If you don't get in the game of homeownership and you rent in your 20s and you rent in your 30s, you're going to turn around in your 40s and having not built any net worth. And in fact, homeowners in America are worth 40 times more than renters. And I'm talking about ordinary Americans.
But that doesn't mean that buying a home made them rich. Right?
It actually does. And I'm going to go through that.
But am I not better off renting and investing in the stock market?
I want to bust this myth because I have spent the last 33 years of my life helping millions of people with ordinary incomes become financially free, including nine years as a financial advisor at Morgan Stanley. And I got to see firsthand help. Everyone who came into my office with an ordinary income built wealth. And there's a formula to getting rich. But there's also a system to how you put your financial life on autopilot in less than 10 minutes. And it doesn't require discipline, budget, and you don't have to make a lot of money to get started. But unless your financial plan is automatic, it will fail. But more importantly, I believe the next 10 years will be the greatest opportunity to build wealth in our lifetime. And yet 7 out of 10 people right now are living paycheck to PayCheck. More than 50% of Americans don't have savings, and most people don't know where their money goes. And in fact, when we ask people, how much money would it take to totally change your Life? They say $10,000. Now, how much money do you need to spend a day to blow $10,000 a year? $27.40 a day.
If you invested that a day for 40 years, you'd have over $4,424,000. That would be life changing.
But just before we get into all of the specifics and the strategies, do you have any specific advice to people that are currently straddled with debt?
Absolutely. There's a very simple formula to getting out of debt called dole. I'd tell you to.
Just give me 30 seconds of your time. Two things I wanted to say. The first thing is a huge thank you for listening and tuning into the show week after week means the world to all of us. And this really is a dream that we absolutely never had and couldn't have imagined getting to this place. But secondly, it's a dream where we feel like we're only just getting started. And if you enjoy what we do here, Please join the 24% of people that listen to this podcast regularly and follow us on this app. Here's a promise I'm going to make to you. I'm going to do everything in my power to make this show as good as I can now and into the future. We're going to deliver the guests that you want me to speak to, and we're going to continue to keep doing all of the things you love about this show. Thank you. David, what has your mission been for the last three decades?
I have spent the last 30 years of my life helping ordinary people, people with ordinary incomes become financially free. And the last 20 years I've spent helping people become automatic millionaires. So. So I love to teach anyone at any income level, minimum wage, living paycheck to paycheck. You might be in debt, you might be struggling. I've taught millions of people how they can improve their life financially. That's what I've been dedicated to. And I spent 33 years total in the financial service industry.
And is this conversation just for people that are in their 20s or is it applicable to everybody at every age?
It's applicable to everybody, every age. Because whatever your age is, if you, you know, look, Steven, so many people are living paycheck to paycheck right now in this country. What's happening right now is that 7 out of 10 people are being left behind financially. 7 out of 10 people right now are living paycheck to paycheck. When you go into looking at finances in America today, half of Americans can't get their hands on $1,000 in case emergency purposes. And my biggest fear, why I updated this book and why I decided to come back out one more time and do another financial literacy campaign is I, I'm afraid people are being left behind. I think with AI right now, the next 10 years going to be the greatest opportunity to build wealth in our lifetime. That's the good news. The bad news is a lot of people being left behind. My goal today, next hour, is very simple. I want to give you the system on how to become an automatic millionaire at any age level, at any income level. What I'm going to teach you is how to put your financial life on autopilot in less than 10 minutes.
Because when your financial life is automatic, your habits work automatically. And an automatic financial life doesn't require discipline, doesn't require a budget, and you don't have to make a lot of money to get started.
Why should people be taking advice from you on this subject matter? What have you done in those 33.
Years I've been doing this my entire life, right? So if you go all the way back. I started investing at the age of seven. And how that happened is I had a grandmother, amazing grandmother. Her name was Grandma Rose. At 30, she made a decision that changed the whole destiny of our family. And the decision she made was, she won't be poor anymore. And at 30, on a very cold day, on her birthday, she turned to my grandfather and she said, we don't have any money. We're living paycheck to paycheck. And I don't want to retire here. I want to go to California. I want to be where it's warm. And my grandfather said, well, what do you want to do about it? And she's like, we need to change what we're doing or nothing will change. And so my grandmother started saving 50 cents a week out of her paycheck. So 50 cents each because they were like middle class people, right? Didn't have a college education. My grandfather worked in a plant, my grandmother worked in retail. But she started saving small amounts of money and over her lifetime she became an investor and she became a self made millionaire.
My first book, which you have sitting over here, was a book called Smart Women Finish Rich. It was the lessons that my grandmother taught me. So at 7, my grandmother took me to McDonald's and she taught me a lesson that would change my life. She said, david, you're sitting here eating McDonald's and cheeseburgers and your French fries and your milkshake. She said, I'm going to teach you today how to be rich for real. You like to play Monopoly? Here's my lesson today. She said, there's three types of people. Those like you who are here eating right now, you're what's called a consumer. She said, the people over there who have been working, they're called employees. And they've been working for minimum wage. And that's a very hard way to live. She said they make eight at the time they made 85 cents an hour. And she said, the third type of person is the person who owns this place. They're called an investor. And she said, today I'm going to teach you how to buy stock in McDonald's so that when you come to McDonald's, you'll make money from everybody who's here. When your friends come to McDonald's, you'll make money from them and you'll be an owner of McDonald's.
And she took me down to a brokerage firm, helped me buy my first share of stock in McDonald's. That moment changed my life, because what she made me realize is, like, everything that we do, I'm seven years old. Everything that we do, there's an opportunity to be an investor and own that. So, like, at nine years old, I'm at Disney. I'm like, hey, Mickey Mouse, are you public? So I was like, not a normal kid in that way, because I started investing at a young age. But then I made a lot of mistakes. Then I went to college. Then I got myself in credit card debt. Then I believed all the myths that young people often believe. I believed I couldn't really invest a lot until I made a lot of money. So my early 20s, I was making money, but spending everything. So I went from making nothing to making $50,000 a year. And I'm still broke. I'm like, well, it's not enough money. So I went to $75,000 a year, still broke, spending more. Then I got to $100,000 a year in income. Lot of money, right in my 20s. Oh, my God, I'm rich.
No, I was still spending more than I was making at that point. I was a financial advisor and all.
That was your joke.
That was my job. I was working at Morgan Stanley, helping people plan for retirement, teaching retirement seminars. And I met this ordinary couple that came into my office at the age of 52, Jim and Sue McIntyre. They had an ordinary job that year. They had made a little over $53,000. Their average income over their lifetime was $40,000. And at 52, Jim put out all the statements on a table in front of me. I sat there and added them up, and they had a net worth of $1.8 million. And I sat back at a table just like this and said, how did you do this? And they had just been in my class for four weeks. Like, David, we did a lot of what you talked about, but we didn't have a budget because budgets don't work. And they talked about why budgeting didn't work for them. They said, we put everything on autopilot. We saved money automatically for everything. And that was the moment that changed my life. I realized that day as somebody who was living paycheck to paycheck with a high income, these people had half the income that I did, and they were able to retire at 52.
I was in my mid-20s, and I realized that if I didn't start saving and investing, I didn't change. Nothing was going to change, and I would never have the financial freedom that they had. And so I Went home that day, and I changed everything in my life. Now, I had a lot of bad habits, so I had a lot of things that needed to be changed.
You were the senior vice president at Morgan Stanley when you stepped down, and you soon after wrote this book called Smart Women Finish Rich. It begs the question, what are the differences that you saw through your process of financial education that women face versus men?
I started. I was in business with my father, and we had a lot of older clients, and I would sit in on meetings, one after another with widows. So in the first month of my career, I sat in three meetings with three widows where the husband had dropped dead suddenly. And my dad at the time was teaching these women how to read their broker statements, how to write checks, and how to know if they would have enough money. And I thought, this is crazy. I said to my dad for the third appointment, dad, what do you. What's going on here? And he's like, what do you mean? I go, well, you're teaching these women when their husband has just died how to handle their finances. And he said, david, not all women are like your grandmother. Your grandmother was a rarity. And I said, dad, that's crazy. I'm going to go out and teach a class for women and money. And when I started teaching classroom money, here's what I learned. Here are the things that make women different than men when it comes to money. Women, first of all, live longer than men, which means they need more money than men do.
The average age of widowhood in America when I wrote that book originally was 57, Stephen. Now it's 59. You do all these shows on longevity. It seems like everybody's living forever. They're not. Okay. The average age of widowhood in America is 59 years old.
When you say widowhood, you mean the age in which a woman becomes a widow?
Exactly. They're married and they lose their husband.
Okay, okay.
So women are often wiped out when that happens financially. Second thing is that women are hurt more than men when it comes to divorce. The third thing that affects women is that they work fewer years. I'm like, these are just the statistical realities. Women work fewer years than men because they have children. So that's an average of somewhere between 7 to 11 years less. And that's less money going into Social Security retirement accounts, and it affects their earnings, and often they earn less. So what I have taught for nearly 30 years now is, as a woman, I don't care what your situation is. I don't care if you're an Entrepreneur. I don't care if you're a stay at home mother. I don't care if you're married to local bank president. I don't care if you're married, singled, widowed, divorced. As a woman, you have to be in charge of your finances, period. Drop the mic. End of discussion. You can't delegate your financial wellbeing to anyone else. You have to be in charge. Now I will also tell you, Stephen, that women make better investors than men. They make better investors than men because often women don't trade like men do.
And they do more research before they invest. And their performance is better. They're way better at long term investing than men are.
I heard some stats once upon a time that men are the majority of the gambling addicts.
Well, I'm sure they're the majority of the gambling addicts. And also when you look at trading, because trading's become a very big thing, but trading's always been a thing. Trading, meaning trading, like trading stocks, buying and selling stocks. Now it's buying and selling, cryptocurrency, buying and doing, selling options. All these things are primarily men doing it. And they don't make money. Cause the bulk of people who trade lose money day in, day out and year out. I teach a philosophy which is this. Your money and your investments should be boring. Your life should be interesting. Your investments should be boring. If someone's coming to a cocktail party talking about their investments and it's exciting, something's wrong with it.
Why?
Because sexy is how you go broke when it comes to money. Boring is beautiful when it becomes. When it's about your wealth. So even driving over here, my son was just like, dad, why aren't you trading Tesla stock? I'm like, you know why I'm not trading Tesla stock? Because you can't make money trading. You gotta figure out when to buy, when to sell. I want my kids investing in index funds. I have my clients investing in index funds. Boring is beautiful when it comes to money.
