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It’s easy to get jealous on social media: Everybody’s sipping Mai Tai’s on the beach, financially independent and nobody cares that guac costs extra. Meanwhile, you’re saving your money, planning for emergencies and controlling your spending.

But what if you’re actually better off? Most “Instagram-rich” people aren’t actually that rich. Behind their profile is a dwindling bank balance, financial anxiety and looming poverty.

So why try to keep up with them? The key to changing your financial destiny lies in ignoring what’s popular and having the courage to do what works for you.

In this episode, you’ll find out how to build a stable financial future by looking at the hard numbers of building wealth.

Ready to stop being jealous and start choosing your financial future? Listen now!

Show highlights include:

  • What courage really looks like (it’s NOT being reckless). (2:28)
  • How the “4% rule” lets you have cash in the bank without running out of money. (8:00)
  • 2 questions to ask yourself before investing your money into conventional assets like 401ks and IRAs. (11:35)
  • The one question that’ll stun anyone recommending you financial strategies that might not work for you. (12:41)
  • How to develop a sustainable financial strategy without doing the math. (14:50)

Remember to download Grandma’s free wholesome wealth recipes book by dropping into www.grandmaswealth.com. Time-honored wealth strategies served with a helping of balance and trust.

If you’d like to see how Grandma’s timeless wealth strategies can work in your life, schedule your free 15-minute coffee chat with us by visiting www.grandmaswealthwisdom.com/call…just like Grandma would want us to do.

Links mentioned on the show:


Find your wealth journal here: https://grandmaswealthwisdom.com/50

Read Full Transcript

A hearty welcome to “Grandma’s Wealth Wisdom” with your neighborly hosts, Brandon and Amanda Neely. This is the only podcast that helps you take charge of your cash flow and leverage your assets, simply and sustainably, the way Grandma used to.

Brandon: Hey, I'm Brandon and welcome to Grandma's Wealth Wisdom where we help you break through to a smart, stable financial future with the tried and true wisdom Grandma used.

Amanda: And, hey, I'm Amanda. Before we jump into the substance of today's episode, you've got to know Brandon is a jaded skeptic at heart.

Brandon: We're not going to go there, are we, really?

Amanda: We're going there. Yeah, and there are a lot of examples, but the one that came to mind for today's episode is when he sees a photo that someone shares on the socials, he's always trying to look for what's really going on, like maybe what was happening right before, what was happening right after, what might be behind the other side of the camera and stuff like that. [01:06.8]

Brandon: Especially on Instagram, I guess.

Amanda: Right. And he's always pointing out just because someone looks happy and successful doesn't mean they really are, and that can be true of their family life. It could be true of their careers, and you guessed it, that can also be true of their money.

Brandon: And sometimes it's big people. You actually have to have a relationship with them to know, and so I think that's …

Amanda: And they can also hide it in a relationship for a long time as well.

Brandon: Yeah, and part of it, when it comes to your money, it's the idea of keeping up with the Joneses, only to find out that the Joneses are not doing that hot actually. And today's episode, the point today is courage. It's to choose a different path than your neighbors, even if they appear to have it all together, to choose courage over conformity. Choose the path that really works for you. Right? [02:01.7]

Amanda: Yep.

Brandon: It's like how the business owners say, Oh, we're fine, when you ask, How's it going? And I've said this before, as a business owner -

Amanda: How's business going?

Brandon: - How’s business going? How are things? And you just say, Ay, we're fine, when you ask them. And the reality is you know things are not fine, but as the consumer, you don't want to hear how it really is going. You just want to hear it's fine. Sometimes courage is telling a trusted mentor or team members, or whoever is around you, that life really isn't fine and how you are going to get out of that not-fineness to a better place.

Amanda: Right, and particularly with business owners, it's really hard to say that business is not doing as well as it might appear.

Brandon: And its ups and downs. There's always bad times and lows, highs and lows.

