, navigation by step, how to get there. You know it, it doesn’t just leapfrog you there. It says step by step, go here, turn here, go this way. And it might be construction on the way, but you did get guide you through the path.
That’s exactly right. How long would it take you to get there? From here? Right now in our, it’s probably 25 minutes from here. Okay, so you punch in the coordinates. Boop, boop, boop. So let’s say right now you’re listening today and we’re going to go to destination success. So us destination six says, so use our listing. You are listening today and you say, I want to be successful. Yes. Uh, but right now you don’t know. You don’t know what to do. That’s cool. But as long as we can punch it where we want to go, right. That’s important. Yes. You start with the end in mind. You, you know, we can’t help you be successful whether it’s in your physical and your marriage and your spiritual walk or, and your financial walk. Unless you define where you want to go. And it’s just same thing with gps. It doesn’t matter how many buttons you push on that. If you don’t
tell it where you want to go, it’s not going to give you good information and you’re just going to go in circles.
So let’s talk about where we want to go. If you’re out there today, we assume you want time, freedom and financial freedom. Perfect. And let’s talk about money for a second. Paul. If you have $1 million in a bank account, okay, how does that allow you to buy back your time?
Well, it it, you know, time, retirement, what have you call it? It doesn’t take age. It takes money and, and so the investments that you, you accumulate will create revenue that will, because you show up to work every day, you get a paycheck. And so you’re trading hours for dollars. And when you save enough and you have enough money in the bank, you no longer trade hours for dollars. The dollars are making money themselves. And so then you can do what you want with your time.
So let’s say outlet. Let’s just say hypothetically out there if, if you’re, if you’re listening today and you want time and financial freedom and you knew that on today’s show that you could specifically learn the four steps you need to take to get to where you want to go financially. Ah, what’d you want to take notes? I think you will. I would think you would probably want to, so my listing right there, maybe all you have near you as an etch a sketch. Mm Sh that’s kind of a weird thing to have the interest to get it and it just gets me where they just get you to draw something great that your friend would go. Sh
I got a funny story about that. You know in today’s technology, these young people, they can come in and they can turn on the computer and they do all kinds of things. When my youngest son was, I don’t know, he was probably 10 he wasn’t a baby who was 10 he, he found an etch, a sketch and he asked me how do I turn this thing on? He was looking for the on button.
Come on, there’s no on button on the edges and the edge sketch books. If you have a piece of paper and a pen, that’s all you need to win. But I encourage everybody to take notes because we’re going to walk you through the four proven steps that you need to take on how to automate your success. You get it kind of look under the hood. It’s an automotive reference autos mate. Wow, you guys are cool. I’m a write that. All right, so step one coming in hot from our Home Office is you want to what? Jason? Cut your expenses by 3% by automating your savings now. Okay, so let’s talk about this. Uh, you are listening today. Let’s say that you are an employee. Yes. Or you are an employer. Either way, you need to get a paycheck every week, I would assume every two weeks. And you have taxes withheld. If you’re in a self employed person, by the way, and you’re not giving yourself a paycheck every week and having your taxes withheld. Paul, why is that a bad deal for you?
You’re going to get audited. The IRS doesn’t like to see portable business that doesn’t pay some social security taxes for the owners. So come see me, made me
quit doing that. You could end up in a jail cell next to a guy named Lou who, who’s not seen a woman or a man in years. Not a good place. You’ll go there, they’ll let me tell you the rest of it. All I can say is when you’re in that situation, don’t drop. So just whatever you do, just let it, let it leave it. If you’ve drawn, if you drop it, don’t pick up. Just walk away. I didn’t need that soap. That wasn’t me. So anyway, no offense to him out there named blue who was in the prison system right now. Who has we love you Lou. He loves you. Not In that way. Okay, so here we go. So step one, you want to cut your expenses by 3% by automating your savings. Now, Jason, you did this a walk listeners through the process that you went through to automate your savings.
Well one, it helped to have the insight that that was something I should do, like telling the listeners, do you know, cut at least 3% of your expenses or automate at least 3% that’s a great place to start. I took um, I guess, uh, Andrew’s Cue, he does 25 I decided I want to start with saying, oh, he’s a sick freak. He really is. He’s 20 years old. He’s married and he has a rental house. Yup. He’s trying to buy three more this year. And he said it’s a quarter of all the money he makes. He’s a sick guy. He know ethics back to you there. Yeah, no. So I just started with 10 and it was as easy as going to my direct deposit form and I was filling it out for thrive circling the percentage or the amount that I wanted to save. Yeah. And then just turning it in.
And then Lo and behold, every time we get paid magically money goes from my paycheck into a savings account. Are you saying that all you did was automated your savings by filling out a form? Yup. And now. Now don’t you miss it though? I mean, aren’t you running around going, why can’t afford to get all these, I mean, are ridiculous. Those, those ics over there at quick trip, I used to buy icees all the time and orange whips and I can’t buy any of that anymore. I mean, are you, are you destitute or you are you, are you one? I don’t know. I don’t know what an orange whip his butt. No, whipping your hair back in the day, like, I dunno, the 80s people would wear Jean jackets, they would have phones. It would plug into a wall and the phone would ring. It’d be like your aunt calling from Minnesota long distance and you would drop everything and answer that because it was long distance.
It was a big deal, right? You had a cable box. It was attached to a cord to the TV. If you want to go to ESPN, you hit the button and it goes to channel 25 and by the way, it was faster than than the satellite now, right? Was it was quick. It was a cable that will plug in. Um, a lot of times you could manipulate the cable box and watch like a Mike Tyson paper view without paying. If you were a crafty guy, there’s a lot of things. When the 80, she had a big button on a Jean jacket, you would typically wear a button would say Paula Abdul or a milli Vanilli or new kids on the block. There’s a lot of great things, but one of the great things from that time period was we had a icees Cooley’s. Have you seen coolies and ics?
