Podcast

The Personal Finance Podcast

13 Financial Moves to Reduce Stress and Anxiety (Feel Calm About Money!)

In this episode of the Personal Finance Podcast, we are going to talk about the 13 Financial Moves that can help you reduce your stress and anxiety around money.

In this episode of the Personal Finance Podcast, we are going to talk about the 13 Financial Moves that can help you reduce your stress and anxiety around money.

 

How Andrew Can Help You: 

  • Join The Master Money Newsletter where you will become smarter with your money in 5 minutes or less per week Here!
  • Learn to invest by joining  Index Fund Pro! This is Andrew’s course teaching you how to invest!
  • Watch The Master Money Youtube Channel!
  • Ask Andrew a question on Instagram or TikTok.
  • Learn how to get out of Debt by joining our Free Course 
  • Leave Feedback or Episode Requests here.

 

Thanks to Our Amazing Sponsors for supporting The Personal Finance Podcast.

  • Chime: Start your credit journey with Chime. Sign-up takes only two minutes and doesn’t affect your credit score. Get started at chime.com/
  • Shopify: Shopify makes it so easy to sell. Sign up for a one-dollar-per-month trial period at  shopify.com/pfp
  • Policygenius: This is where I got my term life insurance. Policygenius is made so easy. To get your term policy go to policygenius.com and make sure your loved ones are safe.
  • Factor 75: Head to factormeals.com/pfp50 and use code pfp50 to get 50% off your first box. These are amazingly easy and nutritious meals.
  • Delete Me: Go to joindeleteme.com/PFP and use promo code PFP you’ll be able to save 20% off your DeleteMe subscription! Protect yourself online!
  • Indeed: Start hiring NOW with a SEVENTY-FIVE DOLLAR SPONSORED JOB CREDIT to upgrade your job post at Indeed.com/personalfinance
  • Monarch Money: Get an extended 30 day free trial at monarchmoney/pfp .

 

 Links Mentioned in This Episode: 

 

Connect With Andrew on Social Media: 

 

 Free Guides:  

The Stairway
To Wealth

Master Your Money with
The Stairway to Wealth

Transcript:

 

On this episode of the Personal Finance Podcast, 13 Financial Moves that can help you reduce your stress and anxiety around money.

What's up everybody, and welcome. To the Personal Finance Podcast, I'm your host Andrew, founder of Master money.co. And today on the Personal Finance Podcast, we're gonna be talking about 13 financial moves that can help you reduce your stress and anxiety. Around money. If you guys have any questions, make sure to hit me up on social Instagram, TikTok or Twitter at Master Money Co.

And follow us on Spotify, apple Podcast or whatever podcast player you love listening to this podcast on. And if you wanna help out the show, leave a five star rating and review on Apple Podcast, Spotify or your favorite podcast players cannot. Thank you guys enough for leaving those five star ratings and reviews.

And if you wanna watch this, you can watch this. On the Androgen Cola YouTube channel, where we show the podcast as well on the YouTube channel. Make sure you subscribe over there to Androgen Cola and that YouTube channel. Now, today we're gonna be going through 13 financial moves to reduce stress and anxiety.

Now, I wanted to do this episode because, I see a lot of people starting to stress out more about money than they need to, and money is there to reduce your stress and anxiety. That's why I think money can increase your happiness over time because it helps you reduce that stress and anxiety. So I'm gonna give you 13 different moves that you can make so that you can reduce that stress and anxiety that you have around money.

And these are really, really powerful things. If you do all 13 of these things, if you check this entire checklist off, it's significantly gonna help you. Over time, specifically, if you wanna build tremendous amount of wealth, if you wanna be really, really wealthy, you wanna retire early, all this stuff is gonna help you protect your money.

It's gonna also help you protect your mind, free your mind from being stressed and worried about money, and it's going to give you in a significant amount of confidence so that moving forward you can make better decisions. Because when you're not stressed about money, you can make better financial decisions.

Think of people who are not wealthy. A lot of times they have to make financial decisions based on that specific day or that specific. Civic week, they can't think long term because they have stress and anxiety around money. So this is really, really, really important to make sure that you understand some of this stuff and see which one of these things that you can add to your financial life.

This is a really, really powerful way for you to reduce that stress and anxiety and really make your life easier for a lot of people, the number one stress in their life is money. So I want to help you reduce that. So this is gonna be a really meaty episode. We have a lot of topics to cover in this one.

So without further ado, let's get into it. Alright. So number one is having a financial plan. And you may be saying to yourself, well duh, if you wanna be good with money, you have to have a financial plan in place. But there is actually a lot of science backing this on why you need to have this in order to reduce your stress and anxiety.

So one of the number one factors when it comes to increased anxiety is uncertain future. And this is one of the biggest factors for anybody in life on why they have increased anxiety. You could think of this in a number of different situations. For example, say you work in the corporate world and your company gets acquired.

Well, all of a sudden you are uncertain about your future because a new company now owns your company. And so you start to get a little bit stressed. You start to become a little bit more anxious. Or if you have no idea how to save for retirement, you start to get stressed about your future because you don't know how you will ever retire.

You don't understand how some of this stuff works, or you can even think of it in a number of different scenarios. The more uncertainty that you have in your life, the more your stress and anxiety increases, and there was a source. That uncertainty in anticipation is the number one source of anxiety.

This source was P M C. They were talking through this. I'll link it up in the show notes below. But your relationship between uncertainty in the future is a negative connotation typically, and typically when that happens, your stress levels increase dramatically. So you wanna make sure you understand how some of this stuff works so that you can create a certain future for yourself and financial planning.

The beautiful thing about financial planning is you can get much more certain than you can in most situations. So if you don't have a financial plan, what happens is you have lack of clarity. You have no defined goals of where you're going or what you're trying to do. You have retirement worries because you have no idea when you'll be able to retire, and you have missed opportunities that you.

Could have taken advantage of if you had a financial plan in place. So what do you need to do? The number one thing is our baseline financial plan that we talk about all the time. Here is the Stairway to Wealth, and what the Stairway to Wealth is. It's a step-by-step guide that shows you exactly the steps in order.

