RPF0565-You_Dont_Have_to_Be_Smart_to_Become_Financially_Independent...But_You_Cant_Be_Stupid_pt._1_of_5
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00:00:30.000 | Welcome to Radical Personal Finance, the show dedicated to providing you with the knowledge,
00:00:34.360 | skills, insight, and encouragement you need to live a rich and meaningful life now while
00:00:39.280 | building a plan for financial freedom in 10 years or less. My name is Joshua. I am your
00:00:43.480 | host and today we kick off part one of a five-part series called You Don't Have to Be Smart to
00:00:49.680 | Become Financially Independent, But You Can't Be Stupid. Again, you don't have to be smart
00:00:57.400 | to become financially independent, but you can't be stupid. As I unfold this series for
00:01:04.520 | you, you're going to hear me approach it using many, many examples from what I call the common
00:01:11.520 | man lifestyle. I don't want you to come away from my show thinking that you have to get
00:01:16.760 | a PhD in financial planning in order to make good financial decisions. You don't. You probably
00:01:22.080 | already know everything that you need to know to become financially independent. I don't
00:01:26.840 | want you to come away from my show thinking that in order for you to become financially
00:01:30.600 | independent, you have to go back to school and earn an advanced degree unless you want
00:01:34.600 | to. I don't want you thinking that you have to live in a bus unless you want to. I don't
00:01:39.160 | want you thinking that you have to create the world's next great company that goes international
00:01:43.360 | and do your IPO and that's when you're going to make your fortune unless you have such
00:01:46.920 | an opportunity. These things are your decisions, but you don't have to do any of that stuff.
00:01:51.800 | You don't actually have to be very smart to become financially independent, but you can't
00:01:57.240 | be stupid.
00:01:58.240 | Today, I'm going to talk about your income and talk to you about how you can build an
00:02:02.900 | income and what kind of income you have to earn in order to become financially independent.
00:02:08.240 | I'm organizing this five-part series around my framework of wealth, which is my own intellectual
00:02:13.440 | property. It's a five-part, 10-word outline that I use to organize financial information.
00:02:19.560 | Everything that I know about finance can be organized into this framework. Every piece
00:02:23.020 | of advice I've ever given about finance fits into this framework. I created it. It's been
00:02:28.360 | now taken across the internet, which is to be expected, but I created it and it's just
00:02:32.640 | something I want you to take and I hope that you find it useful.
00:02:36.500 | These five parts are very simply this. One, increase income. Two, decrease expenses. Three,
00:02:43.080 | invest wisely. Four, avoid catastrophe. And five, optimize lifestyle. But in today's show
00:02:48.980 | and in this series of shows, I'm not going to be using extreme examples. I'm not going
00:02:54.600 | to be very radical because I don't want you to think that you have to be pretty hardcore
00:02:59.880 | radical in order to get good results. You don't. You just can't be stupid.
00:03:04.920 | Let's talk about income. In order to build financial independence in a reasonable amount
00:03:08.900 | of time, you need to have a strong income. Now, I don't quite know how to define strong
00:03:16.920 | income. Obviously, that's subjective. Your strong income will vary depending on where
00:03:23.780 | you live and what you do. But let me give you a couple of thoughts. First, a strong
00:03:28.880 | income would mean at least a median wage level of earning. In the United States of America,
00:03:35.060 | median household income is currently about $55,000 per year. So you should be earning
00:03:40.020 | at least about $55,000 per year. If you're not there, this is a huge area of opportunity
00:03:45.760 | for you.
00:03:46.760 | Now, moving on from there, I think any person who is focused and diligent can earn six figures,
00:03:52.820 | $100,000. Now, obviously, $100,000 doesn't buy today what $100,000 bought 30 years ago,
00:03:58.420 | but $100,000 still buys quite a bit. And you can buy a lot with $100,000. Here's what's
00:04:05.600 | cool about these wages. You don't have to be particularly smart to earn $100,000 per
00:04:12.140 | year in the United States of America, but you can't be stupid. You also can't be lazy.
