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If you don't get in the game of home ownership and you rent in your 20s and you rent in your 30s, you're going to
00:00:06
turn around in your 40s and having not built any net worth. And in fact, homeowners in America are worth 40 times
00:00:13
more than renters. And I'm talking about ordinary Americans. >> But that doesn't mean that buying a home
00:00:18
made them rich, right? >> It actually does. And I'm going to go through that.
00:00:22
>> But am I not better off renting and investing in the stock market? I want to
00:00:26
bust this myth because I have spent the last 33 years of my life helping millions of people with ordinary incomes
00:00:33
become financially free, including nine years as a financial adviser at Morgan Stanley and I got to see firsthand how
00:00:39
everyone who came into my office with an ordinary income built wealth. And there's a formula to getting rich, but
00:00:44
there's also a system to how you put your financial life on autopilot in less
00:00:49
than 10 minutes. And it doesn't require discipline, budget, and you don't have
00:00:54
to make a lot of money to get started. But unless your financial plan is automatic, it will fail. But more
00:00:59
importantly, I believe the next 10 years will be the greatest opportunity to build wealth in our lifetime. And yet, 7
00:01:03
out of 10 people right now are living paycheck to paycheck. More than 50% of Americans don't have savings. And most
00:01:08
people don't know where their money goes. And in fact, when we ask people, how much money would it take to totally
00:01:13
change your life? They say $10,000. Now, how much money do you need to spend a day to blow $10,000 a year? $27.40
00:01:21
a day. If you invested that a day for 40 years, you'd have over $4,424,000. That would be life-changing.
00:01:29
>> But just before we get into all of the specifics and the strategies, do you
00:01:32
have any specific advice to people that are currently struggled with debt? >> Absolutely. There's a very simple
00:01:36
formula to getting out of debt called dole. I'd tell you to >> listen, my my team gave me a script that
00:01:44
they asked me to read, but I'm just going to ask you um in the nicest way I possibly can. Thank you. Thank you first
00:01:49
and foremost for choosing to subscribe to this channel. It is um it's been one
00:01:52
of the most incredible crazy years of my life. I never could have imagined. I had
00:01:56
so many dreams in my life, but this was not one of them. And the very fact that these conversations have resonated with
00:02:00
you and you've given me so much feedback is something I will always be appreciative of. And I almost carry away
00:02:04
a sort of burden of uh responsibility to pay you back. And the favor I would like
00:02:09
to ask from you today is to subscribe to the channel if you um would be so obliged. It's completely free to do
00:02:14
that. roughly about 47% of you that listen to this channel frequently currently don't subscribe to this
00:02:19
channel. So, if you're one of those people, please come and join us. Hit the
00:02:22
subscribe button. It's the single free thing you can do to make this channel
00:02:25
better. And every subscriber sort of pays into this show and allows us to do things bigger and better and to push
00:02:30
ourselves even more. And I will not let you down if you hit the subscribe button. I promise you. And if I do,
00:02:34
please do unsubscribe, but I promise I won't. Thank you. David, what has your mission been for
00:02:47
the last three decades? >> I have spent the last 30 years of my life helping ordinary people, people
00:02:56
with ordinary incomes become financially free. And the last 20 years I've spent
00:03:02
helping people become automatic millionaires. So, I love to teach anyone at any income level, minimum wage,
00:03:08
living paycheck to paycheck. You might be in debt. You might be struggling. I've taught millions of people how they
00:03:16
can improve their life financially. That's what I've been dedicated to. And
00:03:19
I spent 33 years total in the financial service industry. >> And is this conversation just for people
00:03:24
that are in their 20s or is it applicable to everybody at every age? >> It's applicable to everybody at every
00:03:30
age because whatever your age is, it you know, look, Stephen, so many people are
00:03:33
living paycheck to paycheck right now in this country. What's happening right now
00:03:37
is that seven out of 10 people are being left behind financially. Seven out of 10
00:03:42
people right now are living paycheck to paycheck. When you go into looking at finances in America today, half of
00:03:49
Americans can't get their hands on $1,000 in case emergency purposes. And my biggest fear, why I updated this book
00:03:56
and why I decided to come back out one more time and do another financial literacy campaign is I'm afraid people
00:04:02
are being left behind. I think with AI right now, the next 10 years is going to be the greatest opportunity to build
00:04:09
wealth in our lifetime. That's the good news. The bad news is a lot of people being left behind. My goal
00:04:17
today, next hour is very simple. I want to give you the system on how to become an automatic millionaire at any age
00:04:22
level, at any income level. But what I'm going to teach you is how to put your
00:04:26
financial life on autopilot in less than 10 minutes. Because when your financial
00:04:32
life is automatic, your habits work automatically. And an automatic financial life doesn't require
00:04:41
discipline, doesn't require a budget, and you don't have to make a lot of
00:04:46
money to get started. >> Why should people be taking advice from you on this subject matter? What's what
00:04:51
have you done in those 33 years? >> I've been doing this my entire life.
00:04:54
Right? So, if you go all the way back, I started investing at the age of seven. And how that happened is I had a
00:05:01
grandmother, amazing grandmother. Her name was Grandma Rose. At 30, she made a decision that changed the whole destiny
00:05:07
of our family. And the decision she made was she want to be poor anymore. And at
00:05:11
30, on a very cold day on her birthday, she turned to my grandfather and she said, "We don't have any money. We're
00:05:18
living paycheck to paycheck and I don't want to retire here. I want to go to
00:05:22
California. I want to be where it's warm." And my grandfather said, "Well,
00:05:26
what do you want to do about it?" and she's like, "We need to change what
00:05:29
we're doing or nothing will change." And so my grandmother started saving 50
00:05:33
cents a week out of her paycheck. So 50 cents each because they were like middle
00:05:38
class people, right? Didn't have a college education. My grandfather worked in a plant. My grandmother worked in
00:05:44
retail. But she started saving small amounts of money. And over her lifetime, she became an investor. And she became a
00:05:52
self-made millionaire. My first book, which you have sitting over here, was a book called Smart Women Finish Rich. It
00:05:57
was the lessons that my grandmother taught me. So, at seven, my grandmother took me to McDonald's and she taught me
00:06:04
a lesson that would change my life. She said, "David, you're sitting here eating
00:06:08
McDonald's and cheeseburgers and your French fries and your milkshake." She
00:06:12
said, "I'm going to teach you today how to be rich for real. You like to play
00:06:15
Monopoly. Here's my lesson today." She said, "There's three types of people.
00:06:20
those like you who are here eating right now, you're what's called a consumer.
00:06:25
She said the people over there who have been working, they're called employees
00:06:29
and they've been working for minimum wage and that's a very hard way to live.
00:06:34
She said they make at the time they made 85 cents an hour. And she said the third
00:06:38
type of person is the person who owns this place. They're called an investor.
00:06:43
And she said, "Today, I'm going to teach you how to buy stock in McDonald's so
00:06:47
that when you come to McDonald's, you'll make money from everybody who's here.
00:06:50
When your friends come to McDonald's, you'll make money from them, and you'll
00:06:54
be an owner of McDonald's." And she took me down to a brokerage firm, helped me
00:06:59
buy my first share of stock at McDonald's. That moment changed my life because what
00:07:04
she made me realize is like everything that we do, I'm seven years old. everything that we do, there's an
00:07:11
opportunity to be an investor and own that. So like at nine years old, I'm at
00:07:15
Disney. I'm like, "Hey, Mickey Mouse, are you public?" So I was like not a
00:07:20
normal kid in that way because I started investing at a young age. But then I made a lot of mistakes. Then
00:07:27
I went to college. Then I got myself in credit card debt. Then I believed all the myths that young people often
00:07:33
believe. I believed I couldn't really invest a lot until I made a lot of money. So, in my early 20s, I was making
00:07:42
money but spending everything. So, I was went from making nothing to making $50,000 a year and I'm still broke. I'm
00:07:50
like, well, it's not enough money. So, I went to $75,000 a year, still broke,
00:07:54
spending more. Then I got to $100,000 a year in income. Lot of money, right? In my 20s. Oh my god, I'm rich. No, I was
00:08:02
still spending more than I was making at that point. I was a financial adviser and al
00:08:08
>> that was my job. I was working at Morgan Stanley helping people plan for
00:08:12
retirement teaching retirement seminars and I met this ordinary couple that came
00:08:18
into my office at the age of 52, Jim and Sue McIntyre. They had an ordinary job.
00:08:24
That year they had made a little over $53,000. Their average income over their lifetime
00:08:30
was $40,000. And at 52, Jim put out all the statements on a table in front of me. I
00:08:37
sat there and added them up and they had a net worth of $1.8 million. And I sat back at a table just like this
00:08:44
and said, "How did you do this?" And they had just been in my class for
00:08:50
four weeks. They're like, "David, we did a lot of what you talked about, but we
00:08:53
didn't have a budget because budgets don't work." and they talked about why
00:08:57
budgeting didn't work for them. They said, "We put everything on autopilot.
00:09:01
We saved money automatically for everything." And that was the moment that changed my
00:09:07
life. I realized that day as somebody who was living paycheck to paycheck with a high income. These people had half the
00:09:15
income that I did and they were able to retire at 52. I was in my mid20s and I realized that if I didn't start saving
00:09:24
and investing, if I didn't change, nothing was going to change and I would never have the financial freedom that
00:09:31
they had. And so I went home that day and I changed everything in my life. Now I had a lot of bad habits. So I had a
00:09:38
lot of things that needed to be changed. You were the senior vice president at Morgan Stanley when you stepped down and
00:09:44
you soon after wrote this book called Smart Women Finish Rich. It begs the question, what are the differences that
00:09:51
you saw through your process of financial education that women face versus men? >> I started I was in business with my
00:09:59
father and we had a lot of older clients and I would sit in on meetings one after
00:10:04
another with widows. So in the first month of my career, I sat in three meetings with three widows where the
00:10:11
husband had dropped dead suddenly. And my dad at the time was teaching these women how to read their brokerage
00:10:17
statements, how to write checks, and how to know if they would have enough money.
00:10:21
And I thought, "This is crazy." And I said to my dad for the third appointment, "Dad, what do you what
00:10:27
what's going on here?" And he's like, "Well, what do you mean?" I go, "Well,
00:10:29
you're teaching these women when their husband has just died how to handle their finances." And he said, "David,
00:10:36
not all women are like your grandmother. Your grandmother was a rarity." And I
00:10:40
said, "Dad, that's crazy. I'm going to go out and teach a class for women and
00:10:43
money." And when I started teaching the class for women money, here's what I
00:10:47
learned. Here are the things that make women different than men when it comes to money. Women, first of all, live
00:10:53
longer than men, which means they need more money than men do. The average age of widowhood in America when I wrote
00:10:59
that book originally was 57, Stephen. Now it's 59. Okay. You do all these shows on
00:11:06
longevity. It seems like everybody's living forever. They're not. Okay. The
00:11:10
average age of widowhood in America is 59 years old. >> When you say widowhood, you mean the age
00:11:14
in which a woman becomes a widow. >> Exactly. They're married and they lose
00:11:17
their husband. >> Okay. >> Okay. So, so women are often wiped out when that happens financially. Second
00:11:23
thing is that women are hurt more than men when it comes to divorce. The third thing that affects women is
00:11:29
that they work fewer years. I'm like, these are just the the the the statistical realities. Women work fewer
00:11:36
years than men because they have children. So that's an average of somewhere between 7 to 11 years less.
00:11:41
And that's less money going into social security, retirement accounts, and it
00:11:45
affects their earnings and often they earn less. So what I have taught for third nearly 30 years now is as a woman,
00:11:52
I don't care what your situation is. I don't care if you're an entrepreneur. I
00:11:56
don't care if you're a stay-at-home mother. I don't care if you're married
00:11:59
to local bank president. I don't care if you're married, singled, widowed,
00:12:02
divorced. As a woman, you have to be in charge of your finances. Period. Drop the mic.
