Take Control of Your Money: How to Save More, Get Out of Debt, & Build Real Wealth

26:14Because when you rip the band-aid off and you just go do it, you're going to notice it, honestly, the first month. Second month, a little bit less. And third month, you won't notice it. So by the third month, you will have adjusted your own spending? You will have adjusted. And let me give you, because I used to speak all the time, all over the place. And I would say to an audience, especially when you're headed in an economy like this, let me ask you guys a question. Let's be honest for a second. if I come into the office today and I say to you, I'm really sorry. Things are tough. I love you.

26:46You're amazing. We value you. You're a part of our plan long-term. And for right now, we need to cut your pay by 10%, but we want you to stay. How many of you are staying? Most people are staying. So like when you're in a room and you ask that question and people are honest for themselves, most people will stay. They'll still take the 10 % pay cut. And then I go, why would you take the 10 % pay cut at work, but you can't give yourself a 10 % pay cut? I'm not even asking you to take the 10 % pay cut. I'm just asking you to put the 10 % away for yourself. You know, what's interesting about that is you're right.

27:19You would take the 10 % because you immediately perceive that it would be harder to get a different job and make the money. And it'd be easier to just take the cut or maybe you like the job or whatever and you adjust. And what's the second thing you would do? Well, actually, you just said it. You just adjust. You adjust. Yes. And then you get used to the fact that you're paying less. But we don't think about the fact that we could make a decision to adjust to living on less in order to take that money, that 12 % you're talking about, and invest it in our own freedom. We adjust reactively. We don't always want to adjust proactively.

28:01Oh my gosh, what I'm learning from you, David, is that if you ever thought it's too late to turn your finances around, it's not. Financial freedom starts small. It's all about the habits. It's about systems. And you know what I love? I love the way you explain it because it feels doable and important. And I know you're feeling that way too as you are listening, and don't go anywhere because David is just getting warmed up. He has so many specific tools, specific tactics, more mistakes to share with you that are going to help you get a handle on your finances once and for all. And I'm also going to ask you to please take a moment to share this with the people in your life who need to get out of debt, who want to build real wealth.

28:42We'll be right back with more from David Bach when we return. So stay with me.

28:56Welcome back. It's your buddy, Mel Robbins. And today you and I are getting a master class in getting out of debt and building real wealth with none other than David Bach. He's one of the world's top financial experts. He's written 10 New York Times bestsellers. And today David is here with all the tools and takeaways you need to go from feeling stressed about your finances to taking control. All right, David, let's just jump back in. I'm thinking about one of our kids, our daughter, who's a singer-songwriter, and she works a bunch of other side jobs, you know, whether it's waitressing or picking up gigs or babysitting or retail, anything she can to make money.

29:34What does somebody in that situation do if they don't work somewhere with a 401k? What are you making automatic? So actually, the single biggest problem is we don't have automatic retirement accounts for people who don't have 401k plans. Oh. However, she can make it automatic. She just has to do the work, right? So what does she do? She can go to, like in the book, Fidelity, Schwab, Vanguard. I'm just listing firms here. Yeah. Coinbase, Robinhood, Acorns. She needs to pick a firm. Yep. In her case, I don't know how much money she's making, but she could start with an IRA account. Okay. So she could do a Roth IRA.

30:11So Roth IRAs are after-tax money. Okay. The advantage is the money grows tax-free, and it comes out tax-free. For young people, if she's going to say this year it's going to be$7 ,500, I would tell her to do a Roth IRA. Okay. If she needs a tax deduction, she doesn't need the tax deduction. No, no. So she should do a Roth IRA. Okay. So for somebody that's working a retail job, their paycheck to paycheck, their minimum wage, you can still do a Roth IRA. Everyone can do a Roth IRA. Okay. And all you got to do is go online and click some buttons and open it. Okay. And then you can have money taken out of your paycheck.

30:44Well, not your paycheck. You can have money taken out of your checking account when you get paid. So going back to making automatic, when you make money at a job, that paycheck today, in most cases, they actually want to deposit it automatically. Yes. They don't want to give you a check. Correct. And the whole day of giving you checks is going away. So when the money is deposited on a retail job, see, a lot of retail jobs actually all have 401k plans. People just don't use them because they think to themselves, I'm not staying here. That's a mistake too, because people stay in retail jobs two, three, four, five years, and they haven't saved anything.

31:19But if she's not going to use a plan at a retail job that she has, and she opens up a Roth IRA, she sets up the account to debit her checking account the day after her account is deposited. She knows when her check's being deposited, right? So like for checks deposited on the 1st and the 15th, the Roth IRA, the account can pull the money, whatever it is, 50 bucks, 100 bucks, 200 bucks, out of her checking account and move it into the IRA account. And it can all be done the same place. It should be done the same place. Make sure life is easier. Got it. So that's the retirement account. Okay. Okay.

