[00:01] right? >> Brent, I am so excited about this because our clients have literally spent decades building wealth and learning financial lessons along the way. And on today's show, we get to show you just
[00:14] millionaire. >> I'm Brian, he's Bo, and we're financial advisors here to dive into what the wealthy actually do with their money, how they got there, and what you can learn on your way to building your great
[00:28] big beautiful tomorrow. With that, let's jump right in. survey. We ask our clients all these questions. Let's talk about what do they
[00:43] actually look like? Who are these folks? And so, just at a glance, let's start the things we talk about all the time here. We want you to understand where you are and what your net worth is. You
[00:58] take everything that you own and subtract out everything that you own, and that's your net worth. When we look at our clients, the average net worth for our clients is just under 3 and 1/2 million dollars, but the median is about
[01:13] 2 and 1/2 million. It's not skewed by the higher and lower ends. In the middle, about a 2 and 1/2 million dollar median net worth amongst our clients at >> So, if you're watching this and you're wondering, "Well, what is my net worth?"
[01:25] We would invite you, "Hey, you've got to start this journey somewhere. Start keeping score of what you own versus what you actually owe." And I would invite you, go to learn.moneyguy.com and start tracking your net worth. Even
[01:40] just came out of school and you have a lot of student loan debt. I'm telling you, if you have a dashboard view of what's going on every year, you're going to be able to manage your army of dollar bills that much better.
[01:53] >> And Brent, this is the actual tool that you and I both use every single year this is something we built that we don't use. This is what we like to see front net worth, now let's talk about one of the things that leads to net worth. It's
[02:09] the size of the shovel. And when we look at the income, the average income and median income for our Abound Wealth clients, the average income is just under $350,000. But if you remove the outliers and look
[02:22] But if you remove the outliers and look at the median, it's about $262,000. >> But look, I got to tell you if I was outside looking in, I would say, "Well, >> They hire financial advisors. >> I think that this is not telling the
[02:35] full story as of I think take myself. When I graduated college, my starting salary was $28,500. That's That's where a CPA graduating in the '90s was. So, this isn't where these people started out. Yes, they've created
[02:50] education, we're going to get into careers and other things, but I think you're going to see that how your journey starts does not have to be where it ends. And don't get thrown just because you see all the success. What I
[03:03] want you to do is use what we're sharing, the income, the net worth. Start thinking about the behaviors that can impact your life. >> what you just said. How your journey starts does not define how it ends. And
[03:16] worth and income, it's to kind of show you what it looks like beginning with about what were the things that took place? What were the things that happened that allowed our clients to get to the place where they are? And the
[03:31] very first thing, I think this is really interesting, is we ask a question around education. Like how were you trained? What sort of education do you did you is, "Well, okay, if you if you're going
[03:45] successful, you must have gone to some prestigious school. You must have gone to the Ivy Leagues. You must have gone somewhere that allowed you to build a network. You're that private school person and that put you in the position
[03:59] at the numbers, that's not the case. >> Yeah, I love this because this is one of those things I found when I was started, you know, if you read any of the books out there like The Millionaire Next Door, Everyday Millionaires. I love that
[04:11] we kind of get to echo these things by even interviewing and surveying our clients. You find out this that what you perceive is often wrong. >> And education is one of those. So if you look at the 76%
[04:24] of our clients went K-12 in public education. Even the college they went were public universities. >> Now there are some that went to private schools, but it's not the vast majority. A lot of folks just went to the same
[04:40] education as a lot of you out there. That was what their upbringing was. They didn't have to go out and get hundreds of thousands of dollars of student loan debt going into some prestigious university to get some prestigious
[04:54] degree to be able to attain wealth. That was not the track that they went on and you. If you're someone who's sending your students off to college or if thinking about pursuing higher education, we do not think it's a
[05:10] necessity go out and have some crazy expensive, crazy uh debt-riddled education in order to be able to attain success. That's why we talk about when we want you to follow the first-year financing rule. Meaning that whatever