Of what you should do with your money in most financial situations. So that's a great framework to start with and you can check that out. It's linked up in the show notes below on the Stairway to wealth. But at a bare minimum, you need to understand a couple of different numbers. You need to understand your savings rate.

So here at the Personal Finance Podcast, we want you to try to save at least 20% or more of your income. Now, if you can't do that right now, that's akay because savings is seasonal. I want you to rest assured though, I believe that you can get there to 20% or more. How can you do that? There's a number of different ways.

One of the best ways though, to do this is to start with a lower savings rate. Whatever you can save now, save as much as you possibly can. Then start to increase that savings rate by 1% every month or every couple of months until you hit that 20% savings rate. This gradual increase over time is going to allow it to be much more comfortable for you instead of just ripping the bandaid all off at once, and then you're struggling to get to that savings, right?

This is gonna allow you to gradually get to that point. In time, and let's get real here. Most of us when it comes to personal finance, we need to gradually go for these goals. We do not need to be cutting back so drastically all the time. Instead, I want you to gradually get to that point in time so that you can figure out exactly what you want.

So savings rate is number one. Number two. Is you need to understand your net worth, so your assets minus your liabilities are your net worth. So you add up all of your assets and then you subtract it from all your liabilities. Liabilities are things like your debts, your mortgage, all those different pieces, and you figure out what that number is.

For some people, if you're just starting out with your finances, you may have zero net worth or a negative net worth if you're in debt. For someone who's been really good with their finances for a long period of time, You're gonna have a positive net worth. And so you want that net worth number to go up over time because that is your financial scorecard.

Another thing I want you to do is map out what your dream life is. What do you really want to do in life? What do you want your retirement to look like? When do you wanna retire? How soon do you wanna retire? And how soon can you realistically hit that goal? I want you to write these goals down. And then figure out how you can get there.

How do you figure it out? Well, if you wanna be completely financially free, you need to have 25 times your annual income invested. What do I mean by that? That's based on something called the 4% Rule. And the 4% rule tells you that you can draw down 4% of your portfolio every single year. Be able to preserve your wealth throughout retirement.

Now, there's a bunch of caveats to the 4% rule, but the 4% rule is a great baseline to start with. So say for example, you spend $80,000 a year. Well, if you spend $80,000 a year, multiply that by 25, you need $2 million invested in order to hit that goal. Well, if you start to save money and you put that interest rate in and you see how much you're investing over time, maybe you're investing in index funds and ETFs, for example, you can map this entire thing out.

It's an amazing thing once you have this plan in place, and I've coached people a number of times through just how to figure this number out so that. Going forward. They have their plan in place. This is the number one thing we do when we talk to folks, is we make sure that they have this mapped out so that they have that goal in place.

They have that North Star in place. So this is what all this does. It gives you clarity, it gives you defined goals, it allows you to understand all this stuff. So those three numbers you definitely need to understand. And then in addition, there's a bunch of other metrics that I want you to know based on very specific things.

But look at the Stairway to Wealth. The Stairway to Wealth is gonna help you step by step through so many things. That's why we created that step-by-step guide. I is, I learned how to do this myself over a very long period of time. And then I learned from some of the greats out there, some of the financial greats.

I took pieces of each and every single one, compiled it into this framework, tested it out in my own life, and it worked so incredibly well that I started to teach other people how to do it. It worked so incredibly well in their life that the Stairway to Wealth became born. That's how that happened, and we are working on even improving that even more.

'cause there's things I'm adding in my own personal life. I want to add to the Stairway to Wealth that I've been testing first before I talk it through with you guys. So, in summary, you need to have this financial plan in place so that you can have a clear vision going forward that's gonna help you reduce that stress and anxiety because we need a clear vision going forward.

We need to know where we're going so we're not so stressed out about the future. Number two, and we're gonna do a whole episode on this one, but number two is have a digital deadbox. And you may be saying, what in tarnation is a digital deadbox? So what a digital Deadbox is, is if you've ever heard of Financial Deadbox, this is a box that back in the day, in the nineties and the early two thousands, folks would compile either binders.

Or they would compile boxes of all their financial information in these binders or these boxes. And I first heard about this from Rob Berger. If you've never heard of Rob Berger, he's a great YouTube follow. Now, he used to have a podcast called Dole Roller, and now he's a great YouTube follower, but he has a binder that he talked about where in this binder he had every piece of financial information so that anything ever happened to him.

That his wife would not have to worry or stress because everything is in one location. Well, now at this point in time, obviously everything is digital in our digital lives. So you can create a digital dead box. So what would be compiled into something like that? So the first thing would be your will or your living will or testament.

Then you'd have some medical directories, durable power of attorney, those types of things. So all of your estate plan can be compiled into here, all the paperwork for that, who to contact for your estate plan. All that stuff should be inside of this file. Then you have another folder with the list of your financial accounts.

Because a lot of times what happens is in relationships or if you're single, you are the sole person. One person worries about the finances and the other person may help out with the finances, but in addition, they're worrying about other things as well. I. So if you're the person worrying about your finances, you're the person that needs to compile all this information so that the other person in your life is able to find that information and use that information and not get so stressed out if something ever happened to you.

So you need a list of your financial accounts. This is your bank accounts, your investment accounts, your retirement accounts, and include all the numbers, the contact information, how to actually find those accounts and account numbers, and also, Maybe include some statements in there as well. So having all of those accounts available so that somebody can find them fairly easy is gonna be a really, really beneficial thing.

And you can just update this stuff once a year if anything changes. But this is just a great thing to have. Next is real estate documents, so deeds to your property if you own your own home. Or if you own rental properties, all the deeds to properties, mortgage documents should be in there. And recent property tax assessments would be another great thing to add in there.

Then insurance policy, so things like life insurance, health insurance, homeowners insurance, auto insurance, long-term care insurance, disability insurance. All that kind of stuff. Boom. Write in one place so they could find all that stuff. And then the list of debts, if you have debts, mortgages, car loans, student loans, all this stuff needs to be in this folder so that you can have that available.

And obviously you can also compile your tax returns. This is good practice no matter what you do, but in your financial life, you need to have this available for people so that if anything happened to you, they can just navigate this very simply and be able to take over when something happens to you because you're not creating all of this.

