Kevin Hogan

      Before Wealth Accumulation

Is everyone a whiny expert about money?

…or so it would seem. After all…

Look at the evidence:

Most people, go deep into debt and then complain about it later. Or if they are really good, they blame their debt on someone else. That is ODD! (Oppositional Defiant Disorder)

It is definitely time to eliminate the complaint and develop the right anti-obstacle plan and execute. Quickly.

If people are complaining they are upset about something that happened YESTERDAY. They need to be told straight to the face, “Help me plan the next decade. Then when we know we have taken care of problems in advance we can complain about anything you want, about yesterday.”

It’s very important that debt get eradicated ASAP. It’s certainly not the only problem in life but it creates problems by itself and then the moment anything in life goes wrong, you are screwed.

Before I bought my first house and starting a family, (I was 25), my wife and I finished our 2 years and 7 months not going out to lunch, dinner, movies, EVER. Instead we had friends come over to play cards, games, watch videos, have a simple meal and enjoy friendship. The strategy paid off and neither of us ever went in debt again once parting ways, some years later. The very real pain of living to give money to a bank for ‘principal and interest’ or to a automobile dealership, “for interest” was dramatic. My first two houses I paid off the loans in 15 years or less. The third and fourth houses I paid off in cash in less than a year each. It just meant working two + jobs to get rid of the payments.

I’ll show you just what your $400,000 house actually costs below if you finance with a 30 year mortgage.

There are people who need to buy a house and those that don’t and the distinction is a long analysis that takes several hours to go through. I’ll leave that for the course and instead go here…

You can choose to give your money to a bank or a finance company or you can choose to KEEP what is YOURS from WORKING HARD and live a far more secure life. The hiccups will always occur for everyone in life. But those periods can be kept to a minimum.

(A period is a section of your life-timeline. Everyone is likely to experience good and bad periods at some time with bad periods being more likely and more difficult than good periods are good.)

How? Think AHEAD, not in the moment.

If you try to take care of problems as they arise, you will regret it for the rest of your life.

Ever hear someone say, “we’ll deal with that when it comes up.”

Well that person is an idiot. Stop it. Tell them to slap themselves. Grow up. When it comes up, you won’t have resources of ANY KIND to deal with it. And when you begin to put effort in solving a problem or crisis you have ZERO resources to pay the bills or deal with the other problems that grow out from the first problems.

No one ever has come to the door with a certified letter to give you money. Just the people you owe money to, or the people who want YOUR KEEP, knock on the door.

No matter how old you are you can almost certainly live a rewarding life, help others, enjoy world class travel experiences, but it requires being AHEAD of the game on PAPER so everyone around you knows you are in PLAN EXECUTION mode and you don’t make exceptions.

I will show this to you in the Wealth Accumulation System Course which begins as early as tonight or throughout this week. It’s 10 Weeks, you never have to be online at a certain time but you do need to email me at least weekly to make sure your results will match what you need to do to get those results.

 Of course it  will change your life forever. How could it not?  But enough of a reminder, let’s get back to how people screw up or let their families screw up.

Essentially those are the same thing as EVERYONE in the house MUST be on the SAME PAGE…you MUST have at least one person in your life that gets KEEP so you have the mental and emotional support of being pressured by those who simply don’t understand MONEY and that it is the most important life blood you will have…or not.

A quick note about ATTITUDE:

I suspect some of people would demand someone throw them a life jacket when sinking. DEMAND?!

That’s a toxic person.

Never spend time with people who would have you do stupid things with your KEEP (The money that will pay for EVERYTHING from doctors visits, to education, to food, clothing, shelter, time with friends)

Then when they catch the life jacket as they begin to be taken down into the water, they do everything they can to shout loudly about the unfair distribution of money. Another form of blame. The only thing they don’t say, “Damn I screwed this up bad.” It really makes no difference what someone else received from Real Mommy or given to you from Daddy Government or anyone else…regardless of whether it was unearned, stolen, printed in the garage or…yeah… it doesn’t matter. Tell them to let it go.

There is NOTHING in life that is fair. I would argue that “fair” is not ever going to be a controllable commodity.

So let’s just have everyone stop, get out of the pool, and cease the complaining… then give them this article, no matter where they are on the wealth track.

Wealth is not important! It would be insane to think that. Wealth is CRITICAL in life.

This is another growth device.

Don’t fall for the minimalist thinkers impoverished view of building a future that is filled with rich experiences, meeting fascinating people, being a valued person on the planet and creating a legacy for you, your family, your kids, the world.

If you believe in a God, think, “is god proud of me.”

What is wealth?

Your wealth is what YOU KEEP.

That is the only definition either of us ever needs.

It’s so important to consider PRECISELY what sucks potential wealth from you, your friends, your family….and what you can do to stop the drainage.

