Video Closed Captioning:
good morning good afternoon good evening
folks as promised in our daily financial
news this morning thank you for watching
we have a special guest and friend of
the channel mr dion from dion talk how
you doing sir
howdy doing great ready for round one
thanks for having me on the monday i
look forward to thursday so it’s really
really great for me i love it when you
and i get together and just have
one-on-one not that i don’t love three
amigos but sometimes uh it’s nice to
sprinkle just dion alone so i appreciate
you
yeah so what i want to talk about here
is
there’s a financial metric
that
is kind of hinted at in stocks and in
companies but never
never talked about at the family level
and i think everybody needs to talk
about i think everybody needs to
calculate it and i think a lot of you
aren’t doing it
and that is something that goes by the
name of a disposable income
what do you think of that uh what kind
of questions you might have uh about
disposable income
i i think explaining it to people who
haven’t thought in that form
would be step one yeah because most
people think of disposable as i don’t
need it
right it’s disposable i could live
without it but
when you explain it and i’ll give you my
take my my version of the takeaway that
i have and then you can clarify sure
when you make money a certain amount of
that money is allocated to expenses that
are going to happen
housing healthcare food transportation
those kind of things you know wants
versus needs you have needs that need to
be covered
so
what’s left after that
technically would be disposable income
even though disposable doesn’t mean you
don’t need it it means that’s the money
you can put to work yeah
yeah so when you listen to me on my
daily financial news and i’m talking
about earnings right we talk about
revenue
top line
and then there’s this other one called
net income or earnings per share
at the
individual family level and if you’re an
individual who lives alone you are that
family unit you have the same thing you
have your income
then you have a list of expenses that oh
by the way starts with taxes
and 401k and insurance and rent or
mortgage and food and this and this and
this and this
and then at the end of the day hopefully
you got something left
so what in in your family life that is
called disposable income so what is
disposable income
disposable income is in theory stuff you
could light on fire and it wouldn’t
change your life
it is where savings occurs it is where
the income snowball kicks in
it is where you have options
and you know i in my get your money
right course we talk about disposable
income as it relates to time
because
unfortunately
talking about money is not easy
right people don’t like to do it but so
i like to do is talk about time
let’s just say for example for easy math
you make a hundred dollars
and your disposable income after
everything is ten dollars
if you were to go buy a 500 thing a lot
of you
are like cool
i know it’s only five hours of my life
wrong
because
90 of your 100 is already spent it is
actually 50 hours of your life or that
one 500 purchase
is
uh what is that six days six and a half
days
of work
because you only have ten dollars an
hour of disposable income
you guys are not thinking about
disposable income the reason you are
terrified about money
is because you have no disposable income
you are living on the razor’s edge
not because of income
it’s because of disposable income
when you are scared and freaked out your
disposable income is zero and oh by the
way some of you
are negative
your disposable income is negative you
are living on freaking credit cards in a
wing and a prayer
we need to talk about disposable income
we need to focus on disposable income
and for most of you the way to increase
your disposable income is either to
attack expenses or attack the top line
so let’s talk about the top line first
because i think most of you are in a
very unique time
and there are multiple ways you can
increase top line but let’s not let’s
not be cavalier
if you are terrified about money
it is because your disposable income
sucks
so let’s talk about that and let’s fix
that
so let’s talk about uh top line what do
you think dion
well i like the format of the video
we’ve both um i run a company you’ve run
divisions like you’ve had several people
working for you i have about 60 staff
working for me
and a problem
for me is what and it might have been
the same for you when a staff member
comes up and says here’s a problem
okay great what’s the solution yeah
exactly so we’ve pointed out the problem
is people aren’t looking at their
disposable income when they’re making
expense choices
that’s the problem
so the solutions there’s there’s a
couple one
we want to increase top line
we want to reduce expenses
so top line a lot of people especially
in the investing world
undervalue the importance of their w2
income agreed in in the beginning this
is where the ability to get the fixed
rate debt comes from
you’re it’s so weird you can make a lot
of money running a business but if you
don’t have a track record with with tax
returns and ability to show consistency
lenders aren’t likely to do that but you
take somebody who gets
not even a really high just a consistent
hourly wage
it’s easier to get those loans
so your w-2 and i’ve heard you talk
about this a few times
we come from a generation where
longevity was rewarded our parents
worked for companies that had pensions
and states had pensions and now those
