In this episode, Jeff Smith and Shawn Rider dive into financial management strategies that are key to achieving long-term wealth. They discuss the importance of controlling lifestyle changes, avoiding lifestyle creep, and strategically planning new income sources. The conversation also highlights the significance of living below your means and using money as a tool to improve life quality. Stay tuned for their upcoming Financial Foundations course to help you build a solid financial base.
In this episode, Jeff Smith and Shawn Rider dive into financial management strategies that are key to achieving long-term wealth. They discuss the importance of controlling lifestyle changes, avoiding lifestyle creep, and strategically planning new income sources. The conversation also highlights the significance of living below your means and using money as a tool to improve life quality. Stay tuned for their upcoming Financial Foundations course to help you build a solid financial base.
Chapters
00:00 Summer Adventures and Family Celebrations
01:09 Navigating Financial Transitions
02:52 The Importance of Strategic Cash Flow Management
05:16 Deploying Money Effectively
08:53 Living Below Your Means for Future Gains
12:32 Building Financial Foundations
16:25 Money as a Tool for Life Improvement
@realjeffsmith (00:00)
Welcome to another episode of the tactical empire I'm joined by Sean Rider how are you sir. It's been a while.
@shawn_rider_ (00:05)
What's happening?
What's happening? It's been a while since you and I have gotten on a podcast, maybe two weeks or so. So I'm good. I'm good, man. We're coming through end of summer. We got a little day trip plan to Hershey Park with the kids for the first time on Friday, swing over to my dad's house, stay the night there, have a barbecue on Saturday. So we're going to try and end, ⁓ go into August and end the summer with a bang.
@realjeffsmith (00:33)
I love it, I love it, man.
@shawn_rider_ (00:35)
Yes, sir.
You're crossing over the north side of the United States. So where do you find yourself?
@realjeffsmith (00:42)
We're in Wisconsin currently.
@shawn_rider_ (00:44)
Cheese curds.
@realjeffsmith (00:46)
Yes, yes,
we got birthdays all week. We've got my Rowan's birthday. She turns 11. Then it's my sister's birthday. Then it's Brim's birthday three days in a row. So we got the whole family. We got the whole family converged on Wisconsin and we're having a birthday extravaganza. So it's fun.
@shawn_rider_ (01:09)
Let's
go. Let's go. Let's go. I love that man. let's bring up something that, few different contexts, but basically the same principle. have a guy that's coming into the 90 day accelerator soon. Just sold his business of 10 years. Not a multimillion dollar business, but just small business. Sold it.
⁓ seller financing. So he's structured it in a way where he's going to have cash flow coming in consistently while he figures out. He's got an idea of the next thing. That's part of what we're maybe going to talk about today. have another guy. We got another guy who's a union worker electrician in the inner circle, just got a nice pay raise, got a nice little benefit for ⁓ gas money. And then you talk to other guys and they're pushing the envelope, they're coming into more money.
@realjeffsmith (01:45)
Thank you.
@shawn_rider_ (02:01)
One of the easy statements that we say to these guys is, hey, what is the job that that new money's gonna have? Hey, what is the plan with that new money? Why do we ask that? Why do we talk about the job that your money has? Why do we need to have a plan every single time we're increasing the cash flow of our life?
@realjeffsmith (02:24)
because Parkinson's law is real. ⁓ as is lifestyle creep, lifestyle creep will steal more hopes and dreams and freedom from families than almost anything else, realistically. And so, I mean, we do a lot of rewiring of thought processes and that's just another one that we want people thinking strategically along those lines of
Let's sweep that money off and act like it never came in and then create it, create a dividend or some sort of re return on investment with that money that then we can use a portion of that to spend on lifestyle. ⁓ because if you start thinking that way and behaving that way over a period of time, that's the way you can change your entire trajectory of your financial house, if you will.
