Why You're Still Broke Even If You Make Good Money Feat. David Bach

Key Takeaway

Save just $27.40 per day—roughly what you might spend on subscriptions, coffee, or eating out—and invest it automatically in the stock market with reinvested dividends. Over 40 years, this seemingly small amount could grow to over $4.4 million. The secret isn't making more money; it's paying yourself first and automating your savings so the money moves without you touching it. Everyone else is already on your payroll automatically—Netflix, subscriptions, the government. Make yourself the first person you pay.

Episode Overview

David Bach, 10-time New York Times bestselling author of 'The Automatic Millionaire,' shares his time-tested system for building wealth through automation rather than discipline. He explains how ordinary people can become millionaires by paying themselves first, automating savings, and living below their means—even on modest incomes.

Full Transcript

Transcript of Why You're Still Broke Even If You Make Good Money Feat. David Bach from The Ed Mylett Show. Auto-generated from episode audio; may contain minor errors.

What does it take to blow $10,000 in a year per day? $27.40 a day at the end of a year is $10,000. If you save $2740 a day in 40 years, if you invested in the stock market with reinvested dividends, you could potentially have over $4,424,000. It's an astronomical amount of money. Look at think about where are you spending your money. Is it possible? Not everybody, but is it possible? Tens of millions of people that are wasting $27.40 a day. What do you think? A,000% yes.

Including 93% of my beautiful friends that are listening are watching you and I right now. Yes. On another show I was on the host Chachi. How many people do you think could afford this money? And you know what the number came back to? Somewhere between 45 to 55 million Americans. Yeah. Yeah. Yeah. I had first time in your life, you know, you're out of college. I was on minimum wage. that I started a $20 a month automatic payment into a mutual fund when I was 22 years old, starting to pay myself first.

The secret to building wealth, and it's really not a secret, it's a system, is those three words. You have to pay yourself first when you get a paycheck. Welcome back to the show, everybody. I am really grateful my guest is here today because I have to tell you his work has made a huge impact on me. I was telling him off camera. I want him to hear it on camera during the interview. But what we're going to talk about today, you guys, is money, is financial peace, is freedom, is having a system to get your act together financially.

And I can tell you that I'm not going to be the one giving the financial advice today. He will be, but it's something you should lean in and listen to very closely. You're going to learn a bunch of things today. He's a 10 times New York Times bestselling author, but more than that, he's a tremendous financial educator. And the things he teaches are timeproven. timeproven. timeproven. They're not just for the last two or three years. They're not the most recent flashy thing that you should do with your money.

They're time-tested principles. And I want you to know, I attribute what he teaches the vast majority of any wealth I've accumulated in the financial freedom in my family. in a book I read about 15 years ago. It's called The Automatic Millionaire. And he sort of um it's it's it's have a renew it's having a a resurgence now as he sort of like I guess you'd call it a re-release, but it's always been out. But there's been some updated data in it and this is going to be outstanding today, you guys, with David Boach.

David, welcome to the show. Well, Ed, thank you. I'm I'm super touched because I'm a fan of yours. So, you had a huge impact on my son as I was telling you before the show. Yeah. and I'm just grateful to be with you. So, thank you very much for having me. I know you have a huge audience. People love you and it's an honor to be with you. with you. with you. Oh, thank you so much, brother. Like, u I I told you right when we were before we recorded, I said some of my concerns are the things we're going to cover today, ironically, are almost counterculture now.

And I have to tell you guys, the things that David teaches in this book, I started doing before I read the book, but it validated what I was doing. And then I took it to a new level after I read the book. I want to start with just some context. I want to lean right in. you updated the book a little bit and so the beginning there was a stat in there that sort of blew my mind because this idea of becoming a millionaire for most people including me when I was younger that's just impossible right I'm just trying to pay my bills every month and if there's something left over I would go to a nice dinner which is a lot of the mistakes people make you say in the updated version of the book this is staggering just to kind of demystify the concept there are 24 million millionaires just in the United States today Is that correct?

correct? correct? That's correct. And the number is higher now, right? Because I just the book just came out in January as an update. But the reality is that number just keeps growing and and we're about to go into the greatest decade of wealth building that we've ever seen in our lifetime, right? The ability to make money is just getting easier and easier and faster and faster. And so millionaires are being created at a record number. But like you, I have to be honest, Ed. You know, I I launched this book 20 years ago on Oprah and there were about a little over 7 million millionaires in America.

So to go in 20 years from 7 million millionaires to 24 million millionaires and that number is expected to double in less than 10 years. What's happening is when you look around is and not everybody's there, right? Not everybody's millionaires, but as you look around, it seems like everybody's getting rich, except for a lot of people feel like everybody's getting rich but me. me. me. And the reason I decided to put this book out one more time is I've got young kids. I know Max, who's producing, your son, you've got two kids that are similar ages.

And I wanted to make sure that my kids learn the same lessons that I learned at their age. M and I wanted to make sure the next generation learns because I know you have a lot of people listening to you between the age of 25 and 35. And and that's like the golden decade for many people because if you can start investing and saving and doing all the right things automatically when you're young, young, young, the rest is easy. Yep. Yep. Yep. And I'm and I'm worried that we're leaving people behind.

I think we're leaving a generation behind right now. We are. That's a problem. There's no question about it. And one of the biggest culprits of it, and there's a lot of good things about social media, but everyone's driving a Lambo. It feels like everyone's on vacation in the Caribbean. And even this idea of being a millionaire, you know, guys, David and I at our age, being a millionaire was a pretty good thing and a big deal 25 years ago, 20 years ago. It's not that big a deal now.

It's meaning that I'm not saying it's not an achievement, but it's it's sort of a minimum if you're ever going to get free is to get to that status and beyond it for most of you. And so I want David to kind of cover some of the things I learned in my life young that most people it's just not taught anymore. So the first thing David that is in the book that stands out to me. This is huge everyone because you're most of you aren't doing it and I love you and I want you to begin to live like this or at least begin to teach your children this.

Okay? And that is the notion. When I was young, my first job out of getting blown out of baseball was I went to work at an orphanage, a group home, a big one on like a campus called McKinley Home for Boys, David. And I was making minimum wage, but I had just been introduced to the concept of paying yourself first. And so what I did was I had an apartment that I had to pay rent on at the time. I was not living at home anymore.

My dad had sort of said, "Get out of the house. You got a job now." So I'm I'm paying rent every month. I had a car that I had to take care of. I had first time in your life, you know, you're out of college, I'm responsible for my auto insurance. I'm responsible for car repairs and I was on minimum wage, but I started a $20 a month automatic payment into a mutual fund when I was 22 years old, starting to pay myself first. I want you to talk about that concept and what it means and why it's so important to do even when you're not making a lot of money.

