RPF_0010_-_You_Are_100_Percent_Responsible_For_Your_Income
00:00:00.000 | Welcome to the Radical Personal Finance Podcast, Episode 10. I'm your host, Joshua Sheets.
00:00:09.200 | This is the Daily Personal Finance Show, dedicated to serving you with accurate information,
00:00:15.680 | comprehensive education, and inspiration to help enhance your financial literacy so that
00:00:23.160 | you can save money, live better, and achieve the lifestyle of your dreams. No matter where
00:00:29.280 | you're coming from today, my goal is to deliver some ideas that will impact your life and
00:00:33.160 | help you to optimize your personal financial plan.
00:00:38.000 | Today is August 5, 2013, and today we're going to talk about income. The theme of today's
00:00:45.880 | show is that you and I, we are both 100% responsible for our level of income. Now hear me out,
00:00:57.040 | don't shut me off too quickly. Many people when they hear a statement like that immediately
00:01:04.960 | will shut me off. But give me an opportunity to explain, give me an opportunity to defend
00:01:11.320 | that idea, and I hope by the end of it you will see some of where I'm coming from.
00:01:20.680 | You know, in past shows we've been talking a lot about varied topics, which is how I
00:01:25.840 | hope that this show goes. But one thing I think that's very important is that I do not
00:01:33.120 | want this show to reflect a poverty consciousness in the wrong way, meaning that life is difficult,
00:01:42.600 | we have to scrimp and scrape and just barely get by simply because we can't afford to save
00:01:49.560 | any money, or we can't afford to make enough to actually save any money. Income is what
00:01:54.360 | drives everything in financial planning. So remember there's only three variables that
00:02:01.160 | we can really affect. Number one, how much you make. Number two, how much you spend.
00:02:08.560 | Number three, what we do with the difference between those two things. That's it. Everything
00:02:13.880 | else is commentary as somebody famous says. How much you make, how much you spend, and
00:02:21.360 | what we do with the difference between those things. Now if what you make is low and what
00:02:24.960 | you spend is high, that's a problem. If what you make is high and what you spend is low,
00:02:29.920 | that helps. So we've got to constantly, consistently come back to that and focus on each of those
00:02:36.960 | things. What you make, what you spend, and what you do with the difference between those
00:02:41.760 | two numbers. So today we're going to talk about what you make. And I believe that the
00:02:46.160 | foundation to start with, with what you make is by taking 100% responsibility for what
00:02:54.120 | you make. You know if you read books on psychology, personal development, things like that, one
00:03:02.880 | of the themes that you may find, at least that I have found, is that taking personal
00:03:08.400 | responsibility is one of the most important starting places for any major life improvement.
00:03:16.880 | If one doesn't take personal responsibility for their life, it's very difficult to make
00:03:22.160 | any progress. This could be applied in a marriage. If you don't take 100% responsibility for
00:03:31.360 | your marriage, it's very possible that your marriage may suffer. This can be applied to
00:03:37.160 | your personal life. If you don't take responsibility for your health, if you don't take responsibility
00:03:42.400 | for your wealth, if you don't take responsibility for your ability as a parent, or for your
00:03:51.760 | function on your job, if you don't take responsibility for those things, then the results are not,
00:03:59.720 | the results are going to be subpar. Now, many people obviously when I say something
00:04:06.960 | like take one, let's use marriage as an example. I believe that each person in a marriage should
00:04:13.800 | take 100% responsibility for the marriage. So in my marriage, I take 100% of the responsibility
00:04:21.640 | for my marriage. There's a bit of a cognitive, a bit of cognitive dissonance there. Because
00:04:28.280 | in a marriage you have two people involved, obviously not any one person of those two
00:04:34.780 | is 100% responsible. Some would say that there's a 50/50 responsibility. That's possible.
00:04:41.760 | That makes sense if you have two people to split the responsibility. But what do you
00:04:45.080 | do when there's disagreement? What if one person is 70% right and the other person is
00:04:49.480 | 30% right? It's impossible to work your way down that list and be able to rightly divide
00:04:58.960 | the responsibility. How much easier is it if I take 100% responsibility? Because the
00:05:07.160 | thinking here is that if I take 100% responsibility, that means that I never have to look at my
00:05:12.960 | spouse and say, "Well, it's her fault. She needs to do such and such. If only she would
00:05:19.920 | do this, then I would do that." The point is it's my responsibility. Now, I wouldn't
00:05:25.840 | say that responsibility and fault are the same thing. So I wouldn't say that it's
00:05:31.040 | 100% my fault. I think that would be an inaccurate statement. But responsibility is an important
00:05:39.920 | thing. The example that's come to my mind in the past, and specifically I've thought
00:05:44.800 | of it when talking with my wife about our marriage, is the example of who has responsibility
00:05:51.360 | for closing a gate to keep animals in. Let's pretend for a moment you're on a farm or
00:05:55.880 | you have some, I guess you don't have to be on a farm, but just pretend you have a
00:05:58.800 | gate to keep your dog in, or your cat in, or whatever animals there is that you're
00:06:03.960 | dealing with. Imagine for a moment, and I'm going to continue using marriage as an example
00:06:09.560 | and then we'll move to finances. Imagine for a moment that you have a gate and in your
00:06:16.400 | marriage you're not quite sure who's responsible for closing the gate. So you say, "Well,
00:06:22.560 | it's partly your responsibility." I'll use me. And I say, "Partly to my wife."
