RPF0274-Skills_of_Wealth
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00:00:14.840 | Today on the podcast, we're going to talk about the skills of
00:00:18.560 | wealth, and I've got great news.
00:00:20.200 | It's a brand new year, maybe a brand new day, depending on when you're listening
00:00:24.720 | to this, but it's certainly a new year and a new month.
00:00:27.720 | And here's the cool thing about a new year, a new month, or a new day.
00:00:30.840 | A new day is a time for a fresh start.
00:00:33.960 | And today you can reflect back on your progress toward your goals over the last
00:00:39.320 | months and perhaps even a year and consider your progress.
00:00:43.400 | And you might have two emotions that come out of that.
00:00:46.360 | You might be able to look back and reflect on 2015 with satisfaction.
00:00:51.000 | Satisfaction about how much excellent progress you've made towards your goals.
00:00:56.640 | Or you might look back with a little bit of regret, feeling like,
00:01:00.080 | "I wish I'd done a little better."
00:01:02.400 | Well, either one of those is okay.
00:01:04.760 | But today I want to speak with a special message to those of you who look back
00:01:09.880 | with a little bit of regret, because here's the good news.
00:01:12.760 | It's a brand new day.
00:01:14.320 | And today you can begin to develop, practice, and perfect the skills that you
00:01:22.600 | need that will help you build wealth in every area of your life.
00:01:27.960 | Welcome to the Radical Personal Finance Podcast.
00:01:47.080 | My name is Joshua Sheets and I'm your host.
00:01:48.720 | Thank you so much for being with me here today, Radicals.
00:01:51.760 | It's a brand new year.
00:01:52.880 | I am rested, rejuvenated, re-energized, and ready.
00:01:59.400 | I needed one more R.
00:02:00.840 | And ready to go for a brand new year on Radical Personal Finance.
00:02:05.320 | And today we talk about skills, one of my favorite topics.
00:02:09.080 | I hope that you've had an excellent holiday season.
00:02:19.720 | I hope that you've enjoyed perhaps a little bit of time off.
00:02:22.040 | I hope that you've enjoyed some time with those that you love.
00:02:25.200 | But I'm excited to get back to work personally.
00:02:27.640 | I had a great time with my family, did a little bit of camping, visited various
00:02:32.040 | family members, did a little bit of travel, got some things cleaned up.
00:02:34.720 | And today, Monday, January 4, 2016, I am ready to get back to work.
00:02:39.320 | It's going to be a big year for Radical Personal Finance.
00:02:41.800 | I'm very excited about the opportunities that are in front of me.
00:02:46.320 | And I'm excited about the hard work that's in front of me.
00:02:49.760 | But as I was reflecting over the last couple of weeks on 2015 and kind of
00:02:53.600 | checking in on my plans for 2016, I was thinking about the progress that I've
00:02:58.720 | made and the progress that I haven't made.
00:03:01.200 | Now, in many ways, 2015 was an excellent year for me, but it was also a very
00:03:07.120 | challenging year for me.
00:03:08.160 | And frankly, I didn't make quite as much progress as I thought I would, as I wanted
00:03:13.760 | to. I went back and listened to the show that I created at the beginning of 2015.
00:03:19.280 | And in looking at all the things I set out to do, I didn't accomplish all the
00:03:23.720 | things I wanted to do.
00:03:24.680 | Now, for me, that's normal.
00:03:26.840 | And I've learned that that's normal.
00:03:28.200 | I've learned not to beat myself up too much about those things.
00:03:31.040 | Some people struggle with thinking big.
00:03:33.160 | I don't struggle to think big.
00:03:36.320 | Usually I think far bigger than I can ever achieve.
00:03:38.560 | And I've just learned that generally I set out bigger plans than I can execute on.
00:03:42.480 | And for me, it's OK.
00:03:43.840 | I'm aware of that.
00:03:45.320 | And I've learned how to mitigate the downsides of that character trait.
00:03:48.880 | But in thinking about it, I was reflecting on this next year.
00:03:51.920 | And in considering my own personal progress, I found solace in the concept of skill
00:03:59.200 | development. And that's what I want to focus today's show on, to share with you some
00:04:03.400 | ideas that I have about skills and how useful a concept this is for people who are
00:04:10.440 | working toward their goals.
00:04:12.040 | I am amazed about the world that we live in, and especially as it relates to wealth.
00:04:16.480 | And one of the most amazing concepts to me that I love is the fact that anybody in our
00:04:24.560 | modern economic system where we all live today, all of you who are listening to the
00:04:28.480 | sound of my voice, whatever country you're in, anybody can build wealth.
00:04:33.520 | If you have the knowledge that you need and the skills that you need, and if you have
00:04:41.560 | enough time for that knowledge and those skills to be applied to the point where they
00:04:46.880 | work, anybody can do it.
00:04:49.280 | To me, that's a very freeing, freeing idea, because we don't live in a time where you
00:04:56.760 | have to be born into wealth.
00:04:58.040 | We don't live in a time that you have to somehow do something nefarious to gain
00:05:03.680 | wealth. We don't live in a time where you have to get lucky, be chosen from the genetic
00:05:08.440 | lottery. We live in a time where any man and any woman with a good plan, learning the
00:05:13.960 | knowledge that they need and acquiring the education and the wisdom which comes with
00:05:19.640 | applied knowledge and education over time, and then developing the skills, really any
00:05:24.400 | man and any woman can build wealth.