Kmart? They would have these things to do. What’s Kmart? So they’d have these icees, icees and Cooley’s. They had the cherry, which was a good flavor. Cherries are great for that, but that’s, you ever mix? Did you ever meet Coca Cola in the Chair and the cherries? Oh yeah. Lots of his. I was like, I’ll just get crazy. Let’s do it. Why did they call it? It used to call it a suicide. Why? Why does that call a suicide? You just put a little bit of everything in there and it’s because some of the people that were working behind the counter at Kmart looked like they wanted to commit suicide while serving it. So anyway, so what happened is you, they had option that came up with called the orange whip and a, it was made famous in the Blues Brothers movie where uh, John Candy, he’s a, he’s a member of the law enforcement community.
Have you seen the blues brothers a long time ago? You haven’t really, have you seen the movie victory? No. No I haven’t. Paul, have you seen the blues brothers? Of course. Let me see if I can pull up this clip here. This is the orange whip blues brothers. So the blues brothers, you know the premise of the show guys? Absolutely not. One of them gets out of jail and they’re trying to save the Carrie Fisher who played layer and a star wars. She is the love interest and there’s Jake and Elwood blues. There are brothers who were raised in an orphanage and they go to jail for doing all sorts of scams. And somehow the brothers come up with this idea that they are on a mission from God and their goal is to raise money to support the orphanage, which needs funding. Right? But they’re going to raise the money by violating all sorts of laws in stealing it to give to the orphanage.
Sounds reasonable. And so they were in a band before they had to go to jail for violating all sorts of uh, ordinances and laws. And so they, the whole movie, they’re trying to get the band back together cause they’re on a mission from God. That’s the whole premise of the movie. And somehow along the way, uh, one of the Brothers Irritates Carrie Fisher who then the rest of the movie tries to kill them because she’s so upset that he had an affair on her. And then there is a Nazi, a member of the Nazi party, the last member of the Nazi party based in Chicago who somehow they offended as well. So he’s trying to kill them the whole time. And Carrie Fisher is as well. And they’re trying to organize a tour, a concert tour to raise money for the orphanage. And so there, the finally the movie kind of climax is when they’re appearing there after doing a performance and they’re performing live in Chicago. And um, the members of the law enforcement community are all their cars are going to arrest them immediately after their concert. And so John Candy, his, who was the, uh, head of the police department, his talk was, let’s go and let it perform. We’ll enjoy the show and then we’ll arrest him. And so he offers all of the state troopers who were with him, orange whip. So let me queue it up here. This will change your life. Here we go.
Here we go. Here we go. Oh, that’s an orange whip. Orange whip, orange whip.
There it is. But it was a hot, it was a hot beverage in the day. Made an impression on you clay, didn’t it? It was an orange when I do it though. We weren’t whip to Orange whip. Wasn’t organic one good for, you know, we don’t even know what was in that thing. And they use plastic straws to drink it. Right. And it had a little bubble top though. Remember the bubble time so you can get extra in the cup and not a flat top but a bubble on top, on top. So it was a kid, there was a cop and it is a cup. It wasn’t going of animal on that go look what animals on the outside was like a cat cartoon cat or something. The bubble top. You’ve got that extra and they’re orange whip and the straw had like a spoon on the end of it anyway is destroyed. And it was kind of like a, it was a red straw and it was
kind of um, it was, it was, it was like a cloud, like material. It wasn’t thick. No, no, it was light. It was a puffy, it was more organically friendly back then that, that was the deal. So anyway, so step one,
you want to cut your expenses by 3%. My automating your savings and you’re telling me that you have cut your, your income by 10% it automatically goes into savings. Yup. And you can, you can still afford figured Lee speaking all the orange whips you want.
Yeah, I could afford a car repair. I could afford her window repair. And what’s funny is he asked me if I miss it. I don’t because I don’t even notice it. It was way more, oh go ahead. Go ahead. No, it was way more frustrating and kind of anxiety provoking when I looked at my expenses are my paycheck every pay period and said, okay, I need to take x amount of dollars out and put it in this account. Now it does it for me. Don’t even care. See Clay in it. I want to make sure people understand this because we’re saying cut your expenses by saving and see that doesn’t make sense. But what happens is people naturally spend the money they make and that’s why Warren Buffett says to save before you spend. And so when you have less to spend, you automatically saved. So it’s kind of a backdoor way of reducing your expenses because you have less money to spend. But the reality is, is 99% of the people that we put on this path, they don’t fill it. They don’t, they don’t understand. It’s magic. Almost. There was an article I’ll pull up on the big screen and I’ll put a link to it here. Chase to put it on the show notes here and a, we’ll put on the show notes. We’ll put a link to Marshawn lynch. He is a, a famous football player, right.
Known as beast mode. [inaudible] I’ll put it on the big screen. And Marshawn played for the Seattle Seahawks a victory. Did you, are you familiar with the profit
body ever watching pro football? Um, I don’t watch it a whole lot.
Well he was a, uh, university of California running back, standout star and he went to the Seahawks and we played for the Seahawks. He had a really good career there and he decided that he didn’t want to play there anymore and he wanted to retire in or spin his final years. He wanted to play his final years in front of his home crowd in Oakland because that’s where he’s from. And he grew up in the projects there and he really wanted to play in front of the home fans and he wanted to give back. So this guy buys a lot of tickets for inner city kids so they can come to the game for free. And the Seahawks were like, you know, it’s their choice. They said, we’re not going to trade you to the Raiders. And he’s like, okay, well then I’ll just sit out here.
