Reading: How Did We Get There? Slides

LESSON 1:  HOW DID WE GET HERE?!

THE AMERICAN DREAM IS

Having Success In Life and 

Being Financially Free!

THE SAD REALITY

Uncertainty and 

Financial Slavery!

¿What Future Do You Prefer?

Where Do You Want to End Up?

At the end of your life where will you be?

Out of every 100 people who today are 25,

by the time they reach 65:

1 will be wealthy

4 will be financially independent

5 will still be working

29 will be dead

61 will be dead broke - in debt most of their life and dependent on others in their old age – government, children, or charity for most of their life. 

The Majority Will Never
Enjoy Financial Freedom

Despite their Income, the sad reality is:

95% will never be debt free!

5% will live truly financially free!

Our Goal is that You are in the Top 5%!!!

There is Hope!

Do Not Give Up!

Help is Around the corner!

The Rat Race

Have you ever seen a hamster in a cage?

What do they do?

What far do they get?

Why do they do it?

Doesn’t life feel like this sometimes?

We are not much different. We run hard but don’t get very far

The Rat Race –
Happiness is Just Around the Corner…

We Live Comparing
Ourselves to Everyone Else

We work hard

To make more money

To buy more things

To have what others have

Hoping to find happiness… which is just around the corner.

There is a better way to live… 

Financial Freedom is up ahead!

How did we get here?
Bad Programming!

We are programmed since were young! We were given a script!

By Who? Parents, Religion, School, Government, Friends, Society

They tell us to be successful we must:

Go to school and Study hard

Get good grades

Get a good job

Work hard

Make money

Buy whatever makes us happy

Pay our debts

Repeat – We don’t get ahead!

Programmed to be a Student

Get into Debt by acquiring Student Loans.  

This is where the Financial Slavery begins.  

Spend $10,000-$50,000/yr on tuition, room & board. 

Over 4-5 years this can become $40,000-$250,000 of student loans or more.  

That is before going to graduate school. 

Programmed to Be an Employee

After they graduate, most people look for… a JOB! 

A safe, secure, “high paying” job, with great benefits, and an ability to go up the corporate ladder over time.  

JOB = Just Over Broke

Programmed to Be a Taxpayer

As an Employee you immediately become a Taxpayer!

Income Tax Since 1913

Progressive Tax Code

You must pay “your fair share” of Income Taxes

Employers collect payroll taxes before you see the money

Programmed to be a Consumer

Once a person has a Job, the first thing people want to do with their money is spend it to BUY THINGS!

That is what money is for, right?!

“I deserve it!” and the monthly payments are really low… plus they offer 0% interest financing!

How Much Do You Spend on Cars?

If you buy a $20,000 new car

Every 5 years

Over a 50 year lifespan = 10 cars

Pay 10% interest

How much money do you spend over a lifetime?

How much do you need to earn pretax?

How Much Do People
Spend on Weddings?

Wedding Rings

Wedding Dress

Bachelor(ette) Party

Rehearsal Dinner

Wedding Hall

Flowers, Music

Wedding Dinner & Party

Wedding Reception

Honeymoon

How Much Will You Spend on Homes?

If you guy a new home $250,000-$400,000

Every 10 years

Over a period of 40 years = 4 homes

Paying 5% interest

How much interest will you pay over a lifetime?

How much must you make before taxes?

Programmed to Buy
Traditional Life Insurance

Today most of the people who sell life insurance typically offer:

Term Insurance (10-30 years)

Whole Life (permanent – takes 15 years to break even)

Variable or Universal – Eats away money 

Programmed to Be a Passive Investor
While Saving for Retirement

Buy Term and Invest the Difference

Buy & Hold Mentality

Buy for the “Long Term”

Dollar Cost Average

“The Stock Market Makes 10-12% per year”

Buy Mutual Funds

Get an IRA or 401(k)

The Traditional Script Does Not Work!

To Get Ahead in Life = SPEND & GET INTO DEBT!!!

Go to University = Student Loans

Get a Job = Limited Income and Pay Taxes

Get a New Car = Car Loan

Spend on What you Like = Credit Cards

Buy a New Home = Mortgage

Don’t Have Enough Money = Study a Masters or Ph.D.

Have Kids = Pay School, University, Wedding

Retirement Plan = 401k, IRA, Mutual funds

Premature Death = Term Insurance

Where Does All the Money Go?

Government – Taxes.  This money is gone before you even see it!

Banks – Interest. Every time you borrow you pay interest until the loans are paid off.

Insurance Companies – Premiums. Most people have to pay health insurance, car insurance, home or renter’s insurance, life insurance, etc.  

Merchants – Consumption.  Everyone has to eat, pay utilities, buy clothes, pay for a car, gas and maintenance, etc. 

What is the Cost of Being a Financial Slave?

How much money goes out of your pocket in

Tuition

Taxes

Purchases

Consumption

Premiums

Interest

Investment Fees and 

Lost Opportunity Cost

Over your lifetime??