00:05:26.400 | Now, the level of wealth is not guaranteed.
00:05:28.680 | Who knows if you're going to become a millionaire or a billionaire?
00:05:32.120 | A huge difference between those two things.
00:05:34.160 | But you can build wealth.
00:05:37.760 | Now, I love the word skill because skills are learnable.
00:05:43.920 | And a fundamental tenet of wealth building and a fundamental tenet of personal
00:05:48.720 | development is that anything that somebody else has learned, you can learn too.
00:05:54.080 | Which means for me, when I think about all of the challenges that I face and all of the
00:05:59.320 | areas where I fall short and all of the places where my character still needs to be
00:06:03.760 | honed, I take encouragement from the fact that other people with the same problems and
00:06:10.280 | shortcomings that I have, have faced those challenges and have learned new skills that
00:06:14.840 | have enabled them and equipped them to be able to work through them, through the
00:06:18.560 | challenges. So regardless of how good or how bad my results have been, I need to
00:06:25.480 | continue to focus on the skills.
00:06:27.440 | You have a good plan, have the knowledge that I need, and then work on developing and
00:06:32.200 | perfecting the skills that ultimately will lead to wealth.
00:06:35.640 | Because here's a cool thing, at least how I see it.
00:06:40.960 | People who are wealthy or at least people who are wealthy from their own actions.
00:06:44.920 | We'll talk briefly in a moment about those who are wealthy from the actions of others.
00:06:50.240 | But people who are wealthy have done one of two things.
00:06:53.080 | Either they've unconsciously learned the knowledge and applied the skills of wealth to
00:07:00.000 | their situation, or they have self-consciously learned the knowledge and applied the
00:07:06.680 | skills of wealth to their situation.
00:07:08.560 | Either way, the results that they're achieving or have achieved are based upon the
00:07:16.560 | application of knowledge and skill.
00:07:18.240 | Now, what about those who come into wealth by the actions of someone else, win a
00:07:24.600 | lottery, gain an inheritance?
00:07:27.160 | Well, give it a little bit of time and what you'll see is that those people who are
00:07:31.280 | wealthy and stay wealthy in those situations, those who are actually able to stay
00:07:35.360 | wealthy, only are able to stay wealthy because either they've unconsciously learned
00:07:40.760 | the knowledge and applied the skills of wealth, or they've self-consciously learned
00:07:44.640 | the knowledge and applied the skills of wealth.
00:07:46.560 | Now, I don't know how to do things unconsciously, but I do know how to do
00:07:53.360 | things self-consciously. As a sentient being, I can chart the course, pick the goal,
00:08:02.760 | develop the plan, build the skill, and in the fullness of time, I'll get the results
00:08:09.800 | that I'm looking for.
00:08:11.120 | And the same applies to you.
00:08:13.200 | So in today's show, I want to just give you some ideas about how to apply these skill
00:08:17.760 | sets to your life and some ideas on specific types of skills that you should be
00:08:23.080 | looking at to apply.
00:08:25.280 | Before I get to the meat of the skills that I want to talk about in just a moment, I
00:08:30.520 | want to talk briefly about sponsors for today.
00:08:32.720 | Sponsor of the day number one is the YNAB budgeting software.
00:08:37.040 | You need a budget. Budgeting is a fundamental and core skill of wealth.
00:08:42.800 | There are many ways to budget.
00:08:43.800 | I've done recent shows on budgeting.
00:08:45.000 | Feel free to check those out if you're interested.
00:08:46.400 | But budgeting is a core skill.
00:08:49.280 | You will not become and stay wealthy without a good system of budgeting.
00:08:54.160 | If you've got a system that works for you, great.
00:08:56.720 | If you don't, I would commend to you that this is a major area that you can make
00:09:01.560 | progress in in a brand new year.
00:09:03.680 | And I would recommend that you try the YNAB budgeting software.
00:09:07.560 | YNAB is short for You Need a Budget.
00:09:09.960 | It's an acronym.
00:09:10.720 | And YNAB is the number one most requested, most suggested advertiser on the show.
00:09:16.800 | More audience members of Radical Personal Finance use and love YNAB than any of our
00:09:22.320 | other advertisers or frankly, any other product that I'm aware of at the moment.
00:09:25.920 | YNAB solves the major problems of budgeting brilliantly.
00:09:30.400 | I'd recommend you go back and listen to episode 246.
00:09:33.600 | That's an interview with Jesse Mecham.
00:09:35.200 | I love YNAB.
00:09:36.160 | I use YNAB every day.
00:09:37.560 | If you'd like to check it out and see what it's all about, you need to do two
00:09:40.640 | things.
00:09:40.960 | Number one, sign up for a free 30-day trial of the software.
00:09:44.200 | It's a free, full-featured trial of the software.
00:09:47.160 | Sign up for that at radicalpersonalfinance.com/ynab.
00:09:51.200 | Please use that tracking link so I get credit for your download.
00:09:53.960 | radicalpersonalfinance.com/ynab.
00:09:56.600 | Do that, number one.
