How To Not Suck With Money
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What are the five essential personal‑finance principles to stop sucking at money?
54% of US adults say they know a great deal or at least a fair amount about personal finances. The other 46%, not so much.
Brian, I am so excited because we believe that anyone can build wealth, even if you think that you're not that good with money. And today we're gonna cover five simple things that you need to know to get your finances on the right track so that you can start building wealth.
Just in case you're confused, I'm Brian, he's Bo, and this is the Money Guy Show, where two financial advisors give you the knowledge and tools you need to be better with money. And with that, let's jump right in.
Brian, we say all the time that building wealth is simple, surprisingly simple, but it's not that easy not all that easy. And there are a lot of people out there that frankly are just not very good with money, or perhaps it doesn't come to them naturally. What we want to communicate today is that if you want to start being better with your finances, there are really five key concepts. And if you could grasp these concepts, it'll change your world.
Yeah, let's start with one that I think defines both of us is how your journey started does not define how it ends.
Look, uh, some people are in a bad spot because of their decisions. They got in consumer debt, they didn't save, they lived beyond their means. And other people might just have poor circumstances. They were born into a unique situation with a unique family, or there were unique constraints, or a unique thing happened. But either way, just because those truths might exist, it does not mean that you are helpless to impact. Impacting what the future looks like.
Yeah, I think I think this is one that I would encourage and we'll bring this full circle at the end when I share some stats about our own clients and their mindsets. But guys I don't care how bad your situation is. You can improve it. There's going to be a way. And we're going to give you the tips, the tricks, and all the ways to cut through all the things and struggles you might be having right now. And the first key thing is that you just need to understand there's three key ingredients to wealth building. If you can understand these mindset and techniques, you're going to be better for it. The first is discipline. Can you live on less than you make? That's the part that's going to create the margin or aka mindset.
Money and if you give that enough time. Man, oh man, is that time an important component in this? You can watch compounding growth do its magic.
And if you don't believe us, I'll prove it to you because there is a singular behavior. Whether you're awful with money or you've never made any money decisions at all, we have a little test that we think if you will execute this, you can prove to yourself that you can build wealth. And we call it the 5% test. And it's literally this easy. Whatever your paycheck is, whether you're an hourly employee, salary employee, don't even worry about taxes, 401k. Health, any of that kind of stuff. Whatever dollar number hits your checking account on a weekly basis, every other week, monthly, whatever it is, whatever that dollar amount is, I just want you to take that number and multiply it times 0.05. That's 5% of that.
I just want you to take 5% of your net pay and I want you to just put it in a savings yield, a savings account, a high yield savings account. You don't have to overcomplicate it. Google. Best high yield saves account and just park it in there. Only 5%. You take that at your next paycheck. Next week, next month, whenever it hits, take 5% of that, put it in that high yield saves account. And then next month, do the same thing. 5% put in that account. And then the next month, 5% do it again. If you can do this for three months consecutively, if you can walk away from spending just 5%. Of your net take home pay, you have proven that you have that very first ingredient. You've proven that you have discipline, that you can create margin and that you can do that over a period of time.
If you can pass the five percent test, then you can build wealth no matter where you're starting from.
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