are kind of going away
so we have the mindset of if you stayed
a company long enough you’re rewarded
and that’s not really true
now if you change companies every two to
three years instead of a
three to five percent increase every
year you’re getting a 10 to 20 increase
when you shift employers
staying in the same field is important
for lending the lenders are going to
want to see that you’re working in the
same industry
but sometimes it’s going to take
changing employers
sometimes it could just be having the
conversation with your employer showing
out the value that you add and using a
version of the binder strategy
and how i get tenants to request a rent
increase you can get your employer to
request you to take a raise
if you go to your employer and you say
look this is what somebody doing exactly
what i do with another company is being
compensated why am i making so much less
when they’re doing exactly the same job
some employers to retain you might go
well
you ask your employer what do you think
is fair they might not take you all the
way up to what the other person is
making they might not have the bandwidth
but they’re probably going to
offer something
so that starts with w-2 income the
importance of it for lending
then i’m actually doing a live stream
today when this comes out probably come
out tuesday so i’m not sure when you
release the video but
on the importance of side hustles yes
so
some people
think i don’t have time to develop a
side hustle and one of the reasons that
i developed the side hustle is because i
didn’t have time
i couldn’t continue to work overtime
because i was a single parent with three
kids i had to be at home
so this is going to sound weird and
super nerdy but i played online video
games
and i turned them into a side hustle so
i could be at home playing games with my
kids
they played too
but i was able to generate money from
that side from that game what are some
of the side hustles that you think
people overlook
well i first off i want to want you to
know that today is the
the best time ever to monetize your
passion
right you had a passion for playing
video games you want you your kids did
it was bonding time it was all of that
it was all good stuff and oh by the way
you were paid to do it
anybody can monetize whatever their
passion is if you have something that is
fun for you you have a decade of
experience with it i promise you you
could find a way to monetize it whether
it’s a youtube channel a book a course
an etsy page uh
whatever right i talked to todd baldwin
on sundays
we did the choices exercise with him
yesterday not only does the guy live for
free but essentially he got his
groceries for free because his side
hustle was secret shoppers
folks you are not thinking
enough about side hustles today
if you are stressed about money it’s
because your disposable income
sucks think about it a
never been a better time in my adult
life
than now to get a raise
if you’re in a profession or you have
non-competes or whatever and you can’t
move side hustle and for most of you do
both
do both
so we’re gonna you can increase uh top
line i have generated
four side hustles in the last two years
that produced thousands of dollars a
month
and i didn’t even i wasn’t even trying
uh it’s it’s just it’s it’s crazy what
you can do
today
however there is another thing most of
you and this is what i did because again
i couldn’t change i was in a
commission-based field i was already
very good at what i did and compensated
i went after an audited needs verse once
most of you
haven’t done that and most of you
most of you are treating wants like
needs but if you want to fix your
disposable income and be less stressed
go have a just go audit your last 30
days and then more importantly take that
audit to someone you love and care about
and go through it with them
because most of you are not being
um
[Music]
holding yourself accountable and let
them ask you questions
because again we took it down 50 it
wasn’t immediate right you hear me say
50 you think it’s immediate we got 10
almost right away and then it was a slow
grind
down as we found more and more things so
again if just if you’re stressed about
money
it is 100
because your disposable income sucks
step one increase the top line get a
raise change employers side hustle or
both
now let’s attack the expenses and you
have taught us about the impressiveness
of living for free when you did choices
about house hacking or todd baldwin or
spencer cornelia or the lumberjack or
anna
most of you are aren’t taking a step
backward and looking at your biggest
expense it’s not the damn latte
so talk about um you know live in for
free
you mentioned it
uh one of our biggest expenses is taxes
most people housing and taxes are their
top two expenses and it can change
depending on that situation
when you reduce or eliminate your
housing costs you’re impacting how much
you need to make
including the taxes
a very good point yeah so when i moved
from an apartment
i was paying 1500 a month i moved into
my duplex where i was then paying 300 a
month so it was a 1200 a month
difference
i’m in the 24 to 28 tax bracket
basically because you know it’s a
graduated tax system but that’s where my
income is at
so i needed to make an extra three
hundred dollars or so
so i had i had to bring in over eighteen
hundred dollars to have
the fifteen hundred dollars to pay for
housing correct you reduce that down to
three 300 a month and now i only need
what 380.