Wealth, and then something happens to you and then it just gets squandered or lost and nobody knows where it is. You want this to be in all this stuff to be in one location, and you can also add digital assets. Say for example, if you have a business, all your business stuff needs to be in there. If you have other profiles or digital wallets that you need people to understand, or subscription services, all that stuff should be in there.

And then the contact list. So if you use a certified financial planner for anything, they compiled a plan for you, maybe then a certified financial planner's number, your accountant, your lawyers, all that good stuff. It should all be inside of here so that you can have this all put together correctly. Now, we will dive way, way deeper into this when we have an episode on it, but this is a bird's eye view.

Give you a little taste of what's coming. Make sure you're subscribed to the podcast. If you wanna hear that episode so that you can compile this thing, I'll give you a step-by-step guide on exactly how to do it. So that you can just do this effortlessly, but making sure you have this is gonna reduce your stress and anxiety around if anything ever happened to you.

You don't have to worry about this stuff, and your family members don't have to worry about this stuff either. You have it available for them. Number three is investing in your kids' future. So if you have kids and you are a parent, the last thing you ever want to do is worry about your children's financial future.

Now, I don't fully completely understand this right now because my kids at the time recording this are two and four. So my kids are two and four. I'm not super worried about their financial future as of yet, but we do invest for their financial future because I, I know at some point in time when they are grown adults, I am gonna worry about this stuff.

I'm gonna worry about their financial future. Now my goal is to make sure that they are brought up correctly, that we instill generational wealth into their lives so they understand how money works and in addition, they understand how to handle money. That's we as parents. That is our job when it comes to generational wealth.

At the same time, I also wanna make sure I have a plan B or a backup plan for them. So we've talked about this in a couple of different times. We're gonna have a full on episode, and then we're also gonna do workshops on how you can invest for your kids and build generational wealth for your kids. But they're at least at a minimum, you really don't wanna have to worry about your kids' financial future.

What if you just took care of that now with a minimal effort? Because they have so much time for this money to compound. So at a very minimum, what we have right now is we have a tax. Brokerage for each of our kids. We have a 5 29 plan for each of our kids, and then once they start to have earned income, we will also open these custodial Roth IRAs for each of our kid.

We're about to open one for our four year old because he is gonna start to earn income when he turns five. We have some ideas of some things that he can do. If you own a business, you can have them work in your business. There's some a couple of cool things that you can do, but you must have earned income in order to open a custodial Roth, I r a.

Now, the taxable brokerage is where we are investing a lot of their wealth right now, so we invest at least a hundred dollars per month in each of their accounts, and then every birthday and every Christmas, we put $250 per month in those accounts. Then by the time they turn to age 18, if they got a 10% rate of return, for example, Then by the time they turned 18, they'd be have about $80,000 in those accounts going forward.

We are not gonna put another dollar into those accounts, and by the time they turned age 65, if they got that 10% rate of return, they'd have over $7.6 million each. In those accounts. We are actually generating almost over $15 million between the two accounts just by following this plan of putting a hundred dollars per month in those accounts and then adding those little bonuses, birthday and Christmas, and a lot of times the birthday and Christmas bonuses, you may be saying, oh well, That's a lot of extra money to have to put in there, and you don't have to do that part.

You can just put as much as you possibly can fit in into these accounts. But it's going to allow you over time to be able to build up generation wealth for your kids so they have additional retirement. And you could say, well, I don't know what $7.6 million is gonna be worth that timeframe. That's not your worry.

That's not an excuse not to invest. Instead, you want to at least. Try to set your kids up for a great financial future. Now, if you don't wanna give them anything, hey, that is your prerogative as a parent. Some people have the opinion that they don't wanna give their kids anything, that's fine. Also, secondly, we have the 5 29 account.

This allows us to invest for their college and future, and I prefer flexible 5 29 accounts. So I have mine at Fidelity. And with these flexible 5 29 accounts, you can invest your dollars over timeframe so you can invest in index funds, which is absolutely amazing. And then over time these accounts can grow.

Now with the new laws that are being passed in 2024, starting in 2024, if your kids don't go to college or if you just wanna fund it, you become really, really wealthy and you wanna fund their college, you can actually roll up to $35,000 into their custodial Roth I r a from the 5 29 accounts. So this gives you a backup plan if they don't go to college and or they get scholarships or all these other things.

'cause you don't wanna worry about having that money locked up in there. Then we have the custodial Roth. Like I said, you gotta have earned income works just like a Roth I r a, but you have to open it as a parent. Alright, number four is have a cybersecurity plan to prevent against fraud and identity theft.

So fraud and identity theft is one of the most stressful things that can ever happen to you. And so we've had a number of episodes talking about this, and in those episodes we've really gone into deep, deep detail. I'm really, really harping on this stuff. Because it is very, very important to protect your wealth because I know people who have lost a significant amount of wealth to identity theft, to fraud, things getting taken outta their bank accounts, and it is getting worse and worse and worse.

You have to have a plan in place for this. If you wanna reduce that stress and anxiety, have the plan in place so that you can protect yourself. A lot of people say, ah, it's gonna. Eventually happen to me no matter what, but what if you can actually protect yourself as much as you possibly can in order to make sure it never happens to you?

Because if you increase the likelihood that it'll never happen to you, then odds are you are really actually protecting your wealth. I've seen it happen so many different times where either identities are stolen and they're opening up accounts and people's names, they have no idea their credit is getting destroyed.

It's a complete headache to have to deal with and or. They're stealing money in their bank accounts. They get access to all these other things. So obviously passwords are number one. We always talk about that. Make sure you have a different password for every single website. Make sure your passwords are complex and then you can store them in places like a one password or a LastPass, something like that.

The second thing though, and this is one we love to talk about all the time, is making sure that you remove your personal information online. A lot of times data brokers are selling your information. When they get your information, and so you wanna make sure that you are removing that information from being online.

This reduces the likelihood that people who get ahold of any piece of your information can figure out all the rest of your information. Say for example, they get your name, well, they can Google you, they can figure out your address. They can figure out your phone number, and that can lead to deeper searches that can allow them to figure out a lot of other things.