How Much is Left for You?

To Pay off your Home?

To Start a Business?

To Invest in Opportunities?

To Travel?

To Enjoy Your Retirement?

To Help Out Others?

To Leave an Inheritance?

Getting Into Debt is Easy

What is Debt? Borrowing money to buy today with the promise to repay in the future with interest.

Typical Debt Progression:

School Loan

Car Loan

Credit Cards

Home Mortgage

Store Credit

Small Business Loan

Commercial Lease

Commercial Real Estate Loan

The Debt Trap

Debt is a Hopeless Pit

“Youth would take short cuts to wealth and the desirable things for which it stands.  To secure wealth quickly youth often borrows unwisely.  Youth, never having had experience, cannot realize that hopeless debt is like a deep pit into which one may descend quickly and where one may struggle vainly for many days.  It is a pit of sorrow and regrets where the brightness of the sun is overcast and night is made unhappy by restless sleeping." ― George S. Clason

The Vortex of Debt

When people begin to feel desperate about their debt situation, ironically the first thing they typically do is to get into MORE debt, digging up one hole to cover another.

This provides a temporary relief, but in a little bit proves to be a TRAP sucking you further and deeper into a hole!

Refinancing or More Credit
is NOT a Solution

Many people are tempted by credit card applications where they are “Pre-Approved”.

These can provide a low introductory interest rate of 0-3.99% that later converts to 18-30%!

Beware and Throw them away without opening them!

Others will suggest to Refinance your Home or get a HELOC. 

Bankruptcy is NOT a Solution

When people are in debt up to their eyeballs, they try to juggle their debt payments like those who spin plates in the air. 

Disaster is just around the corner as soon as they lose their job or their business slows down.

Beware of Bankruptcy! It is NOT a Solution.

Why Do People Borrow?

“Debt is never the real problem, it is only symptomatic of the real problem ― greed, self-indulgence, impatience, fear, poor self-image, lack of self-worth, lack of self-discipline, and perhaps many others.”  ― Ron Blue.

Borrowing is Pulling the Future Forward.

Someday the Future Becomes the Present.

It is Easy to Get Into Debt. Getting Out of Debt is NOT so easy.

Why Can Credit be Dangerous?

“Credit gives the appearance of wealth without being wealth itself.

At the end, after paying sometimes two and three times more for the purchase than necessary (after taking into account interest payments), he who depends on credit ends with little or nothing to show for their money.

The appearance of wealth can only be temporarily maintained when everything goes well and personal finances are running at an optimal level.

Dependence on credit creates only a facade of wealth, a lifestyle beyond your real possibilities. It is a life that will prevent you from building personal wealth you'll need to ensure a comfortable retirement.

The deception of the lifestyle of "buy now, pay later" appeals strongly to a generation accustomed to instant gratification.” – John Cummuta

Thoughts on Debt

"Owe no man anything, but to love one another: for he that loveth another hath fulfilled the law."― Romans 13:8. 

"Young men starting in life should avoid running into debt. There is scarcely anything that drags a person down like debt. It is a slavish position to get in.

 Debt robs a man of his self-respect, and makes him almost despise himself. 

 Getting in debt for what you eat and drink and wear is to be avoided.“― P.T. Barnum 

"Do not get in debt.  Become a saver all your life.” – John Haggai

"Greater debt means more financial uncertainty.“ – Robert Kiyosaki

Debt is a Form of Slavery

"The rich ruleth over the poor, and the borrower is servant to the lender.“ - Proverbs 22:7. 

" "But ah!  Think what you do when you run into debt;  you give to another power over your liberty.  If you cannot pay on time, you will be ashamed to see your creditor;  you will be in fear when you speak to him;  you will make poor pitiful sneaking excuses, and by degrees, come to lose your veracity, and sink into base, down-right lying..." ― Benjamin Franklin 

WHY Are You in Debt?

“So, if you find yourself in debt, your first question is not, "How do I get out of debt?"  Ask first of all, "Why am I in this situation?" and answer that question.” – Ron Blue

Read: The Camel Trader of Babylon (Chapter 8 – The Richest Man in Babylon)

Don’t Lose Hope! We CAN Change The Future if We ACT Now!!!

America’s best days are NOT behind it! They are Ahead!

We need to make immediate changes.

We need a new mentality.

We MUST improve our financial condition.

There is Hope.  

Our Future depends on ALL of us

We must  Preserve our Heritage, our Liberty, and our Way of Life

We owe it to future generations to change to survive what is ahead. 

The First Step Towards Financial Freedom

Ask Yourself: “Do I have the soul of a slave? Or the soul of a free man?”

“Where the determination is, the way can be found!” 

Have you a desire to repay the just debts you owe?  If thou contentedly let the years slip by and make no effort to repay, then thou hast but the contemptible soul of a slave.  No man is otherwise who cannot respect himself and no man can respect himself who does not repay honest debts.

The Possibility Map
From Slavery to Freedom

Questions? Comments?