00:12:10
End of discussion. You can't delegate your financial well-being to anyone else. You have to be in charge. Now, I
00:12:18
will also tell you, Stephen, that women make better investors than men. They they make better investors than men
00:12:24
because often women don't trade like men do and they are they do more research
00:12:29
before they invest and their performance is better. They're way better long-term
00:12:34
investing than men are. >> I heard some stats once upon a time that men are
00:12:39
the majority of the gambling addicts. >> Well, I'm sure they're the majority of
00:12:42
the gambling addicts. And also when you look at trading because trading's become
00:12:46
a very big thing, but trading's always been a thing. >> Trading meaning
00:12:48
>> trading like trading stocks, buying and selling stocks. Now it's buying and
00:12:51
selling cryptocurrency, buying and doing selling options. All these things are primarily men doing it and they don't
00:12:59
make money because the bulk of people who trade lose money day in day out in year out. I teach a philosophy which is
00:13:07
this. Your money and your investments should be boring. Your life should be interesting. Your investments should be
00:13:14
boring. If someone's coming to a cocktail party talking about their investments and it's exciting,
00:13:19
something's wrong with it. >> Why? >> Because sexy is how you go broke when it
00:13:26
comes to money. Boring is beautiful when it becomes when it's about your wealth.
00:13:32
So, even driving over here, my son was just like, "Dad, why aren't you trading
00:13:35
Tesla stock?" I'm like, "You know why I'm not trading Tesla stock? Because you
00:13:39
can't make money trading. You got to figure out when to buy, when to sell. I
00:13:43
want my kids investing in index funds. I have my clients investing in index funds. Boring is beautiful when it comes
00:13:50
to money. >> Before we get into the real specifics and the tactical strategies and um we
00:13:57
think about a bunch of the sort of things you said about debt and credit cards and saving and getting out of debt
00:14:02
and how to become wealthy and an automatic millionaire. Is there anything we should discuss as it relates to the
00:14:07
broader context of what's going on in the world? Whether it's wealth inequality, whether it's the amount of
00:14:12
people that are living paycheck to paycheck, what I'm trying to get a picture on what the the state of
00:14:16
financial wealth looks like in the Western world. >> Yeah. Well, so let's talk, you know,
00:14:19
when people talk about economies. Here's here's the economy that matters in my
00:14:23
opinion. Your economy, meaning the person that's listening, the economy that you're in control of is yours.
00:14:30
You're not in control over what's going to happen with interest rates, what's
00:14:34
going to happen with geopolitical things, what's going to happen with AI. The only economy that you can control is
00:14:39
yours. Now, here's the question. Are you working? Most cases, the answer is yes. The
00:14:48
average person will work 90,000 hours over their lifetime. So, if you are a dual income household, you're going to
00:14:54
work somewhere between 90 to 200,000 hours, the two of you, over your lifetime. You're going to actually make
00:15:03
millions of dollars over your lifetime. The question is with your own economy, are you going to keep any of the money?
00:15:12
And the sad thing for many people is that they're not. I I say most people have what I call a no plan. Money comes
00:15:19
in, money goes out. And they say, "Well, I don't know where the money all went."
00:15:24
And I go, "That's called a no plan." A person who's an automatic millionaire,
00:15:29
the moment money comes in, they have a plan for exactly where it's going to go.
00:15:33
And it starts with paying themselves first. automatically. >> A lot of people listen to this and if I
00:15:39
go back if I go back just over 10 years in my life, I would have been sat listening to this conversation in £7,000
00:15:46
of debt. And I would have thought, God, like I'm becoming a millionaire, that's
00:15:49
a that's a million miles away, no pun intended. I to become a millionaire, I'm
00:15:54
going to have to earn so much more money. And at the time, I was working in call centers. It it would have just felt
00:16:00
so far away. And I say, you know, people are struggling to feed their children, let alone become a millionaire.
00:16:07
Is it far away for the average person? >> It's far away if you don't know the
00:16:11
strategy. There's a strategy to getting out of debt. There's a strategy to
00:16:15
building wealth. There's a system. >> How much of it is just earning more
00:16:19
money? Because when I have these conversations on my show, I think the surprisingly untouched territory is we
00:16:26
don't teach people how to become more valuable so that they can earn more money. A lot of it's about like index
00:16:32
funds or savings, whatever. But how much of it is just like I need to get higher
00:16:38
valued skills in the market? >> We know for a fact that making more money doesn't make you rich. So, so
00:16:45
people can go, as I told you earlier, like from $100,000. They can go from 50,000 to 100,000 and still be broke.
00:16:51
They can go from a h 100,000 to 200,000 a year and still be broke. They can go from 200,000 to 300,000 and still be
00:16:56
broke. In the US, when you take households that make $150,000 a year, one out of three of them are still
00:17:03
broke. When you peel back the curtain and you ask why is that? Well, we know things cost more, but we also know
00:17:10
there's massive lifestyle creep, right? you get you get around other people who
00:17:14
are making more money and then you spend more money. And the reality is these phones are designed to get you to spend
00:17:21
everything, right? Today with the algorithms, there's better technology today than there's ever been to get you
00:17:26
to spend more money. And nobody wants you to spend money once. They want you to spend money for a lifetime, right?
00:17:32
It's a lifetime value of a customer. So there's a battle for our income. And
00:17:38
everyone wants a piece of it. It starts with the government. like you go to work
00:17:42
and you go to work at 9ine and you actually work from nine o'clock to 12 for taxes. Now, this is an important
00:17:49
lesson actually. The government doesn't ask you to budget to pay taxes. They
00:17:56
take your taxes from you automatically. They take social security from you automatically. They're they take the
00:18:02
money from you automatically because they know you won't have anything to give if they don't take it from you.
00:18:08
Then people work from 12 to about 3:00 for housing and food and then from 3:00 to 5:00 for all the rest all the rest of
00:18:16
things. The people who build wealth in America and really all over the world, they do
00:18:22
something different. They keep the first hour a day of their income. >> What do you mean by that? So what that
00:18:27
means is whatever you earn, you could be making minimum wage, you could be making
00:18:32
$20 an hour, $30 an hour, $40 an hour. Whatever you earn, the first hour day of your income has to go to you. You're the
00:18:41
first person who gets paid. >> And you mean you have to save it, invest it.
00:18:44
>> You have to invest it. So how do you invest the first hour of your day without paying taxes? The answer is you
00:18:53
pay yourself first using a 401k plan. So, if you have a job with a retirement account, 401k plan, you sign up and you
00:19:01
use that plan. Now, I can't just stop right there, right? Because because it
00:19:05
sounds so simple, like, okay, I'll use my plan. No, you have to know the formula to using your plan to be rich.
00:19:12
We know after 40 years now exactly what you need to do if you want to be a millionaire. I can tell you how to
00:19:18
become a millionaire starting in your 20s so that you're done by the time you're in your mid-50s. You save a
00:19:25
little one hour of your income is 12 and a.5% of your gross revenue. I went on online today to look at what's the
00:19:31
latest statistics with 401k millionaires. The new stats that just came out from Fidelity. There are
00:19:37
654,000 people in Fidelity 401k plans that are now millionaires. >> What is a 401k?
00:19:45
>> Okay, >> because you know we've got a lot of global listeners. There's different
00:19:48
types of 401k in every country. So in the US, a 401k plan is a retirement account. It is a retirement account that
00:19:55
the company has set up, right? And it allows you to put money away tax deductible. They call it pre-tax. In
00:20:04
most countries, you have a deductible retirement account, but it depends on the country, too, right? Like in Canada,
00:20:10
it's a different type of plan than it is in Australia, than it is in Italy, than
00:20:14
it is here in the UK. Almost every country though has some form of retirement account and has the ability
00:20:21
to put money away automatically. Here's the problem, and I'll use the US
00:20:27
specifically because it's where I do most of my work in the US. Those who have a 401k plan,
00:20:35
the ones that are millionaires, what they did, here's the formula, the exact
00:20:38
formula. They saved 14% of their gross income and their employer had a small match on top of that. And then how they
00:20:47
invested the money is key because it's not enough to just put money in these
00:20:51
401k plans. You have to be invested for growth. And growth means stocks, right? So you'd have to have and and the actual
00:21:00
specific allocation in these 401k millionaires I just talked about was about 70% stock and 30% bonds.
00:21:08
Okay. Now, what are people doing that aren't achieving this? Well, the average
00:21:12
American saving maybe 3 or 4%. Maybe 5% if they have a 401k plan. People who don't have 401k plans in many cases
00:21:21
aren't even doing this. They can they can open up an IRA account, but in most
00:21:25
cases, they're not doing that. So, the whole secret is not budgeting, not using discipline,
00:21:32
having the money move right from your paycheck. paycheck gets deposited automatically and then it moves the day
00:21:40
it hits your bank account automatically first for retirement. Then later we'll
00:21:45
talk about building a security account, building a dream account. The key is that the money moves automatically.
00:21:54
So in the United States now there's by the way 24 million millionaires now. So
00:21:58
we've seen an increase of 8 million millionaires to 24 million millionaires in the US in just 20 years.
00:22:05
How did they do that? There's two primary escalators to wealth. That is stocks and real estate. And if you're
00:22:14
not in stocks and you're not in real estate, you are being left behind. >> When you say real estate, does that mean
00:22:21
having a mortgage and owning a h home? >> It's owning a home or owning REITs?
00:22:27
>> REITs. >> REITs. Real estate equity investment trusts. So, that's another way to buy
00:22:31
real estate without actually having to own the home, but you don't get the same
00:22:34
level of returns. >> I mean, this is um this is one of the hot topics of conversation we've had on
00:22:39
this show several times is many of my guests that are sort of financial advisers say that owning a home is a bad
00:22:46
investment. I think from what I understood from the research and from reading your books that you feel
00:22:50
differently about that. >> Yeah. I mean I I couldn't feel more differently when we look at where is
00:22:57
wealth created in the United States and also abroad. It's in two places. It's in
00:23:03
home equity and it's in the stock market. So when you look at housing and you take someone who owns a home and
00:23:10
we'll talk about I know it's hard to buy homes right now but when you look at
00:23:14
people who own a home versus people who rent homeowners in America follow this for one second. Homeowners in America
00:23:21
are worth 40 times more than renters. So the average homeowner in America today is worth over $400,000.
00:23:32
>> But this doesn't establish causation. I.e. that doesn't mean that buying a
00:23:35
home make made them rich, right? >> It actually does. And I'm going to go
00:23:39
through that here. So the average renter is worth $10,000, right? So why why does buying a home
00:23:46
build wealth? and how much wealth in the United States is now in home equity. Wall Street Journal just ran an article
00:23:52
on this came out two days ago. There's $34 trillion now in home equity in America. This number has gone up 90%
00:24:02
since before co the other money is in retirement accounts which is 60 70% in stocks.
00:24:11
There's $45 trillion now in retirement accounts. So those two things alone equal $80 trillion dollar, right? Like
00:24:20
when you want to go like where are the breadcrumbs? Where is wealth being created? It's right in front of us. Now
00:24:28
the problem that we have in the United States, but also look, we're here in London right now. Problem we have in so
00:24:33
many cities is that real estate keeps going higher and higher and higher and people's incomes are not keeping pace
00:24:41
with the cost of buying a home. So, when someone comes on a show like this and says, "Look, you don't have to buy a
00:24:47
home. It's cost more to have a house than rent. You, you know, I I watched one of the shows. I won't say who it
00:24:53
was. It doesn't matter. They all say the same thing. Don't buy a house. You'll be
00:24:58
trapped. You'll have to pay you'll have to pay real estate taxes and you'll have
00:25:02
to pay insurance and things break." They go through all these expenses and it it makes it sound like, "Oh,
00:25:10
yeah. If I rent it'll be cheaper." No. Who who do you think pays these expenses
00:25:15
when you rent? You do. The landlord passes the cost of these expenses on to the renter
00:25:25
ultimately. Why do they do this? Because people who buy real estate buy it for an
00:25:30
investment. They buy it for an investment. They're not they're not subsidizing these costs. So, it's a hard
00:25:37
thing to hear and especially when you're young. Like I have a a son who's 22.
00:25:41
He's in Chicago. He's going to move to New York City. It'll be extremely hard
00:25:47
for him to buy a place in New York when he starts working right away. Just will be probably won't for two or three
00:25:52
years. A lot of young people when they move to a major city, they can't afford
00:25:56
to buy right away. When I came out of college, like you, I was in credit card debt. I had $12,000 in credit card debt.