31:56Now, she'll get to the security account because there's a second thing she should do. Okay. And everyone should do this. This is the automatic plan. Everyone should do this. She needs to start building a security account, an emergency account. An emergency account is setting aside money, for an emergency. It's not for a trip. It's not for, think of 10 ,000 other things that people use emergency money for. I'm going to redo my house. I'm going to redo the yard. No, it's for an emergency. So the money gets moved into a separate account. Okay. Okay. That account should be in a money market. Okay.

32:33The reason is it should be liquid. Okay. Okay, so a money market account right now at this moment is paying about 4%. It's not a big return, but it's safe. It's liquid. So, I'm giving Fidelity a bunch of free press here, but let's just use a real brokerage firm. Okay. Okay. She deposits her money at Fidelity. Yeah. And that money actually goes into a Fidelity checking account. Okay. Now, in that Fidelity account that she has, she has a Roth IRA. Got it. So, the money's moved to the Roth IRA. Yep. And she has a separate money market account. Which is your emergency account. Which is the emergency account.

33:07Okay. Okay. Now, if we're going to get super sophisticated, then the third thing is you have a dream account. And the dream account is for all the things that she's going to want to do between now and retirement and emergencies. And so maybe her dream is to go to Mexico at the end of the year. Great. She puts money aside, every paycheck in the dream account to pay for that. Got it. So if I'm doing 14%, 12 % to 14 % in the retirement, what am I doing in the money market and what am I doing in the dream account? So it depends on how serious you are. Yeah. But I would tell people to be putting 3 % to 5 % in the emergency account.

33:41Okay. And then I would choose how much you want to put in the dream account. Okay. The fastest way you get the dreams done is you fund for it. The way dreams come true is you fund for them. So I know people are like, oh my God, this is so much money he's talking about. So for people who don't, because I skipped over this, for people who don't believe they can go from zero to 14%. Yep. And I said, you know, some people are just like their heels are dug in. Or they're scared or they're paycheck to paycheck. Or put 1%. 1%. Just do something. Why do just 1 %? like what benefit does that have when you're already like because you're because you're signed up and what you'll realize is if you do one percent you won't notice it and then a couple months later you can go to two percent and then a couple months later you can go to three percent if you just went from what here's the truth you could do this in a year you go one percent january one percent in february just do one percent a year you'll never notice your expenses changing by one percent.

34:36And if you did it every month, you'd be by 12 percent. You won't notice your income changing by one percent. There's just no way. First of all, it's not even one percent. It's more like 75 cents, right, for every dollar. It's like it's not a whole full percent because you're not paying taxes. So that one percent, if you just did one percent a year for a year, at the end of the year, you'd be at 12 percent. You'd be saving four times what the average American who has a retirement account saves. That feels so doable. It's doable. Mel, here's the thing. How do we know it's doable? There's$44 trillion now in retirement accounts.

35:14Let that settle for a second. This is just in the US. There's$44 trillion in retirement accounts, IRAs 401k plans to all these different retirement accounts this has all happened in the last 30 40 years but the most of it's happened last 20 years what should you I forgot to ask you what should you invest the dream account in is that a money market account is your dream a year is your dream in two years is your dream in three years is your dream in five years like if your dream is to buy a house just like it took you 10 years to get out of debt most people can't just turn around and buy a house.

35:49So if you're like, look, I'm 22 years old. I really someday do want to buy a house. We'll talk about the difference between renting and owning. It might take you five years. So the longer you have, the more aggressive you can be. So if you're telling me you need the money in a year or two, I'm going to have you put in a money market account. If you tell me you don't, you're not going to have this dream come true for five years, I'm going to have you put it in a balanced mutual fund. That's a, that's a mutual fund. That's 60 % stock and 40 % bond. If, and that, I'm being conservative here, right?

36:19So if you'd say to me, it's seven years out, I'm going to have you invest probably all stocks. Now, speaking of stocks, should you try to pick individual stocks? Absolutely freaking not. Really? Absolutely. Even though I started by buying my first stock at McDonald's at age seven and I bought my second stock at nine at Disney. And okay, so I'm going to talk out of both sides of my mouth. I learned how to invest because my grandmother helped me buy my first stock in McDonald's at age seven. Okay. At McDonald's, she said to me, You know, there's three types of people in the world. This is how the world works.

36:52There's people like you who come to McDonald's and you spend money. You're called a consumer. She goes, there's people who work here. They're employees. They make minimum wage. That's a lot of people in America. It's a tough way to make a living. And then she said, and then there's owners. And the owners own this place. And I'm going to teach you today how to buy stock in McDonald's so that when you come here, you're an owner. And she took me home. and she took out the Wall Street Journal and she circled MCD, which is a ticker, even back then for McDonald's. And she sat me in front of a TV screen with the, you know, the TV screen where the tickers go across the bottom.

