Aug. 6, 2025
100: The One Number That Determines Your Financial Future
Your income and investment returns matter—but nothing predicts your financial freedom more than your savings rate. Yet, most Americans save only 3–5% of their income, a level that almost guarantees they’ll have to work far longer than they’d like.
In this episode, Jess & Brandon reveal why your savings rate is the true driver of wealth and how it works regardless of income level. They share real examples of modest earners who retired as millionaires—and why high-income professionals often fall behind due to lifestyle inflation.
You’ll discover:
- How to calculate your personal savings rate
- The percentage you need to hit for retirement security and early financial independence
- Practical steps to increase your savings without feeling restricted
- How to set up automation so you save consistently and effortlessly
They’ll also challenge you with a simple, two-step plan to make saving non-negotiable and start shaping the future you actually want.
Watch this episode in video form on YouTube
To apply to be a guest on the show
You can email us at: thesugardaddypodcast@gmail.com
Be sure to connect with us on socials @thesugardaddypodcast we are most active on Instagram
Learn more about Brandon and schedule a free 30-minute introductory call with him
Please remember to subscribe, rate, and review.
Chapters
00:00 - The One Number That Predicts Your Future
02:55 - What's Your Savings Rate?
05:10 - Automating Your Financial Success
10:40 - Debt Reduction Service Announcement
12:43 - Calculating Your Savings Rate
16:55 - Start Small, Save More
19:30 - Pay Yourself First
23:20 - Your Two-Part Savings Challenge
Transcript
WEBVTT
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In today's episode we talk about the number one, number that determines whether someone is headed towards financial freedom or living paycheck to paycheck.
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What do you think that number is?
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Tune in and find out, hey babe.
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What are we talking about today?
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Today we are talking about the one number that is really important in predicting your financial future.
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You're going to tell what it is.
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I didn't know if you wanted to tell them.
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Oh, okay, I can do that.
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Yes, so that is your savings rate, and your savings rate is how much you are saving on a monthly or annual basis.
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So what percentage of your income are you actually saving?
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Now, that includes money that's going into, you know, say, your emergency fund, your 401k plan, iras, brokerage accounts.
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All those count as your savings rate, but how much are you actually saving on an annual basis of your income?
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How many people do you think know what they are actually saving?
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Majority of people do not.
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Right.
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It's like a majority of people don't know anything about their finances.
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They're just kind of living day to day and that's just the reality, which is crazy.
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When you say it like that, I mean the amount of people, even guests, that we've had on the podcast that also through their work, whether they're financial therapists, counsel, like all sorts of people, coaches, who confirm what you've been saying all along, which is people don't know their paycheck, they don't know how much they make.
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So you're going to W2 people who have a set amount.
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Right, you make it every two weeks on the 15th and the 30th, or biweekly, or whatever it is.
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It's like how do you not know what you're making?
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I don't understand, like, why do you go to work?
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Unfortunately.
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Like I mean, I'm not trying to make excuses, because I think people need to make time for this, regardless of what your situation is, but you have a lot of things that are, you know, just trying to get by day to day.
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Yeah, a lot of people are just trying to get by day to day.
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A lot of people are just trying to get by day to day Surviving yes.
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So them sitting down and doing this seems, in their mind, pointless.
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When, in all honesty, sitting down and doing this could be the difference on you getting ahead, Right.
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Well, and the average American savings rate is three to 5%, which is better than nothing.
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Percent, which is better than nothing, but it's not great.
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What do you say to that?
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Well, I say, first you know, looking at what your savings rate is, regardless of what that number is, you need to know what it is, and if you are at least saving three to five percent, I am never going to look down on you in that scenario, because you're at least saving something.
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Yeah, you're planning for something, You're saving something.
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You're not at zero, and that is to be applauded.
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You know that you are at least saving something Now.
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With that being said, though, we do have to have realistic goals of where we want to get to.
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You know, because saving 3% to 5% of your income unfortunately is not going to get you towards financial independence or becoming work optional.
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No, and that's just the reality.
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Right, I think too and we've said this on so many of our episodes automating that savings right, if it's whatever is going from a percentage standpoint into a high yield savings account for your emergency fund or your sinking fund, and then also, of course, any kind of brokerage accounts, 401ks, et cetera.
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I mean, I know that the only reason my 401k is the way it is and it definitely could still be better, but it's because it automatically comes out.
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I'm not manually doing something, because if you manually do it, guess what?
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You're probably not going to do it.
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That's an intentional structure for a 401k plan.