00:06:26.240 | You know, "Wife, it's partly responsible, you're partly responsible for closing the
00:06:31.120 | gate and I'm partly responsible for closing the gate." Well, if the gate's open, I
00:06:40.400 | may have the potential for looking at it and I may say, "Well, today's the day that
00:06:46.480 | Tiffany's going to close the gate." That's my wife's name. "Today's the day that
00:06:49.640 | Tiffany's going to close the gate, so I'll leave it alone." And Tiffany may look at
00:06:53.200 | the gate and say, "Well, today's the day that Josh was going to close the gate."
00:06:55.600 | And the gate might not get closed. But, if I take 100% responsibility and I say, "It's
00:07:03.400 | my responsibility. If I see the gate open, it's my job to go and shut the gate." Pure
00:07:08.960 | and simple. Now, if my wife is a virtuous woman, and she is, she can also take 100%
00:07:18.960 | responsibility for the gate and say, "If I see the gate open, I'm going to go and
00:07:23.040 | make a clip and I'm going to go and close it." That's what I mean by taking 100%
00:07:28.040 | responsibility. So when it comes to income, this is a very charged discussion. I wasn't
00:07:33.080 | sure exactly what I was going to talk about this morning, but I noticed on my Twitter
00:07:39.480 | feed last night, I was noticing a friend make a comment about the wages that a large fast
00:07:44.960 | food restaurant, McDonald's, pays its employees. And, in case you don't pay much attention
00:07:50.640 | to popular news and whatnot, McDonald's Corporation made quite a stir some weeks ago back in July,
00:07:58.040 | I think it was early July, when they released some budgeting guidance for their employees.
00:08:04.560 | And as part of that budgeting guidance, they released a sample budget for somebody who's
00:08:10.400 | working at their restaurants. And, I'll let you go and research the numbers. I don't
00:08:14.720 | want to talk about the numbers this morning, but many people were extremely upset at the
00:08:18.980 | low level of income and low level of expenses that McDonald's put on that budget. Extremely
00:08:26.760 | upset. And I was thinking, so my friend posted a note about the corporate profits that McDonald's
00:08:33.080 | declared and talked about what they pay their employees. And I think that my personal opinion
00:08:40.200 | is that a company will, can and should pay excellent wages and provide an excellent working
00:08:51.200 | environment for their employees out of their own selfish best interest. Because that will
00:08:57.240 | help them to develop a more quality workforce that cares about their process and about their
00:09:08.240 | product. However, no employee is required to work there. And I'm not going to get into
00:09:19.240 | a discussion and debate on the aspects of where to work and opportunity and whatnot.
00:09:24.280 | I just want to talk about personal responsibility. Each and every one of us is responsible for
00:09:33.040 | what we make. It may be that we've come from an extremely privileged background, however
00:09:38.480 | you define privilege. Maybe our parents were wealthy. They were upper class or upper middle
00:09:45.040 | class. Perhaps they sent us to the best schools, provided the best tutors for us, gave us the
00:09:51.680 | best education, provided all of our needs. And because of that, we've been able to have
00:09:56.480 | a life of luxury because of it. And today our lives exude success in every area. Or
00:10:06.880 | perhaps we came from a very underprivileged start. Perhaps we were abused as children
00:10:14.560 | and we have deep, deep, deep emotional and psychological scars because of that. Perhaps
00:10:20.640 | we come from another country. Perhaps we're immigrants. Perhaps we are in a situation
00:10:26.760 | where we're just extremely disadvantaged. Perhaps our skills are lacking, our education
00:10:33.800 | is lacking. Perhaps even our own physical and mental abilities are lacking. Perhaps
00:10:39.800 | we're not as capable as others may be.
00:10:44.760 | Now one note before I continue on. Today I'm going to speak in the context of the US-American
00:10:52.920 | context. I've been fortunate to travel a good bit in my life and I have seen other
00:11:00.720 | contexts and I'm simply not qualified to apply what I'm saying in other dynamics. I have
00:11:08.800 | been in places in the world and lived in places in the world where I woke up and shook my
00:11:14.480 | head and said it's a difficult place to be and it's very difficult for someone to get
00:11:19.080 | ahead. You need a miracle. And I think there are still things that can be done to optimize
00:11:24.400 | but when the entire social structure and the governmental structure is against you, it
00:11:29.760 | seems very challenging. And I am absolutely not qualified to talk about those countries.
