In this episode of The Tactical Empire, Shawn breaks down personal finance myths that are holding you back. Instead of blindly following outdated advice—like saving 10% of your income or paying off all debt before investing—Sean encourages listeners to rethink their strategies. Learn why investing in your skills, education, and cash flow assets may offer better returns and faster progress toward financial freedom. This solo session is packed with clarity for those inside the 90-Day Accelerator or working through the Seven Levels of Financial Freedom.
In this solo episode of The Tactical Empire, Shawn discusses common personal finance tips and how they are redefined within the framework of their 90 Day Accelerator program. Key topics include the exercise of determining a family's bare ass minimum (BAM), the importance of protecting and investing income rather than merely saving, and the strategic approach to handling debt. Sean emphasizes the value of investing in education, skills, and cash flow assets to achieve greater financial freedom and high achievement.
00:00 Introduction to Tactical Empire
00:44 Rewiring Personal Finance Beliefs
01:43 Cutting Unnecessary Expenses
04:49 Saving and Investing Strategies
06:47 Debunking Retirement Savings Myths
09:38 Paying Off Debt vs. Investing
13:09 Conclusion and Contact Information
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[00:00:00] How do you find the will to fight back against the world that wants to keep you sedated? S stuck plates? Join us for the tools and strategies you need to create a life of abundance, discipline, and high achievement. This, this is the tactical implied with Jeff Smith.
What's up everyone? It is Sean from The Tactical Empire. I'm going to be recording solo today as Jeff has some amazing, uh, adventures planned with his family as they are in DC on their RV trip across the country for spring. Summer and fall. So today I'm going to go over, uh, a topic that we have to rewire for a lot of the men that enter the 90 Day Accelerator program and also the inner circle.
Regardless of how [00:01:00] quote successful these guys are, quote how wealthy they are, which again is subjective based on what your definition of success and wealth are. There are still a lot of, uh, traditional personal finance. Suggestions and advice ingrained in their investor and, um, personal DNA mental DNA financial DNA financial literacy that we have to cut through and rework for them.
Okay, so I'm just gonna go over the top three most. Common personal finance tips that people give and, uh, I'm not gonna completely say that they're wrong, but I'm gonna rewrite them and rewire them and change them based on what we believe at the tactical empire. So tip number one is to cut out. All unnecessary expenses and live below your means.
Okay. So in general, I don't have a problem with the second part to that statement, which is live below your means. Um, [00:02:00] I think there is a time and a place where you might live above your means, um, in regards to taking funds and investing in something like your education or, uh. Ramping up a new business, you might be in a delta, negative delta or a negative cashflow perspective for your family for a short period of time.
But again, uh, that wouldn't be because you're spending frivolously. So my, my, the important part of that is to cut out all unnecessary expenses. Well, unnecessary again, is subjective. When people come into the tactical empire and we put them through the seven levels of financial freedom, we discuss. On level two that they establish their bam, the bam is their bare ass minimum.
Now the bare ass minimum is a mental and financial exercise where if everything would go to shit, both spouses lose their jobs or a business absolutely disappears overnight. Which again, these cases are rare, especially in dual income households. Uh, what are all the [00:03:00] things that you would cut? Only survive on the bare minimum.
So this is a thought exercise that we put men through. So the bare ass minimum is you're cutting out private schools, you're cutting out, eating out, uh, you're, you're cutting out the subscriptions like you can go without Netflix for six months. Like all that. We do it as an exercise. We don't do it as an implementation strategy.
But it is to show that some of these guys, they come into the program, their families are spending 12, 15, $20,000 a month. I know that may sound like big numbers to some of you, um, but these men are doing that, um, and their bam is actually like six to eight grand. So our goal isn't to get them to cut out all the frivolous spending, but it is to show them that if they aren't where they wanna be from an investment or portfolio standpoint.