right so it’s a significant change when
you reduce or eliminate eliminate your
largest expense
and i talk to so many people that say i
can’t house hack because
here’s all the reasons and almost every
reason that they list off is a reason
they should yeah
i can’t house act because i have kids
the sooner you get on the property
ladder the more generational wealth
you’re going to create
so how many millions of families live in
apartments
is your family better than that
how many people could live in a small
multi-family which is like living in an
apartment but you get to pick the
neighbors
or buy a house
with an adu
not even sharing living space not
touching walls your separate driveways
single family house lending options
because house hacking isn’t always about
reducing or eliminating the housing cost
it could be acquiring properties with
owner occupied low down payment loans
rinse and repeat
and then it’s
you don’t have to house hack forever no
i mean
i’m probably going to because it’s
addicting but
i think it’s a good addiction
uh
lumberjack did it i think for 11 years i
think so yeah um
there comes a point and he did it really
smart when he said okay we’re going to
buy a house that will be our forever
home the cost of that mortgage has to be
the amount of the rent that we’re going
to get from the unit we’re moving out
technically i think in my book that’s
still living for free
because the asset you have is paying for
your housing
so you you
decrease the amount you need for your
freedom number because there are some
things we we we build up while we’re
my microphone
yep your sound went down really bad
you’re back i think i’m back now yeah go
ahead keep going okay that’s so weird it
did that the other day that last week
too yeah sorry about that folks we had a
10 10 second uh issue and i’m not
deleting it so let’s just keep going
fair enough um
and that completely threw me off so
that’s okay so yeah we were just talking
about the lumberjack living for free
basically right he did it it’s basically
a plan
so a lot of people
think they can’t house hack because
because because and again there are
probably reasons you should at least
think about it
and if you’re single there’s no excuse
and
again
if you’re if you are stressed about
money i promise you it is because of
disposable income
the biggest expense you have is housing
if you attack that life gets better
here’s the deal
most people spend somewhere between 25
and 30
of their income that’s the top line
number on housing you live for free
a your disposal income explodes
b to your point you got to make less
money
right for the same standard of living
it’s an amazing thing so
um
and again i have one more go ahead sorry
not please this is an unpopular opinion
so this is the opinion of
dion from dion talk not from michael
zuber of one rental at a time we’ll
we’ll see i’ll
maybe let’s
see if your plan is to retire
at or after 59 and a half
contributing to your retirement accounts
makes sense
personally
i hate retirement accounts the thought
of a penny being locked away no matter
what the tax benefits are because when
you do take it out it’s going to be
taxed at earned income which is one of
the worst forms of taxing
it’s not paying you cash flow now you’re
not gaining appreciation on multiples of
what you invest because you’re not using
leverage
you’re not getting principal pay down
where tenants pay off the mortgage so
for somebody who doesn’t invest
retirement accounts make sense
but if you are investing one rental at a
time the way i did
as soon as i stopped maxing my
retirement accounts
i was able to invest faster and make
work optional decades sooner yeah
so that’s my opinion
yeah what i what i would tell you is
it’s something similar right so i i
i always got the company match
but here’s my wrinkle while i was
employed
i borrow against my 401k every year
that’s my wrinkle i used my 401k as a
cheap down payment loan every year so
when i borrowed now again check your
plan and check your employer and blah
blah blah
my employer allowed me to to get um
it’s to select the payment payback
period so i always chose one year so i
bought one house a year for nine
ten years
as my 401k was the down payment
and then when i left
let’s just say i don’t have an ira
you can you can extrapolate what i did
with that money i don’t have a 401k
because again i’ve already i chose to be
done at 45 not 65.
right
so
great way to not make it your opinion
that retirement accounts suck which is
what i say yeah i didn’t say that i just
told you what i did
as much as i as much as i say that i
still contribute for the match i can do
the math that technically it’s 100
people call it free money and here’s my
wrinkle with that
if you have two companies to choose from
one offers a 401k and one does not check
what the wage is because the employer
had x amount of dollars to invest in
employees and my experience running a
nonprofit with a little over 1200
employers that recruit from us the ones
who offer a retirement match
pay less hourly
yes math it’s just math just mad well
dion how can people find you and get
this great conversations
right here on youtube deon talk
financial freedom my live streams are
tuesday afternoons 4 p.m uh
yep and just so you know this video
comes out at three o’clock today