Are You Playing by the Wrong Money Rules? Discover the Secrets Banks Don’t Want You to Know, Part 2

Speaker A: 00:00:00

Welcome to make youe Wealth Work, the.

Speaker A: 00:00:02

Podcast where wealth becomes your greatest ally in achieving your dreams.

Speaker A: 00:00:07

Hey, guys. Welcome back.

Speaker A: 00:00:09

You're listening to the second part of last week's episode.

Joe Pantozzi: 00:00:12

Let's jump back in, and I'll go back and I'll find a note that I made five years ago or eight years ago, and I'll say, wow, that was really well written. It's not because it came from me. I probably stole it from somebody or somebody shared it with me.

But the thing is, the test of time is important because if you look at an idea that you wrote down five or 10 years ago and it still makes sense in your brain and your mind, in your soul, in your gut, it's probably solid. And see, one of the things about what we're doing here, what we're suggesting people do, is get away from the mindset that everybody else has.

First claim on your money.

Curtis May: 00:00:50

Right.

Joe Pantozzi: 00:00:52

And release yourself from that faulty thinking. Well, no, I can't do that because I have to fill in the blank. I have to do this. I have to do this.

I wouldn't be able to stop going to that club because my friends are there. Well, okay, so you're going there because your friends think you should. Okay. Yeah.

It's a matter of clearing out the shelves and getting ready for a new way of thinking and giving yourself time. Because that's another issue is with our instant economy and with everything needing to be immediate gratification. That's why the focus.

It's really a faulty focus. People are asking the rate of return question because they don't know any better question to ask. They're not honoring that question. Their own lives.

They're not looking at the rate of return on that new motorcycle I just bought. They're not looking at the rate of return on that new trip they just took.

Joe Pantozzi: 00:01:49

They're looking.

Joe Pantozzi: 00:01:49

They're not looking at rate of return on anything else that they're spending, but on the few pennies that they want to put here or there. But it's not a matter of getting rich tonight. It's about creating wealth. And what if it takes 10 years? What if it takes 30 years?

What if it takes 30 Years for you to build up a million dollars? What are you gonna say? Well, that's not worth it. Okay, so what's the alternative? Getting to 30 years from now and not having.

And whatever the number is, not having the million dollars?

Okay, you want to get a million dollars in 30 years, you got to save $30,000 a year at zero interest or maybe it's 20,000 or $15,000 a year at some interest component, right? But in order to create wealth, you only have to have a few things.

You have to have capital, you have to have time, you have to have some, a return of some kind. And you have to have freedom from tax.

Because if you put something, if you put money into a model that includes tax, then the tax may eat up the entire principle. And the key is you don't know, right? So why not look at the opportunities to put money into something that would be free of tax?

And I'm not saying you should put all of it, but you should at least consider it because only because maybe the wealthiest people in the world have some money in a tax free zone.

Curtis May: 00:03:18

Because they're, they're, your people don't get their number one expense or what I like to call wealth transfer is taxes.

And what happens is like if you look at a taxable account, they don't see it because all they see is, they look on the, the, it's like sleight of hand. So all you see is the account growing, but you don't see the money because the, your accountant bakes it into the tax cake.

So if you look at your tax return, you'll see the interest on the dividends or on the taxes because if you were paying them, you're paying them out of lifestyle. If you paid them out of the account, you, you would have a fit, you know, you would, you know, and so you just don't see it.

And so you just, you focus on the account growing. But even then it's not, it's real money, but it's not real money because you can't eat equity, right?

So, you know, I try people focus people on cash flow. That's what you can go to beach instead of the beach on cash flow.

Joe Pantozzi: 00:04:15

That's good. So if you want to play that rate of return game, you really have to look at all sides.

I have to subtract the costs that I'm expending and the cost that I'm losing because I prefer. I've chosen to finance my current lifestyle using some kind of a debt instrument, whether it's a credit card or a line of credit or a heloc, Right.

I'm going into debt to finance my current lifestyle because I have to make the sacrifice to put money into a deferred account where I may or may not make a profit in the future. It's not a system that actually works.

If you actually did the math, people are doing that Type of following that kind of a protocol because they're following the majority. They're following the herd and hoping which is not the strategy.

