What is the cause of Financial and Money Anxiety: Budgeting, Simple Investing & A Roadmap for Life

Okay. Tonight is giving an official speech [clears throat] around the table conversation and I feel it's way more than So topics in the conversation um budgeting screw your head on top of your of your head. It's just in the one of the main reasons mention anxiety is for the unknown of tomorrow and anxiety is a terrible anxiety psychology I met anxiety for the unknown depression if he understands how to disconnect from his past with depression for the future anxiety. One of the most powerful anxiety is anxiety for finance. in the >> in the in the in the financial stability. financial situation and believe it or not as she works she she's the bread winner and he's basically and I came over there they called me there's a red mmer um so I get another conversation and he accumulated close to um about $800,000 in savings accumulated. [snorts] Everything in the house is like very strictly controlled. anxiety tomorrow. Anything else? All very stressed out. So once I sat with them and I explained them You had to hear the sigh relief of that woman. So the key for a road map to have a real road map in front of him to know what he is using what he's making what he is able to afford and what he's going to need down the road and how am I coming to that goalpost with a anxiety and you never end up having it. So the main part of this is a financial structure in the beginning of understanding vaost of then you build your plan of how to get to your future and you will be automatically on a great path. mentions in a position of whatever they are and really do the team if they would have a budget in front of them and they would know that it's going to come the day that they need the money and what they need and what they need to do now in order to get that point met with a structure. another bus route. Yeah, it's $500 a week. and the situation. I gave him the do that he can that he needs $500 a week in order to put away to manage. She went back the $500 she gets a week goes into these funds. So, they had a road map in front of them. They knew exactly their plan, what they need to do. Then they sat down husband and wife and made a decision. What has to be sacrificed for that? So, vacations and infrastructure for the future. So rather try to find somewhat what you're doing in your business you're doing or in the industry you're doing or whatever you're capable of doing to be able to take that amount of money that you need and set yourself up for that special fund the the future family or whatever you call it. So the partism is structure first of the spending speech. If you not understand that the good part. So what was the answer? No, of course. Why? because it's not only C. Yes, you have to budget yourself but you also have to take care of the of the investing. So I want to first start with a budgeting gave explaining what his set of men in budgeting how he he he he sits with couples what he tells them and some fascinating stuff that he saw alone with his own eyes situations mentioned take it over >> you I know most of you on the table know me as compel but for tonight for tonight I'm going to be coach and uh the way I got into coaching myself in helping people is because a few years ago I was in a situation that I wasn't making enough money to be able to cover my bills and I found myself in debt [clears throat] and just wasn't working and I'm sure A lot of people go through that situation sometimes in life either when they're younger, when they're a little bit older, different people, different situations. And I'm sure people know what that feels like and that's not a good feeling. A lot of anxiety like said before about it. And uh when someone's in that situation, they feel like there's no way out like this is going to be forever have to turn and credit cards and back and forth. And hem shined into me two good things. Number one is I started listening to explaining what it means to live like a need to make money. What's the reason for working? Not just like the world just just to have money. There's a bigger picture to it. And then by bumping into someone called Dave Ramsey and between the two with his structure, his mahalak and just listening to the mashem I have to say hashem helped me and I was able to get out of it and therefore I took upon myself to be able to to go take classes and coaching courses and coaching to be able to tell people and to show people that went through my situation that there's a way Even if someone has debt, even if someone is not making it, even if someone is drowning and it's not working out, there's a way to do it. and uh about a year ago I finished taking the course and I started sitting with couples at night explained to them um the main the main concept and again this is going to be a little bit overlapping with what the menal had said and is going to say but we'll just uh just for a few minutes the main concept is now I know people some people don't like to hear the word Dave Ramsey people have different mahal and different is it's everything is open and flexible. It's the idea to have some kind of a structure or some kind of an idea to to get out. And also some people say that it's not possible to do day raz now the m the main thing of everything