@shawn_rider_ (03:23)
Sure. This is, ⁓ I mean, this is why like we, whatever word you want to use, right? Budgets, creating buckets, just managing cash flow, like whatever. The premise is that you need to have your eyes on your dollars. Have your eyes on the money. ⁓ I don't like feeling like I'm being restrictive in my household, but I do want to have a really good savings rate.
not to save, not to save in the traditional sense, but so I can move and shift money out of the spending sphere, the lifestyle create sphere and put it into our banking system. This is again, not to turn the episode into infinite banking directly, but like when I teach people about infinite banking, infinite banking concept and creating your own bank, I really only have three jobs for my money.
when I come into more of it or I have extra of it. And it is one, to pay any current premiums that are due to build my bank figure, increase my cash value. Two, if I come into more money, whether that's through a raise, a bonus at a W-2 job, growing the business, an extra distribution, selling a property. If I come in and my premiums are paid, the next step is, do I have outstanding loans against my policies?
If I do, I pay those off. And then the next layer is, my premiums paid? Are my loans paid? And is this money that is gonna be consistently coming in the future? If the answer is yes to that, then I'm gonna build my bank bigger. Now that's not the only thing we do with money. The goal is to build that bank bigger than to go buy cash flowing assets, whether it be businesses, real estate, dividend paying stocks, whatever it may be. But if you just like, again, Parkinson's is a law.
If you have space or time, you're going to fulfill it to the allotted amount that it is if you don't put a governor on it. Okay. So let's say you get an extra thousand dollars a month. If you don't have a job for it, that thousand will disappear. I promise you it'll just poof go away. It's the same thing with like business bank accounting, right? ⁓ When we talk about accounting for businesses, you're just doing bank balance accounting.
@realjeffsmith (05:38)
Yeah.
@shawn_rider_ (05:46)
If the money's there and you know it's there, then you're not gonna feel bad swiping that credit card. You're not gonna feel bad buying that new piece of equipment that's worth five grand when you got 25 grand in the bank, right? And that's actually why you and I, maybe we'll talk about this, why do you and I keep very little money in banks? What are some reasons and thoughts as to when someone comes into the group and they're like, dude, I got $75,000 in a bank savings account at Ally making 4%. Isn't that awesome? And then we're like, meh.
Kind of, but not really.
@realjeffsmith (06:19)
Man, I don't have any real like data to this, but generally like problems find excess money in my experience. And whether it's a tax bill or a fucking $50,000 HVAC system that you're commercial building or whatever it is, anytime I have a huge chunk of money sitting in a liquid bank account, problems tend to find me that are of the same size and scope.
as that bank account.
@shawn_rider_ (06:54)
I've, you've been my mentor for like seven years and business partner for a few years now. I've never actually heard you say that phrase. That's, that's hilarious. So say that for the people again. If, if there's money sitting in the bank account, a problem will find that money.
@realjeffsmith (07:08)
Yes, a problem in like kind size and scope generally. because it is just my personal experience. And I see it happen to other people all the time, too. I mean, you could even say, like when you get a bonus at work, you turn around and get hit with a medical bill or your kid breaks their arm. You get $5,000 bonus and then they get a $4,500 medical bill.
@shawn_rider_ (07:12)
Okay, I believe it.
@realjeffsmith (07:35)
Like it just shit happens. That's the world. That's the way the universe returns some of those things. And, uh, yeah, it's important to make sure that your money is deployed and working for you. think Grant Cardone love him or hate him. Um, one of the principles he teaches, uh, in one of his fucking million courses is, uh, the idea of trying to live off of 40 % of your income and
I personally love that because for me it's important to have a really high savings rate like you mentioned. Like I'm aggressively trying to figure out how to limit our income and increase our sweep because that accelerates the return faster, right? So then if you can get these passive assets or your business assets or your real estate assets kicking off more and more money through delayed gratification,
Then once that money starts to tick up to where you've met your BAM and you've met your lifestyle, then the acceleration of that becomes exciting because then you can adjust your lifestyle accordingly, right? And so like it's just that first period of time where it's no man's land and people don't like it.
the what we refer to as the two to seven years in the seven levels of financial freedom. ⁓ Once you meet that lifestyle number, then you're moving on to like dream lifestyle number. And if you're investing 60 % of that every month, the number grows very, very quickly. And so I always admired
that way of thinking is in that, could you live off of 40 % of what you're bringing in and invest the other 60 %?