37:32You know what? Funny thing is most people don't even know what those are. Those are stock symbols. And she's like, when you see MCD, I want you to call out the price and write it down. And then you're going to come back here and we're going to look at what prices it is and we're going to look in the newspaper. And then tomorrow we're going to go down to the brokerage firm. we're gonna buy you one share of mcdonald's and you're gonna own a piece of this restaurant and you'll now be in the american system of investing i was seven years old at nine years old i'm with her disneyland i'm like can you buy this place she's like yeah so she so she taught me at a young age to think like an investor now i have done the same thing with my kids okay my kids don't own mcdonald's they own things like shake shack right it's been a great stock uh but they own things that they're interested in.

38:15They own Amazon. They own Meta. They got a handful of individual stocks. However, my kids also know I don't want them owning individual stocks. I want them owning index funds. So they got a few individual stocks, but they have a portfolio. I'm just giving you like behind the scenes of the Bach family. Yeah, this is exactly what every parent wants to know. What are you doing with your kids? I have my kids in portfolios almost are identical to mine. So I have them, they're small portfolios, but I have my financial advisor built the same portfolio that I have, a little bit more aggressive because they're younger.

38:52And I have them in these portfolios of ETFs, exchange trading mutual funds, because that's the best way to invest. That's diversification, doesn't take time, low cost, tax efficient, and you won't screw it up. Everyone wants to know what fund are you in? Let me give you one fund. Tell me. Because I literally have all these funds listed in here. All right, what page are you on? But I'm on page 135. So there's a fund by Vanguard. Yep. Okay, this fund is called the Vanguard Total Stock Market. Yeah, I know I'm invested in that one. So for those of you who aren't invested in this, the symbol is VTI.

39:29If you buy the ETF, this fund has 3 ,600 stocks in it. Meaning you're basically an owner in 3 ,600 companies. You're an owner of America. Okay. So that's not, so like if a person's like, I don't know what to start with. Like you took your daughter. Just stick the money in the Roth IRA and the VTI fund. Okay. She's covered 3 ,500 stocks. So I list all the different index funds in here. Start with an index fund. It just makes your life easy. And also, I want to say something. This is really important for young people. The greatest myth for young people is that that's the time to be aggressive with your money and take risk.

40:06Let me explain that. Wait, what? You're not supposed to take risk? Let me explain what I mean when I say this. Okay, because this is where I think people get led astray. Because people say all the time, when you're young is when you should take the risk. And what happens with 20-year-olds, 20-somethings and 30-somethings, because they see this on social media and they hear this, they take the risk on crappy investments. They're buying meme stocks. They're buying meme coins. They're looking for the NFT. They're seeing all this garbage on social media that they're hoping to get this huge return on.

40:43And then they lose everything. And what happens is you get people who are kids to their, you know, they save money, then they make, then they lose all the money, and then they save money, then they lose all the money, and they get to their late 20s or early 30s and they're like, this game's rigged. And then they stop investing. Whereas if they had just invested in an index fund, they'd have something to show for it. David, I got to take a quick break. And here's what I want to say to you. Before you take a listen to our amazing sponsors, if these tools and tactics are helping you, if you're realizing I got things I got to go do as soon as I'm done listening to this, share this episode.

41:22Somebody in your family, one of your friends, someone in your group chat, need this information from David. Because let's face it, money is stressful. The cost of living is crazy. We are all doing the best that we can. And most of us don't know where to start. We got so much more to teach you when we return. So stay with me.

41:51Hey, it's your buddy, Mel. And today you and I are here with 10-time New York Times bestselling author, David Bach. and we were learning all the tricks and the mistakes we need to avoid in order to get out of debt and to build real wealth. All right, so let's talk about compound interest. Mel, I'm so glad you asked, because compound interest is the eighth miracle of the world. That's what Einstein said. So I actually brought a prop for us. Okay. Okay. Went to the bank yesterday, kind of shocked them. Wow, wait, how much money is that? For those of you who are listening and you can't see me, how much money would you guess that is, by the way?

42:27Uh, what are those? This is real money. That's real money. I have no idea how much money. I mean, I don't know. That's a couple thousand dollars. So interestingly, so I'm holding$10 ,000. You're holding$10 ,000? It's$10 ,000 in real cash. This is a very important amount of money I'm holding here. For many reasons that people will probably understand. When we've done surveys and we have asked people how much money would change your life, the number one answer has been$10 ,000. which is fascinating, right? It's not$100 ,000. It's not a million. It's$10 ,000. And usually the reason is it would help them either pay off their credit card debt or give them enough financial freedom to leave their job or a relationship they don't want to stay in.