[05:26] you accumulate in student loan debt, we don't want you to have more than what you anticipate your first year's salary can be. So if your first year salary coming out of school for an accountant in the '90s was $28,000,
[05:41] we would not want your total student loan debt to be more than $28,000. those first two slides, the net worth, the income, it's going to be somewhat of it's going to be polarizing. Whereas I love that we're going to kind of build
[05:55] this thing up from the foundation now of education and show no, these people are a lot more like us than you probably realize. And the first is on student say, "Well, these are all silver spoons. They must have just had it given to
[06:07] them." No, we found out that our clients, 52% of them actually had to use student loans to get through college. So, yes, they're just like us. They're having to go get student loans to make it through college, but that now asks a
[06:21] question, did they follow the Money Guy rules before the Money Guy rules even are now the age that this is just good instincts. And yes, we found out that of our clients actually followed the first-year financing rule. And if they
[06:36] had student loans, they made sure they kept them below the balance of what their first-year salary was going to be. >> I think it's the idea that they were they intuitively recognized, man, I don't want to be carrying this debt load
[06:48] into my career. I don't want to drag this education along with me for years or even decades into the future. So, not only were they forward-looking, they were also beginning with the end in mind. We asked them this question, "For
[07:00] the job that you have now or for the vocation that you pursued, does it align that you went out and got?" And when we asked our clients, we found out that 76%
[07:14] of our clients, three out of four of them, actually work in a field related to their field of study. Meaning, the degree that they got in college matches up with they do for a living. >> Well, now, this is where Look, this one
[07:28] education. I've often felt like it was holding the ladder of opportunity to make you a better version of yourself. And our clients are the best version of that showing that 76% of them are actually working in their field of
[07:41] study. Unfortunately, if you look at the general public, only 27% of the typical American works in their field of study. So, that means a lot of people, something that should be a benefit to you and make you a better version of
[07:55] yourself, for a lot of you, it's creating a trap. You're You're ending up with all of the bad stuff, the student loans, the high interest rates, and then you're not even working in the field of study. Guys, this is why we got to tell
[08:08] you if you're going to make sure education is going to be an amplifier of your wealth-building journey, be a good allocator of resources. I want you to make sure and by the way, a lot of you, maybe your past is Think about this for
[08:22] relatives. Think about this for your neighbors down the street. Pay this knowledge forward. Don't go to college unless you know what you're going to do we're that it's that expensive now that you got to be very deliberate with what
[08:37] of education. >> Now, I love what you said, Ronnie. You said that education is the ladder that you can crawl up to change the circumstances that you're in. And And it's a wonderful tool, but it's not a
[08:53] about the average income for our clients. A big shovel is a wonderful tool, but it's not a necessity in order to build wealth. But, I'm going to argue this next one. This one is a necessity. This is something because it is more
[09:07] behavioral and this is something you can control no matter where you came from, no matter what your shovel looks like, and that's your savings rate. How much you were willing to lean into the first ingredient of wealth creation, how much
[09:20] you're willing to exercise discipline and defer gratification to the future will have a direct implication on how wealthy you are able to become and how healthy your savings rate is. >> my very detail-oriented people, when we
[09:34] use cuz we we it's just this part of our personalities, when we say savings, we're using that interchangeably with also investing to a large degree. So this means this is your army of dollars that you're putting to work so that you
[09:46] don't have to work so hard in the future with your brain, your back, or your hands. And I'm happy to report if you look at the data of our millionaire >> [clears throat] >> 71% of our working abound clients save
[10:00] >> Yeah, what I love is I love love about this is it's a be a client of abound wealth. You have to already attained a certain level of investable assets. Well, even though our clients have had financial success and reached financial
[10:14] conclusion, "Okay, well, I'm done. I'm finished. I can put that aside." No, those that are working are still committed to deferring gratification and building towards a great big beautiful tomorrow. And I bet if you were to ask
[10:27] them individually, while they might not have started as early or as young as they wanted to, what they would tell you is I started and I never stopped. I started and I consistently got better at deferring gratification into the future.