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Yeah, and that is wonderful, grateful for it Potential and plan that automating it has a higher probability of people you know actually following through with the contributions.
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Because if you don't see it, then it's gone right, like if it comes out of your paycheck and this is a call out.
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We've said this before as well.
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A lot of employers will allow you to split your paycheck to go into different accounts, and so you can, of course, you have, you know, your 401k hopefully coming out, or 403b whatever your retirement is through your employer, and then you can also have, even if it's 20, 30, $40 going into a separate account from your paycheck that maybe is filtering into that high-yield savings.
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Again, if you don't see it in your bank account and you don't know it exists, but it's stacking up on the side, that is the optimal scenario, because if it's not in your face, you don't want it, you don't miss it, there's nothing to miss, it's already taken care of.
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I can tell you from my years of working in financial services that savings rate is the number one indicator of success.
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All right, real quick.
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I want to speak to the person listening who feels like they can't work with a financial planner yet because they're carrying a lot of debt.
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First of all, I see you and I need you to know you're not broken, you're not behind.
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You're just in a tough season.
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I created something just for you because I've had people reach out who are serious about changing their money story.
00:05:15.500 --> 00:05:18.968
But the full financial planning package just wasn't the right fit yet.
00:05:18.968 --> 00:05:24.161
So I built a new service through Oak City Financial that's focused completely on debt reduction.
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No fluff, no shame.
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You'll get a one-time planning session, a personalized payoff strategy, your own financial dashboard and monthly coaching.
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If you want extra support while you climb out, it's $300 to get started and $100 a month.
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If you want that ongoing guidance, that's it.
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This is about helping you get unstuck, not making you feel like you failed.
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If this sounds like what you've been needing, go ahead and schedule a call with me.
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The link is in the show notes.
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Let's take the first step together.
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Well, and you say that a lot too with your clients that it's not how much you make, right?
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It's how much you save, because I've sat down with people that have a great income but they're not saving anything, or they're saving very little but they're not saving anything, or they're saving very little as compared to someone that maybe their income is not as high as they would like or, you know, as somebody would deem a good income, but they have a high savings rate.
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You're gonna have a lot more success than the person who has?
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maybe making three or four times as much as you, but they're not saving anything what do you think is the difference there?
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like, if you're thinking about, you know a lot of and when I say a lot I don't have a percentage but teachers right, teachers we know historically in the US don't make very much, but there are teachers who are retiring millionaires.
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They are good with their money, they are saving, maybe they have a side hustle in the summer or on the side in general.
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But like, what do you think what's the difference?
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Because everybody can make an excuse Like life is expensive.
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I would say one Going into being a teacher.
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You already know you're not going to make a lot of money.
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You know, that from the get-go, you're not going into this career to make a lot of money, as compared to other people choosing certain careers where their goal is to make money.
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They might not be making money now, but they're always like I'm in a career where I can make money.
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Right.
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That's not a teacher's thought process at all.
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Yeah.
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They're in a career where they know, like I'm, doing this for the passion and the love of teaching, not for making money.
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Now also, I would say good teachers are organized.
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That's true.
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You are an organized person because you and you can't be a good teacher and not be organized.
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It's impossible, because your classroom is just going to be in chaos.
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Yeah, part of financial planning is organization, so it pairs very well.
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But then also um, how some of the like you know 403bs and you know retirement plans for teachers are set up.
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It also is helpful the way that theirs are structured what do you mean by that?
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um, so some of them have a required minimum that you have to contribute oh it automatically comes out, and you know that's a t-shirt yeah that you had a amount that automatically was going to come out.
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You didn't even have the option which was good, because I definitely was not contributing above and beyond whatever they were taking but the amount that was coming out.
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You didn't have an option, it was already coming right or, as compared compared to with, you know, most corporate America jobs, you could shut off your 401k plan and not contribute at all.
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Yeah, that's true.
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I think, too, one thing that I was thinking about just in talking about teachers in general and we've talked about this is that lifestyle creep which, if you're working at the you know, in the corporate tech maybe kind of world, which is where I am there's a lot of that like you got to look good, you got to drive the fancy car, you got to fly business, you got to do these things right To like, keep up appearances, keep up with the Joneses.
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Nobody's telling you to do this right.
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This is totally things that people have in their in their heads.
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But like, yeah, you do want to look nice when you go to conferences or when you're going to business meetings, I think there's a difference.
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When you're in that teaching field, it's like no, we're all broke, we're all making it.