Before we get into the real specifics and the tactical strategies and we think about a bunch of the sort of things you said about debt and credit cards and saving and getting out of debt and how to become wealthy in an automatic millionaire, is there anything we should discuss as it relates to the broader context of what's going on in the world? Whether it's wealth inequality, whether it's the amount of people that are living paycheck to paycheck. I'm trying to get a picture on what the state of financial wealth looks like in The Western world.
Yeah. Well, so let's talk. When people talk about economies, here's the economy that matters. In my opinion, your economy, meaning the person is listening. The economy that you're in control of is yours. You're not in control over what's going to happen with interest rates, what's going to happen with geopolitical things, what's going to happen with AI. The only economy that you can control is yours. Now here's the question. Are you working most cases? The answer is yes. The average person will work 90,000 hours over their lifetime. So if you are a dual income household, you're going to work somewhere between 90 to 200,000 hours, the two of you, over your lifetime. You're going to actually make millions of dollars over your lifetime. The question is, with your own economy, are you going to keep any of the money? And the sad thing for many people is that they're not. I say most people have what I call a no plan plan. Money comes in, money goes out, and they say, well, I don't know where the money all went. And I go. That's called the no plan plan. A person who's an automatic millionaire, the moment money comes in, they have a plan for exactly where it's going to go.
And that starts with paying themselves first automatically.
A lot of people listen to this and if I go back, if I go back just over 10 years in my life, I would have been sat listening to this conversation in £7,000 of debt and I would have thought, God, becoming a millionaire, that's a million miles away, no pun intended. To become a millionaire, I'm going to have to earn so much more money. And at the time I was working in call centers, it would have just felt so far away. And I say, people are struggling to feed their children, let alone become a millionaire. Is it far away? For the average person, it's far away.
If you don't know the strategy. There's a strategy to getting out of debt, there's a strategy to building wealth. There's a system.
How much of it is just earning more money? Because when I have these conversations on my show, I think the surprisingly untouched territory is we don't teach people how to become more valuable so that they can earn more money. A lot of it's about like index funds or savings, whatever, but how much of it is just like, I need to get higher valued skills in the market.
We know for a fact that making more money doesn't make you rich. So people can go, as I told you earlier, like from $100,000, they can go from 50,000 to 100,000 and still be broke. They can go from 100,000 to 200,000 a year and still be broke. They can go from 200,000 to 300,000 and still be broke. In the US when you take households that make $150,000 a year, one out of three of them are still broke. When you peel back the curtain and you ask, why is that? Well, we know things cost more, but we also know there's massive lifestyle creep, right? You get around other people who are making more money and then you spend more money. And the reality is these phones are designed to get you to spend everything right today with the algorithms. There's better technology today than there's ever been to get you to spend more money. And nobody wants you to spend money once. They want you to spend money for a lifetime, right? It's the lifetime value of a customer. So there's a battle for our income and everyone wants a piece of it. It starts with the government.
Like, you go to work and you go to work at 9 and you actually work from 9 o' clock to 12 for taxes. Now, this is an important lesson, actually. The government doesn't ask you to budget to pay taxes. They take your taxes from you automatically. They take Social Security from you automatically. They take the money from you automatically because they know you won't have anything to give if they don't take it from you. Then people work from 12 to about 3 o' clock for housing and food, and then from 3 o' clock to 5 o' clock for all the rest of the things. The people who build wealth in America and really all over the world, they do something different. They keep the first hour day of their income.
What do you mean by that?
So what that means is whatever you earn, you could be making minimum wage, you could be making $20 an hour, $30 an hour, $40 an hour. Whatever you earn, the first hour day of your income has to go to you. You're the first person who gets paid.
And you mean you have to save it, Invest it.
You have to invest it. So how do you invest the first hour of your day without paying taxes? The answer is you pay yourself first using a 401k plan. So if you have a job with a retirement account, 401k plan, you sign up and you use that plan. Now, I can't just stop right there, right? Because. Because it sounds so simple, like, okay, I'll use my plan. No, you have to know the formula to Using your plan to be rich. We know after 40 years now exactly what you need to do if you want to be a millionaire. I can tell you how to become a millionaire. Starting in your 20s so that you're done by the time you're in your mid-50s, you save a little. One hourity of your income is 12.5% of your gross revenue. I went online today to look at what's the latest statistics with 401 millionaires. The new stats that just came out from Fidelity. There are 654,000 people in Fidelity 401 plans that are now millionaires.
What is a 401?
Okay.
Because you know, we've got a lot of global listeners.
Yeah, yeah.
There's different types of 401k in every country.
So in the US a 401k plan is a retirement account. It is a retirement account that the company has set up. Right. And it allows you to put money away. Tax deductible, they call it pre tax. In most countries you have a deductible retirement account, but it depends on the country too, Right? Like in Canada, it's a different type of plan than it is in Australia, than it is in Italy, than it is here in the uk. Almost every country though, has some form of retirement account and has the ability to put money away automatically. Here's the problem. And I'll use the US Specifically because it's where I do most of my work in the U.S. those who have a 401 plan, the ones that are millionaires, what they did, here's the formula, the exact formula, they saved 14% of their gross income and their employer had a small match on top of that. And then how they invested the money is key because it's not enough to just put money in these 401 plans. You have to be invested for growth. And growth means stocks. Right? So you'd have to have. And the actual specific allocation in these 401 millionaires I just talked about was about 70% stock and 30% bonds.
Okay. Now what are people doing that aren't achieving this? Well, the average American saving maybe 3 or 4%, maybe 5% if they have a 401 plan. People who don't have 401 plans in many cases aren't even doing this. They can, they can open up an IRA account, but in most cases they're not doing that. So the whole secret is not budgeting, not using discipline, having the money move right from your paycheck. Paycheck gets deposited automatically and then it moves the day it Hits your bank account automatically, first for retirement, then later we'll talk about building a security account, building a dream account. The key is that the money moves automatically. So in the United States now, there's, by the way, 24 million millionaires now. So we've seen an increase of 8 million millionaires to 24 million millionaires in the US in just 20 years. How did they do that? There's two primary escalators to wealth, that is stocks and real estate. And if you're not in stocks and you're not in real estate, you are being left behind.
When you say real estate, does that mean having a mortgage and owning a home?
It's owning a home or owning REITs.
REITs?
REITs. Real estate equity Investment Trust. So that's another way to buy real estate without actually having to own the home. But you don't get the same level of returns.
I mean, this is, this is one of the hot topics of conversation we've had on this show several times is many of my guests that are sort of financial advisors say that owning a home is a bad investment. I think from what I understood from the research and from reading your books that you feel differently about that.
Yeah, I mean, I couldn't feel more differently. When we look at where is wealth created in the United States and also abroad, it's in two places. It's in home equity and it's in the stock market. So when you look at housing and you take someone who owns a home and we'll talk about it, I know it's hard to buy homes right now, but when you look at people who own a home versus people who rent, Homeowners America. Follow this for one second. Homeowners America are worth 40 times more than renters. So the average homeowner in America today is worth over $400,000.
But this doesn't establish causation, I. E. That doesn't mean that buying a home made them rich. Right.
It actually does. And I'm going to go through that here. So the average renter is worth $10,000. Right. So why, why does buying a home build wealth? And how much wealth in the United States is now in home equity? Wall Street Journal just ran an article on this, came out two days ago. There's $34 trillion now in home equity in America. This number has gone up 90% since before COVID The other money is in retirement accounts, which is 60, 70% in stocks. There's $45 trillion now in retirement accounts. So those two things alone equal $80 trillion right. Like when you want to go like, where are the breadcrumbs? Where's wealth being created? It's right in front of us. Now, the problem that we have in the United States, but also, look, we're here in London right now. The problem we have in so many cities is that real estate keeps going higher and higher and higher, and people's incomes are not keeping pace with the cost of buying a home. So when someone comes on a show like this and says, look, you don't have to buy a home. It costs more to have a house than rent.
You know, I watched one of the shows. I won't say who it was. It doesn't matter. They all say the same thing. Don't buy a house. You'll be trapped. You'll have to pay. You'll have to pay real estate taxes and you'll have to pay insurance and things break. They go through all these expenses and it makes it sound like, oh, yeah, if I rent, it'll be cheaper. So who do you think pays these expenses? When you rent, you do. The landlord passes the cost of these expenses on to the renter. Ultimately, why they do this, because people who buy real estate buy it for an investment. They buy it for an investment. They're not, they're not subsidizing these costs. So it's a hard thing to hear, and especially when you're young. Like, I have a son who's 22. He's in Chicago. He's going to move to New York City. It'll be extremely hard for him to buy a place in New York when he starts working right away. Just will be. He probably won't for two or three years. A lot of young people when they move to a major city, they can't afford to buy right away.
When I came out of college, like you, I was in credit card debt. I had $12,000 in credit card debt. I remember opening up my bills and having the room spin and thinking, I'm never going to have credit card debt. How am I going to buy a house? But I did. And in fact, I didn't buy a home when I was young by myself. I bought a home with a best friend. So how did I get my first house? First house we bought was a quarter of a million dollars. We put 10% down, and my best friend and I, Andrew, we split that down payment. So we each put $12,500 down. This is how we scraped it together. The house was a complete fixer upper and we didn't have enough money to make the mortgage payments. So we rented out bedrooms and we had friends rent bedrooms. And that helped us cover our mortgage. We scraped it together. And that's what a lot of people do when you're young. But if you don't get in the game of homeownership and you rent in your 20s and you rent in your 30s, you're going to turn around in your 40s.
And having not been built any net worth when I wrote The Automatic Millionaire 20 years ago, two things have happened since then. The stock market has gone up in 20 years, 600%. Okay, so if you had a $100,000, just that has gone to $600,000. If you bought a house, the house has gone up 400%. So when you read this book with all these, there's a whole chapter of updated success stories, there are a lot of ordinary people that started saving 5, 10, 15, $20 a day, bought a starter house, and today they're millionaires.
So am I not better off renting and investing in the stock market versus buying a house? Because obviously when I buy a house, I'm paying a premium on the house so that I can get a mortgage.