[10:41] need to save this much money. If I save this much money, then I'll be able to achieve." >> Well, a lot of you might be exactly like I was when I graduated college is that I was ambitious and I was trying to
[10:54] didn't know what I didn't know and I didn't know what I should be doing. So I would encourage you, I want you to go out to moneyguy.com/resources. And if you're curious, how much should you save and invest for the future?
[11:07] We've created a resource where you actually say, "Here's what your current age is, when you think you want to retire and build and save for financial independence." We'll tell you your savings and investment rate to shoot for
[11:20] based upon actual math that we've done on the back end so you don't have to, you know, spend all those calories of mental horsepower. We've done the offer. >> So, savings rate is this affirmative
[11:34] action that you take. I'm going to actually put effort into doing this thing, and yet most Americans fall short on that. But, then there's another it comes to wealth building, think about the decisions that we're not making, the
[11:49] consumption decisions that make us as millionaires look different from our peers. And for most folks, the two most expensive things you're ever going to spend money on are automobiles and homes. And so, we want to ask, okay,
[12:01] when we think about how our clients pursue those huge purchases, how did they do it? And how did they think about it? And we >> Well, no, I >> What did we find? We found that 63%
[12:16] of our clients said that for their most recent car, they were able to pay cash. So, over half of our clients are in the financial situation where they can pay cash for a car today, but that wasn't always the case.
[12:30] want to give the context, and then I I see where you're taking it, but I want the person on the street. >> Mhm. >> 81% of new cars are purchased or financed. And we know that most of those
[12:44] >> At least. >> I mean, it's it's it's it's crazy. So, a lot of Americans are taking these big purchases, especially the auto, as this purchases, especially the auto, as this is their first step in rewarding
[12:59] college kids. I even was talking to somebody, and we we were talking about the behaviors, and like you sacrifice, sacrifice. You go to school, go to like, "I'm going to reward myself with a new car." But, you did this.
[13:12] >> I mean, a lot of people do. I've seen so many peers that they think, "This is what I'm going to do to show my peers that I'm good, and I'm successful, and car." And I'm here to tell you, this thing is napalm. Instead of you building
[13:25] wealth, you're going to drive your wealth, and that's not successful. Now, I understand if 63% of our clients paid cash, that's for after they've probably had a pot of money behind them. I know when I needed to, in the beginning of my
[13:39] journey, trade my time for wages to build, I needed reliable transportation. first car were just like the general public? If 81% of general public's clients financed their first car? >> Yes, 71% of our clients said that when
[13:56] it came time to buy my first car, I could not pay for it in cash. I had to borrow money. I had to finance. >> So, we want people to understand it's >> So, we want people to understand it's okay if you have to use debt to get
[14:08] yourself going to your JOB. But, you better have some foundational rules as just as quickly as you truly can afford it, we want you paying cash for afford it, we want you paying cash for your vehicles. Cash is always the best
[14:21] depreciating. But, if you're in that desperate situation where you need reliable transportation, follow 23/8. And if you've never heard of 23/8, let us explain it to you. 20% down, that way
[14:34] bit of equity into this car that you're purchasing. You make sure that you don't finance it longer than 3 years. Look, the dealership, they're going to want to do that. They'll say you can afford anything, a few hundred dollars a month.