43:10Got it. So$10 ,000 buys freedom from a job or a relationship. $10 ,000 for many people buys freedom. Now, here's the really interesting question. Okay. How much money does it take to blow$10 ,000 in a year a day? How much money do you have to spend a day to blow$10 ,000? So I'm holding a brick here of 10 grand. Okay. A lot of people would like this brick. Yes. It's$27.40 a day. Wait a minute. $27.40 a day is 10 grand? Okay. Now, what happens, Mel, if you invest$27.40 a day? This explains compound interest. If you invest$27.40 a day and you're in your 20s, and you do this for 40 years at a 10 % rate of return, which is what the stock market has averaged for 100 years, you use that fund I told you about, the VTI fund, you have$4 ,424 ,000.

44:13Say that again? If you invested$27.40 a day, which comes out to$10 ,000 a year. In 40 years, you'd have$4 ,424 ,000. That's a fortune. Now, the question is, are there people who are blowing$27.40 a day on stupid shit? Yes. Yes. Every one of us. Well, probably there are people listening. They're like, I'm not. But there are people, there are a lot of us doing it, right? Because everything's so expensive now. It takes nothing to blow$27.40 a day. Now, give me examples of how you can find that money. Because I think when you feel having been somebody that not only was in paycheck to paycheck for a decade, but then was in a situation where I had no money and was in massive amounts of debt.

45:04But when you're in paycheck to paycheck, where can you find the 20? Give me some examples of where it's hidden. You've got to go through your lifestyle, right? I mean, everything today is about convenience, right? So people are getting food delivered to them every single day. They're not really paying attention to what that's costing. People are taking Ubers every single day. I mean, you've got to look at your own lifestyle. Everybody's got something that they're wasting small amounts of money on. People don't think, like, if I spend$5 a day on something, that's$150 a month. That's well over$1 ,000 a year.

45:40It's$5. But if you're spending, again,$27.40, it's$10 ,000. I've done podcasts in the past where I've talked about 100-day savings challenge. All right, let's do 100-day savings challenge. What is that? The 100-day financial challenge that I have for people is this. Especially people who do not have$1 ,000 in savings. Because there's a lot of people who don't have$1 ,000 in savings. So for 100 days, save$10 a day. Where am I putting it? In a savings account? Literally, you could just start off by putting it in a jar in your house. But you could put it in a savings account. Like my grandmother, where she put the money in a coffee can.

46:17Save for 100 days. And what? Pick anything. It could be a dollar. Just to prove to yourself. I actually like the idea of putting it in a jar because you can see it. And then you're like, oh, I'm doing it. Yeah. So go and think about your life and see, am I wasting$27 a day? $27.40 a day on something? I guarantee you, I am. because I guarantee you there are subscriptions I don't even know about that are draining out of my bank account every month that probably add up to$27 a day. So let's talk about people though who are listing and they're not in their 20s and in their 50s. Yeah, okay, so let's pretend I'm in my 50s.

46:57I'm in a situation where I've heard this podcast and now I'm like, oh God, how do I get going? What do I do? I didn't do it early enough. I've missed the window on compounding interest. Where do I start? David. So I'll tell you a classic story. This is a really funny story, actually. One of my first book signings that I did for The Automatic Millionaire was in New York City at Barnes & Noble. So I do the book event, right? And then I take questions from my audience. And this woman stands up and she's like, David, I love you. I've read all your books. I've read Smart Women Finish Rich, Smart Couples Finish Rich.

47:33I got the Finisher's Workbook and I'm going to get The Automatic Millionaire. And she says, but you haven't written the book that I need. And I go, oh, well, all my book titles, for the most part, have come from readers. What do you need? And she goes, I need start late, finish rich. And the room cracked up. And I'm like, okay, I hadn't thought about that. But how old are you? And she says, I think she was in her 50s. Okay. And I said, okay, well, let me ask you a question. And I go, are you married? She said, yes, I am. I said, so my question to you would be, could you save$20 a day? More than what you're saving, could you save$20 a day more?

48:08She's like, yeah, I could. I said, could your husband save$20 a day? She goes, I would make them. Everybody laugh, right? I go, all right. So that's a lot of money, actually. That's$40 a day between the two of you. If you just put that in, I gave her an example of a mutual fund, invested that for the next 15 years, here's what it could be worth. And the answer is it could be worth close to a half a million dollars. Wow. And she's like, okay, so you're telling me that I can catch up a little bit, right? I go, let's just play this out. It's 65. Is it better to have a half a million dollars or have nothing?

48:45She's like, it's much better to have half a million dollars. I said, great. So start with the$20 a day. She's like, okay, I can do that. Right? Because that's the whole thing. You got to figure out what can you do. Some people who are listening to me right now can do more than$20 a day. Yes. You got to come up with what can you do. But here's a big thing. Your 50s are a beautiful time to save and invest and catch up. And the reason is your kids hopefully are finally gone, right? The kids are gone. In many cases, by their late 50s, these kids are out of college. So the only thing you got to take care of is you and maybe your partner.