00:26:03
I remember opening up my bills and having the room spin and thinking, I'm never get out of credit card debt. how
00:26:09
am I going to buy a house? But I did. And in fact, I didn't buy a home when I
00:26:15
was young by myself. I bought a home with a best friend. So, how did I get my first house? First house we bought was a
00:26:21
quarter of a million dollars. We put 10% down and my best friend and I, Andrew, we split that down payment. So, we each
00:26:28
put $12,500 down. This is how we scraped it together. The house was a complete fixer upper and we didn't have enough
00:26:36
money to make the mortgage payments. So, we rented out bedrooms and we had friends rent bedrooms and that helped us
00:26:41
cover our mortgage. We scraped it together and that's what a lot of people do when you're young. But if you don't
00:26:50
get in the game of home ownership and you rent in your 20s and you rent in your 30s, you're going to turn around in
00:26:56
your 40s and having not been built any net worth. When I wrote the automatic millionaire 20 years ago, two things
00:27:03
have happened since then. The stock market has gone up in 20 years 600%. >> Okay? So, if you had a $100,000, just
00:27:16
that is gone to $600,000. If you bought a house, the house has gone up 400%. So, when you read this book with all
00:27:26
these, there's a a whole chapter of updated success stories. There are a lot
00:27:30
of ordinary people that started saving 5, 10, 15, $20 a day, bought a starter house, and today they're millionaires.
00:27:38
>> So, am I not better off renting and investing in the stock market versus buying a house? Because obviously
00:27:48
when I when I when I buy a house, I'm paying a premium on the house so that I
00:27:52
can get a mortgage. I want to bust this myth because what happens is people come
00:27:56
on they go the stock look I can tell you right now the stock market over the last
00:28:00
20 years has averaged over 10% annually people go the returns are better in the stock market than the real estate yeah
00:28:06
but that's not applesto apple comparison why you buy a piece of real estate when you
00:28:13
buy a home people don't typically pay cash for their first house they put down
00:28:19
20% and they borrow the other 80%. So you take like an example of a take a $200,000 home. $200,000 home you put 40
00:28:28
grand in. Home goes from $200,000 to 400,000 in 10 years. This has happened to so many people in the last five years
00:28:36
since COVID. There are markets all over the US where housing prices have gone up
00:28:41
100 to 200%. So a person buys a $200,000 home, they borrowed 80%. It's doubled.
00:28:48
So they've made 200,000 in profit. They didn't put in 200,000, they put in 40.
00:28:54
So, they got a five times return on their down payment. They go to sell their house.
00:29:00
They don't pay taxes on the gain because when you own a home, at least in the
00:29:04
United States, you own a home for over two years. If you're single, you get $250,000 in taxfree gains. If you're
00:29:11
married, you get over half a million dollars in taxree gains. You get tax deductions on the mortgages. So, what
00:29:18
happens is people come here and they go, "You know what? You shouldn't be you
00:29:21
shouldn't be tied down. You need to be flexible when you're young. You don't
00:29:25
want to have the responsibility and you should take the extra money and you should put it in a mutual fund. And
00:29:32
you know what happens in the real world, Stephen? People don't do that. They rent
00:29:36
an apartment that's nicer than what they can afford and they spend all their
00:29:40
money and then they turn around in their mid30s and they have no equity because they haven't bought anything and they
00:29:47
also haven't saved money. It is an absolute freaking myth that people take this extra money that they
00:29:55
could have used to buy a house and they're going to put it in the stock market. They don't do that. And that's
00:30:01
why also, by the way, corporate America got into the game of buying up real estate all over America, houses, and
00:30:11
building apartments to rent to an entire generation, hoping these people never buy
00:30:21
this. Like 10 days ago, Trump came out and basically said he wants the institutions out of buying up all the
00:30:27
homes in America. Why does he want to do that? because he because he recognizes how serious of a problem it is to have a
00:30:36
generation of Americans who are renters. I'm telling you, when you look at average Americans, average, I'm talking
00:30:43
about ordinary Americans. When you look at where their wealth is, it's in home
00:30:46
equity and it's in the stock market. And this is the last thing I'll say,
00:30:51
generational wealth is created for better or worse through home equity. So when you look at why you know you asked
00:31:00
the question about causation if a family doesn't buy a home the likelihood the next generation can buy a
00:31:08
home is very low because it's this when someone dies the money that is in the house that home
00:31:17
equity is often what transfer transfers to the next generation helps the next generation buy a house. I was looking at
00:31:24
some stats here because I want to what I want I wish I could sit >> sit down all of the guests that have
00:31:29
been on my show that have had a difference of opinion and have said that buying a house is a bad
00:31:33
>> it could be a really interesting conversation. Right. >> It would be a really interesting
00:31:36
conversation. What I've done as an alternative to that approach is I've pulled up what they've said
00:31:40
>> and I'm going to give you some of the things they've said just so so you can
00:31:43
rebuttle them um and have your say on them. One of the things that they often say is that long-term real
00:31:49
inflationadjusted home price appreciation in the US is about 1% annually and one of my guests cited
00:31:56
Robert Schiller as the evidence of that. After maintenance um which usually equals 1 to 2% um property taxes which
00:32:03
equals about 1% insurance and transaction costs the net real returns approach roughly zero on average. So
00:32:10
when you say housing is a great investment, are you referencing the gross appreciation which is the the the
00:32:14
total appreciation or the net returns after taxes, maintenance, insurance, and selling costs?
00:32:20
>> So when you dig into these kind of numbers like this, what they are is they're numbers, but
00:32:25
they're not real world, right? And so like when you when you talk to someone
00:32:28
who owns a home today and they've owned it for 20 years and you ask them how
00:32:33
much of your net worth is now in the equity in your house over 50% of their net worth is in their
00:32:40
house. You will see people on your YouTube channel that literally if you read the comments and I'm sure you do. I
00:32:46
do >> where people say it's not true. There was I read a comment yesterday on your
00:32:51
YouTube page. All I know is I bought a house and it's gone up in value three
00:32:57
and a half times and the rent when I bought the house was $1,200 and the rent today to buy that if I had that house if
00:33:05
I was renting it would be $4,000. So the thing is you have to understand is that rents always go up, Stephen.
00:33:13
Like I lived in New York City for 18 years. When I moved to New York City in 2001,
00:33:22
a really nice apartment, a nice apartment was like $6,000 a month. When I left New York, that same apartment was
00:33:32
$25,000 a month. Follow the follow the insanity of that math. Now, that apartment went from being $2 million
00:33:41
apartment to a $5 million apartment. So, I could have been renting it, but in my
00:33:46
case, I owned it and it went up in value $3 million. So, I have friends who have been renting
00:33:52
in New York for 20 years. They have built no net worth. I have no vest interest in this conversation. Meaning,
00:33:58
I don't sell real estate. I'm not a real estate agent. I'm not selling real
00:34:03
estate. I've just seen in the real world how people have built wealth. the the
00:34:08
the McIntyres in this book, the automatic millionaire, when they came into my office and they were worth $1.8
00:34:14
million and he was 52 and able to retire having earned an average of $40,000 a year.
00:34:22
All their money wasn't in the stock market. They had bought a home in San Leandro, California, what he what they
00:34:28
called a middleclass neighborhood. Their home at the time was worth about $300,000.
00:34:35
They had paid their mortgage off and they had bought one more house on their street. They rented the first house.
00:34:41
They bought a second house on their street. They paid that mortgage off. And so they owned two homes free and clear.
00:34:47
One house they got income from. One house they lived in with no debt. And then they had saved money in their 401k
00:34:53
plan. So, if I was a young person or not even a young person, a middle-aged and older person who took my down payment
00:35:01
that I was going to pay into the house, if let's say it was say my down payment
00:35:04
was $20,000 and I put that into the S&P 500 instead over the long run, won't
00:35:10
that grow larger than the total home equity potentially? >> Here's why the index fund theory doesn't
00:35:17
work. You can't live inside an index fund. You can't live inside a mutual fund. You
00:35:25
have to live somewhere as long as you're alive. Here's what people should do.
00:35:31
Take a look at what you're paying in rent. Now, ask yourself a question. If I'm
00:35:37
paying 5,000 a month in rent, which lots of people are, right? Do you know people
00:35:43
paying 5,000 a month in rent? >> Yes. >> Okay. So, they're paying 60,000 a year.
00:35:46
Let's take that number. >> Yeah. >> So, over 10 years, they're going to
00:35:49
spend $600,000 in rent. Yeah. >> If the rent doesn't go up, >> Yeah.
00:35:55
>> in 20 years, they're going to spend 1.2 million in rent. If the rent doesn't go
00:36:00
up, in 30 years, they will have spent $2 million in rent if the rent doesn't go
00:36:06
up. But the rent does go up. So, the question you just have to ask yourself is, am I going to take all this money
00:36:12
that I'm spending on rent and never build anything? And if you really believe that renting
00:36:19
is better than owning, then you should still consider the idea of buying something than that somebody else rents.
00:36:25
Cuz I promise you, somebody's getting rich in the transaction. If you're the
00:36:30
renter, you're not the one who's getting rich in the transaction of renting. It
00:36:34
is a great short-term solution renting. It is not a great term long-term wealth building solution. The other thing that
00:36:41
people often talk about and you you cited earlier is the mobility that renting gives you.
00:36:46
>> Yeah. >> Your son was here a second ago. He's 16 years old. Yeah. Soon he'll be
00:36:52
>> at the age where he's got his own place and he's thinking about different career
00:36:55
opportunities and oh my god AI is this big thing. So he might want to go to San Francisco. Then he might want to go live
00:37:00
in Florence and wherever else. if he's bought a place, there is a interesting
00:37:05
sort of psychological but also financial component to the fact that it makes it harder for you to move with the
00:37:10
opportunity of life. And if we are if if what people say about the future of work
00:37:14
is true, that we're going to have many more careers in our lives than we did in
00:37:17
the past, one might assume that we're also going to be more mobile. And so, is
00:37:22
there an argument to say that buying a house might hurt my prof professional opportunities, my ability to pursue
00:37:29
professional opportunities? The answer is possibly, right? But here's the thing
00:37:33
about rent. Rent's, interestingly enough, a major obligation, right? Usually, when you go and you do a lease,
00:37:42
you lock yourself into a one-year lease. Sometimes you lock yourself into a two-year lease.
00:37:48
When you buy something, and this is assuming that you have the money to buy something, Stephen,
00:37:55
look up because you've got all the data at your fingertips here. Look what the
00:37:58
average length of time it takes to sell a home in the United States. Just just Google that right now because what I
00:38:05
will tell you is in certain markets you can put your home on the market and you can sell it in less than 90 days. Now
00:38:11
some markets you can sell your home in less than 30 days. In many cases you actually have more flexibility when
00:38:17
you own something than when you rent. And that's if you want to sell it. It says the average time from listing to
00:38:24
sale is about 47 to 62 days from listing to closing in 2025, including 16 days on
00:38:32
the market and 30 to 45 days to close. >> That's called less than 2 months.
00:38:37
>> Even in hot markets, the process from putting a house on the market to legally
00:38:40
selling it can take 1.5 to 3 months. Meaning home equity isn't a quickly accessible investment.
00:38:47
>> Yeah. But do you think that's pretty quick? 90 days. >> No, it is. It is quick. I mean it takes
00:38:50
takes you that amount of time to get out of a lease. >> Exactly. So now so so here you've got a
00:38:54
piece of property that you can turn around and sell in less than 90 days. Now this is the US. You can't do that.
00:38:57
Like for inance I live in Italy. That could be very hard to do that in Italy. But in the US you've got something
00:39:02
that's in a good market. It's liquid. The other thing is you can rent it,
00:39:07
right? You're you're actually not trapped. If if you start to build equity
00:39:11
in your home and you pay your mortgage down slightly, next thing you know you're able to rent that property and
00:39:15
you can still move. Today, people are taking their homes and they're Airbnbing
00:39:19
them. What I really want for people is the chance to be financially free. There's also an age at which it doesn't
00:39:26
matter if you own. You know, once you start to get older and you've built financial security, you get in your 50s
00:39:31
or your 60s or 70s and you just want to travel and you don't want to own anything. That's a different stage of
00:39:36
life. So, the question just becomes the money that you make. I go back to the 90,000 hour comment. When you make n
00:39:44
when you work 90,000 hours over your lifetime, what's your plan to keep some of this
00:39:50
money? You have to have a pay yourself first plan. That has to be your number one
00:39:56
priority is that when you earn money, the first person who you're going to pay
00:40:00
is you. If you say, you know what, I watched Stephen and I saw David and I've
00:40:04
seen a bunch of other people on his show and I'm not going to buy a house. Okay,
00:40:09
then you have to pay yourself first more. Now I go around the world for the last 30
00:40:17
years starting with Oprah with the automatic millionaire. I launched this book on Oprah and I talked about you
00:40:22
have to save 1 hour a day of your income and people will get on these social media boards and be like I can't save
00:40:28
10% of my income. They'll I can't live off 90% of my income. It's not possible. I have to
00:40:34
spend all of it. Right? Well, then that person who's renting and not buying a
00:40:41
house, which is for savings, is clearly never going to save. So, the other thing
00:40:46
about buying a house is it does require force savings because when you use have a mortgage payment, part of that
00:40:52
mortgage payment is paying down your debt. And I teach you how to use a bi-weekly mortgage payment plan. So, you
00:40:57
take a 30-year mortgage and you pay it off five years earlier. And doing that can save you, depends on the size of the
00:41:02
home, can save you $50 to $100,000 just in interest payments. You talk about having a savings mindset.