00:11:35.520 | So let's set that aside. It's a conversation for another day. I'd love to be of service
00:11:40.360 | to some people in those contexts but I don't know how to be. But I do feel that I can speak
00:11:47.120 | accurately about the US-American context. And in the US-American context, opportunity
00:11:52.280 | is wide open. It absolutely still is. People say well those times are changed. No they're
00:12:01.720 | not. It absolutely, we still do live in the land of opportunity. Now opportunity is a
00:12:07.480 | charged word because an opportunity is not a guarantee. An opportunity is just that,
00:12:14.440 | it's an opportunity. People have an opportunity to do what they, whatever they can do. But
00:12:27.200 | it's not a guarantee. Now when it comes to income, you're responsible for how much
00:12:31.880 | money you make. I'm responsible for how much money I make. It doesn't mean that
00:12:41.920 | I can't make choices. I don't always choose personally. I don't always choose to do
00:12:45.720 | the things that result in the highest income because that doesn't reflect my values. But
00:12:50.920 | I will never say that I'm not responsible for how much money that I make. It's in
00:12:56.000 | my hands. It's largely under my control. See here's what I mean. In the United States
00:13:09.160 | of America, you are paid exactly based upon your worth in the marketplace. That's it.
00:13:21.560 | Now that's a freeing concept for me. If I'm paid exactly according to my worth in
00:13:26.240 | the marketplace, then what I need to do is look and say, "Am I happy with what I'm
00:13:33.720 | making?" And if not, I just simply need to increase my worth or I need to make sure
00:13:39.760 | the marketplace really sees my worth. And if the marketplace is ignoring my current
00:13:47.800 | worth, I guarantee you somebody's going to find me from another opportunity who's
00:13:53.600 | going to recognize that worth. It may not be immediate, but somebody's going to find
00:13:58.600 | it. The level of income that we make has much to do with our personal productivity, our
00:14:07.480 | personal performance, our personal skills, and our personal knowledge and our personal
00:14:10.680 | ability. So why do some people with the same 52 weeks a year, 24 hours a day, why do some
00:14:19.240 | people make $10,000 a year, some people make $100,000 a year, some people make a million
00:14:27.560 | dollars a year, some people make a $10 million a year, and some people make far more? What's
00:14:34.920 | the difference? Well, it's obviously not a difference in time, although it may be a difference
00:14:40.760 | in hours worked. It's a difference in the person's knowledge, skills, ability, and the
00:14:47.520 | environment in which they're applying those things. We all have the same amount of time.
00:14:55.440 | We all start from where we start from, and that's mostly irrelevant. We all come out
00:15:00.440 | naked, kicking and screaming as people say. We all start with no education. Now some people
00:15:10.520 | start that education process early. We all start with no character. Some people start
00:15:15.840 | that character formation process early. But each and every one of us has the opportunity
00:15:23.360 | to increase who we are, to change who we are, and to become more valuable in the marketplace.
00:15:30.240 | But if we only do that if we see that we are responsible. If we don't see that we're responsible
00:15:37.040 | for how much money we make, we view it as someone else's fault. "Well, I'm not making
00:15:40.720 | enough because my employer's not paying me enough." Or, "I'm not making enough because
00:15:45.600 | my hourly wage is not enough, and the minimum wage is too low." Or, "I'm not making enough
00:15:50.200 | because my company doesn't allow me to advance beyond this certain cap, this salary cap."
00:15:56.520 | Or, "I'm not making enough because the commission rate is too low, or because the commission
00:15:59.940 | rate is decreased." Or, "I'm not making enough because business is bad, and customers aren't
00:16:04.720 | buying my products." You're responsible for affecting those things. You're responsible
00:16:11.960 | for changing those things. I'm going to give some examples, but the two things that I want
00:16:17.880 | to focus on is that by taking responsibility we can take action. And number two, that by
00:16:24.400 | developing our own knowledge, skills, and ability we can become worth more in the marketplace.
00:16:32.480 | Number one, in taking action there's a lot of actions we can take. Most of them probably
00:16:38.120 | aren't going to be fun in the short term. Taking responsibility I have found is very
00:16:45.120 | rarely fun because it forces me to look at my own character and my own shortcomings.
00:16:51.320 | I usually don't enjoy that because my character and my shortcomings are usually weaker than
00:16:56.640 | I wish they were. But it's important. So if I'm not making enough, let's go with the lower
00:17:04.320 | wage of the wage scale. If I'm not making enough, what's my first choice? Work more.
00:17:13.320 | I'm not saying that everybody should work 100 hours a week, but there's a reality to
00:17:17.160 | it that if I'm not making enough, I've got to work more. I've been to places in the world
00:17:22.720 | one year ago was a place that really impacted me. I was in Guatemala City, Guatemala. And
00:17:28.840 | in Guatemala City, Guatemala, and in many places in the world, they have a large city
00:17:33.360 | dump. And there are people that make their living in the dump. Their entire living and
00:17:41.880 | their entire livelihood comes from scavenging through the trash, finding things that might
00:17:46.760 | be of value to other people, collecting those things, and reselling them. And that made
00:17:53.800 | my heart hurt for those people who were living there. Children, men, women. It absolutely
00:17:59.280 | still does make my heart hurt for the people that are living there. And I want to help.