49:17So you've got the time and money and still the energy to catch up. Yeah. What you don't want to necessarily be doing is trying to catch up in your late 60s because the energy level is not the same. You might not even still be working. So you got to take advantage of your job. You know, what I just got in listening to you is that there's an enormous mindset shift around even the purpose of work. Because you're right, I think a lot of us are busy with our head down, making money to pay for our life, when really what we want is freedom. And if you don't have a plan and you're not clear about the vision that you have for your life, you're going to be on that treadmill forever hoping it works out.

50:05100%. I believe everything you're saying. And it feels doable. And it feels very hopeful. You can kind of see the light at the end of the tunnel. And as somebody who has been in situations in my life where I've been in crushing debt, like just running myself into financial ruin, the shame that you feel, like it can be so lonely and really dark and hopeless. Like that's how I felt. Like I felt hopeless. I felt like the only idiot in the world who had screwed this up. And so I'd love to have you talk to somebody who's listening right now who's really in debt and just overwhelmed by the idea of digging yourself out.

50:52Because I remember, David, it was like six months that I didn't open up bills. Like I just could not even open the bills. Total denial. Yes. I always say this happens all the time. If you don't look at it, it's not real. right so a lot of people don't actually look at their bills because they're like i can't i can't face to look at them yes by the way i didn't even talk i got into credit card debt in college so i've made multiple mistakes i remember having so much credit card debt junior year that like you i would open my bills but i would open my bills this is stupid well i would open my bills and cover my eyes okay so so i'd be like i'd be like this and then and then i would open the bill and i remember once sitting in my apartment, I'm a junior.

51:37I've got like$12 ,000 in credit card debt, which was all on stupid shit I didn't need to buy. And I remember opening my bill in the room spinning because I was so sick that I had done this to myself. Yes. And you don't even remember what the hell you spent it on. I'm not even talking about like medical debt, right? Like some people get hit with things that they can't control. And I will tell you, it took me three years to dig out of that credit card debt after college. And I carried a charge card for 30 years and a debit card. I did not have a credit card literally until maybe, I don't even know, six, seven, eight years ago.

52:11And I have never carried credit card debt since I got out. But I got into credit card debt twice because I got into credit card debt sophomore year with$5 ,000. Because most people don't get into debt once, by the way. If you've gotten into debt and you've gotten out and then you got back into debt, that's totally typical. Why is that typical? Because it's a habit. So the habit I had was spending money that I didn't have on things I didn't need to impress people I didn't know. Right? You've heard that phrase before. Talk to me about how you do it. You've maxed out your card. You've missed the payments.

52:45Your credit score is in the gutter. How do we turn this around? Credit card. If you're in credit card debt, how do you get out? I have a system I call DOLP. DOLP? DOLP. It's in the automatic... That's what I feel like when I have credit card debt. DOLP. It's in the Automatic Millionaire book. DOLP stands for done on last payment. Done on last payment. Okay. So this is my system that I've taught for decades on how to get out of credit card debt. It's very, very simple. Okay. Just takes time. Okay. So first thing you do is you literally take all your credit cards out. And in this day and age, you got to go print your statements.

53:19Okay. So take the credit cards out of your wallet, go print your statements because you're doing everything online. Go back to my file folder. Go get the file folder for every credit card. Take one piece of paper. Put the credit cards down on the piece of paper. Write down the debt that you have. Okay. Write down if you made minimum payments, how long would it take you to pay that off? So you can do a super, it's a super simple calculation. Like if your minimum payment is$100. Don't they print it on there? They print it on there, don't they? Yeah, they do. You know, it's funny. I used to rail about that issue.

53:55You're right. They do that. I talked about that on a PBS show that it shouldn't be legal to not know this. So you're right. You can print your statement and you can look at that. It'll tell you. It's like 20 years or something. So take a look at the number, though. I want you to know how many months it is. Then look at the interest rate. Once you have that down, what I want you to do is I want you to— it's a mathematical formula, but I'll keep the formula simple. I want you to pay the smallest credit card off first, regardless of the interest rate. And I'm going to explain why. By smallest, what do you mean?

54:26The smallest balance? Smallest balance. Okay, so it doesn't matter if it's the lowest interest rate. You take the credit card with the smallest balance. Or the highest interest rate. Like, let's say that you have a credit card with 29%, a credit card with 0%. Logic would tell you that you pay the one off that's 29%. I want you to pay the smallest card off first. Why? I don't know. I want you to reduce the amount of credit cards you have as fast as you can. So most people don't have one credit card. Most people have three, four, five, six credit cards. And they're traps because if you pay your bills late, you will get hit with a$30 late fee and your rates go up.

