2816: The Most Important Financial Habit AND Why Simple Financial Strategy Works by Derick Van Ness on Personal Finances

[00:00:01] [SPEAKER_01]: This complex financing talk is very exciting. Do I get my depot ever?

[00:00:06] [SPEAKER_02]: But you already have a depot.

[00:00:08] [SPEAKER_01]: No.

[00:00:09] [SPEAKER_02]: Yes, you have the Vodafone Gigadepot.

[00:00:11] [SPEAKER_01]: That's right! And I have myself in the hand how big my depot is.

[00:00:15] [SPEAKER_02]: Now with the Vodafone Gigadepot and the data volume of use in the next month. Go on in the 5G network of Vodafone. Vodafone. Together we can.

[00:00:26] [SPEAKER_00]: Have you ever noticed how a calm mind can really set the stage for a good night's sleep?

[00:00:31] [SPEAKER_00]: That's the idea behind our new podcast, Good Sleep.

[00:00:35] [SPEAKER_00]: Greg, our host from Optimal Relationships Daily, is here to help ease you into a peaceful night's rest with some positive affirmations.

[00:00:43] [SPEAKER_00]: And these affirmations aren't just comforting. They can help ease anxiety and nurture positive thoughts, setting you up for true good sleep.

[00:00:52] [SPEAKER_00]: So press play on good sleep tonight, because a good tomorrow starts with a good night's sleep.

[00:00:58] [SPEAKER_00]: Just search for Good Sleep in your podcast app and be sure to pick the one from Optimal Living Daily.

[00:01:06] [SPEAKER_00]: This is Optimal Finance Daily, the most important financial habit and why a simple financial strategy works.

[00:01:14] [SPEAKER_00]: Both by Derek Van Ness of BigLifeFinancial.com.

[00:01:18] [SPEAKER_00]: And I'm your host and personal finance enthusiast, Diana Merriam.

[00:01:22] [SPEAKER_00]: For now, let's get right to it as we optimize your life.

[00:01:29] [SPEAKER_00]: The most important financial habit by Derek Van Ness of BigLifeFinancial.com.

[00:01:36] [SPEAKER_00]: Imagine you just bought your dream car.

[00:01:38] [SPEAKER_00]: How would it feel to sit behind the wheel with your windows rolled down and the fresh wind blowing across your skin?

[00:01:44] [SPEAKER_00]: The rumble of the engine tickling you as your favorite song plays on the radio, making you want to sing at the top of your lungs.

[00:01:51] [SPEAKER_00]: And you can't believe how great it feels to lean into the incredibly comfortable seat.

[00:01:56] [SPEAKER_00]: Everywhere you go, people see your car and gaze in admiration at how beautiful it is rolling down the road.

[00:02:02] [SPEAKER_00]: Then suddenly, the engine stops cold.

[00:02:05] [SPEAKER_00]: Not even a gurgle as it freezes and leaves you sitting in a lifeless, soundless hunk of metal going nowhere.

[00:02:13] [SPEAKER_00]: Just 30 seconds ago, you were living the good life.

[00:02:16] [SPEAKER_00]: But now you're wondering how you're going to get anywhere.

[00:02:18] [SPEAKER_00]: What changed?

[00:02:20] [SPEAKER_00]: The engine stopped, that's what.

[00:02:23] [SPEAKER_00]: In a car, your engine is everything.

[00:02:26] [SPEAKER_00]: Without it, you can't move anywhere.

[00:02:28] [SPEAKER_00]: The windows don't work and even the radio stops.

[00:02:30] [SPEAKER_00]: The engine is the entire foundation of what makes a car go.

[00:02:34] [SPEAKER_00]: Your financial life is the same thing.

[00:02:37] [SPEAKER_00]: It has a lot of fluffy bells and whistles that can be exciting.

[00:02:40] [SPEAKER_00]: But without the engine, none of it works.

[00:02:43] [SPEAKER_00]: So what's the financial engine in your life?

[00:02:46] [SPEAKER_00]: Learning to save.

[00:02:48] [SPEAKER_00]: I know, I know, that's not very sexy.

[00:02:51] [SPEAKER_00]: But it's incredibly important.

[00:02:53] [SPEAKER_00]: To think about it, if you never saved any money, how would you grow your business?

[00:02:57] [SPEAKER_00]: How would you invest?

[00:02:59] [SPEAKER_00]: How would you ever go on vacation, buy a house, or do anything that costs more than a single paycheck?

[00:03:04] [SPEAKER_00]: Learning to systematically save is literally the difference between people who become incredibly wealthy and those who live paycheck to paycheck.

[00:03:12] [SPEAKER_00]: Yes, even if you make a lot of money.

[00:03:15] [SPEAKER_00]: I've worked with thousands of small business owners, and I've seen this play out in every single case.

[00:03:21] [SPEAKER_00]: I've helped people who make less than $50,000 a year and are building wealth.