00:18:05.000 | So this is not coming from any kind of arrogant idea that there's something wrong with the
00:18:10.520 | people there. There's nothing wrong with people there. Some of the hardest working, most dedicated
00:18:14.640 | people that I have seen. But imagine you're in that situation. If your entire living comes
00:18:19.640 | in such a basic, challenging way, do you hang out all morning? Lying in your bed, enjoying
00:18:29.280 | the bed, and then get up in the afternoon? You know, you wouldn't want to work during
00:18:34.680 | the hot part of the day. So you get up in the afternoon for a little bit, work a little
00:18:39.040 | bit in the coolness of the evening, find what you need, and then turn around and go and
00:18:42.280 | sell it? Guarantee you not. The people that I observed and that I interacted with, sun
00:18:50.360 | up to sun down every single day. Work is something like that. If you're not making enough, you've
00:18:58.880 | got to work more. Got to work more, got to work harder. The people that were making their
00:19:05.640 | living in that manner were not lazy. Think about many of us who, obviously, if you're
00:19:10.280 | listening to the sound of my voice, you have access to maybe a computer, maybe an mp3 player,
00:19:17.960 | maybe a phone that you're streaming me on. Think about the situation that we have in
00:19:23.920 | life. Think about the opportunities that we have. So number one is we can work more, we
00:19:32.080 | can work harder. The interesting thing about the McDonald's budget that was published,
00:19:38.440 | many people were incensed that McDonald's assumed automatically that people would have
00:19:44.080 | a set of two jobs. It lists right on the budget income from first job and income from second
00:19:48.800 | job. People were incensed about that. Now again, I'm not going to get into the political
00:19:55.600 | conversation here, but are you kidding me that you would work on minimum wage and only
00:20:02.920 | have one job? Are you kidding me that you'd work on minimum wage and work 30, 35, 40 hours
00:20:10.920 | a week? There's no possibility of that. It's not possible to make it on that, which is
00:20:19.800 | why people that work those types of jobs, generally it's part of a family unit or generally
00:20:24.280 | they're young, young people. Young people just getting started, working part time as
00:20:29.000 | they're working their way through school. It's not an adult that is working and supporting
00:20:38.320 | their family as running the cash register up front. Now I will tell you this, my observation
00:20:45.880 | and experience with people who work at McDonald's, McDonald's has some of the best advancement
00:20:50.460 | opportunities in the world. If you are dedicated and focused, McDonald's will take you from
00:20:57.080 | being on the front cash register. If you've got a good smile, a good sense of humor, and
00:21:00.920 | by the way those are easy to develop, McDonald's will take you from there and they will put
00:21:05.240 | you through McDonald's University and they will take you to be a top level manager. And
00:21:09.840 | there are plenty of people who have started on the front line at minimum wage who now
00:21:14.680 | own multiple McDonald's. And McDonald's franchises are very profitable to own. That's up to you.
00:21:23.640 | Do you come to work with a surly face or do you come to work with a smile? It's a choice.
00:21:31.200 | Responsible, you're responsible for that choice. The second big thing that impacts our income
00:21:36.320 | is our knowledge, skills, ability, personal productivity. Now years ago I heard a talk
00:21:45.640 | by Brian Tracy. I always have enjoyed Brian Tracy's presentations. When I was younger
00:21:51.840 | I bought all of his books and audio programs and I would strongly encourage you if you're
00:21:56.800 | looking for a good place to start, it's tough to do a lot better than what he has to share.
00:22:03.000 | Brian Tracy is, I don't know what you call him, I wouldn't call him a motivational speaker.
00:22:07.600 | That has a different connotation. He often goes by management consultant and personal
00:22:12.560 | success coach. I don't know what he is. He's a speaker, he's a writer, but he comes from
00:22:16.880 | a corporate background. But I have always found every book, every recording, everything
00:22:22.120 | that I've ever purchased from him to be incredibly pithy and to be packed with information. So
00:22:28.640 | there's my, I give you a ringing endorsement that every dollar you may spend on any of
00:22:33.120 | his materials would be well worth the money spent. So I really couldn't recommend anybody
00:22:42.560 | more highly than I recommend Brian Tracy's materials. The thing that I always love and
00:22:49.080 | have, enjoy and appreciate about his talks is that he doesn't leave you with fluffy,
00:22:59.600 | feel good ideas and emotions. He gives you practical tips and strategies and tools that
00:23:11.800 | you can use to take action on what he says and then that action ultimately produces the
00:23:20.080 | good emotional feelings. Years ago I heard a talk from him called his thousand percent
00:23:28.120 | formula, how to increase your income by a thousand percent in ten years time. And I
00:23:33.320 | will link to his original, I found one version of his talk on YouTube. I will link to that
00:23:37.760 | talk in the show notes so that you can watch him do it. I am 100% plagiarizing what he
00:23:44.240 | has said, just adding a few things of my own and I'll summarize his points. But his major
00:23:49.360 | thought was that, he proposed that anybody can increase their income by a thousand percent
00:23:58.160 | in ten years time. So take your current income, multiply it by ten. So if you're earning
00:24:06.520 | fifty thousand dollars a year, that's five hundred thousand dollars a year. If you're
00:24:11.240 | earning twenty thousand dollars a year, that's two hundred thousand dollars a year. If you're
00:24:14.880 | earning a hundred thousand dollars a year, that's a million and etc. And the reason he
00:24:21.880 | said that was partly A) because he had experienced it. His story that he tells in the video that
00:24:27.560 | I'll link to was that one year he finished his tax return and his taxable income was
00:24:32.280 | fourteen thousand four hundred dollars. Twelve years later he filed his tax return and his
00:24:39.400 | taxable income was one million four hundred and forty thousand dollars. An increase of
00:24:46.400 | one thousand percent over the course of twelve years. And it was in looking back and reflecting
00:24:52.880 | on that and reflecting on what he had done in the interim that he developed his thousand
00:24:57.760 | percent formula. But the major idea is that you can increase your income by increasing
00:25:03.520 | your productivity, your performance and your output. In the United States of America and
00:25:12.280 | in many countries in the world, you're paid exactly what you're worth. I'm not getting
00:25:17.720 | into your worth as a human being, but as a person, as an individual, as a sovereign individual.