Curtis May: 00:05:08

Hope is not a good strategy. And the herd is broke.

Joe Pantozzi: 00:05:11

The herd is broke.

Curtis May: 00:05:12

The herd is broke. So you're following. That's why there's 1 percenters and 99 percenters. Right. And it's more in how they think in their behavior.

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A lot of these people started businesses and like even you read like the, what is it called? The millionaire next door. And one of my books is Success Secrets of Black Millionaires by Dennis Kimbrough.

Similar thing just focused on African Americans. If both of them ask well how did you become a millionaire? What credit do you give your He's.

They both say stockbroker but right now that term would be wealth manager.

Joe Pantozzi: 00:06:00

Sure.

Curtis May: 00:06:00

How much credit do you give them for that? It's like 10, 11%. You know it's not, you know, that's not what it, you know necessarily.

You may, they may hold it in equities but that's not how you build it. Right. And so success leaves clues. But you've been lulled to sleep like ah, you know, this stuff is too complicated. You, you don't have the time.

I used to have a presentation I did when I was you know, registered rep and we say look, you don't have the time, the temperament or the training to personally manage your own funds. So give it basically all marketing on on in the financial world basically says give your money to us. You're not smart enough.

You don't have the attention to detail and we'll give you liquidity. Professional management and diversification.

Joe Pantozzi: 00:06:49

Sounds like a bank. Sounds like a bank.

Curtis May: 00:06:51

Bank sounds like equities. Wall Street. And we're not saying not do that. But like I'm not. I'm my people say what do you do?

I will jokingly say I'm the anti Wall street financial advisor but I'm not really anti Wall Street. I'm anti you not understanding the game. You not know what's going on. You with hope as your primary strategy.

Joe Pantozzi: 00:07:13

You make a good point about, about wealthy people on Wall Street. Next year I'll celebrate 50 years in the business and I do not have one client who became wealthy from investing in Wall Street.

Now I have clients with seven figure balances in their Wall street or market account. But they're secondary to their primary wealth vehicle, which is typically their business.

Curtis May: 00:07:42

Yeah.

Joe Pantozzi: 00:07:42

And, or their investments. And they're putting a percentage of their money into a Wall street account as, as an asset class.

They're not relying on that asset class to create their wealth. They've created their wealth elsewhere.

And they're going to put some money in cash, some money in Wall street, some money under things, some money in gold and silver, or some money in crypto, whatever. What people choose place their wealth, to store their wealth, to hold their wealth, or maybe even to grow their wealth is totally up to them.

I'm, I'm completely agnostic about it. But the primary engine has to be something that you control.

Curtis May: 00:08:18

Right. Like you got to put it in your system first, see if you can. It's like having a financial tailwind. Right.

If you can put it in a pool of money, you control first and then you can leverage that money to go buy those things. Now you get your money working in two places at the same time. And that's the part we miss because you, you.

And that's the part where you've got to examine or you know, get with a coach when you hear that, stop fighting it.

Joe Pantozzi: 00:08:47

Okay.

Curtis May: 00:08:48

And because you, you know, you're doing well. But what if you could do better?

Joe Pantozzi: 00:08:55

Yeah, yeah, that's, that's the.

You just described the wealth creator, the person who uses the asset that like we've been talking about as their collateral to go and buy capital assets that create passive cash flow, passive income. And now we're building up wealth in two buckets as opposed to chasing returns and trying to leverage too much.

Buying one asset that may be cash flowing, but you're using toxic debt to finance it.

And you're doing that because you're probably following the example of somebody else maybe who's doing it correctly and you're trying to take a piece of what they're doing but not looking at the whole program.

Curtis May: 00:09:47

Right. What I try to do is my goal. I don't know if I shared this with you is I want to be the number one holistic planner in North America. Okay.

And so because I tend to my mind works as fast. Look at my Colby from that event we met at with, with Kim.

And I was like, wow, you know, I really look at, I'm a strange guy the way I look at stuff because I see the whole picture but I can break it down to you a little bite sized pieces. And I was like, okay, this per works. This is Why? I see the world the way I do. Like, I don't see it that complicated.

People have these little silos, as you put it, of where they store their money at, and that hurts them because you're putting so much money out of your control and you don't save more than. And I don't even really put call 401k. Money is savings. That's really investing.