[14:47] No. 3 years, that will keep your back pocket and your purse honest, and make sure that your payments don't exceed 8% of your gross income. This will keep you >> Now, it's not just how you buy the car that matters, it's how you use the car,
[15:03] how you actually consume that purchase. So, we asked our clients this question. So, we asked our clients this question. When you purchase a new car, how long do you drive it? And we found that 83%, the vast majority of our clients, when
[15:16] they buy a car, they drive it for greater than 7 years. They're not the people that are changing out and replacing a brand new car every two to >> see though this is why we use the term financial mutant is because you're going
[15:31] clients, just like we process the world a little differently, I bet you're watching a personal finance show right now, you process the world differently. So, it's not going to surprise you that 65% of Americans drive cars for 5 years
[15:47] or less. You heard me say these cars depreciate like a rock. I mean, they go down in value very rapidly. So, you're actually rewarded if you drive cars for 7-plus years because that means you have less depreciation. You're not making
[16:01] more bad decisions. You're actually just driving these depreciating vehicles longer. There's a lot of success built in that deferred gratification and that consistency of how you use vehicles. >> All right, so that's cars. Now, let's
[16:14] talk about homes. For most folks, this is often the largest purchase you will ever make in your life. And we know that right now in this country as we've seen home prices run up and increase, we know that the median home value in the US,
[16:29] according to the Federal Reserve, is about $403,000. So, the question comes, okay, if that's the median, how do our clients stack up? What do their houses look like? We've already shared with you that the average
[16:43] net worth of our clients is around 3 and 1/2 million dollars. The median net worth is about 2 and 1/2 million. >> But, when it comes to homes, when it comes to their main residence, the median home value for our clients is
[16:56] the median home value for our clients is about $700,000. The average home price of our clients' current market value is right at about $850,000. that's coming from just what's happened in the housing market in the last 5
[17:09] years. I think a $700,000 median house probably 5 years ago was what? $450,000? >> so that's why I do it. It's all It also depends upon the market you live in. We do have clients that live in high cost of living areas where these houses can
[17:24] go well beyond a million, two million dollars. But, I think overall, the important thing is to understand, hey, don't let house is shelter, but you need to be careful how you structure it because it can be such a big expense
[17:37] category in your financial health. >> Well, and I think a lot of people are houses have gotten so expensive, and I know I've got to put 20% down, and I I I just the house keeps running away. I'm never going to be able to own a home.
[17:50] which we live. And so, we said, okay, let's ask our our clients, when you bought your house, when it came time for you to buy your first home, and you're you to buy your first home, and you're finally crossing into home ownership
[18:04] the home ownership category, what was your down payment? How much did you save? How much did you put down? And we found that 79% of our clients, almost 80% of our clients put down less than 20% on their
[18:17] on your first house? >> did not put down 20% on my first house. >> not put down 20% on my first house, and we believe that when you go to buy your first home, you do not have to put 20% down to be able to come into home
[18:31] liberates some of you who might be sitting on the sidelines. You know, for life purposes, it makes sense for you to buy this house for your growing family, many talking heads telling you 20 plus percent forever, and then here you are,
[18:47] you find out that the majority of people who are really good with money put down a lot less than 20%. I think I put down 5% on my first house. >> So, it it is one of those things, but also, look, we live in unique time, and
[18:59] we've done shows on is it better to buy versus rent in this current marketplace? And in a lot of cities, it's better to rent, and that's one of those things. feel like you have to get pressured into this. I would I want you to go out to to
[19:13] once again. We have a home buying calculator. We also have home buying figure out if you go through the decision matrix, does this even make sense based upon how often I'm moving for my job or my lifestyle? Go use these
[19:28] tools and resources to know that you're living your best life and not forcing >> All right, Brent. So, we've talked about their net worth. We've talked about our clients' income. We've talked about how they were educated. We talked about
[19:40] their large major purchases. But, now let's talk a little bit about their know, if you've listened to us for any amount of time, we've come up with a >> Oh, I got it. I got it. I got it here somewhere. Come on. There
[19:53] >> It is our nine-step process to help you understand what to do with your next develop the financial order of operations was both through our personal experiences building our own wealth as well as our professional experiences