00:25:23.520 | But in your economic worth, you're paid exactly what you're worth. So if you want to get paid
00:25:29.360 | more, the only thing you can do is be worth more. To develop your skills, knowledge, ability,
00:25:37.080 | increase your productivity, your performance and your output. That's it, that's the formula.
00:25:44.720 | And it's applied at every end of the income scale. So if you're making eight dollars an
00:25:50.000 | hour and you say I want to make nine dollars an hour, you have to look at your situation
00:25:54.680 | and say what does someone who is worth nine dollars an hour do and how do I become that
00:26:00.840 | person? And if you're making three hundred thousand dollars a year and you want to make
00:26:06.040 | eight hundred thousand dollars a year, you have to look at your situation and say what
00:26:12.600 | does somebody who is worth eight hundred thousand dollars a year do in the marketplace and how
00:26:16.880 | do I become that person? And it's going to be different than who you are making three
00:26:23.160 | hundred thousand dollars a year. It's going to be an evolution, an evolution of yourself.
00:26:33.120 | Brian Tracy's formula that he delivered in that talk that I heard years ago, is that
00:26:39.920 | if you'll focus on yourself and develop your own personal abilities, you'll become worth
00:26:46.280 | more in the marketplace. And all you have to do is focus on small, incremental, consistent
00:26:53.760 | changes. Incremental, consistent changes. And if you do that, you can become worth more
00:27:02.560 | in the marketplace. Now his formula, let me walk through his formula of how he got to
00:27:07.360 | one thousand and four percent, one thousand percent over the course of ten years. What
00:27:12.320 | he said was, can you become one tenth of one percent more productive each and every day?
00:27:25.280 | If you'll just focus on each and every day becoming one tenth of one percent better,
00:27:29.800 | better at what you do, more productive, higher performance, increasing your output, increasing
00:27:35.240 | your skills. One tenth of one percent better every single day. That'll get you where you
00:27:41.360 | need to go. I'll walk through the math in just a second. Let me ask you a question and
00:27:44.760 | think about this. And by the way, when I share these things, I'm not coming from a place
00:27:48.480 | of I haven't done it. I haven't made one million four hundred and forty thousand dollars in
00:27:51.920 | a year yet. But, I'm doing this with you, but I believe that the concept is sound. Could
00:28:00.800 | you become one tenth of one percent better every day? I think anybody could get one tenth
00:28:10.120 | of one percent better every day. It's one one thousandth better every day. A tiny little
00:28:16.680 | improvement. And he gives a formula for how to do that. I'm going to add a few of my own
00:28:20.960 | things to that. But the math is that if you'll become one tenth of one percent better each
00:28:26.980 | and every day, that means that each and every week you'll become one half of one percent
00:28:34.720 | better every week. One tenth times five, five days a week is one half of one percent. Which
00:28:41.800 | means that every four weeks, every month, you will become two percent better than what
00:28:50.200 | you are right now. Two percent better every single month, or every single four week period.
00:28:57.840 | There are thirteen four week periods in a year, fifty two weeks a year. Two percent
00:29:01.960 | better every four week period over the course of one year is twenty six percent better.
00:29:08.200 | Twenty six percent better each year, compounded over ten years is one thousand and four percent
00:29:13.160 | better every ten years. So you get ten times better in ten years. That's the math. But
00:29:26.400 | it comes down to one tenth of one percent better every day. Now, the formula for how
00:29:31.000 | to do this is pretty simple. He lists seven things in his formula, which I'll share with
00:29:36.560 | you. And then I'm going to add a few of my own as we go through. And I'm not going
00:29:42.440 | to worry too much about what's attributed to him and what's attributed to me. You
00:29:46.880 | can watch the video, the YouTube video, and you'll see what's attributed to him. But
00:29:51.880 | here's the important thing. Take somebody who earns ten thousand dollars per year,
00:29:59.000 | and take somebody who earns a hundred thousand. That's probably a bad example. Take someone
00:30:02.680 | who earns forty thousand dollars a year and someone who earns four hundred thousand dollars
00:30:06.480 | a year and ask, does the person who works, who is earning four hundred thousand dollars
00:30:12.520 | a year work ten times as hard as the person who's making forty thousand dollars a year?