Because if I were there with you live, I would just I would high-five you right now, right? Because the secret to building wealth, and it's really not a secret, it's a system, is those three words. You have to pay yourself first when you get a paycheck. paycheck. paycheck. And you have to understand how money actually flows in the real world. So in the real world, when you earn a paycheck, right? Now, who normally gets paid first is the government, Uncle Sam, right? So you go to work at if you have a job you go to work at 9:00 and most Americans pay work pay taxes on the first three hours a day of their income.

They actually work until 12:00 for taxes. Makes you kind of want to come to work after lunch, right? I always joke about this. Then you pay everything else. You pay your your rent or your mortgage. You pay, you know, eating, uh, health care, car bills. And what happens is most people hope that there'll be a little bit of money left over at the end of the day to then save and invest. Correct? Correct? Correct? And what happens is the end of the day there's not anything left to save and invest invest invest and then they live paycheck to paycheck.

So the secret to building wealth and it's not a secret it's a system is that on any income you have to make a decision decision decision and that's the key. You have to make a decision that the first person who gets paid is you. Y Y Y that single decision changing your whole life. Now when I go now when I break it down, you want me to break it down like what that looks like? Yeah, sure. Yeah, sure. Yeah, sure. You know, you you saved $20 out of each paycheck.

paycheck. paycheck. Typically what I teach is you need to keep the first hour day of your income. So, whatever you earn an hour, could be minimum, it could be minimum wage, you could be making $20 an hour, $30 an hour, $50 an hour, whatever you make an hour, the first hour day of your income's got to get saved right off the top. Now, the the the best way to do that to get paid pay yourself first is that you automate it. So, if you have a job with a 401k plan, you automatically move and the percentage is 12 and a half% of your gross income.

That's one hour a day of your income. I let out my kids. kids, I don't want them to save 12 and a half%. I actually want them to save 15% of their gross income. But at a minimum, you need to save at least 10, right? So, keep it simple. 1 hour day of your income automatically goes right off the top into a 401k plan or retirement account. Now, this is super important. It's all about automating it. Meaning the money has to move automatically move automatically move automatically from your paycheck into these retirement accounts and you talked about mutual funds into investments funds into mutual funds into investments because if you require discipline, if you need a habit, if you need psychology, these things don't work.

These things don't work long term. What works long term is automation. So when you look at how do how are there 24 million millionaires in America right now? Here's the next number that's staggering. Ed, there's $45 trillion dollar now. That's with a T in retirement accounts. That's all got there in the last 40 years. years. years. Now, the bulk of it got there in the last 20 years. It all got there through automation. Meaning, people aren't thinking. They're not spending time on this. Money is being moved in the background while they sleep, while they work.

It's being moved without them touching it. And here's, you know, I'm going hold my phone up here and I don't know, you know, this will be on YouTube, but also on on audio. What I talked about today and I talked about it in the update is that we are living in an automatic economy. automatic economy. automatic economy. Okay? An automatic economy, it has never been easier to automate your financial life. In a matter of minutes today, you can open up an app with a financial service company and we can list a whole bunch for you.

And you can automatically save for retirement, save for emergencies, save for a dream, and you can save your change today automatically. automatically. automatically. When you went to save $20 a paycheck, it was actually not that easy to find a mutual fund that could take $20 a paycheck. paycheck. paycheck. Correct. Correct. Correct. You know, you had to find the few funds that would take a small amount of money. That's right. Today, there are firms that are designed to help you invest your change. One of them is a company called Acorns.

You can literally open up the app in less than 10 minutes, automate everything. You go to Vanguard, Schwab, Fidelity, Coinbase, Robin Hood. Like, I'm giving all these firms names because people like, "Well, I don't know what to do. I don't know where to go." There's no excuse anymore to not get saving and investing. But when I held up the phone, what you need to know is this. this. this. Everyone is taking money from you automatically. automatically. automatically. Everyone, the government takes your taxes automatically. Every single bill you have today is automated.

Netflix, let's use Netflix as example because so many everybody's got Netflix, right? right? right? Netflix doesn't say, "Hey, Ed, pay us today and then in 30 days if you want to watch another show, then write us a check." check." check." No, they debit your credit card. Mhm. Everybody's taking your money automatically because it's all about the lifetime value of a customer. So, everyone's on your payroll but you. You have to let that like sit and s, you know, let that sit for a second. Everybody's on your payroll but you.

Pay yourself first. Wait a minute. Hold on. Hold on. Hold on. I'm not doing this anymore. anymore. anymore. Yep. Yep. Yep. I'm not paying everybody else first. You open up Open up your phone if you got an iPhone. Go to settings. Click on settings. Go to subscriptions and look at how many people you're paying right now automatically for stuff you don't use. Your lotions and your potions and all your subscriptions. I just did this on another show. I won't say who the host was. Very big show and I brought my son to go see this show and he does it.

He go I go he starts scrolling through his phone because I walked him through how to do this. He's scrolling and and he's scrolling and he's scrolling. I'm like, "How many subscriptions do you have?" He's like, "I have 23." I go, "Okay, how how many do you use?" He goes, scrolls back and goes, "David, I'm only using three of these." these." these." Yeah. Yeah. Yeah. And I go, "How many of these what what are the ones that you're using cost that you're not using?" He's like, "It's like $400 to $500." Yep.

Yep. Yep. So then, so then while we're on the air, he starts running the numbers on what this would be worth in 20, 30 years. And he and he's like, "It'd be worth millions of dollars." And I get back in the car with James and I go because he was in the studio area watching this and I said, "Um, did you catch that?" Yeah. Yeah. Yeah. I go, "That was that was the money shot." He goes, I go, "That if that shot gets put on clips, that's the clip.

That's that's the clip. It's going viral." He goes, "Well, why would it be put on clips?" I'm like, "Because you never know until the show airs. You could edit it." You know what he did? He edited it. He did. Now, he left it in, but he changed the math because he didn't want everybody to be mad about the fact that he had 23 subscriptions. That's subscriptions. That's subscriptions. That's so he did he did simpler math. so he did he did simpler math. Yeah. Yeah. Yeah. But, you know, the message is we're not everybody, but for the most part, Ed, lots of people are spending money unconsciously and someone has signed up for your paycheck and it shouldn't.

You need them you need them off your payroll. You do. And can I add one thing to this everybody? And then I want to I I know some of you are listening going, "Okay, wow, 20 bucks, 30 bucks, 40 bucks, that's not going to do anything." Uh, hang on. You might be surprised. We're going to talk about compound interest and the rule of 72 here in a second. But before we get there, guys, I know what you're thinking. See, which is that when I make another if I get my next raise, then I'm going to do that.