Maybe even your social security number, for example. So you need to make sure that you are removing your personal information online. Now, I've talked about this before. I've tried manually to do this. It took hours and hours and hours. Then I finally found a service called Delete Me because early on I got my identity stolen.

I talked about this in the identity theft episode that I got my identity stolen, and when I had my identity stolen through a phishing scam, it was one of the most stressful things that I ever went through. So I decided to figure out a way that I could actually minimize this risk from ever happening again, or any additional fraud happening to me.

So when I started to remove my personal information online, I just found out it was a super complicated, time consuming process. Then my friend told me about a service called Delete Me, and so I tried out Delete me and Delete me. Literally removes. All my personal information that I was trying to get off of the internet in a couple of days, and it was one of the best services that I have ever spent money on 'cause it was absolutely the quickest way to do it and it saved me a ton of time, energy, stress, all those different things.

So getting your data removed from these data brokers is one of the best things you can do to protect yourself. And I love the service so much that we decided to partner with. Delete Me and Delete me actually is gonna give you guys 20% off of their service, which is one of the best deals that they ever provide.

So if you go to join delete me.com/pfp and you use the promo code pfp, you'll be able to get 20% off your Delete Me service and subscription. So if you go check it out now, that's join delete me.com/pfp and you can use promo code pfp. So, The next thing you want to do is look for two-factor authentication.

Make sure you have that authenticated on everything. You wanna make sure that you have regular software updates so that the operating system and the software and the apps are updated. Because cyber attackers often exploit old, outdated software. So you gotta make sure that you are updating that have.

Firewall. If you're using Windows and antivirus. If you're using Windows, make sure you have secure wifi. If you're using it out in public places, you wanna make sure that you have a V P N in place. Make sure you subscribe to a credit monitoring service if you can. There's a bunch of different ones out there.

Experience got one. A lot of the major brokerages have one too. And then another major thing, and one of the best things you can do is freeze your credit and freezing your credit. It means that you go to the three major credit bureaus and you say, Hey. I wanna freeze my credit. Do not open any accounts in my name until I unfreeze my credit.

And this is just gonna allow you to protect yourself from these fraudsters that are out there who are opening student loans in people's names, or tax fraud, or opening a bunch of different credit cards or accounts in people's names. This completely protects you from that. So go out there, freeze your credit completely free, takes you 15 minutes, and once you're ready to buy a car and get a car loan, or you wanna buy a house, And get a mortgage, then you just unfreeze your credit during that timeframe and then freeze it back up again once you do that.

So these are some of the main things that I want you to do. Bird's eye view. If you wanna dive deeper, we have two episodes. One on identity theft and one on how to protect yourself online that you can check out. We'll link 'em up down in the show notes below so that you can have access to that information.

'cause we dive really, really deep into this stuff because it is very, very important. I don't hear anybody else really talking as much as I do about this stuff, and it really is because it happened to me and the impact to me and the. Hours that it took were so significantly difficult that I wanna make sure it does not happen to you.

Number five is to buy a safe card that you can actually afford. So the larger your payments are in your life, the more stress this is going to bring on to your financial life. So I want you to understand. Well, what is a car that I can actually afford based on my income, based on what I got going on right now?

And what I want you to do is think of it a number of different ways. So first, we wanna find a safe car, especially if you have kids or anybody else in your life. And for yourself, obviously one of the most dangerous things you can do is drive down the road. It's one of the highest death rates in the country.

But two, you wanna also have a reliable car that's not gonna cause you a ton of different issues over time, where you're always fixing that vehicle and then you don't have the thing that takes you from point A to point B. But we have a rule called 24 7. And what that stands for is 20% down four, no more than four years of payments on your car loan.

And then seven is no more than 7% of your gross income spent on car payments throughout the year. So if you make a hundred grand a year, no more than $7,000 spent. On those car payments, and really I want that number to be even lower than that if you can possibly do it. The average car payment right now is $742.

That is way too high for most people's budget. So 20% down. Why is it 20% down? We talk about this a lot because I don't want you to get underwater when you buy a car, so you need to get some skin in the game so you don't get underwater, because if you get in an accident and you're underwater on your car, then you could really lose a lot of money if you total your vehicle.

So you gotta make sure that you have at least some skin in the game. Trade-in is fine. Trade-in will allow you to get that 20% down if you're trading your car in. And then if it's not 20%, make sure you just make up the difference. Four years or less. I really want this less than four years, but four years is because the car market is so crazy right now.

Affordability is becoming much more difficult for people. So at least you have that four year timeframe where you have those payments and after four years, I want you to drive this vehicle at least 10 years if you can possibly do it. If you can afford a car that will keep going for at least 10 years.

This is gonna allow you six additional years to not have payments. If you take on four years and those additional six years, you can take those extra payments, put them towards wealth building, or you can put them towards your next car also, if you are already hitting your investment goals. So double whammy there.

That is why we wanna shorten that timeframe. What you do not want to do, I will repeat this over and over again, is never, ever, ever buy a car based on the monthly payments. What are the monthly payments that I can afford? That is not the way you buy a car. You buy a car based on total cost of ownership.

Broke. People think of it in monthly payments. Wealthy people think of it. And total cost of ownership. So you gotta think through that. What is the maintenance gonna be? What is the gas charges gonna be? What is the increase in insurance gonna be? All of these different things matter, and it's gonna reduce your stress because if your car payment's too high, you're gonna get stressed out, you're gonna have anxiety, and it's for something that's not even gonna help you build wealth over time.

Your future self will re regret that decision. I've never met a single person in my life who says, man, I really regret. Driving around this paid off car. This thing is really, really burning a hole in my pocket 'cause it's completely paid off and it's bringing me a lot of stress and anxiety. No way. And we just wrote an article on the Master Money Newsletter talking about how to think through this.

If you have a used car, how to think through when it's time to buy the next car. If you're not subscribed to the Master Money Newsletter, we are giving you a ton of information every single week. You learn and get smarter with your money in. Five minutes or less. I'm so excited about the Mastermind newsletter and some of the future stuff we're gonna be doing with it.

And we also give you promo codes and discounts on our courses, all that kind of stuff as well. And we give you the best news every single week. And if you wanna subscribe to it, it's linked up in the show notes down below. But one thing people don't know is we have a book. Club in the Master Money Newsletter.