And they’re like, who in the prime of their career sits out an entire NFL season? Maybe even too. And he’s like, well, just so you guys know so far I’ve earned 40, 49 point $7 million and I have not spent a dime of my money. And they’re like, how? And he goes, well, I got an endorsement deal from Nike, Pepsi and skittles and progressive. And, uh, I’ve lived off of that and I haven’t spent it most that either. And they’re like, how? Well the NFL, you get a per diem check. Uh, Jason, are you familiar with a per diem check? Yes. So basically per day when you’re in, when you’re in the NFL, if you, if you’re on the road, you’re traveling, they will pay for the hotel. They’ll also give you, you know, hundreds of dollars to spend on food. He lives entirely on the per diem and a fraction of his endorsement costs. So he was able to say, you know what, I don’t want to play next year. And he didn’t have to play because there wasn’t money motivated. He was able to buy his time back exactly as a result of saving money. But that’s gonna require right now today you taking the action step to automate your savings. If, if there’s a, it’s a weird phenomenon, Paul, but if you save the money first, you won’t miss it.
That’s right. And you will not, it’s, it’s, there’s something psychology there. People don’t actually look at their checkbook and say, Hey, I’ve got money left. I need to go spend it. It just, you spend, it’s a natural thing. You spend what you have. And so it’s the same principle of people that have four one ks at work. Um, and so business, uh, we really, really clay, we really work with business owners to pay themselves first to take 3% of their gross and put it over onto the, uh, outside. I kind of tell them, and, and you’re going to run with this. I know you will, but we tell them to take a little bit of the milk off of the cow and put it over to the side so that, so that at the end of the day you’re creating another revenue source. I take a little bit of frosting off of the steak. It’s the same thing, sir. Live a little bit of that melted,
but you weren’t even over there. You won’t even miss it though. You won’t, you won’t miss it. Now it would be kind of like Jason, some of our listeners, they listen to this show and I said, if, if, if, if, let’s say you’re listening to the show today and you’re thinking to yourself, man, I like this shop, this, this show, this show is a good show. That’s a good show. It would be like for you. You wouldn’t even maybe know hypothetically if there’s shows recorded twice. Hmm. You know what I mean? You wouldn’t even miss the first show. Hypothetically that as an example. Now, step number I get. Step number one is what Jason cut your expenses by 3% by automating your savings. Let me read some notable quotables from our, our dearest friend Mr. Benjamin Franklin and from Thomas Edison. So let me queue up my deep deep music.
Kind of a let me, I said, well, we’ll keep some story music here. So here we go. Beware of the Turd expenses. A small leak will sink a great ship. Benjamin Franklin, the legendary inventory of the Franklin stove. Bifocals, the first flexible catheter and the famous United States diplomat. Notable quotable number two in from our Home Office here. Opportunity is missed by most people because it is dressed in overalls and looks like hard work. Thomas Edison, the founder of Ge, the inventor of the modern light bulb recorded audio and recorded. Sound big. Shout out to Marshawn Lynch. Sign your friend Thomas Edison. Okay, so think about this. You have to be aware of these little leaks. You spending money all the time. You got to automate your savings. You got to do it now. Now step number two is got to increase your income by 3% by 3% now, Jason, I give you the opportunity.
If you’re an employee, he out there, you’re an employee and you’re saying, I work for somebody, for somebody and I, I don’t, I don’t have control over my wages, my income, my dollars per hour. I want to increase my income by 3% what is the tip that we would give the listeners? What is step number two to increase? If someone wants to increase their income by 3% and they work for somebody, they’re an employee. How do they do at Jason? Find out what time your boss gets to work and be there before them. And why does that work? Because they take notice of you, I think. Okay. Okay. Just so Jason, well, let’s think about the store. What store are you gonna be working at today? Do you know what? Still be at a 91st and Yale today. What time do you get there? Uh, I will leave directly from here.
I always try to be there an hour before the shop opens. So what time do you think that the first person who’s not you will show up there as well? Um, let’s see here. It will be mark or Carly and they will be there five minutes before they’re supposed to be marking. Carlin. There’ll be there every time. What time do you get there? I get there. So if we open at eight, uh, typically I tried to be there by seven, but if it were recording them there by seven 30. So if you get there at seven 30, no one else shows up until what time? Until about eight 25. Eight 25. Okay. But if someone wanted to get your, your attention, if they showed up at seven 30 but they get your attention, absolutely victory. You managed stores? Yes, sir. You’re right now in the competition to become the super manager. Whoa. To replace. Jason has a super manager because Jason’s getting a promotion. That’s cool. Yeah. So you’re in a competition. What time will you get to your store? Typically on a Saturday on us
Saturday I go in probably around 1130 1130 12 o’clock okay. Start at 1230 because you worked until close, right? Yes sir. Okay. So let’s Paul, what time it is Your Business Hood? CPA’s open each day? Well, it opens at eight o’clock or normal office hours. Or what time do you roll in there? Oh, I’m in there. I’m working probably usually by seven. And does anybody else get there at seven? Uh, they’re, you know, there’s some people that will come in early and not too many though. So if somebody wanted to beat you to work, what time would they have to be there? Oh, they’d have to be there by six 37 o’clock for sure. So listen out there. Really, let me, let me say this too, because what people don’t understand is we’re not talking, because I’ve had people try to show up early and then try to get me to pay them for that extra time.
Talking Palm. Yeah. What you want to do is it, you don’t expect to get paid. It’s the person who asked for nothing that deserves everything. And so show up early and, and work for less than what you’re worth. And then eventually you’re going to get paid more than what you’re worth because your boss, you’re there to, to take, to help him with his time freedom. So the more you can take off of him, the more you’re going to make. But don’t go in there and say, well, I showed up 15 minutes early, so I expect over time now. It’s not the way it works.