Or business growth acceleration standpoint or, uh, education standpoint. If they go from spending 15 grand a month to spending 11 and their BAM is eight, you know, it gives them that $3,000 wiggle room to have lifestyle expenses, to not tell their wife to not go get [00:04:00] a latte or get her nails done, whatever it may be.
But it also creates more delta in this case. Uh, if they go from spending 15 to 11,000, they'd have an extra $4,000 to accelerate their portfolio or investment or, uh, buy a program from, um, a mentor or things like that. So we wanna focus on expanding your means, not just shrinking your lifestyle, because ultimately income is unlimited, but frugality.
Is a survival method. It's not a wealth building method. All right? So, uh, I definitely want you guys to enjoy the benefits of what you've built. But there's a time and a place where, you know, you cut back a little here or there, but also, you know, you take your kids out to dinner at a, at a better restaurant after they finish their support season.
Common tip number two in personal finances to save 10 to 15% of your income. That might be a, uh, uh, the end of the sentence there, but we can expand it to, to say, [00:05:00] save 10 to 15% of your income for retirement and we can. Extend that sentence to say that people say, save 10 to 15% of your income for retirement in your 401k or traditional IRA.
So, uh, I kind of disagree with all parts of this sentence. Instead of saying save 10 to 15%, I think we should be saying, protect and invest. A minimum of 10 to 15%. Now as you build up your income, that percentage should actually increase. Okay? You don't want your lifestyle expanding at the same rate at which your income, uh, expands.
So yes, when you're 25, and you might be making 30 grand a year, 40 grand a year, you know, 10% is four grand. But when you're 35, and you might be making. 80 grand a year, 10% is eight grand, but your lifestyle shouldn't have increased at the same rate. So realistically, you should be saving 25, 30, 30 5%. And by saving, I mean protecting.
Protecting it in high early cash value, life insurance, and then [00:06:00] investing. Investing in what one your education. Especially in your twenties and thirties, I'd rather you be investing in knowledge and skills than investing in a 401k or a traditional IRA or the stock market in general. Right? Because in the long run, these skills are gonna pay dividends for eternity and there's, there's no down year when it comes to your skills.
And then also. Cash line assets, building a business, building a side hustle. So in the next two to seven years, you can leave a traditional W2. And remember, when you go from making $150,000 in a W2, you don't need to make $150,000 in a small business. It's not a one-to-one ratio 'cause your tax obligation is going to be different.
That's something that my wife is learning as she made the transition from W2 to business owner. Again, we don't believe in 4 0 1 Ks and traditional IRAs, uh, from a wealth building perspective. And you know, the, the argument there, we have done other podcast episodes on this, but for maybe the, the first [00:07:00] time listeners or you just got turned onto our podcast a few episodes ago, when you put money in a 401k or traditional IRA.
People say, I'm, I'm deferring the taxes to later. I'm saving on taxes today. Okay. At first glance, that sounds great. The problem with that is people forget to finish the sentence, and the sentence is the completion. The full completion of that sentence is, I'm deferring the taxes. And I'm also deferring the tax equation.
That second part is the biggest issue that we have with investing in 4 0 1 Ks. 4 0 3 Bs, traditional IRAs, things that defer the taxes. Okay? And the reason is, is you know what the tax rate would be today if you decided to pay the taxes on that money. That is a guaranteed rate today. You know it, you can calculate it.
Even five years from now, you don't know what the tax rate's gonna be nonetheless, 10, 15, 20, 25, 30, 35 years from now, for some of [00:08:00] you that are younger and, uh, on the younger side of our listenership, you have no idea what the government's gonna do. Okay? We are 36 trillion, $38 trillion in debt. Okay? Do you know how much money is in pre-tax?
Yet to be taxed retirement accounts in the United States, it is over $30 trillion. So if the US government would want to pay down the government debt, there is almost a one for one ratio of money that has yet to be taxed in, uh, pre-tax government qualified accounts. So it doesn't take a rocket scientist to think, what can they do?