So one of the biggest questions I get are, what are the best financial books or what are the best books to advance in my career or have high performing habits? Well, our book club is called the High Performance Book Club. It's in the Master Money Newsletter, so make sure you check that out as well.

'cause every single week I'm giving you the book I'm reading and I'm reading a lot of books. I usually try to read a book per week, so make sure you're on that Mastermind newsletter so that you can see. What books is your boy reading, and maybe we can read 'em together, so make sure you're doing that as well.

That is one of the best ways to get a bunch of additional content from us. Then you can see what podcast episodes come out, when they come out, our YouTube videos, all that different good stuff is all in the newsletter. And I'm gonna be doing some giveaways and we're gonna also be giving away some coaching sessions as well.

So really, really excited about that. A lot of stuff gonna be going on there. So the moral of the story, do not make your car payments too high, otherwise you're gonna be stressed about your car payments overall. Number six, don't buy more house than you can afford and become house poor. So this is one, a lot of people don't understand how much house they can afford, and this is along the same lines as these car payments because if your rent is too high, Or your mortgage is too high.

This is really, really gonna stress you out. Now listen, everybody listen to me right now. I know how difficult this is. This is one of the most difficult times to find housing affordability I have ever seen. Historically. I've gone back, historically looked at a bunch of the data. I don't really see much out there that has been more difficult than what it is right now to afford housing.

This is a time where I know this is killing a lot of you. I know this is eating into your budget and it's become so incredibly difficult to save money when you can't afford your simple, basic needs of housing. I understand how difficult this is, and if you're a baby boomer listening to this and you're saying, uh, millennials just aren't working hard enough, they're not able to be able to afford housing because they are not working hard enough.

Well, let me give you a little, couple fun facts here. Because in 1983, the average home price was $56,420. Today the average home price is $436,800. Okay, so we have inflation. A lot of different things are happening there, but you may be saying college tuition in 1983 was 1030 $1 college tuition. Now, Per year on average is $12,016.

The average salary in 1983 was $21,380. The average salary now is $58,260. So during this time, home prices have risen eight times and college tuition has risen nine times. But salaries have only risen 2.7 times. This is an affordability problem that most people need to understand. Now, I know this is probably one of your main stressors.

You're pulling your hair out, trying to figure out how to make this work. So I'm gonna show you the numbers on how to make this work, and then you have to figure out for your personal situation, how can I fit these numbers into my personal situation while still having a safe, reliable house that is comfortable, that has all the needs and wants that I have.

Very difficult to have it all right now. It is very, very difficult to have it all. But I'm gonna give you the numbers that we teach here and you wanna make sure it's in a good area. You know, one thing you could do is have a newer build with a less maintenance to worry about, but it depends on the prices in your area.

So 2033 is our rule, 20% down if it's your second house. If it's your first house that you're buying, then you can do an f h a loan with 3.5% down, or you can do a standard loan with a traditional 3% down. There's a bunch of other loans out there we'll talk about and having a whole episode on, but making sure that you understand how that part works.

Having 20% down if it's your second house, is because you can roll the old house in. When I bought my first house, I did not put 20% down. That's why I give you leniency on the first one. 'cause based on my own personal experience, it's hard to save 20%. On your first house. So my second house, I rolled the equity of the first house in in order to make sure I had way more than 20% down on my second house payment.

The house I live in now and 30% is the most important number. So the 30 number is 30% of your income. You need to make sure that your housing costs are 30% or less of your income. And then the three number, which is harder to hit in some areas, and then in some areas that are more affordable, it is much easier to hit.

But I've always hit this number, which is why I have this number in our rules, and I got this number from the Millionaire next door, is that no more than three times your annual salary spent on the purchase price of a house. If you make $50,000 a year, you're saying to yourself, well, how am I gonna find a house for $150,000?

That's a safe and a reliable and good area where I live? So it really depends on your affordability index in your area. Right now, in most situations, when affordability is much more normalized, This is a number that is really, really, really great to hit. I bought houses both times where it is much more affordable to own a house.

I bought my second house, the one I live in now in 2020 when housing prices dropped, and the first one I bought was back in 2013. So I've owned two personal residence. I've owned tons of rental properties, but two personal residences. This is my second one. I bought it during covid when affordability was much, much easier.

So for me, this was easier. Right now it is difficult. I get it. I know this is a struggle and we're gonna keep on working on content for you guys to help you with the struggle because I know how difficult this is. But if you can get those payments low enough to fit this criteria, you will have reduced stress in your life when it comes to housing.

And I know how difficult it is. I'm gonna keep on trying to help you guys out with this. If you have. Questions about this stuff, especially housing. I really, really sympathize with you because affordability is so, so bad right now. Alright, number seven is to create a sustainable business or side hustle.

So having a side hustle is gonna be really, really helpful. I know a lot of millennials right now, I. Have side hustles just to afford life, which is something that's tough to do. But if you are looking for some way that in the future you can maybe take control of your time, creating a sustainable business or side hustle is going to help you have additional income coming in that will help you reduce your stress and anxiety when it comes to surrounding money.

Now that business brand may bring on stress depending on what type of business you take on, but if there's something that you're really, really interested in, maybe you can do this and enjoy your time. As well. There's a bunch of different examples out there of like hobbyists. For example, if you're really into fishing, for example, you go out and be a fishing captain.

If you're really into yoga, you could be a yoga instructor or pickleball. Something I've really gotten into as of late is pickleball and all of a sudden there's not really that many pickleball coaches out there. So if you're really into something like that, you can go out and become a pickleball coach, teach people, make money, all these different things.

And in addition to that, creating a sustainable business is one of the best things that I've ever done. We've had multiple businesses that we run here, and creating a sustainable business means that you don't. Have to stress about future opportunities. You have to go get them yourself. In addition, you don't have to rely on anybody else.

You just have to rely on yourself. If you have that sustainable business running and you have it running every single month, so I love business. I love business. For a lot of people, it is the really fastest way to build wealth is to have your own business. But you gotta make sure that it's a business that is profitable and a lot of businesses fail, so you gotta enter the right industries.