Can I tell you about the, uh, the, the Jackass Award of 2015? Jason might talk to you about the Jackass Award of 2015. No, but I’m interested now. Okay. When you go into the box that rocks, yeah. You’re going to see a picture of like 12 people. Oh, I’ve seen that picture. It used to be by the front door and there’s one that you’ll see up there and next to it as a post it note, I always keep track of how people screw me. I put it next to their picture. You have the bathroom, you can see a festival of lights as well. I always keep track of that way. I know what happened. I was remember Britain, you know I always want to try to guard my heart. I’ve got great people in my life. My wife is great. Paul Hoods, great. Dr Zelner’s great.
You guys are great. I like great people but eh, 80% of people screaming so I ha I keep track of it. This guy, true story, Paul, this was good. I cannot believe that I didn’t put this on the show notes. This is what I cannot believe that we escaped this idea. He came to work early one day, beat me to work and I was like, that’s cool man. He’s got a graphic designer. I thought that’s cool. He says, man, I just want to, I’ve been reading, thinking grow rich and it talked about over delivering and that cannot make this story up. So for all of 2013 he’s one of the first guys to work and John would know who I’m talking about. Now this guy, one day at work, he says, I just want you to know I’m, I’m going to be taken a job moving to the east coast, moving out.
And I said, okay, that’s cool. You’ve had, you’ve done a great job. Honestly, his work was good and he always beat me to work right. And I get to work just so we’re clear. I am at the office usually 4:00 AM okay. Now obviously I do a radio show, so I have a different schedule, but the point is I typically work from like 4:00 AM to five most days. That’s my normal flow. So I’m good for, you know, 1314 hours a day every day. That’s what it’s, that’s what I do. I like that. That’s my Mojo. Well, this guy, now remember we’re paying him to work nine to five, right? He’s getting to work at four. Do you know what this nefarious idiot dead. Do you know what he did? Do you want to do you guys want to lay it on us? He tracked every hour when he’s getting to work to like read and stuff that I’m not paying them to do, and he literally gave me an invoice for a little over $10,000 if you’ve seen that note in the box, you got to look at it.
He does. This dude gave me an invoice for $10,000 for unpaid time via an attorney. That’s ridiculous. And this guy then when it thinks did not go so well on this east coast job, he called me and asked me for a reference. I’m serious. I’ll give you a reference. He didn’t say a good reference. Unbelievable. I mean, that’s crazy. So again, if you’re over delivering, don’t I see it? There’s one attorney that I knew, not west Broadway, west Carter’s the best attorney. I love that guy. There was one attorney that years ago was trying to get my business right and he’s doing this over delivery move or he’s like checking in every week to give me updates and making sure I’m proactive on my legal side of my business and he was billing me. He would call me to check on me unsolicited like, hey clay, how’s it going?
Great Dude. It’s like, well, you know, I had 18 things I wanted to talk about. Do you have an hour? Sure. I mean, he’s like just talking and talking. I’m getting bills for that. Stem fields don’t. So you overdeliver, don’t, don’t screw your boss. Okay, so step one, cut your expenses by 3% by automating your savings. We got that. Yep. Step to increase your income by 3% by beating your boss to work. Another way you can increase your income. If you’re a self employed person as you can, just raise your prices by 3%. That’s a move. You could raise your prices by 3%. Now, uh, victory. What’s a food item that you buy every week? It’s just like you, you buy it every week. It’s something you eat. Pretty normal flow. What’s a food item that you eat on the weekly? Uh, actually it’s raised and Bree raisin bran, rice, apples.
Are you going with the brand name or the offerings? I grew up on a lot of off brand. I ate a lot of that offbrand raisin brand growing up. Are you on brand on brand for that specific way? I have to do on brand and then I do. I do apples every month to two pound box of apples. Two pounds of apples every Monday. Really at two pounds every Monday. You remember those commercials for the raisins back in the day? California? Yeah. Dancing raisins. Doot doot Doo doot doot doot doot Doo. Ooh Wait. Hey I get bit. You’re wondering how I knew. I’m wondering that myself. The hands. Okay, so you buy that, you ride the on brand? I do. I do. How much does that cost per box? Um, well I go to Costco, so it’s probably like eight bucks and I get two large bag.
Oh God. You know
the prices though? I do. I do know the price. So they’re eight bucks for two big things. Yeah. Okay. Two big containers for eight bucks. Now, if they raised the prices this year versus last year, would you know? Probably not. No. Okay. I just wanna throw this out there, Paul. There’s a lot of business. Every time we go to the grocery store, Paul, if he noticed that the gas prices are a little higher this year, then like 10 years ago, they always, yeah, absolutely. I wonder why have you noticed that the cost of milk, Jason, is more than it was 10 years ago. It’s because the quality, the of milk is better today. No, it’s called inflation. So what happens is imagine our currency as a country is koolaid and anytime the government needs to spend more money than they have. It’s such a ridiculous exercise. But this is what happens.
And I’m sure you’ve seen the news here folks, if the government is spending more money than they have, they go, well, since we’re out of money and since in 1971 Nixon took us off the gold standard, we can now print money. 1971 by the way. So now Paul, they can just print money. They can. So anytime that we are spending more money than we have, they say to the president, Mr President, do you wish to shut the government down or do you wish to print buddy? That’s what happens, Paul. It is. They don’t do a budget anymore. They do. They do spending bills. They don’t do a budget anymore. You don’t know if you know that. How did you, did you guys know how that, how that works? I did not. That’s what that means. So like literally every year they’re like mister president, Mr. Obama, we have no money in the bank account.
Do you wish to print more money sir? And then they do a spending bill where they just print money and that’s what a government shut down is when the government says, I’m not going to print more money right now. And why is it a double standard? Why is it if I print money, I go to jail? That’s a thought. I don’t understand. Hey, have you heard about the Choo Choo train in California? No. Oh boy. You guys are going to love this. Let me pull this up real quick here. This is the California train. Let’s type in CNN. Um, stop the California train. Let me get it here. The super trained, let me see out of money. I’m typing it and pull it up. Sorry folks. It’s not super exciting to hear a guy, um, uh, talk about a train while he’s Google it, always googling it.