To pay down the debt. Well, they can accelerate how much tax or increase, sorry, increase how much tax they take from people in retirement, changing the tax rate on that. They can also accelerate how quickly you need to take your, uh, required minimum distribution, which actually has been slipped into bills [00:09:00] that have yet to pass.
They actually want to pull back or increase the amount of. You are required to take, right now it's like 70 or 71, 72 years old, you're required to take a minimum distribution. If they pulled that back to 68, now they're getting tax money quicker. If they increase the minimum amount they have, they're getting more tax money quicker.
So we wanna pay taxes today if we pay tax at all. Okay, so again. It is not about saving. It is about protecting high early cash value, life insurance, and then investing in your education, cashflow, assets, businesses, things like that, that will pay you today, tomorrow, and forever in the future. Lastly, pay off all debt before investing.
Okay. This is basically a a, a time and opportunity cost and trade off equation. Okay? We are not big fans of consumerism, materialism, debt. Okay? If you have 10, 15, 20, 20 $5,000 of credit card debt, and that's 1920 1% [00:10:00] minimum, of course, that is not great debt to have. All right? But every month, every quarter, every year that goes by that you are not investing in your skillset, education, or cashflow assets.
All right? You are losing a greater opportunity. Opportunity costs against those dollars. So I will argue yes, if you take a dollar and you pay off a 19% credit card. You are getting an immediate 19% return. Now you don't see it, you don't feel it, but you're saving yourself 19%. Fair enough? And that is a pretty high interest rate.
So I'm a fan of that. But once you pay that off, it's gone. Okay? Now you have to put those extra dollars to work. So hopefully you do, then you get a, a compounding return for the rest of your life. But let's say more traditional debt, uh, student loan debt at five to 9%. Um, HELOCs, we have a lot of guys that come into the group.
They're like, Hey, I had a [00:11:00] hundred thousand dollars heloc. I pulled $50,000 for this thing, and I wanna accelerate the pay down because it's 8.5%, 9.5%. Fair enough. Okay. But some of these guys also have investments that return them 15, 20, 20 5% a year, or they could pay for mentorship and learn a skill that will increase their income by 25% in perpetuity.
In that case, we recommend that those guys just pay the minimum required and invest in themselves and ca more cashflow assets over the next two to five years, and over time, that debt will be paid off, God forbid. That you're trying to pay off a low interest mortgage, right? A 30 year fixed rate home mortgage is the greatest debt tool ever created.
Okay? Someone is giving you 250, 350, 500 plus thousand dollars. To buy an asset. Okay? Yes, that's a liability on your balance sheet. You're taking a loan to buy an asset that you get to raise [00:12:00] a family in, that you get to sleep in at night that will appreciate over a long enough timeline and they're giving it to you.
Hopefully you got a mortgage before the rates doubled and tripled. But 40, 50 plus percent of people in the United States have interest rates below 5%, so let's just go with that. If you have a mortgage below 5%, inflation is 3%. Okay, now your mortgage is technically only costing you 2%, but with the housing supply in the United States, housing values are going up 5, 6, 7, 8, 10% more in some areas.
Okay, so why would I pay down a sub 5% debt on a, an asset that's appreciating at a greater return? I don't wanna do that. I do not want to use the most valuable dollars today to pay down a fixed rate debt. Your $2,000 home mortgage in 10 years, that $2,000 is essentially gonna be like 1500 bucks. Don't like, don't [00:13:00] accelerate that.
Pay down just so you can have 15 extra years of not having $2,000 payments. 'cause you're missing the point of opportunity cost. Okay, so these are things that we teach in the 90 day accelerated program, our seven levels of financial freedom course. We have that course online for like really cheap right now.
Go to our website, find it, shoot us a dm. Guys, we appreciate all of our listeners. We appreciate you guys. Keep it in. If you ask specific personal finance questions, feel free to reach out, uh, to me or Jeff. Uh, at the Empire, find us on Instagram. My personal Instagram handle is Sean Rider. Sean is spelled SH wry is R-I-D-E-R.
We will see you guys later.