I love online businesses too. If you are interested in doing. Working your full-time job and having a side hustle. Online businesses are great for that because you can use things like leverage and systems and figure out ways to actually build up online businesses. So a lot of great stuff there. If you are interested in learning more about that stuff, I can give you a bunch of information.

Shoot me an email, join the Mastermind newsletter and shoot me an email and I can give you some more ideas on that. Number eight is invest for your future first, because the number one thing you want to do, and Warren Buffett always says this, is that you want to first make sure that you are investing in your future.

Then spend what is left over. This is why we have the reverse budget. The reverse budget is my favorite way for most people to budget. 'cause most people don't wanna budget. So the reverse budget is my favorite way to, for people to budget, where you get money coming in and when your paycheck comes in.

You save off the top, then you spend what is left over. This allows you to pay yourself first. Why do we wanna pay ourself first? Because we can provide certainty to our future if we pay ourself first, meaning that we are investing our dollars and we can be conservative with the numbers. On understanding what our future models are gonna be.

What do I mean by that? I mean by, if you're gonna say, for example, you wanna invest in the s and p 500, well, historically the s and p 500 has returned over 10%. We don't know what it's gonna do in the future. Why don't we bump that bad boy down to 7%? And so our future models are gonna tell us, Hey, if we bump that bad boy down to 7%, Over this timeframe, we'll be able to at least hit this number, and so I'm saving enough money to hit that number.

This provides certainty within your future. If you have these models in your financial plans, you always wanna invest for yourself first. Make sure you are investing in order. Now, the Stairway to Wealth tells you what order to invest in for most situations, so you can check that out, do your own research for your own personal financial situation.

But the Stairway to Wealth will give you the step-by-step guide on what to do with your money. It also has the investing checklist in there. Which is great, so make sure that you check that out when you go through this process. Number nine is eliminate debt. Debt is the soul sucking, stress inducing anxiety riddling, wealth crushing machine.

Can you tell? I don't like debt, especially when it comes to high interest debt. So if you think about debt, you could think about things like credit card debt, for example, which is one of the most frustrating things that most people have to deal with because a lot of people get into credit card debt and it has a 15 to 30% interest rate.

All of a sudden they feel like they can never get ahead. Like their payment just never goes down, ever, ever, ever. Why is that? Because compound interest is working against them instead of for them, 15 to 30% interest rate is a pants on fire emergency, and we need to figure out ways to get extra cash flow to pay down that debt so that you can get rid of that debt.

The Stairway to Wealth tells you when to do that, but it is very early on in the process, obviously, because this is a big, huge emergency that I want you to get rid of that debt so, Very, very, very important that you make sure that you get rid of high interest debt. What is high interest debt? Anything above a 6% interest rate is what we classify as high interest debt.

Now, if you've got a mortgage that's 6.5% and you just bought a house, that's something that you can really go either way on at this current point in time. But I want you to refi that mortgage obviously when rates drop at some point in time and think through that as you go through that process. But anything like a personal loan, credit cards, student loans that have really high interest, any of this stuff with above a 6% interest, I want you to get rid of that debt as fast.

As you possibly can. Now, one thing this does not include is things like, uh, rental properties. For example, if you have a rental property right now you're acquiring, and say for example, you get a 6.5% interest rate on there with that rental property, if you factor that interest rate in the numbers, it works.

You still cash flow, you're good to go on that. You just gotta run the numbers. Make sure those numbers. Work. So get rid of debt. Debt is a soul sucking and stress inducing thing that you definitely wanna make sure that you get rid of. If you're interested in getting outta debt, you have no idea how to do it.

We have a free debt course that we offer you guys. If you go to master money.co/debt course, we have a free debt course. It's less than an hour, you can check it out and make sure that you are on the path to getting outta debt. We even give you a plan on exactly how to do it. Number 10 is avoid shiny toys.

Until you can afford 'em. So this is one that I'm starting to see that I get a lot more questions on, and it's very interesting that I'm getting a lot more questions on this because they always say the economy's down and everybody's spending money all the time. And what do I mean by shiny toys? I mean things like golf carts.

I got a golf cart in my garage right now. There's nothing wrong with shiny toys, it's just you gotta be able to forum first boats. Four wheelers, jet skis. These are what I'm talking about. Recreational vehicles, things that you're buying just to have fun. Your third car when you really don't need a third car, you're your second car when you really don't need a second car.

All of these things are what I classify as shiny toys. And honestly, to be a hundred percent honest with you, you know, I'm always trying to get on your level here. I'm all for you spending money on things that bring you value, but I think that you would be absolutely insane to buy this stuff if you are not.

Out of high interest debt, meaning you've paid off all your high interest debt or you have not been hitting your investment goals, or you have no financial plan. If you don't have any of those three things, you should no way, shape or form be buying any of this stuff until you figure that stuff out first.

Very, very important to note this, and I know it might be a little bit harsh the way I'm saying this. But it's gotta be harsh 'cause this stuff goes down in value over time instead of increases in value over time. So if your net worth is negative, no reason to be buying this stuff. I never even add this stuff onto my net worth statement because it goes down in value over time.

I don't want it on my net worth statement. I don't even wanna touch it on my net. I don't even have my cars on my net worth statement. So this is something that you definitely wanna make sure that you avoid unless you got that stuff together. Number 11 is, To get term life insurance. So term life insurance is something where it's really, really inexpensive.

I'm not talking about whole life. I'm not talking about I lss. I absolutely hate those. If you wanna know how much I hate those, just check out some of our other episodes. I'm talking about just term life insurance. Term life insurance is incredibly cheap. It is the life insurance that I have. I have it through PolicyGenius.

Who is also a show sponsor here, because I use PolicyGenius. And so with term life insurance, what it does is that you buy life insurance for a specific amount of time and then it terms after that specific amount of time, which is why it's so cheap. So for example, when I bought my latest policy, I was 30 years old and it's gonna last me all the way till I'm 60 now.

The thought process with. This is a 30 year term life insurance policy. The thought process with this is by the time I'm 60, I'm gonna amass so much wealth and I'm not gonna need life insurance. If anything happens to me, my family's gonna be straight. They're gonna be good. They're gonna be a okay. And so I have that term policy in place to cover me during the wealth accumulation phase.

