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: Hi, I’m Brandon, and welcome to our 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, howdy, I'm Amanda, and this is Episode 94, titled “The Secret to Real Financial Progress.”
Brandon: I love that you put in the “secret.” That seems so mysterious and, I mean, who wouldn't want to know the secret of real financial progress, seriously?
Amanda: If that's what you want to learn, you're in the right place. But we've got to catch you up. If you missed the last episode, we busted apart net worth as “the” gold standard of measuring financial progress. We shared a few examples of a net worth as not the most important metric for what financial success looks like. [01:08.1]
We encourage you to check out that episode, but it's not necessary to get the big idea of this episode, which are our secrets to real financial progress. In fact, there are five and we're calling them secrets because they are definitely often misunderstood.
Brandon: Yeah, and I think, again, it's financial progress moving in a direction, so first we have to talk about why financial progress is important. Now, Grandma would remind us that each of us is born knowing absolutely nothing about how money works and all of that, and when we're born, right? More importantly, how do we make it work for our benefit? We're not taught that and we're not born with it, right? [01:57.8]
Amanda: Yeah, and then as we're children, Brandon, you know this, if our parents do talk about money, we learn both positive and negative money things for them. Even the things that positively worked for them, we're not really sure they're going to work for us, right? And they certainly don't teach us about how money works and how to make it work for our benefit in school, right? Schools don't teach these kinds of things all the time.
How we think about money is whatever we've picked up from the adults that we were around as kids. That's what we bring into our adulthood. It's called our money mindset, and it's going to have pluses and minuses as we start taking control of money for ourselves, right, earning it and deciding where it goes.
Brandon: Yeah, I know for me, growing up, there were a lot of negative money mindsets that I had to even teach myself today.
Amanda: Same here.
Brandon: Yeah, so we know there are often kinks in our initial money mindset, right? We just said that, because when we start adulting with money, we run into other kinds of issues that we weren't necessarily prepared for. Again, I have a niece that started working and she asked me some money questions. I'm like, Really? You didn't learn that in school or your parents didn't teach you? It was just weird. But there are a lot of things that we're not taught about as we go into adulting. [03:15.6]
Amanda: Yeah, for example, debt, how it works, when to use it, when to not use it, all those things. I just was talking to someone yesterday that when he was in his twenties, there was some purchase he wanted, some kind of stereo or something, and it was a 10-buck payment per month. He was like, Oh, yeah, I could totally do that, having no clue what the interest rate was, how long he was going to be paying that $10 a month, how that compared to paid in full. We just don't learn those things, and we might think that all debt is bad, we might think all debt is good, somewhere in between, right? But we bring that into our adulthood.
Brandon: I think I did that with a stereo system myself, too, I’m not going to lie, for the car. You remember that, that nice system I had.
Amanda: I don't remember it, but I’ve heard stories. [03:58.4]
Brandon: And then there's budgeting so that you don't go into more debt. We have to figure out how to learn that big “B” word, budget. Again, when my niece was calling me, when she started working, she was like, Hey, I’ve got a job and I'm not getting paid for a couple of weeks. What do I do? I'm like, There's some budgeting that you’ve got to probably figure out and knowing how money works and all that other stuff, but she didn't even know that she wasn't going to get paid right away. She was ready to spend already before she even had a paycheck.
Amanda: And then it was probably a big shocker to her to see that she had to have taxes paid, taken out of her paycheck. She didn't even get the full hourly amount, right? That's often a big surprise to us.
Brandon: Yeah, two weeks later, she was calling me and saying, “It's not as big,” and she was upset after getting started.
Amanda: Yeah, and we enter a lifelong battle of how to make sure we pay our fair share of taxes and not a penny more, and that's always confusing, and trying to figure out what the future of taxes are, it’s impossible, all those things related to taxes. [05:05.5]
Brandon: Then there are the savings decisions like, how do we save for the future? We often think, Oh, 65-year-old us is way off, because we're only 20 or 25 or 30, whatever, and so saving is a challenge, especially in our world now where you're not even given much incentive to save.
Amanda: Yeah, and then there are all the investing decisions if you choose to invest in real estate or in stocks, bonds, mutual funds, all the things to learn there and all the decisions related to that. Lots of things that we come into adulthood with and we're forced to learn and grow in and make progress in.
Brandon: Yeah, and, again, trying to figure out how to make progress. No matter where you are starting from, how do you make progress financially, both practically and on a mindset level? It's not just making it in your wallet, but in your head as well. How do you make progress? [06:08.0]
Amanda: Yeah, and sharing some of those examples we just shared might make some people feel like, Wow, I’ve made a lot of financial progress since I started as an adult, and having my own money. Congratulations, that's amazing. I hope that you'll keep growing, right, and you'll be able to make even more progress in the future.