00:30:20.000 | I would say no. It's probably not possible to work ten times as hard. Does the person
00:30:26.720 | who's making four hundred thousand dollars an hour, excuse me, four hundred thousand
00:30:30.080 | dollars a year work ten times more hours than the person who's working, making forty thousand
00:30:36.840 | dollars a year? There's no way. It's not possible. So what's the difference? The person
00:30:42.960 | who's making four hundred thousand a year has a higher level of knowledge, skills, and
00:30:48.320 | ability and they're applying those things in a different field or in a different manner
00:30:52.800 | than the person making forty. So that means that in order to make more, we have to develop
00:31:02.840 | who we are as a person and increase our knowledge, skills, and ability as a person. Now to prove
00:31:08.440 | this to yourself, ask yourself this question. Look at your industry. Wherever you come in
00:31:13.800 | the pay scale of your industry, look at your industry and ask yourself, is the person at
00:31:17.440 | the very top of your industry is making ten times more than you are? The answer is probably
00:31:24.560 | likely yes. That somebody who's at the very top of your industry is probably making ten
00:31:31.280 | times more than you are. Unless you're at the top of your industry. In which case you've
00:31:37.080 | got a choice of, am I in the right industry where I'm happy with what I'm doing? Or do
00:31:43.720 | I need to change? Or you have the choice of, is this important to me to make more? And
00:31:48.680 | if so, can I either figure out a way to do it in my current industry or do I need to
00:31:53.240 | switch to another industry? Side note, make sure that as you're doing these things that
00:32:01.320 | first you've got your ladder leaning against the right tree. You're going to talk about
00:32:04.960 | what to do. It's a lot easier if you know you're in the right career. And this may change
00:32:09.800 | over time, but it's a lot easier to know what to do if you're confident in the career and
00:32:13.400 | the choices that you have made. So step one of Brian Tracy's formula is get up earlier
00:32:26.440 | and read for one hour every single day. Read one hour every single day in your field. Now
00:32:36.000 | the average American simply does not read. If you only did this one thing, if you only
00:32:42.600 | got up an hour earlier and read for one hour per day, how many books would you read and
00:32:49.440 | how much knowledge would you acquire and how many skills could you pick up as time goes
00:32:53.680 | by? The impact that step alone could have is astounding. If you read at the average
00:33:05.760 | rate of speed that the average American reads, you would read on average an hour a day about
00:33:11.440 | a book a week. If you read about a book a week, that's about 50 books a year, which
00:33:20.320 | means in the course of 10 years you would read 500 books. And these should be books
00:33:26.560 | that are either in your field or are something that you think would benefit you and help
00:33:30.520 | you. So the question is this, look at your industry and ask yourself, if I were to read
00:33:35.280 | 500 books that were in my field, is it possible that I wouldn't have a comprehensive knowledge
00:33:49.200 | of what's going on in my industry? Is it possible that there would be anybody else
00:33:53.800 | that were more knowledgeable than me? It may be possible but it's not probable. Most people
00:33:59.360 | don't read. Just that right there, one hour per day, that's 50 books a year, that's
00:34:06.600 | 500 books in your field. That could increase your knowledge by 1000% easily. His step two
00:34:15.520 | is make a list of everything you need to do every day before you start. Make a list of
00:34:21.040 | everything you need to do every day before you start. Write it down. Most people don't
00:34:27.240 | write things down. Step three, put it in order of priority. Most people don't put this in
00:34:33.480 | order of priority. This is my personal weakness. I can put it in order of priority but I usually
00:34:38.800 | want to work on the fun things before the most important things. So put that list in
00:34:43.880 | order of priority and then start on the most important thing and focus on it 100%. Step
00:34:56.120 | five, turn your car into a university on wheels. The average person in the United States of
00:35:01.520 | America spends about the same amount of time in their car as the average college student
00:35:06.040 | spends in class. Which means that if you'll seek out information and education that are
00:35:15.640 | on topics that are interesting and important to you and you'll do that while you're listening
00:35:22.720 | in your car, you'll gain far ahead even things like this podcast. Here's my commitment and
00:35:29.000 | my promise to you. I promise that in the fullness of time by listening to this show, listeners
00:35:34.800 | to this show will develop a level of understanding and financial literacy that goes from the
00:35:42.160 | basics to as high as enough knowledge that would be required for passing the CFP board
00:35:52.440 | exam which is a comprehensive financial planning exam that's administered by the CFP. Now it's
00:36:00.000 | going to take a little time to get there. I don't have 97 classes on financial planning
00:36:06.080 | scoped out in my mind. I'm figuring this out as I go. But I promise that we're going to
00:36:10.720 | talk about the basics from what is compound interest and what is an asset and what is
00:36:14.760 | a liability all the way through advanced complex technical topics. My challenge is just to
00:36:21.480 | figure out how to do that in an interesting way that's not boring. I don't know how to
00:36:26.360 | do that so I'm working on that. But you can listen to this for free in your car. My goal
00:36:33.560 | is to deliver the equivalent of a college education in financial planning through this
00:36:37.680 | podcast. So that right there, just simply turning a drive time into a learning time
00:36:44.600 | could be incredibly valuable. So many people have benefited from that. For me personally,
00:36:50.000 | this has been a huge asset through the years. I don't have much of a commute now because
00:36:54.040 | I've arranged my life in such a way to diminish my commute. But for years I commuted. And
00:36:58.600 | any time my car was moving, I always was listening to something, learning something, understanding
00:37:05.440 | something and developing my knowledge on something. Brian Tracy's step number six is ask two questions
00:37:14.160 | every day after every major meeting or after every major day. Number one is what did I
00:37:18.640 | do right? Number two is what would I do differently next time? I think of this as self-coaching.
