$50 turns into 30,000

The main idea of this transcription is that poor spending habits and the desire to portray a high social status are linked to poor credit and financial illiteracy. The speaker emphasizes the negative impact of financing cars and the high interest rates associated with it. They urge listeners to live below their means, save money, and invest wisely in order to accumulate wealth and achieve financial independence. Living below one's means and investing in dividend-paying companies are highlighted as key steps towards gaining financial security. Welcome back, guys, to another episode of Sweet Millionaire Formula. How are you doing today, my wealth builders? I hope that you guys are in good health and good stance with your finances and preparation towards your generational wealth. Today is a special topic for me, and I believe that this is the difference between having credit excellence and having poor credit. I believe that the difference between having the characteristics of a person who has poor credit is high consumers for social status. You're consuming high. You're buying the newest car every year. You're shopping and spending thousands of dollars on clothes. You're eating out all the time. And I wanted to correlate why poor credit history is in correlation with your poor habits. When you have poor spending habits, it's a reflection of your undiscipline, your need for instant gratification, your need to show that you're living a high social status lifestyle. And I believe the day and age of Instagram has perpetuated this life that you have to live glamorous. You have to show that you're wealthy. You have to show that you're in the latest. Because what's easier to process and what's more satisfactory in today's society is, oh, I have the newest car. Oh, you see, I have the latest Hermes bracelet. I have the newest weeds. I change my weeds every week. I buy and shop at Gucci and Chanel. And I believe that the portrayal that you're living a high social status lifestyle is what's causing many people, especially the younger generation, to fall into the financial illiteracy and the habits of a person who is seemingly living a high social status lifestyle. But in reality, they're poor. They don't have any assets. And I believe the person who is showing you that, oh, I'm driving a Mercedes-Benz or, oh, I'm driving the latest Tesla or whatever the case, 9 times out of 10, those persons who show off their social status via labels and cars and different things like that, 10 times out of 10, have no assets to show for what it is that they're portraying. So when you are portraying poor habits and perpetuating this identity being attached to labels, you are showing and proving to others that you have this high social status, but in reality, your wealth is none. You have a net worth of $0. So when you, let's just break this down, because we want you guys to go from being under-accumulated wealth builders to prestigious accumulated wealth builders, okay? I want you guys to know that when you buy a car from a local car dealership, they're sharks. They're after your, not only are they after a majority, they're upwards of 40% of your monthly income, but they're also after your credit as well. How many people know that when you go to a car lot and you are not buying the car cash out, that you are financing a car? How many people know that? Okay. And how many people know that your credit takes a hit every time that you go to a different car dealership and you're shopping for cars, whether it's in a 30-, 60-, or 90-day period, your credit is taking a significant dip, meaning that when you go to one car dealership and you're applying or trying to get a car, typically the rates for, typically you should lease a car, but typically when you're buying a car, the rates are between, especially when you have a credit score under 750, 800, the interest rate is between 17% to 25%, which means that you're paying nearly three times that car's worth, because we know that when a car, you buy a brand new Mercedes or you buy a brand new Toyota, Kia, Tesla, the moment that you drive that car off of that car's lot, the depreciation immediately goes down. What I would prefer you guys to do, let's go back, when the car is between 17% and 25%, you're paying, the figure price is $25,000, but when you really break down the fact that there's a principal balance and there's an interest balance, because that bank loans you that money for that car, they expect their interest, and the interest is usually three times the principal balance. If you have a car that you're paying a car note on, and the car note is 580, do you know that upwards of $131 is going towards the $25 sticker price, $25,000 sticker price, and nearly 400 and something dollars is going towards the interest rate. Even though they give you a 72, 82 month payoff rate, you're looking at paying the car off somewhere between 7 and 14 years. How many can honestly say that they believe a car that they buy off the lot that's supposedly new was 80,000, 90,000, 100,000 miles because some of these cars are fleet cars, company cars, enterprise cars that they've sold to these dealerships at below market value, and they're selling these cars back to you at full market value. The problem is when you're paying an 18% interest rate is that you are paying upwards of nearly twice or three times the car's value. An interest rate of 18% or more, you're looking at the sticker price is $25,000, but when you factor in the interest rate, you're looking at paying $45,000 to $50,000 for this car. They know that the car's value depreciates when it leaves off the lot. You find yourself paying nearly $50,000 for a car that you've deemed as brand new, a car that when it leaves off the lot and you do, because most people do not do the research for buying a car. They don't haggle. They don't bargain. They don't have the leverage to do so because if you have a low credit score, you don't have much room to bargain and to negotiate prices. When the car drives off the lot, then you want to do your research and figure out how much am I really paying for this car, but before you buy the car, you should be doing the research on what you're going to be paying for a car or know the facts about buying a car because a car and a mortgage are two of the leading causes of not establishing generational wealth and not establishing wealth at all because we know that a mortgage, you need somewhere to stay and you need something to drive. We know that those are accounted for nearly 60% of our income. If you're working and you're getting paid biweekly, when you get paid, I don't know, $2,000, $1,000, however much you get paid, 40% of that is going towards your car note and the rest of housing and goods and bills and whatever other credit cards you may have. Every week, you're having to trade your time for money and by the time you get your money, you're having to go back and trade your time again for money and it's a perpetuated cycle of trading your time for money which you never have the ability to invest, you never have the ability to look outside of how you can generate wealth for yourself outside of casinos and paid deals. We want you to get you out of the cycle of that. That's the goal of generational wealth and Sweet Millionaire Formula is to get you out of the cycle of working until you die and not having any assets to leave to your family. When