has to do with finances personal finance is to be able to fund your lifestyle. It's a word that my father came up with once everyone has to fund their lifestyle. If someone's lifestyle is x amount of money it costs them to to live what whatever that includes then fund it. Make sure to get another job, get a raise, open a business, whatever it is, just fund it. Now funding a lifestyle isn't only about going to the grocery and buying clothing and ash with the kids. Funding lifestyle is the full picture like the said before. It's including everything that a person is going to need for the rest of his life. If it means marrying off the kids, vacations, retirement. When a person decides, okay, I have now $100 over here. Okay, so I I could afford it. I could take it then go buy whatever I want. No, because the rest of life they have to take in consideration. I have something to say. It's felt in a minute. Have a minute. That's you can have what you need later on. You're right. And I saw from from that he said that any expense that a person knows that is going to come in life. A person has to take it into into consideration and put away for it. A person doesn't have to stop putting away money for any maybe or something that might happen. Like explains towards the end something to say I'm going to put away for anything that might just happen in the world. There's no end to that in sight. Whatever a person knows that he is going to need to one day if it's hass if it's b mitzvah whatever it is. So that's the concept of funding your lifestyle. Now when it comes to budgeting that's the concept the concept of there's different ways have to budget. One of the ways to budget is called a zerobased budget. It means a person takes their income whatever that amount is puts in all their expenses and the bottom should be zero. Now it doesn't mean the bottom should be zero that nothing should be left for them to put away but all their um plans that they need for so whatever it is should be included in that. So income minus expenses expenses of the grocery weekly monthly yearly and for whatever they need to save and then the bottom should be zero. That's the concept of of of budgeting. Now, just a a small story. I was sitting with a couple and uh [clears throat] they weren't using credit cards at the time, only debit cards. They already maxed out the credit cards. I always ask people, how much money do people spend on credit cards? Anybody know how much money people spend on credit cards? How much? So I like to say people spend on credit cards whatever the credit card limit is only has 10,000 limit and they spend up to 10. I'm talking about someone that kind of to a bump. I'm not talking about someone that can I know they could afford everything. So I asked I asked them how much do they so she told me that when they go to the grocery is uh is always anxiety. She goes to the grocery and she doesn't know if there's enough money in the cart or not. She has to call her husband. Is there enough money in the car or not? He is answering. He's not answering. She's going to the register. She's shaking. Is going to go through or not. The whole going to the grocery is an anxiety situation. So I said, "Okay, this is what we start doing. We start budgeting with cash. Take away the cards. Let's not do cards. Cash. How much do you need for a week for the grocery? X amount of money. Okay. Take that money, divide into envelopes, everything else you need and take it She told me that it could very much be that from the day we started sitting, she had less money to spend in the grocery. Maybe the number was less when she really spent. But walking into the grocery, she knew this is what I have to spend. I have the cash in my envelope and she was able to shop with calmness and be able to go to the register and pay and there's no phone calls and there's no anxiety and nothing. So again, that's a little bit of a case with this this, you know, situation. There wasn't anything extra, but it's just a concept of being able to go to the grocery and be able to budget and know what a person has. So that's basically the concept of of of budgeting. Um there's different ways of doing the actual budget is either what I tell my clients is for the first two three months to just track the person doesn't know how much I spend and start taking out Excel sheets and and statements from years and years. So, what I usually [clears throat] tell my clients is the first two, three months, just track. Write everything down. Everything that's spent, just write it down and track it. After two, three months, you have an idea of what you're spending. Then, put that into a budget in the beginning of the month. Budget how much you want to spend that month. Divide it. If it's by envelopes with cash or if it's different bank accounts for different things or it's using a budgeting app with whatever is out there, it doesn't make difference how. And then basically track it and go and go along with it. But the concept is have a zerobased budget and to make sure to fund your lifestyle. That's basic basic of budgeting. >> So to take example that we said before when someone knows that he needs to reach to a certain amount of money and he looks around himself and he sees he cannot make it what he does decided to go into coaching as a side job. is