Or if I get my next this. Here's what I have found with my friends now that I'm an old guy, right? I'm 55. my friends who didn't develop this automatic quote unquote habit. See, habits are what get you wealthy. I don't believe it's your income. I don't believe it's hitting the holy grail on, oo, I bought XYZ at 12 and it's now a $100 stock or I timed the market on Bitcoin. I don't think it's any of that. I think it's habitual. And what you're going to find is is that if you can't do it on your small income now, you won't do it on the next raise and you won't do it on the next one.

You're going to want a little bit larger latte. you're going to want a little bit nicer pair of shoes. You're going to lease a little bit more expensive car. You're going to upgrade that apartment or that home you're in and you never get around to this habit. So, it's more important that you establish the habit than even the dollar amount for right now or even even the vehicle if you just start the habit. Let me prove to you how small. Well, David, you were on another show, friend of mine.

I won't say who. And this clip came to me and I should know this math, but I didn't. Talk about the power of $27.40 40 cents a day. So, if you track your sleep, you count your macros, you close your loops on your watch, but you've never looked into your gut microbiome, you're missing a pretty big piece of the puzzle when it comes to your health. I was missing it. Tiny Health gives you real, detailed data about your body so you can optimize your health with more precision.

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Now, why is that such a an important number to look at? Well, the math is, and I have, you know, I don't know if we sent you the latte factor month, uh, but the math in the book is if you save $27.40 a day, and I started with the big number, in 40 years, if you invested in the stock market with reinvested dividends, you could potentially have over $4,424,000. And [clears throat] that's in 40 years. If a person did this over 30 years, they have $1,644,000.

It's an astronomical amount of money. And now the question I asked, you know, anyone who's listening is, do you know somebody who's wasting $27.40 a day on nothing? nothing? nothing? Like lit like eating out, Uber, one cocktail at the hotel bar. Look at think about where are you spending your money? The average person's got two, three, $400 a month now in subscription fees. The average American's car payment is $700. Is it possible, not everybody, but is it possible that there are tens of millions of people that are wasting $27.40 a day and they're not investing?

Yes. Yes. Yes. What do you think? A thousand% yes. Including 93% of my beautiful friends that are listening are watching you and I right now. Yes. And and actually, you know, on another show I was on, the host Chad GPT did because he asked the question, "How many people do you think could afford this money?" And you know what? The number came back somewhere between 45 to 55 million Americans. Yeah. Yeah. Yeah. Have the have a disposable amount of money that they could actually save $27.40 a day.

Now, why did I use that math of $10,000? The reason is what I've seen having done this for 33 years is that most people think they need a million dollars to change their life. And in fact, for most people, the beginning step is 10,000. Because when a person has saved nothing and you get them to save 10,000, it's like going to the gym. You've never gone to the gym and then you finally start working out and then at the end of the year your whole body has changed.

When a person goes from zero to saving $10,000, they realize like this is totally doable. Yes, doable. Yes, doable. Yes, I actually can make this happen. And that's what changes their life. Also, it gets the average American out of credit card debt. It helps people leave jobs that they don't that they don't want anymore. It helps people get out of abusive relationships. It is a number that is a great starter number. And you know, you keep saying the word uh habits, but if it's automatic, correct?

It doesn't have to be. You don't have to make a decision and then the habit's over. You're done. You have to make one decision. really valid point that. By the way, what I love about the book, too, is it's a powerful one-step system. one-step system. one-step system. One-step system. You can implement a one-step system. And I know everybody listening going, "Ed, I know this sounds easy at your stage of your life or whatever." Well, guys, I'm just telling you that when all the different stages of my life, I found a way to pay myself first.

That's all I can tell you. And it's it was a mindset and a way I looked at the world. And it was automatic. I had it on automatic deduction, just like what David's describing. You know, it's counterculture what we're talking about right now. And what what's more vogue right now, there's two paths to getting wealthy. Well, there's multiple ones. You could exit your company. You could make a fortune. But the one that's promoted most of the time right now is the a little bit anti this in the sense that hey, you got to use leverage.

You got to use debt. You know, so and so became a billionaire by leveraging debt and going into debt. And I want you all to know something. I do have friends who have utilized debt to become wealthy. I do. And they become very wealthy doing it. I have more that went broke though doing it that way. I just want my audience to know I have more that lost everything doing it that way. And when your way of getting wealthy is leveraging debt. And by the way, I've leveraged debt before, but I want to be really clear with all of you.

Most of my friends who tried that path flamed out and went broke. It works until it doesn't. It works until the market goes crazy the wrong way. And then you hear all these people, oh, oh wait, I got wiped out, but I'm back now. Oh, 9/11, I got wiped out, but I'm back now. Oh, 2000 co, I got wiped out, but I'm back now. You only have so many of those. But let me tell you this, the process of saving money, eliminating consumer debt, reducing your household debt, saving money in a systematic monthly deposit type fashion, I've had no friends go broke doing that.

And then people people people No, no, no friends will ever go broke doing that. doing that. doing that. They can't. They can't. They can't. It's not possible. That's right. That's right. That's right. If you if you live below your means, you can't go broke. Do you think, David, I want to kind of lean in. And by the way, let me tell you the other thing people will say. Well, that's how you become like the millionaire next door. I watched a clip yesterday, a guy say, "Well, I don't want to be the millionaire next door.

What's the point of having a million bucks if I still drive a seven-y old truck? I still live in a average home." And I'm like, it's a huge difference, dumb dumb, because you'll be free living in that place as opposed to someone else owning that place. It's a huge difference, just so you know. And the vast majority of people aren't going to be billionaires and don't even want to be. Their priorities are their family or making a difference or their vocation or their church or their hobby.

But what they would like to be able to do is to get financially independent. Maybe not totally wealthy where they're worth 50 million or hundred million. But I also want you all to know and I'm going to ask David a question. I promise. I've become mega wealthy, hundreds of millions of dollars of wealth this way without using debt. In fact, the times I've used debt, I've lost money most of the time because I understand the process and something called dollar cost averaging. I don't have to time the market.

Would you at least explain to them why just get started is most important in your mind as opposed to timing when they start making these automatic payments? automatic payments? automatic payments? Absolutely. Absolutely. Absolutely. And I want to talk about and I'll come back to that the biggest myth is if I make more money then I'll be rich. Right. Right. Right. Right. If I make more money then I'll be rich. Then I'll stay invest then I'll make then I'll do the things I'm supposed to do. It's just not true.