Then I don't need life insurance after that. I got my money, I got my stacks. I got my racks on. Racks on racks. I don't have to worry about it anymore. So term life insurance allows you to have it for that specific term, and guess what? Because you have it for that specific term, it is 10 times cheaper than any other type of life insurance.

I pay $30 per month. I mean, it is a no-brainer for most people. So how much term life insurance should you get? I like around eight to 12 times. Your annual income is the way to go for most people. If you have two people working in your household, I mean you can probably get away with a little less. Eight to 12 times is like the rough number that I like.

And a lot of people say that as well. A lot of people say 10 times, anywhere in that range. I think you are totally fine, and it depends on how many dependents you have as well. So say for example, if it's just you and your spouse and just your spouse, depends on your income. You could probably get away with eight.

But if you have a couple of dependents, meaning two kids or aging parents who depend on you, then maybe you want to go a little bit higher. Now, one thing to note here, Is that you don't need term life insurance unless you have people who depend on your income. So if you have people who depend on your income, then you need term life insurance.

And yeah, boy, the financial guy actually did this a little bit late because I got married and I waited about five years after I was married, before I actually went out and got life insurance. My wife had it through her workplace, but I never got it until I turned 30. And so once I turned 30, we had our first son then.

I was like, oh, I better get my stuff together on life insurance. That's when I got term life insurance, but I was actually a little bit late. If you have anybody who depends on you whatsoever, I would go out, get some term life insurance, and then just call a day. Super easy, just automatically pays every single month, 30 bucks a month.

Super, super easy thing to put together. I. Number 12 is to create a wealth protection plan. Now, your wealth protection plan is one of the most important things that you can possibly do. Now, what do I mean by wealth protection plan? We have a full episode on this, and I'm very, very passionate about this as well, but your wealth protection plan.

Is things that are actually gonna protect your wealth building ability. What I mean by that is if anything happens to you in life, you got the money just there to take care of it. You've heard me talk about this a number of times for two of the things, but we go deeper and deeper in the wealth protection plan.

So first, cash buffer. Cash buffer is just going to cover your deductibles on insurance. So you just save up enough money to cover whatever your highest deductible is. So you can think of it, it's usually like around 4,000 bucks is usually where that lands. So you look at all your deductibles from your car insurance to your housing insurance, to your medical insurance, and just which deductibles the highest?

Save up at least that much. That way, if anything happens in life, you at least have the money there to cover the deductible. Then after you have that built up, then you start building up your emergency fund. Six months emergency fund is what we talk about here. I don't like three months at all. Six months emergency fund is what I really, really want you to have.

But if you get to three months and you wanna start investing, A lot more, and then you're still working your way to six. I get it. But at the same time, I want you to have six months there available so that you can protect your wealth over timeframe. And then in the wealth protection plan, we go through a lot more stuff.

We go through. What about having the HELOC open so you can have extra stuff there? What other lines of credit can you open up in case something really drastic happens and you need to take care of that? Can you take advantage of making sure you have other accounts available so that you can draw from a Roth I R A.

For example, if something really, really bad happens, you can avoid bankruptcy. A lot of other things we talk about there, making sure you have that protection plan in place is really, really important. If you guys want me to put together some sort of course or something like that, packaging together, identity theft, fraud protection, and wealth protection, we can do that if you want to.

I can go really, really deep on this stuff, but I know not everybody loves that stuff, so you just gotta make sure that you tell me, but you need to have it. You really need to have it. I can't stress this enough. I'm already having listeners saying, thank you for putting some of this stuff together, because they put together their wealth protection plan and things have happened to their friends or their family members, and so they've been able to help them put together these wealth protection plans as well, just based on our episodes.

Super excited about that because it really, really is important. Most likely for all of us, something will eventually happen either to our finances or somebody's gonna attempt to do something to us. And so we gotta have these protection plans in place. And the last one, number 13, is a financial education.

So continuing your financial education is gonna significantly reduce your stress and anxiety because the more you understand and the more you know, the less stressful this stuff becomes. This is a great example. The more I read about the stock market and I learn about the stock market, the more I understand that the stock market is very volatile, meaning the stock market goes up and the stock market will crash down, then it'll go back up again.

But the stock market in the long run goes in one direction. If you look at the last a hundred years, the stock market is going up. That is it. That is the only direction it is going in, and what you have to understand is ebbs and flows in the market are very normal. How do I understand this and how do I stay so calm whenever a recession comes or there's a big crash, or if there was a major, major issue in the stock market?

Because I have a financial education and your financial education can help you shoot so many different things. Why do I never look at the monthly payment? I. When I go to buy a car and see can it fit into my budget instead, I look at total cost of ownership because I have a financial education. Why do I never go out there and just buy anything that I can afford without even thinking twice about it?

Because I have a financial education. I wanna put my dollars towards assets instead of too many liabilities. Why do I enjoy spending money on lavish vacations or spending money on things that actually bring me value and learned how to actually build the skill of spending? 'cause I have a financial education and all this stuff matters.

All of this stuff matters. To reduce your stress and anxiety. You should be able to spend your money on the things that you want. You should be able to buy the things that you want. Having a financial education is how you get there, and spending on your values is one of the best things that you can ever do.

So I'm really, really excited for you guys. To be learning more. Listening to this podcast helps you build a financial education. If you follow the Master Money Newsletter, that's gonna help you because we talk about the best books out there, the best financial books, the best personal growth books, the best career books, the best investing books.

All of those are gonna be on the Master Money newsletter, so make sure you check that out. But reading is number two. Number three is taking courses or coaching or all that kind of stuff. I spent so much money this year on courses alone and my personal growth has exploded. It's like a way that you can see.

All of someone's life work, and you can accelerate your path in one direction to whatever you're trying to to advance in. Whether it's career stuff, whether it is personal growth stuff, whatever you are trying to get better at. Even if you're trying to get better at pickleball, for example. Maybe you go out and get a coach, and so there's a lot of things that you can do there in order to accelerate your path to becoming a better person.

