#158 Financial Discipline w/ Will Koedatich

Will Koedatich, back again, to talk financial discipline.  Will is having a big year in the mortgage business, at the age of 28 years old.  When things are going well, or very well, it’s important to have your priorities set in the right order.  Neither Will, or myself, grew up with a financial IQ.  We had to teach ourselves, learn from others, and seek out other resources.

Execution at a High Level

For his situation, retirement plans were never a part of the conversation.  Will never heard about investing money with a financial planner.  That money was saved in an envelope in a cabinet.  That was it.  And that money was for something like vacation.  Will realized at a young age that he didn’t want to live that way.  He didn’t want to live paycheck to paycheck.  

The crazy thing here is that this is the norm for most people.  Many people are used to their parents making a certain amount of income, and that’s it.  That becomes the normal.  Will chose to not follow in their steps.

Will had always been a saver, starting with washing dishes at 13 years old.  Everything was getting saved, but it evolved into a fear of not knowing what to do with this money.  He didn’t have the financial IQ yet.  It was just sitting there in case things were to hit the fan.

Shifting to Investing

Having healthy amounts of money in your checking and savings accounts is great and all, but what else should you be doing?  How should you invest the rest of your money, to ultimately make more?

Getting started is the most important part.  The earlier you start the better.  There are many different options for investing, especially in today’s financial world.  Start with finding and interviewing multiple financial planners.  Find one that you like and trust.  Find someone you can bounce ideas and questions off of.  Find someone that can dumb it down so you can understand what is exactly going on.  From there, they can help you construct a plan, establish goals based on your personal situation, and talk you off the ledge when the market seems like it’s going bad. 

Most Have No Clue

Do you know what’s going on with your investments?  Do you have any investments?  Maybe you contribute $100 per paycheck to your 401k at your company, but do you know what it’s doing?

Will is seeing this every day in the mortgage business.  People come to refinance or buy their next house.  Their pension checks are $3,000 a month.  That’s it, that’s all they have for everything.  Why is this an issue?  Because the cost of living is going through the roof and other costs rising.  Not a great position to be in, right?

Do Something

Don’t live paycheck to paycheck.  Will’s system?  He lives off one third of his net income and invests the rest.  Of course, this is relative to everyone’s situation, but the key here is to just do something. 

Minimize your liabilities and live below your means a bit.  If you can avoid the instant gratification trap, then you’re putting yourself in a much better position for later down the road.  If you can only put in $50 a month, that’s okay!  Make it a goal to increase this monthly amount over time.  Again, the earlier you start, the more time you have for the law of compounding to work.

How many kids turn 18 years old, get a credit card, and throw a hundred dollars on there?  Then, they don’t pay it.  The payment’s late and the interest starts accumulating.  Their future credit is being adversely affected.

There’s no excuse anymore.  There are plenty of resources on the internet, on podcasts, in books, etc.  Taking the time to increase your financial IQ is going to pay dividends in a big way.

Generational Change

There simply was zero talk about this subject growing up.  So, once you educate yourself, educate your kids.  My kid understands more at 10 years old than I did at 25.  It’s unbelievable. 

Don’t live paycheck to paycheck.  That’s no way to live.  You shouldn’t have to worry about how you’re going to pay the next electric bill.  Be the person who has their shit together.  Be the person that your family wants to go to for help.  Eliminate the financial stress from your life altogether.