55:06So the credit card companies and the banks make billions of dollars a year off late fees. So you need to reduce the amount of credit cards you have as fast as possible. So you take the small card, you pay it off first. and then check mark. You see yourself make progress. Now you go to the second card that's small. In terms of the balance, the next smallest balance. Next smallest. And this includes not just like MasterCard and Visa and Amex. This is like also store cards, like all the stores that have cards, all that stuff. Don't, please, please, please, please, please, please say no to these people for those cards.

55:39Do not do those cards. Do not take the 10 % discount because that card then is going to get jacked up to 20 % interest or 25 % interest or 30 % interest, stop taking credit cards out, okay? So then once you've got the order that you're going to pay your cards off, now we've got to start tackling the interest rate. Okay. Okay, so how do you get the interest rate lower on your cards? I don't know. There are multiple ways. You've even talked about this. I've heard this. You can play the game where you switch from one card to another, right? A lot of times you can do the balance transfer. Okay. So if I've got a card that's 20%, maybe somebody will let me transfer it to them.

56:14at zero percent however you got to be very careful because those cards are designed to also have you have if you get caught with the late late bill oh they change the interest rate goes right up it's all in the paperwork so nobody wants you to have a credit card at zero percent so you that's also why you have to pay your credit cards automatically so every credit card you can go in and you can click pay minimum automatically and have a debited from my account so your credit Card bills should actually be automated on the minimum balance. Not the maximum balance, because I want you to look at your bills.

56:51But I want the minimum balance so that you never have a late fee. Now, what you can do to make this easier for yourself is the credit card companies will move the time that they bill you. And they will. They will? Yeah, they'll coordinate it to the date that you ask them. So let's say you're paid on the 1st and you have a credit card coming due on the 13th. Well, all of a sudden you can't pay the bill because you're at the end of your two-week cycle. Oh, my gosh. So you could call them and say, can you bill me on the second? Exactly. Oh, I didn't know you. Could you do that with other bills? Yeah, in many cases.

57:23Most people do not care when they're billing you. You just tell them when you want to be billed. And, you know, some people, you'll line all the bills up, same date. Some people, you'll spread it around. You'll have two bills in the first two weeks. You'll have two bills in the second two weeks. I feel like I need to take a day off of work and spend an entire day. No, I'm dead serious. Like I need to have a date with myself about my financial life and just give myself a Saturday or a day probably during the week where I do a little staycation and I just do every single one of the things that you're talking about.

57:59It is a great idea. I call it a money date. You actually have a word for a money date. So in Smart Couples Finish Rich, I teach couples to plan a money date. they're like that doesn't sound romantic no but you're gonna sit down together and plan a specific period of time when you're both ready by the way because most financial conversations for couples take place when one person's ready one person's not and the person who was not ready was like hanging out watching tv doing whatever and they're like we need to talk about the bills and it's like so when you go look i want to have a money day i list this mill robbins podcast how about we start with listening to the podcast together let's let's sit down together and listen to this podcast.

58:39Let's make a list of what we need to do. That'll be our second money date. And you do money dates once a month until you've got the stuff done. And then once you've got the stuff done, what you do with your partner is you do at least once a year, you know, I call it the money anniversary, you know, where you sit down once a year or twice a year and you actually check in on everything. If you have a financial advisor, that's a great time to do it. So people will say to me, Mel, all the time around these ideas, I don't have the time. Yes. And you know what? That same person's for sure binge-watched something on Netflix this year.

59:15You have the time. You have the time. You have the time. I mean, the amount of people that talk about these television shows, we have the time. The amount of time we spend on our phones, we have the time. It's just prioritizing it. What do you want to say to somebody who's watching us or who's here listening and learning right now with us, and they're convinced they're never going to be able to afford to buy a house? Well, okay. So first thing I would say is I would prefer that you don't believe that. Yeah. Because what's happening is a lot of people are believing they can't buy a house because it's hard in certain states to buy a house.

59:46Yeah. So I would start with the basics. First things you should know are the facts. It is an unfair truth that homeownership is the single most important thing in America that creates generational wealth. So when you look at who is disproportionately not as wealthy as others, it's families that don't own homes. Wow. Because what happens is families that own homes have a net worth that gets inherited. Families that rent, they don't. So you got to figure out how to get into your first home. And the key to buying your first home is your first home is just never a dream home. Everybody wants the dream first.

1:00:28Your first home is not a dream home. Your first home's not necessarily in the neighborhood you want. Your first home's smaller than anything you want to live in. Your first home's almost always not as nice as what you can rent. You know, I read that 40 % of homebuyers today are getting assistance with their down payment from family. Absolutely, positively believe that. How can people whose family can't support them or won't give them money ever buy anything? They will have to buy in an area that's more affordable. Or, like, I know a bunch of young couples who have been living with their families and saving money for a couple years, and then they have a down payment.