Here's the number one thing about how to make financial progress. You have to spend plenty of time knowing your financial vision, tracking what's coming in and out, seeing what progress or lack of progress you're already making. We actually covered those three building blocks in our last three episodes, defining your financial vision. What if you hate budgeting? And what was the last one? Is net worth a good measure, right? All about measuring your financial progress. Go back, listen to those three episodes for more on those topics. [06:58.3]
Brandon: Now that you've done those things—you have your goals; you’re kind of tracking things—now you're ready to make the real progress from the context of knowing your goals and knowing where you're already at, right? Then it's time to make it happen. We have five Cs because Amanda loves using those Cs and Bs or whatever letters to make a memorable. She's always thinking in those ways. Five Cs for what progress is not and five Cs of what it is.
Amanda: Okay, so the first one—progress is not consumption. Progress is concentration.
Now, consumption does not equal progress. Being able to buy more expensive stuff or go and more expensive experiences, a lot of people feel like that means they're making financial progress. It doesn't. I mean, hopefully, it means your income is increasing and that's amazing, but if your expenses are increasing right along with them and you're still spending a hundred percent of every dime you earn, you're in the same spot. You're actually not progressing and the rug could be ripped out from under you at any moment. [08:05.3]
Instead, progress is more like concentration. You know what's important to you is happiness throughout your life. You know your values around money, so you concentrate your money there rather than getting distracted by all the consuming that you could do and that the marketers and advertisers want you to do.
Brandon: Yeah, what I’ve learned is everybody has a plan for your money and you need to have that plan first.
Financial progress is also not competency. Instead, it's capable cultivation. Competency does not equal progress because knowing what to do is not enough. There are a lot of people who know what to do, right? It's putting it into action. Unless you're implementing what you learn, competency is worthless.
Instead, progress is more like capable cultivation. If your financial life is like a garden, you're always learning and responding to environmental factors to cultivate what you want to grow. [09:10.7]
Amanda: Yeah, so if you're going to start a vegetable garden, you might read some books about gardening. You might start following some people on Pinterest or who knows what you do to learn. But then you actually have to go out and plant the vegetables. You grow the things and you’ve got to cultivate your garden. Otherwise, you'd never have vegetables if you stay in Pinterest or land or whatever. But then, also, as pests start invading your garden, you've got to do something to keep them out of your garden, right?
All of those kinds of things are actually a really good analogy for your money. You have to learn what to do. You actually have to go out and do it, and you have to continue to cultivate and be aware of what's happening in responding to environmental factors like that. [09:52.0]
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: The third C is that financial progress is not contribution. Instead, it's cascading.
Now, contribution is giving, right? Being generous. Too many people think they're making financial progress because they are giving more and more and more, they're being more and more generous, when, in fact, sometimes that generosity is actually too high of a cost to their current and/or future financial wellness—and this doesn't have to be charitable giving. This could be helping out family members, different things like that. We want to do those things. Those are good things. [11:06.8]
But, instead, we think progress is more like a cascading. I think we've shared before on this podcast, but in case you're new, our former business was named Overflow. Overflow, cascading, kind of the same kind of ideas. The idea behind that name, Overflow, was that we wanted to spread good things throughout the world, have them overflow throughout the world.
But we lost track of that vision along the way because we're so focused on contribution, right? We had a contribution we wanted to make in the world and we sacrificed all that we could to make that contribution happen. We put others before ourselves by a lot, right? But then we realized that we actually couldn't solve poverty nearly as well from the edge of poverty ourselves. The contribution we wanted to make was actually harder because of the position we'd put ourselves in.
When we shifted to thinking of generosity as a cascading of our blessings to others, that changed everything, and now we can give from that overflow rather than from our lack and we're actually able to give more when we’ve made that shift ourselves. [12:12.3]
Maybe that's a shift that you'd want to try on yourself, too, thinking of financial progress, not just as how much are you contributing, but are you cascading? Are you sharing those blessings that you receive with others, and appreciating what you receive and how it cares for you as well?
Brandon: And, I would say, going back, pre-listen to this, and, hopefully, you don't go through the pain if you're a giver or an activist kind of like we were or are, because that experience pretty much landed me in the hospital and was really, really painful. Learn from this, and, again, be in that cascading role of receiving as well as giving. Yeah, so the next one.
Amanda: Okay, number four. [12:57.7]
Brandon: Number four, financial progress is not community. Instead, it's your crew.
Now, community, we love community, but it does not equal progress. Some people totally have a community. It's hard to say that word sometimes. Some people totally have a community that is getting them to harm themselves financially. I mean, seriously, we see that, whether it's spending too much to try and have fun and enjoy life or their community isn't allowing them to carve their own path and celebrate their unique goals. Again, their unique goals.