We’ll talk about what can surprise you and strip you of some of your wealth.

You’ll also find out because there are different ways to KEEP and there are different life periods of KEEP. You can literally have a lot for retirement, for example, while you have very little for the next 10 years… or vice versa. People who plan to KEEP and then KEEP, must look at those time periods/life periods and drill down to take care of each period as well as you can, IN ADVANCE.  People who take everything for today, and that is over 80% of all people in western society, well, obviously they WILL be in serious trouble which becomes more painful and horrible as each year passes.

Other people may have kept a lot for 70+ and find themselves stinging after losing their high paying job at 45.

First things first. Let’s go to what you KEEP and what MATTERS.

Here’s the stuff that really doesn’t matter much….at all.

You can’t (profitably) sell your old clothes, your old food, your paper towels. You can’t sell much of anything like your furniture. If you are in the process of buying a car (monthly payments) you have no equity in your car. (You don’t own any of it.) But if you paid cash for your car, you’ll catch up to everyone else eventually. Most 4 wheeled friends are worth almost nothing 10 or 20 year later.

If you make $75,000 per year you possibly could save $5,000 of that for retirement and maybe $1,000 for a car or house, if you have no debt. So STOP the expenses of things that go DOWN in value. right.

I give an analysis game plan in the Wealth Accumulation System Course on whether you should buy a home or rent. It’s not like anything a banker or financial advisor will show you. That is for sure.

Here is the first question we answer as to the “where will I live and what do I live IN?”

Does a House Factor into YOUR KEEP?

If you bought a house with 20% down and want to sell it in a couple of years for some reason, it’s not certain by any means, that you’ll get any of that 20% returned to you, when you sell. That is painful to think about.

Here is the simple math:

• • You want a $500,000 house. You need to put “down” $100,000 of your own money. The bank will loan $400,000 at 7% (maybe not today, but rates could drop a bit, who knows)

• • After 10 years, if you make your payments on time, you’ll have reduced your $400,000 loan to $342,000 left to pay. (Say “wow”)

• • In 20 years if you make your payments on time, you’ll have reduce your $400,000 loan to having $231,000 left to pay.

• • The other number you want to be aware of is that it costs about 10% to sell a house if you kept it perfect from day one. It could cost a lot more, could be less, but 10% is likely close.

• • The other myth to be aware of is that your $500,000 house will always be worth at least $500,000. That would be wildly ridiculous to believe this, though most people believe. It was only 14 years ago that  millions of people’s lives were destroyed because housing prices went down.  You can almost be certain that in the next 15 years it will go up AND down in “value” which in this case is the actual sales price. You and I know that housing in general, in most places, prices will NOT go up more than 4% per year if mortgage rates are at 7%…

• • Finally, the total amount you will give the bank back is $1,000,000 for your $400,000 loan at 7% one takes today.

• • Finally, finally, you must to add insurance (about 1/2% of home value) and taxes (about 1++% of home value) to your mortgage payments which bring your $2700 payment per month up to about $3700 per month, for a grand total of $1,300,000 in payments over 30 years.

(A $300,000 house would mean putting down $60,000 and taking out a loan of $240,000 plus taxes and insurance for 30 years for a total cost of about $780,000 (about $2400 per month)

You read Coffee so you are smart enough to know that 30 year commitments that work out without a problem, aren’t real in life. (10 YEAR commitments to other humans or banks or whoever, rarely work out.)

It’s easy to see why all those big beautiful buildings in city center are banks, insurance companies, government buildings and those related to the following….

I paid cash for my house 14 years ago, but don’t get too excited. Buying expensive things cost money today and tomorrow, and you don’t always know what all of those costs will be in advance.

What if housing prices crash and stay crashed? What if property taxes take away hundreds of thousands of dollars. (My property taxes are about 1.7% of the value of the house…per year. If you stay in your house for 30 years, that means you’ve taken your house and then paid for ANOTHER half of a house…except you didn’t get the half of a house. You simply…bought an imaginary house.

Sometimes renting a home can be very good strategy. Sometimes. (We’ll go into detail in the course)

Now that’s all dealing with question one in should you have a house or rent.

Let’s switch to THINKING and DEALING WITH THE INSANE THINGS some friends and family will say to you.

Mantras of poverty and long term sadness...

“All you think about is money,” is always stated by an idiot to someone who is doing their job in life.

“Life is more than money,” is stated by someone who hasn’t been told that money is an agreed upon value which is used as a means of exchange, where if you have an appropriate amount you can pay the rent, the food, the utilities, have a few changes of clothes, pay for doctors visits and if you get lucky, you can take a vacation or a Friday night off.