But California, uh, this is from CNBC. California’s $77 billion bullet train to nowhere faces a murky future as political opposition ramps up, Paul, these guys are only like halfway through building the train and there are a little over two times more than they were supposed to spend. And so the California has now decided to stop building the train and it looks like that. That’s nuts. So it’s the most expensive go for a ride, right? That would be like building the Hoover dam and then stopping halfway and then never coming back to him. Seriously. This is crazy. So government, what happens is government runs out of money, but they still have months left in the year. Right? And they print money.
So that train, here’s the deal though, that train might come back around because with this new green deal, you know, we’re getting rid of planes. I saw a deal the other day that, you know, it’s fun. I laugh at it. Okay. The Russians have just launched their bombers and a president of case, whatever her name is, um, says to let’s launch our trains. Let’s, let’s, let’s, so this might be part of our defense system at some point
then maybe they’re planning forward drains, quick hustle going in a circle quickly. And if we go fast enough, we’ll make it to Russia. That’s all right. All right. So again, step number one, if you want to automate your savings, you cut your expenses by 3%. That’s how you do it, right? Then you, that’s step one. And what you do is you automate it going into a savings account. You have to do that. If you don’t do that, Jason, you don’t miss that money. No, but it’s, it’s stacking up. Yup. Now step two, if you’re an employee, you have to beat your boss to work. I cannot stress how important this is for your financial future to beat your boss to work. Cause if you’re not in the room, you’re not in the deal. That’s right. The boss is busy. The boss has a lot going on. The boss cannot possibly think of everybody. I think of right now it work. I get to work ticket 4:00 AM and Andrew’s always there now, right? John’s always there. You know who started showing up recently? There’s that Larry Brown, Larry freaking, Larry, hello Larry. Larry Brown is starting to show, I will come out from working at like four 30 and he’s there and he’s there every day,
but he doesn’t have his handout. Right? And he’s there to learn because what I try to teach my employees again is everybody at my office. And I’m not saying anything bad about anybody, is there because I don’t want to do their job or it’s more efficient for me to do other things. So the way people in my office, I explained to them and the way people at every business make money is you. You are there if you take more off of the person above you and the more off the PR, that frees them up to take time and task off the person above them. And so what happens is you end up just becoming increasing your value to the operation just by being there. You also learn, you know, there’s a learning curve. Clay, if even if we come, let’s say hypothetically we come and we record a show and then it doesn’t get hypothetically, hypothetically, and, and we lose it, but it’s still not a waste of time because I’ve learned and Jason has learned just by being here, it’s not about oftentimes the pay that she receive is not in cash or in checks.
It’s in knowledge that’s going to move you to the next level. So get there early, hang around, don’t, not in a brown nosing way, just do things, learn things. But you got to invest your time when you don’t have money to invest.
Also, when you do get there early, it gives you margin for bad things to happen. And not to derail your day. No. So like hypothetically, hypothetically not, not this situation on a Saturday, uh, my next interview would be like at a seven 30 in the morning. Right. And so hypothetically, if it was six 53 we were on a recording number two then hypothetically it wouldn’t be super stressful knowing that we have enough margin. If we had to record something twice, we just talk extra fest. Right? Okay. Now step number three, very important. Step number three for everybody out there to step number three you want to commit to automatically investing that 3% right? So I’m going to give the listeners out there a lot of ways to invest and Jason, they feel make note of these fabulous for this’ll be a good thing for our listeners to know.
K One you can just put it in the bank and I’d recommend anybody out there if you are just getting started putting the bank, I would, I would recommend that until you have what is called a rainy day fund, right? So you want to do is you want to save up to at least two months of income. That’s my rule in that before you start investing in other things, in my opinion, and I’ll tell you why, it’s because of the liquidity or lack there of of an investment. So, as an example, I see a lot of people who want a lot of gold, which is cool. Um, gold is shown to hold value over the long term. Um, but if you, you know, we’re in a bind and you go into best buy today with a gold coin that’s valued at like $400, right? And you’re like, I would like to buy that computer.
And the best buy goes, cause usually the use of the guys that work at best buy or Brah Brah you what brow you? Hey, here’s the deal. I would like to buy that computer with this gold coin. Uh, okay, let me talk to a manager. So now the best buy manager comes up, Eh, you want to buy a computer with a gold coin? You said, yes, Mr manager, Bro, I gotta to talk to my super manager. Now you’re talking to it rational, sane person. The senior managers like, wow, so how can I help you? I’d like to buy that computer with this gold coin that’s super manager would say, oh, I can’t do that. But if you go to bestbuy.com I’m sure you could find the answers there. Take care of any question. By the way, no matter where’s the bathroom. Well if you go to bestbuy.com you’ll find your interest there.
I’m looking for this adapter. You know, if you go to bestbuy.com and that’s what they’re doing, right? So, but the point is that gold coin, you can’t buy a computer with that. Another example, Paul, let’s say you own a series of rental houses, all right? They’re paid off, right? And uh, your daughter has a wedding coming up and she said, dad, I want to have a wedding at the Mayo hotel. I want it all the pageantry, the accoutrements, that decor. I want uplighting. I want there to be passed hors d’oeuvres, I want. And you’re going, okay. So you show up at the Mayo Hotel and they say it’s going to be $27,000 to accommodate 50 people to attend this thing. And you go, okay, I would like to sign over 20% of the equity and one of my rental houses. All right. God, I don’t know how to handle that. So you need to have liquidity, liquid cash, right? You can’t go into quick trip and buy gas with equity in your house.