@shawn_rider_ (09:29)
Yeah, I like that too. And I think in my past when I was a teacher, this is actually why I really enjoyed being paid once a month. So if I got paid on the last day of the month, I would get that huge amount of money just deposited into my bank account, the whopping $2,300 a month.
after taxes. ⁓ But you know, for a young single dude out of college, that was plenty of money ⁓ that I didn't have any hobbies back then either. So I still don't have any hobbies. Who am I kidding? I just filled something out earlier today. This. ⁓ shoot, what the hell is it called the Wheel of Life thing that John brought up on on the podcast yesterday. And one of the categories is hobbies slash fun. And it said, Where do you rate yourself currently? And I gave myself a one.
@realjeffsmith (10:00)
You
@shawn_rider_ (10:18)
And then it said, where do you want to be at? I gave myself a one. What a boring guy I am that I just want to spend time with my family and my businesses. My fun is whatever my kids ⁓ want to do. ⁓ anyways, I forget where I was going with that. ⁓ Shit, I totally lost my train of thought. ⁓
@realjeffsmith (10:42)
That's all good, bro. It's all good.
@shawn_rider_ (10:44)
man, well I was getting paid once a month. So the money would come in and then I would actually play a game with myself where it was like, don't do anything wild for like two thirds of the month. And so I would just like buy my gas, buy my food, pay the normal fixed rate bills, whatever that are consistent every month. And then by the end, then I started allocating what do I do with the rest of it? And then I came to this, then I would come to this predicament where it was like at the end of every month, the last seven days of the month, it would be like,
If I wanted something, let's just say a new pair of shoes or go on a little day trip or something, was like, do I want to do that thing more than I want to have the money? And then usually the answer was like, I'd rather have the money because I know that's going to build next month. Now I wasn't investing in assets. didn't have a, you know, that's when interest rates in bank account were 0.01. So I did not have a plan for that money. The only plan was to make the bank balance bigger.
But the same premise holds here true. How much of the meat can we keep on the bone so we can feast more in a year? Now, the dichotomy to that argument is like, we don't support the living on ramen noodles scarcity minded lifestyle either. So if there's a type of lifestyle that you want right now, BAM is different. That's like the lowest of the low first level to reach for ⁓ buying a cash flow assets. But like, if you wanna have steak dinners,
you allocate for that. You just have to build above whatever that level is. And so maybe you're having one steak dinner a week and you get a pay raise. It's like, okay, well we can nudge that to two and we're still gonna have an extra 250 bucks to set aside into our entrepreneur's treasure chest, which for me is dividend banking. So this is really, really fun to talk about money. We don't do it on every single episode, but it is a big part of what we do. We say it's the easiest part of we do.
Jeff and I right now, we've already recorded the videos. I'm putting together the resources and we're picking the dates here soon for a few day. I think it's gonna be a five day financial foundations course. Some of it's gonna be live. You're gonna get an email every day. You're gonna have to do some homework and then we're gonna come together and help you guys move forward with financial foundations, people in the inner circle, people out of the inner circle. So what are you excited about in regards to helping people with their financial foundations, Jeff?
