2845: My Simple Philosophy For Achieving Financial Freedom In 5 Years Or Less by Steve Chou on Money Advice

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

[00:00:05] [SPEAKER_00]: That's the idea behind our new podcast, Good Sleep.

[00:00:09] [SPEAKER_00]: Greg, our host from Optimal Relationships Daily, is here to help ease you into a peaceful night's

[00:00:14] [SPEAKER_00]: rest with some positive affirmations. And these affirmations aren't just comforting.

[00:00:19] [SPEAKER_00]: They can help ease anxiety and nurture positive thoughts, setting you up for true good sleep.

[00:00:26] [SPEAKER_00]: So, press play on Good Sleep Tonight because a good tomorrow starts with a good night's sleep.

[00:00:32] [SPEAKER_00]: Just search for Good Sleep in your podcast app and be sure to pick the one from Optimal Living Daily.

[00:00:39] [SPEAKER_00]: This is Optimal Finance Daily, my simple philosophy for achieving financial freedom

[00:00:46] [SPEAKER_00]: in 5 years or less by Steve Chou of MyWifeQuitHerJob.com. And on your host and personal

[00:00:53] [SPEAKER_00]: finance enthusiast, Diania Merriam. This is actually one of multiple shows in our network,

[00:00:59] [SPEAKER_00]: covering different topics like personal development, health, relationships, and your work life.

[00:01:06] [SPEAKER_00]: So if you like narration style podcasts, be sure to search for Optimal Living Daily

[00:01:11] [SPEAKER_00]: wherever you're hearing this and check out our other shows. But for now,

[00:01:16] [SPEAKER_00]: let's get right to it and continue optimizing your life.

[00:01:23] [SPEAKER_00]: My Simple Philosophy for Achieving Financial Freedom in 5 Years or Less by Steve Chou of MyWifeQuitHerJob.com.

[00:01:33] [SPEAKER_00]: If you ever see me at a casino, you'll often find me playing cards at the

[00:01:37] [SPEAKER_00]: PyGaO poker table. Now, PyGaO is definitely not the sexiest game at the casino,

[00:01:43] [SPEAKER_00]: nor is it one that draws a huge crowd. But those who appreciate PyGaO enjoy the game for

[00:01:49] [SPEAKER_00]: its simplicity, its longevity, and its potential for a large payout. In fact, I've learned to love

[00:01:56] [SPEAKER_00]: the game so much that I use the principles of PyGaO to model my entire strategy for financial freedom.

[00:02:04] [SPEAKER_00]: This simple plan that I'm about to describe has allowed me to create multiple 6 and 7 figure

[00:02:10] [SPEAKER_00]: side hustles and achieve financial freedom. Both my wife and I no longer rely on a day job

[00:02:16] [SPEAKER_00]: for income and barring any major catastrophes were essentially financially secure. The rules of PyGaO

[00:02:24] [SPEAKER_00]: and how they apply to financial freedom. Now, before you can understand the lessons that I've

[00:02:30] [SPEAKER_00]: learned from PyGaO, you must first learn how the game works. Here's a quick one paragraph

[00:02:36] [SPEAKER_00]: description of the rules of the game. You and the dealer are dealt 7 cards. And with

[00:02:42] [SPEAKER_00]: these 7 cards, you create 2 poker hands, a 2 card hand and a 5 card hand. Both of your hands then go

[00:02:51] [SPEAKER_00]: up directly against the dealer's 2 hands. If you win both poker hands, you win the bet.

[00:02:57] [SPEAKER_00]: If you lose both, you lose. And if you win one and lose one, you tie and no money changes hands.

[00:03:05] [SPEAKER_00]: Here's the thing, more than half the time, you end up tying with the dealer

[00:03:09] [SPEAKER_00]: and no money changes hands. In fact, I've literally sat at a PyGaO poker table for hours before

[00:03:16] [SPEAKER_00]: and not won or lost a single dime. Now given the slow nature of the game,

[00:03:22] [SPEAKER_00]: how can you possibly win money if you're pushing with the dealer more than half the time?

[00:03:27] [SPEAKER_00]: How the heck can you hit the jackpot playing such a boring game?

[00:03:32] [SPEAKER_00]: The Fortune Side Bet

[00:03:34] [SPEAKER_00]: The secret to PyGaO lies with the Fortune Side Bet.

[00:03:39] [SPEAKER_00]: Whenever you play a hand of PyGaO, you're offered the chance to put some additional money in a side

[00:03:44] [SPEAKER_00]: pot that pays out like a slot machine depending on what hands you're dealt in the regular game.