I want to bust this myth because what happens is people come on, they go, the stock. Look, I can tell you right now, the stock market over the last 20 years has averaged over 10% annually. People go, the returns are better in the stock market than real estate. Yeah, but that's not apples to apples comparison. Why when you buy a piece of real estate, when you buy a home, people don't typically pay cash for their first house. They put down 20% and they borrow the other 80%. So you take like an example of a, take a $200,000 home, $200,000 home, you put 40 grand in, home goes from 200,000 to 400,000 in 10 years. This has happened to so many people in the last five years since COVID there are markets all over the US where housing prices have gone up 100 to 200%. So a person buys a $200,000 home, they borrowed 80%, it's doubled. So they've made 200,000 in profit. They didn't put in 200,000, they put in 40. So they got a five times return on their down payment. They go to sell their house, they don't pay taxes on the gain.
Because when you own a home, at least in the United States, you own a home for over two years. If you're single, you get $250,000 in tax free gains. If you're married, you get over half a million dollars in tax free gains. You get tax deductions on the mortgages. So what happens is people come here and they go, you know what, you shouldn't be, you shouldn't be tied down. You need to be flexible. When you're young, you don't want to have the responsibility and you should take the extra money and you should put it in a mutual fund. And you know what happens in the real world, Steven? People don't do that. They rent an apartment that's nicer than what they can afford and they spend all their money and then they turn around in their mid-30s and they have no equity because they haven't bought anything. And they also haven't saved money. It is an absolute fricking myth that people take this extra money that they could have used to buy a house and they're going to put it in the stock market. They don't do that. And that's why also, by the way, corporate America got into the game of buying up real estate all over America houses and building apartments to rent to an entire generation, hoping these people never buy this.
Like 10 days ago, Trump came out and basically said he wants the institutions out of buying up all the homes in America. Why does he want to do that? Because he, because he recognizes how serious of a problem it is to have a generation of Americans who are renters. I'm telling you, when you look at average Americans, I'm talking about ordinary Americans, when you look at where their wealth is, it's in home equity and it's in the stock market. And this is the last thing I'll say. Generational wealth is created for better or worse through home equity. So when you look at why, you know, you asked the question about causation. If a family doesn't buy a home, the likelihood the next generation can buy a home is very low because it's when someone dies, the money that is in the house, that home equity is often what transfer, transfers to the next generation that helps the next generation buy a house.
I was looking at some stats here because I want to what I want. I wish I could sit down. All of the guests that have been on my show that have had a difference of opinion and have said that buying a house is a bad investment.
It could be a really interesting conversation, right?
It would be a really interesting conversation. What I've done as an alternative to that approach is I've pulled up what they've said and I'm going to give you some of the things They've said just so you can rebuttal them and have your say on them. One of the things that they often say is that long term real inflation adjusted home price appreciation in the US is about 1% annually. And one of my guests cited Robert Schiller as the evidence of that. After maintenance, which usually equals 1 to 2%, property taxes, which equals about 1%, insurance and transaction costs, the net real returns approach roughly zero on average. So when you say housing is a great investment, are you referencing the gross appreciation, which is the total appreciation, or the net returns after taxes, maintenance, insurance and selling costs?
So when you dig into these kind of numbers like this, what they are is their numbers, but they're not real world. Right? So like when you, when you talk to someone who owns a home today and they've owned it for 20 years and you ask them how much of your net worth is now in the equity in your house, over 50% of their net worth is in their house. You will see people on your YouTube channel that literally if you read the comments, I'm sure you do.
I do.
Where people say it's not true. There was, I read a comment yesterday on your YouTube page. All I know is I bought a house and it's gone up in value three and a half times. And the rent when I bought the house was twelve hundred dollars. And the rent today to buy that, if I had that house, if I was renting it would be $4,000. So the thing is, you have to understand is that rents always go up. Steven. Like I lived in New York City for 18 years. When I moved to New York City in 2001, a really nice apartment, a nice apartment was like $6,000 a month. When I left New York, that same apartment was $25,000 a month. Follow the, follow the insanity of that math. Now that apartment went from being $2 million apartment to a $5 million apartment. So I could have been renting it, but in my case I owned it and it went up in value $3 million. So I have friends who have been renting in New York for 20 years. They have built no net worth. I have no vested interest in this conversation. Meaning I don't sell real estate.
I'm not a real estate agent. I'm not selling real estate. I've just seen in the real world how people have built wealth. The McIntyre is in this book, the automatic millionaire. When they came into my office and they were worth $1.8 million and he was 52 and able to retire, having earned an average of $40,000 a year. All their money wasn't in the stock market. They had bought a home in San Leandro, California, what they called a middle class neighborhood. Their home at the time was worth about $300,000. They had paid their mortgage off and they had bought one more house on their street. They rented the first house, they bought a second house on their street, they paid that mortgage off. And so they owned two homes, free and clear. One house they got income from, one house they lived in with no debt. And then they had saved money in their 401k plan.
So if I was a young person, or not even young person, a middle aged and older person, who took my down payment that I was going to pay into the house, if, let's say it was, say my down payment was $20,000 and I put that into the S&P 500 instead, over the long run, won't that grow larger than the total home equity? Potentially.
Here's why the index fund theory doesn't work. You can't live inside an index fund. You can't live inside a mutual fund. You have to live somewhere as long as you're alive. Here's what people should do. Take a look at what you're paying in rent. Now. Ask yourself a question. If I am paying 5,000amonth in rent, which lots of people are, Right. Do you know people paying 5,000amonth in rent?
Yes.
Okay, so they're paying 60,000 a year. Let's take that number.
Yeah.
So over 10 years they're going to spend $600,000 in rent.
Yeah.
If the rent doesn't go up.
Yeah.
In 20 years they're going to spend 1.2 million in rent. If the rent doesn't go up in 30 years they will have spent $2 million in rent if the rent doesn't go up. But the rent does go up. So the question you just have to ask yourself is, am I going to take all this money that I'm spending on rent and never build anything? And if you really believe that renting is better than owning, then you should still consider the idea of buying something then that somebody else rents. Because I promise you, somebody's getting rich in the transaction. If you're the renter, you're not the one who's getting rich in the transaction of renting. It is a great short term solution. Renting it is not a great term, long term wealth building solution.
The other thing that people often talk about and you cited earlier is the mobility that renting gives you.
Yeah.
Your son Was here a second ago. He's 16 years old. Soon he'll be at the age where he's got his own place and he's thinking about different career opportunities. Then I got AI this big thing. So he might want to go to San Francisco, then he might want to go live in Florence and wherever else if he's bought a place. There is an interesting sort of psychological but also financial component to the fact that it makes it harder for you to move with the opportunity of life. And if we are, if what people say about the future of work is true, that we're going to have many more careers in our lives than we did in the past, one might assume that we're also going to be more mobile. And so is there an argument to say that buying a house might hurt my professional opportunities, my ability to pursue professional opportunities?
The answer is possibly right. But here's the thing about rent. Rents, interestingly enough, a major obligation, right? Usually when you go and you do a lease, you lock yourself into a one year lease. Sometimes you lock yourself into a two year lease when you buy something. And this is assuming that you have the money to buy something. Steven, look up, because you've got all the data at your fingertips here. Look what the average length of time it takes to sell a home in the United States. Just, just Google that right now. Because what I will tell you is in certain markets, you can put your home on the market and you can sell it in less than 90 days. Now, some markets you can sell your home in less than 30 days. In many cases, you actually have more flexibility when you own something than when you rent. And that's if you want to sell.
Says the average time from listing to sale is about 47 to 62 days from listing to closing in 2025, including 16 days on the market and 30 to 45 days to close.
That's called less than two months.
Even in hot markets, the process from putting a house on the market to legally selling it can take 1.5 to 3 months. Meaning home equity isn't a quickly accessible investment.
Yeah, but do you think that's pretty quick, 90 days?
No, it is, it is. I mean, it takes you that amount of time to get out of the lease.
Exactly. So here you've got a piece of property that you can turn around and sell in less than 90 days. Now this is the US you can't do that. Like for instance, I live in Italy. That could be very hard to do that in Italy. But in the US you've got something that's in a good market, it's liquid. The other thing is you can rent it, right? You're actually not trapped. If you start to build equity in your home and you pay your mortgage down slightly, next thing you know you're able to rent that property and you can still move. Today people are taking their homes and they're Airbnb them. What I really want for people is the chance to be financially free. There's also an age at which it doesn't matter if you own. You know, once you start to get older and you've built financial security, you get in your 50s or your 60s or 70s and you just want to travel and you don't want to own anything. That's a different stage of life. So the question just becomes the money that you make. I go Back to the 90,000 hour comment.
When you work 90,000 hours over your lifetime, what's your plan to keep some of this money? You have to have a pay yourself first plan. That has to be your number one priority, is that when you earn money, the first person who you're going to pay is you. If you say, you know what, I watched Steven and I saw David and I've seen a bunch of other people on his show and I'm not going to buy a house. Okay, then you have to pay yourself first. More. Now, I go around the world for the last 30 years, starting with Oprah with the Automatic Millionaire. I launched this book on Oprah and I talked about you have to save one hour day of your income. And people will get on these social media boards and be like, I can't save 10% of my income. They'll tell I can't live off 90% of my income. It's not possible. I have to spend all of it, Right? Well then that person who's renting and not buying a house, which is for savings, is clearly never going to save. So the other thing about buying a house is it does require for savings because when you use have a mortgage payment, part of that mortgage payment is paying down your debt.
And I teach you how to use a bi weekly mortgage payment plan. So you take a 30 year mortgage and you pay it off five years earlier. And doing that can save you depends on the size of the home, can save you 50 to $100,000 just in interest payments.
You talk about having a savings mindset. What is a savings mindset and how does one go about saving? If they are one of those people that says, listen, I'm barely getting by as it is. David. Yeah, how the hell am I going to save money when I'm actually increasingly getting into more debt right right now?
So the first thing is you have to find your money, right? So what I, what I find, Steve, is when I talk to people, most people don't know where their money goes. Literally, they don't know. They're like, I'm like, how much money do you spend a month? Well, I'm not really sure. How much money you spend a year? Well, I'm not really sure. You need to be sure. So you should be doing something to track where your money goes. Now, you can be sophisticated. You can use an app that will track where your money goes. You can also take out a pad of paper. And I give people a seven day financial challenge for seven days. Just bring a little pad of paper with you and write down every single day where your money goes. Now why do I want people to do that? Because most people today are spending money unconsciously. I go back to these phones, the fact that I don't, I don't even have to carry a wallet anymore, right? It's just click, click, click and pay for things. We've lost touch with spending money. So when people start to see what they're really spending and it's a wake up call.