Get 1% better every day. Just keep saying that to yourself. 1% better every day. 1% better with my finances, 1% better with my fitness, 1% better with. My family 1% better with my personal goals. How can you do that? It's by advancing learning. Continuing your education and your personal education plan can be something that's really, really powerful.

Maybe we'll do a entire episode on a personal education plan. I think that's really, really cool. So that's something we'll look in doing as well, so that you guys can understand how I do it. And I think what I do has hacked me into, I'm just a normal guy. I'm just a guy who learned this stuff on his own.

I took pieces from each and every person that I learned, applied them to my life to see how they worked. And it really just works to do it that way. So financial education, learning, putting together your plan, I'll do an episode on that. I just convinced myself, I'll do an episode on how to put together your financial education plan or your education plan actually, so that you can actually have that built up as well.

So, Listen, those are the 13 things that will help you reduce your stress and anxiety around money. If you guys have any questions, make sure you reach out to me. I am here for you. That is my job, is to teach you how to build wealth. I want as many of you as possible to learn how to build wealth. Sometimes I get behind on the dms, but I promise you I will respond to you eventually.

So make sure you're reaching out to me, talking through. The fastest way to get ahold of me though is emailing me. So if you're on the Mastermind newsletter, you can reply back and I will answer you. Thank you guys for investing in yourself by listening to this episode, and if you have value outta this episode, share it with friends, family members.

Leave that five star rating and review if you can. Thank you so much for doing so, and thank you again for listening, and we will see you on the next episode.

More Episodes You Will LOVE:

The 6 Stages of Financial Independence With Joel and Matt From How to Money

In this episode of the Personal Finance Podcast, we’re gonna talk about the 6 stages of financial independence with Joel and Matt from How To Money.

View Episode

How to Become a Million Dollar Creator with Jay Clouse

In this episode of the Personal Finance Podcast, we’re going to talk about how you can build wealth with the creator economy with Jay Clouse.

View Episode

The Average Debt By Age and Generation (And How to Get Out Of Debt!)

In this episode of the Personal Finance Podcast, we’re going to talk about the average debt by age and generation and what you can do to avoid that debt and get out of debt.

View Episode

Here’s What Our ListenersAre Saying

Customer Reviews 4.8• 477 Ratings

5/5
Never Too Late, And Here’s Why!

Andrew is positive, engaging, and straightforward. As someone who saw little light at the end of the tunnel, due to poor saving/spending habits, I believed I would be entirely too dependent on Social Security. Andrew shows how it’s possible to secure financial freedom, even if you’ve wasted the opportunities presented in your youth. Listened daily on drives too and from work and got through 93 episodes in theee weeks.

Bradley DH
5/5
Just What I Have Been Searching For!

This podcast has been exactly what I have been looking for. Not only does it solidify some of my current practices but helps me to understand the why and the ins-and-outs to what does work and what doesn’t work! Easy to listen to and Andrew does a great job and putting everything in context that is applicable to everyone.

M. Marlene
5/5
Simply Excellent!!!

Excellent content, practical, straight to the point, easy to follow and easy to apply! Andrew takes the confusion, complexity and fear as a result (often the biggest deterrent for most folks) out of investing and overall money matters in general, and provides valuable advice that anyone can follow and put into practice. Exactly what I’ve been looking for for quite some time and so happy that I came across this podcast. Thank you, Andrew!

Katica_KateKate
5/5
Great Information In An Understandable Way

Absolutely a must listen for anyone at any age. A+ work.

GiantsFan518
5/5
Wealth Building Magician

Absolutely love listening to this guy! He has taken all of my thoughts and questions I’ve ever had about budgeting, investing, and wealth building and slapped onto this podcast! Can’t thank him enough for what I’ve learned!

Dmoney7777
5/5
Fun Financial Literacy Experience

I discovered your podcast a few weeks ago and wanted I am learning SO MUCH! Finance is an area of my life that I’ve always overlooked and this year I am determined to make progress! I am so grateful for this podcast and wish there was something like this 18 years ago! Andrew’s work is life changing and he makes the topic fun!

mariasarchi
LOAD MORE

The StairwayTo Wealth

Master Your Money with The Stairway to Wealth

Learn to Invest and Master your Money

You know there’s power when you invest your money, but you don’t know where to start. Your journey starts here…

The Stairway To WEALTH

We will only send you awesome stuff

PRIVACY POLICY

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum.

Semper feugiat nibh sed pulvinar proin gravida hendrerit lectus a. Sem viverra aliquet eget sit amet tellus. Pellentesque habitant morbi tristique senectus. Sem viverra aliquet eget sit amet tellus cras adipiscing. Amet justo donec enim diam vulputate ut pharetra sit. Sit amet consectetur adipiscing elit duis tristique sollicitudin nibh sit. Pulvinar etiam non quam lacus suspendisse faucibus interdum posuere. Iaculis at erat pellentesque adipiscing commodo. Aenean et tortor at risus viverra adipiscing at. Volutpat blandit aliquam etiam erat velit scelerisque in dictum. Eu augue ut lectus arcu. Lorem donec massa sapien faucibus et molestie ac. Mauris in aliquam sem fringilla ut. Ut porttitor leo a diam. Malesuada pellentesque elit eget gravida cum sociis. Lectus urna duis convallis convallis. Ipsum dolor sit amet consectetur adipiscing.

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum.

Semper feugiat nibh sed pulvinar proin gravida hendrerit lectus a. Sem viverra aliquet eget sit amet tellus. Pellentesque habitant morbi tristique senectus. Sem viverra aliquet eget sit amet tellus cras adipiscing. Amet justo donec enim diam vulputate ut pharetra sit. Sit amet consectetur adipiscing elit duis tristique sollicitudin nibh sit. Pulvinar etiam non quam lacus suspendisse faucibus interdum posuere. Iaculis at erat pellentesque adipiscing commodo. Aenean et tortor at risus viverra adipiscing at. Volutpat blandit aliquam etiam erat velit scelerisque in dictum. Eu augue ut lectus arcu. Lorem donec massa sapien faucibus et molestie ac. Mauris in aliquam sem fringilla ut. Ut porttitor leo a diam. Malesuada pellentesque elit eget gravida cum sociis. Lectus urna duis convallis convallis. Ipsum dolor sit amet consectetur adipiscing.