But they have to chase returns because they're not putting away enough capital. So you have to get 10%, 12%, because you're, you're, you're, you're chasing returns because you don't have any money.

Whereas if you had a lot of money, you don't need to chase returns.

And then you're, you know, so Instead of that 28% you're giving away on a credit card, you recapture that, you know, and so what people don't, they don't really understand. Even when I talk to investors, they don't really understand opportunity costs.

You know, so when we say you finance everything you buy, they get using leverage, but they don't understand when they pay cash, they financed it.

Joe Pantozzi: 00:11:15

Right, Right. And so it's just called opportunity cost.

So so many people would say, well, I'm always on time with, with my credit card bill, I'm always on time with my mortgage, my car payment, my heloc, you name it. Everybody's on time with the payments that they make to the bank. But if I ask them.

So if you take out $20,000, I use that word intentionally, take out. Because that's how it happens. You take out $20,000 out of your savings account, how do you pay it back? Well, what do you mean?

Well, do you pay it back systematically? Well, I try. Wait a minute. You don't try to make your car payment. You make your car payment, right?

So you try to put the money back in your savings account after you've taken it out. Well, what about interest? You pay yourself interest? Well, why would I pay myself interest? It's my own money. So wait a minute.

What you're telling me is you'd rather pay interest to some stranger on their money and you'll never see that money again, but you're not willing to respect your own money at the same level that you respect the bank's money. See how your thinking is not working for you. It's working to serve those who lent you money, but it's not working to build wealth for yourself.

And you can't justify putting yourself in a subservient position to the bank, why not charge yourself the same amount that the bank would charge you? Well, the Bank's charged me 14%. Why would I want to charge myself 14%? To have more money, to have more control.

Start thinking about control in every aspect of your financial life. You'll start going in the right direction. You'll start moving that ship, right. Which takes a long time to turn.

You start going in the right direction when you start realizing, I deserve this, my money should be respected, my financial system should be respected as much as, if not more than some outside bank that I'll never see again.

Curtis May: 00:13:15

And so I think that starts with where, where I'm realizing it starts with. And most advisors find this tedious, but it starts with cash flow control.

Like the, you know, like if you look at the rich dad financial statements, you know, the income statement or you would call a budget, most wealth is lost right there. Right. And in your philosophy, because there's cash flow patterns of the, of the poor. Work, pay bills out, right.

If you're, if you're picture a financial statement, then the financial statements of the middle class is work, pay bills, you got debt, but out, right? So the money is going out.

And then if you look at, if you analyze the financial statements of the wealth creators, they see themselves as an expense, so they pay themselves first and then they use that capital to buy or build what I like to call cash flow engines so that they can work to buy things that are taxed more favorably, that generate income whether you get out of bed or not. Like that's the game. But you have to start with, I think, analyzing. All right, here's what's coming in here was going out.

Like if you look at, what I'll do is I'll do a cash flow audit with people. And let's look at your cash flow exercise. Let's look at your balance sheet first.

I'm going to show you your income statement, your balance sheet and how they correlate, right. And how much money is leaving you. And then because I think a pitch is worth a thousand words, then you've got.

And it's not going to happen overnight, but you have to because that's where every time you get a paycheck, that's where decisions are being need to be made right there at the point of contact. And you have to kind of automate that. That's, you know, that's kind of where we're trying to help people.

But you've got to make that because right now savings is not a willpower thing. It needs to be automatic and systematic, where you do that? And then you look at, okay, now what money is leaving me?

And how can I redirect that outflow to a pool of capital that I own and control? And to me, that's for most people, step one, you know.

Joe Pantozzi: 00:15:26

Right.

Curtis May: 00:15:27

And that's, that's the work. Right. So you gotta ask, all right, you know, I'm making money. Where's it going? Like, if you say, well, I don't know where my money goes.

And that's where, as Jerome said, I don't know where my money goes. Oh, great, let's have you run the country. You know, let's have you run the whatever.

Because if you're, I say, look, if you are running a business and you wanted me to get you invested in your business, and you told me you didn't know what you made, what you spent, how much echo you're building, how much saving or, or how much debt you have, how long would you, would your business last? Well, that's what you're doing now. You're, you're the CEO of your life, and that's how you're running your business. And so that's a problem. Right.