Instead, progress is more like finding your crew. Now that's a smaller group of people, right? Your crew are those who know you personally and know your financial story, and maybe even give you competing advice for your benefit. [14:00.5]
You're the captain, though, of your financial ship. Your crew helps you get where you want to go and warns you of the storms they see on the horizon, so you want a crew that focuses on certain areas, but also knows you and is connected to you in some regard.
Amanda: Yeah, you wouldn't take a community on a trip across the Pacific Ocean. You would want a crew, right?
Brandon: Yeah.
Amanda: That’s there for your benefit, knows what they're doing? Very big difference there if you want to get from Point A to Point B and make financial progress.
Now for number five. I'm going to say it, go with me here. Compounding does not equal progress. Many people think compounding, they’ve got to go after compounding. They’ve got to get that compound interest building. But what they think of as compounding isn't really compounding, because either there's volatility where they lose value and then they have to gain that back and it takes more to gain back while you lost than you might think, right—the math, that's how it works—or because they end up spending a portion of their money, right? They end up buying that car, doing this thing, and that destroys the compounding they could've gotten if they had left that money there. [15:15.3]
I have to get away from the Cs on this one, but I think it's okay because this is “the” most important one and we want it to stand out. It's not compounding. Instead, it's uninterrupted compounding. A UC instead of just a C.
There are only really, truly a few ways to get real uninterrupted compounding in your financial portfolio. We don't have time to go into that in this podcast. We’ve covered it in many before. But if you want to learn more about our favorite way to get uninterrupted compounding interest working in your favor, visit Grandma'sWealthWisdom.com, look for the download for “Grandma's Top Tips for an Independent Financial Future” and we go over that strategy in there. While you're doing that …
Brandon: It has made a huge difference for us, definitely. [16:01.6]
Amanda: A hundred percent, yep. Here's the main point of what we're talking about today. You can't reign in consumption, and, instead, concentrate on your most important actions. You can't build on your competency and transform it into capable cultivation. You can't contribute from a cascade of your personal financial health, and you can't build your crew.
You can't do all those things overnight. You can't just snap your fingers and, all of a sudden, you've gotten all these Cs in a row, right? Uninterrupted compound interest, that doesn't do much in a day, right? Even if you have a penny doubling in a day, it's still just two pennies. You need more time for it to grow and see it working.
Now, all of these things as I just recapped that, they might seem overwhelming. Which one do you start with? What are some steps that you could take today to see that real financial progress?
Let me say that again. There are five Cs: concentration, capable cultivation, cascading, crew, and uninterrupted compounding. Which is the most important? Can you improve all five at once? [17:08.7]
Brandon: Here's where we learned a great analogy and it's the barrel analogy. You might have heard of it. Think of your financial life as a barrel with flat slats running up and down. Now the slats are called wooden staves. Amanda did some research, so it's actually a stave that they have.
Each of these five Cs of financial progress is a stave that makes up your barrel. Some might be long, meaning, they are developed and working well, and other staves might be short, meaning, they are undeveloped and not working.
What we suggest is looking at your barrel and determining which stage is the shortest, then focus there. Then your barrel can hold more until the next stave is reached, so the next level, right? Then you focus there. You keep lengthening your stave, so your barrel can hold more and more contents, right? [18:12.8]
You keep growing your weakest area. It's concentration, capable cultivation, cascading, your crew, or uninterrupted compounding, and you choose one and focus there until you feel like it's leveled up with the other four.
Amanda: Yeah, so the one thing about barrels, though, that we have to include in this analogy is that they have a bounding. There's a metal or a wooden hoop that holds all these staves together. The staves are worthless without something that holds them together. The barrel is not going to hold anything, right? That hoop for when we're talking about this financial progress type barrel, that hoop is your goals, your values, your overall financial vision, the things that actually define success for you. [18:59.1]
Now, this is part of why we've done these episodes in this order, right? Defining your financial vision, tracking your in and out, inspecting your progress, defining what progress really looks like for you. These are all building on each other. They're creating what we actually have termed the STILL Method where we believe you can defeat overwhelm. You can be ready for whatever money that flows into your barrel and what you're going to do with it, how you're going to keep more of it and direct its purposes.
You can get more information about the STILL method, download the checklist that we've created to bring to your times where you're focused on your money and thinking through what you want your money to do for you, and you can get all of those things at STILLMethod.com. That's S-T-I-L-L method [dot] com.
Brandon: So, there you have it. Financial progress is growing your concentration, capable cultivation, cascading, crew, and uninterrupted compounding. Now it's your turn to try it out. [20:05.0]
Listen to the episode multiple times as well and grow each of these areas of your financial life and see if you don't make financial progress and live a better life overall because you've enacted and built in those five Cs.
In our next episode, we're going to be chatting a little about how together is better than rich. Together is better than rich. You don't have to do any of this work alone. If you're looking to build a crew, the next episode is for you.
Amanda: 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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