true to help people in need, but also as a sidekick to make extra few dollars to be able to cover his budget. And this is a great idea and it's nothing wrong. It's actually a fantastic thing because So just finalizing the parts in budgeting most men have to rent from budgeting desire confused they start going into kind of panic what do I need I need coaches I don't need coaches apps mus so do alamment mention you know to all type of people we are we are humans that make mistakes we are humans that have needs. We are humans that have just plain take a piece of paper. Write down your income. Note the exact number. mortgage limit basic groceries just I promise you there's no way survived but where is your where is your main place and where can you work on so the situation sing that said I just can't I said what what is he show groceries is he gave me his whole budget groceries so bring me grocery and again groceries there is essentials and there's non-essentials there's the bread there's the milk there's the fish whatever you must have feed. But I promise you that I was able out of his four weeks grocery every week I was able to take off $50 $50 and certain spendings of items that he did not really need or must have. Small stuff like he bought corn chips and potato chips and pretzels for instance. We say we're going to take off one of the two, either the corn chips or potato chips. We bought two types of ice creams, five types of dips, whatever it was. Was able slowly slowly we so we were able to to to um find $50 in his a week. That's $200 a month. secure is the $1,000. All this is all he needs in order for him to say invest in other other everybody became like scared. budgeting. I don't even know where to start. About 16 months that I started doing this I I counted I mean I see All of a sudden, accounts I can show you pictures of WhatsApp messages of that have accounts saved up sent me yesterday. I just want to send you because we're on a group together. I don't know if you watched what happened then. people started becoming very complicated with these investments and stuff and I said just keep it simple go straight and be clear take all the nos outman sends me a picture $160,000 he saved this year and he told me a salesman vacations business classes and all of a sudden It's it's it's fascinating. It's fascinating. All because a little weirdness. First of all, middle class says the maybe 5% 15% was and then there's a 20 down to the other side. I would say 30 down to the other side. Let's leave Vietnam millionaire out of the equation at the moment. Let's first put in our equation a structure of how I should have a decent life and a decent living. in stressy. So first structure first instructions and I don't miss it on a single speech. $50. I'm sure the grocery $50. I'm sure maybe not but I'm sure there was someone in this crowd saying thinking to himself $50 $50 $50. This is exactly $50 anyway. I'm screwed anyway. I mean like like we hear it every single day almost in just being conscious. So the flowing viral about the $14 milkshake. I don't know how many people here saw that clip. And But once a week for he gave him his time. Don't you think about that is important? And then you know many different comments say it's not the milkshake. It's not $14. It's it's it's it's irrelevant the number and it's really really irrelevant the attention the kid. It's irrelevant. It's the point the idea. That's what it is. It puts you into a conscious state. Of course, and enjoy shabas and it's okay to go buy a milkshake. It was just to show you what the steady habits of doing things that really unnecessary or maybe necessary what this could give you in 20 years, in 10 years. And this is really can build and this can take off depression and anxiety from your life. And it's it's like you see on this on the sheet over here, $5 a day for 20 years, $5 a day for 20 years will give you $82,000. And if you put in a kicker of $3,000 in the king's, you will have $100,000 to marry your child. I don't know. But guess what? Zero is, you know, so just $5 a day. That's what it is. Just $50 being mindful with your spendings around you. And again, it's a hyp. Again, it's it's irrelevant the the ETF or the you going to do about a certain mahal, right? You ask about a certain mahal about but I didn't get to answer him. I'm sure my son I think my son gave me the answer but um it's it's irrelevant feels comfortable ETF or fund or or brokerage to feels comfortable as long as you do something and you're consistent about it you set it up automatically you will be okay% on their phone their phone% economists all of a sudden economists because by now I'm confused. Move all the noise away. Take away all the chatter. Take away nothing. Whichever mahal you'll take, whichever [clears throat] mahalak, if it's S&P 500, if it's the QQQs, which is the NASDAQs, if you want to go strong technology, if you feel that's for you, do it. If you want to go to bond and they're happy, they're good and they're making tons of money because in English they say pigs get slaughtered. >> [clears throat] >> The best, best school, the best, the best, the best teacher, the best best, the best, the best, the best and the best and the best and the best and the best and the best of the best. What happens to all the people that need the