00:41:10
What is a savings mindset and how does one go about saving if they are one of those people that says, "Listen, I'm
00:41:15
barely getting by as it is, David." >> Yeah. >> How how the hell am I going to save
00:41:19
money when I'm actually increasingly getting into more debt right now? >> So, the first thing is you have to find
00:41:25
your money, right? So, what I what I find, Steve, is when I talk to people, most people don't know where their money
00:41:30
goes. Literally, they don't know. They're like, I'm like, "How much money
00:41:33
you spend a month?" Well, I'm not really sure. How much money you spend a year?
00:41:36
Well, I'm not really sure. You need to be sure. So, you should be doing something to track where your money
00:41:41
goes. Now, you can be sophisticated. You can use apps. It will track where your money goes. You can also take out a pad
00:41:48
of paper and I give people a 7-day financial challenge for seven days. Just bring a little pad of paper with you and
00:41:55
write down every single day where your money goes. Now, why do I want people to do that? Because most people today are
00:42:02
spending money unconsciously. I go back to these phones. The fact that I don't I
00:42:07
don't even have to carry a wallet anymore, right? It's just click click click and pay for things. We've lost
00:42:11
touch with spending money. So, when people start to see what they're really spending, it's a wakeup call. The
00:42:18
biggest thing I've been sharing lately is what does it take to blow $10,000 a
00:42:23
year per day in terms of spending? How much money do you need to spend a day to blow $10,000? Now, show us the per here.
00:42:31
Now, we happen to have these are we have pounds today, right? So, um so I I'm
00:42:36
holding Stephen right now. I'm holding what is known as a brick. So, I don't know if your staff told you
00:42:42
how much I'm holding here. You know how much what you guess I'm holding?
00:42:46
>> It looks like maybe $5,000. >> Okay. So, this is a life-changing amount
00:42:50
of money, Stephen. This This is $10,000 right here. >> And what does it take to blow $10,000
00:42:57
in a year per day? How much money you have to spend per day to go through $10,000? I'll make it easy for you. The
00:43:05
the answer is $27.40 a day. $27.40 a day adds up equaling $10,000 over the year. Now, before we go
00:43:16
through where do you where do you spend this money? How do you waste $27.40 a day, the question becomes, if you didn't
00:43:24
waste $27.40 40 cents a day and you were able to get yourself to invest $10,000 a
00:43:30
year, what could this be worth over time? And the answer is in 40 years if this was in the S&P 500 fund which you
00:43:42
quoted earlier and you earn 10% annually with reinvested dividends that stack there would grow to 4 million
00:43:50
four over $4,400,000 if you invested $27.40 a day. >> Pass me this big brick.
00:43:58
>> Yeah. >> So if I save half of this a day then in did you say 40 years?
00:44:04
>> In 40 years. So, let me give you the math on a couple different ways of doing
00:44:07
this. Okay, so what would happen if you invested roughly half of this a day? The
00:44:12
number I use is $27.40 a day. It's the magic number. That equals $10,000 a year. If you invested that a day for 40
00:44:21
years, you'd have over $4,424,000. >> If I invest $27 a day, in 40 years, I'll
00:44:29
have $4 million. >> Over $4 million. Let's go through the yeah butts now because people are going
00:44:36
to hear this. Some people are going to go, "Wait, what?" And then we'll talk
00:44:39
about where you find $27.40 a day. Yeah, but $4,400,000 won't be worth a lot of money in 40
00:44:49
years. With inflation, it won't be worth that much. It won't have the same purchasing
00:44:53
power. My answer would be it's worth a whole lot more than zero. Right? If you're not saving any money, if you
00:44:59
can't save $27.40 40 cents a day, you won't have $4,400,000. Yeah, but with taxes, you know, it won't
00:45:08
grow that much. Well, it could if it was in a retirement account. You wouldn't be
00:45:12
paying taxes on the money. Yeah, but it's not possible to earn 10% on my money. Well, the stock market for over a
00:45:20
hundred years has averaged over 10% annually with reinvested dividends. Yeah, but the stock market's risky and
00:45:27
complicated. Well, no, it's not. If you bought an index fund, it's actually not
00:45:30
that risky and complicated. Yeah, but I don't know. I don't know how to get started. Well, you could start
00:45:36
really easily. You could open up a brokerage account. You could go to a Charles Schwab, Fidelity. I mean, I'm
00:45:43
literally going to go through them all. Vanguard, Robin Hood, Coinbase, Acorns, and in less than 10 minutes, you could
00:45:52
open up an account and be saving. Pick a dollar amount. $5 a day, $10 a day, $27
00:45:58
a day, and that could change your life. Now, why is $10,000, Stephen, such an important dollar amount? Here's what I
00:46:06
can tell you, having done this for 30 years. This dollar amount right here, first of
00:46:12
all, this is one in two Americans don't have $1,000 in a bank account right now. So, this is
00:46:19
10 times what one out of two Americans have. But more importantly, $10,000. When we do surveys
00:46:26
and we ask people, "How much money would it take to totally change your life?"
00:46:30
The answer is not a million dollars. The answer is not $100,000. The answer is actually$10,000.
00:46:37
And the question is, why is it 10,000? And the reason is is that's about what
00:46:42
the average person has in credit card debt. And they feel like they're drowning like you talked about earlier.
00:46:49
and they know that that could pay off their credit card debt. Or they have a job they don't like and they if you knew
00:46:57
that if they had $10,000 in a savings account, they'd quit that job and they'd be free. They'd have to
00:47:03
go find another job >> or start a business or something >> or start a business or god forbid
00:47:08
they're in an abusive relationship and they can't leave. But if they had
00:47:11
$10,000, they'd leave. So, you know, a lot of people go, "David, you just make
00:47:16
this all too simple." And it's true. I do because when it's simple, people take
00:47:22
action on it. So for years, I have taught this concept called the latte factor. A lot of people love me for it.
00:47:30
Now I have a lot of people hate me for it. And I have taught that, you know, we waste small amounts of money on little
00:47:36
thing. I had your staff bring me a nice coffee. Um, when I started teaching the latte factor, I would talk about the
00:47:42
idea that we waste five bucks a day on coffee. And that if you don't believe
00:47:47
you can start saving and investing, at least save $5 a day. Make your coffee at home. And people would say, "But I
00:47:54
don't want to give up my coffee." Okay. Well, then figure out another way to
00:47:57
save $5 a day. This iced coffee, I don't know what it costs here in London. In
00:48:01
New York City, that coffee right there is $9.50 plus a tip. It's over 11 bucks. I know because I was
00:48:11
just in New York. So today we we had a bunch of props here and I said, "Well, let's try to show
00:48:17
like what what is $27.40." Like when I go to my hotel later when I leave here,
00:48:23
a cocktail is going to be 30 bucks, right? I was just in New York City cocktail. I had a cocktail in my hotel
00:48:28
was $31.50. Wine $50. Eating out. You go and have lunch today, it's going to be $25. And
00:48:36
people say, 'Well, I have to eat.' And I go, I know you do, but you could also
00:48:40
brown bag your lunch. It's what my grandmother did. Now, her friends teased her. But my grandmother was able to
00:48:46
retire to California. And her friends all got stuck in Milwaukee, Wisconsin, where it was cold because they couldn't
00:48:52
afford to retire the way she did. >> How many people could actually save $27 a day? Because if I go
00:49:00
back again, just over 10 years of my life, I mean, there's no chance I could
00:49:03
save $27 in a day. There's just no there's just no there's no way >> if you go back to what age?
00:49:08
>> If I go back to between like 18 19 years old roughly that period of my life.
00:49:15
>> Yeah. >> There was no way I could have save $27 a day. >> Here's really the question. Do you have
00:49:21
friends and do you think you have people who work with you who are making more than $50,000 a year
00:49:28
and they're not saving $27 a day? They're not even saving $10 a day. This
00:49:33
is true. I actually did a bit of research um on this and it says approximately 40 to 50 million families,
00:49:40
if we just take the United States where I think there's what 330 million people
00:49:42
roughly um approximately 40 to 50 million families in the US can realistically save $27 a day. This
00:49:49
represents roughly the top 30 to 35% of households. For everyone else, the bottom 65 to 70%. Saving that amount
00:49:57
would require either extreme poverty level budgeting or is a mathematical impossibility. over 40 million people
00:50:03
they think can afford to save $27.50 a day. >> Yes. It's based based on income and
00:50:07
expenditure data from 2025 to 2026 approximately 40 to 50 million families in the US can realistically save $27 a
00:50:15
day. >> So for those 40 to 50 million people in the United States that would be
00:50:22
lifechanging. Now are there people who can't afford to say that? Absolutely. In
00:50:26
the United States I I was just in uh Arizona. I just did a keynote speech. I asked the audience,
00:50:32
this is when the government was shut down. I said, "How many people do you think in America are taking and
00:50:38
receiving SNAP checks?" >> What's that? >> Thank you. Because, by the way, most
00:50:44
Americans don't even know what a snap check is. That's a check that the government gives to people for food. And
00:50:50
the dollar amounts a little over $6 a day. So, smart people in a room, by the way, I didn't know the answer to this a
00:50:58
week prior either. The answer is about 41 and a half million Americans get a snap check.
00:51:06
When I told the room that, the room gasped. I said, "So when you under when
00:51:11
you hear that the government was shut down for six weeks, that was three pay cycles."
00:51:21
Well, the average American doesn't have two weeks of expenses set aside. I I mean, I don't think everybody fully
00:51:29
grasps the problem right now. Four out of 10 Americans can't get their hands on
00:51:33
$1,000 in case of emergency purposes. If you actually dig into the Federal Reserve data, it's 37% of Americans
00:51:40
can't get their hands on $400 in case of emergency purposes. So, there's a whole
00:51:45
section of America that's truly struggling. Like, but there's a whole lot of America
00:51:51
that is still struggling. They're living paycheck to paycheck, but their money is
00:51:56
being taken from them all the time because they don't have a plan for it. For that bottom 60% of Americans that my
00:52:06
research says wouldn't be able to save $27 a day. Um, the data reveals a discretionary income cliff. Once you
00:52:12
drop below the top 40% of earners, the money available after bills vanishes rapidly. The top 20% which earn I think
00:52:18
$96,000 per household are in a surplus. The middle 20% um have a $15,000 surplus uh
00:52:25
which the $27 a day takes 66% from. But the bottom 40% often have a roughly $2,000 surplus. So it's impossible for
00:52:34
them to get to the $10,000 for that bottom 40%. What's what's the advice for them?
00:52:41
>> Start with something. Okay. It's like we took this 50 and we said cut it in half
00:52:46
25. I would say can you save a dollar a day? I have actually talked about this idea
00:52:55
really simple. Could you save $10 a day for 100 days? So like if you're listening to me and you happen to really
00:53:00
be struggling right now, my question would be could you save $10 a day for 100 days? Why? Because it would get you
00:53:06
to your first $1,000 and you now have more than 50% of Americans who don't have savings. And I can't tell you how
00:53:14
many people have come back after a hundred days and said, "Okay, I did it. It wasn't easy." For some people, saving
00:53:19
$10 a day could be really really hard. But you're you're into fitness. You saw my
00:53:26
son who just came in here. Fitness is built through daily action, right? It's built through daily action.
00:53:34
Daily eating well, going to the gym, doing certain things on a regular basis. Savings, the same thing.