You know I I didn't when I start when I came out of college I wasn't like you. I didn't actually save $20 a paycheck in my first job. Most don't. Most don't. Most don't. I was you know I was making $50,000 a year and I had never made any money and I thought oh my god $50,000 a year I'm rich. rich. rich. And then I spent more. I wasn't rich, so I thought I need to make $75,000 a year. Spent more. Wasn't rich. Thought, well, I'll make a hundred.

The hundred's the number, right? Everyone thinks there's always that number. It was at $150,000 a year in income. When I met the McIntyres, Jim and Sue McIntyre, that the automatic millionaire book is based on y this ordinary couple comes into my office able to retire at 52, having never made that year, they made a little over $50,000. Their average income had been $40,000 a year. and he comes into my office and he's able to retire. He has two homes paid off and his net worth was $1.8 million.

And I was so blown away by this that I asked them, "What what did you do?" Right? Right? Right? How did you do this? And and they looked at me, you know, in my office in Morgan Stanley like, "David, we did all the stuff you talked about in your class." Because they had taken a four-week class of mine and I'm a young kid then. I go, "Well, not everything." Like you talked about budgeting. Budgeting totally doesn't work. We tried to budget. We almost got divorced because we were fighting over the budget.

You talk about discipline. We got rid of discipline. We just automated everything. We did the pay yourself first thing. We just put everything on autopilot so that we didn't have to have put time into it. We didn't have to have discipline. We just automated it and it just worked in the background. But they said we had a goal and our goal was to be free in our 50s. There you go. and they lived in a neighborhood called San Leandro, California. It gives me chills. And they said, you know, we live in a bluecollar neighborhood.

And you know, a lot of our friends are policemen and they're teachers and they're garbage men and and um we have a lot of really good friends on our street. And we all had this goal to be free in our 50s when our kids went off to college and not need to work and hang out together. And they're like, we had mortgage burning parties, burning parties, burning parties, you know, and I'm like, what's a mortgage? you know, back because this is, you know, we we're old now, but this this is a while ago.

They were they were our age and they're like wonderful wonderful wonderful mortgage burning parties where you like you're you're done with your mortgaging and you actually burn the last statement and you throw a party. Wonderful. Wonderful. Wonderful. And I was like, wow. And they left my office and I said to myself, I want that. that. that. Yeah. Yeah. Yeah. I want I want the freedom that they have. have. have. Yes. And I realized at that moment in time, Ed, that I was one of these, you know, today on Wednesdays people like I was trying to look wealthy before I was.

I mean, I tell these stories in the book. I had my Jaguar convertible, my gorgeous apartment in San Francisco. I had my Rolex watch, but I didn't have assets. assets. assets. And I didn't want to be a big hat, no no cattle guy. cattle guy. cattle guy. Yeah. Yeah. Yeah. And so that meeting changed my life. That's so That's so That's so because they left my office because they left my office and I'm like I went home. I opened up a journal. We talked about Tony Robbins before this gone caught on here live.

I went to a Tony Robbins seminar. I had my journal. I opened up my Tony Robbins seminar. I'm like today is the day I changed my life. When I go back to the office tomorrow, I'm going to change everything. I went back into the office. I signed up for my my I was already using my 401k plan, but like so many people just putting two or three% away. M M M I ripped off the band-aid and increased it to the maximum. I started forcing money into a stock purchase program.

I started building net worth. Yeah. Yeah. Yeah. And you know, fortunately then I started making more money too. And by the time I was 30, I was financially free by 30. by 30. by 30. Now financially by 30. Now financial freedom is relative, right? Because you can always keep spending more. That's right. That's right. That's right. But I but I made a decision and I still make this decision. I want the feeling that comes with being free. I don't need the stuff. Yep. Yep. Yep. Like and and you know once you get to a certain age and certain level of success, you actually realize you don't need the stuff at all.

It's ironic. It's really ironic. By the can I jump in and say something you just said? I want everyone to rewind about 40 seconds ago. I want you to have the feeling of being free financially. I don't know that I care whether or not you own an island or a jet or any of that. A lot of the times everybody those things begin to own you when you have too many things. What he said though about being free, you know, it makes me emotional because the world is so counter this right now and the work you do is so profound.

David, I just want to acknowledge you because we need your voice in the world. You know, just for my audience's edification, I grew up when I was really little poor. We were on welfare. Then we were kind of lower middle class and I think we probably made it to middle class. And then personally, I got to where I live paycheck to paycheck. And then I got to the stage of being financially free. And then I got to extremely wealthy. And I can tell you extremely wealthy is overrated, right?

It's not that complicated. It's more complicated. But, you know, if you can get there, do it. Being poor is is really terrible. It's hard to live that way when you can't help and you live in fear and you've got anxiety. And what is underrated more than anything on this planet right now is getting financially free. that tear up your mortgage party, that be free in your 50s or 60s. That is the most underrated thing in the world. David right now, you guys, is doing this podcast from Florence, Italy, and what appears to be a very nice place.

And he got to make the decision, if you don't mind, it's not bragging, but when you're financially free, you also get choices and freedom and choice. And so, how'd you end up there, just for the record? Well, consciously, right? like you can live a conscious life or an unconscious life. And I was building if another financial service company. So I was I was I built it's still there. It's called awealth management. It's one of the largest registered investment advisors now in America. And I committed three years to my my two co-founders to get this business up and off the ground.

And I came home one day and I said to my wife, you know, at the end of three years, um, we've got one chance to take these kids abroad, our kids, to live abroad before they go to college. college. college. And if we don't go on at this specific point in time, we'll never do this. So, let's move abroad. Let's take these kids and put them in international school and let's go live abroad for a year. And she's like, where do you want to go? I'm like, well, let's just play the game.

Where do you want to go? And so, I'm like, I love Florence. Let's let's start in Florence and take a look at Florence and see if if this could be the right city. And we landed in Florence and we walked I live actually right by the pond ofio. So we walked on the pond ofio on a perfect night. There's this there's a color to the sky in Florence. It's unlike anything you've ever experienced. It's this pink color on the perfect night. It was a perfect evening evening.

evening evening. evening evening. And my wife turned to me. We have a picture of this. It gives me chills. And she's like this works for me. Does this work for you? I'm like totally. So she's like, "So if the school looks good tomorrow, then let's just we don't have to go look at some other cities. Let's just come here." And we did. So we planned it out two years in advance. Yep. Yep. Yep. And we worked with the schools and we moved our kids and we came for nine months.