[00:03:26] [SPEAKER_00]: And I've worked with too many people that make $50,000 a month and are broke.

[00:03:32] [SPEAKER_00]: The broke ones spend every penny they make and live in constant fear.

[00:03:37] [SPEAKER_00]: How is that possible?

[00:03:39] [SPEAKER_00]: Because they never learn to save.

[00:03:41] [SPEAKER_00]: That's it.

[00:03:42] [SPEAKER_00]: Seriously, the broke ones are smart people, and they are doing a lot of things right.

[00:03:47] [SPEAKER_00]: But they never figured out how to set aside money from each payday, and it's killing them.

[00:03:53] [SPEAKER_00]: It's hard on their health, it strains their marriage, and it will be very hard on them when life throws a curveball and they have nothing to fall back on.

[00:04:01] [SPEAKER_00]: Before you learn to run, you must learn to walk.

[00:04:04] [SPEAKER_00]: Before the windows and radio work in the car, the engine has to be firing.

[00:04:08] [SPEAKER_00]: Before you can build wealth and invest effectively, you must learn to save.

[00:04:14] [SPEAKER_00]: If you aren't already, start setting aside at least 10% of every dollar you make.

[00:04:19] [SPEAKER_00]: Unless you are absolutely broke already, you should be able to do that quite easily.

[00:04:24] [SPEAKER_00]: Then, once you're used to 10%, bump it up to 15%, and then 20%.

[00:04:29] [SPEAKER_00]: You'll be amazed at how quickly the money builds up.

[00:04:32] [SPEAKER_00]: Guess what else builds up?

[00:04:34] [SPEAKER_00]: Your confidence, your abundance, your optimism.

[00:04:37] [SPEAKER_00]: Somehow the world looks a lot rosier when you've got financial strength, and I want you to experience it.

[00:04:44] [SPEAKER_00]: Saving isn't the only component of building wealth, but without it, you'll never even get out of the parking lot.

[00:04:54] [SPEAKER_00]: Why a Simple Financial Strategy Works by Derek Van Ness of BigLifeFinancial.com

[00:05:01] [SPEAKER_00]: In life and in finances, simplicity is underestimated.

[00:05:06] [SPEAKER_00]: The truth is simple things get done, and the complex usually doesn't.

[00:05:11] [SPEAKER_00]: In the end, results matter, so getting things done isn't optional.

[00:05:16] [SPEAKER_00]: Within finances, having a complex master plan can be overwhelming and lead to paralysis,

[00:05:22] [SPEAKER_00]: not to mention it's unnecessarily costly.

[00:05:25] [SPEAKER_00]: Rather than fixating on the massive master plan, simply take the first step or begin with the most important action.

[00:05:33] [SPEAKER_00]: By getting the first step right, you'll be setting yourself up to powerfully take the second step.

[00:05:39] [SPEAKER_00]: Said another way, doing the most important and obvious things first, you lay a solid foundation.

[00:05:45] [SPEAKER_00]: Anything large starts as something small.

[00:05:47] [SPEAKER_00]: In fact, the complex is merely made up of many simple interlocking parts.

[00:05:54] [SPEAKER_00]: In finance, the first steps may be obvious, but not glamorous.

[00:05:58] [SPEAKER_00]: Take them anyway.

[00:05:59] [SPEAKER_00]: For example, begin saving 10% or more of your income and never stop.

[00:06:05] [SPEAKER_00]: As your income increases, your 10% savings should too.

[00:06:08] [SPEAKER_00]: This seems obvious, but many won't take the time to carry it out.

[00:06:12] [SPEAKER_00]: If you don't have one, then use that money to build up your emergency fund.

[00:06:16] [SPEAKER_00]: Start with one to two months worth of expenses so that you can begin building peace of mind and confidence.

[00:06:23] [SPEAKER_00]: Next comes another simple step.

[00:06:25] [SPEAKER_00]: If you have inefficient debts, anything over a 7% interest rate, begin using that savings to pay off the debts.

[00:06:33] [SPEAKER_00]: Paying off a 17% credit card has the same impact on your bottom line as earning 17% in an investment with no risk.

[00:06:42] [SPEAKER_00]: Paying off bad debt isn't sexy, but it's incredibly effective.

[00:06:46] [SPEAKER_00]: Don't skip this step.

[00:06:48] [SPEAKER_00]: Once the bad debts are paid off, continue to save until you have three to six months worth of expenses.

[00:06:54] [SPEAKER_00]: Again, this is simple, but it continues to build your confidence and help your mindset become one of abundance rather than fear or scarcity.

[00:07:02] [SPEAKER_00]: This is a huge shift.

[00:07:04] [SPEAKER_00]: If you simply continue to save 10% to 20% of your income and never invested a penny, you'd still end up ahead of 80% of the people in our country by retirement.

[00:07:14] [SPEAKER_00]: It won't make you uber rich, but this plain and simple practice will single-handedly change your life.

[00:07:20] [SPEAKER_00]: It takes time, but even with no other action, it works.