00:53:44
There's a company called Acorns. I invested Acorns back in 2015. Acorns came up with an app that helps you roll
00:53:52
your change up. So, if I go to Starbucks and I spend $9.50 on a coffee, you can round it up where the 50 cents
00:54:01
to 10 bucks is put into investments. Just rounding up your change. And people have saved tens of thousands
00:54:10
of dollars over the last 10 years by just rounding up their change. Every time I've tried to improve
00:54:16
something in my life, like my businesses, my health, my relationships, I've noticed that the biggest shifts
00:54:21
have come from being better informed. And when it comes to our health, most of us know very, very little. So, when our
00:54:26
team was approached about partnering with function health, it felt very much aligned. Their team has developed a way
00:54:32
of giving you a full 360 degree view of your health, many of the things that are
00:54:35
going on in your body, in the form of different tests. You do one blood draw and it gives you access to over 160 lab
00:54:42
results. Hormones, heart health, inflammation, stress, toxins, the whole picture. I use it and so have many of my
00:54:49
team members. >> You sign up and you schedule your tests and once you're done, you get a little
00:54:52
report like the one I have here. I can see my inrange results, my out of range results, and there's a little AI
00:54:58
function, too. So, if I have any questions about my out of range results, I can just go in there and ask it any
00:55:03
question I want. And these tests are backed by doctors and thousands of hours of research. It's $365 for a yearly
00:55:09
membership. Go to functionhealth.com/doac and use the code DOAC25 for $25 off your membership.
00:55:18
I had a friend of mine contact me and I I spoke to one of the previous financial
00:55:21
adviserss and educators that I'd spoken to on the show about him. He told me he
00:55:26
was in deep financial debt. Probably earns about £50,000 or dollars a year, but has got himself into real debt. And
00:55:32
I imagine a lot of my listeners are are somewhat in debt, whether it's credit
00:55:36
card debts or loans or others. Do you have any specific advice to people that are currently straddled with debt?
00:55:42
>> Absolutely. Because it's one of the most important things you need to know how to
00:55:44
get out of. Debt is like quicksand. Like you know, you talked earlier about how you were in debt and what that felt
00:55:50
like. When I came out of college and I had $12,000 in credit card debt, it felt like the greatest weight on my
00:55:56
shoulders. Like I was carrying like a 50 lb backpack. And how did I get out of debt? How do you get out of debt? I will
00:56:03
give you the very simple formula to getting out of debt. DolP. DolP stands for done on last payment. If you said to
00:56:13
me, David, I've got five credit cards. I'd say, "Okay, Stephen, I'd take a piece of paper just like this
00:56:20
and I'd start listing your credit cards." I'd go one, two, three, four,
00:56:26
five. And I'd list them all. Visa, Mastercard, and I'd list them. And then I want to
00:56:32
know, Steve, how much do you owe? So, I put the dollar amount down. And what I would do is I put the dollar amount down
00:56:40
on paper and I list it small to large. Then I want to know the interest rate. Now, what people say is, "Oh, you should
00:56:52
take the highest interest rate and pay it off first." But I wouldn't tell you
00:56:56
that, Stephen. I'd tell you you take the smallest credit card. I don't care what the
00:57:01
interest rate is. >> The smallest amount. >> Smallest amount. So maybe this card
00:57:05
right here is $500. And this card down here is 3,000. I'd have you make minimum payments on
00:57:13
every card automatically. This is really important, the automatic part. Have you go on I'd
00:57:19
literally go into your house. I'd open up the I'd open up your iPad and I'd
00:57:22
have you make minimum payments online automatically so that every card's paid
00:57:27
on time. Then I'd say, "Stephen, how much extra money do you have?" Because I
00:57:31
want you to put it all towards the smallest card. We're going to get that small card paid off as fast as possible.
00:57:36
We're going to add all the extra money to that small card. Minimum payments on
00:57:40
everything. Once that card's paid off, we're going to go like this. You don't
00:57:45
have to close the account because we don't want to lower your credit score, but we're going to put that card over
00:57:48
here. never use it. Now, we're going to go to the next next smallest card. Some people call this the snowball
00:57:54
approach. The reason I teach this system is it reduces the amount of credit cards you
00:58:01
have as fast as possible. And you see yourself make progress. It's really important to see yourself make
00:58:10
progress when you're doing anything financially. Then I would attack the interest rates
00:58:15
because the interest rates aren't always permanent. You can negotiate your rates
00:58:22
lower. You can move credit cards to another card with a low interest rate. Have to be very careful though when you
00:58:28
do that because they're waiting for you to make a slip up and make a late payment. And when they do, they'll jack
00:58:33
the credit card interest rates back up again. You can also call up your credit card
00:58:38
companies if you're really struggling and tell them, "I'm struggling and I'd
00:58:43
like to know if you have a program in place where I can stop the interest rate and pay these cards off and more
00:58:51
accessible." Like this is basically what the nonprofit credit card counseling
00:58:53
organizations do. But the credit card companies often have programs too for this. They'll tell you to stop using the
00:59:00
card. they'll actually make it so you can't use the card anymore, but they'll
00:59:02
stop the interest rate. So, that approach has helped so many people get out of credit card debt.
00:59:10
Now, I just want to say something super important because I've gone through this.
00:59:15
When you go through the work of getting out of credit card debt, it's a huge victory.
00:59:23
Don't go out and celebrate on the credit cards because I got myself out of credit card debt in college,
00:59:30
junior year, and then I went out and celebrated and got myself back into credit card debt.
00:59:35
>> And people do this all the time. Usually people get themselves in a hole at least
00:59:39
twice, sometimes three times. Don't go back in a hole again. Uh I didn't carry credit cards for 30 years.
00:59:46
I only carried a debit card and I had to pay it off every month. Should these people um who are in the bottom sort of
00:59:54
60% be thinking at all about how to make more money, how to increase their income?
01:00:00
>> Absolutely. And what are the like the easiest ways to do that would that you'd
01:00:04
recommend just from your own experience of you know being in the professional world and
01:00:08
>> so my experience and I know that you look you wrote this great book diary of
01:00:13
a CEO right anybody hasn't read your book you have this great book what's the
01:00:16
best way to grow your income if you have a job it's to be good at what you do
01:00:22
right you can have a job at minimum wage let's pretend you work at McDonald's and
01:00:28
you have a job working minimum wage McDonald's. The owner of McDonald's, the
01:00:33
guy who owns that franchise or the gal that owns that franchise desperately needs good employees. Who becomes a
01:00:40
manager that makes more money? The person who works really well. Now, a lot of people, I don't I don't know if I
01:00:46
want to work McDonald's. I'm just giving it as an example. Anywhere you work, how
01:00:50
you grow your income is you are the best at what you do. You show up early. You have a game plan at work. You work late.
01:01:00
You do what you say you're going to do. You don't wait to be told what to do,
01:01:05
right? Like I've been an entrepreneur all my lifetime. The hardest thing about
01:01:09
being an entrepreneur is what? >> Yeah. >> Everything. >> It's everything. And most people are
01:01:15
entrepreneurs go, "Well, it's, you know, a lot of times it's hard to have good
01:01:18
people unless you're a good leader." People are so thirsty to have jobs with
01:01:23
purpose and meaning. And most people are actually looking for leadership. So if you can be really good at what you
01:01:31
do, you will make more money. There's no limit to wealth in the world, right?
01:01:35
Like we've never seen so much wealth being created in our entire lives as right now. If I were young, a lot of
01:01:41
people, well, you should learn AI. Yeah, you know what? Probably you definitely should learn how to use AI
01:01:46
because if you don't learn how to use AI, you're going to have really limited
01:01:49
skills and go the and do certain jobs. You know what else people are going to go out and do? Learn how to be a
01:01:55
plumber. Learn how to be electrician. Learn how to put up garage doors. I've
01:02:01
got friends. I got I was just recently on a podcast with a guy who's made a billion dollars putting in garage doors.
01:02:07
>> And he took me through his warehouse and showed me their garage door models. And
01:02:14
I was like, you know, I've got a friend who makes gyms that go in garages. I
01:02:17
just connected them. He's got a huge business making gyms for garages. There's just no limit to the amount of
01:02:25
opportunities out there. You have to though get out of a stuck mind frame. I mean, you had Tony Robbins here. If
01:02:29
there's anybody who can help you get out of a stuck mind frame, it's that guy,
01:02:34
right? But you can't you can't have they Zig Ziggler used to call it stinking
01:02:38
thinking. You have to have the ability to look into the future and believe that your future can be as
01:02:46
exciting today or better. I put up a post yesterday. I said, um, I would rather be an optimist and be wrong than
01:02:57
a pessimist and be right. And you show me somebody who wants to make more money, go into the world an
01:03:05
optimist and figure out how to go make more money. Do you think a lot of this is a mindset
01:03:11
at at at the core of it? Obviously there are real socioeconomic factors and there's people live in certain
01:03:16
situations and if I think back to you know where I was born in Botswana there's just less opportunity and
01:03:21
sometimes you have repressive governments and other factors that will objectively keep you stuck but all other
01:03:27
things being equal how much of the game is mindset. >> It always comes down to a decision and
01:03:34
we started by talking about my grandmother. If my grandmother hadn't made a decision at 30 that she didn't
01:03:40
want to be poor, she was tired of living paycheck to paycheck. If she hadn't
01:03:45
decided that she would go out and teach herself about money and take 50 cents of
01:03:48
her paycheck and 50 cents from my grandfather's paycheck and start investing,
01:03:54
I wouldn't be here today. She made a decision that had a ripple effect through our family. She built financial
01:04:01
security for herself with that one decision. She taught my father how to invest and
01:04:06
he was a financial adviser for over 45 years. My sister's a financial adviser.
01:04:11
I was a financial adviser. I spent the last 30 years teaching people about money. One woman's decision had this
01:04:17
ripple effect. So, one thing I say to people who are listening, especially the moms,
01:04:23
sometimes you got to make a decision that's not just for you. You're actually making a decision for
01:04:29
your family. and you can come up with a list of reasons why this stuff won't
01:04:33
work. Somebody who's watching this show or listening to us right now, they're
01:04:38
already interested in this. That's why they're here. Now, they're here for a
01:04:43
couple reasons. Either A, they're hurting financially and they know they need to fix something. Great. Start
01:04:49
where you are. Fix what needs to be fixed. Some people are like, you know, I think I'm doing pretty well, but I'm not
01:04:55
sure if I'm doing everything well. you know, I I've I've opened up my Roth IRA
01:05:00
or I've opened up my 401k plan. I'm putting some money away, but I don't
01:05:04
know if I'm putting enough money away. Then you can improve what you're doing.
01:05:09
Some people like, I'm renting. I think I would like to buy a house someday. All
01:05:13
right, make that a goal. I teach three buckets when it comes to money. Three baskets. Pay yourself first for
01:05:18
retirement. We haven't even talked about emergencies yet. Putting aside putting
01:05:22
aside money for emergency purposes. Have to talk about that. You got to you got to get more money put aside for
01:05:27
emergency purposes and then building a dream account. You need to put money away for your dreams. Those three
01:05:33
accounts should be automated. >> And on that point of having three accounts, you call it a future account,
01:05:38
an emergency account, and a dream account. How much of your earnings should you be putting into each of those
01:05:43
accounts on a monthly basis? >> All right. So, keep it super simple. I recommend one hour a day. Again, said
01:05:50
this earlier, it's 12 and a half% of your gross income. When you say 1 hour a
01:05:53
day, you mean one hour of the the time you work per day. >> Yeah. So, whatever you make an hour.
01:05:58
>> Yeah. >> It's if you're say if if you're working a 40hour work week, 12 and a half% of
01:06:03
your gross income goes off the top into a retirement account. Now, let me just say something up for the yahutters.
01:06:10
They're like, I can't go from 0 to 12%. There's no way. Then start at 1%.
01:06:15
If you're not saving right now and you're listening to us and all you do
01:06:18
when you leave this podcast is make one decision and that decision is I'm going to save
01:06:25
1% of my income and you start that this month your life will change. Your life will change because you start the
01:06:33
process of making a difference. It's just like the first day you go to the gym. Now I will tell you if you save 1%
01:06:38
of your income you won't notice it. And if you did that every month for a year,
01:06:43
at the end of the year, you would have saved 12% and you will be saving four times what the average American saves
01:06:48
and you will be in a rockstar shape. Then the second hour, this is where people's minds blow up. But the second
01:06:55
hour, so the first hour goes for the future, the second hour goes for safety and for dreams. So 30 minutes of your
01:07:02
income, roughly 5% should go into an emergency account and another 5% goes into a dream account.
01:07:10
Now, that dream account could be for buying a house, could be saving money for college, could be the vacation you
01:07:17
want to take at the end of the year, could be getting married, could be the engagement ring, but you're putting
01:07:23
money away for your dreams. Because when you put money away for your dreams, that's how they become real.
01:07:30
>> And you know, the book is called The Automatic Millionaire. This is a book
01:07:34
that sold over two million copies >> um on its own. Why did you use the word automatic?