And here this is actually an interesting thing. So we came for nine months. That was the intention. And because that was the intention, we moved to an apartment with basically two bags each, right? Just clothes, furnished apartment, plugandplay, dropped our bags, and started being tourists. only tourists for nine months, right? And ended up having the absolute time of our life. And 90 days in, my older son, Jack, said, "God, this is incredible. Like, do we have to go back to New York City? Like, could you run the business from here because I'd like to stay?" Yes.

Yes. Yes. And I walked into my wife's bedroom. I'm like, "Honey, Jack wants to stay." She's like, "Well, I want to stay." Oh, great. And it's six years. But it's in six years, right? It's six years later. And I'll tell you a funny story. It's just it's a random story to tell you at the moment, but it happens to be related to yesterday. Okay. Okay. Okay. There's an article in the Wall Street Journal yesterday about the storage industry. industry. industry. Mhm. Mhm. Mhm. How much how how insanely large sto the storage industry is becoming in the United States.

United States. United States. And I think it's like 16% of Americans, I'm trying to remember the quote, have stuff in storage. Okay. Okay. Okay. And I talk about this all the time, like people have got so much Yes. Yes. Yes. That they had to put it in storage and now they're paying 2, three, four, $500,000 $500,000 $500,000 a month. a month. a month. Gosh. Gosh. Gosh. And the article starts off with this guy's story about how he's spent $100,000 on storage over 20 years, I think it was, and how he finally just threw in the towel.

It's like, I don't need this stuff. Oh my gosh. And and so again, people are just not always protecting the wealth that they're earning. they're earning. they're earning. And I've fallen into this. when we moved to Florence, we stuck our stuff in storage. storage. storage. Yeah. Yeah. Yeah. Cuz And so the next thing I know, we're staying and I'm saying to my wife, "Because the bills are coming in, what are we going to do with this stuff in storage?" She's like, "Well, I don't know. Maybe we'll go back to New York eventually, but like like it's too much work to figure out what to do with it." I'm like, "Now the bills are going up.

They're going up." They're going up. They're going up." Finally go, "Honey, I don't care anymore. I want you to throw everything in storage away." She's like, "It's everything we had in New York." I'm like, "I don't care. Don't need it." She's like, "Okay, I'll go I'll have somebody go through it." So, she so that she had stuff sent here. Um, and then we closed out the storage. But like if you've got storage, storage, storage, Yeah. Yeah. Yeah. storage could help just cutting out your storage bill can help you start saving and investing.

and investing. and investing. All the the reason I wanted you to tell that story is that's what freedom can give you, the freedom of choice. I mean, yours is extreme. Let's go visit Florence for 9 months, but it might give you the choice everybody at some point in your 50s to go visit Florence for two weeks or just have some experiences of your life. And so if you get an automatic system in place, you can begin to live like this. Now, here's the hard question, and I don't have the answer to it, so I' I'd love to hear yours.

Someone's listening to this, and they're not in their 20s or 30s, or their parents aren't who haven't done this, and they're 46, they're 46 or 56 or whatever it might be, and they really feel behind. feel behind. feel behind. What do you say to them, David? And I don't I don't have the answer for that one, so I'm hoping you do. So, I was telling you about this podcast that went this this clip that went viral in the last 24 hours. So, I did something you're probably never supposed to do.

I started reading like the 4,000 comments comments comments and and then I also started doing I started engaging in some of them. Um, but I because I really I really care. I know you and I and I tell you this because there are a lot of people hurting and there are a lot of people like, you know, David, I'm 50 now and it's divorced. I have nothing. I'm what what do I do? I don't have 30, 40 years. And my answer is you start today. You start today with wherever you are.

Where are you? Can you save $5 a day? Can you save $10 a day? Can you save $20 a day? You start where your feet are planted. planted. planted. Okay. Okay. Okay. Now, one of the things you can do because you got to find the money is you can start by looking at where does the money go. money go. money go. Yes. Yes. Yes. Most people have no idea. You know, it's it's fascinating me 33 years of doing this. Like people tell me, "Well, how'd you track your expenses?" Well, no, not really.

Well, what do you spend a month? Well, I'm not really sure. So, how about you start there? Go through your credit card. Go through your checking account. Track your expenses for a week. Every time you go somewhere, here a pad of paper, write it down what you're spending. Okay? Get a handle on where you're spending money. Open up your subscriptions on your iPhone. Cancel some things today. I would tell you that today if you're 50 years old and you're starting at nothing and you have a job, the first thing you should do is sign up for your 401k plan.

If you if you have a 401k plan because the laws have changed now. 401k plans now based on the new secure 2.0 act are supposed to be automatically enrolling you in a 401k plan. And most cases about 60 70% of plans are doing that today. But Ed, what they're doing is they're automatically enrolling you at a 3% savings rate. So they're a lot of times someone who's 50 is like, "Oh yeah, I'm using my 401k plan." Well, how much are you saving? Oh, I don't know.

How do you not know? Let's open up your 401k statement right now and let's look at what you're saving. Oh, I am saving 3%. That's not enough. enough. enough. You have to up that right now. Well, how much should I up it to? Well, you should up it to 15%. Am I going to do that? Well, if you can't go from three to 15, can you go from three to five? Can you go from three to four? Can you go up 1% every 90 days? Do something.

But do it today. Like, like if you're still listening to us, do it today. Like when the show's over, don't scroll to the next show. Write down the three things you're going to do as a result of this show and go do it. Because it. Because it. Because when you do that, that's how your life changes. The other thing is when you make one decision to to make a change and you do it, you will instantly feel better. You will feel better because you've done something.

Y and and and last thing I'll say because I know you're such a big identity guy and then I'll shut up so you can talk like I want you talking. You know, people have these identities where they will come up to me and they will say I'm not good with money. Right. Yes. [panting and gasps] Then wait, wait. And I wait, stop that mean you're not good with money. Are you good at spending money? Everybody's good at spending. Well, yeah. Okay. So, you can make money and you can spend money.

So, what are you not good at? Well, I don't know. I you know, what you're saying is you're just not good at investing yet because you haven't started started started because you don't know how. I mean, the automatic night I wrote the book. So, it could be super simple. You could read in a couple hours and it could tell you 99% of everything you need to know to build wealth or life. M and I just think there's no excuse anymore today to not get started today.

There's no friction anymore. Yeah. Yeah. Yeah. But you have to start. So change your story to yourself. If your identity is I'm not good with money, that was the old you. That was the you before you listened to Ed's podcast today. And the last thing I'll say is this. Please think about this. Imagine you're seeing yourself in 10 years. You're literally meeting yourself in 10 years or 20 years or 30 years. You're meeting an older version of you. Do you want to have to explain to yourself in 10, 20, 30 years why you didn't do anything?