No clay and, and you know what you’re saying is people go through two stages in life. They go through a an accumulation phase and a distribution phase. In the accumulation phase, you want to embrace volatility. You want that, you know ups and downs in the market. But if you put yourself in a position to where you have no liquid money for emergencies or opportunities and the market are, your investments happen to be down at that point in time and you then you have to sell those investments, then you flip the thing on your head and you’ve lost. So you’ve got to have that two or three months worth of of emergency funds sitting over there first for situations like that to give you timing, give you the opportunity to, to make good decisions instead of rash decisions.
So put those, put the savings in the bank and they have two months of income saved. Yes. Now move number two, you want to meet with somebody like Paul Hood or some accountants you can trust or somebody can help you. You want to buy insurance and you want to buy as much insurance as you can. Okay, so that you have a bad day and not a bad life. As an example, the day that you buy that insurance policy and you realize you’ve just agreed to pay 80 bucks a month for that life insurance or that apartment insurance at Renter’s insurance and home insurance, flood insurance, whatever that is, won’t, you’ve agreed to pay that new monthly expense. You’re going to go this Hugh was a bad day. You’re spending money, right? But it’s not a bad life. No. Now the moment you come home from work and your house has been looted or the, the uh, the, the plumbing broke and it’s flooded your home or the roof collapses and you’re going, this is a bad life and your kids are saying, what’s going on to how we now have a bad life? And they go, one, cause I saved $80 a month, buy out by insurance. And now that we’ve had, every asset we had was stolen. We have a bad life. What does that mean? Did we’re going to be hopeless? I mean, seriously, you have a bad day or a bad life. Paul, talk to us about buying insurance. Why do you want to buy that?
Yeah, insurance is, is about, so again, what we’re talking about is risk and at hood CPA’s it’s all risk. And so when you buy insurance, you’re transferring risk and you’re sharing that whether you’re insuring your house, your life, your car, whatever it is you’re transferring of catastrophic thing, creating a bad life for you. Clay. And I’ll tell you this, um, I have never once, not one time have I had had a widow come in to my office, her husband just passed away and she’d say, you know what? My husband had too much life insurance. It doesn’t happen too much. You’ve got to provide for your family. You provide for them during your lifetime and you provide for them at your death or in, and that goes with your house, your car, you invest in these things. And you know, the dumb thing is, is it’s actually the, the government had to get involved and say if you have a loan on your car or on your house, you have to have insurance. Because a lot of people would not take that serious and they, they would rather risk a bad life than a bad day.
That is very true. Now, the next kind of investment I’d recommend that you would buy would be semi liquid investments. So again, put the savings in a bank so you have two months worth of savings saved, done. Then you went over to meet with an accountant to make sure you have enough insurance for your family, but then you want to buy [inaudible] liquid investments. Paul, could you walk us through maybe an investment where I’m investing in something, but I knew there might be some penalties, but if I had really needed the cash, I could come up with cash pretty quick. Maybe within like a week if I needed that money back.
Yeah. Well, what happens is, is when you step up and you get the chance of better return, that means you’re going to have, there’s, there’s more risk and risk comes in the forms of missed opportunities because it’s, it’s a little illiquid or, or penalties. And so some people will go to CD’s so you get a little more cash deposits. Yeah. Yeah.
I thought you were talking about investing in like cds. I was like Paul,
no cds so that that pays you a little higher interest. But there’s a penalty now we do, you know, I wouldn’t go into a traditional mutual fund cause most mutual funds have a load, which means you pay to get energy, you pay to get out. We at Hood Cpas, we favor more of a, um, there’s no fee to get in, no fee to get out more institutional money management, fee based type stuff to where it’s liquid. You can get to it, um, then then, but there’s no penalty, there’s no fee to get in, no fee to get out. Got It.
Now this next, this next investment vehicle is, it’s buy and hold long term investments. I would say like a rental house, maybe buying in shares in a company or maybe starting a business. Some of it’s more of a buy and hold as an example. Um, those of you listened to the show often would know. Uh, Facebook after three years in business lost 3.6 $3 million. Um, after nine years in business, Jeff Bezos had not made a profit at Amazon. Uh, after over 15 years, ESPN had yet to turn a profit. You know, ESPN did not make a profit for 15 years. Oh Wow. So those are more of a longer, longer term. And Paul, Paul White, why are there certain investments that you just want to buy and hold long term?
Well, the reason is because again, some like rental property you brought in front of the property rental property typically in the early years is not a good cashflow investment. And oftentimes you actually end up putting money into those investments. But if you, if you sit down and you’ve heard of Robert Kiyosaki, we interviewed, yeah, Sharon Lechter and Co, author of Rich Dad, poor dad, poor dad, he’s got another book called the cashflow quadrant. Great Fun. People don’t understand that, that you have to look deeper into real estate. But the key is is, is you’re leveraging. So to be successful, you leverage time. People are money and when you have a longterm investment, you’re leveraging other people’s money like in real estate. So that I’m on the back end. It becomes a cash positive asset. So it’s a, it takes a longer time to develop, but the payoff on the back end is better than anything you can get.
So let’s talk about the cashflow quadrant. Since you brought it up, I’m going to get into what the cashflow quadrant is, right? But, um, if you can imagine it as a four step path, okay. And by the way, this is the path we’ve set up for the alpha in the room. Employees, whether they know it or not, this is how it works. Step one, you start off as an employee. That’s what the cashflow quadrant says. You start there as an employee and if you get to work early and you over deliver, you’re going to get pro moded. Now when you get promoted adventure, you’re going to have some money that you can be saving, right? And if you automate your savings, you could then open your own store. Jason, if you open your own store, what would be the value of opening your own store? I could then hire people to, like Paul said, he has employees because they do what he does not want to do. And so then I could have somebody else run the business for me and I would have time freedom. So you could actually manage the store if you wanted to write and make the profits as the owner so you could double dip. You know you’re making like two salaries.
