Latest / Money Grows on Trees / #301 - How Much Money Do You Need to Never Work Again?

Transcript

#301 - How Much Money Do You Need to Never Work Again? · Money Grows on Trees

• 0:00
  It's 2026 and I want to ask you a question. What did you accomplish financially in 2025? Did
• 0:07
  you build your wealth? Did you increase your net worth or did you just survive? Pay the bills, get
• 0:12
  buy tread water? Because here's the brutal truth most people waste entire years. They have
• 0:19
  good intentions. They want to save more, invest more, build wealth. But they don't have a plan. And
• 0:24
  without a plan, nothing happens. So this year is going to be different. Right now, I'm going to give
• 0:30
  you a complete financial plan for 2026. Three simple steps. No complexity, no
• 0:37
  overwhelm, just the things that actually matter. Because I've helped people save tens of millions
• 0:42
  of dollars over the years, and it's never the complicated strategies that work. It's the simple
• 0:46
  ones, the ones that focus on the 20% that drives the 80% of your results. So if you're serious
• 0:51
  about building wealth in 2026, this is your plan. I'm Lloyd James Ross, a seven figure investor and
• 0:58
  entrepreneur, and I've helped thousands of business owners and professionals turn financial
• 1:02
  stress into success if you're stuck in old money habits. Overwhelmed by investing or unsure where
• 1:07
  to start, this is for you. I'll give you the mindset and strategies to take control, grow your
• 1:13
  wealth, and achieve financial freedom. It's time to make your money work for you. Step one the Magic
• 1:20
  Number I talk about this in my book Money Buys Happiness, and the magic number is the number at
• 1:25
  which your net worth needs to be for the income that you can generate from that capital that will
• 1:31
  cover your expenses. Where this comes from is the definition of wealth by Robert Kiyosaki. And he
• 1:37
  said, wealth is measured by how many days you can live at your current lifestyle without working
• 1:42
  another day in your life. That's the definition of wealth, as far as I see it. Yes, because time is
• 1:47
  more important than money. So your magic number is the amount of money that which once invested
• 1:53
  based on the return that it can get from cash, will cover your expenses on a yearly basis. That's
• 1:58
  the magic number. That's the number you should aim for. So for example, if your expenses are, say, 5000
• 2:05
  a month, it would equate to about $60,000 a year in lifestyle expenses. Okay, that covers your
• 2:11
  expenses generally. Now, if 60,000 a year is the number to get to the magic number that we
• 2:18
  should have invested, all we need to do is pull out a little calculator on our phone and we take
• 2:22
  our annual expenses. So if it's 4000 of us, sorry, 5000 a month, then annually it's $60,000. Yes.
• 2:29
  Now, if we were to invest that at say, and you can do this in certain ETFs, a 6%
• 2:35
  dividend rate, then if fully invested in that particular ETF, it would produce enough to cover
• 2:42
  these expenses. So it would have to produce 60,000 a year. So here's what we do. We do the shortcut. We
• 2:47
  we work it back. We back work it. And we divide that number by 0.06 and it's $1 million.
• 2:54
  So if you had $1 million invested in a specific ETF that paid a 6% dividend, it means that every
• 2:59
  single year 0.06, you would get paid $60,000 in income. That doesn't include the growth in the
• 3:05
  actual underlying cash either, but that would be an example. $1 million divided by is the magic
• 3:11
  number. Does that make sense? That's your target. That's your goal. So you've got to have a goal.
• 3:15
  Otherwise you're like, why am I doing this? Why am I going? Why am I flying to the mines twice a week
• 3:19
  and sacrificing time with my family? Why am I saving y y y y y? You have to have a y reason. This
• 3:26
  r right. So that's that was my first goal. And now I've got a goal of, you know, 10 million. But
• 3:33
  we got two goals. Otherwise we don't know what we're doing it for. Right. And on the way to the
• 3:36
  goal you'll have financial independence okay. That's the first step getting a goal. Step number
• 3:41
  two. To get to that number you have to put your money to work and you have to do it over time,
• 3:46
  which means you have to have some spare money to actually put to work. And the number one
• 3:50
  underlying problem I see in every single person that I talk to, that I deal with when it comes to
• 3:57
  their money, this is the number one thing they don't do well. They don't track their spending, so
• 4:03
  they don't actually know what money's coming in and what Money is going out. They have no idea. So
• 4:08
  if you have no idea, then you can't do this one. And this is to ascertain how much money is left
• 4:14
  over every month after you live life. Because if there's no money left over no free cash flow, you
• 4:19
  can't invest, which means you can't do step three. So how do you do this? Well,
• 4:26
  the first step is to actually look at your bank account. I know I've said this before, but most
• 4:30
  people don't. And what you have to do is you have to identify what money is coming in from wages,
• 4:37
  investments and welfare. Calculate it and tabulate it and sum it up. And then you have to calculate
• 4:42
  exactly how much money is going out on rent, groceries, insurance fees, school,
• 4:49
  travel, etcetera, etcetera, etcetera. And you have to make sure that there's more money coming in then
• 4:56
  going out every month. Now here's the caveat to that. If more money is going out than coming in,
• 5:02
  the number one thing you need to do immediately is to cut your costs. That's the. And the reason?
• 5:09
  Yes. You can increase your income and I encourage it. Of course you should increase it. You should be
• 5:13
  working to increase your income as much as possible. However, your cost structure is the first
• 5:19