And I, I, you got to see it that way because people will say, oh, you know, the tariffs, this, and, you know, I tell people, look, I don't care whether your candidate won or didn't win. This is why I've been really honing in on this statement. You know, Jim Ro says the, the winds of adversity blowing us all.

The difference is how you set the sale. Right. And so you've got to work at setting a better sale. I, you know, we, Joe and I try to work with clients.

Basically we're trying to do is help you set a better sale. Because if, you know, Nelson would say, I think I heard, I knew, I heard from him. I probably got somewhere else.

If you know what's going on, you know to do. Right. So most of you don't know what's going on. You don't understand economics. You don't.

You get your, your, your news from sound bites, from people trying to win your vote. But that there, if you understood policy, you know, what they're talking about can't work. And it's never worked in the history of mankind.

Curtis May: 00:17:09

So.

Curtis May: 00:17:10

But you have to. Again, you've got a. What's that movie? I like the Replacements. So.

And my man Gene Hackman tells Keno Reeves to listen, winners always want the ball right at the end of game. And so the people that Work with us. Want the ball.

Like if you're a business owner, you understand that you are a make or a real estate investor, your money, your assets already outperform the S and P. And so, okay, you want to put more money in, in that thing that you know, understand and control or do you want to give some fund manager a thousand miles away you ain't never met and hope surely goodness and mercy will follow you all the days of your life. Like you just want to hope, you know, you just want to hope they win. I don't think that's a recipe for success.

Joe Pantozzi: 00:18:03

So let me, let me leave us with, with, with something that's, that's, that's simple because I tend to think that the, the simplest truths are the ones that stick with us, right?

If you take a, an executive who's making decent money, not, not crazy money, but decent money, you know, a mid level CPA at an accounting firm is making $200,000 a year. And what do they refer to when they say what their income is?

They say, my take home is X. I might make $17,000 a month, but my take home is something below that. Because guess where the taxes are taken out? They're taken out at the source, right?

And somehow those of us who used to work for W2, which Curtis and I don't anymore, somehow we figure out a way to live on the take home, right? And that's because somebody else is imposing the tax on us.

Somebody else is withholding the taxes from us and we don't get a choice, we don't get a vote. But now if you just take that a step further and say, well, what if I just impose that on myself and I'll give, I'll take the 10% out to give.

You know, for me it's, it's giving to the Lord, right? I give that and then the next 10% or more comes off. And you know what? I have to find a way to live on what's left.

And the people who are in control of the financial game are the people who have solved that equation. I'm going to save first and live on what's left over. Then you have the other people who spend first and, and save if there's anything left.

And those spenders always work for the people who save first. It's a natural law. It cannot happen any other way. You have to take control of deciding what you're going to live on, what you're going to put aside.

You can break that down to long term savings and opportunities and and opportunities, I tell you, are going to take more money than long term savings because there's so many opportunities and emergencies and schooling and medical issues and replacing the car engine and so forth and so on. And you don't have to allow for that, but if you don't, it's going to come out of your credit card. So we've touched on a lot of things.

I hope we can continue to expand on some of these points. And I really enjoy talking with you, Curtis, because you make my mind go in so many different directions.

And what we all always come back down to is we all have to use our common sense and we have to make a decision that we're going to be in control of our own future and not delude ourselves that we're in control when somebody else controls 90% or more of our money.

Curtis May: 00:21:06

Right. That's, you know, it sounds abstract, but you really have to, you need a coach.

You need to sit down with somebody that will help you look at your current paradigm, look at your current personal economy, help you deconstruct it and help you reconstruct it to serve you. And that's really the work that, that, that we both do.

So if you, if you like that, then, you know, you should reach out and we'll walk you through that process.

Joe Pantozzi: 00:21:37

Good to see you. Look, look forward to continuing next time.

Curtis May: 00:21:40

All right, sounds good.

Joe Pantozzi: 00:21:41

Thanks everyone. Practical wealth show and make your money well work.

Curtis May: 00:21:45

Have a great day.

Joe Pantozzi: 00:21:45

Talk to you soon. Have a great day.

Speaker A: 00:21:47

All right, this is the podcastfactory.com.