Month: July 2019

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Money Myth Monday – Why You Should Manage Your Own Money, Don’t Be Fooled By Financial Advisors

Money Myth Monday 7/22 – I have someone who manages my money so I don’t need to worry about it.

Ever thought: “I didn’t know what to do with my money so I thought the next best thing was to have someone else manage it for me. There is no reason to leave it in the bank.”

This is the exact thought process I have heard from many of my peers. They end up having successful careers, make a butt load of money, and don’t know what to do with it. The only logical thing to do is sign up with a financial advisor who will then manage the money for them.

Three key things are not realized in this scenario:

  1. Fees associated to having advisors manage your money are astronomical
  2. 98% of funds won’t beat the market over the long term
  3. The path is much simpler than financial advisors lead you to believe

Let’s dig into these three key things.

1. Fees Associated to having advisors manage your money are astronomical

There are many ways advisors can and will make their money. The most common being to charge a 1% fee on your assets under management. To provide an example, if you were to have $1,000,000 of assets under management, you would be paying $10,000 per year in fees. Now that 1% seems a little more than you thought?

The true kicker is the cost over a long time horizon. Let’s look at another example:

  • Financial advisor cost of 1% assets under management
  • Starting with $25,000 in a retirement fund
  • Adding $10,000 per year to the fund
  • Fund, on average, earns 7%

In this above example, over the timespan of 40 years, you would lose out on over $590,000 in returns due to the 1% advisor fee.

Now I know what you might be thinking. Are you freaking kidding me!? Nope. Unfortunately I am not. On a positive note, there is a better, more simple solution available.

Time to look at the second point.

2. 98% of funds won’t beat the market over the long term

The key to this statement is over the long term. Funds can and will beat the market this year and even 3 of the last 5 years. The issue becomes if you were to project out over the long term, only 2% of funds will beat the market. The challenge being the ability to pick winners each year. Based off research done by AEI we will take a look at how mid cap funds have performed over the long term.

In the first year, 46% of the funds beat the market. Almost a coin flip. Not too bad. Let’s continue to expand the time horizon.

In the first three years that number drops to 17%. We are now heading in the opposite direction from where we want to be.

Continuing to expand to a 10 year time horizon only 7% of funds are beating the market.

Expanding a little further to a 15 year time horizon and less than 5% of funds beat the market. Now imagine what the number would be looking 20/30/40 years out. Why try to beat the market picking funds or individual stocks when you can take the returns of the market.

Now let’s look at the last point.

3. The path is much simpler than financial advisors lead you to believe

If you have had any time to dig into the Financial Independence community, you would know the path is simple. There are hundreds of thousands of articles detailing out the simple path to wealth.

Financial advisors will overcomplicate things. They will make you believe the 1% fee they are charging will save you a ton of pain from managing your money. Don’t be fooled by these tactics.

There is a very simple path to wealth. I am by no means saying do this, but simply stating what I do. There are these incredible things called index funds you can invest in. They charge low fees (between 0 and .06%) and allow you to invest in the whole market. It is what I personally do with some of my current asset allocation.

If you don’t know what to do with your money and want to keep things simple, I recommend this path. It is simple yet effective.

Key Takeaways:

  • Don’t let financial advisors trick you into thinking managing your money is complex. It isn’t.
  • 98% of funds won’t beat the market over the long term. Why waste time trying to get lucky and find the 2% of funds that do?
  • Fees of financial advisors will cost you hundreds of thousands of dollars.
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My Miracle Morning Part II – It Begins The Night Prior!

Own the first and last hours of your day and watch how your life can will change forever.

Why The Miracle Morning Begins the Night Prior

First you tell me to wake up early to become more productive, and now you are telling me I need to start the night prior? Yes, that is exactly what I am saying. Let me explain the reason why your Miracle Morning needs to begin the night before.

The first reason for your Miracle Morning needing to begin the night before is due to mindset. What you think about before going to sleep will have a profound impact on what you dream about.

Here is a great example of this exact scenario:

Let’s say it’s a work night and you decided to go out for drinks with some friends to watch your team play. The game goes into overtime and ends much later than anticipated. You thought you would be getting home at 10pm, but instead, you don’t get back till 11:30pm. The game ending later doesn’t mean you now get to begin work later. Instead of having a nice 7 hours of sleep, you are stuck with 5 and a half hours.

Before going to sleep, what do you believe your subconscious will be repeating in your mind? If I were a betting man, your subconscious will be thinking about the need for your body to get 7 hours of sleep. Since you are only getting 5 and a half hours instead of 7, your subconscious will be repeating how tired you will be.

How do you think you are going to feel tomorrow morning when you wake up? Exhausted right? What if I told you there was a way to trick your mind? What if I told you there was a way to wake up feeling energetic even in the scenario you don’t get “enough” sleep.