Yeah. Well it wasn’t a Rockefeller that said 1% of a hundred people’s efforts worth a whole lot more than a hundred percent of my own efforts. This is true. The point is is when you leverage leverage, leverage time, people are money. Leveraging people means you pay somebody to do a job and then you can create a profit off of their efforts. So you reward other people and you create opportunities and clay. That’s why you are scaling elephant in the room is, is not because you’re bored and have plenty of time and you want to go and run 50 different places. You want to create opportunities for other people to make money because if you base your success on the success of other people, you’re going to have time and freedom once you learn how to automate your success.
Can I tell ya as a sad story that ends well talk call me? Talk to me. The year was, what year is it now? 28
do you need to lay down on a couch right now and get my notepad? It was
a 2012 ish and we started elephant in the room and it was a men’s grooming lounge and open at 16th in Boston. And we thought let’s go ahead and build this first. So we hired a team of builders, people we can trust to build. Yeah. One of the builders told me he had workman’s comp insurance but he did not. And so we, the city inspector showed up, he put it out to us that we did not have the proper plumbing set. So we needed to dig a trench to make the proper plumbing be where it needed to be so that we could put in the shampoo bowls for our men’s grooming lounge, our haircut facility for men, we need to date dig a trench to put in the proper plumbing, right? So whatever we built previously, not good, we got to Redo it. Dig a trench. We’ve already poured the concrete and concrete. So we hire a guy who says he has workman’s comp insurance to this and cut his way through the concrete. Right? So he’s cutting and cutting and Splore. And I’m upstairs 16th in Boston, the second floor, and I’m downstairs hearing them and I’m spinning up $100,000 to open up this location. And what would you hear it hitting rocks and good. Good, good, good. All of a sudden here.
Oh my God.
No. And I’m like, Whoa, whoa. That, that come downstairs. Not Good. And it’s a festival of blood. There is like a laser show, like a horror movie just in the dude had cut his foot into the shape of a triangle and so I thought that’s not a good deal. So it turns out the guy that we’d hired did not have workman’s comp insurance and so that guy tried to go after us, but we had insurance. Right. Long story short, I was not the general contractor. I didn’t have to pay anything, but I had insurance so I had a bad day. Not a bad life. You got with the triangle foot. I cannot speak for him. I’m not sure what it is to go through life with the foot and the shape of a triangle. But then we’re in business for like, I dunno, a month now. I agreed to pay myself from the very beginning, $2 per haircut.
Okay. And we were doing probably 12 haircuts a week. We’re cut my dad’s hair. You are rolling. And I’m like paying my dad to get his hair cut there and I’m not kidding. I’m like paying my dad. He goes, hair cut there. Kirk fryer was the first member. He was a client of mine, farmer’s insurance. I got maybe 12 hair cuts a week, which means that my expenses are like four or five, four or 5,000 a month for employees and for the rent. And it was actually pre hire probably 8,000 a month, but I’m only bringing in like 24 bucks a week, you know. Uh, then it was probably customer number 50 and a one of our new stylists spec before we figured out what we were doing. Uh, he like cut the guy’s ear. Ooh. And like a gnarly way where it’s like we can we, we call it the dangler.
Ouch. I mean it was like, I mean it was like he looked like he was a member of the Harlem Globe trotters. Then things just moving around. So anyway, it’s crazy. So anyways, that didn’t go well. Anyway, so now fast forward now to 2019. Right. I still pay myself $2 a haircut. So roughly it’s like $8,100 a month I receive. But for a long time, year one and year two I was spending in a 6,000 a month. And it in honestly like $400 a month. Right. And then bring it in a thousand a month and then, and it took me after I figured out the model, it takes about six months for every store to become profitable. When you opened one, it takes about six months to build up that. But when you pay yourself $2 per haircut, as it scales Paul, then we have 40,000 customers. It’s a better deal.
Yeah. Well the point is is that was a longterm investment. Seven years. You had to put money into it for a period of time. And the same principle applies if you own a business, if you’re going to buy real estate. I, I’ve shown people that I had a guy, he was a good story for you had a guy that, that had some real estate. He put $50,000 down and got $1 million for the real estate. Wow. Great deal. So he comes to me and said, this is a horrible deal. I had to put $5,000 into this deal last year. He had to write a cheque negative of five grand. But when I showed him the tax savings, I showed him the fact that his principal, what he owed on the, on the real estate was down by a certain amount. He actually, even though he put five grand in, he was positive $20,000 all he focused on though is that $5,000 check he wrote not on the fact that he was $20,000 further ahead and that will be realized year after year after year after year. So it’s like, it’s, it’s like when you have a 401k and you put money in and your employer matches it a lot of times with real estate, but structured right, your match is 300% of what you put into it because of using other people’s money, renters, renters and banks, money to buy the property, to leverage what you don’t have right now. And so that’s what we mean by a longterm investment. It’s not a positive necessary cashflow thing today, but it’s going to create wealth in the future.
So let’s look again. Let’s treat it, let’s revisit his cash flow quadrant. You start off as an employee, then you save that money, you automate the savings, then you want to become self employed. Were you own, you own a business but you actually work in it. If that makes sense. You own the business but you work at the business that you get a better paying job basically. You work more. Yup. And and you get paid a little bit more. So you get your salary and they get the profit. That’s right. Now I’m, step three is a business owner. That’s where you own the business, but you’re not actually working in it on a daily. That’s right. And but you still have involvement. I mean you still have to hire people, fire people, do the taxes. You’re not in the daily, but you still have to do a lot of work. A lot of behind the scenes work. Yup. Now the final level is an investor where essentially you’re doing nothing because your money is working for your money. Paul is Armenian.