Some form/type of money is ABSOLUTELY necessary because the carpenter, truck driver, author, teacher, doctor all do different things which have different values to different people. Money is what someone gives them so they can go spend that money with one of the other people or companies/governments/spiritual orgs, that employs those people. The price of a loaf of bread is posted. If you want the bread you pay for the loaf, if you choose not to, you can get something or nothing else.

Most people on this planet don’t have any of the luxuries I just mentioned, no matter how much they do right.

It’s not just friends or family that suck with KEEPING.

There are other challenges that are GOVERNMENT GIVEN TO YOU TO DEAL WITH.

Luxuries, Necessities and How YOUR KEEP is chewed up in the U.S. or in Various different Countries.

You MUST level the playing FIELD FOR YOU and those you love.

Imagine you are, or know a Type One Diabetic. THE TOD needs insulin or their life expectancy is going to be very short.

You can rest assured that if you live in the U.S. you pay about $100 monthly for insulin.

In Italy the same refill costs $10. (really, ten bucks)

Something in the U.S. is seriously screwed up because insulin is medicine for millions. It costs almost nothing in real life. The country with the second highest cost of insulin is Chile. $21. Chile’s standard of living leaves a lot to be desired. So how can it be twice as expensive for insulin in Chile as in Italy? How can medicine in general be more than 10 times more expensive in the U.S. than everywhere else on the planet?

The answer is simple. In the U.S., the money train runs from your pocket to buying insurance (in a majority of individuals). U.S. government essentially demands the majority of American’s be “covered by insurance.” That’s very sweet of them but they know that they have just created a money circle when they make demands like that, or “guaranteed student loans.”

There aren’t a lot of good reasons to take out student loans.

If you are over 21 and you have kids thinking about college you can almost erase any need for any loans.

But you have to be smart and show your kids HOW to go to university for FREE in the United States.  I’m going to give you a few tricks here.

One thing is not a trick, you can’t meet university when the day comes. You must meet the future a few years in advance with a SOLID PLAN to not have to pay for that Bachelors Degree. I’ve worked on this with MANY people in the U.S. and in my own home.

And NONE OF IT will work the moment they hit Junior Year High School if they haven’t started the plan the summer before.

First the student loan theme:

You can’t guarantee someone else’s loan…except it is in the U.S. Go to most other nations on planet earth and these two concepts are foreign. School is going to be inexpensive to the eye of the American or equally as likely, it will cost nothing.

How can a University in the U.S. cost an infinite amount of money more than it does in many countries on the planet?

Infinite?

Yep, there are MANY countries that don’t charge for an undergrad (through Bachelors Degree) on this planet. There are a smaller number that don’t charge to get you to MD/PhD.

In Minnesota, University students pay about $12,000 per year for education. If a student is from most other states and wish to be students here they will pay about 3 TIMES that. Same is true for most universities in most states in the U.S.

First rule in University is, except in some bizarre situation, there is NO REASON to leave your state to get an education ending in a bachelors degree in the United States. And for students who recognize they work hard and our sharp early in high school, you really can pay almost NOTHING for an entire bachelors degree in some states by starting college early through your high school system, and then simply testing out of courses. Having college debt through the Bachelors Degree level is really not necessary in most cases. Sharp students and sharper parents can make it happen.

There is no evidence that an “out of state” education has any benefits over an in state education.

Meanwhile…

Graduate school (masters/doctorate) is another game altogether in the U.S.   Getting past the B.A. or B.S. is generally very expensive, though the astute shopper will find ways to optimize their dollars.

How you pay or never pay for your education can transfer to your Wealth Bottom Line.

You could argue the quality of getting an education somewhere you don’t live, is better (better would mean it would have a higher longer term payoff) and you get what you pay for nearby.

The argument is almost always ridiculous. More in the course.

Let’s go back to the illusion of guaranteed loans which the government would like to start printing money to pay off.

You could argue that the government guarantees a lot of student loans. A government (essentially) can print money which then can guarantee the people at the University some massively high paying jobs because their company (the university) gets their money from federal loans to students which are direct deposited at the University.

It wasn’t always like this. It doesn’t always work like this in 2023 either. But it is the norm in the U.S.

It requires savvy (THINK, PLAN, EXECUTE) in the U.S. to get the almost no cost education, even if that is not true around the world.

1) The Lazy Parents/Students with no pre-plan, will pay full price.

2) Hard Working Parents/Students WITH a good pre-plan who create and then execute a plan will pay less.

3) The Smart AND Hardworking pay almost nothing.

There is a causal relationship between education level and income, (in the U.S.) as well as net worth. (But keep reading, I’ll give you the strongest level of certainty on wealth creating in a minute.)

You must be intelligent enough to get the fact that things don’t make sense to people first looking at a question like, “how is it that in some countries you can go all the way to get your PhD or MD…free?”

You’d think then, “wow the people in that country must be rich!”