00:09:57.800 | And number two, work your way through the excellent training materials that YNAB
00:10:02.760 | offers.
00:10:03.320 | They have all kinds of free webinars and classes about how to use the software and
00:10:08.120 | build your budget properly.
00:10:09.560 | This is the perfect time of year to do it.
00:10:11.120 | So check out radicalpersonalfinance.com/ynab.
00:10:13.920 | Sponsor of the day number two today is Paladin Registry.
00:10:16.440 | And this is my solution to the most requested problem or question that I've
00:10:21.920 | gotten on the show, which is, "Joshua, how do I find a great financial advisor?"
00:10:25.400 | Paladin Registry is a registry service of financial advisors.
00:10:30.080 | It's a vetting service, a screening process.
00:10:32.520 | The founder of Paladin Registry is a man named Jack Wehmeyer.
00:10:35.120 | He and his team have put together an extensive series of screens to help weed
00:10:40.160 | out some of the bad and incompetent financial advisors that are out there.
00:10:43.960 | Who have a license to their name.
00:10:45.280 | And so the way it works is if you would like to interview some prospective
00:10:50.120 | financial advisors to see if they might be able to serve you in the care and
00:10:54.360 | stewardship of your wealth, you go to this link radicalpersonalfinance.com/paladin.
00:11:00.160 | P-A-L-A-D-I-N.
00:11:01.560 | radicalpersonalfinance.com/paladin.
00:11:03.920 | Use that link.
00:11:04.920 | Go through that link, put in your name, your email address, your phone number.
00:11:09.280 | It'll ask you for your zip code.
00:11:11.040 | I can't remember if it asks you for your mailing address.
00:11:13.080 | And it'll ask you for the amount of assets that you have that are potentially
00:11:17.280 | available for the advisor to manage.
00:11:18.960 | It's important that you fill that in properly so that they can match you with
00:11:22.560 | an advisor who works with clients similar to you.
00:11:25.640 | And then they'll put you in contact with sometimes two, sometimes three
00:11:29.320 | advisors, sometimes more.
00:11:30.440 | You have an opportunity to check with those advisors, see if they
00:11:33.440 | might be a good fit for you.
00:11:34.480 | It's a great time to do that here at the New Year.
00:11:36.800 | The good financial advisor is worth their money.
00:11:39.440 | A bad financial advisor isn't worth any money, but a good financial
00:11:42.280 | advisor is worth their money.
00:11:43.320 | radicalpersonalfinance.com/paladin.
00:11:45.680 | A majority of the listeners of Radical Personal Finance are based
00:11:50.000 | in the United States.
00:11:51.080 | And there's something very unique about the United States of America.
00:11:55.000 | It can be measured based upon wealth.
00:11:58.400 | The United States is an incredibly wealthy country, and there are many
00:12:01.320 | reasons for that.
00:12:02.840 | Some reasons are geographical.
00:12:05.200 | If you look at a globe and look at the different aspects of just global
00:12:10.080 | geography, you can see some of the major influences that have led to the
00:12:14.280 | United States being as wealthy as we are.
00:12:17.680 | But some major reasons are also cultural, and those cultural
00:12:23.040 | reasons are very important.
00:12:24.120 | One of the very important aspects of the U.S.
00:12:26.760 | culture is a deep-seated belief in the idea of cause and effect.
00:12:31.280 | Now, that's a worldview perspective.
00:12:35.960 | It comes from the Judeo-Christian heritage of the United States culture.
00:12:40.160 | Scripture says, "Don't be deceived.
00:12:42.520 | God is not mocked.
00:12:43.400 | Whatever a man sows, that also shall he reap."
00:12:45.720 | And that idea of cause and effect goes very deeply in U.S.
00:12:50.040 | American society.
00:12:51.160 | It's a reason why people had the expectation that if I put in hard work,
00:12:57.200 | if I put in effort, if I plant good seed, I can expect to reap a good harvest.
00:13:04.800 | That's not true in many other places of the world, or at least people don't have
00:13:09.680 | that perception of it being true because of the external influences, whether it's
00:13:13.200 | corrupt government or an unjust system of confiscation or whatever the cultural
00:13:19.120 | influences may be.
00:13:20.160 | But that cause and effect principle has a tremendous bearing on what we do.
00:13:27.520 | And so if we want to create the effects of wealth, we've got to study the causes
00:13:34.920 | of wealth, and those causes are knowledge, knowing the right things to do, having
00:13:41.360 | knowledge about the areas that are important, and then applying that
00:13:45.800 | knowledge systematically over time and applying the skills that will ultimately
00:13:50.440 | lead to wealth.
00:13:51.280 | And those skills are going to fall into the same basic five-part framework that
00:13:56.480 | we talk about, except it's primarily going to be about the first three.
00:14:00.040 | We have to apply the skills of increasing income.
00:14:03.800 | We have to apply the skills of decreasing expenses.
00:14:06.280 | We have to apply the skills of investing wisely.
00:14:08.760 | Skill is applicable to avoiding catastrophe and optimizing lifestyle, but
00:14:13.440 | it's less direct.
00:14:14.760 | And today we're going to focus heavily on wealth.