Amanda: But it's also a lot deeper than that and I've seen this really go a lot deeper in the parent-child relationship. I have come across several adult children that work with the same financial advisor as their parents and they never even question it. Their parents trust him, so he must be good, no questions asked, no second thoughts, just “I'm going to work with the same guy my parents work with.” [03:17.6]

And I'll never forget this beautiful lady who told me, “I want to get out of my parents' shadow and chart my own course, and so I'm willing to look at different things than just to my mom's financial advisor, what he tells me to do.” And in a lot of cases, for us, adult children, courage can mean getting a second opinion rather than just a hundred percent trusting your parents' financial advisor. Courage can mean doing your own research instead of simply taking your parents' advice and doing what they are doing.

Brandon: No matter what crowd you're following or what financial peer pressure you might be experiencing, we're going to talk today about carving your own path forward and how to find the courage to change. [04:05.0]

So, today's episode, it's a monumental episode. We're at Episode 50. Can you believe that, Amanda? Already at this with this podcast, and it's again titled “Courage over Conformity: Changing Your Financial Destiny.”

Amanda: The first thing we want to do is ask you to sit there and think about this with us. We're going to put a couple of things together and show you the cycle that reinforces each other. So, on the one hand, let's say, you pull out your left hand and your left hand, you see that you only know what people are willing to tell you they're doing with your money. Pretty straight forward. You can't know what people are doing with their money other than what they're willing to tell you. You don't get to go look at their bank account or sneak into their 401(k) account and see what they're doing.

And then, on the other hand, it may be your right hand, people usually only tell you what they're proud of and they're proud of doing what they’ve heard other people do. So, then, they tell you what they're proud of, which is what they think they should be proud of, and you only know what they're proud of, and so you might then tell them the same thing. And it's the cycle where people are talking about the same thing that they're proud of, that they think they should be proud of because it's what everybody else is proud of. [05:20.9]

Brandon: And people don't like to bring up, as we shared before, when things are not fine. They don't like to bring that up or they block it out. So, things like in 2008, that was a thing that people blocked out. When things are hard, when a catastrophe happens financially or in general, we forget those things and we don't remember. And that's probably a good thing actually. If we remembered all the bad things and not any of the good things, that would not be a nice life to have.

Amanda: Yeah, it's a protection mechanism for our brains.

Brandon: Now, I want to use a nonfinancial example from my cubicle days. Here's something to think about. [06:02.7]
You know that coworker who always acts like he has everything together? You know you have him pictured in your mind, or her. They're always bragging about landing that deal or meeting that goal, or whatever it is. And then, you find out their life outside of work is in shambles. I mean, there's heavy drinking, a broken relationship, just a whole lot of negative things.

Amanda: Right, and he only tells you what he's proud of, and those things that he is proud of are the benchmarks that are important in your office culture, and that's all that you really know about him for months and months and months, maybe even years of working together.

Brandon: And, unfortunately, that's what a lot of Americans’ financial life looks like. They've got the nice house, the fancy car, the expensive clothes, but they struggle to pay their credit card bills, and we don't know it. We just see, Hey, you just got that new Louis Vuitton bag. Nice.

Amanda: Right? And you might be shaking your head right now because you know this is true. You've seen it yourself. You know someone who lives this way. But what about something a little less obvious where it might be harder to choose courage over conformity? [07:11.5]

Grandma always said, “Eat your vegetables. Look both ways before crossing the road. And never risk your financial future on elements of the market you can’t control.” That Grandma, always good for some tried-and-true advice. And although some of her wisdom seems to have skipped a generation, you don't have to be left behind.

Download “Grandma's Top Tips for an Independent Financial Future” absolutely free, when you visit Grandma’sWealthWisdom.com. Don't wait. Get Grandma's best tips today.

Amanda: Let's go to some of the more difficult things to think about.