best? End up having basically a mumble jumble of nothing. A person that's a very solid person five to six% return for him he's happy then all of all of his other decisions that he makes in business is a total different decision as well. This is he's not trying to maximize which means water park in investments investments a billion dollar. So you had the lumber over a billion dollars. I know from a group of $100 million alone. I know one group $100 million. And and believe me, it's way way way more than that. This is some kind of AI technology that went bust. Google was supposed to put in three trillion dollars whatever numbers 10x 15x Why does it happen meeting was in in 2018 2019 the lawyers company reputable company and heavy invested in a company. So the preferred return is 6%. And whatever 2x one and a halfx Okay. Five a 6% preferred return on his money. You know that's it. This is group get% preferred return as promised not 3x group get same% promise not 5x Fresh doesn't make sense. Doesn't make sense. Start small. Start small 250%. It's proven. It is proven. interesting mind because of co insurance went up three times the amount. All the buildings were on bridge loans 14 15 16%. None of them were in real mortgages and 3x. Guess what? All the buildings went lulu and together with the build buildings in my group alone a hundred million dollars got flushed down and it real estate millionaire industry. Why? Because we are greedy. this indication the person that made this whole deal together. I'm sorry my expressions got out sloppy like crazy reports whatever I mean to say and this is one of the main reasons that I put myself onto this hot plate and I took upon myself to go out and warn the [clears throat] do not do private investments whatsoever. I don't care who it is. I don't care if it's your brother. I don't care if it's your father. I don't care it's your mother. I don't care. You will be the controlling partner. You will be in the business. You will invest money. Okay? You make your calculations. You show to your accountant. You make sure it's done correctly. But it's a game for syndicators. group whatever his name is. Yeah. guys. [clears throat] company was sought in Ecuador gold trillions of dollars in all the government private equity groups. It's a private equity company. First question asking why doesn't Chase put in the movie JP Morgan or any of these big company why don't they invest in if it's so good [clears throat] investment tools and pages and pages. So like Northern Beach is like this. Okay. I like to in index fund which is the S&P 500 or QQS or whichever one you want to choose whatever you feel comfortable. straight S&P total stock market and VTI 4,000 companies S&P 500 lights but the other companies the lights the S&P 500 so if their companies go bust everything goes bust There's no water in your sink. There's no lights in your house and there's no cars driving. Nothing. So it's impossible. The American economy something with American beautiful gorgeous calculation. It's impossible that the whole GDP of the American economy is how it's possible that the S&P should grow so much so much is way more than the whole GDP. guy explain the American invested economy is not even in the GDP has nothing with the GDP as Apple iPhones in the gel with the Americana GDP has nothing to do with the economy here Coca-Cola soda that he sells doesn't even have to do with the American economy so like it's irrelevant but the fact is it's been around for all these years it's strong and it's the best investment and way better for real estate. Everybody's asking me is better real estate, way better than real estate. Climate calculations can only do look at page four. [clears throat] The number number one is telephone. He's in the real estate business. He has a bonus. He made $100,000 here. He wants to know where to [snorts] if if it's safe to put in the S&P 500 real estate. I mean, if you're in the business, why don't you just keep on investing and building your portfolio? So, find the numbers over leveraged real estate. The trick is to refinance it so you would no money in there. in Kim Trump are from immigrants. There's no more immigrants coming in. So all these areas that have these huge apartment buildings and those all of a sudden apartments are empty. There's no demand anymore. All these areas immigrants sentiment different situations market it might tank. I mean in New York City you buy a door for especially with a new mayor and stuff. Forget it, you know. So wish the best investment in real estate like in the S&P 500 there's no minimum and there's no maximum and there's no minimum amount of time s there's no maximum amount of time it works for everybody for whatever they need. But if you're a disciplined person and you put it in the way you're supposed to and you don't touch the money you'll be a millionaire. Yes. But if you do the right things, you will be a millionaire. You see, they should teach but they still have to do because they still have to do retirement. Look at the first box over here. These are real numbers in S&P program in that has all the data from the all the data from from the S&P. Whatever it is, you take $1,800 a month for 13 years. The first 13 years of marriage expenses is very little. There is no camp, there's no there's no braces, there