00:37:27.760 | By asking yourself what did I do right and what would I do differently if I were doing
00:37:32.640 | this again next time? This is a valuable skill to be able to coach yourself into everything
00:37:42.920 | that you need. See, teachers and coaches, they don't know your situation, but you do.
00:37:48.520 | And you can coach yourself if you'll observe. But most people don't take the time to observe
00:37:52.840 | and analyze. So observe. What did I do right and what would I do differently next time?
00:37:57.840 | His step seven is treat everyone you meet like a million dollar customer or a VIP. Treat
00:38:04.080 | everyone you meet as important. Now think about the impact of those steps that he gives.
00:38:13.680 | Reading an hour a day in your field. You're building your knowledge. Make a list of everything
00:38:20.680 | you need to do. Put it in order by priority. Start on the most important thing and focus
00:38:24.320 | single-mindedly on that. You're increasing your productivity. Turn your car into a university
00:38:30.040 | on wheels. You're increasing your knowledge. Ask two questions. You're increasing your
00:38:34.960 | skills and your ability and you're coaching yourself in the right direction. Treat everyone
00:38:39.680 | you meet like a million dollar customer or the most valuable person. You're increasing
00:38:43.740 | your social skills. Is there anything that's not enhanced by that? Is it possible that
00:38:53.920 | if you got one-tenth of one percent better at each one of those things each and every
00:38:57.800 | day that you would be able to make some major progress? I think it's very likely. And the
00:39:09.000 | difference between the major progress can be substantial. The difference between somebody
00:39:13.200 | who's doing those things and not doing those things at the beginning doesn't seem like
00:39:16.240 | much. Someone who is two percent better in the beginning, not that big a deal. But at
00:39:24.120 | the end of a year, someone who's 26 percent better, that's huge. At the end of two years,
00:39:31.560 | someone who is 40, 50 percent better, I guess it wouldn't quite be that. I can't compound
00:39:37.400 | the numbers in my head but it would be huge. Time and compounding make a huge difference.
00:39:49.120 | I'm going to add a couple of things. This is actually probably also from one of Brian
00:39:53.240 | Tracy's books that I read back in the past. I'm going to focus specifically on the education
00:39:57.560 | part of things. Education is so important. Without education, education is important.
00:40:06.960 | And he has two steps that he mentioned in these seven steps that I wrote down from the
00:40:10.640 | video. But in the book, I remember him adding a third. So step one, read for an hour a day
00:40:15.720 | in your field. That's a book a week, that's 50 books a year. Average PhD program requires
00:40:21.400 | a student to read between 30 and 50 books and write a dissertation. If you read for
00:40:26.320 | an hour a day, 50 books a year in your field, that's the equivalent of a PhD level education
00:40:33.640 | each and every year. Number two, listen to educational materials in your car. That's
00:40:41.240 | the equivalent if you spend the same amount of time in your car as the average college
00:40:45.200 | student spends in class. That's the equivalent of two and a half bachelor's degrees over
00:40:49.560 | a ten year period of time. Let's call it two and round down to be conservative. His step
00:40:54.440 | three is search out, seek out, and attend one conference in your field every quarter,
00:41:01.760 | or per year. And the reason that conferences are important is because conferences in your
00:41:07.040 | field, or conventions, or shows, or whatever it is in your field, is where the best of
00:41:12.280 | the best and the brightest of the brightest are invited to share their ideas. They don't
00:41:19.300 | invite the people who are losing up on stage, generally. They invite the people who are
00:41:25.360 | crushing it. And one idea at a conference can make the entire thing worth it. The other
00:41:31.400 | thing that's so valuable about conferences is that the people who go to conferences are
00:41:35.960 | the people who are generally very committed and very dedicated to their fields of study
00:41:39.720 | and fields of work. So by being at the conferences and networking with the people that are there,
00:41:46.320 | you're in a situation where you're getting to know the best of the best, and you're becoming
00:41:52.800 | friendly with them, and you are learning their tips and their techniques just simply by being
00:42:00.200 | there. Now it takes time out to take time off on the weekends. That's why the people
00:42:04.560 | that you find at the conference are the highest earners in your field. Now I add another one.