00:04:24.180 | In this series, as I said, I'm going to give you many common man examples. I'm going to
00:04:29.320 | give you blue collar examples instead of white collar examples of income. I'm going to give
00:04:33.740 | you ordinary suburban expense levels instead of weird radical levels of expenses. But if
00:04:41.380 | you'll just simply focus on working hard and earning an income, you'll put yourself in
00:04:44.780 | a situation where you can have the income levels that you need to build financial independence.
00:04:50.740 | I have known people in every single industry, in every blue, major blue collar industry
00:04:56.860 | who are in $100,000 a year and started with no education, no experience. I've known people
00:05:03.400 | who started, I had a client one time, a client of mine who started working at McDonald's
00:05:08.700 | as an entry level worker at McDonald's and worked his way through the McDonald's university
00:05:15.400 | process to become a middle manager for a significant local franchise group, earning about $140,000
00:05:23.660 | per year. And he did it in a couple of decades. I've known a friend of mine, started off at
00:05:30.260 | 16 years old while he was in high school, apprenticing in the electrical trades. He
00:05:35.280 | apprenticed as a helper, as an electrician. Then when he got out of high school, he went
00:05:39.120 | to work as an electrician. He studied. Today, he earns in excess of six figures working
00:05:43.700 | for as an electrician. And in his case, he transitioned to working for a large electrical
00:05:48.940 | company. And so in addition to a very strong salary, he has all kinds of cushy benefits,
00:05:53.080 | which are frequently not offered in the household electric construction, electric industry.
00:05:59.960 | I've known people who started in farming with nothing and built up a six figure income.
00:06:06.400 | I've known people who did it in all kinds of situations. And so if they can do it, you
00:06:10.760 | can do it too. But you have to be hardworking and diligent. If you just simply look at how
00:06:18.880 | the common man earns his money, he earns it in an hourly wage. And frequently he's entitled
00:06:26.480 | to overtime. Now, when you start running the numbers, if you'll work 50, 60, 70 hours a
00:06:34.280 | week, much of the time you'll earn a lot of money, even if your hourly rate is not particularly
00:06:41.600 | high. Let's say that your hourly rate is $35 an hour, which would be 30 to $35 an hour
00:06:48.240 | would be a very normal income for somebody who is a skilled tradesman. 30 to $35, let's
00:06:55.080 | drop it down, $30 an hour, $30 an hour times 60 hours a week. And let's say that you do
00:07:00.560 | that 50 weeks per year, that's $90,000 per year of income. You can take yourself from
00:07:08.760 | entry level, which entry level in today's world is probably about 14, 15 bucks an hour.
00:07:14.200 | You can take yourself from entry level and double that in a few years, five years. And
00:07:19.520 | if you'll put in 60 hours a week, regularly, week after week, you'll put yourself in the
00:07:23.920 | situation of earning a six figure income. Now, let's say that you're a common man, you
00:07:30.320 | have simple, ordinary skills, but you're willing to work hard. If you're willing to go into
00:07:35.440 | one of the trades or one of the opportunities where you can earn a higher level of income
00:07:40.480 | due to a dangerous job, due to adverse work conditions, you can earn way more. Go and
00:07:50.200 | work on an oil rig out in the middle of the ocean. Go and volunteer as a mercenary, working
00:07:55.520 | for a contractor, a defense contractor, and ship out overseas and do a tour there. Go
00:08:01.440 | and take a job working on a fishing boat. These types of jobs that are incredibly demanding
00:08:07.960 | and incredibly difficult can also be very profitable. So if you'll just simply focus
00:08:15.460 | on earning a significant amount of money, you'll have the foundation that you need.
00:08:22.920 | Now, you don't need to make any radical career change. Here's what you can do. Look at your
00:08:28.600 | job and look one level above you, two levels above you, and try to figure out what did
00:08:36.160 | those people do? What skills did they develop in order to advance to that level of earning?
00:08:42.700 | If you work on a factory floor, then look at the manager and ask yourself, what did
00:08:47.720 | that manager do? Here's my recommendation. Go and ask that manager what they did to be
00:08:52.920 | prepared for that next level. I worked with a guy one time who was, he worked for one
00:09:00.880 | of these uniform companies that takes uniforms in and processes uniforms, et cetera. He started
00:09:06.080 | on the factory floor, but he didn't stay there. He started washing uniforms and then doing
00:09:10.360 | the delivery routes. And then he moved into the management program and he moved his way
00:09:13.880 | up. This is the normal way of advancement. And it doesn't take much for you to get into
00:09:19.040 | it. You have to be hardworking, diligent, reasonably conscientious, and reasonably capable.