00:14:17.280 | So in order for you to build wealth in this next year, you've got to gain and
00:14:23.760 | assimilate knowledge in the areas that matter to your life and to your goals.
00:14:27.320 | And then you've got to learn, develop, and perfect those skills that lead to wealth.
00:14:32.760 | Knowledge is the important first step.
00:14:34.680 | If you're having a problem or you're seeking a certain result in your life,
00:14:39.320 | then the first thing you should do is seek out the information and the education
00:14:43.040 | and the knowledge and the ideas that are pertinent to that problem.
00:14:46.000 | Frankly, I'm astounded at people who don't do this, and the majority of people
00:14:51.280 | don't do this.
00:14:52.280 | The majority of people who have problems in their lives just simply want to complain
00:14:57.040 | about those problems and gripe about those problems.
00:14:59.000 | And it somehow doesn't seem to occur to many people to actually think about how
00:15:02.560 | to solve those problems.
00:15:03.800 | Now, there is a subset of the culture for whom this is unthinkable, and that subset
00:15:10.000 | is me and many of you who are listening.
00:15:12.040 | We can't even conceive of why would you not work on your problems, but yet the
00:15:17.520 | majority of people don't seem to even take the first steps of working on their
00:15:23.200 | problems.
00:15:23.520 | They don't seem to even take the first steps of going out and searching for the
00:15:26.840 | knowledge and the ideas that they need.
00:15:28.680 | So knowledge is the basis.
00:15:32.840 | If you've got problems, just start by asking around and talking about the
00:15:36.360 | problems that you're facing, and you'll start bumping into answers.
00:15:39.520 | One of the core principles of the personal development and success ideas is the idea
00:15:48.440 | of focus and intention.
00:15:49.920 | And when people talk about the importance of setting goals or talking about problems
00:15:54.360 | when I talk about journaling or things like that, what those things do is they
00:15:57.320 | bring the problems, they bring the decisions, they bring the situations you're
00:16:01.600 | facing from the back of your mind to the front of your mind and make you aware.
00:16:04.600 | And then when you're aware of things, your brain starts to filter the results that
00:16:10.040 | are in your environment around you.
00:16:11.640 | This is what, I mean, this is the basis of the famed law of attraction.
00:16:16.040 | It's not a matter of attraction.
00:16:18.720 | It's a matter of recognition.
00:16:20.280 | The best, simplest example is to think about whatever kind of car you drive, how
00:16:25.240 | by driving down the road, you can pick out that car half a mile away.
00:16:30.680 | You can pick out the exact color and the Mike and model because you're tuned into
00:16:33.800 | that.
00:16:34.120 | If you drive a red sports car or you decided you want to drive a red sports car,
00:16:38.280 | all you see are red sports cars.
00:16:39.600 | But until then you never saw them.
00:16:41.560 | Well, the same thing happens with knowledge.
00:16:43.520 | So when you ask about the problems and you start talking about the challenges that
00:16:48.080 | you're facing, then you can systematically over time start to bump into the answers.
00:16:53.720 | So ask questions about the big problems you're facing and then ask questions about
00:16:58.800 | the little problems you're facing.
00:17:00.480 | Ask questions about the things in your life that aren't yet how you'd like them to
00:17:03.520 | be.
00:17:03.880 | And you can start to learn the knowledge and ideas that will be helpful to you.
00:17:09.520 | But knowledge is only the first step and knowledge has to be actually applied in
00:17:14.400 | order for it to be useful.
00:17:15.680 | And that's where we turn to the topic of skills, which is our focus for today.
00:17:20.640 | You have to develop the skills of success.
00:17:24.040 | And where I first learned this concept was years ago through a Zig Ziglar set of CDs
00:17:30.400 | that I had that I listened to frequently.
00:17:32.080 | Zig Ziglar was just an incredible speaker.
00:17:34.440 | I always liked his style, I liked his southern accent and I liked his style.
00:17:39.440 | And he was one of the first kind of success people that I ran into.
00:17:42.560 | And he had this place on his tapes where he talked about what people want and he
00:17:48.440 | talked about how to build the skills of success in the areas that people want.
00:17:52.560 | He would make the point that everybody wants just about the same thing in life.
00:17:58.320 | And these things that people want, people want to be happy, they want to be
00:18:02.680 | healthy, they want to be at least reasonably prosperous.
00:18:06.680 | We all want to be secure.
00:18:09.160 | We all want friends.
00:18:10.640 | We all want peace of mind.
00:18:12.360 | We all want good family relationships.
00:18:15.040 | And we all want hope that tomorrow is going to be better than today.
00:18:18.880 | And that was his discussion of what people want.
00:18:24.080 | Personally, I think that's a pretty fair list.
00:18:27.280 | It's at least a good place to start.
00:18:28.840 | I don't know if it's a complete list or an incomplete list, doesn't matter.
00:18:32.800 | But the most important part of that seminar was how he went on from the
00:18:38.680 | basis of what people want, and he talked about how to get what you want.
00:18:44.400 | And he made the point and effectively proved it to me that each and every one
00:18:49.760 | of those things is a skill.
00:18:52.040 | It's a learned skill.
00:18:55.080 | Now, you've got to go listen to the seminar if you want to learn how
00:18:57.760 | happiness and health are learned skills or reasonably prosperous is learned skills.