is no by age 40 Allah by the way because the expenses in the camps with the places with the with the vacations it's like it's mention true this is age but the vic concept besides investment the strategy. If $1,800 a month for only 13 years, that's it. Only 13 years, you will have by the end, look on the bottom, the green, the green line, $693,000. That means you put in 300. The red line is you put in 300,000, you have by the end 693,000. But for life, you leave that money for additional seven years. Put in you see on the top of the the next box is $693,000 for se from 2018 till 2025. So the issue to box you from 2005 to 2018 13 years. Then if 2018 to 2025 $693,000 was one from the first 13 years it came out to be $1.7 million. Okay. By the time he is 40 years old, he starts marrying off his first child. He has a net value of $1.7 million. Now look at the chart after that. At age 40, he has in the balance 1.7. He starts withdrawing every year. The first year 125. The following year 130, following year 135, he increases $5,000 every single year. Okay. At age 50 million by age 50 is million75 a year which is $15,000 a month pal. Crazy numbers. Guy's age 60 his value is already 26 and he's already taking out $225,000 a year. That's $20,000 a month almost. $50,000 million is $1,800 a month for 13 years. This is how powerful this is. What's $400 a week? Of course. Wouldn't you do it? I'm asking you, wouldn't you consider when you're age 20? This is what I'm saying. If you have a road map in front of you, you know what your needs is going to be. You have a structure how you're going to get there. The best. First of all, from age 33 till age 40, you don't have to save nothing. You can live life. Spend braces, spend whatever you need. Go vacation from age 33 to 40 be the most expenses of smart lab most is 45 but you know then you have a fantastic life you have a fantastic retirement built a retirement in age 65 when you retire you have over here taking out the age 65 $250,000 a year when you retire is mindful you $50,000 yet still have an asset of $2.7 million. This is how powerful this is. And this for now, but guess what? It's irrelevant the number and it's irrelevant the calculations. Sit down yourself, make calculations yourself, make yourself goals, come to numbers and work on it to get there. That's it. It's very simple. But that's retirement. Okay. She should take just one years of the of the in in the IRA $7,200 bottom box over here. She does not add anything until she is 70 years old. Not um um yeah 70 years old. If a girl takes one year's IRA contribution, which is $7,200, when she's when she's a girl, they're out of it. She puts that away for retirement. Look, if you put it in 1975, 77 $7,000, $7,200 now is the value $2 million. 1975 September 1975 October 2025 which is 50 years. So that means the person is take one take $10,000 and just lock it away for your retirement and she's $2 million by retirement. $10,000, $2 million for retirement. said IRA, Roth IAS, 401ks, whatever it is, if you know what it is or if you don't know what it is, but it's extremely extremely important generation, the next generation, the generation, whatever the retired age, this is the baby boomers are getting into retirement now and they're hitting the wall. Tons of people that I know don't have money to cover their monthly income, their monthly expenses. cover. Build yourself a retirement fund whenever you can. The maximum is $7,200 a year. You and your wife. Make sure it gets fun. First set up your funds. This is from my website.com. So the calculator How much do I need? So, so I made a fantastic calculator over there. You see, you put in and the first thing is goal $100,000. Start age is nine, end age is 20, interest rate 10%. you have to put in a week, $96. The youngest one, which is only a year old, the same calculation, he has 19 years to go. Is his for him, you only have to put in $33 a week. The total contribution has to be $335 for the whole computer. Go, go yourself on the computer. Put in your kids' names. Put in the age. Put in your goal. If your goal is 100,000, put in. If it's 50,000 or it's 200, whatever your goal is, put in a goal over there. It's so important this whatever the ages is, you have a clear picture in front of your eye what you must put away every week or every month. Once you have that picture, you know what you need. You'll be able to set yourself up a balance sheet. You'll be able to set yourself up a budgeting plan of fun days. But you must fund this every week for every month. Just like you spent limit, just like you fund your mortgage, just like you fund all your other necessities in your life before you go on vacation. This has to be funded. If this is funded, you can go on vacation. If this is not funded, you should not go on vacation. Unless Prepare yourself and be mindful of your money. Watch how you spend your money. And everything you do, think if you need it or not. What's a necessity? What's a luxury? But number again, $335 is a lot of money a week for a person this age. But you're going to need that money. So guys, in credit be mindful. office vis whatever business class no big no big shakes business class I feel claustrophobic airplane 12 hours he feels he can't survive. So he had to go to the business class ticket. He went shopping