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It's like there's not that air of I need to look a certain way or I need to drive a certain car.
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I think that that I mean how and where you work I think feeds into your lifestyle.
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Also too, like as a teacher, if you start to have nice things, people start to wonder like what are you?
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doing?
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What are you doing?
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I remember when I was in fourth grade we had a teacher that drove like she was a little bit older but she drove a Corvette like a newer Corvette, but her husband had a great job and whatnot.
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And I'm going to also use I'm a date myself here, but any of you guys that watched, uh, the movie varsity blues back in the day there was a teacher who had a really nice car, stuff like that, and they're like what does this teacher do?
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And then there's a scene where they go to a strip club and they find out their teacher strips on the side.
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Oh no, my gosh.
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Okay Well, hopefully that's not the case.
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No judgment, okay Well, but you know what I mean.
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Like there is that air, or even think about people in the medical field, like sure, during the day you're wearing scrubs and like you're unassuming, but then it's okay.
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Well, I have to have the big house and I have to have the nice car and I've got to look like a doctor, whatever that means, or you mean specifically doctors yes, doctors, lawyers, right, no.
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But you know what I mean.
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Like there is that again, that societal pressure, whether it's in our head or in our circle, where you just depending on who who's in your crew, and like who you run with, like are you just keeping up with the Joneses?
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Yeah, you know.
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So there's something there too.
00:10:34.470 --> 00:10:39.743
So one thing we should also explain to you is how do you actually calculate your savings rate?
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Yeah, perfect, let's get into that.
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So there's two different ways you could do it, because you can either do like your gross savings rate or your net savings rate, and the difference between that is gross is your paycheck, obviously before taxes are taken out, and net is after taxes are taken out.
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It's what you take home.
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I think you should do it based off of your net, because that's ultimately what you have.
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What you actually have.
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Yeah, I know, and the gross, if that number is great then your net is not because you have all this stuff coming out.
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The hard part there is that, for example, if you're doing pre-tax contributions.
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Oh I see it's taken out.
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Prior to taxation yeah, yeah, but I think the easiest way for most people is just through the net.
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So, for example, if you make $1,000 a month and you're saving $100 of it, so that's 10%.
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Yeah.
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So that's all you're doing, is you're dividing how much you're saving divided by your take-home pay.
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Okay, I mean that's, but I think too, don't you?
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I mean taking a step back, going back to budgeting, knowing your numbers, knowing your cashflow.
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If people don't know how much they're making and bringing home, they also, then, assuming, don't know what their monthly bills are and like what's actually left.
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You know whether you're doing like whatever the?
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Uh, the 20% of your income is for fun, 10% is for savings, 50% is for whatever way that you're budgeting, right?
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If you don't know what your income is, you probably don't have a budget in.
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You're budgeting, right.
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If you don't know what your income is, you probably don't have a budget in place.
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And then you don't know what your savings rate is or could be, because you're just kind of like willy nilly, just surviving.
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Yeah, Like I said, savings rate is the number one indicator of any type of success.
00:12:23.283 --> 00:12:27.886
So, for example, if I know a client's making a lot of money like a new prospect, they're making a lot of money.
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That doesn't get me jazzed.
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Doesn't do anything for you Once I look through their information and they're great savers.
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I already see that they have a high savings rate, and by high savings rate I'm talking at least 15% or higher.
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I'm like yes, because that's the hardest thing to get people to understand and do.
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It is a habit and it's something you have to learn.
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How to do is be accustomed to saving a certain amount each month, each paycheck, whatever it may be.
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And if that person really has that muscle memory built in for that, there's so much easier to work with.
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You heard it here first, friends, what gets Brandon jazzed?
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A savings rate of 15% or more.
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A savings rate of 15% or more.
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I'm just saying that what comes with a good savings rate also eliminates other negative things from your finances.
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Normally you don't have a high savings rate and a lot of debt.
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That's true, because a lot of debt comes into play because you're overspending, you don't have enough money to pay for something.
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So, if you have a good savings rate, for example, you built up that emergency fund.
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So when you have an emergency you have money to pay for that emergency and you don't go into debt.
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So it just makes your overall financial situation easier.
00:13:36.504 --> 00:13:41.316
And then, like you said, if you're wanting to work and to become work optional, what's the best way to become work optional?
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Have a higher savings rate.
00:13:43.099 --> 00:13:47.846
Yeah, how do you propose, like, what are the steps?
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If people listening and they're like man, I know I'm contributing to my 401k.
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Maybe I do or don't know my percentage.