Or do you want to meet yourself in 10, 20, 30 years and go, good job. good job. good job. You took care of us. You did it. You took care of us. Thank you, David, for doing this at 30. Because now you're 60 and you did it all. I'm 59, actually. Mhm. I didn't want to meet I didn't want to meet myself at this age having not done it. I hear you. I didn't want to be that person. Right. And and and I think for anyone who also is older, if you have younger kids and and maybe you're not where you wanted to be and you're meeting yourself at 16, you're like, I didn't want to be here.

You've got kids, then tell them. Tell them what you did wrong so that they don't do it, too. Because kids learn by what they see you do. Not just what you say, but what they see you do. That's right. right. right. And then let them see you make changes. You can change it. You know, you have you have a whole audience that's over the age of 52. I've seen your audience. It's broken into two pieces. And and the beauty of being in your 50s and your 60s is you're smarter.

You don't care anymore what people think. think. think. And You can start over. You can start over today. David, this is so good. Yeah. Stuff with your kids is caught, not taught almost all of the time. How do you know? Tough question. Someone's listening to this and they are 30 or 40 or 50 and they're like, I would like to get to where I'm financially free. Do you have a formula or a strategy, a methodology where you can calculate that you have enough to make that decision that I am going to retire.

I'm not going to work anymore. In other words, even for me, I my homes are all debtree. I have sub substantial amount of cash, but my burn rate's pretty high because of the properties and different things that I own. And it's hard for me to know what's the dollar amount where I'm free because I'm not even sure how long I'm going to live with the way technology is now, right? Like I'm 55 now. If I were to stop earning income today, I know what I've got saved, but what if, you know, planning on living to what, 85 or 90, but what if I live to 105?

What if I live to 110? So, I think people also have a hard time knowing when they actually are financially free. Did you Oh, you're so right. Right. So how do you know? Well, so it's interesting because how you know how meaning you specifically Ed, Ed, Ed, right? This high net worth individual and somebody who's just saving one hour a day of their income for 30 years, how how how they know and you know it's the exact same formula. Correct. Correct. Correct. And for and the formula is you you do a financial plan, financial plan, financial plan, right?

So like you know you should you go and have a financial plan done. Now technology is making it today so that you can basically do a financial plan even on chat GPT or claude but you there's a zillion different software programs out there and you can go meet with a financial advisor and what are they going to do? They're going to run all of your assets. They're they're going to make a net worth statement. What do you own? They're going to go through everything. What's in a retirement account?

What's in taxable accounts? What's in bank accounts? They're going to add everything up. How much equity do you have in your home? They're going to add that up. Then they're going to look at what do you spend a month and a year and what do you need the portfolio to produce produce produce to create enough income for you to live. Now most people don't actually live just off their portfolios. They do use social security. security. security. They may have a pension plan and they've got retirement savings and they may have equity in their home.

So it's it's just a mathematical formula. And these numbers today, it used to be you would go into financial advising office, they would print these 40page binders with these complicated plans. Clients hated these plans, by the way, because they were so complicated. These plans have gotten simpler. Today, you open up your dashboard. I I mean, I can see what we've spent. I can see what the portfolios produced. So, I would tell anybody who's in their 40s and their 50s, go meet with a financial planner, right?

right? right? And today, you can hire financial planners by the hour. You can hire a CFP by the hour or you can buy software programs. It's not software anymore. It's all online and you can start to play with this by yourself. I think for somebody who's not super into money, that's complicated for them. It can be nice to sit down with somebody and pay them by the hour and say, "I just want you to run a basic financial plan for me and tell me like, do I have enough money set aside to stop working?" And and I think there's something I really want to make sure I I don't forget to talk about, which is what surprised me when I updated the automatic millionaire, aside from the fact that there was so much wealth that's been created, the number that blew my mind away, because I had not I I had not heard this before.

before. before. I learned about this thing called health expectancy. expectancy. expectancy. So health expectancy is not the same as life expectancy. life expectancy. life expectancy. Health expectancy is the age that the World Health Organization and every government around the world knows what age on average is someone going to get sick in a country and have a permanent disability that affects the rest of their life. And in the United States, the age is 63. Wow. Wow. Wow. Wow. Right now, we rank 72nd in the world. world.

world. So, and the other thing I talked about on some of these other shows, I'll talk about it here, is that everybody thinks, you know, you said we're going to live to be 110. The data doesn't actually, you know, if you're into health hacking, some people are going to live that maybe live that long. I don't know. The long. I don't know. The real the reality is life expectancy United States is going down, not up. So life expecties is 76 right now. It's the worst it's been in 20 years in America.

And it's worse for men than women. women. women. So I think that people should work on trying to retire sooner versus later. I totally agree. I think I think too many people have put off their whole life and then they retire at 65 and they're not even healthy enough to enjoy their retirement years. You're totally right. And I think it's tragic. I agree with you. By the way, I can't believe that it's 63. I have to say something to everybody. There's something else in the book.

Get the book, by the way, guys. Get the book. There's something else in the book though for this idea of projecting because first off, I don't know how long we're going to live either. But my f I have a lot of these, you know, David Sinclair's and Hubermans and those guys on the show and they tell me depending on there may be a huge difference between how someone how long someone's going to live who's listening to this that is 30 is going to live compared to like you and I with technology AI and and uh you know all the different stuff they're doing on gene expressions now.

And so um they may actually live that long, right? But one other thing, and this may seem like a technical thing towards the end of a podcast, but I want you guys to have a gift of all of it, especially if you're new to this, but there's a there's such a thing as risk assessment based on your financial situation. And in the book, you have the automatic I think you call it like financial pyramid of rate of return and risk relative to age. You know, the part that I'm talking about of the book.

Yeah. Yeah. Yeah. Can you just address that? The investment pyramid. The reason that this matters everybody, it may seem kind of like you know low vibrational stuff here is but when you are making those calculations at 55 or 60 years old that 10% number that David referenced earlier should not be your expected rate of return more than likely because of some risk assessment as you get older you may be more conservative with your money. So at least address the concept of rate of return based on age and all of that other stuff that's in that pyramid.

Yeah. Yeah. And and so the other thing is that what I talked about in the book and and maybe a lot of your listeners have heard of this, but in case they haven't, it's called a target dated mutual fund. So inside most 401k plans, and every firm has these, a target dated mutual fund basically is divided among a lot of different asset classes, but it's between stocks and bonds. And you'll have global investments, you'll have large company stocks, medium company stocks, small company stocks, and you'll have fixed income.