The biggest thing I've been sharing lately is what does it take to blow $10,000 a year per day in terms of spending? How much money do you need to spend a day to blow $10,000? Now show us the here. Now, we happen to have. These are. We have pounds today, right? So. So I'm holding, Stephen, right now I'm holding what is known as a brick. So I don't know if your staff told you how much I'm holding here. You know what, what'd you guess I'm holding?
It looks like maybe $5,000.
Okay, so this is a life changing amount of money, Steven. This is $10,000 right here. And what does it take to blow $10,000 in a year per day? How much money you have to spend per day to go through $10,000? I'll make it easy for you. The answer is $27.40 a day. $27.40 a day adds up equaling $10,000 over the year. Now, before we go through, where do you spend this money and how do you waste $27.40 a day? The question becomes, if you didn't waste $27.40 a day and you were able to get yourself to invest $10,000 a year, what could this Be worth over time. And the answer is, in 40 years, if this was in the S&P 500 fund, which you quoted earlier, and you earned 10% annually with reinvested dividends, that stack there would grow to 4 million4. Over $4,400,000 if you invested $27.40 a day.
Pass me this big brick.
Yeah.
So if I save half of this a day, then in. Did you say 40 years?
In 40 years. So let me give you the math on a couple different ways of doing this. Okay, so what would happen if you invested roughly half of this a day? The number I use is $27.40 a day. It's the magic number. That equals $10,000 a year. If you invested that a day for 40 years, you'd have over $4,424,000.
If I invest $27 a day, in 40 years, I'll have $4,000,000.
Over $4,000,000. Let's go through the yeah buts now, because people are going to hear this. Some people are going to go, wait, what? And then we'll talk about where you find $27.40 a day. Yeah, but $4,400,000 won't be worth a lot of money in 40 years. With inflation, it won't be worth that much. It won't have the same purchasing power. My answer would be it's worth a whole lot more than zero. Right. If you're not saving any money, if you can't save $27.40 a day, you won't have $4,400,000. Yeah, but with taxes, you know, it won't grow that much. Well, it could if it was in a retirement account. You wouldn't be paying taxes on the money. Yeah, but it's not possible to earn 10% on my money. Well, the stock market for over 100 years has averaged over 10% annually with reinvested dividends. Yeah, but the stock market's risky and complicated. Well, no, it's not. If you bought an index fund, it's actually not that risky and complicated. Yeah, but I don't know. I don't know how to get started. Well, you could start really easily. You could open up a brokerage account. You could go to a Charles Schwab Fidelity.
I mean, I'm literally going to go through them all. Vanguard, Robinhood, Coinbase, Acorns. And in less than 10 minutes, you could open up an account and be saving. Pick a dollar amount, $5 a day, $10 a day, $27 a day. And that could change Your life. Now, why is $10,000, Steven, such an important dollar amount? Here's what I can tell you. Having done this for 30 years, this dollar amount right here. First of all, this is. One in two Americans don't have $1,000 a bank account right now. So this is 10 times what one out of two Americans have. But more importantly, $10,000. When we do surveys and we ask people, how much money would it take to totally change your life? The answer is not a million dollars. The answer is not $100,000. The answer is actually 10,000. And the question is, why is it 10,000? And the reason is, is that's about what the average person has in credit card debt. And they feel like they're drowning, like you talked about earlier. And they know that that could pay off their credit card debt or they have a job they don't like. And they knew that if they had $10,000 in a savings account, they'd quit that job and they'd be free.
They'd have to go find another job.
Or start a business or something, or.
Start a business, or God forbid, they're in an abusive relationship and they can't leave. But if they had $10,000, they'd leave. So, you know, a lot of people go, david, you just make this all too simple. And it's true, I do. Because when it's simple, people take action on it. So for years, I have taught this concept called the latte factor. A lot of people love me for it. Now I have a lot of people hate me for it. And I have taught that, you know, we waste small amounts of money on little thing. I had your staff bring me an iced coffee. When I started teaching the latte factory, I would talk about the idea that we waste five bucks a day on coffee. And that if you don't believe you can start saving and investing, at least save $5 a day, make your coffee at home. And people would say, but I don't want to give up my coffee. Okay, well, then figure out another way to save $5 a day. This iced coffee. I don't know what cost you in London. In New York City, that coffee right there is $9.50, plus a tip.
It's over 11 bucks. I know because I was just in New York. So today we had a bunch of props here. And I said, well, let's try to show, like, What. What is $27.40? Like, when I go to my hotel later, when I leave here, a cocktail is going to be 30 bucks, right? I was just In New York City. Cocktail. I had a cocktail. My hotel is $31.50. Wine, $50. Eating out. You go and have lunch today, it's going to be $25. And people say, well, I have to eat. And I go, I know you do, but you could also brown bag your lunch. It's what my grandmother did. Now, her friends teased her, but my grandma was able to retire to California and her friends all got stuck in Milwaukee, Wisconsin, where it was cold because they couldn't afford to retire the way she did.
How many people could actually save $27 a day? Because if I go back again, just over 10 years of my life, I mean, there's no chance I could have saved $27 in a day. There's just no. There's just no. There's no way.
If you go back to what age?
If I go back to between like 18, 19 years old, roughly that period of my life, yeah, there was no way I could have saved $27 a day.
Here's really the question. Do you have friends and do you think you have people who work with you who are making more than $50,000 a year and they're not saving $27 a day? They're not even saving $10 a day?
This is true. I actually did a bit of research on this and it says approximately 40 to 50 million families. If we just take the United States, where I think there's what, 330 million people, roughly approximately 40 to 50 million families in the US can realistically save $27 a day. This represents roughly the top 30 to 35% of households. For everyone else, the bottom 65 to 70%. Saving that amount would require either extreme poverty level budgeting or is a mathematical.
Impossibility over 40 million people they think can afford to save $27.50 a day?
Yes. It's based, based on income and expenditure data from 2025 to 2026, approximately 40 to 50 million families in the US can realistically save $27 a day.
So for those 40 to 50 million people in the United States, that would be life changing. Now, are there people who can't afford to say that? Absolutely. In the United States. I was just in Arizona. I just did a keynote speech. I asked the audience, this is when the government was shut down. I said, how many people do you think in America are taking and receiving snapchecks?
What's that?
Thank you. Because by the way, most Americans don't even know what a snapcheck is. That's a check that the government Gives to people for food. And the dollar amounts, a little over $6 a day. So smart people in a room. By the way, I didn't know the answer to this a week prior either. The answer is about 41.5 million Americans get a snapcheck. When I told the room that, the room gasped. I said, so when you hear that the government was shut down for six weeks, that was three pay cycles. Well, the average American doesn't have two weeks of expenses set aside. I mean, I don't think everybody fully grasps the problem. Right now, 4 out of 10Americans can't get their hands on $1,000 in case of emergency purposes. If you actually dig into the Federal reserve data, it's 37% of Americans can't get their hands on $400 in case of emergency purposes. So there's a whole section of America that's truly struggling, like, but there's a whole lot of America that is still struggling. They're living paycheck to paycheck, but their money's being taken from them all the time because they don't have a plan for it.
For that bottom 60% of Americans that my research says wouldn't be able to save $27 a day, the data reveals a discretionary income cliff. Once you drop below the top 40% of earners, the money available after bills vanishes rapidly. The top 20%, which earn, I think, $96,000 per household, are in a surplus. The middle 20% have a $15,000 surplus, which they're $27 a day. Take 66% from. But the bottom 40% often have a roughly $2,000 surplus. So it's impossible for them to get to the $10,000 for that bottom 40%. What's. What's the advice for them?
Start with something. Okay, it's like we took this 50 and we said, cut it in half, 25. I would say, can you save $1 a day? I have actually talked about this idea. Really simple. Could you save $10 a day for 100 days? So, like, if you're listening to me and you happen to really be struggling right now, my question would be, could you save $10 a day for 100 days? Why? Because it would get you to your first thousand dollars, and you now have more than 50% of Americans who don't have savings. And I can't tell you how many people have come back after 100 days and said, okay, I did it. It wasn't easy. For some people, saving $10 a day could be really, really hard. But you're into fitness. You saw my son who just came in here. Fitness is built through daily action, right? It's built through daily action, daily eating well, going to the gym, doing certain things on a regular basis, savings, the same thing. There's a company called Acorns. I invested acorns back in 2015. Acorns came up with an app that helps you roll your change up.
So if I go to Starbucks and I spend $9.50 on a coffee, you can round it up where the 50 cents to 10 bucks is put into investments. Just rounding up your change. And people have saved tens of thousands of dollars over the last 10 years by just rounding up their change.
Every time I've tried to improve something in my life, like my businesses, my health, my relationships, I've noticed that the biggest shifts have come from being better informed. And when it comes to our health, most of us know very, very little. So when our team was approached about partnering with Function Health, it felt very much aligned. Their team has developed a way of giving you a full 360 degree view of your health. Many of the things that are going on in your body in the form of different tests. You do one blood draw and it gives you access to over 160 lab results. Hormones, heart health, inflammation, stress, toxins, the whole picture. I use it and serve many of my team members.
You sign up and you schedule your tests and once you're done, you get.
A little report like the one I have here.
I can see my in range results, my out of range results, and there's a little AI function too. So if I have any questions about my out of range results, I can just go in there and ask it any question I want. And these tests are backed by doctors and thousands of hours of research.
It's $365 for a yearly membership. Go to functionhealth.com doac and use the code DOAC25 for $25 off your membership. I had a friend of mine contact me and I spoke to one of the previous financial advisors and educators that I'd spoken to on the show about him. He told me he was in deep financial debt. Probably earns about £50,000 or dollars a year, but has got himself into real debt. And I imagine a lot of my listeners are somewhat in debt. Whether it's credit card debts or loans or others. Do you have any specific advice to people that are currently straddled with debt?
Absolutely, because it's one of the most important things you need to know. How to get out of debt is like quicksand. Like, you know, you talked earlier about how you were in debt and what that felt like. When I came out of college and I had $12,000 in credit card debt, it felt like the greatest weight on my shoulders. Like I was carrying like a 50 pound backpack. And how did I get out of debt? How do you get out of debt? I will give you the very simple formula to getting out of debt. Dope. Dope stands for done on last payment. If you said to me, David, I've got five credit cards, I'd say, okay, Stephen, tear up your paper just like this. And I'd start listing your credit cards. I go, 1, 2, 3, 4, 5. And I'd list them all. Visa, MasterCard, I'd list them. And then I want to know, how much do you owe? So I put the dollar amount down and what I would do is I put the dollar amount down on paper and I list it small to large. Then I want to know the interest rate.