for a ticket. A business class ticket was about $7,000, $6,800. A regular ticket was about $1,700 in the co whatever you know. So Billy ticket business for $7800. He decided he's going to do he's going to try it and he g him $5,000 cash that I do in his own pocket and a regular coach. So he took the same $75,000 that he put away for his ticket for the $5,000 he put in the food inside kick phobic. It's just being mindful. Mckenzic if you know what it is just just understand what your value is what you're spending your money you know now I'm a little bit more mindful but um and all these things it's always in the beginning I'm trying to tell you. I'm asking you gonna speak tonight. Put in a little bit more should know not to spend and be careful. Just be mindful what you spend, how you spend your money. Be mindful what money can be bring you for your tomorrow's value. That that's the main thing. Go on vacation if you need it. You need to lease a car. Lease a car. You know, don't lease a car. Only buy a car. Driving an car. A driving a feel good. He wants to feel good. No problem. He's driving a Lexus. Alexis is offet differently but this is do the XL model is 500 and XLE limited is 700 difference,000 from the XLE limited $1,000 at least. So, you're always going to take the upgraded version of the car because it's only $200 more. Big deal. Go for it. Knock yourself out. Go for the car. I don't care. Go for a vacation. Full business class. This is set up. Your retirement is set up. The final is life insurance and term only. No whole life insurance only term. If you're a rich person, a very rich person, you can afford whole, make a whole policy. But if you're not, if you're regular bat mentioned, like we said before, the 80% people in the middle cannot. Why not a whole and why term on a term policy for an average for this age over here is approximately per million dollar $100 a month approximately is the figure million $100 a month per million dollar. Okay. The average person in this room million and I would say up to5 million of you have a mortgage. about a whole policy for a million dollars is $1,000 a month or $1,500 a month which is $ 15 to $20,000 a year versus a term $100 a month which is $1,000 a year. Soion policy then therefore you don't have you don't have enough coverage. have a $750,000 policy $50,000 value,000 cash value on a policy is goodish. Don't put insurance together with investment. Don't put insurance together with insurance is insurance. Investment is investment. Like in the S&P like in the market, you will have your money. >> Was a pleasure for bringing with you. >> Anybody has questions, it's an open round table. Ask >> this is for S&P or IRA. >> It's [clears throat] irrelevant what the Zach is. S&P. Okay, let me explain you one thing. Okay, is IRA and is S&P? Okay, IRA is a kind of a savings account. The same way you got you go into the bank, there's a checking account, >> there's a savings account. The difference there's a checking account and savings account, right? In the bank, there is a brokerage account where you buy your brokerage accounts for your one type of account. There is an IRA account where you buy to put away for your retirement. What do you buy in those accounts? You buy the S&P 500. You buy index fund. You understand? So other S&P other other IRA a brokerage account for an IRA is for retirement. The difference is why should I do everything than an IRA? IA has a limit of $7,000. IRA has bene benefits that there's two ways how you can have use it as a deduction either from your income. Now let's say the person has to pay $100,000 in taxes in income. He has $100,000 of income is that is taxable income just to pay like $30,000 or whatever his tax bracket is. So he can take $7,000 out of his taxable income and buy IRA put it into IRA. So his income is only $93,000. So his taxes is less. But the other way to do it is pay taxes now and by the time you'll retire all the profit is taxree. So this girl if she bought a Roth IRA at age 20 that we spoke before and she has $2 million in profit now it's all taxree totally taxree. So, so let me do IRA tax for but you can't. You can only government wants you to put away money because they know that the social security system cannot support the people. It's not big enough to be able to retire on. So they want you to put away money for retirement and they want it limited because then the government got taxes. My question [laughter] >> again. So the 7200 you don't pay taxes now. You don't pay tax. >> No, the 72 you are paying now. >> That's no no the number. >> That's a regular IRA. But all the profit traditional IRA but then all the profit at $2 million you have a capital gain that you're going to have to pay about 30% taxes. >> 15 depends. Long term depend federal state depends where you live which kind depends in the in the it's going to depend in the laws then >> income >> whatever is going to be your tax bracket then so a lot of people believe pay now your taxes unless you can't afford your taxes now >> and let your money grow taxree so [clears throat] the same tax bracket you traditional around is basically the same in terms of when you take it out much easier. >> That's not the same. Why do you say so? No, you invest money. your money >> then you pay taxes you make your tax $1,000 anything