How To Trick Your Mind:

Here is the trick. I leverage free materials provided by Hal Elrod at: https://www.miraclemorning.com/start-here/

Every night, before going to sleep, I read Hal’s bedtime affirmations. In these affirmations, you must detail the exact time you are going to sleep and the exact time you are waking up. You will then figure out how many hours of sleep this will give you. You then read this statement, “I am going to bed tonight at _:_ PM and waking up at _:_ AM, which gives me _ hours of sleep. This is PLENTY; in fact, it is exactly what I need to perform at a peak level tomorrow.” Full credit to Hal for the above. This is taken from his free bedtime affirmation document.

Believe what you are reading and you will increase the chances of feeling great when you wake up in the morning. This is the first actionable thing to do the night prior. Now let’s look at two other critical components.

Journaling To Get In The Right Mindset

Now that you have read your night time affirmations, it is time to continue focusing your mind. I have found two powerful things to write down before going to sleep. Again, mindset is critical here. For this, you can use any blank or guided journal. I use ‘Five Minute Journal’.

First Thing To Write

The first thing I write down is three amazing things that happened that day. This can be anything amazing that happened to you, a friend, or even family member. Think hard. The goal of this being to put yourself in a mindset of gratefulness. Think grateful thoughts and set your mind in a state of positivity.

Second Thing To Write

The second thing to write down is something that excites you about the day ahead. When I first started my Miracle Morning I did not do this. I started having difficulty waking up one or two mornings a week. Once I introduced writing this down, I found it much easier to wake up each morning full of excitement.

Last Trick To Set Your Miracle Morning Up For Success

There is one last trick I have found to beneficial when performing the Miracle Morning.

Set your alarm clock across the room!

Why? This forces you to physically get out of bed to turn your alarm off. Getting out of bed is the most difficult step to waking up. When you must get out of bed to turn your alarm off, you have now completed the most difficult step! It is too simple to turn over and hit the snooze button! Put your alarm clock across the room so you must get out of bed to turn it off!

Now we have our mind right going into sleep, the next post will focus on the Miracle Morning itself. I hope you can now understand the Why behind your Miracle Morning beginning the night before.

Key Takeaways:

  • Read bedtime affirmations (Hal’s exact one) before going to sleep
  • Reflect on your day and write down three amazing things that happened and one thing you are excited for.
  • Set your alarm clock across the room so you are forced to get out of bed to turn it off.
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My Miracle Morning Part I – How I Found Out About The Miracle Morning

Own the first and last hours of your day and watch how your life can be changed forever.

This has been a three part series I have been extremely excited to post for some time now. On my Instagram, @TheYoungRetireeBy33, I have been posting teasers here and there about what I am doing each morning to kick start my day. Each morning I end up having new people reach out to me asking what I am doing and why I am doing it. With all the positive feedback I have received, I have decided to finally create a three part series to talk about the Miracle Morning.

In Part I, I am going to discuss how I found out about the Miracle Morning and how I immediately became motivated to give it a try. In Part II, I will discuss more about why your Miracle Morning actually begins the night before! This is such an important idea I have found to be extremely beneficial and I want to ensure to detail out the reasons for it. In Part III, I will discuss exactly what my Miracle Morning looks like each day!

Looking forward to all the feedback I will receive, and I hope to convert some naysayers into morning rockstars! Here we go!

How Did I Find Out About The Miracle Morning

Since finding the Financial Independence community, I have gone down some massive rabbit holes. It all started with reading Rich Dad Poor Dad. That quickly turned into googling real estate podcasts. BiggerPockets ended up being at the top of the list and I went down a huge real estate rabbit hole. Show 157 of BiggerPockets – A Simple Morning Ritual to Help You Dominate Every Area of Your Life with Hal Elrod blew my mind.

This was the first ever introduction to the Miracle Morning for me. Josh and Brandon brought Hal Elrod on to discuss and promote his new book – The Miracle Morning. Hal Elrod immediately drew me in from his incredible energy he brought to the podcast. He also has one hell of a story. Before I walk through why I was inspired to try out The Miracle Morning I want to first talk more about Hal.

Who Is Hal Elrod, The Creator of The Miracle Morning

Hal’s story is one I was immediately inspired by. Hal’s journey to maximize his potential all began after being dead. Yes, you read that right. Hal was in a serious car accident where he was hit dead on by a drunk driver at 75 mph. He flatlined for over 7 minutes and luckily, for all of us and him, one of the paramedics didn’t give up on bringing him back to life. After the accident, Hal was told by all the doctors that he would never walk again. To that, he overcame the odds to not only walk, but to run a multiple marathons.

How Hal Started the Idea Behind The Miracle Morning

After defying the odds of walking again, Hal had a new outlook on life. He was determined to maximize his potential each and every day, but the biggest question became how do you maximize each day?

Hal went searching for answers. He started by researching the most successful people in the world to try and get a better idea of what makes them successful. Hal was able to determine one factor that almost all successful people had in common. All successful people woke up early! Now I know most of you don’t want to hear that because you are not a morning person, but stick with me now.