[00:07:25] [SPEAKER_00]: Of course, once you've begun to build up savings, things can get more complex, but only if you let them.

[00:07:31] [SPEAKER_00]: You'll want to put your money to work earning for you, but that can be a large learning curve.

[00:07:35] [SPEAKER_00]: The truth is, developing a financial strategy doesn't have to be tricky.

[00:07:40] [SPEAKER_00]: But with so many people looking to help you manage your money, it can be difficult to determine which way to go.

[00:07:46] [SPEAKER_00]: Some will show you intricate plans with many moving pieces and in-depth flow charts.

[00:07:51] [SPEAKER_00]: Others will ask you to hand them your money and never look at it until retirement.

[00:07:55] [SPEAKER_00]: Neither of these is a good idea because if you don't understand what's happening, it's easy to lose confidence or get bamboozled.

[00:08:03] [SPEAKER_00]: The good news is that you can keep wealth building simple and allow yourself to focus on what's really important.

[00:08:10] [SPEAKER_00]: Your loved ones, your health, and your work.

[00:08:13] [SPEAKER_00]: If you get those right, you'll be winning the game of life.

[00:08:20] [SPEAKER_00]: You just listened to the post titled,

[00:08:22] [SPEAKER_00]: The Most Important Financial Habit and Why a Simple Financial Strategy Works,

[00:08:27] [SPEAKER_00]: both by Derek Van Ness of BigLifeFinancial.com.

[00:08:31] [SPEAKER_00]: And I'll be right back with my commentary.

[00:08:33] [SPEAKER_00]: Buy low, sell high.

[00:08:36] [SPEAKER_00]: It's easy to say, hard to do.

[00:08:39] [SPEAKER_00]: For example, high interest rates are crushing the real estate market right now.

[00:08:44] [SPEAKER_00]: Demand is dropping and prices are falling, even for many of the best assets.

[00:08:49] [SPEAKER_00]: It's no wonder the Fundrise flagship fund plans to go on a buying spree,

[00:08:55] [SPEAKER_00]: expanding its billion-dollar real estate portfolio over the next few months.

[00:08:59] [SPEAKER_00]: You can add the Fundrise flagship fund to your portfolio in just minutes and with as little as $10 by visiting fundrise.com slash OFD.

[00:09:10] [SPEAKER_00]: That's F-U-N-D-R-I-S-E dot com slash OFD.

[00:09:16] [SPEAKER_00]: Carefully consider the investment objectives, risks, charges, and expenses of the Fundrise flagship fund before investing.

[00:09:26] [SPEAKER_00]: This and other information can be found in the fund's prospectus at fundrise.com slash flagship.

[00:09:33] [SPEAKER_00]: This is a paid advertisement.

[00:09:36] [SPEAKER_00]: I love the great reminder here that we need to prioritize saving and make it a mindless habit.

[00:09:43] [SPEAKER_00]: I see many people, when they start getting interested in personal finance,

[00:09:47] [SPEAKER_00]: immediately jump into investing or focus on increasing their income.

[00:09:51] [SPEAKER_00]: And don't get me wrong, these are very important aspects of personal finance.

[00:09:55] [SPEAKER_00]: But I believe the place to start is getting very clear on the gap between your income and expenses.

[00:10:02] [SPEAKER_00]: That gap is your savings, and the key to financial freedom is growing and investing that gap.

[00:10:09] [SPEAKER_00]: You can grow the gap by increasing your income, reducing your expenses, or better yet, both.

[00:10:15] [SPEAKER_00]: Now you've got some bandwidth to pay down high-interest debts,

[00:10:19] [SPEAKER_00]: build an emergency fund, or an emergency slash opportunity fund, as I like to call it,

[00:10:24] [SPEAKER_00]: and yes, invest for your future.

[00:10:27] [SPEAKER_00]: If you only focus on increasing your income and aren't mindful about lifestyle creep and its effect

[00:10:33] [SPEAKER_00]: on your expenses, you simply aren't minding the gap.

[00:10:37] [SPEAKER_00]: I also appreciate how this second article reminds us that we don't need to overcomplicate our financial

[00:10:42] [SPEAKER_00]: plans.

[00:10:43] [SPEAKER_00]: Yes, there are plenty of opportunities to overcomplicate it, but we can also keep our finances

[00:10:48] [SPEAKER_00]: pretty straightforward.

[00:10:50] [SPEAKER_00]: Pay down debts, hold some cash for emergencies, and save and invest in low-fee index funds for

[00:10:55] [SPEAKER_00]: retirement.

[00:10:56] [SPEAKER_00]: Easy peasy.

[00:10:58] [SPEAKER_00]: That'll do it for another edition of Optimal Finance Daily.

[00:11:02] [SPEAKER_00]: Thank you for continuing to listen.

[00:11:04] [SPEAKER_00]: Have a great start to your weekend, and I'll see you tomorrow where your optimal life awaits.