Now what people say is, oh, you should take the highest interest rate and pay it off first. But I wouldn't tell you that, Steven. I'd tell you, you take the smallest credit card, I don't care what the.
Interest rate is, the smallest amount, smallest amount.
So maybe this card right here is $500 and this card down here is $3,000. I'd have you make minimum payments on every card automatically. This is really important. The automatic part. Have you go on. I'd literally go into your house and open up the. I'd open up your iPad and I'd have you make minimum payments online automatically so that every card's paid on time. Then I'd say, Steven, how much extra money do you have? Because I want you to put it all towards the smallest card. We're going to get that small card paid off as fast as possible. We're going to add all the extra money to that small card. Minimum payments on everything. Once that card's paid off, we're going to go like this. You don't have to close the account because we don't want to lower your credit score. But we're going to put that card over here. Never use it. Now we're going to go to the next, next smallest card. Some people call this a snowball approach. The reason I teach this system is it reduces the amount of credit cards you have as fast as possible and you see yourself make progress.
It's really important to see yourself make progress when you're doing anything financially. Then I would attack the interest rates, because the interest rates aren't always permanent. You can negotiate your rates lower. You can move credit cards to another card with a low interest rate. You have to be very careful, though, when you do that, because they're waiting for you to make a slip up and make a late payment. And when they do, they'll jack the credit card interest rates back up again. You can also call up your credit card companies if you're really struggling and tell them, I'm struggling, and I'd like to know if you have a program in place where I can stop the interest rate and pay these cards off and more accessible. This is basically what the nonprofit credit card counseling organizations do. But the credit card companies often have programs, too, for this. They'll tell you to stop using the card. They'll actually make it so you can't use the card anymore, but they'll stop the interest rate. So that approach has helped so many people get out of credit card debt. Now, I just want to say something super important because I've gone through this.
When you go through the work of getting out of credit card debt, it's a huge victory. Don't go out and celebrate on the credit cards, because I got myself out of credit card debt in college, junior year, and then I went out and celebrated and got myself back into credit card debt. And people do this all the time. Usually people get themselves in a hole at least twice, sometimes three times. Don't go back in a hole again. I didn't carry credit cards for 30 years. I only carried a debit card, and I had to pay it off every month.
Should these people who are in the bottom sort of 60% be thinking at all about how to make more money, how to increase their income?
Absolutely.
And what are the, like, the easiest ways to do that that you'd recommend just from your own experience of, you know, being in the professional world.
And so my experience and I know that you look, you wrote this great book, Diary of a CEO, right? Anybody hasn't read your book? You wrote this great book. What's the best way to grow your income? If you have a job, it's to be good at what you do, right? You can have a job at minimum wage. Pretend you work at McDonald's and you have a job working minimum wage at McDonald's. The owner of McDonald's, the guy who owns that franchise, or the gal that owns that franchise, desperately needs good employees. Who becomes a manager that makes more money? The person who works really well. Now, a lot of people, well, I Don't. I don't know if I want to work at McDonald's. I'm just giving it as an example. Anywhere you work, how you grow, your income is. You are the best at what you do. You show up early, you have a game plan at work, you work late, you do what you say you're going to do. You don't wait to be told what to do, Right? Like, I've been an entrepreneur all my lifetime. The hardest thing about being an entrepreneur is what?
Yeah, everything.
It's everything. And most people are entrepreneurs. Go, well, it's. You know, a lot of times it's hard to have good people unless you're a good leader. People are so thirsty to have jobs with purpose and meaning, and most people are actually looking for leadership. So if you can be really good at what you do, you will make more money. There's no limit to wealth in the world, right? Like, we've never seen so much wealth being created in our entire lives as right now. If I were young, a lot of people go, well, you should learn AI. Yeah, you know what? Probably you definitely should learn how to use AI, because if you don't learn how to use AI, you're going to have really limited skills and going into certain jobs. You know what else people are going to go out and do? Learn how to be a plumber, Learn how to be electrician, Learn how to put up garage doors. I've got friends. I was just recently on a podcast with a guy who's made a billion dollars putting in garage doors, and he took me through his warehouse and showed me their garage door models, and I was like, you know, I've got a friend who makes gyms that go in garages.
I just connected them. He's got a huge business making gyms for garages. There's just no limit to the amount of opportunities out there. You have to, though, get out of a stuck mind frame. I mean, you had Tony Robbins here. If there's anybody who can help you get out of a stuck mind frame, it's that guy, right? But you can't. You can't have. Zig Zigger used to call it stinking thinking. You have to have the ability to look into the future and believe that your future can be as exciting today or better. I put up a post yesterday, I said, I would rather be an optimist and be wrong than a pessimist and be right. And you show me somebody who wants to make more money, go in the world an optimist, and figure out how to go make more money.
Do you think a lot of this is a mindset at the core of it? Obviously, there are real socioeconomic factors, and there's people who live in certain situations. And if I think back to where I was born in Botswana, there's just less opportunity. And sometimes you have repressive governments and other factors that will objectively keep you stuck. But all other things being equal, how much of the game is mindset?
It always comes down to a decision. And we started by talking about my grandmother. If my grandmother hadn't made a decision at 30 that she didn't want to be poor. She was tired of living paycheck to paycheck. She hadn't decided that she would go out and teach herself about money and take 50 cents of her paycheck and 50 cents from my grandfather's paycheck and start investing. I wouldn't be here today. She made a decision that had a ripple effect through our family. She built financial security for herself with that one decision. She taught my father how to invest, and he was a financial Advisor for over 45 years. My sister's a financial advisor. I was a financial advisor. I spent the last 30 years teaching people about money. One woman's decision had this ripple effect. So one thing I say to people who are listening, especially the moms, sometimes you got to make a decision that's not just for you. You're actually making the decision for your family, and you can come up with a list of reasons why this stuff won't work. Somebody who's watching this show or listening to us right now, they're already interested in this.
That's why they're here now. They're here for a couple reasons. Either a, they're hurting financially, and they know they need to fix something. Great. Start where you are. Fix what needs to be fixed. Some people are like, you know, I think I'm doing pretty well, but I'm not sure if I'm doing everything well. You know, I. I've. I've opened up my Roth IRA or I've opened up my 401k plan. Putting some money away, But I don't know if I'm putting enough money away. Then you can improve what you're doing. Some people are like, I'm renting. I think I would like to buy a house someday. All right, make that a goal. I teach three buckets when it comes to money. Three baskets. Pay yourself first for retirement. We haven't even talked about emergencies yet. Putting aside. Putting aside money for emergency purposes. Have to Talk about that. You got to get more money put aside for emergency purposes. And then building a dream account. You need to put money away for your dreams. Those three accounts should be automated.
And on that point of having three accounts, you call it a future account, an emergency account, and a dream account. How much of your earnings should you be putting into each of those accounts on a monthly basis?
All right, so keep it super simple. I recommend one hour a day. Again earlier. It's 12 and a half percent of your gross income.
When you say one hour a day, you mean one hour of the time you work per day.
Yeah. So whatever you make an hour. Yeah. If you're, if you're working a 40 hour workweek, 12 and a half percent of your gross income goes off the top into a retirement account. Now let me just say something for the YA Butters. They're like, I can't go from 0 to 12%. There's no way. Then start at 1%. If you're not saving right now and you're listening to us and all you do when you leave this podcast is make one decision, and that decision is, I'm going to save 1% of my income. And you start that this month, your life will change. Your life will change because you start the process of making a difference. It's just like the first day you go to the gym. Now, I will tell you, if you save 1% of your income, you won't notice it. And if you did that every month for a year, at the end of the year you would have saved 12% and you will be saving four times what the average American saves, and you will be in rockstar shape. Then the second hour, this is where people's minds blow up. But the second hour, the first hour goes for the future.
The second hour goes for safety and for dreams. So 30 minutes of your income, roughly 5% should go into an emergency account and another 5% goes into a dream account. Now that dream account could be for buying a house, could be saving money for college, could be the vacation you want to take at the end of the year. It could be getting married, could be the engagement ring. But you're putting money away for your dreams, because when you put money away for your dreams, that's how they become real.
And you know the book is called the Automatic Millionaire. This is a book that sold over 2 million copies on its own. Why did you use the word automatic?
Unless your financial plan is automatic, it will fail. How do I know this? Because I spent nine years as a financial advisor at Morgan Stanley and I got to see firsthand everyone who came into my office with an ordinary income, who built wealth, they did it by saving automatically. Every single time a client came into my office and they said, I'm going to bring you a check every month myself. I never had a client save for more than six months. They stopped when it. Once you make the decision to automate your financial life, it works in the background. Now here's the thing. Everybody else is already doing this to you. You go sign, you go to go to a gym, to go work out. They don't ask you to bring them money every month. They automatically bill you. You get a phone bill. They automatically bill you today. In many cases when you rent, they automatically pull the money out of your account. The banks automatically take money from you for your mortgage when you pay taxes. They're all automated. Everyone takes money from you automatically. Everything that you sign up for on your phone is a subscription service, Netflix.
Go through your credit card today, open up your phone, look at all your subscriptions. All those businesses are taking money from you automatically. Why? That's the only way they can be in business. They know if they don't get money from you automatically, you won't keep using them. Most people who start off with a free subscription, it'll take them three to six months to turn off something that they don't use. I'm here getting people to automate their financial life for themselves.
Is there simple ways apps, tools, websites we can use to go through all of our subscriptions and turn them all off?
Yes, there are. So let me tell you the easiest way. This is really actually free publicity for Apple. Okay? Because so many people have Apple phones. Number one, only do your subscriptions inside of Apple. In an ideal world, don't pay anybody directly. Do it all through Apple. Why? Because if you go to the bottom of your phone and you don't know how to do this and you put subscriptions up, will pop everything that you've signed up for and you can go click, click, click and turn them all off. Another thing I will tell you is that when you sign up for anything, let's say it's a one year, because everything now is a one year trial subscription or a one month trial subscription. The moment you sign up for it, shut it off. Because what happens is if you sign up for anything and think of any subscription, you can imagine companies hate me for this. The moment you shut it off, when the time comes for it to renew, they will offer you a better deal to renew.
Okay? So I've opened up my iPhone, I've gone to the settings, I've clicked on my name in the settings and then I've clicked on the button. Subscriptions. I have 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11. Of which three of them I would keep. So all these other ones have just been running in the background. And it's because I used an app one time and it signed me up to some kind of free trial and I just totally forgot to cancel it. Oh my God. Some of them are massive.