And the way it works is as you get older, if you know when you're young, you have more of your money in stocks and as you get older, you have less of your money in stocks. And so it automatically does what's called rebalancing each year as you age. And so really, people don't have to make this complicated. You can just pick a target date mutual fund and if you're going to retire in 2050, you pick that fund fund fund and they everybody's got them. Vanguard, Fidelity, Schwab, everyone's got them.

And that fund will automatically change the asset allocation as you age. You don't have to do anything. It's all done for you. It's automatic. By the way, trillions of dollars now in these accounts and they work great. Like they work great because people leave them alone. You asked me earlier about dollar cost averaging and I invest sidetracked. Dollar cost averaging means that you're putting money in into the market, in the bond, whatever you're putting in, putting it in every time you get paid, right? So every two weeks or every 30 days, you're investing.

The key to dollar cost averaging is that sometimes the market goes down and you're buying it cheaper. Sometimes the market goes up and you're paying it more expensive. But the reality is over time because of the consistency the money will compound and compound and compound. What you don't want to do is try to time the market. Like when the market goes down, you don't want to go, wait a minute, this is it. Like we're going to war with uh Iran. I'm like, I got I'm gonna get out of the market and I'm going to go to cash and then when the market when when the war is over, just example, because there's always things like this, when the war is over, then I'll invest.

Yeah. Yeah. Yeah. Like three days ago, the market went up a thousand points in one day. Yeah. Yeah. Yeah. If you miss the best days of the stock market, you only need to miss a handful of them to miss almost all the returns of the stock market. Like there's a statistic and I'm I might might get this wrong but I just read the statistic again like over 20 years that if you miss the top 10 days in the market you're going to get rate of return that's 5% instead of 10%.

I'll go back and fact check that for you later. later. later. But you the point of the time in the market just doesn't market time in the market just doesn't work. You have to figure first I have to be right twice. You have to figure out when to sell. You have to figure out when to buy. You have to pay taxes. You need to invest and leave it alone. Yeah. And then we haven't even talked about home ownership. I don't know if we have time to talk about homeowners.

We do. I actually I got two more questions. One is home ownership, too. But before we do it, I'm gonna these are where the hard questions start coming in late in the interview, everybody. So, those of you that are still here, so if I don't ask you, because you know this, I'm sure you do. You've recommended 401k a bunch of times in the interview, right? And so I know you know that a lot of advisers are going to be going, "Wait a minute, he hasn't talked about taxes at this retirement stage." And so if you're in a 401k or a traditional IRA and you've accumulated that money and you go, "Oh, I've got a million5 in my 401k.

I'm going to retire." You have taxes to pay when you get to the end there. So, I'm wondering about your feeling about tax deferral accumulation and then the taxes on the back end because you'll have people say, "Well, wait a minute. Do you think taxes are going up or down?" And if they think they're going up, they don't know that they want to defer that money to the end of the 401k and then pay ordinary income when they pull the money out on a larger number.

So, when you're recommending 401ks, I just want this to be a, you know, advisor that follow me go, you should have asked them about the tax thing. So I'm asking you about the tax thing. What are your thoughts on that? So let's let's talk about the two different options that people have when it comes to a 401k plan because the world has changed. Like this is totally different from 20 years ago. Y most people today will have a choice to either do a Roth or traditional.

Meaning that in their 401k plan they can elect to put money into a Roth 401k plan which is after tax dollars. dollars. dollars. Correct. And that money will grow taxree forever and come out taxree. Or they can elect to have a deductible investment, right? They don't pay taxes up front and then it grows taxree until they take it out. But when they take it out at the age over 59 and a half, it comes out of ordinary income, which is better? Well, a lot of people today like the Roth IRA because they don't want to pay taxes later, right?

makes a ton of sense. However, you're you're having to save more because you're not getting a tax deduction. deduction. deduction. So, I recommend a lot of times for people to split the baby, put half of what they're going to put into a Roth IRA and put half what they're put into a deductible deductible 401k plan. Um the key thing ultimately is that you just do one of the two or you do both. Okay. Okay. Okay. So, once but there is a problem. Let me tell you what, because this is the problem that I've identified.

We've got $4 trillion dollars in retirement accounts right now. And what is shocking to me, and I also learned this when I updated the book with all the research, the research, the research, people are not taking money out of the retirement accounts who have done a good job saving. They're not using the money. They're waiting to take money out of the retirement accounts until what's called RMD age, RMD age, RMD age, right? right? right? Required minimum distribution age. And that is the age of 73 or 75.

Like for you and I, it's going to be 75. We won't have to take $1 out of our retirement account until 75. And by the way, we won't because we've got money outside of our retirement accounts. This is a problem that's massive because 83% of Americans aren't taking money out of their accounts until they're forced to by the government. I think there's actually a solution to this. this. this. In fact, I'm working on the solution. I I think the government should change the tax laws on IRA distributions to a flat tax.

And I think if the government were to change the taxes on IRA accounts after the age of 60 and they pick a number 10% 12% or 15%. More people would access their retirement accounts sooner. They could then enjoy the money. It would go into the economy and the government would get tax dollars sooner because the government's waiting for all these RMD distributions. M so I actually have a website and a white paper and a Google notebook LM on this at at at Iraflatax.com Iraflatax.com Iraflatax.com and I'm and I'm starting to share this idea.

I have no vested interest in this. I just think we need to think about ways in which we stir our economy, get the GDP of America up, bring in tax revenue, and help baby boomers and retirees live their best life. And so I think it's it's time to have this conversation because the money's some of this money's a lot of this money is just sitting there because no one wants to pay taxes. Um, okay. I want to finish with this has been so productive and fruitful and detailed.

I'm really grateful that we started kind of on the surface, but we've gone really deep here. And so you mentioned home ownership and um I'm just a huge fan and uh I've heard so many things online people going home owning your own home isn't an asset. You shouldn't buy a house. And I'm the complete reverse and just it doesn't matter what I believe, it matters what you believe. But one of my great concerns for this generation now that's in their 20s is ever having enough access to buy their own home.

And I watched that be the centerpiece of my parents at least financial strength was that they owned a home and and paid that home off eventually and had that asset. I've watched that in my own life fortunately on multiple homes and and I worry for my kids and young people listening to this that they may not they're it's so difficult to get home ownership now for young people based on how much homes are and lack of income growth etc. So saying that that's how valuable I think owning a home can be.

What's your advice or your counsel around home ownership just in general for someone listening to this today? today? today? Well, you and I are on the same page and I think what happens, this is what I've experienced with this book launch. I've always talked about the power of home ownership ownership ownership always for 33 years, right? Because all my I worked on Morgan Stanley. All my clients who came in who built they're ordinary millionaires, right? They built million-doll wealth on an ordinary income. All they did was two things.

