FROM BROKE TO INEVITABLY WEALTHY
How To Manage Money In A Way That Makes Becoming Rich Inevitable
12 years ago, I would have never conceived that I would eventually own a million dollar watch and car collection just for fun. I never imagined owning multiple millions in assets such as real estate, stocks, and business equity. I couldn’t even dream of the idea that I would eventually be earning 7 figures a year.
But 12 years ago, when my wife and I were at our absolute poorest, I put a financial strategy together that made becoming wealthy inevitable. As long as I stuck to the plan, there was no way I couldn’t become rich.
When we lived in Huntington Beach, I had no idea how to manage money. Brooke and I thought, “you only live once,” so therefore we should spend every last dollar we make on enjoying life. So we rented a house on the water, leased expensive cars, and went out to eat A LOT. We lived as if our income was guaranteed for life. She worked as a psychiatrist at a county clinic and I was a full time personal trainer at a local gym. We were burning through nearly $8,000/month. Here’s a breakdown of our monthly spending:
HOUSING (including utilities/maintenance): $3500/m
AUTO (including ins/gas/maintenance): $1500/m
HEALTH INSURANCE: $250/m
LIFE INSURANCE: $200/m
GROCERIES: $600/m
ENTERTAINMENT/EATING OUT: $1000/m
PHONE/INTERNET: $200/m
MISC: $500/m
TOTAL EXPENSES: $7750/m
NET INCOME: $8,000/m
NET SAVINGS: $250/m
Then the unexpected happened. We had a baby and the day our baby was born I was fired from my job and Brooke went on maternity leave with no pay. We had to file for unemployment & disability, which reduced our income to only $3000/m.
This put us in a desperate financial situation, because now our living expenses were sky high compared to our income. We were burning through our savings at a rate of $5000/m. At this rate, we were going to be completely wiped out in 2 months and wouldn’t be able to afford rent. This was the closest I’ve ever been to being forced to live on the streets. I had to do something fast, or we were in serious trouble.
So we took some massive action. We downsized everything, cut expenses everywhere we could and I frantically hustled to get personal training clients. We moved to a cheaper house, replaced our cars with cheaper ones, stopped going out, started buying cheaper groceries, etc. Within 2 months, we succeeded in reducing our monthly expenses to $3890/m and increasing our net income to from $3000/m to $5000/m.
Here’s what our monthly spending looked like after downsizing and cutting expenses:
HOUSING (including utilities/maintenance): $1500/m
AUTO (including ins/gas/maintenance): $840/m
HEALTH INSURANCE: $250/m
LIFE INSURANCE: $200/m
GROCERIES: $400/m
ENTERTAINMENT/EATING OUT: $200/m
PHONE/INTERNET: $200/m
MISC: $300/m
TOTAL EXPENSES: $3890/m
NET INCOME: $5000/m
NET SAVINGS: $1110/m
For the first time, we were in a financial situation where we were making far less money, but saving far more. This was an eye opener for me. I never thought I could actually be in a better financial situation, while making less money. My savings were rebuilding at a rate more than 4x faster than I had ever saved in my life.
Living on less actually taught us to find joy and happiness through activities that required little to no money at all. With the security of having so much more surplus money coming in every month, we were finally able to breath and sleep at night without the anxiety and worry of making next month’s rent. We were finally stable and what a relief that was.
This was a new way to live for us. We figured out how to be happy without having to have lots of money. This allowed me to create a financial strategy that eventually became responsible for making us millions.
My strategy was super simple. It only had 2 parts.
1) Live WAY below our means by cutting expenses to the absolute max.
2) Aggressively invest all the surplus money in ANYTHING that could make us even more money.
Now that we had over $1000/m to invest, I invested in hiring mentors and purchasing business courses. I didn’t know what to invest my money in, so I invested it in education that taught me how to invest and how to make more money with my current business. The net result of the two things was a dramatic increase in our monthly income.
Within 6 months our income doubled. Within 2 years we were earning a net income of $15000/m, but our expenses were still only $3890/m. Now we had a surplus of $11110/m flowing in each and every month.
Now I could buy bigger investments. I started buying real estate and much higher ticket coaching programs with big-time business coaches.
I purchased 3 homes in Austin in 3 months. I rented out 2 of them and used the rental profits to pay for the 3rd home which we soon moved into.
With my mortgage being paid by my 2 rentals, our monthly living expenses dropped even more. Our expenses went from $3890/m to only $2400/m and living in our own 3 bedroom/2 bath home, versus a tiny little 2 bedroom/1 bath rental. Our surplus money was now gushing in at the toon of $12000/m.
There were some months that were spent focused on implementing what I was learning from my courses, coaches, as well as simply maintaining my assets. In those months, the extra $12000/m was still coming in whether we had a use for it or not. In some of the months where I didn’t have anything to invest in, we used it to pay down debt. Within a few short months, I paid off my student loan and all of our cars, reducing our monthly expenses even more and increasing our monthly surplus money.
Inevitably, the coaching and business courses produced big results. Before we left Austin to move to Houston, all of our businesses combined were producing a net income of over $30,000/m. Again, our monthly living expenses were still only $2400/m, making our surplus money over $27500/m.
The surplus money was coming in faster than we could find investments to put the money in. I ended up buying my very first luxury and exotic cars. Before I knew it, I had a Mercedes S600 and an Aston Martin Virage sitting in my garage. Both completely paid off.
I continued to purchase homes each month, as I literally couldn’t stop the excess money from coming in. As someone who made at most $65,000 a year at my best job, my monthly surplus income felt like a fire hose of money that I couldn’t fully contain.
The training and education that I had in my business and investing was enough to take me to much much higher levels than I currently was at. Brooke and I were operating as a simple, 2-person show, running all of our businesses and investments.
At this point, I no longer needed more education to get to the next several levels. We were maxed out with what we could do ourselves. So we directed our surplus money to buying team members. Hiring employees and partners.
Then our income continued to multiply to ridiculous levels. Levels I’ve never actually dreamed was possible for myself in this lifetime. But here we are.
Multiple dream homes, a fleet of dream cars, a collection of dream watches are all just an insignificant fraction of the income that comes in from all of our investments and businesses we have amassed and built from the years of sticking to my simple 2-part strategy.
You can do it too. Just 1) live WAY below your means by cutting expenses to the absolute max, and 2) aggressively invest all the surplus money in ANYTHING that could make you even more money.
Make this your daily principle for living. Make this the principle by which you make all decisions around money. If you do that and don’t go off path, becoming wealthy is inevitable.