[20:08] able to build wealth. And so, we said, "Okay, let's put this to the test. How do our clients perceive and how did they actually realistically live through the financial order of operations?" Because wealthy folks, folks who've been able to
[20:23] build wealth, understand the value of what you're doing with your dollars and what you're not doing with your dollars. So, we said, "Okay, let's figure out steps of the financial order of operations is high-interest debt." It's
[20:36] step number three and a lot of Americans fall into this trap. I think the average to month right now is right around $6,000 carried over where you're paying punitive interest rates. So, we asked
[20:50] our wealthy clients, "Question number one, do you use credit cards?" Some Some ever use credit cards. You just don't get them. You don't use them." We don't fall into that camp and we found that over 97%
[21:04] of our clients, almost all of them said, "Yeah, we use credit cards. We get "Yeah, we use credit cards. We get points. We get cash back. We use them as points. We get cash back. We use them as a tool in our financial tool belt." But,
[21:17] 99% say, you know, cuz remember we always say credit card use A-OK, credit card debt, meaning we're paying it off every month, no way. We do not want to have now Look, I'll be honest, when I saw
[21:31] this one, I was like, "Who in the world is here to bound wealth is carrying credit card debt?" I I don't I don't know why this number's not 100%, but if you get enough people in a population, you're always going to have the the the
[21:45] crazy outliers. So, I guess I'll take 99% but that number should be 100%. not anybody hopefully who's here on staff. I want you to aspire to be 100%
[21:58] >> So, one of the questions is, okay, well, well, why are they able to why don't your clients have to have credit card debt? Why don't they get themselves into that pickle where they have to swipe the card to cover some costs they could not
[22:12] afford? And the answer is cuz they understand the financial order of more time. They know that in step four, one of the again, the early stages to have a fully funded emergency reserve.
[22:24] That thing that prevents you from being derailed by life's unknown unknowns. We found that 93% of our clients 93% of our clients have a fully funded emergency fund. They know that no matter what comes their way,
[22:40] they have enough liquid capital to be able to bridge the gap between what's going on today and what they hope to be going on in the future when they get >> And remember, emergency reserves are so important in the financial order of
[22:53] operations. It's not just one step, it's step one and it's step four. So, don't protect you from making desperate decisions. That's what's going to keep you so that you're grounded and have peace of mind so you don't even mess up
[23:07] investments later in time because you know, hey, even if I lost my job, I'm have to do crazy things with either my portfolio or having to rely on credit card debts or do anything that's going to get me in a bad financial situation.
[23:22] want to know more about the Financial Order of Operations, go to moneyguy.com/resources and you can download your very free own free copy. >> It could be your first and your and your
[23:34] >> It could be your first and your free It can even be your laminated copy if you laminate it. So, we want you to understand that there is a better way to do money. We've helped build the plan for what that should look like. And our
[23:47] clients, they've figured that out. They've actually lived that in reality. So, we said, "Okay, now let's focus a little bit on their mindset." We know what they did tactically. We know how they approach handling their money. But
[24:00] who are they when you get inside of their minds and you think about when works. And so, we just asked this question. At what age did personal finance become serious for you? At what age did you start figuring out how money
[24:17] works and how you should interact with it? And we found that 58% of our clients got serious about their personal finances before age 30. >> Yeah, remember I've already kind of talked about that our clients see the
[24:31] world differently. You're watching personal finance finance finance content. So, you also see the world differently. These are all indicators that you might be a financial mutant. And I love it when people discover the
[24:46] power of compounding growth and early and often is your best friend. And that's why we often talk about what's called the wealth multiplier. And this is kind of the thing Y'all know my journey on becoming wealthy was is being
[24:59] the poor kid sitting in my economics class in high school and Mr. Morrow told me if I could save $100 a month. He told the whole class, $100 a month you'll all be millionaires. And I was working fast food and I was like, holy cow, I can do
[25:12] this. What seemed impossible now was sitting right before me. You too can build wealth beyond your wildest imagination if you understand that your can. What I think people would be shocked to find out is that when you
[25:26] reach actual financial independence, if you put your army of dollars to work early and often, between 77% of your total account value at retirement is probably going to be the