00:09:29.280 | I know so many business owners who own blue collar businesses. The biggest challenge they
00:09:33.960 | find finding people who are capable of making that jump from employee to manager. But if
00:09:40.960 | you'll make that jump from employee to manager and give it a few years, most businesses will
00:09:46.080 | pay you six figures for that. So recognize that you need to earn a strong income. If
00:09:52.600 | you don't have a strong income, it's very hard for you to save enough money in order
00:09:57.380 | to become financially independent. But you don't have to be super smart to earn a strong
00:10:02.760 | income. A modest level of work ethic is sufficient. A modest level of conscientious behavior is
00:10:10.080 | sufficient. A modest level of interest in your career is sufficient. Why do I say modest?
00:10:17.320 | Well perhaps in some industries you have very competitive work environments. If you're an
00:10:22.760 | attorney and you're trying to make partner, a modest level of effort is probably not going
00:10:27.200 | to be sufficient. But if you're working in the oil chain shop and you were going to become
00:10:32.120 | a certified mechanic, modest level of work ethic is sufficient. You can go ahead and
00:10:38.580 | make that jump with modest changes. Because frequently the challenge that the business
00:10:43.840 | owner faces is how to actually get an employee to show up. Show up on time. Show up not drunk.
00:10:52.320 | You don't have to be a superstar. Just a little bit above average will do. You don't have
00:10:59.700 | to be smart to be financially independent, but you can't be stupid.
00:11:04.720 | So my question in closing, in your career and in your income, are you being stupid?
00:11:12.160 | Are you doing something that is stupid? If so, stop and apply yourself to the opportunities
00:11:18.960 | that you have. Don't worry about shipping out across the country. Just explore the opportunities
00:11:24.200 | that are in front of you. If you want a little bit more, explore a little bit harder. If
00:11:29.880 | you want to double your income, explore around a little bit. In every place I've been, every
00:11:35.580 | town I've been in, I've always found that if you'll just start asking people, all of
00:11:40.280 | a sudden people will start telling you about the people they know who are earning a lot
00:11:44.380 | of money. Here's my suggestion. When people are telling you about people they know who
00:11:50.120 | are earning a lot of money, pay attention because they're probably people who are similar
00:11:55.800 | to you and they're probably doing something that you can do too. But that's up to you.
00:12:05.400 | Thank you for listening. You've honored me with your time and attention, and I'm grateful
00:12:09.220 | for that. And I hope that I've effectively served you today with some ideas and strategies
00:12:14.720 | and tactics and techniques and tools that will help move you towards your goals. Before
00:12:20.140 | you go, three simple requests. One, if there's an idea that's been helpful to you in today's
00:12:26.440 | show, make a plan to take action on it. Listening does lead to learning, but learning in and
00:12:33.920 | of itself doesn't automatically lead to a life change. It's action that leads to a life
00:12:40.440 | change. So take action. Two, take something that was helpful to you in today's show and
00:12:47.800 | share it with somebody that you care about. I'm depending on you to be a co-laborer with
00:12:54.040 | me in helping me to propagate the message that I'm seeking to share. That helps the
00:13:01.200 | person that you are engaging with, and it also helps you because teaching others is
00:13:06.860 | one of the most effective ways for you to learn and for you to cement your learning.
00:13:13.240 | Three, if there's an idea that's been specifically helpful to you, and if you're gaining financial
00:13:18.540 | benefit from Radical Personal Finance, I'd be grateful if you'd consider paying me for
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00:13:41.800 | right to you. But if you're gaining financial benefit from this show, and if it's achieving
00:13:47.120 | financial results in your life, I'd be grateful for your financial support at radicalpersonalfinance.com/patron.
00:13:53.800 | Sweet Hop is an online marketplace curating the best in premium seating at stadiums, arenas,
00:14:13.800 | and all over the world. Visit sweethop.com today to book your premium tickets to your
00:14:17.540 | favorite teams, artists, and all the must-see live events to Sweet Hop Around LA. It's more
00:14:25.440 | than just a ticket.