Brandon: Here's something that's been taught to financial professionals for decades. You might've heard of it. It's called the 4% rule. The 4% rule states that you can safely withdraw 4% of your investments each year, and get this, you'll never run out of money. So, of course, that's an awesome thing. Never run out of money. Take 4%. You're golden. [08:14.8]

Amanda: Yeah, and lots of people are doing this. They're saving up a big nest egg. They're taking their 4% out and they're counting on never running out of money. Yet, in 2013, an organization called Morningstar, which is a global investment research and investment management firm right here in Chicago where we currently live, published a report in 2013 called Low Bond Yields and Safe Portfolio Withdrawal Rates.

Brandon: That sounds like a very exciting title that I'm ready to click on and read.

Amanda: Right. At least to put you to sleep at night, right? But you don't need to go read the report, unless you want to.
The bottom line of the report is that we're way off from the former averages of the 1980s and ’90s, with the new way of the financial world in the 2000s, 2010s, the last 20 years—actually, this was published in 2013, so they're really just looking at the early 2000s—but that this 4% rule, their math shows, has only a 50-50 chance of success for a 30-year retirement, meaning if you're planning to live 30 years after you retire, you have a 50% chance of running out of money before you get your wings. [09:26.6]

And in order to have a 90% chance of not running out of money in that 30-year retirement, they give an option to reduce the withdrawal rate to 2.8%. Basically, they're saying don't follow the 4% rule; follow maybe a 2.8% rule instead.

Brandon: Yeah, and that's an article that was done in 2013 you said, right?

Amanda: Yeah.

Brandon: Who knows what it's been like in the past seven years? I bet you there are some other reports that are coming out and it might be even less. Who knows? I'm sure somebody has done more of that math there. [10:01.3]

So, what do those numbers actually mean? It’s that if you're following what everyone else does, you, again, have a 50-50 chance of running out of money. But if you're willing to question, if you're willing to dig deep and look for the latest research by some of the smartest thinkers, you can increase the chances to 90-10, 90% of making sure you don't run out of money with a 10% failure rate as opposed to 50-50.

Still, there's a 10% failure rate, so we want to get that. Actually, I don't know about you, but I don't want to fail even with a 10% chance. I want a 100% chance personally, a 100% chance of succeeding. There you go.

Amanda: Right. Yeah. There are other examples. That's just one example of how these, quote-unquote, “rules” that people follow, that getting the courage to just question them and look for newer research, look for what the opposite people would say and kind of weighing what you believe can really make a big difference. Right? A difference of a 50% chance of running out of money versus a 10% chance of running out of money. [11:14.9]

And, of course, there are lots of other examples. You might ask questions like, Is everyone really using 401(k)s and IRAs to save for retirement? Is that really what they're doing? Maybe a question like, and insert a commonly accepted practice or a commonly accepted principle about finances and ask this question about it. Has that principle or practice with stood the test of multiple lifetimes or maybe only the last 20 to 40 years?

Brandon: And has it worked out for the people that are going through it? How is it really working out for them? That's another question to ask.

Amanda: Yeah. So, that's kind of where we're going here. The first thing to start with when you're looking for your unique financial path forward is that you’ve got to be ready to question what's commonly accepted out there and what might have become conventional, and question, Is that really what's true? [12:09.7]

Brandon: We've talked about how it's important to question if people are giving you their whole story, and we've talked about if financial professionals are also just going along with the crowd, right?
So, how do you break free? How do you get the courage to choose something different?

Here's what we've found to be one of the most important questions to ask and that’s this: have you ever done the math on that? That's the question you want to ask. Have you ever done the math on that? And this is an important question because this is only your future and your life, right? So, you want to do the math on your life.

Amanda: Yeah. We're talking about like real math, not just using some averages, some random projections, putting it onto a chart, making guesses about what's going to happen, but actually breaking it down in spreadsheets, showing your work. [13:04.3]

When you do that, you see all this logic there, because math is logical, and you're able to see those money matters as they really are, not just a figment of your imagination or a sketch on a napkin, or a chart that someone has shown you with a graph of a curve. When you see the math, it actually makes change a lot easier when you see it really laid out line by line, year by year, from whatever age you're at to, say, age 95. And seeing that future mapped out on a spreadsheet with “Here's how much you can count on to be there when you're 80 years old, and here's how much would be maybe there, but you don't really know,” kind of weighing what's dependable and what's not dependable, that can be really powerful.