00:19:01.440 | I'm not going to repeat the whole thing here.
00:19:03.640 | But he expanded that and it changed my worldview.
00:19:07.880 | Because when I understood that all of those basic things were skills, it made
00:19:12.600 | me feel confident that I could learn and study and apply the knowledge that I
00:19:17.560 | learned to my life in order to learn those skills.
00:19:23.560 | And when you feel empowered like that, it's life changing.
00:19:26.720 | It's potentially life changing at least.
00:19:29.120 | Because skill development is something that most of us, I think, can relate to.
00:19:33.920 | We all have different areas that we're skilled in.
00:19:36.520 | But when you look at things as skills, it makes us think of an ongoing process.
00:19:41.000 | We recognize first that we're not going to be very good in the beginning.
00:19:44.920 | Any skill that you've acquired or that you've developed, you probably weren't
00:19:51.360 | very good at that skill in the beginning.
00:19:53.880 | But over time, you were able to build it and perfect it perhaps.
00:19:58.560 | So one of the areas in wealth building that people get knocked off is we often
00:20:04.760 | don't do very well in the beginning.
00:20:06.320 | We often don't have the highest paid job in the beginning.
00:20:09.600 | We often make bad purchases in the beginning.
00:20:13.120 | We often lose money in investments.
00:20:15.360 | And if we let those things define us as who we are, then it has a tendency to
00:20:23.080 | stifle us and stop us.
00:20:24.440 | But if we just simply see those things as skills that we're developing, then, well,
00:20:29.640 | we can be mediocre in the beginning and that doesn't spell ruin and doom.
00:20:35.240 | It's just where we're starting.
00:20:37.400 | The concept of skills is powerful because there's a progression.
00:20:43.480 | It's also powerful because it means that we never stop.
00:20:47.040 | And that's where with wealth building, people often make the mistake of looking
00:20:50.680 | for that one thing, that one idea, that one deal.
00:20:54.400 | Do those things exist?
00:20:57.320 | Maybe.
00:20:57.880 | There can be one major deal that makes a big difference in some people's lives.
00:21:03.200 | But usually it's not one major deal.
00:21:07.240 | It's usually a series of little deals.
00:21:10.040 | I love the title of one of John Schaub's books.
00:21:13.160 | It's the book he retitled into "Building Wealth One House at a Time," but the old
00:21:19.320 | title of it, I think, was "Making it Big on Little Deals."
00:21:22.360 | That you don't need one major thing.
00:21:25.880 | You just need a lot of little progressions, little steps in the right
00:21:30.040 | direction.
00:21:30.560 | And when you have the confidence that you just need a lot of little steps in the
00:21:36.960 | right direction, you'll systematically probably be able to more effectively keep
00:21:41.680 | going through the earlier ones where they're difficult to press forward to the
00:21:46.280 | ones where they are going to be more fruitful at the back end.
00:21:50.520 | So as you face 2016, a good journaling exercise for you to do would be this.
00:21:58.560 | Ask yourself, what are the skills that you need to focus on and develop in order
00:22:05.320 | to grow towards your wealth?
00:22:07.160 | And which of those skills will have the most impact, the most immediate impact
00:22:13.680 | for you?
00:22:16.160 | Make a list and brainstorm some skills.
00:22:18.160 | I'd encourage you not to constrain these skills to money and to wealth.
00:22:24.960 | I'd encourage you to expand your list to the skills of life.
00:22:32.440 | The skills of excellent communication with your spouse are going to be more
00:22:37.200 | impactful than how many dollars are in your IRA, as far as impactful to your
00:22:43.160 | level of happiness.
00:22:44.880 | And it's a lot cheaper and easier to build better communication skills with
00:22:48.960 | your spouse than it is to save a million dollars in your IRA.
00:22:51.600 | But since this is radical personal finance, let's talk about some of the
00:22:58.120 | skills of wealth that you can focus on.
00:23:00.760 | Starting with the first part of the radical personal finance framework, number
00:23:05.160 | one, increasing income.
00:23:06.320 | What are the skills that you can and should work on to increase your earnings
00:23:11.680 | and your earning ability?
00:23:12.960 | Are there specific job skills that you could develop?
00:23:18.480 | Do you need to retool your skills because you're facing a transition point in
00:23:25.120 | life?
00:23:25.600 | Making a New Year's resolution to make more money might be a good starting
00:23:31.480 | place.
00:23:32.040 | Setting a goal to increase your income by, say, 10% this year might be a better
00:23:38.240 | starting place.
00:23:40.320 | But that goal is only going to be practical if it's connected to a plan, and
00:23:44.680 | that plan is going to have to involve skills of some kind.
00:23:47.280 | For me, it's skills of -- major focus.
00:23:52.640 | 2016, for me, major focus is to massively improve my skills with written
00:23:57.360 | communication, with my email list, with all of you who've signed up for the email
00:24:01.480 | list. Major undone thing for me in my life.
00:24:07.840 | Another major skill is to develop the skill of finding out what are the
00:24:12.400 | specific courses and products that I can develop and offer to you, the audience,
00:24:17.920 | that will be life-changing for you.
00:24:20.200 | So I've got to develop all the skills of creating those products, designing the
00:24:24.840 | outlines, and I want to make them world-class.