[00:03:51] [SPEAKER_00]: For example, if you happen to get a straight flush, you win a large sum of money. Even

[00:03:57] [SPEAKER_00]: hands as low as 3 of a kind still pay out a decent multiple of your bet. And as if that

[00:04:02] [SPEAKER_00]: weren't enough, you can still win even if a different player at the table gets a good hand as well.

[00:04:09] [SPEAKER_00]: Therefore, even though you push with the dealer more than half the time and you rarely make any

[00:04:15] [SPEAKER_00]: money on the regular game, you always have the chance to win a huge payout. How the

[00:04:20] [SPEAKER_00]: different facets of PyGaO apply to your finances? Now the regular game of PyGaO is super slow

[00:04:28] [SPEAKER_00]: and boring, but the advantage is that you can play for a long time without losing money.

[00:04:33] [SPEAKER_00]: And it turns out that PyGaO is an excellent analogy for your day job. A regular day job

[00:04:40] [SPEAKER_00]: is great for paying the bills and making ends meet, but you will never ever make life changing

[00:04:46] [SPEAKER_00]: money by working for someone else. Even if you were able to go above and beyond and make

[00:04:51] [SPEAKER_00]: your company a lot of money, your potential upside is capped by your steady salary. On the

[00:04:58] [SPEAKER_00]: other hand, the fortune side bet is where it's at. By placing a small side bet on the table,

[00:05:04] [SPEAKER_00]: you have the potential to make a thousand times the money you would make otherwise.

[00:05:09] [SPEAKER_00]: But the catch is that you have to risk a little money to play.

[00:05:13] [SPEAKER_00]: In real life, your fortune side bet is starting your own business.

[00:05:17] [SPEAKER_00]: You might not win on your first try, but the longer you play, the more likely you will succeed.

[00:05:23] [SPEAKER_00]: But if you languish on the sidelines and stick with the regular game,

[00:05:27] [SPEAKER_00]: you'll never get anywhere. One of the reasons I love the game of PyGaO is that I can go to

[00:05:33] [SPEAKER_00]: the casino and play all night without losing all my money. And my ability to last a long time

[00:05:39] [SPEAKER_00]: gives me enough runway for a chance to hit the jackpot.

[00:05:43] [SPEAKER_00]: A more conservative approach to entrepreneurship. One of the questions I most often get asked

[00:05:50] [SPEAKER_00]: is whether you should quit your job cold turkey to pursue your business full-time.

[00:05:55] [SPEAKER_00]: And I almost always reply, no. Ideally, you should keep your day job until you've had a

[00:06:01] [SPEAKER_00]: chance to fully validate your business idea before taking the plunge. After all,

[00:06:07] [SPEAKER_00]: running a business is challenging enough as it is. And you definitely don't want financial stress

[00:06:12] [SPEAKER_00]: to cloud your judgment. Even though you might hate your day job and you can't stand your boss,

[00:06:18] [SPEAKER_00]: think of your day job as a way to stay in the game. Use your salary to buy yourself some extra

[00:06:24] [SPEAKER_00]: time until you can grow your business. Stick with something steady until your side project

[00:06:30] [SPEAKER_00]: gets off of its feet. Overall, there are no guarantees with any business.

[00:06:35] [SPEAKER_00]: But one thing's for sure, the more time you have to validate your business idea,

[00:06:41] [SPEAKER_00]: the more likely that you will eventually succeed. The best and safest entrepreneurial strategies

[00:06:47] [SPEAKER_00]: involve creating a safety net and having the freedom to take small calculated risks.

[00:06:54] [SPEAKER_00]: The truth about entrepreneurship. The biggest misconception about entrepreneurs is that

[00:07:00] [SPEAKER_00]: they're all gamblers. But at this point, I've interviewed well over 200 successful small business

[00:07:05] [SPEAKER_00]: owners on my podcast and not a single one of them has ever struck me as a big-time risk taker.

[00:07:12] [SPEAKER_00]: And I don't know if the media is to blame, but there seems to be this crazy myth

[00:07:16] [SPEAKER_00]: that successful entrepreneurs like to take wild chances. But nothing could be further from

[00:07:23] [SPEAKER_00]: the truth. Almost everyone that I interviewed so far has taken a methodical and conservative

[00:07:28] [SPEAKER_00]: approach to starting their businesses. And to put it succinctly, here's what they do.

[00:07:34] [SPEAKER_00]: They take small calculated risks. They don't bet the farm and they iterate on their mistakes.

[00:07:41] [SPEAKER_00]: When my wife and I first started, we both worked our full-time jobs

[00:07:45] [SPEAKER_00]: while crafting our e-commerce store on the side. And while we were worried about failure,

[00:07:51] [SPEAKER_00]: running through the worst case scenarios helped to temper our fears.