[25:39] encourage you go to moneyguy.com/resources. We have calculators. We have resources like this. You can actually put in what you have. You can put in what your age is and see how powerful every dollar you
[25:54] >> Now, I want to pause real quick cuz maybe you're out there listening to this and maybe you're not younger than 30. I mean, we we all understand conceptually that the earlier we save the better. And
[26:07] investing and saving would have been yesterday, which makes today by default hear these numbers. We said that a vast majority, 52% of our clients or 58% of
[26:19] listen to this, even for clients that work with us today, 20% of them found out in their they figured out personal finance in their early 30s. 12% in their 7% that didn't figure it out till they were 40. So maybe this is the first time
[26:35] you're seeing this. Maybe this is the first time that you're interacting with this content. It's okay. Even if you're that 40-year-old, every dollar that you that 40-year-old, every dollar that you save has the potential to turn into $7
[26:47] by the time that you retire, but you have to start today. If you've delayed, if you haven't caught the bug yet, make sure that you catch it and your future take it seriously. >> I want to bring it back to something
[27:01] that was said at the beginning. How your story begins does not define how it ends. And I think for a lot of you I grew up in a household where I was told constantly, you know, the way you get wealthy is you have to be born into it
[27:14] against those that don't come from money. And I remember when I read, you know, I had the Mr. I had the tomorrow moment where I understood compounding growth, but it wasn't until I read The
[27:26] Millionaire Next Door by Dr. Stanley and Danko that I that I quickly learned that, you know what, 80% of millionaires are first generation. And then once you know it that we fast forward the the 30 years into my career and we're
[27:40] interviewing our own clients and we find out that just like the 80% that Dr. Stanley shared back in the mid-90s, we find out 74% of our clients also are
[27:53] first generation, meaning they didn't inherit this money. It came from them doing the hard work of deferred gratification, being disciplined, saving a little bit today to build your great big beautiful tomorrow. You can do this,
[28:06] >> If you even just think about the math, we said that the median net worth of our clients is about two and a half million dollars. That means that if 74% of our than $25,000, that inheritance likely represents less
[28:21] than 1% of their total wealth. These are folks who understand how money works and they have a mindset that just because I'm in a situation today does not mean that I'm going to have to
[28:34] be in that situation tomorrow, that I get to take a part in controlling what my future looks like. And we believe and we've always kind of anecdotally folks we interact with, they generally think that opportunity is going to be on
[28:49] my side, that tomorrow will likely look better than today, that I have the ability to impact my future positive. So, we asked our clients, "Hey, when you that you view the world and the way that you think about opportunities, would you
[29:02] describe yourself as an optimist who always sees the glass half full or as a pessimist who always sees the glass half empty?" And we found that 82% of our clients, from a mindset perspective, they would consider themselves and
[29:17] identify themselves as being optimists versus being pessimists. >> And once again, is a separation from the general public because unfortunately, um there's a lot of people out in the general public that classify themselves
[29:31] as pessimistic. And I get it. Look, if you watch the nightly news, they you the book, Millionaire Mission, when I wrote it, is that if it bleeds, it leads. It seems like that the the news media has also discovered that if we
[29:45] create something that makes you feel on edge or scared or that there's a catastrophic catastrophic thing coming your way, they'll keep your eyes and ears that much more peeled. It is so hard to work against the current, but
[29:59] I'm here to tell you guys, these are exciting times. There's going to be lots of opportunity for you to build wealth, to let your money work harder than you can. You just kind of have to see through the noise. And that's what we've
[30:12] tried to create a safe space for you to come get the best education out there in the marketplace. And our goal is is to help you really maximize the abundance Is that I have literally Bo and I have created an entire platform
[30:27] for you to learn our concepts, grow through them, and then apply them. And once you create so much success that your simple life that seemed like all savings rate, you had to put that money to work, all of a sudden your life
[30:40] becomes complex. You're thinking about taxes, you're thinking about retirement about insurance, and all the things you We're going to leave the porch light on for you. And I want you to consider
[30:53] maximizing the abundance cycle to the next level by becoming a client of the the country, and we'd love for you to give us a chance to show you why we're that special. I'm your host Brian, joined by Mr. Bo. You too can be part of
[31:08] our next millionaire study. Money Guy, out.