I just got back from Dallas, Texas at a 3-day financial training event with several of the top financial advisors in this country. I’m so grateful to be able to learn (and contribute) about the best financial tools and strategies to create the maximum financial potential for my clients.
When I am visiting a city I always like to eat at a local restaurant. I usually enjoy the food and I feel it’s the fastest way to learn more about a local community. I was eating at the bar having a delicious pork chop and the gentleman next to me asked what I did for work and he was very interested. He pulled out his phone, subscribed to my podcast and his next question was, “Hey, I know you don’t know my financial situation, but what is the first thing I can do to create more wealth for my family?”
My response, “save 20% your income and live off the rest.” At first, he appeared a little confused/disappointed and then he asked what I meant by that. I explained the importance of having money that is safe from market risk; readily available to use anytime he wants; and that the more he accumulates — opportunities will seek him out. Your savings account becomes one BIG OPPORTUNITY FUND. Once I said, “Opportunity Fund” his eyes lit up.
Over the last eight years, I’ve been advising clients to save at least 10% of their income and live off the rest. Because of our low-interest-rate environment (it’s about to get even lower), I typically advise clients now to save 20%. Quite often with new clients that advice creates some resistance – just like the gentlemen at the bar. Why?
At first, it sounds like they will have to live less of a lifestyle; have to do without; can’t remodel their kitchen/bathroom this year; can’t go on a fun trip, can’t ….
But once my new clients understand this different approach to their finances, they are ecstatic. They see that I just changed the flow of their money. There was no out-of-pocket expense and they get to use and enjoy more of their money TODAY and potentially create a way wealthier tomorrow!
I now understand I have been using the wrong word: ‘savings.’ It is a horrible word to introduce initially. So from now on I will refer to it as the ‘Opportunity Fund.’ Once you can establish feeding 20% of your income into your opportunity fund, opportunities will seek you out. And your rate of return will shock you.
I have seen this phenomenon with my family and a lot of my clients over the last several years. Opportunities will seek you out! We are not talking about 8% returns. I’m talking about double-digit and triple-digit rates of return!