Hal now felt like he had found the golden key to success. There was one big flaw in the thought of waking up early every day that Hal found. It wasn’t the simple fact that all of these successful people woke up early that made them successful. Anyone can wake up early and not have a specific plan to move themselves towards a goal. So Hal dove further into what specifically these successful people did each morning. What he found amazed him.

What Do The Most Successful People Do With Their Mornings?

Hal found that each individual did something different, but they had a very strict personal development practice they stuck to. Hal was able to narrow these practices down to

  1. Meditation and/or Prayer
  2. Reading Affirmations
  3. Visualization of Where You Want To Be
  4. Getting Your Blood Flowing to Your Brain Through Exercise
  5. Reading a Personal Development Book
  6. Journaling of Some Sort

Okay, so he now had 6 different things these individuals do each and every morning, but there was one odd thing still. He found that none of the people he researched did more than one of these. They simply focused on one item from the list above, and only one item.

There were so many options to choose from, Hal didn’t know which one to start with or which one would make him the most successful. Too many choices and too difficult of a decision to make. So what did Hal decide? He asked himself, what if I did all 6 of these each and every morning for an abbreviated time frame? This was the birth of The Miracle Morning.

How I Became Inspired To Try The Miracle Morning

When pulling up the weeks podcast on BiggerPockets with Hal Elrod, I almost skipped the episode because I could tell from the title they weren’t going to be talking about real estate. I am extremely thankful that I did not end up skipping it because I think the takeaways I had from this one podcast trumped any actionable takeaways I previously had from the others.

At one point during the podcast interview Hal asked Josh and Brandon a very simple question:

How do you determine what time you set your alarm for tomorrow morning?

Have you ever thought about how you would answer this question? Interesting thought right? This was something, at that point in my life, I had never deeply thought about. The crazier part was this is a decision I had to make each and every night. Josh and Brandon’s response was exactly what I would have said at the time:

I figure what my first obligation is tomorrow morning (getting the kids to school, getting to work, etc.) and then figure out what time I would need to wake up to be where I need to be.

Yep, that sounds exactly like what I would have responded with. Hal was ready to have a field day, you could hear in his voice that he was expecting to hear that exact response. Hal exclaimed:

YES! YES! That is exactly how everyone thinks. You ask yourself, ‘What is the last possible instant I can wake up to get to wherever my first obligation in the day lies and then you set your alarm to that time!’

Okay okay now….it was like he knew me too well. I couldn’t stop laughing. That was exactly how I thought. I have a feeling most of you are probably like this as well. Hal went out to explain the simple fact that when you wait till the last possible instant to wake up, you are constantly feeling rushed from the very beginning of your morning. That is no way to live if you want to take control of your life and begin the day with clarity. Okay okay Hal, you have started to really get my attention now. What more do you have for me?

The Oh So Popular Snooze Button

Hal now really had my attention. He then went on to talk about hitting the snooze button when the alarm goes off in the morning. He asked both Josh and Brandon if they hit the snooze button in the morning? They both mentioned they did a few times until they turn and look at the time and have to really get out of bed.

Hal was ready to have another field day with this one! Hal went on to explain this incredible idea:

Think about why you are hitting the snooze button on your alarm? More than likely, you are hitting the snooze button because you don’t want to wake up yet to begin the day. You want to go back to sleep. This is almost always the case; but, there is a hilarious fact about hitting the snooze button. You hit the snooze button because you don’t want to wake up and get out of bed, but what you are really doing is saying ‘I don’t feel ready to wake up, so I want to go back to sleep and have this same exact feeling again in 5 minutes!’ Bahahaha

Wow…okay okay now Hal. That was truly incredible and something I had never thought about. Each time you hit snooze, you are literally doing the exact opposite of the thing you want to do. You think you are getting more sleep and you will magically feel different after hitting the snooze button, but what you are really doing is saying to yourself ‘I want to feel terrible again when my alarms wakes me up again in 5 minutes.’

I Was Hooked!

At this point in the interview, I was hooked to anything and everything else Hal would go onto say. The two things he walked through with the snooze button and alarm clock truly resonated with me. I was ready to buy whatever he was selling, and the incredible thing was, Hal was selling how to maximize your morning and accomplish your wildest dreams!

This was a little bit longer of an article than they typical ones I post. This is mainly due to the passion I have for this subject and wanting to ensure I talk through everything I want to touch on. Looking forward to you reading Part II of the Miracle Morning series I will be posting soon!

Key Takeaways:

  • Many of the most successful people in the world wake up early each morning; however, the practice of waking up early in the morning alone won’t make you successful. It is what you do with the time that will make you successful.
  • Stop setting your alarm clock with the thought “What is the last possible instant I can wake up tomorrow to meet the first obligation I have?”
  • The oh so popular snooze button. Realize whenever you hit snooze, what you are really telling yourself is I want to go back to sleep so I can wake up and not want to get out again in 5 minutes! This is ridiculous! Stop hitting the snooze button!