I love minions. Tell us about the main hands men. Yet. I talked to people because people think that that retirement takes age and it doesn’t, it takes money and an old person. Yes. So, but what the, what I tell people to kind of think about is, is you know, the little minion guys a little running around the little yellow, I don’t know why it was some have one, I’m just going to have two eyes as I’m going to have to. But anyway, their minions and they’re working like crazy. And so as soon as your, if you think of your money and your investments longterm, short term, um, as minions, the, as soon as you get enough minions too, that will work, that pay you, buy you back your time, then you can quit working. And so we’ve interviewed people play, you and I have interviewed people that retired at 30 years old because they were saving 82% of what they made.
And so it’s, it’s all a matter of, it’s relative to how much short term pain do you want to have today to have longterm gain. The more pain you do today by maintaining your lifestyle at a level that’s, that’s good. By investing in short term things, by putting, having an emergency fund, by making longterm investments, that short term pain of not be able to go out and maybe by that frigerator that talks to you and, and the has your fingerprints so that your kids can’t, whatever you, you delay those things. The more you do that today, the, the sooner that you can buy back your time and have lifestyle in the future. Can you tell me more about this refrigerator with the fingerprint thing? Yeah, cause I’m, I’m really like, I want to spend my savings on it and I may have, uh, may have exaggerate a little bit about that, but no. Yeah, he’s like a frigerator so that you walk up to it and then all of a sudden it lights up and you see what’s inside of it. So I don’t have to open the door. I mean that’s such a taxing step to have to grab the handle and pull an open, no, it, it lights up and you can see what’s in the refrigerator. I mean, yeah, I don’t need that. I just, there’s a lot of
people I see with spinners. Yeah, on their vehicle, like furry wheels and they’ve got a, it’s usually like a Buick. Oh yeah. Smooth Riding Buick with like oversized wheels and spinners. Nice subwoofer in pubs. Yeah, it’s, anyway, we were talking about buying assets, not liabilities. Assets. Put money in your pocket. Yes. Liabilities take money out of your pocket. Now step number four, the final step we have as we wrap up today’s show is you want to get compound interest working for you. We just talked about it, but I want to make sure we hammer home this idea. You want your money working for you. What you want to do is you want to put money into some investment vehicle that kicks you out or return. So examples of this would be if you had a rental house and your payment was a thousand a month and the renter pays you $1,400 a month, then if you are properly insured, then you should come out ahead by $400 a month.
Sure. I didn’t want a bad thing happens like a flood or a, you know, things that happened in a house, then you’re not out of all your money you’ve saved because you have insurance for that kind of thing and you can cash flow a positive of $400 a month. There’s 1400 it comes in a thousand that goes out, somebody else paying off that 15 year mortgage and that’s how you make money. Another example would be you invest in a business and you say, Hey, Mr Entrepreneur, you have a proven track record of success and I’m going to invest in you because I know that you’ll figure it out and I’d want a 2% of the gross revenue or something like that. And then as the business grows, you make more money passively. You don’t have to think about anything. You don’t have to solve any problems, you just get paid passively.
Another example would be stocks, bonds, investments, mutual funds where your fund grows every year and as you grow older, the fund begins to increase exponentially in value. And I want to read this. Thomas, are these a Albert Einstein? Notable, quotable. Sorry Thomas Edison. I didn’t want to give you a quote and then take it away. But this is an Albert Einstein quote. He says here, compound interest is the eighth wonder of the world. He who understands it earns it. He who doesn’t pays it. So Paul, I’m listening today and I said, you know what, you guys have covered a lot of ground, but for me, this is the guys for you. This might be your second time hearing this today, but for me it’s my first time hearing this. And they said, you know, I just want to sit down with a CPA one on one for an hour of power. Absolutely. And I wanna I wanna pick your brain. So someone goes to hood, CPA’s dot com and they scheduled at one hour consultation. How much does that one hour consultation cost and what kind of tangible goods and services will they leave with in their hands?
And so it’s very expensive. It costs $0 million so it’s Oh, we’re investing in you. We take time. I’m, it’s tax season people. We have, we have a ton of things to do, but we’re still willing to take the time to meet with you. So when you come in, you get an hour of my time or one of my staffs for free. For free. Okay. You get a copy of Warren Buffet’s a snowball book, only authorized biography he’s ever done. Right. If you want all successful, then you need to emulate a lot of the things that he did. Maybe don’t don’t have two wives, but any like most everything else. Real quick back story. He was married to a lady for a long time and at some point he thought, you know what, I kind of want to have a younger wife. Yeah. So he’s still married to that person, but he has another wife.
Mm. So Warren Buffett has two wives, one who was dramatically less old than his current than his actual wife. He’s married too. So he does have a wife he’s married to, and then he has to live in. But it was an accident. It was a quiet, doesn’t count. That’s, that’s probably the part of the book. That’s a, that’s a tip you don’t want to do. You want to act on that tip Paul, back to, you know, so you get free hour power. You get, you get Warren Buffett’s book and you get one of my books, or you can go to Amazon and buy it for 15 bucks. I’d say take the time, but literally clay, that, that time though, that, that we invest in them. We’ll give him the book. Because you know what? The book is not free to me. It costs me money. Yes. So when they come and sit down with me, I’m investing in that hour. I’m invested in to $250 into them. So you’re going to give somebody a free consultation and you’re going to give them a free copy of Warren Buffett’s only authorized biography. Yep.
And the catch, the catch is it’s free. And if somebody likes your services, likes what you do, right, they can sign up, become a client. If not, they don’t have to pay. They don’t have to. You have to do it. We’ve talked about investing here and so, so you invest your time and your money. I’m investing my time and money and people, and I can tell you almost a hundred percent of people that come sit down with us. They want to work with us because it’s all about them and their financial future. Paul, I appreciate you taking time out of your schedule to join us and the entire thrive nation, and we’d like to end each and every show with the boom. So here we go. Any further? I do three, two, one, boom.