@realjeffsmith (13:02)
Yeah, I'm excited to get that going because I want them to be able to track this. Like I always say that I think the most powerful brain shift people can make in their financial world is is when they invest that first amount of money and then receive that first dividend or receive that first return on investment that didn't take any time, effort, sweat, blood and tears. And so like if you put $10,000 in and you get 100 bucks a month,
Like that trigger changes the way you look at things now, right? Because if you understand that it took $10,000 to create that $100 a month, but like a steak dinner is what you want, then maybe that $10,000 just bought you one steak dinner every month for the rest of your life. And so if you conceptualize it by those are the things that you want, and then this is what I have to do to go out and get it.
How long do I have to delay to make that happen? And that's where people get tripped up though, because you get the $100 raise personally on your W-2 income, and then you go start eating steak now with your earned income, then you have to go out and work for it and trade time for that steak dinner every week, every month, every year for the rest of your life, as opposed to looking
at the long tail effect of putting that money into something that's gonna pay for that steak dinner into perpetuity forever. And that's how I wanna rewire people's brains to think about this because it is really just a few years of discipline and focus to get to where you wanna be forever. I made a post the other day in social media that was like.
Most people cannot focus for three years to change the next 30 to 40 years of their life. And that really is a microcosm of what we're doing. I mean, it's not a get rich, quit situation. The foundation and the structure is what it is, and it takes time to build upon. That's why we say two to seven years, but you have to stay in it, and then it's up to you and your vision.
@shawn_rider_ (14:58)
Thanks.
and
Peace.
Thank
@realjeffsmith (15:22)
⁓ as to how big or how small you want to expand your financial world at that point.
@shawn_rider_ (15:30)
Hell yeah. Hell yeah. mean, the financial side of things is what really changed my life. then there's more layers to the onion to peel away. You could make a ton of money and still be a jackass, an asshole and ruin your life.
But we do understand the value of the financials. So that's why we're creating this course. We just wrapped up the mid-year reset. Very little of that revolved around finances. For the people that were in the group there, I think the biggest strides that they made were in fitness and then just allocating the appropriate amount of time to the proper areas of their life, which would fall into both family and freedom usually. ⁓ So I think the people got extreme value out of that. ⁓
Some of the interesting things were like people were saying, I know I need to do this, but setting the time aside this week to write it down is going to help me actually take that step. Same thing with the finances. Excuse me. It's why we're bringing out the financial foundations course. Is there anything regarding those topics, Jeff, that you want to give to the people before we set them?
@realjeffsmith (16:32)
Yeah, I it's I just feel like it's an important thing. We're not financial advisors. So I mean, we're that's that's not at all what we're doing. ⁓ But I think money is a tool and it's an important tool for men. And that's who we work with it or it specifically it relieves a lot of pressure. ⁓ When when your money's right, it makes your marriage better. It makes you more focused as a as a husband, as a father. And and so I
think it's a vital tool ⁓ to getting your house in order so that you can focus more time on what's important to you. so if you can get that financial albatross off your back of living paycheck to paycheck or wondering how you're going to pay the bills next month or it never feels like enough or when I got to making six figures I thought I would be feeling more financially secure and it
doesn't feel any different. ⁓ Those are all questions that I mean, I think everybody has dealt with at some point in time. And, and what you have to do is you have to have a real system. And then once that system starts building on itself, you can see the trajectory of where you're going. And it makes it makes trading your time for dollars that much more easy and fulfilling because you have a destination in mind and a plan in place and like that's what's important.
And that's where people spin their wheels with no structure and no plan.
@shawn_rider_ (18:07)
Beautiful. Jeff, as always, good to see you. Appreciate you. Keep your eyes open for the Financial Foundations course, We'll post more about it. It'll be on our Facebook page. But Jeff, go ahead and send the people out.
@realjeffsmith (18:12)
Absolutely,
guys link up with us in the tactical empire community. We're the tactical empire on all platforms. can DM Sean and I on Instagram. He is Sean underscore writer underscore and I am real Jeff Smith. If you have questions about this stuff or you want to start an infinite banking system, hit us up. We've got the plugs to put you in with the right people. So let us know. Have a great week. Kick ass.