1:01:07100%. Now, if you live in a major metropolitan area because that's where your job is, but you do want to own a home, what do you recommend? Buy the smallest thing you can get into. Okay. Buy a studio. Buy the smallest thing you can get into. Maybe you got to go 10 minutes outside. Yeah, like, what do you do if you really are just in an area, whether you're going there for graduate school or you had to move there for a job. And you've moved from an area, like Boston's crazy expensive. And so people will move here to either work at this company or to go to graduate school or move here for a different opportunity.

1:01:41And it's like 5X the cost of where you've come from. This happens all the time. You move to cities that create job opportunity. It's more expensive to rent. You're not gonna be able to buy something. Then you need to actually do your best to save more money. I think you fund the dream account, which is for a house later, and they maybe don't stay in Boston. I want to go back to something that you said earlier that really surprised me, which is that the average age of widowhood is 59. Yeah. So let's say you are in that situation where it's later in life, you thought you were doing the right things.

1:02:18And whether it's a divorce or widowhood or cancer diagnosis, or your adult kids are struggling and now they're draining you dry and you feel like it's too late. Is it too late? And what's the first thing to do if you feel like you're in that moment where life has smacked you across the face and you did not expect to be in this position? Yeah. When you go on boats, they do those fire drills, right? Those drills where they put you in the, here's where you go. Yes, yes. You put the life vest on. Here's where the boats are. You got a plane. Here's the air mask. The drill you should run, this is a horrible drill, and I'm sorry to give it this way, but it's the truth.

1:03:00You should run a drill if you're married, which is if my husband or my wife dies tomorrow, what would I need to know? And the answer is everything. You would need to know everything. You'd need to know where all the accounts are. You would need to know the passwords. You would need to know if your spouse has left 401k plans behind. You would need to know if there's an insurance policy. You would need to know where the will is. You would need, do you have a will, right? Like six out of 10 people who are listening don't have wills. A lot of people have wills. Their wills are woefully out of date.

1:03:36If you have a will that's 10 years old, it's completely out of date. If people get their wills done, they also hide their wills. Then the person can't find the will. People put their wills in safety deposit boxes. people still have safe deposit boxes. Then they hide the key. Now the will is really missing because it's very hard to get into a safe deposit box if you can't find your key. So all of this stuff, people sit in my seminars and they're like, oh my God, there's a big checklist here. You're right. That's called real world. So you want to get this all done before that day happened. By the way, you want to get this done before you, if you're thinking about divorce, because great divorce is a huge issue right now.

1:04:15lots of people getting divorced after the age of 50 and 60. And most of those divorces are actually from women. The women are choosing a divorce. Really? Yeah. And I will tell you this, you do not want to go out and suggest a divorce until you know where all the money is. If you don't know where all the money, sorry, guys, guys, it's true for you too, by the way. If you don't know where all the money is, when you go to get divorced, you don't get half the money. Wait, if you don't know where all the money is before divorce comes up, you will not get half the money. There's no way. Because people will hide it.

1:04:47Totally. Wow. You're looking at me like, yes, this is what goes on in the real world. So like, don't just randomly pop off and say you want a divorce. You need to know where all the finances are. Wow. I'm sorry. I'm sitting here like, I got a lot to do. Like, I'm not thinking about divorce, but I'm not sure I know where everything is. Okay. So now, now we'll go to the part that I didn't answer. Now it's hit. you are now a widower you are financially in trouble you are really now you don't like you're paycheck to paycheck or you're devastated in terms of your savings by the way this is not too late it's not too late and let's just be honest here this is not always because you're devastated like this is also just because you're left in a mess you know i've just lived through this tragically.

1:05:36My dad just died. My dad died in August. And my dad was in charge of all the money. My dad managed money his entire life. My mom was not involved looking at the bills. She wasn't involved. You know, God bless my mother. She's amazing. She's my biggest fan, my biggest supporter. But my dad handled everything. And my dad would be like, Bobby, I've got this. And we would say to my dad in the last couple of years of his life, please dad let's automate these credit card bills let's automate everything so if something happens to you mom's okay we don't have to step in here and start figuring all this stuff out and he'd say oh it's all fine don't worry about it my mom's lucky she's got two kids in the business managing money what what did we have to go do for my mom because this is what people have to go do we had to go into my dad's office and sit down and figure everything out so what what do you have to do you have to figure everything out you have to figure out like where are all the bills where are all the credit card bills how many credit cards his dad have that they're using where was he paying them where were all the bank accounts you have to find everything so there's just what you end up doing the moment someone dies is after you deal with the funeral the first thing you deal with is the money, right?

1:06:52Because, you know, you're grieving, but now you have the estate to deal. So there's a lot of pieces to an estate. And we were able to help my mom do that. I don't know what my mom honestly would have done without the two of us, because you're not in a good mental state. And you got to figure this stuff all out. So what I would tell you if you're going through this, pull together everything. And I'm a big believer in old school methods. So I'm the guy that goes and buys a box of file folders. And I would literally go buy a box of file folders. And a bunch of my books, I call it the finish rich file folder system.