you drive off the lot and that car appreciates and then you look and go to a used car dealership with the same Toyota Corolla 2011, same Kia 2015 and you bought the 2023 model when you could have got the used car for $7,000, you went and paid the full sticker price which is upward at the interest rate of $50,000 for a car that you could have got from a used car dealership. We want you guys to be prodigious accumulators of wealth and not under accumulators of wealth. The reason and the way that you're going to change that is by it takes discipline, sacrifice and hard work to become a generational wealth or wealthy at all and you have to become financially independent but are you willing to make the necessary life changes to achieve financial independence? What is the trade-off that you're willing to... that you're going to have to sacrifice your time, your energy and your consumption habits? With that car note that is $589 a month and knowing that $131 of that is being paid towards the principal balance and the other $400-something is being paid towards the interest, what room does that leave you to invest at least 10% of your check every month into stocks or REITs or real estate or building up your credit and having secure credit builder cards that you can pay to build your credit, okay? So what you need to do instead of trying to live the high social status lifestyle, you need to live below your means. Living below your means is going to save you a lifetime of debt, okay? And we know that high debt and low credit scores are what keeps the people in the perpetuated cycle of living in under accumulators of wealth. When you're under accumulator of wealth, you're living in high social status lifestyle, you're consuming at high rates, you have credit cards more longer, you have credit cards in your wallet that have bills attached to them that are... basically you're living in a cycle of living like you have it but you really don't have it and when you start to live below your means, then you start to trade off in consumption habits from living this high social status lifestyle into living a below your means lifestyle which means you're not, instead of buying the latest true religion jeans or Balenciaga shirt or Alexander McQueen shoes, instead you're buying from TJ Maxx with a $40 pair of shoes and a $20 shirt and a $20 pair of jeans, okay? So you saved yourself almost $2,000 in credit card fees and in money by taking the first step of living below your means. I know it sounds cliche but you should live below your means because that is going to help you accumulate more wealth for yourself, okay? So when you live below your means, you have to understand that when you are able to save 10% of your check, 20% of your check and you're able to allocate that money towards investing into, you know, Pepsi, Nebraska, Kraft cheese, Heinz, when you're able to invest into these companies that have high dividend returns, you're knowing that you're able to recycle your dividends, the dividends that you're receiving from investing and buying 1,000 shares of PepsiCo or 1,000 shares of Kraft or 1,000 shares of whatever it is that you deem necessary. We'll get into the top 20 stocks on the next episode but when you're buying these shares for $50 and you want to buy, let's say you want to buy, you want to start off by buying 10 shares but that's $500 that you would have to spend to buy 10 shares of Kraft, right? Which is going for $50 on the U.S. market and has a dividend rate of 5.7%. That means that monthly you're getting 5.7% return on your $500 and when we, it may not seem like much initially that you're investing or that you're getting an investment return on but let's see, if you get $500 and you multiply that by 5.7%, you're getting a, I'm sorry, I did, I did 500, so when I do 500 times .5%, $250 return so you're getting $250 back on that 5% yield on your investments and you want to get the returns on your investments because that ultimately is going to compile over the years and by the time you're, say you're starting investing at 30, by the time you're 50 years old, you're looking at somewhere between, I'll do, let's see, you're looking at somewhere between and I'm sorry, if you were to invest $500 worth of stocks into Kraft, which is going for $50, you get $25 for your $500 investment and then when we multiply 25 times one year, let's just do 25 times one year, times 12, so you're looking at a 300%, $300 return on your $500 investment, right? So let's just do 300 times 50 years. You've let your, you've bought the shares in this company, you've let it, you've bought it and you held onto it and don't let those shares that were $50 go up to $75 because then your return is even greater so you have to look at the fact that the investment in the stock market is your best bet from becoming wealthy because if you invest this money into the stock market then you're getting dividend returns and you're investing those dividend returns back into your stocks that you already have and you're looking to continue to build your wealth and continue to invest and buy more shares. But with the $500 that you invested into Kraft Cheese for $50 a share, you're getting $300 yearly. Okay, $300 yearly times 50 years equates to $15,000. Okay, $15,000. If you were to hold that share and let that portfolio build and let that stock compile interest for 50 years, you would be at $15,000 and this is just one stock, guys. This is why it's important to take the lesson that you learned at Sweet Millionaire Formula and apply this to your actual life and we have a course available on Sweet Millionaire Formula for you guys to begin investing and how to pick the top 50 stocks and how to know the characteristics of a good stock. We break down the formula on how to compute those stocks so if you want to start investing yourself, Sweet Millionaire Formula already has this stuff laid out for you. We already have the plan laid out for you. Only thing we need you to do is take the course and apply it to your actual life because it's not knowledge that is power, it's the execution of knowledge that is power. So that's just one stock. So you're looking at 50 years of investing and holding that stock instead of selling it and trying to buy the next hottest stock. You're holding on to that stock for 50 years. You're passing that stock into your portfolio, your estate, and letting it continue to build for 100 years and let's see if you just keep that stock into your family for 100 years. Let's do 30 times 100 years. 300, I'm sorry. 300 times 100 years. $30,000 from one stock investment from $50. You're using your money to buy 50. I mean, 10 shares into a company and you're looking at, in 100 years, a $30,000 return. How many people want to reap that benefit? So when I ask you guys to live below your means so that you can save $500 so that you can invest into 10 shares of Kraft Cheese, this is what I mean by the payoff of living below your means because you'll have more money to invest. All right, guys, so you leave your comments in the comments section and if you're on the group chat and group discussions on our university, Sweetener Formula University, then you'll have more access to ask more questions and get more feedback. about how it's working out for other students who've already been in your position and made the sacrifice to live below their means. See you guys on the next episode. Thank you.