00:24:27.320 | I've got lots of ideas, but those are all skills.
00:24:29.920 | Once I've done about 10 of them, I'll probably start to get okay at it, and
00:24:34.000 | then another 20 or 30, and I'll probably start to be world-class.
00:24:37.320 | But it's just a skill.
00:24:38.120 | So what are the job skills that you need?
00:24:39.920 | Do you need to develop people skills?
00:24:42.080 | Do you need to focus on communication skills, leadership skills?
00:24:47.040 | Is your opportunity specific and tactical, or is it big picture?
00:24:54.560 | Do you need to upgrade a level of leadership, where you go from leading in
00:24:59.640 | specifics to leading in vision?
00:25:01.120 | What are the skills that you need to increase income?
00:25:04.960 | I'd encourage you, pause the podcast and brainstorm a list if you're in an
00:25:10.000 | environment where you can do that.
00:25:11.360 | If you're driving in your car, hit pause and use the voice recorder app, or use a
00:25:15.440 | dictation into an Evernote file or into an email file, use the voice dictation on
00:25:20.600 | your phone, and just spend some time brainstorming a list of the skills that
00:25:24.560 | would help you to increase your income.
00:25:26.320 | Next, what about decreasing expenses?
00:25:30.800 | What are the skills that for you will lead to decreasing your expenses?
00:25:35.880 | Do you struggle with impulse buying?
00:25:40.480 | Well, you should focus on developing the skill of not buying on impulse.
00:25:47.080 | That's a learned skill.
00:25:48.480 | Now, in an ideal world, hopefully your parents taught this to you.
00:25:52.080 | Or in an ideal world, hopefully you had some life experience that taught
00:25:56.560 | this to you early in life.
00:25:58.760 | For me, it was one of those little radio-controlled cars.
00:26:02.280 | Well, there've been various ones.
00:26:03.640 | I'll tell two stories just because they, I think, illustrate.
00:26:08.080 | One, I remember so much.
00:26:10.680 | I desperately wanted one of those little radio-controlled cars, little things you
00:26:15.480 | squeeze the trigger and drive the thing around.
00:26:17.800 | I thought it was the coolest thing ever.
00:26:19.480 | And so my parents gave me the opportunity to buy it with my own money.
00:26:23.240 | I remember just jumping on that thing and buying it.
00:26:26.560 | And I remember how utterly bored I was a week later with a toy that I was so
00:26:33.080 | enthusiastic about.
00:26:34.240 | When you save and then spend quickly on something and it doesn't bring you any
00:26:43.880 | lasting satisfaction, you learn not to continue so long with buying that stuff.
00:26:50.320 | Another way I learned not to be an impulsive spender on little things was one
00:26:57.160 | summer I worked on a farm and I had the opportunity and I was mainly out in the
00:27:04.000 | fields and I got very bored because I was driving a tractor around all day.
00:27:07.320 | And this was while I was in high school.
00:27:09.320 | And I would very much look forward to my lunch break and my mid-afternoon break.
00:27:13.320 | And there was a gas station a couple of miles down the road that had some pretty
00:27:16.680 | decent gas station food, specifically some pretty good chicken wings.
00:27:19.960 | And I was a little bit lazy about going and packing my lunch and packing my snacks
00:27:26.640 | to eat. And so I'd wind up at that gas station.
00:27:28.800 | In retrospect, I was able to calculate probably two to three times a day.
00:27:32.480 | I'd like to go in the morning, get a coffee.
00:27:34.520 | At lunchtime, I'd swing down there, get some lunch.
00:27:37.040 | In the afternoon, maybe I'd swing by and get something else.
00:27:39.440 | Well, that particular summer, at the end of the summer, it came time to start
00:27:46.320 | paying my dad the money that I owed him for my tuition bills.
00:27:50.400 | And I would usually be able to earn in the course of a summer about two to
00:27:53.120 | three thousand dollars.
00:27:54.080 | So I'd usually wind up at the end of a summer of work in high school with about
00:27:58.560 | two or three thousand dollars in my checking account, which I would spend down
00:28:01.680 | over the course of the school year.
00:28:03.680 | As I remember, I think I paid my dad a hundred dollars a month for my tuition at
00:28:07.520 | a private school and some things like other just miscellaneous high school student
00:28:11.040 | expenses. Well, that particular summer, as I remember, we were basically had seven
00:28:16.960 | or eight hundred dollars in my checking account.
00:28:18.720 | And I'm sitting there counting things up and trying to figure out where did my
00:28:21.680 | money go?
00:28:22.800 | And so my father at that time forced me to go back to go back and do a an
00:28:28.080 | investigative audit of my finances and figure out where my money had gone.
00:28:32.080 | And I was quite chagrined to find that I had spent at least a thousand dollars,
00:28:39.200 | possibly much more on chicken wings and soda from the gas station.
00:28:42.960 | And that year I was broke the entire year because I'd wasted all my money
00:28:49.120 | frivolously on stupid impulse purchases that I didn't track.
00:28:52.960 | That lesson went deep.
00:28:55.520 | So I had the opportunity to learn those skills with hard lessons young in life.
00:29:02.160 | That's very helpful to me now.
00:29:03.520 | Ideally, if you didn't have those lessons, perhaps you can learn from my stupidity
00:29:11.280 | and other people's stupidity.
00:29:12.400 | But if not, think about how you can develop the skill of not buying on impulse.
00:29:17.360 | Recognize that your behavior is not fixed.
00:29:21.360 | It's not the way it's always got to be.
00:29:24.080 | You can change it.
00:29:24.960 | You can learn a new skill.
00:29:27.200 | And so whether that means you put some guardrails on your credit card and your
00:29:32.720 | check card and spend cash out of an envelope, whether it means you institute a
00:29:36.960 | mandatory 30-day waiting period on any purchase over $20 or over $100, whatever
00:29:42.880 | it is, make a plan to learn and develop the skill.
00:29:47.600 | Perhaps it's the skill of careful purchasing, and that's what you need, is you
00:29:53.680 | develop the skills of researching decisions.
00:29:56.320 | So you can integrate this and say, "Well, over the next 30 days, I'm going to
00:30:00.080 | research this decision.
00:30:00.960 | I'm going to figure out how can I get the best bang for my buck."
00:30:03.680 | One of the things that's so sad, if you look at people who are broke, you often
00:30:08.320 | will find that they have the same things that people who are not broke have, but
00:30:14.000 | they just buy cheap versions of them.
00:30:16.640 | And those cheap versions are always breaking down, and they can't seem to make
00:30:19.920 | a good purchase that's going to lead to a lower life cycle cost.
00:30:25.600 | So they buy all the fancy stuff, but they buy the cheap versions that break down
00:30:30.160 | and have no residual value, where somebody who's wealthy has probably developed
00:30:35.920 | some habits of careful purchasing.
00:30:38.080 | So they think carefully about their purchases.
00:30:40.240 | They plan their purchases in advance.
00:30:42.480 | They carefully choose purchases that don't depreciate very much in value.
00:30:46.240 | So that on the back end of the life cycle of ownership, they can sell the item
00:30:50.320 | back into the market, and it has a lower cost to them.
00:30:53.360 | Frankly, you can drive with good skills of careful purchasing.
00:30:57.760 | You can drive a luxury car, have lots of luxury products, and you'll have luxury
00:31:03.280 | products with a lower price tag than cheap, inferior products.
00:31:07.200 | That is a skill.
00:31:09.680 | It can be focused on, developed, and learned.
00:31:15.440 | What are the skills that will help you to decrease expenses?
00:31:17.920 | These skills have to be appropriate to where you are.
00:31:20.720 | If your food bill is out of hand, maybe your skill is, "How can I really develop
00:31:26.640 | the skill of decreasing our food expenses?"
00:31:31.920 | But perhaps it's not a food bill.
00:31:34.400 | Perhaps it's something else.
00:31:35.520 | How can I develop a skill?
00:31:37.680 | And you can be as tactical and specific, kind of learning the skill of changing
00:31:42.160 | my own oil or performing some of my own car repairs in order to save money at
00:31:45.840 | the mechanic, or very, very big picture.
00:31:48.640 | That's up to you.
00:31:49.840 | Just ask yourself, "What are the skills that will help you to decrease your
00:31:52.560 | expenses?"
00:31:53.040 | Next, investments.
00:31:54.320 | What are the skills that you need to learn that will lead to your making wiser
00:31:57.920 | investments?
00:31:58.560 | First skill with investing is always the skill of saving money diligently and
00:32:04.000 | setting it aside.
00:32:04.880 | At the front end of your investing career, that is the major skill set that's
00:32:10.160 | needed.
00:32:11.920 | And so one component of that is, yes, higher income.
00:32:14.800 | Another component is, yes, lower expenses.
00:32:17.040 | But a major component is the skill of forcefully saving money right off the
00:32:22.560 | top, paying yourself first, figuring out a plan that's going to allow you to
00:32:27.920 | fund your investment account, whether it's as simple as going down and
00:32:31.920 | increasing your 401(k) contributions or putting an automatic transfer on your
00:32:37.200 | checking account so that on the day that your direct deposit hits your account,
00:32:42.800 | some amount of money goes into a savings account.
00:32:44.800 | It can be simple or it can be complex.
00:32:47.680 | But in your area of chosen focus, then you need to develop more skills around
00:32:53.760 | investing.
00:32:55.520 | Depending on the type of investing, perhaps you are pursuing a trading
00:33:00.960 | strategy, so then you've got to develop skills of trading stocks.
00:33:04.960 | Or if you are in something like real estate investment, you're buying and
00:33:08.960 | selling single family houses, then there are skills that are associated with
00:33:12.160 | that.
00:33:12.320 | There's the skills of finding the deals.
00:33:14.000 | There's the skill of negotiating a great deal.
00:33:16.080 | There are the skills of managing crews of people to fix things up.
00:33:20.720 | Each of those is a skill that can be studied and focused and developed.
00:33:24.000 | And those skills, when systematically practiced, are what lead to a mature
00:33:29.600 | investor.
00:33:34.000 | And these skills, when comprehensively practiced, are what lead to a mature,
00:33:39.520 | wealthy person.
00:33:41.840 | It's a systematic application, development, and perfection of skills.