00:42:12.560 | Learn to be a decent public speaker. If you're not comfortable with public speaking, join
00:42:18.120 | Toastmasters organization. Well worth the, I don't know, tiny little membership fees
00:42:23.080 | to learn how to be a decent public speaker. Because the thing is this, while you're at
00:42:26.720 | a conference, you want to network with the leaders who are there, who are leading the
00:42:33.360 | sessions and the ideas. And is there any reason why if you're reading 50 books a year in your
00:42:38.760 | industry, and you're getting two bachelor's degrees every 10 years in your industry, and
00:42:43.920 | you're applying those insights each and every day, and you're learning while you're at the
00:42:48.360 | conferences, is there any reason why you shouldn't be on stage? Why you shouldn't be sharing
00:42:53.320 | the things that are helpful for you? There's no reason at all. And with those things being
00:43:01.160 | done, is there any reason why you shouldn't be able to increase your income by 1000%?
00:43:08.040 | But this only starts if you start with taking personal responsibility for your life. You
00:43:15.920 | have to take personal responsibility for your life, for your education, for your knowledge.
00:43:21.320 | I personally get really upset when people talk about, "Oh, I can't do this because I
00:43:25.960 | can't go to college." Education is free. Each and every town has a local library. And in
00:43:32.200 | that library are hundreds and thousands of books that are available for free to you.
00:43:40.320 | All for the cost of driving there or walking there or riding a bicycle there and going
00:43:47.320 | inside and learning. Whether someone is a brand new immigrant to the United States,
00:43:51.760 | and I believe this formula can be solved in any way. Immigrants to the United States,
00:43:56.920 | by the way, I think the statistic that I can't source this or prove this, but the number
00:44:02.600 | that I remember in my mind, four times more likely to become millionaires than natural
00:44:07.200 | born citizens. People who show up to the United States don't speak a word of English. You
00:44:12.160 | can get English classes for free down at your local library. You can check out English classes
00:44:16.640 | on CD. The books are there for free. The internet is there for free. With YouTube, there is
00:44:22.280 | almost nothing you can't learn with YouTube. Want to learn math skills? Khan Academy. Want
00:44:28.200 | to learn science skills? There's tons of science podcasts. You can watch university lectures
00:44:33.920 | for free. Everything for free. The problem is not that the information and the education
00:44:39.760 | is not available. The problem is that people don't seek it out. So don't be one of those
00:44:44.560 | people. Seek it out. Seek it out. To close, take responsibility for your income. Choose
00:44:51.560 | how much money you want to make. If you want to make a low level of income, maybe to avoid
00:45:01.840 | paying income taxes, that's fine. There's nothing wrong with that. There are people,
00:45:08.480 | I'm fascinated by people who are tax protesters. I'm hoping to have one on the show here. I
00:45:14.520 | have contacted for an interview. It's not quite the right time, but in the future I'm
00:45:17.280 | going to interview somebody who is a tax protester. This person is anti-war and he does not want
00:45:23.960 | his tax dollars being used to support foreign wars. And so because of that, he avoids paying
00:45:30.220 | income taxes. He avoided paying income taxes by consciously reducing his income from a
00:45:35.840 | higher taxable income down to a level that's no longer taxable. So if you want to choose
00:45:42.760 | to make a lower income, more power to you. But you can also choose to make a higher income
00:45:49.120 | or develop your skills and knowledge and ability that you have the opportunity to do that.
00:45:53.080 | Take responsibility for that and encourage others to take responsibility for that. I
00:45:59.120 | hope this has been a good show. I felt a little bit like I've rambled, so if I have, forgive
00:46:03.280 | me. It's always challenging to be pointed and brief, but yet share enough information.
00:46:11.800 | I hope some of the ideas in here, these ideas have been helpful to me. Look at the show
00:46:16.400 | notes for more information. There are others that are much more capable of explaining things
00:46:20.360 | better than I can. So look in the show notes for some other resources and links. I hope
00:46:25.200 | this has been helpful. Leave some feedback in the comments section. Shoot me an email
00:46:29.040 | at joshua@radicalpersonalfinance.com or also leave some notes in the comments section.
00:46:33.920 | If you have questions, let me know what your questions are. I want to tailor this show
00:46:38.760 | to be exactly what will serve you, the audience. We're starting to get some really nice numbers
00:46:44.800 | as far as listenership. I'm excited. I'm committed to being here and doing this. I'm going to
00:46:49.360 | be improving my audio quality soon here. I apologize, the website was down last week
00:46:54.920 | for a day or two. I host the website with Bluehost and evidently there were some major
00:47:01.920 | outages with the parent company that owns Bluehost and HostGator. There were something
00:47:08.160 | like 8 million websites affected. So poor folks over there were scrambling all day to
00:47:13.280 | get things done. So the site was down on Friday. But it should be back up now. Again, going
00:47:19.680 | to keep on doing this, getting better. Let me know what you want, how I can serve you.
00:47:23.040 | I'm going to keep applying my 1000% formula to this show. Doing it consistently, learning
00:47:28.560 | how to become better at it. If you need to check back in 10 years, check back in 10 years
00:47:33.120 | and find out if I'm 1000% better. I believe I will be. So just check back and we'll find
00:47:38.000 | out for it. We'll find out together. Have a great week everybody.