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You should look at that first.
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And then I want to do something more.
00:13:58.360 --> 00:14:05.557
I want to start contributing more to my high yield savings account, or like, what are the steps that people can take to actually do that?
00:14:05.557 --> 00:14:11.456
Because, again, a lot of the things that we talk about, it's simple but it's not easy, right?
00:14:11.456 --> 00:14:12.236
Like it's not?
00:14:12.356 --> 00:14:17.808
easy for people to do Exactly, and it all comes back down to cashflow.
00:14:17.808 --> 00:14:27.557
Like I said, I don't necessarily like to use the word budget, but it's the one that most people are familiar with is that you have to create some form of a budget in you know, understanding what your cashflow is.
00:14:27.557 --> 00:14:30.605
How much money do you have coming in, how much do you have going out?
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Where's it going?
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And then, do you have any additional money that you could free up to put towards your 401k plan, to put towards your savings?
00:14:38.285 --> 00:14:41.120
That's the first thing how much money is coming in, how much money is going out?
00:14:41.120 --> 00:14:44.837
Do I have any excess money that I can put towards the benefit me?
00:14:45.379 --> 00:14:45.578
Right.
00:14:45.778 --> 00:14:46.399
That's the first step.
00:14:46.399 --> 00:14:57.086
Now, once you've looked through your finances and you say like, hey, I have an additional $200 that I could free up, where does it make sense?
00:14:57.086 --> 00:15:01.549
To put it, you know, do you already have your emergency fund built or do you need to work on that?
00:15:01.549 --> 00:15:06.576
Are you already, you know, contributing to your 401k plan, where you're at least taking advantage of your employer match?
00:15:06.576 --> 00:15:13.265
If you're not taking, you know, if you're not taking full advantage of your employer match, maybe it might make sense to increase your contributions there.
00:15:13.265 --> 00:15:14.881
So at least you're getting that quote unquote free money.
00:15:15.515 --> 00:15:30.066
Or maybe it makes sense that if you don't have the amount, you don't have six months of an emergency fund, or you know eight months of an emergency fund maybe it makes sense to start putting money towards that in order to increase in order to increase the balance of that account.
00:15:30.567 --> 00:15:33.691
So there's no right way, one right way where to put the money.
00:15:33.691 --> 00:15:38.136
It's all based upon your situation.
00:15:38.136 --> 00:15:54.918
But it's all going to start off with understanding where your money is going and then making decisions on how you want to spend your money that best reflects how you want to live your life and, if you're spending money in places that doesn't best reflect how you want to spend your life, cutting back on those to free up that money to put other places that is more beneficial to you.
00:15:55.360 --> 00:15:56.864
Yeah, I think too.
00:15:56.864 --> 00:16:12.519
One of the things that I think is important and adds value over time is not feeling like you have to do it all at once, like you can't jump from 3% to 10%, but maybe you can jump from 3% to 5%.
00:16:12.519 --> 00:16:21.745
And then in December, you know, maybe you add 2%, because if you do it slowly, what's, what's an additional 2% of a hundred dollars?
00:16:21.745 --> 00:16:29.365
Right, like it's not gonna, you're not going to feel it, you're not going to miss out on something because you added 2% to wouldn't be 2% of be 2% of $100.
00:16:29.384 --> 00:16:30.245
It would be 2% of your.
00:16:30.486 --> 00:16:32.629
Whatever, yeah, but you know what I'm saying.
00:16:32.629 --> 00:16:41.157
If you do it slowly yes, always do it slowly Don't do like these big, oh, I'm going to do 20% right off the bat You're going to be like wait, where did all my money go?
00:16:41.157 --> 00:16:41.456
Yeah.
00:16:42.278 --> 00:16:48.826
If you sit down and you have currently a a savings rate of 3%, like you just said, don't try to jump to 20%.
00:16:48.846 --> 00:16:49.407
That's unrealistic Right?
00:16:49.407 --> 00:16:49.927
That's crazy.
00:16:49.967 --> 00:16:51.188
You are just setting yourself up for failure.
00:16:51.188 --> 00:16:53.716
Crazy sauce Do 5%.
00:16:53.716 --> 00:16:54.961
See how that's working for a few months.
00:16:55.241 --> 00:16:55.523
Yeah.
00:16:55.754 --> 00:16:59.225
And if you're increased from 3% to 5% over a few months, you don't feel it.
00:16:59.245 --> 00:17:01.610
You feel fine maybe up to 6%.
