This week’s Misfit Entrepreneur is Jeff Johnson. Jeff is a wealth adviser with Buckingham Strategic Wealth and the author of One Decade to Make Millions, A Strategy to Maximize the Power of Your Twenties.
When I heard the title of the book, I knew I had to talk to Jeff to learn what he was teaching people in their youth to do to retire wealthy, but I also was interested in what people who maybe didn’t get off to as a good of a start in their early years building wealth, can do now to make a difference in their years to come.
Needless to say, Jeff’s practical advice and easy to understand actions can help anyone looking to improve their wealth make a difference for themselves. And I’ve asked him on to share all that he can to help you do so.
Book: One Decade to Make Millions
Jeff has been on the financial services world for over 40 years. He has learned from the clients he worked with over the past 4 decades and noticed traits of those that were most successful. Much of this is what he wrote about in his book. One of the biggest things they did was maximize their 20’s.
Jeff became passionate about helping young people when he taught a personal finance class Nebraska.
Share the story about the bookkeeper and the surgeon…
- It’s a true story.
- The bookkeeper was a client who started saving with Jeff in 1983. They didn’t make a lot of money but were thrifty.
- The bookkeeper retired with significant wealth in his early 60’s.
- The surgeon came to Jeff about the time he was ready to retire.
- The surgeon had some money saved, but not nearly enough. He was making a million dollars a year but spent most of it and didn’t or set themselves up to succeed in wealth.
Why do you think we don’t teach financial education and wealth building in our school system?
- I don’t know, but it is something that should be taught at home.
- The bookkeeper’s children were good with money and the surgeon’s were not good with money – teaching your children at home is critical to their financial success.
What is someone’s 20s so critical to financial success?
- It allows for the miracle of compounding to occur. 30-40 year of compounding is such a huge advantage over even 20 years of compounding.
- Compounding doesn’t just pertain to monetary growth, but effort and productivity. If you work very hard and set aside money to compound and continue to add to it in you 20’s, it almost becomes like snowball rolling down a hill gaining momentum.
- The story of the doctor and the nurse. The story shares how clients of Jeff’s that were identical twins did in their wealth.
- One became a nurse and saved diligently in their 20’s til about 30 and then let it compound until they were 70.
- The other went to medical school and became a doctor and stopped saving early one, but then started saving from age 30 to age 70.
- So, the nurse saved only for 10 years, from age 20 to 30 and the doctor saved from 30-40.
- Guess who had the most money? The nurse did because they got started so much earlier.
- Now imagine if you started saving in your 20’s and continued to your 60’s/70’s.
5 steps to take control of your financial future?
- They are called the 5 Financial Foundations.
- They are the 5 keys to successful wealth building from working with the wealthy.
- 1: They always save money. Even when they were young.
- 2: They always have and keep a cash reserve.
- 3: Almost all working people have their biggest pool of money in some sort of retirement plan.
- 4: They own the right size home. They live comfortably, but not extravagantly.
- 5: They do not have bad debt. They borrow on things that can increase in value like homes or businesses.
You say, “money is not important.” Explain that….
- Money itself is not important.
- Just keep track of money doesn’t bring happiness.
- Money is important because it allows you to do the things you want to do and provide a better life. So, it’s not the money. It’s what it allows you to do that matters. That is where the value is.
- There are people that are very wealthy, but not happy.
Actions people can take right now to start putting these principles into practice?
- Get started. Save some amount of money. Anything to get going and learning how to accumulate money.
- Next, become familiar with what your investment decisions are. Read books by John Bogle and others. Self-educate.
- Once you have $10-20k saved, you can then really start making it work.
- Even something like the compounding power of dollar-cost averaging over time can make the difference.
- If you are starting later in life in life, you have to do things differently. You may have cut down on a lifestyle to get out of debt or downsize so you can save money.
Let’s talk more about people later in life. Say someone is “late to the party in their 30’s and 40’s,” what can they do to make a difference?
- Go through everything you spend on. Get a very good idea of what your real bills and expenses are. Cut out the fat.
- Use the money you were spending on the fat and start putting that toward paying down debt to get rid of it.
- You will have to cut back and change your lifestyle.
- The challenge is people will notice, so if you really care what other people think – it will be tough for you.
At the 33 min mark, we have a great discussion about “expanding your means.”
Anything else that you think is important?
- Get intentional about your life and what you want – forget about what other people think and it will be much easier to save and grow wealth.
Lessons from your entrepreneur journey?
- Jeff was a stockbroker for 20 years and then started his own financial services firm.
- He ended up merging his firm with the firm he is in now.
- He made a lot of mistakes, but he took the time to learn from them and figuring out what worked and what didn’t.
- He was intentional about what he wanted and how he would do it.
- He loves his work and that fueled him to work harder at it and get better.
- Have a business plan as an outline and a basis for what you want to do – but it won’t work out as planned.
Best Quote: Money itself is not important. It allows you to do the things you want to do and provide a better life. So, it’s not the money. It’s what it allows you to do that matters. That is where the value is.
Jeff's Misfit 3:
- Be intentional. Have a specific plan and know what is important to you.
- Once you know what it is you want and why – get started as soon as possible. Execution is more important than creating the plan. Have fun but live in a state of gratitude.
- Gratitude squeezes out all the other bad emotions.
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