Episode 100: The Three Secrets of the Wealthy – Transcript

Wealth On Any Income Podcast Episode 100

Rennie Gabriel  00:09
Hi folks, welcome to episode 100 of the Wealth On Any Income Podcast. This is where we talk about money tips, techniques, attitudes, information, and provide inspiration around your business and your money. I'm your host Rennie Gabriel. In past episodes, we spoke about how to understand the numbers from your business, how to measure the level of pleasure based on where you spend your money, how to track your money in 5 - 10 seconds. What determines how close you are to Complete Financial Choice®, and how to run your business without being in your business. And last week, we had Mike Michalowicz, the author of Profit First and six other books, talking about what he learned after going broke, and losing millions of dollars. For episode 100 today, we have as a special guest - Me. You may know that after three divorces in a business failure, I was flat broke at age 50. After learning and applying the three secrets of the wealthy, I was able to choose to work instead of having to work by age 58. I became a multi-millionaire. And this means that now when I teach you how to handle money powerfully, I'm able to donate 100% of the profits to the animal and veteran charities that means so much to me. 

Rennie Gabriel  01:32
So what are those three secrets of the wealthy? I use the acronym AFI, which has nothing to do with the American Film Institute. AFI stands for attitude, forms and investments. As a summary, wealthy people have different attitudes when it comes to money, wealth, and investments than ordinary people. When it comes to the forms we might already be familiar with, like a balance sheet, the wealthy look at them differently. And when it comes to investments, we are not limited to stocks, bonds, and mutual funds. So let's go into detail on each one of those three secrets. 

Rennie Gabriel  02:16
Attitude. Recently, I wrote a book explaining 32 attitudes I've identified that wealthy people operate by that most ordinary people are not even aware of. As one example, most people are raised in a family, where if they asked a parent a question about money, like, 'Dad, how much do you make?' The answer would be something like, That's none of your business. Or it's rude to ask people about money. Don't ever do that, again. Wealthy people talk about money all the time. They talk about the investments they make, the deal they got on an expensive car, how much they pay certain employees, how they negotiated a vendor contract, and more. Another example would be if you hear some familiar phrase about creating wealth, like pay yourself first. If you have an ordinary mindset, you might make a statement like I've heard that before. Or that's not new to me. If you have a wealthy mindset, instead of making statements, when you hear familiar information, you would ask questions like, 'How would that apply to me? Where could I put the money? When will I begin to practice that? What would be the amount I should set aside? Who can help me with that?' You may have learned the words that start these questions in elementary school. They're the ones that are suggested when you write an article like how, where, when, what and who. Another example would be that wealthy people are conscious of the difference between personal use assets, like a house - versus investable assets, like rental real estate. One more example would be they understand the difference between good debt and bad debt. And they use good debt to create wealth. Earlier I mentioned a book I wrote, it's called Attitudes of the Wealthy and has 29 more attitudes that separate the wealthy from the ordinary mindset. If you make a $20 donation to the charity Shelter to Soldier, which has a link at the top of my Wealth On Any Income website. I'll send a free PDF copy of Attitudes of the Wealthy. Just be sure to include your email with your donation. You can see the link in the show notes.

Rennie Gabriel  04:47
The second of the acronyms for AFI, the F is for forms. Forms are the second secret of the wealthy. What mean by that is they may use the same forms you're already familiar with, like a cash flow statement or a balance sheet, but they look for different things on them. Unfortunately, almost none of us have been taught anything about these forms in the first place. I often say that parents can't teach what they don't know. And school teachers can't teach what they've never been taught. When I say almost none of us, I mean, 9 out of 10 people have been taught nothing about money. I know this, because I've surveyed thousands of people, including Certified Public Accountants, and other financial planners. I've helped CPAs through bankruptcy, just because they know how to complete tax returns, doesn't mean they know how to avoid debt, or how to create wealth. When I look at the balance sheet for me and my wife, which lists our assets and liabilities, I'm looking beyond the net worth. And if you're not sure what these terms mean, that means you're missing the basic financial education that you need. What I'm looking for is the amount of assets that can generate an income, the income from our assets is the reason we don't have to work for a living. It's the reason I can take 100% of the profits from educating you and donate that to charities that my wife and I want to support. For most people, their home is a liability, not an asset. It not only doesn't generate an income, but it sucks up money to pay for utilities, repairs, insurance, even if it has no mortgage. And there's always property taxes. We are the exception, where we have converted some of the equity in our home to generate an income. We don't use it for an AirBnB, we have invested some of the equity and earn 4% more than the interest we have to pay. Granted, that's not a lot, but we have converted our house into an income-producing asset. When it comes to cash flow, most people forget to include the expenses that do not show up on a monthly basis. Like back to school clothing for children, or auto registration fees, and maintenance. When the car breaks down, too many people have to use their credit card to pay for the repair and end up with more monthly payments plus the interest. 

Rennie Gabriel  06:56
The most important thing I learned was that to create wealth, I needed to focus on reducing expenses first, and grow my income second. Let me repeat that. I had to focus on reducing expenses first, and grow my income second. For years, I did it backwards and it didn't work. As I earned more money, my expenses grew faster. And the more money I made, the deeper in debt, I became 

Rennie Gabriel  08:02
The third secret of the wealthy the I, AFI. The I stands for Investments. Investments are the third secret of the wealthy, we do not look at our savings account as an investment. It's a temporary parking place, either for an emergency or until we find a suitable investment. Reserves are important. When the pandemic hit in 2020 my wife and I could continue to pay all of our bills for two years, even if no tenants paid their rent, and none of our stock investments paid a dividend. As it turned out, 100% of our tenants paid 100% of their rent. And we continue to earn 2% a month on our stock portfolio and none of our other investments had any interruption in income. And when it comes to investments, we are not limited to stocks, bonds, and mutual funds. We don't give our money to someone else and hope it grows - we control our investments. We invest in things like multi-unit residential real estate, office buildings, self-storage facilities, board and care operations, our own businesses, real estate investment trusts, oil and gas projects, hotels, short-term rentals, triple net leases, peer to peer lending, student housing, private placements, life insurance, life settlements, tax liens, tax deeds, equipment leasing, and so much more. Hopefully that gives you an idea there are so many more things than stocks, bonds, and mutual funds. 

Rennie Gabriel  09:46
Well, there you have it, the Three Secrets of the Wealthy - AFI. The attitudes they have, how they look at the typical forms you've all seen, and that they control their investments. If you're like the 9 out of 10 people who did not get any financial education, and you want to create a strong foundation and build your wealth, just like my offer to get a free copy of the Attitudes of the Wealthy book for a $20 donation through the link at the top of the homepage of WealthOnAnyIncome.com, you can get a free copy of my award-winning, best-selling book Wealth On Any Income by donating $25 and providing your email address. 

Rennie Gabriel  10:34
To my listeners. Thank you for tuning in. Next week, we're going to have Mandi Hill Ellefson talking about how to free up 40 - 60 hours per month, and scale your business to $100,000 per month of profit. You can listen to the Wealth On Any Income Podcast on your favorite platform and please rate, review, and subscribe. If you'd like to know how books, movies and Society programs used to be poor, and what the cure is, then log on to wealthonanyincome.com/TEDx. You'll see how to increase your wealth and donate to the causes that touch your heart. And again, with a donation to Shelter to Soldier through my Wealth On Any Income website, you can get a free copy of either or both Attitudes of the Wealthy or Wealth On Any Income. The website is justgiving.com/fundraising/wealthonanyincome. Again, this will be in the show notes. Until next week. be prosperous. Bye bye for 

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