00:17:01.652 --> 00:17:06.986
Yeah, Maybe up to 7% should be this big jump because it's not sustainable.
00:17:06.986 --> 00:17:10.980
It's not realistic and also, like you want to have some, like you know, better ideas.
00:17:10.980 --> 00:17:30.450
As far as like benchmarks you should be working for, yeah, ideally 10 should be your minimum and that's just for, like covering emergency savings, I mean minimum to maybe have some stability in your life now, um, if you're, you know, being, you know, solid and on a good track 15% to 20%.
00:17:31.056 --> 00:17:37.328
Which sounds like a lot because, again, most people are living paycheck to paycheck and life is so expensive.
00:17:37.596 --> 00:17:38.875
I don't want to discount that either.
00:17:38.934 --> 00:17:40.602
Yeah, that's a reality.
00:17:40.954 --> 00:17:42.823
It's all based upon your own individual situation.
00:17:42.823 --> 00:17:54.895
So, if you are in a hard situation, you're in a hard period of life then you just need to figure out some things on your day to day basis, and maybe this should not be a focus at this moment in time.
00:17:55.297 --> 00:17:55.498
Right.
00:17:55.538 --> 00:18:07.461
But this is not to shame anybody, but these are just the numbers that, from a statistical standpoint, if you're doing these things, it leads to a higher, it leads to a better outcome that you'll be able to retire one day.
00:18:07.461 --> 00:18:08.323
Become work optional.
00:18:09.265 --> 00:18:10.867
And most people aren't saving anything yeah.
00:18:11.214 --> 00:18:23.503
So if you want to fast track it, 30 plus percent 30 plus percent, yeah, and that's more or less than, honestly, when you hear those people that are in fire, which is financial independence, retire early, those are the people that are doing, you know, 30% and more.
00:18:23.503 --> 00:18:26.637
I have my own feelings about that to each of their own.
00:18:26.637 --> 00:18:27.459
Do whatever you want to do.
00:18:27.459 --> 00:18:36.829
For most people, that's just not realistic, especially for, I would say, our demographic, because if you already have kids, you're starting to put away 40% of your income, especially depending on where you live.
00:18:40.135 --> 00:18:41.317
That's almost unrealistic in this day and age.
00:18:41.317 --> 00:18:42.260
And how are you living?
00:18:42.260 --> 00:18:43.723
You still want to live life.
00:18:43.723 --> 00:18:44.926
We still want to live life.
00:18:54.134 --> 00:18:56.041
I agree, and a lot of people are very lean and honestly doing all the things they do now.
00:18:56.041 --> 00:18:56.804
But, like I said, to each their own.
00:18:56.804 --> 00:18:58.670
But the idea here is have a conversation so that you have a starting point of understanding.
00:18:58.670 --> 00:18:59.594
Hey, I do need to understand what my savings?
00:18:59.594 --> 00:19:04.412
Rate is, I do need to understand hey, if I'm not contributing, I'm saving as much as I would like to.
00:19:04.412 --> 00:19:07.478
What are some of the things that I need to do in order to get there?
00:19:08.118 --> 00:19:15.068
I think another thing and I just had this conversation with a friend of mine is saving is an expense.
00:19:15.609 --> 00:19:15.769
Yes.
00:19:16.295 --> 00:19:18.172
You know, and you really do need to think of it like that.
00:19:18.172 --> 00:19:18.535
It's not optional.
00:19:19.455 --> 00:19:21.344
When I work with clients, I don't consider it an option.
00:19:21.596 --> 00:19:22.714
Yeah, it is a line item.
00:19:22.894 --> 00:19:25.137
Even if it's only 3% or 4%, it is.
00:19:25.518 --> 00:19:34.209
It is there, it is a line item and it is an expense, just like your mortgage, just like your cell phone bill, just like Sorry, you save intentionally.
00:19:34.269 --> 00:19:35.211
You don't save what's left.
00:19:39.335 --> 00:19:41.338
Well, and that's what I was going to feed into is pay yourself first.
00:19:41.338 --> 00:19:45.647
Wealthy people pay themselves first in their savings, in their retirements, in their brokerage accounts, all those things.
00:19:45.647 --> 00:19:53.224
It is an expense for them that they put into their budget and then what is left they spend.
00:19:53.224 --> 00:20:04.680
So once you've covered all your bills, which includes saving and your retirement, then you can go to dinner, then you can book the vacation, then you can upgrade your flights, then you can do the kitchen remodel.
00:20:04.680 --> 00:20:06.104
It is an expense.
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