[00:07:55] [SPEAKER_00]: Worst case scenario? Our business flops and we both continue to work at our day jobs.

[00:08:01] [SPEAKER_00]: Realistic case scenario? My wife works full-time on the business while my day job supports the

[00:08:06] [SPEAKER_00]: family. Best case scenario? Our online store takes off big time and we sip margaritas on

[00:08:13] [SPEAKER_00]: the beach for the rest of our lives. How did things end up turning out? It took a little while,

[00:08:19] [SPEAKER_00]: but today our online store is making seven figures. My wife and I no longer work a regular job,

[00:08:26] [SPEAKER_00]: and we spend most of our time with family. Key takeaways? If you take away anything from this

[00:08:33] [SPEAKER_00]: post, it's that you'll never make life-changing money unless you play the fortune side bet.

[00:08:38] [SPEAKER_00]: And in real life, your fortune side bet is your business. But starting a side hustle

[00:08:44] [SPEAKER_00]: doesn't have to be risky. If you decide to take the plunge, then make sure you have a backup plan.

[00:08:50] [SPEAKER_00]: Stay at your day job until your side hustle can support you. Then build upon your existing

[00:08:55] [SPEAKER_00]: successes until you have a portfolio of income streams. You just listened to the post titled

[00:09:05] [SPEAKER_00]: My Simple Philosophy for Achieving Financial Freedom in Five Years or Less by Steve Chiu

[00:09:11] [SPEAKER_00]: of MyWifeQuitHerJob.com and I'll be right back with my commentary.

[00:09:17] [SPEAKER_00]: Buy low, sell high. Buy low, sell high. It's a simple concept, but not necessarily an easy concept.

[00:09:25] [SPEAKER_00]: Right now, high interest rates have crushed the real estate market. Prices are falling

[00:09:30] [SPEAKER_00]: and properties are available at a discount, which means Fundrise believes now is the time to

[00:09:36] [SPEAKER_00]: expand the Fundrise flagship fund's billion-dollar real estate portfolio.

[00:09:42] [SPEAKER_00]: You can add the Fundrise flagship fund to your portfolio in minutes by visiting fundrise.com

[00:09:48] [SPEAKER_00]: slash OFD. That's F-U-N-D-R-I-S-E dot com slash OFD. Carefully consider the investment

[00:09:59] [SPEAKER_00]: objectives, risks, charges and expenses of the Fundrise flagship fund before investing.

[00:10:07] [SPEAKER_00]: This and other information can be found in the Fund's prospectus at fundrise.com slash OFD.

[00:10:15] [SPEAKER_00]: This is a paid advertisement.

[00:10:18] [SPEAKER_00]: I absolutely agree with Steve's advice here about keeping your day job while you validate

[00:10:23] [SPEAKER_00]: your side business. You may hear stories about entrepreneurs who drained their 401k to pursue

[00:10:29] [SPEAKER_00]: their dreams and it worked out really well for them, but you don't hear about all the times

[00:10:35] [SPEAKER_00]: this doesn't work out. Forbes released an article about the 11 reasons why most entrepreneurs fail

[00:10:42] [SPEAKER_00]: and the number one reason is running out of money. Reaching a level of financial stability

[00:10:48] [SPEAKER_00]: before taking on entrepreneurial risk as well as keeping a regular source of income while you build

[00:10:55] [SPEAKER_00]: is really important. For me personally, I took a 40 grand loss on my first year of the economy

[00:11:02] [SPEAKER_00]: conference. It was a huge hit, but because I still had my full-time job and that was money

[00:11:08] [SPEAKER_00]: that I was going to invest anyway, I was able to cash flow it. As someone who is careful

[00:11:14] [SPEAKER_00]: about money and successful with using budgeting in my personal life, you would think this would

[00:11:19] [SPEAKER_00]: carry over to business finances. When I developed my first budget for the conference, it was 20 grand,

[00:11:26] [SPEAKER_00]: but my actual cost the first year came to 60 grand. I made a ton of assumptions in developing

[00:11:33] [SPEAKER_00]: that initial budget that were flat out wrong, but that's the game when you create something

[00:11:39] [SPEAKER_00]: new. You have to have financial bandwidth to be able to navigate the unknowns. It's risky,

[00:11:46] [SPEAKER_00]: but keeping your day job can make it more manageable. But that should do it for today.

[00:11:51] [SPEAKER_00]: Have a great rest of your day and I'll see you tomorrow where your optimal life awaits.