Okay, so as you do this, what you're doing right now is a real life example. So if someone's listening to us watching this, they're married, they've got kids, or they're single by themselves. This one exercise, my guess is there are many, many people listening that could find 50, 100, $200 a month that they could shut off and redirect that money to saving and investing and that could change their life.
Are there other apps you can use and go to to figure out how to cancel all of your subscriptions?
So there, there are. And most these apps you have to pay for, right? So like you can go to. So then you're right back into paying for now probably the two popular, most popular apps are Monarch and Ynab. You can also use with your credit cards. The credit car comes to doing a better job of showing it on your statements. And again, I go back to the Apple example because Apple makes it the easiest to shut these off.
Maybe some of you will be spending $100 a month. So I did $100 a month. And it says if you invest, if you sort of cancel those subscriptions and invest $100 per month for 40 years, an annual rate of return of about 10%, which is roughly what you get if you just put it into some of the big tech index funds at the moment, the total money you'll have in 40 years is $632,000, which is a staggeringly life changing amount of money, Tom.
It's staggering. And let me just give some very specific investment for people to consider, right? And they still need to do their own due diligence and read prospectuses. And yes, there's risk involved in stock market, but the first one I would talk about and look at, these are all listed in my book because I just want to give you. Because people like, what's an index fund? What do I buy? Look at the Vanguard Total Stock Market Fund. The symbol is vti. Okay. This is, this is actually the largest index fund in the world. There's trillions of dollars now in this fund. I talk about it in the book. I looked up the annual, the annual returns of VTI the last 10 years have been 14%, 14% annually. This fund has 3,500 stocks. You know, all the biggest U.S. stocks. So you don't to figure out what stock to buy. You buy this fund, you buy an exchange rated mutual fund. You have access to 3,500 great American companies. I'll give you another stock index fund I love.
And everybody can buy this on their phone right now, probably literally.
You can go to Vanguard, Schwab Fidelity. This is an etf, so it's available everywhere. It's a stock.
And if you want to figure out how to do this and you're listening right now, what I'd do is use ChatGPT or Gemini and put in the stock, the fund that has been said and ask it, how do I invest in this in the country that I'm in? What app do I need to use? What website do I need to use? Again, this is not investment advice advice. Well, I guess it kind of sounds like it is, but.
Well, no but, but it's also like so like someone says, okay, but I'm not, I'm in, wherever I am, I'm in the uk. What's an index fund in the UK that covers the uk. I'll give you the global version of vti. So because I own these funds, so I. So the global version of VTI is a symbol, which is all I'm going to give you another Vanguard fund.
When you say you own these funds for clarity, you mean you've invested in them?
Yeah, I've got money in these mutual funds. So this other fund, because I have, I want money, my, my personal money that's in the stock market. I am one third Global Investments and I'm 2/3 US Investments. So I have a lot of global index funds. This global index fund, the symbol is vea. Okay, so this is the Vanguard Global Index Fund without US Stock symbol again, is V E A that fund last year. And it won't always be like this because Global Investments have underperformed the US For a long period of time. That fund last year was up 35%. Last year, global investments significantly outperformed the US investments and the US investment market was up on average of 17%. So the US markets were up 17% or higher and global investments were up 30% or higher. Now there will be a point in time, Stephen, without a shadow of a doubt that we will see a market pullback. And when that day comes, you have to stay the course and keep investing automatically monthly. And then I'm gonna give you a tech fund because everybody wants to know, what should I invest in that is, should I invest in an AI tech fund?
And my answer would be is, you don't need an AI tech fund. You need the best tech fund that's existed in my lifetime. And that's the NASDAQ 100 ETF and the symbol for that is QQQ. So go and look. You know, go into whatever you're using and go look up QQQ. Read about the top 100 stocks in the NASDAQ and the returns for QQQ. I mean, actually in top of my mind right now, I think it's over 20%. But look up what is the QQQ total return been for the last 10 years. I can tell you, since I put money in qqq, it's gone up tenfold now. The market's been unbelievable and there will be pullbacks. And that is also why I should say this, even because we haven't even addressed this. I don't run around telling people to put all their money in the stock market. I also don't think that young people should be putting all their money in the stock market. I think one of the greatest myths out there is that when you're young, you should take a lot of risk. Let me say that one more time because it's super important, so make sure it sits.
Everyone says when you're young, you should take risk. The problem with that advice is that today people in their 20s and their 30s are taking a lot of risk. They're not just putting money in index funds, they're putting money in meme coins, they're putting money in meme stocks, they're putting money in NFTs, they're on social media and TikTok watching people day trade. They're trying to get into options. What they're really trying to do is get rich quick. All I can tell you is the older guy in the room here, people who try to get rich quick stay broke forever. And the problem with taking too much risk with your money when you're young is if you keep. If you do everything right. Like let's just say you're the. You shut off all your subscriptions and you're saving $200 a month. But you put that $200 a month into a junk investment and you turn around in 10 years and you have nothing to show for it. You'll stop investing.
Looking at the QQQ data. So this is the NASDAQ 100. So this invests in the top 100 companies in America.
The NASDAQ Stock Exchange.
The returns over the last 10 years from 2016 to 2026, the annualized returns have been roughly 19%. The total return of that period has been roughly 480%. So $10,000 investment 10 years ago would now be worth approximately $60,000 today. If you'd done nothing, never added to it over the last 20 years, the annualized returns, the return every year has been 15% with a total return over that period of 1,500%. And again, so if you've added $10,000 to it 20 years ago and done nothing, you would have roughly $170,000 today.
So here's the beauty of what you just did. You checked my Mike, my, you checked my advice, you looked at the data and now you know what has been done in the past, Right? Let me give you a super boring fund. I'm not sponsored by Vanguard. I'm just giving generic vanilla stuff here. Look up the Vanguard Balanced Fund. So right, Vanguard Balanced Fund and the Vanguard balance fund is 60% stocks and 40% bonds. That by the way, is the most typical asset allocation. The difference between stocks and bonds in the world. The average retiree has a portfolio that's about 60% stock and 40% bonds. You look up the Vanguard Balance Fund and what you're going to find is that fund has averaged over 8% annually since inception. It is as boring an investment as they come. So if someone says, well, I don't want to be 100% stocks, I just want to be, I want to be more conservative, but I want some stock exposure. The Vanguard Balance funds, a great example. I list all these funds in the automatic millionaire. One of the kind of funds I talk about the most is, is what's called a Target Dated mutual fund.
I don't know if you guys have, do you guys have a 401k plan?
We have something similar.
Okay, so in the US if you have a 401k plan, what you're going to find when you open up your 401 plan is you have what are called Target dated mutual funds. This is a one stop mutual fund solution to your investing all the way until you retire. And it will be divided among stocks and bonds and it will be what's called rebalanced automatically as you get closer to retirement. So I'll go from being more stocks. When you're young less stocks as you get older. There are trillions of dollars now in these targeted mutual funds. When I wrote the automatic miller 20 years ago, just getting started, this automatic solution to investing has changed the game of investing for millions of Americans. That's why there's 24 million millionaires and that's why there's now $45 trillion in retirement account ounce.
We have a brain budget. The way to think about it is we have a limited amount of energy that we can spend every single day. I'm saying find ways to simplify your life. And one way I've conserved my body budget is via our sponsor Factor who are a meal delivery service. They are especially great because they make fresh meals and they cater to so many different diets. High protein, keto, vegan, vegetarian, low carb, gluten free pepper, paleo diets, you name it. Every meal is designed by a dietitian, made by chefs and delivered right to me. Fresh and never frozen. So if you're ready to streamline your food intake, visit FactorMeals.com diary50off and use my code DIARY50OFF to get 50% off your first Factor box plus free breakfast for one year. And this offer is only valid for New Factor customers with code and qualifying auto review subscription purchase over the years, people have reached out asking me for mentorship, but the challenge I've always faced is that my calendar doesn't permit me to help every single person that reaches out. So when I know I can't personally help, I try to push people towards tools that I think can.
And that's why I wanted to tell you a little bit about a resource that I think will be great for those of you who are founders of small and medium sized businesses. It's a content series that our longtime show sponsor Vodafone has created. It's called Vodafone. You'll find it on YouTube. This series delivers the knowledge that founders today need to grow their company in the digital age. There you'll learn about personal branding, cyber security, scaling, e commerce companies, and through conversations with many founders who I've invested in and work closely with, the opaque picture of building a business will become clear. Some of those founders I've invested in in the series include Christiana Brenton from Flight Story, Marissa poster from Perfect, Ted, Leo Harrison from Chapter 2, and Georgia Gibson who I've partnered with to build Stephen.com and these are just a few of the great names involved such vodafonebusiness Connected to. Learn More the other book that you wrote which sold Incredibly, incredibly well. Is this book about smart couples Finish Rich. That's the title. Smart Couples Finish Rich. Nine steps to creating a rich future for you and your partner. As it relates to how rich or wealthy you become, the person you choose, and the way that you configure that relationship, how consequential is that?
It's everything, really. It can be everything. Why?
You're married.
I'm married.
Yeah.
So why can it be everything? Because here. Here's what happens in the real world, Stephen. Often we marry our financial opposite. So I always joke, like, I used to do a lot of seminars for couples, and I'd say there's two types of people that are born in the world. One person comes out, literally, with a calculator, and they're born to track where all the money goes. And they love to budget, and they're super excited about investing. That's one kind of person. The other kind of person loves to shop, loves to spend money. Almost inevitably, those two people hook up. Now, sometimes two people who like to spend money marry, that's a disaster because they end up broke. So now what do you do about the couple that's got the financial opposites? That's what led to Smart Couples Finished Rich. Because if you are married to your financial opposite, you will fight about money all the time. And fights about money are what lead to divorce. They're the number one cause of divorce. The real key, and what I've been teaching now for over two decades, is the way you get couples on the same page when it comes to money is you start with your values.
So you look at what do you really value most together as a couple? You put the money aside for a second, you go through your values. What's most important to you? What do you really care about? You talk about your values, and then you build a financial plan around what's really most important.
The two. You say that there's six worst money mistakes that couples make, and the first of those is not deciding who is responsible for what.
Yeah. So often in a relationship, one person pays the bills. Okay, who's managing the money? Now, I used to say, in every household, there should be at least one person that's paying the bills and the other person's managing the money, meaning that they're in charge of investments that you still get together and go through it. As I've gotten older, I've really realized how important this is, because I go back to the fact that the Average age is 59. Average age of widowhood is 59. I'm 59 now. I've had three best friends already pass away, all men, and they passed away before they were 57. So all these statistics that I talk about, I'm seeing them come true. And I will tell especially the women, hear me louder, hear me on this loud and clear. But this is important for the men, too. The question you need. This is hard to hear. The question you have to ask yourself is, if your partner died today, what would you need to know about the finances? And the answer is, everything. Now, what does that mean, Everything? That means you would need to know, where is the money?
Does he have money in an old 401k plan? Does he have money in an IRA account? Does he have money in a bank account? What are the passwords to get into the accounts? Where's the will? You know, six out of 10 people listening to us today don't have a will. You have to have a will at any age. At any age. Especially if you're in a relationship, you have to have a will. If you have kids, you have to have a will. Is there life insurance? You know, so many people today who have children don't have life insurance and they don't have assets. You should at least get a million to $2 million term policy. Super inexpensive. Protect your family. You have to run the drill, right? Like we got on a plane. We flew here today. The first thing they do on a plane before you take off is they talk to you about what to do in case of emergency purposes. The mask is going to come down. You're going to put it on your face, okay? You get on a cruise boat, the first thing you do is talk about what you're going to do.
If the cruise boat's got a problem, you're going to go get in these emergency boats. You need to run the fire drill for your family. On finances. I almost died. Like it's now been four years ago. My wife found me face down, passed out. I was brought to the hospital in Florence. I was in a coma for four days. I was in the hospital for 17. I had meningitis. When I came out of Just like a movie. I'm laying down, laying down in the hospital. Doctor's looking over me. Doctor says, do you know what your name is? I said, it's David. It's very good. Your last name is. I said, it's Bach. He says, do you know where you are? I go, yeah, I'm in Milan. I just had an ankle surgery. Because I had had an ankle surgery two weeks prior. Two, two weeks before that. And he says, no, no, you're. You're in Santa Maria nola. You're in the icu. We're treating you right now for meningitis. But now that you've opened up your eyes, you're going to be. You're going to be okay. You're safe now. And then they brought my wife in.
They said, do you know what her name is? And I made a joke. I said, this is Rebecca. She was like, who? I go, honey, I can still be a smart ass. In the hospital. It's Alicia. And she starts screaming and yelling, and she's like, oh, my God. Oh, my God, he's okay. But, Stephen, the truth was, I wasn't okay. Because when you get meningitis, you get brain swelling. So I couldn't remember things. I couldn't remember my passwords to the bank account. I didn't know the passwords to my phone number anymore to my phone. One of the things I did when I came out of the hospital, because I always manage the money, is I said to my wife, we're going to hire a financial advisor, and you have to be involved in what's going on. We actually had yesterday our annual account review, because I tell couples, you got to have an annual camera review either together, and if you have a financial advisor, at a minimum with your financial advisor. And I didn't want to cancel the appointment because I was. Even though you guys invited me to come here, I'm like, I'm keeping the appointment.
We'll fly your flu this morning. And so, again, having worked at, you know, Morgan Stanley for nine years and been a financial advisor, I've seen too many couples not do this, including, sadly, Steven. My dad just recently passed away, and my dad was in the money management business his whole life, so he managed the money. And my mom was not involved. And when my dad passed away, we had to just, like my book, step in and help my mom with everything. Now, she's lucky she's got two kids in the business. But as she did, my mom was just a ripe, waiting example of somebody who could be taken advantage of. So the time to learn about money is before there's a problem. If you took Smart Couples finish Rich Honestly, Stephen, it's designed to be a. A roadmap for two people together where you can sit down and go through this book chapter by chapter together, starting with just organizing your financial information, putting everything into file folders. It starts the conversation and then talking about your values, then talking about your dreams, then going into, well, What. What do you want to share? You know, you have a very comp.
I don't know, all your stuff. I've followed you for years. As I told you, I'm a fan of yours. I've got your book. I've watched your podcast. I've listened to you now for years. As your business is expanding, your life is getting more complicated. God forbid something happens to you tomorrow.
Yeah, it'd be a fucking nightmare.
And she's your fiance.
Yeah.
She wouldn't even know where to start. And I don't know if she would know who to call. So it's a worthwhile conversation. Like, I just had this guy in the show, and I don't know, maybe. Maybe we really need to, like, you know, involve you a little bit.
I was just looking at some of the data here, and it says that in terms of income ignorance, According to a 2021 study by Fidelity Investments, nearly 40% of couples could not even identify how much their partner earned. It says, in terms of financial infidelity, surveys from Bankrate and Credit Cards.com consistently find that up to 40% of adults share that they have kept financial secrets, which is hiding cash, hiding bank statements, and hiding debts that they have from their romantic partner. So that's almost half. And you pointed at this earlier on, which is the CFO dynamic. In many households, one spouse acts as. As the chief financial officer. And research indicates that roughly 50% of couples have a non managing spouse who has little to no idea how much money the family have total. They don't know where it is, and they don't know the passwords.
It can sound scary, it can sound intimidating, and yet I can tell you every day, people who actually kind of do this basic stuff that we've talked about, once you start to do it, you feel a lot better. You feel better instantly. You don't. You don't have to go from having no savings to having a million dollars to feel better. If you just start automatically saving some money, paying yourself first, the moment you make that decision, you'll feel better. You go and you turn off some subscription fees like you just looked at. The moment you do that, you'll feel better. It's literally like a financial muscle. You start to build this financial muscle. When you start to take action, it is action that changes your life. I always say, I wrote all these books. If a person buys a book, reads it, and doesn't do anything, then I was a form of entertainment. If you listen to a podcast on money and you don't do something Then we were again a form of entertainment. My purpose for doing this podcast today, why I got on a plane and flew out here immediately to do this with you, was I want to try to change somebody's life today.
I've always taken the approach of, like, I want to change a person's life one person at a time. And sometimes the things I share are hard to hear, but I also know they wake people up. You had this great, great quote in this book. I was showing this today to my son. I'm holding for those of you who can't see me, I'm holding Steven's book, A Diary of the CEO, which has also sold millions of copies. And this is your quote on page 233. I wonder if you remember your quotes because sometimes you forget them, right? If you want long term success in business relationships and life, you have to get better at accepting uncomfortable truths as fast as possible. When you refuse to accept an uncomfortable truth, you are choosing to accept an uncomfortable future. The one thing that wasn't in this quote was money. And everything we're talking about is, I'm like, you're going to work 90,000 hours of your lifetime if you don't pay yourself first and you have nothing to show for it. The uncomfortable truth is you will be broke. We haven't talked about global issues and government issues and debt.
Why do you have to take care of yourself financially right now more than ever before? Because the future is about to radically change. And I will talk out of both sides of my mouth for a second. Number one, I believe the next 10 years, hands down, will be the greatest opportunity to build wealth in our lifetime. AI is create. Going to create so much wealth that we've never seen anything like it. Like when you look at the returns in the stock market from last year, they're a result of AI. What's happening is AI is making companies more profitable and more productive than they've ever been. The downside is people are losing their jobs, right? You've had people on the show, including Tony Robbins, talking about this, and there are going to be a lot more of those job losses. So some people are going to get much wealthier, and then a whole lot of other people are going to have a challenge. But there's another problem that we are not talking enough about, and that is the safety nets of governments. All these safety nets that were created in the US Social Security, Medicare, Medicaid, unemployment, you can go to through every single country.
All of these things are called entitlement programs, which is a Fancy word for saying the government made a promise to you and a whole lot of people are dependent on that promise and there's not enough money to pay for those promises. So like in the us you take Social Security. The average Social Security check right now is nineteen hundred dollars. Not a lot of money. But about 60 million Americans depend on that amount of money in the U.S. social Security. This is government data, not me. You can do all this stuff online. The government is telling us that in 2033 that's around the corner that Social Security is going to be underfunded and they're going to have to cut the benefits. Now what they're talking about is cutting the benefits by 20%. You have a lot of Americans that, that's going to be a real problem for every country's got this issue because people are living longer, governments have more debt than they've ever had. I am here to tell you it's a cliche term, but no one's coming to save you. You're gonna have to save yourself and you're gonna have to take your personal financial well being and more seriously now than ever before.
And if you do, you will be in great shape. If you don't, you will be dependent on a system that is buckling.
One of the things in your, I think it's the sixth point of the six things that couples get wrong is waiting too long to pay off the mortgage. What do you mean by that? I actually had a friend contact me and ask this. They said, Stephen, I've got some cash that, that's been given to me, I think through an inheritance. Should I pay off my mortgage or should I go invest in the stock market in the s and P500 or something else? Yeah, I didn't know what to say because I'm not a financial advisor.
If you called me up and you said, David, what should I do? I go, Stephen, what's the rate on your mortgage? Then you'd say, well David, I got a mortgage five years ago and it's two and a half percent. I'd say, okay, well that's a really low rate, Steven. You know what, you can put the money in a money market account right now and make more than that. So maybe you don't need to rush to pay it off as fast as possible possible. But if you've got a mortgage that's 6 or 7 or 8%, it's a no brainer. The biggest thing I can tell you about paying down your mortgage early is actually really simple. Here's ways to do it. If you make one extra payment a year on a mortgage, you'll take a 30 year mortgage and you'll pay it off. Depends on the rate. Five, six, seven years sooner. So you can go online, you can run a calculator. Today you don't even need calculators. Just run the question you put in your mortgage. You, you tell Gemini, here's the size of my mortgage, here's my mortgage payment. If I make an extra payment a year, how many years faster will I pay it off and how much will I save?
And you'll see the number. When people see the number in black and white, they go, I've got to do that. Now here's the key. Make that payment automatic. The easiest way you make your payment automatic is either make one extra payment at the end of the year or take your mortgage payment and increase it by 10%. So if your mortgage payment is $1,000, make an $1,100 a month mortgage payment and tell the bank you want to add that to the principal. When people do that, they need to make sure, though, that money is actually paying down the principal. Another way to do that is a bi weekly mortgage payment plan where you take your mortgage, you split in half, you pay half every two weeks. That'll also pay your mortgage offer. Really?
Prenuptial agreements. I'm engaged.
Yep.
Should I be getting a prenup?
So I would tell anyone who's getting married. Number one, if your incomes are not the same, you should get a prenup. Number two, if you both have good incomes, you should get a prenup. Number three, if you're in your 30s, you should get a prenup. You would never go into a business without a contract. Marriage is the ultimate contract. It just is. Now, is it romantic to do a prenuptial agreement? No. Does one person in the relationship typically not like doing a prenup? Yes. I know a lot of women today who want prenups and the husbands don't want them. It's whoever's making the money. But I will say this about prenups. You need a lawyer. She needs a lawyer. You cannot go and do a prenup right before you get married. When people do that, those prenups get thrown out the window because they will claim and say and have an argument for, I was under extremely undue influence to sign this agreement before the wedding. And those agreements get thrown out even if there's disclaimer language and both of you need attorneys. And prenuptial agreements can often be Like a negotiation. And you can learn a lot about your partner, that it's not always pretty.
I'm not saying you, but one can learn a lot about their partner that's not always pretty. When you do a prenuptial agreement, and once the prenuptial agreement is done, if it's a reasonable prenuptial agreement, it goes in a file, it doesn't get looked at again, and it won't matter unless the day comes that you need to pull it out. And that's for a first time marriage. Okay, You're a second time marriage or a third time marriage and you've got kids and custody issues and support for your first wife. You definitely need a prenup.
What is the most important thing we should have talked about that we didn't talk about?
Stephen, We've talked a lot about money today, but money is just a tool. So we actually haven't got to talk a lot about is using money just to free yourself to live your best life. And you don't have to have money to live your best life again. Money is just a tool. So what's most important in life? I'm going to say things that people know. Health. I started following you because of all the shows you did on health. Love. People hold on to love. Way too much gratitude. Being consistently grateful for the life you have. Friendship, loving your friends fully. And the last thing is fun. You know, I think people go through life and at some point they stop designing their life. My grandmother used to say, you gotta dream it, design it and do it. And she's like, you're gonna run out of time. So what I would say to anybody is like, this is. You've got this one beautiful moment in time where you're here. What do you want? And start working on that today.
You listened to the episode with Tony Robbins.
Yeah.
You've referenced him several times in this conversation.
If someone were to ask me who is the greatest mentor and greatest influence in my life besides my grandmother and my father? Father, it's Tony Robbins. So I went to Tony Robbins seminars in the early 90s, back in the day when he had an infomercial with audio cassettes and I went to a program that he taught in Hawaii. He had this big hotel called the Waikoloa. And he did it. He did an exercise. This is so. It's like, I remember, like, this is yesterday. He said to this, the room we were in, there were, I don't know, a thousand of us in this room. He said, how many of you Have a dream that you're not working on. And we all had dreams. So he got us into a peak state and he had us work on our dreams. And then he asked the question, how many of you think you're going to be alive in 10 years? Everyone's like, yeah, I'm going to be alive in 10 years. He's like, great. So I got a question for you. Are you going to be alive in 10 years having worked on your dream, hopefully gotten it right, done all the things I've taught you to do, model the masters, got yourself in peak state, learned the pattern recognition?
Have you gotten 10 years older, having gone through dreams and maybe got it? Or did you just get 10 years older and you let your dream die? You let your dream die? And he just let that sit. And then he had us go off in groups of 10 and share our individual dream. So we'd all written it down on paper. So I shared that my dream. I'm this young kid, financial advisor. I'm a guy. I shared my dream was to write a book called Smart Women Finish Rich and teach a million women to be smarter with money so they could protect themselves, teach their kids, and help their family. My heart's pounding, Steve. And I'm sharing this idea with 10 strangers. And then we go back into the room, and he's like, how'd that go? Are you guys all ready? He gets us back in a peak state. Ten minutes later, a woman comes, taps me on the shoulder, and she says, I just heard about your dream. My name's Vicki. I've worked on Tony's last two books. If you want to do your book, you're going to need a book proposal. You've done books.
You know this. She's like, I can help you write a book proposal. I hired her. I started working on that book proposal. Later, I would go after the same agent that Tony has, Jan Miller. She'd become my agent. He'd write a cover letter, I'd get a book deal, and I'd start working to help millions of people. It started at a Tony Robbins seminar. And I go back to my grandmother, right? Dream it, design it, and do it. He gave me the life skills to do that. And I will tell you something about Tony, because you see Tony on all these shows, and people go, is Tony the real deal? Even if I was with you, and I sent Tony a text, and Tony has a lot of friends like this. Tony gets right back to me. Tony's the real deal. I just went to Germany and took my older son Jack, who's 22. To see him do UPW in September could bring tears to my eyes because I wanted Jack to have the experience without me there. So he was, you know, bless Tony, sitting in the front row. I came in on day three when he was in the peak state, and I came in and I watched him, you know, I was basically his age, and I thought, God, you know.
You know, I went in, I gave him a hug, and I'm like, you just don't even know. This is just this experience that you're seeing. What you're learning today, if you use this stuff, it will change your life. That's the power of Tony. And people go, you know, whatever it is, your podcast, your events, Tony's events, my books, we're just catalysts. But God, God gave you a seed and a dream. And when we're the catalyst for, like, look, go do this. Listen to that voice, whoever your God is, that soul that you hear yourself saying, I have a dream. If I only had 10 years left to live, I would really hate to die with that dream inside me. That's the dream you go work on.
And since then, you've done exactly that. You've educated hundreds of millions of people through your books, through podcasts, seminars, newsletters, and thousands of media appearances on how to do exactly that, how to get financially free, pursue their dreams, get hold of their money so that they can live the life that is destined for them. And that is an incredible thing. And you sold almost 10 million copies of your books worldwide. I'm sure you're going to hit that number at some point soon. And I guess you'll never get to see the impact that that's had on so many people's lives and how you've therefore changed the trajectory of their financial future and their kids and their kids and their kids, like your grandmother did for you and your family. I'd highly recommend everybody go and listen to that episode. I'm actually going to link it below. So if you haven't listened to the episode with Tony Robbins, that's a great next thing to do. If you're still listening now. But, David, I wanted to thank you so much for coming, and you present a really interesting different perspective on the subject of money, which is hard to find.
It's rare, but it's very, very, very important, and hopefully it'll be consequential for many. We have a closing tradition, as you know, where we ask the next guest, the question left by the last and the question left for you is interesting. If you had all the money you needed to have to support yourself and your family, zero financial worries, what job, profession would you be doing? Or rather, what would you spend your time on?
That's surreal that this is the question you're giving me, that that was asked before I got here, like that's, that's a God moment too. Like that's meant to be.
This is, by the way, I'm not making this up.
So, because that's me, I have enough. I have all the money that I need. I have my health right now, I have my time. And this year, what am I going to, what I want to go do my dream for the year. I want to have an endless ski season. So at the end of the year, ask me, did I ski somewhere every month this year I leave you today, I go back to Florence for 24 hours and I turn around, go to Verbier, Switzerland with friends. I'm going to try to ski somewhere every day, every month this year with friends and with family all around the world for fun. I did this as my last dream, to help one more generation be smart with their money. This is my final book, these may be my final podcast.
And what you've done is you've updated your smash hit best selling book that sold millions and millions and millions of copies that you wrote 20 years ago to make it relevant to the current financial situation and world that we live in.
And my goal with this was a lot of my readers now in their 50s and their 60s, but they've got young kids like I do and I wanted this to be a book they can put in their hands.
I'm going to link the book below. Fantastic reader. You've written several incredible books, so I'm going to link all of them below in the description for anyone that wants to grab a copy of them. The Automatic Millionaire. A powerful one step plan to live and finish. Rich. David.
Thank you, Stephen, thank you. It's been great.
I'm going to show you how to get clear on what you really want, figure out what's been stopping you, put the plan in place and teach you the most important thing that's made me successful. And I don't think people fully realize the significance of how many of the most influential people on planet Earth you have worked with and continue to work with. What is the pattern that you noticed in those people? So I found four things with them.
The first thing is.
Can 1 hour a day make you a millionaire? Bestselling author DAVID BACH reveals how the first-hour rule, retirement investing, passive income ideas, and 401k matching build financial freedom…FAST!
David Bach is a 10x New York Times bestselling author and one of America’s most trusted financial experts. He has helped millions become financially secure for life, and also serves as Director of Advisor and Investor Education at AE Wealth Management. He is the consecutive New York Times bestseller with over 7 million books, including books such as: ‘The Automatic Millionaire, 20th Anniversary Edition’.
He explains:
◼️Why saving $27 a day can outperform earning more money
◼️The phone automation trick that doubles your savings without willpower
◼️The hidden system that keeps most people in debt
◼️The real reason 70% of people stay broke despite earning more
◼️The wealth code for your 20s, 30s, 40s, and 50s
(00:00) Intro
(02:29) How I Helped Millions Become Millionaires
(04:33) How My Grandma Became a Millionaire With an Average Job
(09:25) Why Smart Women Finish Rich—And What They Do Differently
(12:20) Why Boring Investments Are the Key to Long-Term Wealth
(16:02) Why 50% Stay Broke—And How Just 1 Hour a Day Can Change That
(19:28) The 70/30 Wealth Rule Millionaires Rely On
(22:20) Are Homeowners Really Richer? What the Numbers Say
(27:22) Stocks vs. Real Estate: What Builds Wealth Faster?
(31:08) Is Buying a House Worth It After All the Hidden Costs?
(34:39) Should You Put Your Down Payment Into the S&P 500 Instead?
(36:25) Will Buying a House Limit Your Career and Mobility?
(40:50) A Proven Framework to Get Out of Debt
(42:39) How the Average Person Wastes $10,000 a Year
(43:43) How Much You Need to Save Daily to Become a Millionaire
(51:47) How to Save Tens of Thousands Without Noticing
(54:00) Ad Break
(55:03) The Real Dangers of Debt—And How to Escape Them
(59:35) The Easiest Way to Boost Your Income Starting Today
(1:02:54) Is Wealth Just a Mindset Game? Here's What to Know
(1:05:19) How to Grow Your Savings Without Even Realizing It
(1:10:16) This Simple Phone Hack Could Save You Hundreds a Month
(1:13:24) Should You Invest in Tech Funds Right Now?
(1:20:21) Ad Break
(1:22:18) 6 Money Mistakes Most Couples Don’t Realize They’re Making
(1:30:24) Why You Must Understand Your Partner’s Finances
(1:33:40) Why the Next Decade Is the Greatest Money-Making Opportunity Yet
(1:36:10) Should You Pay Off Your Mortgage Early or Invest Instead?
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You can purchase ‘The Automatic Millionaire, 20th Anniversary Edition’, here: https://amzn.to/4pZYBbH
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