David Bach is a legend in the personal finance space — a master at helping creators and entrepreneurs make -and keep- more of the money we earn. He’s one of America’s best known financial gurus, having put nine consecutive books on the NYT best sellers list. In short, when David Bach talks – and you’re a creator who wants to make money – you listen.
We had David in the CL studios not long ago to share wisdom from his epic class Start Late, Finish Rich. Some of this material was so fundamental for creators making a living and a life doing what they love that I felt was crucial to get it seen by as many people in our community as possible. So much so that in addition to the class on CL, I wanted to share it here on the podcast, for free.
So…in this episode, David covers so many things, among them the mindset around how to best get paid…AND how to pay yourself first (as in pre-tax and pre-debt collectors). If this sounds curious already – it’s a must listen. Think you got it all sorted and don’t need financial advice? Think again. This is helpful stuff to anyone who wants to earn money over the long haul. From concept down to the detailed tactics, these 30 minutes are a quick code for getting your long term finances on rails.
In this episode:
- There are six routes to wealth. Winning it, marrying into it, inheriting it, suing for it, budgeting for it and PAYING YOURSELF FIRST. Every paycheck you get or dollar that you earn, make sure you get your cut before Uncle Sam, debt collectors, or anyone else.
- All it takes is stashing 14% of every paycheck to be a millionaire. Pay yourself 14% of every paycheck before it touches Uncle Sam’s fingers (through legit mechanisms!) and if you can bump that up to saving 20% of every dollar you earn, you’ll have enough to retire early.
- The government makes it pretty easy for self employed people to save money. BUT, of acronyms like IRA, SEP and IRS make you queasy you need to spend this 30 min with David in your ears. Stuff like this sounds scary but in reality setting up a SEP IRA to save money pre-tax only takes ten minutes to set up.
- …and more 😉
Enjoy!
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In This Episode, You Will Learn:
- Ordinary people become millionaires by paying themselves first. [4:40]
- The six routes to wealth: win it, marry it, inherit it, sue for it, budget for it, and pay yourself first. [5:10]
- What it means to pay yourself first and how to do it. [7:24]
- The government takes about 28% of every dollar that you earn. [8:15]
- How to use a 401K plan to pay yourself first. [11:00]
- You’ll work somewhere between 70,000-80,000 hours of your life. [12:45]
- Fidelity, one of America’s largest 401K providers did a study that found they had 72,000 millionaires in their 401k plan, who, on average saved 14% of their paycheck. [13:25]
- Why women should save more than men. Women live longer! [13:50]
- If you can save 20% of every dollar you earn, you’ll be able to retire early. [16:30]
- The three key plans to pay yourself first are: IRA, 401k, SEP IRA. [17:00]
- Roth IRAs and Roth 401Ks don’t help you avoid paying taxes now. They are tax deferred options. [17:30]
- Question from the audience: Are there salary caps for regular IRAs or Roth IRAs? [18:55]
- Why you need to set up a SEP IRA today if you’re self employed. [19:35]
- The low down on Solo 401K plans. [21:30]
- Question from the audience: Can S-Corps use Solo 401K plans? [23:20]
- Question from the audience: Can you do both the SEP IRA and Solo 401K plans? Spoiler alert.. The answer is no. [24:30]
- Start your path to financial freedom by choosing one of the following reputable firms to set up your accounts: tdameritrade.com, fidelity.com, schwab.com, vanguard.com, wealthfront.com, or betterment.com. [24:50]
This podcast is brought to you by CreativeLive. CreativeLive is the world’s largest hub for online creative education in photo/video, art/design, music/audio, craft/maker, money/life and the ability to make a living in any of those disciplines. They are high quality, highly curated classes taught by the world’s top experts — Pulitzer, Oscar, Grammy Award winners, New York Times best selling authors and the best entrepreneurs of our times.