No. It’s the opposite. If EVERYONE were getting a PhD or MD somewhere, the average value of each would be very LOW.

That’s why your friend is reading this article on accumulating wealth. There are lots of “rules of thumb” but you need a lot of thumbs…

If there are 100 people stranded for 10 years on a tiny island (and a desert island could easily be a country where it cost nothing to gain your MD) and they were all MD’s, the value of being in MD is not much.

Wealth is not simply about getting paid a lot and saving it. Both of those things are important, but neither guarantees anything, or predicts much of anything.

What About the Entrepreneur Who is Just Getting Serious About Making it Happen?

I consulted with a small start up business in California last year before I got laid up.

The owners desire was to build a company he could resell at a later date.

That’s a pretty good idea. If someone has a few hundred thousand dollars and the ability, and an executable plan, to create trade-mark-able products or create inventions and patent them, or create intellectual property that can be fairly easily protected, their odds are good.

This owner didn’t. Yet, he was adamant about building a business he can sell. But no one taught him what that MEANT, HOW to do it, What a business really is.

That brings the owner to the easiest way to create a company he can later sell. Develop the business so it has a customer/client base or prospect list that would take someone else years to develop. Then service those clients/customers, on some predictable level. (Once a month, once a year)

Example: My Mom had a good friend, John, in Minnesota. John owned a garbage truck and developed a business of getting people’s trash every week. He created a loyal base of just over 1000 customers. They paid about $150 per year. He netted about 1/3 of that revenue (today it would be worth and cost twice that). He worked long hours and made a modest income. Then about 20 years later he sold his business for about 2 times his annual revenue. Thus a good job for twenty years and cashed out the business at about $300,000. (Today’s money would make that about $1,000,000.)

What was he selling? A truck, a full time employee that had done all of the routes at one time or another and the most important thing by far, his residential client list that was paying his company about $150 per year and his corporate client list that was paying him about $600 per year.

Without the “list” and accounts receivable, obviously you don’t have much of a business. He also was selling his reputation in the community. The new owner bought the company name so the transition was seamless.

Back to my client. He had a list of clients that he would help once every 15 years (roofing company). Unfortunately that list is almost worthless. It doesn’t have an accounts receivable side to it so the company could only work for resale based on either future added service or reputation in the community. A three year proven marketing plan with strict instructions on what to do and when and how to maintain community involvement and charitable work, scholarships for local high schools, doing community education in the schools in their area of excellence and preparing for a transition to solar would also be helpful. Very few roofing companies anywhere are able to put together a resell-able business.

From the perspective of wealth, it was far more likely that the company principals would benefit most from KEEPING what they earned.

Apparently, this is not a big California way to do things.

California has serious problems which I didn’t necessarily see coming with entrepreneurs:

“I want money to go have fun with and I want to work a 45 hour week.”

That created a sad smile on my face. That and creating a business you can sell aren’t quite on the same page.

I told him:

“December 31, each year, open, then add to a money market account and take 3% of your after tax money each year and go crazy in 2023 and each year thereafter.”

Then immediately I went to what really needed to be addressed first, though you don’t want to stop people from “having fun,” god forbid…

“How about as soon as we pay down your debt, eliminate overhead, have all tasks done in house by you or someone who has a reason for the business to succeed, stash about a quarter million into 401k’s and IRA’s (about a 6 years task based on their revenue and expenses) and THEN you can take a year and play. Then return to KEEPING another 250,000 in whatever period it takes to keep it, then take a year and play, then KEEP another 250,000 by keeping it, and then take a year and play. Now you’re at year 18 and you can sell your business if you’ve been able to have an add on to the business that allows for monthly, quarterly or annual services of some kind.”

And that’s how you keep the money you earn. You put it into investments that you won’t touch until you retire. Because the client is 40, he is not exactly starting early in life, but certainly he can put a million away into his retirement and if he chooses to buy a home or have a real estate investment of some kind, no problem.

Real estate can be a good investment but a tax deferred strategy for him, because he’s still 30 years from retirement carries less risk because of diversification possibilities.

(Early in last year, buying a home and real estate in the U.S. made a lot of sense. Interest rates were meaningless. Today however, you have 7% interest rates for home ownership and higher for investments. Those prices are very expensive and have been since the turn of the century. Typically, increases in long term rates cause housing prices to stop racing up, and then begin to level out. This is when cash purchases can be a possibility. Mortgage payment interest used to be tax deductible in the U.S. and in a sense it still is but for most people it may not be all that helpful for a lot of people. This will be discussed in the Wealth Accumulation Course itself.)

There are a small number of ways to accumulate wealth over various periods of your life.

There are a much larger number of ways to lose your wealth, often over several life periods.

The Wealth Accumulation System solves for all the above.

To see all the details of The Comprehensive Wealth Accumulation: The 12 Week Course: