The path to financial freedom is really not complicated, yet at times it can be challenging. Learn what the path to financial freedom looks like and the steps you can take to become financially free in this step-by-step training taught by Braxton Fears who is an entrpreneur achieved financial freedom all before turning 36Sign Up to Watch
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-Now we're moving on to principle number 11, which is, take the emotion out of money. Now, this right here is a concept that I struggled with for a while, because to me, growing up without certain things, I wanted things. Like, I used to think that my definition of happiness was to buy as much materialistic goods as possible that I could then leave on the planet when I died. That was my plan, though.
And so let's just kind of get into this here. Money decisions are often emotional decisions, and that is not good. Why?
-Well, I mean, because your feelings aren't reliable. You can all agree that your feelings are great, and it's important to, though, just control them. I look at it as a game. I like nice stuff. I like to enjoy life. I love to travel. I like all that stuff, but if you look at it as, you know, my feelings are unreliable, and really, my choices, my will, the deeper part of me, that's going to be the part that I'm going to let lead rather than my feelings.
Your decision making when it comes to money, if it's run by your feelings, you're never going to get ahead.
-I'm going to throw some examples of feelings, and I'll use an epic voice. That way we can have it represented by some wise, wise-sounding voice. But the feelings might say, (WISE) well, Braxton, you need, you deserve a new car. New car. You deserve it. (REGULAR) What would you say to that?
-Well, I mean, I'd say, OK. I deserve to enjoy getting ahead. I've got other things I want to do with my money. And while that car's nice, I'm just going to tell my feelings, you know, get out of here. I can find a car that's $30,000 less. What could I do with that $30,000? I could grow it and I could enjoy seeing my money grow, and continue to do things that I like to do.
-Here we go. This is a tough one, though. You're at the mattress store. Don't act like you haven't been to the mattress store. You know you've been there. I go there. We've all been there. You go in, the guy says--
BRAXTON FEARS: I experienced this recently.
-(WISE) You deserve to have the comfort of a Sleep Comfort bed. You adjust the number, and it helps your lumbar, and your overall circular system, and you live forever, and it's only $10 a month. Finance now. No money down. (REGULAR) What would you say to your feelings there?
-Well, I'd say to my feelings, it's going to be much better. I did this recently. Tempur-Pedic. $7,000. Needed a new mattress, and I tried something. I tried buying the memory foam mattress off of Walmart.com. I know this sounds cheap, but it worked. Man, that thing, it was like $279 and--
CLAY CLARK: Memory foam?
- --shipped it to my house. It's like the 8-inch memory foam.
CLAY CLARK: Gosh, memory foam.
-And my wife's very picky about her mattress, but she liked this one, so check that one out. But I was so much better off for just trying that cheaper version at first. And if it didn't work, you know, whatever, but I'm not going to buy a $7,000 mattress, because what could I do with that $7,000. It's going to increase and then be able to do more and more things, and not be bound by monthly payments and my money. Buy memory foam. Yeah.
-That's a new-- OK, I've got just a couple more examples, because I feel like a lot-- Obviously, I wouldn't be talking about this is 90% of us were not going to end in financial peril at the age of 69. Now, Braxton. I wouldn't be hammering this point if the overwhelming majority of us as Americans or worldwide humans weren't getting into debt here.
One more. Just one more. You know, you're going online. All of a sudden you see a house, and you see a beautiful house. And because of the interest rates right now-- maybe you're watching this in 10 years from now and the interest rates are different, but right now, the interest rates are so low that you absolutely cannot invest-- you can't pass up the opportunity to buy a house. I mean, interest rates are so low.
The home is the best investment you'll ever make. How do you tell your emotions when they start to say, (WISE) you should buy a house?
-Yeah. And then the mom and the mother-in-law want you to settle down and all that stuff, and the National Association of Realtors, which I'm a member of, they actually put out radio ads, and TV ads, and they're trying to build their business. And I get it, but they're telling you, hey, the interest rates have never been lower. There's never been a better time to buy a house. And everyone's saying, hey, you've got to buy a house, because that's what everybody does.
And you've just got to remember, you've got to remind yourself, you know what, is this my move. Is this my core business? Is this the thing I'm going to do? Because most of the time, it's not. And it's not 4% or 5% of your money that is going to interest in that first year. It's 95% to 97% of your payment to that bank or lending institution in that first year, and you're really just a little bit less in the second, and a little bit less in the third, but most of your money is going towards interest. It is not going towards the value of your home.
So you just have to remind yourself of these common sense things that really are not that common. You have to remind yourself, hey. You know what? My $1,000 house payment, it's better to go somewhere else. I'll rent somewhere for a little cheaper to give me more flexibility. I'm not going to be paying closing costs and interest. I'm going to put my money into something that's a core business, somebody that I trust, or myself, preferably.
-And you're basically renting the house from the bank.
-Oh, sure. That's really what it is. The bank owns your house. Unless you've paid for it free and clear, or you have unless you only have, like, a loan for 10%, or even 25% of the house, that's still not ideal, but most people own only maybe 2% of their house.
-And I have an extreme view that might be a little crazier. But once we pay off the house, we still keep paying taxes for the house.
BRAXTON FEARS: You still keep paying taxes and all that. And plus, once you've paid off the house, you've paid twice what the house was originally bought for. So you're probably still not ahead. I've met so many people that have bought houses, they lived in their house for 10 years, and they're going, I even if I sold this house, I wouldn't make money, because this is how much I've
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-Now here's some situations that Braxton and I worked together in commercial real estate for a while. And these are situations-- and we would come back for meetings sometimes feeling like, oh man, that's a bad deal.
But we would meet men, typically, who had been very successful-- they made a lot of money I should say-- who are 40, 50, 60, 70, who had earned millions of dollars. Who had a building paid for with cash that they could not sell. They paid for it twice after interest. And they're 60 or 70, and they still had to keep working because they couldn't sell their building.
-Yeah and this isn't just in a down market. This is in a pretty steady market. Tulsa is not an up and down market.
But I mean, there's a time and a place to buy a building. But it needs to be part of your core business though. If it's not part of your core business, rent. And put your money into a core business that you have or that you're part of.
-Now, as we're continuing to talk about the concept of taking the emotion out of money here, look on the last page here. You know, Tim Mullaney on March 21st of 2013, there was an article in USA Today where he showed that 69% of Americans have debt.
So obviously they're not taking the emotion out of decisions. This isn't debt like, they're buying a business. This is debt like, they owe money on the refrigerator. Why is that in your mind?
-Well, I mean it's because it's the easiest route. It's the easiest way to get what you want. And it's all based on feeling. It's all based on emotion.
It seems like, well, why would I go and buy a used refrigerator? I don't have the money to buy a nice new refrigerator, but I want that nice new refrigerator. So why don't we just use this credit card. We'll figure it out later. And that's a really-- you're putting yourself into a bind when you do that.
-Now it really simply obvious looking at it now that in order to become wealthy, you need to have more money coming in than money coming out. It seems obvious that that's kind of like the deal.
But it seems as though most people that I meet never really have more money coming in than coming out. It seems like no matter how much they make, they have the same out coming out. And I really think it comes down to the emotional decisions.
-And you could easily justify anything in your mind. I mean, we can talk ourselves, especially smart people. You're smart, just understand that you can argue with yourself really well. You can tell yourself why something will work. You just got to take that emotion, you've got to almost fight with yourself a little bit and just let that deeper part of you win. Just make sure you understand, don't just follow your feelings.
That's a fairly common thing we hear. Just follow your feelings, just do what feels right.
-Go with your gut bro.
-Go with your gut. And a lot of times, you've got to fight that feeling and just say, you know what, I'm going to play a little game with myself here. And I'm going to take the common sense-- which isn't really common-- but the rational sense of me. And I'm going to do something that is different than what everybody else around me is doing.
-As a marketing guy, I just want to share with you a final kind of a capstone thought and I want to get your thoughts on this as we kind of wrap up this concept of getting into financial freedom. As a guy who really understands marketing, I will tell you if I am a bank, I want to convince you that the best thing you could possibly do is to borrow money. If I own a bank. If I'm selling refrigerators, I'm going to convince you that the best possible thing to do is to buy a refrigerator no money down.
If I own any product or service, I'm trying to sell it. My job is to try to convince you that my product solves your problem in a unique way and it's worth buying. So don't make your decisions based off of marketing ads and make your decisions based off of solid, non-emotional--
-I think in general in your life, not just financial decisions-- this works for financial decisions. It works for all kinds of decisions. Don't sacrifice the important for the immediate.
Don't sacrifice the important for the immediate. Don't just go what's immediate, the thing that I need immediately. Focus more, focus all your attention on really what's important. What is important thing right now, not just the immediate thing? And one thing that we talked about in another session that we can refer to-- you've got to budget your money. You've got to take the emotion out of it by saying-- just like you would with a schedule, I'm going to schedule my time. I'm going to take a budget and make it simple. And I'm going to account for every dime that I've got.
And so I'm going to put a little bit here and a little bit there. A great place to go for that is Dave Ramsey's Gazelle Budget. And the Gazelle Budget, you can just Google that. Dave Ramsey. Gazelle Budget. And it's very simple. And it's not free. It's $10 a month, but it's worth it because it's formatted in a really good way. So it's worth the $10 a month.
-And I want to say this and then I would like to leave you, because I know everybody watching this, you can achieve financial freedom. And financial freedom simply means that you're free to pursue the activities, passions, hobbies, relationships that you want to pursue, and you're not burdened by this infinite desire to work. But to do it, it does require some sacrifice. I've driven a really terrible vehicle for years. I've not had air conditioning for a while when we first got married.
Didn't have air conditioning in Oklahoma for almost two years. It's like 100 degrees, no AC. I don't have cable today. Do you have cable?
-I don't have cable.
-So we made sacrifices. But ultimately if you want to achieve financial freedom, you have to say no to some things to say--
-And I'll say this. You and I can afford cable. Now we're at a point were it works. We've gotten into a habit at a fairly early age just based off of some good advice for mentors that we've had in the past. But we've gotten into this thing where now really for me it's I can afford cable just to have it. But I've chosen, you know what? I've gotten into this mentality of you know what? Is that really a good use of my money?
Because I can take that money and do other things. I can take my kids out to eat. I can invest in a business. I can go on a trip. I can do things that I enjoy to do. And it's not all about just getting the assets. But taking that money that you're spending on stuff that really isn't that useful-- it's just because everybody else has it-- and use it for something worthwhile
--Braxton, I appreciate your time for coming in here and for just letting me just gaze at the majestic beauty that is your hair. And I appreciate you so much.
-Yeah, thank you, sir.
-Thank a lot.
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