00:33:50.560 | The final point I'd like to make on the topic of skill development is simply
00:33:56.560 | that skills, that the necessary skills change and they develop.
00:34:04.000 | As time goes forward.
00:34:05.760 | If you consider somebody like an athlete, a professional athlete, professional
00:34:10.160 | football player, professional football player has perfected some skills.
00:34:14.800 | But just because they've perfected some skills doesn't mean that they can avoid
00:34:21.440 | and ignore skill development.
00:34:23.440 | Just means that the skills are different.
00:34:25.840 | When they were playing peewee football, there were a certain type of skills,
00:34:31.360 | certain levels of skill that they needed to focus on.
00:34:33.840 | And it's the same thing in wealth building.
00:34:36.640 | The peewee football scenario is simple things like the skill of getting a job,
00:34:42.400 | the skill of making a resume, the skill of not getting fired from the job, the
00:34:46.720 | skill of paying your bills on time, the skill of managing a checkbook.
00:34:50.000 | That's peewee football.
00:34:51.040 | When you get into the big leagues, you still have to be developing skills,
00:34:56.400 | but they're different.
00:35:00.160 | So when you're leading a company with hundreds of employees, it's a very
00:35:05.120 | different skill set than when you had zero.
00:35:07.120 | Or when you're managing a portfolio of $5 million, that's a very different skill
00:35:13.600 | set than when you had $5,000 in the bank.
00:35:16.400 | But it's still just a system and a series of skills, something that can be
00:35:23.200 | learned, developed, improved, and perfected.
00:35:27.760 | I hope that these ideas are useful to you.
00:35:31.200 | I guess it's hard for me to know.
00:35:35.200 | Sometimes I struggle with articulation.
00:35:36.560 | It's hard for me to know if these ideas are as life-changing for other people as
00:35:42.080 | they were for me.
00:35:42.720 | But for me, looking at life as a series of skills to be developed was very freeing
00:35:48.880 | because it eliminated much of the emotion around who I am and who I'm not, this
00:35:54.320 | idea that I'm this kind of person that's this way.
00:35:56.720 | And it just made it simpler, made it recognize that I'm who I am, but I can
00:36:02.000 | learn and apply different skills.
00:36:03.680 | And with the application of different skills over time, I can make major
00:36:10.720 | changes in my life.
00:36:11.680 | So that's the core of what I wanted to share with you.
00:36:15.360 | It's hopefully an appropriate New Year's message.
00:36:18.560 | If 2015 treated you well, congratulations.
00:36:22.720 | May 2016 be even better.
00:36:25.040 | If 2015 treated you poorly, to borrow another Zig Ziglar aphorism, another one
00:36:31.840 | that I always just love, always found very encouraging, remember this, "Failure
00:36:36.480 | is an event.
00:36:37.120 | It's not a person.
00:36:38.720 | Yesterday ended last night, and today is a brand new day."
00:36:43.920 | Sounds cheesy, but to me, I love that quote, and I've often said it to myself.
00:36:48.640 | I'm excited about walking with you here in 2016.
00:36:50.880 | It's going to be a big year.
00:36:52.000 | I thank each and every one of you who listens to the show.
00:36:54.640 | A couple of quick announcements as we go.
00:36:56.640 | Number one, you will notice if you are someone who subscribes to the show on a
00:37:02.480 | mobile device, something like that, and also it reads on the website and gets
00:37:06.480 | the emails, you'll notice a delay when in shows being posted to the website,
00:37:11.520 | perhaps by as much as a couple days.
00:37:14.240 | This is due to me eliminating a bottleneck in my production line.
00:37:18.320 | The bottleneck is producing the graphics for the website.
00:37:20.720 | So if you would like the quickest access to the show, the best way to do that is
00:37:24.800 | to subscribe on your phone.
00:37:26.560 | Best way to subscribe on the phone is to download our free mobile app.
00:37:31.040 | So just search the app store on your phone for Radical Personal Finance.
00:37:33.760 | You'll find our free mobile app, and that will allow you to subscribe to the
00:37:37.040 | show, and you'll get the shows as soon as they're published that way.
00:37:39.600 | If you have an iPhone, feel free to use my iPhone app or feel free to use the
00:37:42.640 | built-in Apple Podcasts app.
00:37:44.080 | That's either one is fine, or iTunes.
00:37:46.480 | Any place that you subscribe to the feed, like an iTunes subscription, that will
00:37:51.280 | be the fastest way to get the shows.
00:37:53.120 | Then the shows will show up on the website a couple days later after my
00:37:56.880 | graphic designer creates the artwork for the show.
00:38:00.160 | Just a quick note, hopefully that's useful to some of you.
00:38:02.640 | By the way, if any of you are listening in iTunes and would like to leave the
00:38:08.560 | show a review, please leave the show a rating and review.
00:38:10.480 | That's always helpful in the iTunes rankings.
00:38:13.440 | So if you could take a moment on your phone, just do that.
00:38:15.840 | You can do it right from within the Apple Podcasts app.
00:38:18.160 | Just hit the star, leave a quick one-sentence rating and review.
00:38:21.040 | That would be super helpful.
00:38:22.400 | And I will be back with you tomorrow with a great show.
00:38:25.440 | Thanks for listening.