Learning Center

The learning center will be a place of sharing basic knowledge around budgeting, saving, debt reduction, and other financial topics.

I -Do I need a Financial Coach?

This is an important question! One that can be answered after you answer the questions below. If you respond yes to any of the questions, a coach would prove useful in your life.

  • Do you struggle to pay off debt?

  • Do you have more liabilities than income?

  • Are you stressed about money?

  • Do you argue about money?

  • Are you unsure about budgeting?

    Why is it difficult to achieve financial success without a coach?

  • Emotions cloud our judgement and our decision making process

  • Making wise choices can be elusive without a guide

  • Coaches provide a prospective filled with experience (usually they too went through financial hardship)

  • Coaches provide steadfast encouragement

II - Needs vs Wants

  • Needs are necessities to live (we call these the four walls)

    • Shelter (rent or mortgage)

    • Food

    • Utilities

    • Transportation

  • Wants are the extras in life

    • Subscriptions

    • Going out to Eat

    • Vacations

III - Seven Baby Steps

  1. Save $1000 starter emergency fund. If they have more than $1000 that money goes toward debt. This fund isn’t meant to be enough money for emergencies but rather to create a fire under you to exterminate the debt.

  2. Pay off all consumer debt except the house using the debt snowball. List smallest to largest regardless of interest rate. Pay min to others. Debt is a behavior problem not a math problem- this method gives you hope for the future when you see the progress you are making

  3. Save 3-6 months of expenses (not income). This fund becomes your new and improved emergency fund. Remember this fund is based on your household expenses not you monthly income.

  4. Invest 15% of household income-Invest 15% of household income to retirement. Match beats Roth beats Traditional.

  5. Save of kids college using 529 Save for kids college fund 529, or ESA. No kids skip this step

  6. Pay off your house Use additional funds toward the principal of the house. It takes most people 7-10 years to finish paying of the house

  7. Be generous- Save, Give, and Spend. Live like no one else so you can live and give like no one else.

IV - Assets vs Liabilities

Assets - These are item that increase over time and add value to your net worth

  • Real Estate

  • Investments

  • Vehicles (these depreciate over time)

  • Personal Property

  • Cash

Liabilities

  • Debt

  • Mortgage

  • Student Loans

  • Credit Card Debt

V - Net Worth

Net Worth is Assets - Liabilities = Net Worth.

VI - Steps to Freedom

  1. Recognition of your situational disparity

  2. You have an ‘I had it!! moment"‘

  3. Hire a good financial coach

  4. Dream journaling

  5. Learning to create a budget

  6. Learn about the 7 baby steps and the importance of following it precisely

  7. Master coaches will assist you with the baby step process (this will take many months to achieve)

VII - Compound Growth

  1. The power of compound growth isn’t fully understood. Take these examples-

    • 21 year old invests $100 per month 45 years at 10% growth. At 66 he has $1,048,246. He invested a total of $54,000 over 45 years and it grew to over a million dollars. The growth was almost a million dollars. WOW

    • The moral of the story is to invest monthly over long periods of time

    • 21 year old invests 15% of his $50,000 salary each year. This means he is investing $7500 per year. If he does this for 45 years at 10% growth, he will have $6,551,563. He invested $337,500 over 45 years. The growth was over 6 million dollars.

  2. The power of compound growth is the time in the market and dollar cost averaging.

VIII- Insurance

Insurance is of vital importance! Think of this as a shield around your life. Below are the kinds of insurance you need to have

  1. Health

  2. Auto

  3. Home or Renters

  4. Term Life Insurance

  5. Umbrella Insurance

  6. Long-Term Disability

  7. Identity Theft Insurance

IX - Rule of 25

Take the amount you expect to spend each year in retirement and multiply it by 25. The result is roughly how much you'd need to fund a 30-year retirement, assuming a 4% annual withdrawal rate from your investments.