And, also, seeing the math often helps people stay on track and sometimes even helps them make better choices that bring them more money. Knowing that math often gives a better sense of knowing what calculated risks to take and which to avoid, and it helps through those kinds of decisions, which can mean more money in your pocket, too. [14:12.3]

And, even better, if you see your future, if you make no change, your current path, and then your future if you do make a change, the new path you might consider, and then compare and contrast the two, which one actually looks better. What will this change really mean for the next 20, 30, 50 years, however long it is? And that might be the clarity that you need to have the motivation to choose courage and to step forward into a better future, even if it's a different future than what your peers would choose.

Brandon: But let's face it, Amanda. Not everybody loves math, right? Some of us hate math, so that's okay. You can have someone, a.k.a. us, do it for you. Shameless plug.

And we've got one more important point, maybe the most important in today's episode, so stick with us. But start thinking about what you're going to do differently because of what we shared today. [15:11.9]

Here are three actions you might take after this episode is done.

1. One, of course, reach out to us and have us do the math for you. Just go to Grandma’sWealthWisdom.com/call.

2. And if you're not quite ready to chat, but want some more questioning of the typical advice out there, we recommend checking out a series of three episodes we did called Grandma’sWealthWisdom.com/fire. We bring a lot of questioning of conventional wisdom into these three episodes in a very succinct way, so go again to Grandma’sWealthWisdom.com/fire.

3. And while you're there, download the wealth journal that accompanies this episode at Grandma’sWealthWisdom.com/50, and we've got four questions to help you choose courage and begin the journey towards a brighter financial future. [16:08.1]
That's a lot of resources right there.

Amanda: Yeah, we'll put all the links in the show notes, but, again, it's Grandma’sWealthWisdom.com/call, Grandma’sWealthWisdom.com/fire or Grandma’sWealthWisdom.com/50 to get those three things.

But, let’s say, for that last most important point, you're with us. You agree that people don't tell you their full financial details. You agree that we need to question, quote-unquote, “conventional” financial advice that was created in, say, the 1980s. You agree that seeing the math might give you the courage to make change happen.

What's probably the biggest obstacle you're likely to face if you decide to make a change? Here it is people: who care about you. Seriously, if the people who care about you are like the people who care about us, they don't like it when you change, because that often means change for them. [17:00.9]

Say, you're going to move across country, the people who care about you don't want you to leave them. They're going to have to do things differently because you're not around anymore. Or if you're going to stick with a savings plan, the people who care about you don't want to miss out on all the fun you had together, spending too much money, right? And it's just the case that anytime you shake the status quo, those closest to you are going to feel it and they're going to want to say, No, no, no, stay the same. I don't want to change, or I'm not ready for a change yet.

Brandon: The other thing is that people who care about you, what they're going to do is ask you 101 questions about the change. I mean, again, they care about you and don't want you making a change for the worse, and this is actually a good thing if they are asking these questions with the motivation of concern for you, rather than from a selfish motivation. If they're asking in the right lens, that's a great thing, but they're going to ask you lots of questions. [18:00.0]

Amanda: Yeah, and that's why we created the next episode, Episode 51. That episode is for those who care about you, especially those you either share finances with or those you look up to for financial advice.

We're going to talk about some of the questions they would ask, particularly about Grandma's strategy if you choose to work with us and pursue that strategy for yourself, and how you can be ready to have a heart to heart with them that's helpful to both you and to them, and still helps you make the change that you decide is best for you and that you wish to see in your life. So, be sure to not miss the next episode on that topic.

Brandon: Awesome. We'll close today for now. So, until next time, keep building your wealth, simply and sustainably, so you can break through to a smart, stable financial future.

The topics presented in this podcast are for general information only and not for the purposes of providing legal, accounting or investment advice. On such matters, please consult a professional who knows your specific situation.

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