Bought a home, paid it down, and paid themselves first automatically using their 401k plan. That's all they did. Those two things and they live below their means in order to do that. Today, young people are being told, and there's a lot of financial influencers telling you, "Your house is not an asset. It's cheaper to rent than own. You should take all that money that you're going to waste on buying a house, and you should put it in the stock market. You should put it in Bitcoin or whatever they're telling you to put it in." in." in." And what people don't realize is that you can't live inside Bitcoin.

You can't live inside a mutual fund. Right? you you have to live somewhere as long as you're alive. And rent, even if it's cheaper today, I promise you in 10, 15, 20, 30 years, it's not. it's not. it's not. Yep. Yep. Yep. Rents have skyrocketed across the United States. And so is the value of home ownership. So, you know, 20 years ago, homeowners were worth 40 times more than renters. Today, homeowners are worth 43 times more than renters. Wow, what a stat. Wow. You know, you know the stat the average renter is worth less than $10,000 and the average home is worth over $430,000.

There is $37 trillion in home equity like like people go success stories clues. clues. clues. Yeah. You want to know where the wealth is? You can see where it is. It's in two places. Homes and the stock market. Those are the two primary escalators to wealth. You have ideally you're on both. Now, the problem is the average age of home ownership today is 40. Yeah. Yeah. Yeah. First- time home buyers are now 40. Gosh. Gosh. Gosh. Why is that? They've got student loans. They're living, you know, a lot of people making $100,000 a year still living paycheck to paycheck.

Yeah. Yeah. Yeah. How do And people think, "Oh, it's it's so much harder today to buy a home." The Wall Street Journal did a study on this, too. Like, is it is it actually harder for people today than it used to be? And they one of the things they talk about is like, I think it was in the 80s, you know, mortgage rates were 18%. Mhm. People talk about mortgage rates being high right now at 6 and a half to 7%. There was a time they were 18%.

So I know homes are harder to buy today than ever and yet there are lots of places you can buy them. Someone will go say, you know, the top 50 markets aren't affordable. Well, then you'd have to go live in one of the markets that are not one of the top 50 markets. You just have to realize that if you don't buy don't buy don't buy really one of the things you need to know, and here's the truth that here's what's happening. You don't create generational wealth unless you own a home.

home. home. Generational wealth is created through home ownership. When you look at who doesn't own homes, it's family after family where they didn't buy a house. Renters stay in a rent trap. So what's going to happen actually is there's about $120 trillion is talking about being transferred from one generation to the next ultimately. Maybe depends on the baby boomers that spend their money. And the and the wealth's going to transfer to the next generation. Then those people, the first thing they're going to do who are renting is they're gonna go out and buy a house.

a house. a house. That's right. That's exactly right. The Everybody's like, I don't want to buy. I'm gonna rent. But as soon as mom and dad die and they hopefully leave them some money, which came out of their house, then they're going to go buy a house. I think I would do it sooner than that. I think I would really in my 20s and my 30s. It's less important to own at our age. Ironically, it is it is it is right. Because if you because once you build your wealth, you don't need to have the equity in your house.

You can put the equity in all the other assets. That's right. But when you're starting, home ownership is forced savings. Yes. Yes. Yes. Because you're spending money every month to pay your mortgage. It's paying your mortgage down. And you just turn around and, you know, 10, 15, 20 years later, you built huge equity in your house. house. house. Yeah. Yeah. Yeah. And I get these stories all the time from people like, you know what, I saw you on Oprah 20 years ago and I went and bought a house and now I got three of them and just like you said, I'm set.

You're you're you're I'm so glad someone's on my show saying this because I I understand the argument you guys. Your home is the one asset you have that you also get to use as David said earlier. And I know the argument. Well, you got to pay property taxes and repairs. Yeah, you do need to do all that. And at the same time, that usually adds value to the home when you're making the repairs of the improvement to the home. And so, I just want you to know I don't have a lot of wealthy friends that don't own a home.

And I have a bunch of wealthy friends who do own their home. And there's a reason why Black Rockck's buying all of them because it's a great investment. and where they're doing it. Maybe you could get your hands on one. So, please listen. listen. listen. Also, what you just said about Black Rockck, and there are a lot of companies doing this, they're actually creating a generation of renters intentionally. They are. That's right. Right. You've got an entire generation that that are being misled that renting is the solution because it's the ultimate way to build wealth.

I just looked at some investment properties yesterday. What's the first thing I want to know? What are the expenses? What's it going to cost me to buy this property? What am I going to rent it for? for? for? Right? Right? Right? And anything any investor is going to buy to rent, I'm not taking anything less than a four cap. Like those, you know, four cap, five cap, six cap. So people who buy homes and rent them or apartment buildings, they're not doing it for charity. That's right.

That's right. That's right. And the first thing they're going to do is raise the rents when they can raise their rents because they want a return on their money. Exactly. Exactly. Exactly. It's not a gift to you. It's not a gift. By the way, everybody, success leaves clues. And just think about this. If let's just take Black Rockck. They can deploy capital anywhere they want. Why are they choosing to own homes? And so they could it ought to tell you what a good investment it can be if you do it correctly.

If a a firm that behemoth in size is deploying their capital, part of it there. So you ought to get a little bit of yours there as well. Don't listen to someone who tell you you shouldn't own a home. It's silly advice in my opinion. Um this is one of the best conversations I've ever had on money like in my life. Not just recorded, but in my life. And the reason is is because these are principles and it's automatic and it's a one-step system. And I know when we do this, there'll be comments saying that you and I are two older guys with old information and all that other stuff.

What it is, you guys, if you just really want to know the truth, is just two men who have accumulated wealth that would love to help you and have no vested interest otherwise and believe strongly in a lot of these principles. I just think it's cool that I agree with you on it. Now, the tax thing on the 401k, that's all for you to do with your adviser and all that, you guys. But this idea of being an automatic millionaire, of owning a home, of not being stupid with your money, of having it come out automatically, of understanding your risk assessment, of all the things we've talked about today, of compound interest, of paying yourself first.

These are time-tested principles from the beginning of time. If you don't agree with David, ask Warren Buffett. He'll give you the same exact advice that we've talked about today. So, David, thank you for today. It was awesome. like truly awesome. And thank you. I really really enjoyed this. I appreciate you. This has been great. great. great. It has been so good. The automatic millionaire David Bach. Everybody share this episode with anybody you care about in terms of their money and their financial peace. God bless you.

Max out.