01:07:41
>> Unless your financial plan is automatic, it will fail. How do I know this? Because I spent nine
01:07:49
years as a financial adviser at Morgan Stanley and I got to see firsthand. Everyone who came into my office with an
01:07:55
ordinary income who built wealth, they did it by saving automatically. Every single time a client came into my
01:08:01
office and they said, "I'm going to bring you a check every month myself." I
01:08:07
never had a client save for more than six months. They stopped. When it once you make the decision to
01:08:14
automate your financial life, it works in the background. Now, here's the thing. Everybody else is
01:08:21
already doing this to you. You go sign, you go to go to a gym to go work out. They don't ask you to bring
01:08:28
them money every month. They automatically bill you. You get a phone bill, they automatically bill you.
01:08:34
Today, in many cases, when you rent, they automatically pull the money out of your account. The banks automatically
01:08:39
take money from you for your mortgage. When you pay taxes, they're all automated. Everyone takes money from you
01:08:46
automatically. Everything that you sign up for on your phone is a subscription service. Netflix, go through your credit
01:08:54
card today. Open up your phone, look at all your subscriptions. All those businesses are taking money from you
01:08:59
automatically. Why? That's the only way they can be in business. They know if
01:09:05
they don't get money from you automatically, you won't keep using them. Most people who start off with a
01:09:11
free subscription, it'll take them three to six months to turn off something that
01:09:18
they don't use. I'm here getting people to automate their financial life for themselves.
01:09:26
Is there simple ways, apps, tools, websites we can use to go through all of our subscriptions and turn them all off?
01:09:34
>> Yes, there are. So, let me tell you the easiest way. This is really actually
01:09:39
free publicity for Apple, okay? Because so many people have Apple phones. Number
01:09:45
one, only do your subscriptions inside of Apple. In an ideal world, don't pay
01:09:51
anybody directly. Do it all through Apple. >> Why? Because if you go to the bottom of
01:09:56
your phone and you don't know how to do this and you put subscriptions, up will pop everything that you've
01:10:01
signed up for and you can go click click click and turn them all off. >> Do that.
01:10:05
>> Another thing I will tell you is that when you sign up for anything, let's say
01:10:10
it's a one year because everything now is a one-year trial subscription or a
01:10:14
one month trial subscription. The moment you sign up for it, shut it off. Because what happens is if you sign
01:10:20
up for anything and think of any subscription you can imagine. Companies hate me for this. The moment you shut it
01:10:26
off, when the time comes for it to renew, they will offer you a better deal to renew.
01:10:32
>> Okay, so I've opened up my phone. I've gone to the settings. I've clicked on my
01:10:36
name in the settings and then I've clicked on the button subscriptions. I have one, two, three, four, five, six,
01:10:44
seven, eight, nine, 10, 11 of which three of them I would keep. So, all these other ones have just been
01:10:56
running in the background and and it's because I used an app one time and it
01:11:00
signed me up to some kind of free trial and I just totally forgot to cancel it. So, I've got Oh my god, some of them are
01:11:06
massive. >> Okay. So, so as you do this, what you're doing right now is a real life example.
01:11:13
So, if someone's listening to us, watching this, they're married, they've
01:11:17
got kids, or they're single by themselves, this one exercise, my guess is there are
01:11:24
many, many people listening that could find $50, $100, $200 a month that they could shut off and redirect that money
01:11:30
to saving and investing and that could change their life. Are there other apps you can use and go to to figure out how
01:11:38
to cancel or leave your subscription? >> So there there are and most these apps
01:11:41
you have to pay for, right? So like you can go to So then you're right back into
01:11:45
paying for an app now. Probably the two popular most popular apps are Monarch and Ynab. You can also do this with your
01:11:53
credit cards. Um the credit card comes doing a better job of showing it on your statements. And again, I go back to the
01:12:00
Apple example because Apple makes it the easiest to shut these off. >> Maybe some of you will be spending $100
01:12:06
a month. So, I did $100 a month. And it says if you invest if you sort of cancel
01:12:10
those subscriptions and invest $100 per month for 40 years, an annual rate of return of about 10%, which is roughly
01:12:17
what you get if you just put it into some of the big tech index funds at the moment. The total money you'll have in
01:12:23
40 years is $632,000, which is staggeringly life-changing amount of money. >> It's staggering. And let me just give
01:12:33
some very specific investment for people to consider, right? And they still need
01:12:37
to do their own due diligence and read perspectuses. And yes, there's risk involved in the stock market. But the
01:12:42
first one I would talk about and look at, and these are all listed in my book because I just want to give because
01:12:47
people like, what's an index fund? What do I buy? Look at the Vanguard Total
01:12:51
Stock Market Fund. The symbol is VTI. Okay, this this is actually the largest index fund in the world. There's
01:12:59
trillions of dollars now in this fund. I talk about it in the book. I looked up the annual uh the annual returns of VTI
01:13:05
the last 10 years have been 14%. 14% annually. This fund has 3500 stocks. You you know all the biggest US
01:13:15
stocks. So you don't have to figure out what stock to buy. You buy this fund,
01:13:19
you buy an exchange traded mutual fund, you have access to 3,500 great American companies. I'll give you another stock
01:13:28
index fund. I love >> and everybody can buy this on their phone right now probably
01:13:33
>> literally. You can go to Vanguard, Schwab, Fidelity. This funds, this is an
01:13:37
ETF, so it's available everywhere. It's a stock. And if you want to figure out
01:13:41
how to do this and you're listening right now, what I'd do is use ChatV or
01:13:44
Gemini and put in the stock the the fund that um has been said and ask it how do
01:13:51
I invest in this in the country that I'm in? What app do I need to use? What
01:13:53
website do I need to use? Again, this is not investment advice. Well, I guess it
01:13:57
kind of sounds like it is, but >> Well, and but it's also like so like if
01:14:00
someone says, "Okay, but I'm not I'm in um wherever I am. I'm in the UK. What's
01:14:04
an index fund in the UK that covers the UK?" I'll give you the global version of
01:14:10
VTI. So, because I own these funds, so I So, the global version of VTI is a symbol which is all I'm going to give
01:14:17
you another Vanguard fund. >> When you say you own these funds, for clarity, you mean you've invested in
01:14:20
them? >> Yeah, I've got money in these mutual funds. So, this other fund because I
01:14:24
have I want money my my personal money that's in the stock market. I am one-third global investments and I'm
01:14:30
twothirds US investments. So, I have a lot of global index funds. This global index fund the symbol is Va.
01:14:39
Okay. So this is the Vanguard global index fund without US stock. Symbol again is VA.
01:14:47
That fund last year and it won't always be like this because global investments
01:14:51
have underperformed the US for a long period of time. That fund last year was up 35%.
01:14:57
Last year, global investments significantly outperformed the US investments and the US investment market
01:15:03
was up on average of 17%. So the US markets were up 17% or higher and global investments were up 30% or higher. Now
01:15:11
there will be a point in time, Stephen, without a shadow of a doubt that we will
01:15:15
see a market pullback. And when that day comes, you have to stay the course and keep investing automatically monthly.
01:15:23
And then I'm going to give you a tech fund because everybody wants to know what should I invest in that is, you
01:15:29
know, should I invest in an AI tech fund? And my answer would be is you don't need an AI tech fund. You need the
01:15:37
best tech fund that's existed in my lifetime. And that's the NASDAQ 100 ETF.
01:15:44
The symbol for that is QQQ. So go and look up, you know, go into whatever you're using and go look up
01:15:52
QQQ, read about the top 100 stocks in the NASDAQ and the returns for QQQ. I mean, actually, in the top of my mind
01:15:59
right now, I can I think it's over 20%. Um, but look up what has the QQQ total
01:16:06
return been for the last 10 years. I can tell you since I put money in QQQ, it's gone up tenfold. Now, the market's
01:16:15
been unbelievable and there will be pullbacks. And that is also why I should say this, Stephen, because we haven't
01:16:21
even addressed this. I don't run around telling people to put all their money in
01:16:24
the stock market. I also don't think that young people should be putting all
01:16:28
their money in the stock market. I think one of the greatest myths out there is that when you're young, you should take
01:16:34
a lot of risk. Let me say that one more time because it's super important. So,
01:16:38
make sure it sits. Everyone says when you're young, you should take risk. The problem with that advice is that
01:16:49
today people in their 20s and their 30s are taking a lot of risk. They're not
01:16:54
just putting money in index funds. They're putting money in meme coins. They're putting money in meme stocks.
01:17:01
They're putting money in NFTTS. They're on social media and Tik Tok watching people day trade. They're
01:17:08
trying to get into options. What they're really trying to do is get rich quick.
01:17:12
All I can tell you is the older guy in the room here, people who try to get rich quick stay broke forever. And the
01:17:20
problem with taking too much risk with your money when you're young is if you
01:17:23
keep if you do everything right, like let's just say you're the you shut off
01:17:27
all your subscriptions and you're saving $200 a month, but you put that $200 a
01:17:32
month into a junk investment and you turn around in 10 years and you have nothing to show for it, you'll stop
01:17:39
investing. >> Looking at the QQQ data, so this is the NASDAQ 100. So this invests in the top
01:17:46
100 companies in America. in the NASDAQ stock exchange. >> The returns over the last 10 years from
01:17:53
2016 to 2026, the annualized returns have been roughly 19%. The total return over that period has
01:18:00
been roughly 480%. So, a $10,000 investment 10 years ago would now be worth approximately $60,000
01:18:09
today if you'd done nothing. >> Then nothing >> ever added to it. Over the last 20
01:18:13
years, the annualized returns, the return every year has been 15% with a total return over that period of 1,500%.
01:18:22
And again, so if you've added $10,000 to it 20 years ago and done nothing, you
01:18:26
would have roughly $170,000 today. >> So here's the beauty of what you just
01:18:32
did. You checked my my you checked my advice. You looked at the data and now you know what has been done in the past,
01:18:41
right? Let me give you a super boring fund. I'm not sponsored by Vanguard. I'm
01:18:46
just giving generic vanilla stuff here. Look up the Vanguard balanced fund. So, right, Vanguard Balanced Fund. And the
01:18:55
Vanguard Balance Fund is 60% stocks and 40% bonds. That by the way is the most typical asset allocation. The difference
01:19:04
between stocks and bonds in the world. The average retiree has a portfolio that's about 60% stock and 40% bonds.
01:19:13
You look up the Valangard balance fund and what you're going to find is that
01:19:16
fund has averaged over 8% annually since inception. It is as boring an investment as they
01:19:24
come. So if someone says, "Well, I don't want to be 100% stocks. I just want to
01:19:28
be I want to be more conservative, but I want some stock exposure. The Vanguard balance fund is a great example.
01:19:35
I list all these funds in the automatic millionaire. One of the kind of funds I talk about the most is what's called a
01:19:42
targetdated mutual fund. I don't know if you guys have you guys have a 401k plan.
01:19:47
>> We have something similar. >> Okay. So in the US if if you have a 401k
01:19:51
plan what you're going to find when you open up your 401k plan is you have what
01:19:54
are called targetdated mutual funds. This is a onestop mutual fund solution to your investing all the way until you
01:20:05
retire and it will be divided among stocks and bonds and it will be what's called rebalanced automatically as you
01:20:13
get closer to retirement. So, it'll go from being more stocks when you're
01:20:16
young, less stocks as you get older. There are trillions of dollars now in these target date mutual funds. When I
01:20:22
wrote the automatic miller 20 years ago, was just getting started. This automatic
01:20:27
solution to investing has changed the game of investing for millions of Americans. That's why there's 24 million
01:20:33
millionaires and that's why there's now $45 trillion in retirement accounts.
01:20:38
>> We have a brain budget. The way to think about it is we have a limited amount of
01:20:44
energy that we can spend every single day. I'm saying find ways to simplify your life. And one way I've conserved my
01:20:50
body budget is via our sponsor Factor who are a meal delivery service. They are especially great because they make
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01:21:32
Over the years, people have reached out asking me for mentorship. But the challenge I've always faced is that my
01:21:37
calendar doesn't permit me to help every single person that reaches out. So when
01:21:41
I know I can't personally help, I try to push people towards tools that I think
01:21:44
can. And that's why I wanted to tell you a little bit about a resource that I
01:21:48
think will be great for those of you who are founders of small and medium-sized businesses. It's a content series that
01:21:53
our longtime show sponsor Vodafone has created. It's called Vodafone Business.connected.