  thing that you can control, and it is the thing within your control because you can literally
• 5:23
  make a decision today that stops that money going there. Here's an example. Let's say you've got
• 5:28
  Disney, Netflix and stand and you see that in your expenses. Here's how you address that. Oh I have
• 5:34
  three streaming channels. I'm entitled. Hmm. Maybe I should cancel two. Perfect. Boom, boom. Save yourself
• 5:40
  40 bucks a month. Done. It's like that. It's that or. Oh, we ate out four times this week. Maybe we
• 5:46
  should not do that. So, honey, we're not going to go and eat there and there anymore. We're just going
• 5:50
  to eat there. Are we saved ourselves $200 that month. You see how this works? This is identifying
• 5:55
  where you're sending your money and stopping it. This is to stem the bleeding to to plug the holes.
• 5:59
  And then at the end of the month you can go, oh my God, we got $1,000 here. There's a student that I
• 6:04
  was dealing with. Uh, he's one of our programs and he's from the USA. And he did this one exercise,
• 6:10
  and the first month he did it, he said, Lord, you wouldn't believe it. I said, what? He goes, there's
• 6:13
  $6,000 in my account. I'm like, huh? You don't say. I mean, you know, if you can't measure it, you can't
• 6:18
  manage it. So as soon as you started measuring it, he can manage it. And he created 6000 in a single
• 6:22
  month. That's 70,000 a year, right? So imagine what you could create if you knew where things were
• 6:28
  going. And most people don't do this. They're just so reactive. They have no idea. So it's about
• 6:34
  getting in control of your money. That's step two. Just quickly. If you're ready to take control of
• 6:39
  your finances but feel stuck on where to start, I have a solution. In my book, Money Buys Happiness
• 6:44
  simplifies Investing and Wealth Building with practical steps to help you achieve financial
• 6:49
  peace. Get your copy via the link in the show notes and let's get your money working for you.
• 6:54
  Now back to the episode step three the Final step. Because you have some free cash flow, because
• 6:59
  you're tracking your expenses and you have a goal of getting to $1 million, which is a wonderful
• 7:02
  goal. Then the next step is to get there. And what you want to do is you have to understand that
• 7:06
  saving your way there is the hard way. So the thing is, if you put it into a high interest
• 7:10
  bearing account, I say for 4.5%, the government will take 30% of that is taxed because they tax
• 7:15
  interest income. Uh, and so and then you don't get any underlying growth in the cash in the bank. So
• 7:22
  savings are not ideal. You want to be able to grow your money sensibly and safely and consistently
• 7:28
  above the rate of inflation. And so one of the most simple ways of doing it is to take the cash
• 7:34
  and invest it into a simple exchange traded fund, which is like a basket of stocks fully
• 7:40
  diversified by one of the major fund managers their low cost index funds. Warren Buffett has
• 7:45
  mentioned this many times at his shareholder meetings at Berkshire that if you just were a lay
• 7:49
  investor and you just put your money into a broad based index fund or an ETF, you can compound your
• 7:54
  money at between eight, nine and 10% a year. That's well above the inflation rate. Over long periods
• 7:59
  of time, your money grows. Plus you get an income from the dividend. And this is the most sensible,
• 8:04
  safest, most effective and predictable way to get your money to work harder than you do. And the
• 8:10
  beauty of this is you can pull up your phone. You can download an online broker platform to your
• 8:16
  phone. There are many. I'm sure you can find one if you just google it, download it, open up like a
• 8:21
  bank account, put your money in there, select the ETF that you desire and purchase it with your
• 8:25
  free cash flow you're creating every single month and repeat that for the next ten years. That's the
• 8:32
  plan for certainly repeat it in 2002 and in 2026, because if you just did those three steps, you had
• 8:39
  a goal. You understood why the goal was in place. You had savings each month because you're
• 8:43
  watching and managing your money nice and simply. It's not crazy. And you took some of that free
• 8:48
  cash flow and invested it into an ETF. At the end of 2026, you're going to have a money system
• 8:53
  that's repeatable for the rest of your life. And the philosophy of wealth is finding the simple,
• 8:59
  effective things that move money forward and avoiding the stuff that doesn't. You don't have to
• 9:04
  be super smart. You don't have to have a high IQ. You don't even have to like numbers. You just have
• 9:10
  to do the basics well and again and again and again. It's about iterations of doing that over
• 9:14
  long periods of time that makes you wealthy. So if you don't have a plan now, you do. You've got a
• 9:19
  three step plan to actually execute in 2026 that will markedly see your
• 9:26
  money start to grow in savings, in building wealth, and of course, keeping things simple. And that's
• 9:32
  really what happens because simple scales and complex files. So hope it makes sense. I'd love to
• 9:37
  know what step are you on? Leave me a comment below. Tell me what step you're on. What's your
• 9:41
  magic number? Pop it in the comments below and keep me posted in 2026 on how you're going at the
• 9:47
  end of the year. Shoot me a DM and let me know. Hey, I implemented that money plan and it's doing so
• 9:51
  well. Thanks so much. That'd be amazing. All right, see you soon. Thanks for listening to Money Grows
• 9:56
  on Trees. If you enjoyed the episode, leave a five star review on Apple Podcasts and Spotify, and
• 10:01
  subscribe to us on YouTube so you never miss an episode. And if you're serious about building
• 10:05
  wealth, make sure to check out the links in the show notes and follow me on all social media
• 10:10
  platforms at Lloyd James Ross for more. See you in the next episode.