1:07:34I had 13 file folders that people need. You buy a box of file folders and you start putting everything in file folders. So you're like credit cards. These are all the credit cards I got to figure out. the will wait there's nothing in that file folder i need to get the will done like you go through the list of things you have to deal with and then you basically have a to-do list you're like what am i going to tackle first yeah and you typically tackle the things that are the biggest emergency we've talked a lot today david about how to prepare for all of the curveballs and frankly awful things that can happen in life how has the experience of loss changed you I've lost three best friends in the last two years.

1:08:15I'm 58 years old. By the way, they're all guys. So my best friend from high school and my best friend from, two of my best friends from high school and my best friend from college had passed away. Wow. I know. And it's like, we're too young. We're too young. But I'll tell you what, you got to live every life to the fullest every single day. I always say live rich now. Live your life now. Wow. You know, all the things we hear, be grateful for what you have. Appreciate every single moment. I love the fact that you tell everybody you love them. By the way, you started by telling me, I love you back.

1:08:50You know, I, my friends, I don't leave my friends without telling them I love them. Same. And people don't do that. And it's interesting when you actually look someone in the eyes, you know, I love you. Right. And, and because people aren't getting a lot of that. Yeah. The other thing is people are not getting a lot of good jobs. My father, um, when he was, he was in hospice for the month of august i was there when he took his last breath and i knew that this was going to be the end i just had a sense and i sat next to him and held put my hand on him and i spent like two hours telling my dad he wasn't talking then but i felt like he could hear me and i spent the last two hours telling him everything that he had done in life that he'd done a good job on oh and i i know he heard me right and i'm like he did such a good job dad And you can go now.

1:09:41It's okay. And I'll take care of everybody. And I think we have a whole lot of good jobs going around. I think we need to be telling people good jobs. We just need to be going around and picking each other up more. I agree. You know, you did a really good job here today. If the person listening takes just one action today, based off of absolutely everything you've poured into us, what do you think the most important thing to do first is? Leave this podcast with this. I want you to pay yourself first one hour a day of your income automatically for life. That's my goal for you. Pay yourself first one hour a day automatically for life.

1:10:29And if you can't start with that, start with something. Leave this podcast, put down the phone, and go do something today where you were saving money automatically. And it will change your life. And if it only starts with a little thing, $10,$5, anything, the moment you start to do that, you choose yourself. You know, your whole beautiful book, the world-changing book, The Let Them Theory. This is let me, right? All the problems in the economy, all the problems in the world, that's all let them. It is. everything that we've talked about today that involves you doing it is let me this is like let me financial planning and you know with seven million books i think a few people can relate to that but like that's it man people spend so much time in their story of money trauma and the psychology of this and great that's let them now today decide this podcast is over what's the first thing you're going to do?

1:11:32What's your first let me financial decision you're going to make? Because when you make that decision, that's the beginning of your life changing. And I also love that it can just be the decision. I'm done living paycheck to paycheck. I'm done doing it this way. Yeah. And I'm going to figure this out. David Buck, I love you. Thank you for being. I love you back. My friend, thank you for the work that you do. You're truly a gift to all of us. Thank you. You're welcome. Very, very much. This has been amazing. It has been. And it's also amazing that you're here. I want to thank you for taking the time to listen to something that will set you free.

1:12:11And in case no one else tells you, I wanted to be sure to tell you as your friend that I love you. You're doing a good job. We're going to take that one from David. You're doing a good job. And there's no doubt that if you take what you just learned today, you share it with people that you care about, we all need this wisdom and these tools and this truth in our life, that your life will get better. Alrighty. I'll see you in the very next episode. I'll be waiting to welcome you in the moment you hit play.

1:12:43So then you made, what is that? 11 ,000. It goes like this. Let me start that over again. I don't know that I've ever seen anybody holding$10 ,000 except for maybe at a casino. Right. When they're like buying chips. Logic would tell you to pay off the one at zero. No, the highest one. I'm sorry. Logic would tell you to pay off the highest interest. Right, the 29. Yeah, I reversed. Let me start that over. Okay, start it over. You know what's so amazing about doing a podcast like this is that we just had so much time. Yeah. You know, I mean, you could never do this on TV. No. David. Woo! Fucking fuck.

1:13:15Oh my God, are you good. You are world... That's going to be one of our best episodes ever.

1:13:23Oh, and one more thing. And no, this is not a blooper. This is the legal language. You know what the lawyers write and what I need to read to you. This podcast is presented solely for educational and entertainment purposes. I'm just your friend. I am not a licensed therapist. And this podcast is not intended as a substitute for the advice of a physician, professional coach, psychotherapist, or other qualified professional. Got it? Good. I'll see you in the next episode.