01:21:59
You'll find it on YouTube. This series delivers the knowledge that founders today need to grow their company in the
01:22:04
digital age. There you'll learn about personal branding, cyber security, scaling e-commerce companies, and
01:22:09
through conversations with many founders who I've invested in and work closely
01:22:13
with, the opaque picture of building a business will become clear. Some of those founders I've invested in in the
01:22:18
series include Cristiana Brenton from Flight Story, Marissa Poster from Perfect Ted, Leo Harrison from Chapter
01:22:24
2, and Georgia Gibson, who I've partnered with to build Steven.com. And these are just a few of the great names
01:22:29
involved. Search Vodafone business.connected to learn more. The other book that you wrote which sold
01:22:36
incredibly incredibly well is this book about smart couples finish rich. That's
01:22:40
the title. Smart couples finish rich. Nine steps to creating a rich future for you and your partner.
01:22:45
>> As it relates to how rich or wealthy you become, the person you choose and the
01:22:49
way that you configure that relationship. How consequential is that? >> It's everything
01:22:55
>> really. >> It can be everything. Why? >> You're married. I'm married.
01:22:59
>> Yeah. >> So, why can it be everything? >> Because here's what here's what happens
01:23:05
in the real world, Stephen. >> Often we marry our financial opposite. So, I always joke like I used to do a
01:23:13
lot of seminars for couples and I'd say there's two types of people that are
01:23:16
born in the world. One person comes out literally with a calculator and they're
01:23:20
born to track where all the money goes and they love to budget and they're super excited about investing. That's
01:23:26
one kind of person. The other kind of person loves to shop, loves to spend money. Almost inevitably those two
01:23:35
people hook up. Now, sometimes two people who like to spend money marry. That's a disaster because they end up
01:23:43
broke. So now, what do you do about the couple that's got their financial opposites?
01:23:48
That's what led to smart couples finish. Because if you are married to your financial
01:23:55
opposite, you will fight about money all the time. And fights about money are what lead to divorce. They're the number
01:24:05
one cause of divorce. The real key and what I've been teaching now for over two
01:24:10
decades is the way you get couples on the same page when it comes to money is you start with your values. So you look
01:24:17
at what do you really value most together as a couple. You put the money aside for a second.
01:24:23
You go through your values. What's most important to you. What do you really
01:24:27
care about? You talk about your values. And then you build a financial plan around what's really most important to
01:24:34
you. >> You say that there's six worst money mistakes that couples make. And the
01:24:39
first of those is not deciding who is responsible for what. >> Yeah. So often in a relationship, one person
01:24:47
pays the bills. Okay, who's managing the money? Now, I used to say in every household there should be
01:24:56
at least one person that's paying the bills and if the other person is managing the money, meaning that they're
01:25:00
in charge of investments, that you still get together and go through it. As I've
01:25:06
gotten older, I've really realized how important this is because I go back to
01:25:10
the fact that the average age is 59. Average age of widowhood is 59. I'm 59 now. I've had three best friends already
01:25:18
pass away, all men, and they passed away before they were 57. So, all these statistics that I talk about, I'm seeing
01:25:26
them come true. And I will tell especially to the women, hear me loud, hear me on this loud and clear, but this
01:25:33
is important for the men, too. The question you need, this is hard to hear. The question you have to ask
01:25:40
yourself is if your partner died today, what would you need to know about the finances?
01:25:49
And the answer is everything. Now, what does that mean? Everything. That means you would need to know where is the
01:25:54
money. Does he have money in an old 401k plan? Does he have money in IRA account? Does
01:25:59
he have money in a bank account? Where are the passwords to get into the accounts? Where's the will? You know,
01:26:07
six out of 10 people listening to us today don't have a will. You have to have a will
01:26:12
>> at any age. >> At any age. If you, especially if you're in a relationship, you have to have a
01:26:16
will. If you have kids, you have to have a will. Is there life insurance? You know, so many people today who have
01:26:23
children don't have life insurance and they don't have assets. You should at
01:26:26
least get a million to$2 million term policy. Super inexpensive. Protect your family. You have to run the drill,
01:26:35
right? Like we got on a plane, we flew here today. The first thing they do on a plane before you take off is they talk
01:26:40
to you about what to do in case of emergency purposes. The mask's going to come down. You're going to put it on
01:26:44
your face. Okay. You get on a cruise boat. The first thing they do is talk about what you're going to do if the
01:26:48
cruise boat's got a problem. You're going to go get in these emergency boats. You need to run the fire drill
01:26:54
for your family on finances. I almost died like it's now been four years ago.
01:26:59
I uh my wife found me face down, passed out. I was brought to the hospital in Florence. Um I was in a coma for four
01:27:08
days. I was in the hospital for 17. I had menitis. When I came out of just like a movie, I'm laying down. I mean,
01:27:18
I'm laying down in the hospital. Doctor's looking over me. Doctor says, "Do you know what your name is?" I said,
01:27:25
"It's David." He said, "Very good." He goes, "Your last name is?" I said, "It's
01:27:29
Boach." He says, "Do you know where you are?" I go, "Yeah, I'm in Milan. I just
01:27:33
had an ankle surgery." Because I had had an ankle surgery two weeks prior, two
01:27:38
two weeks before that. And he says, "No, no, you're you're in Santa Maria Nolla.
01:27:42
You're in the ICU. Uh we're treating you right now for menitis, but now that
01:27:47
you've opened up your eyes, you're going to be you're going to be okay. You're
01:27:50
safe now." And then they brought my wife in. They said, "Do you know what her
01:27:54
name is?" I and I made a joke. I said, "It's Rebecca." She was like, "Who?" I
01:28:00
go, "Honey, I can still be a smartass in the hospital. It's Alatia." And she
01:28:04
starts screaming and yelling and she's like, "Oh my god, oh my god, he's okay."
01:28:07
But Stephen, the truth was I wasn't okay because when you get men and judges, you
01:28:11
get brain swelling. So I couldn't remember things. I couldn't remember my
01:28:15
passwords to the to the bank account. I didn't know the passwords to my phone
01:28:19
number anymore, to my phone. One of the things I did when I came out of the hospital, because I always manage
01:28:26
the money, is I said to my wife, "We're going to hire a financial advisor
01:28:31
and you have to be involved in what's going on." We actually had yesterday our
01:28:36
annual account review. Because I tell couples, you got to have an annual account review either together and if
01:28:41
you have a financial adviser at a minimum with your financial adviser. And I didn't want to cancel the appointment
01:28:47
because I was, even though you guys invited me to come here, I'm like, I'm
01:28:50
keeping the appointment. We'll fly here to flute this morning. And so again,
01:28:55
having worked at, you know, Morgan Stanley for nine years and been a financial adviser, I've seen too many
01:28:59
couples not do this, including sadly Stephen, my dad just recently passed away. And my dad was in
01:29:08
the money management business his whole life. So he managed the money and my mom
01:29:14
was not involved. And when my dad passed away, we had to just like my book, step
01:29:20
in and help my mom with everything. Now, she's lucky. She's got two kids in the
01:29:25
business, but she didn't. My mom was just a ripe waiting example of somebody
01:29:31
who could be taken advantage of. So, the time to learn about money is before there's a problem. If you took smart
01:29:37
couples finish honestly Stephen that you it's it's designed to be a a roadmap for
01:29:43
two people together where you can sit down and go through this book chapter by chapter together starting with just
01:29:50
organizing your financial information putting everything into file folders starts the conversation and then talking
01:29:56
about your values then talking about your dreams then going into well what what do you want to share you know you
01:30:03
have a very comp I don't know all your stuff, but I've followed you for years.
01:30:08
As I told you, I'm a fan of yours. I've got your book. I've watched your
01:30:11
podcast. I've listened to you now for years. As your business is expanding, your life is getting more complicated.
01:30:18
God forbid something happens to you tomorrow. >> Yeah. It'd be a [ __ ] nightmare.
01:30:22
>> And she's your fiance. >> Yeah. >> She wouldn't even know where to start.
01:30:27
>> And I don't know if she would know who to call. So, it's a worthwhile conversation. like
01:30:34
I just had this guy in the show and I don't know maybe maybe we really need to
01:30:37
like need to involve you a little bit. >> I was just looking at some of the data
01:30:40
here and it says that in terms of income ignorance according to a 2021 study by Fidelity Investments nearly 40% of
01:30:48
couples could not even identify how much their partner earned. It says in terms of financial infidelity, surveys from
01:30:56
bank rate and creditcards.com consistently find that up to 40% of adults share that they have kept
01:31:02
financial secrets which is hiding cash, hiding bank statements and hiding debts that they have from their romantic
01:31:08
partner. So that's almost half and you pointed at this earlier on which is the
01:31:12
CFO dynamic. In many households, one spouse acts as the chief financial officer. And research indicates that
01:31:18
roughly 50% of couples um have a non-managing spouse who has little to no idea how much money the family have
01:31:26
total. They don't know where it is and they don't know the passwords. >> It can sound scary. It can sound
01:31:32
intimidating. And yet, I can tell you every day, people who actually kind of do this basic stuff that we've talked
01:31:37
about, once you start to do it, you feel a lot better. You feel better instantly.
01:31:41
You don't you don't have to go from having no savings to having a million
01:31:45
dollars to feel better. If you just start automatically saving some money, paying yourself first. The moment you
01:31:52
make that decision, you'll feel better. You go and you turn off some subscription fees like you just looked
01:31:57
at. The moment you do that, you'll feel better. It's literally like a financial
01:32:02
muscle. You start to build this financial muscle when you start to take action. It is action that changes your
01:32:09
life. I always say I wrote all these books. If a person buys a book, reads it and doesn't do anything, then I was a
01:32:16
form of entertainment. If you listen to a podcast on money and you don't do something, then we were
01:32:23
again a form of entertainment. My purpose for doing this podcast today, why I got on a plane and flew out here
01:32:28
immediately to do this with you was I want to try to change somebody's life today. I've always taken the approach of
01:32:35
like I want to change a person's life one person at a time. And sometimes the
01:32:40
things I share are hard to hear, but I also know they wake people up. You had this great great quote in this book. I
01:32:46
was showing this today to my son. I'm holding, for those of you who can't
01:32:51
see me, I'm holding Steven's book, A Diary of the CEO, which has also sold
01:32:54
millions of copies. And this is your quote on page 233. I wonder if you remember your quotes because sometimes
01:33:00
you forget them, right? If you want long-term success in business, relationships, and life, you
01:33:08
have to get better at accepting uncomfortable truths as fast as possible. When you refuse to accept an
01:33:17
uncomfortable truth, you are choosing to accept an uncomfortable future. The one thing that wasn't in this quote
01:33:25
was money. And everything we're talking about is I'm like, you're gonna work 90,000 hours
01:33:30
over your lifetime. If you don't pay yourself first and you have nothing to show for it, the uncomfortable truth is
01:33:35
you will be broke. We haven't talked about um global issues and government issues and debt.
01:33:43
Why do you have to take care of yourself financially right now more than ever before?
01:33:48
Because the future is about to radically change. And I will talk out of both sides of my mouth for a second. Number
01:33:55
one, I believe the next 10 years, hands down, will be the greatest opportunity to build wealth in our lifetime. AI is
01:34:02
create going to create so much wealth that we've never seen anything like it.
01:34:08
Like when you look at the returns in the stock market from last year, they're a
01:34:11
result of AI. What's happening is AI is making companies more profitable and
01:34:16
more productive than they've ever been. The downside is people are losing their
01:34:21
jobs, right? You've had people on the show including Tony Robbins talking about this and there are going to be a
01:34:26
lot more of those job losses. So some people are going to get much wealthier and then a whole lot of other people are
01:34:33
going to have a challenge. But there's another problem that we we're not
01:34:37
talking enough about and that is the safety nets of governments. All these safety nets that were created
01:34:46
in the US, Social Security, Medicare, Medicaid, unemployment, you can go to through
01:34:54
every single country. All of these things are called entitlement programs, which is a fancy
01:35:01
word for saying the government made a promise to you. And a whole lot of people are dependent
01:35:09
on that promise and there's not enough money to pay for those promises. So like
01:35:15
in the US, you take social security. The average social security check right now
01:35:19
is $1,900. Not a lot of money, but about 60 million Americans depend on that amount of money.
01:35:30
In the US, Social Security, this is government data, not me. you can do all this stuff online.
01:35:37
The government is telling us that in 2033, that's around the corner, the Social Security is going to be
01:35:44
underfunded and they're going to have to cut the benefits. Now, what they're
01:35:47
talking about is cutting the benefits by 20%. You have a lot of Americans that that's going to be a real problem for
01:35:53
every country's got this issue because people are living longer. Governments
01:35:58
have more debt than they've ever had. I am here to tell you, it's a cliche term, but no one's coming
01:36:05
to save you. It's you're gonna have to save yourself and you're gonna have to
01:36:10
take your personal financial well-being more seriously now than ever before. And
01:36:16
if you do, you will be in great shape. If you don't, you will be dependent on a
01:36:22
system that is buckling. One of the things in your I think it's the sixth point of the six things that
01:36:29
couples get wrong is waiting too long to pay off the mortgage. What do you mean by that? I actually had a friend contact
01:36:34
me um and asked this. They said, "Stephen, I've got some cash that that's
01:36:39
been given to me." I think through an inheritance. Should I pay off my mortgage or should I go invest in the
01:36:45
stock market in the S&P 500 or something else? >> Yeah. >> And I didn't know what to say because
01:36:49
I'm not a financial adviser. >> So, if you called me up and you said, "David, what what should I do?" I'd go,
01:36:53
"Stephen, what's the rate on your mortgage?" Then you'd say, "Well, David,
01:36:57
I got a mortgage 5 years ago and it's 2 and a half%." And I'd say, "Okay, well
01:37:00
that's a really low rate, Stephen. You know what? You can put the money in a
01:37:04
money market account right now and make more than that. So maybe you don't need
01:37:07
to rush to pay it off as fast as possible." But if you've got a mortgage
01:37:11
at six or seven or eight%, it's a no-brainer. The biggest thing I can tell you about paying down your mortgage
01:37:17
early is actually really simple. Here's ways to do it. If you make one extra
01:37:23
payment a year on a mortgage, you'll take a 30-year mortgage and you'll pay
01:37:27
it off, depends on the rate, five, six, seven years sooner. So, you can go online, you can run a
01:37:34
calculator. Today, you don't even need calculator. You just run the question.
01:37:36
You put in your mortgage. You tell Gemini, here's the size of my mortgage. Here's my mortgage payment. If I make an
01:37:43
extra payment a year, how many how many years faster will I pay it off? And how much will I save? And you'll see the
01:37:49
number. When people see the number in black and white, they go, "I've got to
01:37:54
do that." Now, here's the key. Make that payment automatic. The easiest way you make your payment
01:38:01
automatic is either make one extra payment at the end of the year or take your mortgage payment and increase it by
01:38:08
10%. So, if your mortgage payment is $1,000, make an $1,100 a month mortgage payment and tell the bank you want to
01:38:15
add that to the principal. When people do that, they need to make sure though that money is actually paying down the
01:38:21
principal. And another way to do that is a bi-weekly mortgage payment plan where
01:38:25
you take your mortgage, you split in half, you pay half every two weeks. That'll also pay your mortgage off
01:38:30
early. >> Prenuptual agreements. I'm engaged. >> Yep. >> Should I be getting a prenup?
01:38:36
>> So, I would tell anyone who's getting married, number one, if your incomes are not the
01:38:44
same, you should get a prenup. Number two, if you both have good incomes, you should get a prenup. Number three, if
01:38:49
you're in your 30s, you should get a prenup. You would never go into a business without a contract.
01:38:56
Marriage is the ultimate contract. It just is. Now, is it romantic to do a prenuptual agreement? No. Does one
01:39:04
person in the relationship typically not like the doing a prenup? Yes. I know a lot of women today who want prenups and
01:39:12
the husbands don't want them. It's whoever's making the money. But I will
01:39:15
say this about prenups. You need a lawyer. She needs a lawyer. You cannot go and do a prenup right before you get
01:39:22
married. When people do that, those prenups get thrown out the window because they will claim and say and have
01:39:29
an argument for, I was under extremely undue influence to sign this agreement before the wedding. And those
01:39:41
agreements get thrown out even if there's disclaimer language. And both of you need attorneys.
01:39:48
And prenuptual agreements can often be like a negotiation. And you can learn a lot about your partner that it's not
01:39:54
always pretty. I'm not saying you, but one can learn a lot about their partner
01:39:57
that's not always pretty when you do a prenuptual agreement. And once the prenuptual agreement is done, if it's a
01:40:02
reasonable prenuptual agreement, it goes in a file. It doesn't get looked at
01:40:06
again. And it won't matter unless the day comes that you need to pull it out.
01:40:11
And that's for a firsttime marriage. Okay, you're a second time marriage or a
01:40:16
third time marriage and you've got kids and custody issues and and and support
01:40:23
for your first wife. You definitely need a prenup. >> What is the most important thing we
01:40:28
should have talked about that we didn't talk about? >> Stephen, we've talked a lot about money
01:40:32
today, but money is just a tool. So, what we actually haven't got to talk a lot about is using money just to free
01:40:40
yourself to live your best life. And you don't have to have money to live your
01:40:44
best life. Again, money is just a tool. So, what's most important in life? I'm
01:40:50
going to say things that people know. Health. You I started following you because of all the shows you did on
01:40:56
health. Love. People hold on to love way too much. Gratitude. Being consistently grateful for the life
01:41:07
you have. Friendship. loving your friends fully and the la last thing is fun. You know,
01:41:18
I think people go through life and at some point they stop designing their life. My grandmother used to say, you
01:41:26
got to dream it, design it, and do it. And she's like, you're going to run out
01:41:34
of time. So what I would say to anybody is like this is you've got this one beautiful moment in time where you're
01:41:42
here. What do you want? And start working on that today. >> You listen to the episode with Tony
01:41:53
Robbins. >> Yeah. >> You've referenced him several times in this conversation. If someone were to
01:41:59
ask me who was the greatest mentor and the greatest influence in my life besides my grandmother and my father,
01:42:04
it's Tony Robbins. So I went to Tony Robbins seminars in the early 90s back in the day when he had an infomercial
01:42:10
with audio cassettes. And I went to a program that he taught in Hawaii. He had this big hotel called
01:42:17
the Yaloa. And he did it he did an exercise. This is so I it's like I remember like this yesterday. He said to
01:42:25
this the room we were in and there were I don't know a thousand of us in this
01:42:29
room. He said, "How many of you have a dream that you're not working on?" And
01:42:35
we all we all had dreams like and so he got us into a peak state and he had us work on our dreams. And then he asked
01:42:42
the question, "How many of you think you're going to be alive in 10 years?"
01:42:47
Everyone's like, "Yeah, I'm going be alive in 10 years." He's like, "Great.
01:42:50
So I got a question for you. Are you going to be alive in 10 years having worked on your dream?
01:42:58
Hopefully gotten it right, done all the things I've taught you to do, you know,
01:43:03
modeled the masters, got yourself in peak state, learned the pattern recognition.
01:43:09
Have you gotten 10 years older having gone through your dreams and maybe got it? Or did you just get 10 years over 10
01:43:16
years older and you let your dream die? you let your dream die and the room he just let that sit and then he had us go
01:43:28
off in groups of 10 and share our individual dream. So we'd all written it down on paper. So I shared that my dream
01:43:37
and this young kid financial adviser I'm a guy. I shared my dream was to write a
01:43:43
book called Smart Women Finish Rich and teach a million women to be smart with money so they could protect themselves,
01:43:50
teach their kids, and help their family. My heart's pounding, Stephen. I'm
01:43:55
sharing this idea with 10 strangers. And then we go back into the room and he's
01:43:59
like, "How'd that go? Are you guys all ready?" Gets us back in a peak state. 10
01:44:02
minutes later, a woman comes, taps me on the shoulder, and she says, "I just
01:44:05
heard about your dream. My name's Vicki. I've worked on Tony's last two books. If
01:44:11
you want to do your book, you're gonna need a book proposal. You've done books,
01:44:15
you know this. She's like, I can help you write a book proposal. I hired her.
01:44:19
I started working on that book proposal. Later, I would go after the same agent that Tony has, Jan Miller. She'd become
01:44:26
my agent. He'd write a cover letter. I'd get a book deal, and I'd start working
01:44:30
to help millions of people. It started at a Tony Robbins seminar. And I go back to my grandmother, right? Dream it,
01:44:37
design it, and do it. He gave me the life skills to do that. And I will tell you something about Tony
01:44:44
because you know, you see Tony on all these shows and people go, "Is Tony the
01:44:48
real deal?" I Stephen, if I if I was with you and I send Tony a text and I and Tony has a lot of friends like this,
01:44:55
Tony gets right back to me. Tonyy's the real deal. I just went to Germany and
01:45:00
took my older son Jack who's 22 to see him do UPW in September could bring tears to my eyes because I wanted Jack
01:45:08
to have the experience without me there. So he was, you know, bless Tony sitting
01:45:13
in the front row. I came in on day three when he was in the peak state and I came
01:45:19
in and I watched him, you know, I was basically his age and I thought, God, you don't, you know, I went in, I gave
01:45:26
him a hug and I'm like, you just don't even know. This is just this experience
01:45:31
that you're seeing, what you're learning today, if you use this stuff, it will
01:45:36
change your life. That's the power of Tony. And people go, you know, whatever it is, your podcast,
01:45:45
your events, Tony's events, my books, we're just catalysts. But God God gave you a seed and a dream. And
01:45:59
when we're the catalyst for like, look, go do this. Listen to that voice. Whoever your God is, that soul that you
01:46:07
hear yourself saying, I have a dream. If I only had 10 years left to live, I would really hate to die with that dream
01:46:15
inside me. That's the dream you go work on. >> And since then, you've done exactly
01:46:21
that. You've educated hundreds of millions of people through your books, through podcast, seminars, newsletters,
01:46:27
and thousands of media appearances on how to do exactly that. How to get financially free, pursue their dreams,
01:46:33
get hold of their money so that they can live the life that is um destined for them. And that is an incredible thing.
01:46:39
And you've sold almost 10 million copies of your books worldwide. I'm sure you're
01:46:42
going to hit that number at some point soon. And uh I guess you'll never get to
01:46:47
see the impact that that's had on so many people's lives and how you've
01:46:49
therefore changed the trajectory of their financial future and their kids and their kids and their kids like your
01:46:54
grandmother did for you and your family. I'd highly recommend everybody go and
01:46:58
listen to that episode. I'm actually going to link it below. So if you haven't listened to the episode with
01:47:01
Tony Robbins, that's a great next thing to do if you're still listening now. But
01:47:05
uh David, I wanted to thank thank you so much for coming and uh you present a really interesting different perspective
01:47:09
on the subject of money which is is hard to find. It's rare um but it's very very
01:47:14
very important and I'm hopefully it'll be consequential for many. We have a
01:47:18
closing tradition as you know um where we ask the next guest the question left by the last and the question left for
01:47:24
you is interesting. If you had all the money you needed to have to support yourself
01:47:30
and your family, zero financial worries, what job profession would you be doing? Or rather, what would you
01:47:40
spend your time on? >> That's surreal that this is the question you're giving me that that was asked
01:47:49
before I got here. Like that's that's a God moment, too. Like that's meant to
01:47:52
be. >> This is, by the way, I'm not making this up. So, cuz that's me. I have enough. I have all
01:47:59
the money that I need. I have my health right now. I have my time. And this year, what am I going to what what I
01:48:05
want to go do my dream for the year? I want to have an endless ski season. So, at the end of the year, ask me, did I
01:48:12
ski somewhere every month this year? I leave you today. I go back to Florence for 24 hours and I turn around, go to
01:48:18
Verbier, Switzerland with friends. I'm going to try to ski somewhere every day,
01:48:22
every month this year with friends and with family all around the world for fun. I did this as my last dream to help
01:48:31
one more generation be smart with their money. This is my final book. This may be my final podcast. And what you've
01:48:37
done is you've updated your smash hit best-selling book that's that sold
01:48:43
millions and millions and millions of copies that you wrote 20 years ago to make it relevant to the current
01:48:48
financial situation and world that we live in. >> And my goal with this was a lot of my
01:48:52
readers now in their 50s and their 60s, but they've got young kids like I do and
01:48:55
I wanted this to be a book they can put in their hands. >> I'm going to link the book below.
01:48:59
Fantastic read. You've written several incredible books. So, it's I'm going to
01:49:03
link all of them below in the description for anyone that wants to grab a copy of them. The Automatic
01:49:08
Millionaire, a powerful one-step plan to live and finish Rich. David, thank you.
01:49:14
>> Stephen, thank you. It's been great. >> I'm going to show you how to get clear
01:49:17
on what you really want, figure out what's been stopping you, put the plan in place, and teach you the most
01:49:22
important thing that's made me successful. >> And I don't think people fully realize
01:49:25
the significance of how many of the most influential people on planet Earth you have worked with and continue to work
01:49:30
with. What is the pattern that you noticed in those people?