Wealth In Overdrive Podcast

Why We Finance Everything We Buy

February 14, 2022 Hari Luker Episode 2
Wealth In Overdrive Podcast
Why We Finance Everything We Buy
Show Notes Transcript

In episode #2 Hari talks about why we finance everything we buy. Find out why financing isn't just about using banks, and how it plays into the lost opportunity cost of your current and future wealth, and more! Tune in today!

Go To https://www.philbodine.com/401K to learn more about the concepts mentioned in today's episode.

Leave some feedback:

  • What should we talk about next? Please let us know in the comments below.
  • Did you enjoy this episode, If so, please leave us a short review.

Connect with us:


This material is for informational purposes only. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and Sowell Management’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.


Hey guys, Hari Luker here coming to you live from the wealthy overdrive podcast, I will be flying solo today, Phil is not with us, this is kind of more because this was more of a spontaneous decision. He's over on the West Coast three hours behind. I'm over here in the Midwest. And of course, at these times, it's uh, I just had a spontaneous decision to get on here. I wanted to actually go over something Phil had actually mentioned to me call this must have been years ago. And it's always in the back of my mind. And that concept is you finance everything you buy, which you probably seen the title this podcast right now. I just want to take the minutes just to go through this primarily that every time you make purchases, we're always financing something. I want to break that down in this podcast real quick, because you have to look at it. You know, what comes to mind when you read that statement? Or you hear me talk about that statement? Is you're probably thinking to yourself, no, I don't you know, possibly you recently just paid cash for your kitchen remodel or that new bedroom furniture set that you might have been eyeing on for some time did you make a choice to pay cash for your new car, or maybe it was a new washer and dryer set something or more the large the larger purchase anywhere from like 500 up to multiple 1000s of dollars. When it comes to self employed business owners, there's no doubt that they routinely pay cash for major capital purchases within their business. Regardless of your business or personal items you decide to be cash for you thought it was a wise decision. The bottom line is that if you paid cash, you made a choice to use your money instead of someone else's money you are borrowing to make your purchase. So paying cash for life's big ticket items to all interest and purposes is a wise financial choice. It's something we've been told by our grandparents or our father and our mother. You know, paying cash is the best way to do things. Well, you will hear us ask this question many times on this podcast. And that is if what you thought to be true about your money turned out not to be true. When would you want to hear about and I know that can leave you open to many different concepts. But the way you spend your money is equally important as the act of actually saving your money at the same time. Neither Wall Street nor the government wants an informed public when it comes to money. The best defense is an informed mind. If you're serious about your money, it's imperative that you are committed to self education and being aware of what is actually going on and understanding the current financial system, banking, economics, all that fun stuff. Well, fun, the sun will serve you and your business well in these less than economic times, of course at the making of this podcast in 2022. There's a lot going on. But you will want to seek out someone who is passionate about helping you learn these fundamental truths about how your money works. Hence why we created this wealth and overdrive podcast. Now. Have you noticed that you always give up something when you make choices in every financial decision, you sacrifice something to obtain something else that you consider more desirable. For example, you might forego current buying to invest funds for future purchases, or you might gain the use of an expensive item. Now, by making credit purchases from future earnings. You are constantly making choices among various financial decisions. So in making those choices, you must consider the time value of money the increase in an amount of money as a result of interest earned, saving or investing $1 Instead of spending it today results in a future amount greater than $1. So every time you spend, save, invest or borrow money, you should consider the time value of that money as an opportunity cost. The spending money from your savings means future lost interest earnings or lost opportunity costs. You'll hear us talk about lost opportunity cost in our company many times in future episodes from here, but failing to learn the lessons of lost opportunity costs and the value time of money is a serious impediment to growing your wealth. You finance everything you buy, you either earn interest or you give up the ability to earn interest. So if you give up $1 Today, it not only cost you that dollar, but what that dollar could have earned had you been able to keep it. So in order to avoid interest lost and its opportunity cost you must understand the rules. Do the financial institutions teach you the rules? No, absolutely not. And for until you understand the rules, you can end up losing hundreds of 1000s of dollars unknowingly and unnecessarily. It's not our job to play the game, but to teach you the rules. It's about the process, not a specific financial product. So we always go back to the old terms of if you had Tiger Woods in a set of clubs, would you rather Tiger Woods, his clubs to go out and play around at 18? Or would you rather his 30 years of knowledge and strategy and his swing to go out and play the game, so no matter how good his clubs are, ie the product, you always want his ability in his swing, ie the strategy. So the person that pays cash for them in for most everything is really what they cost as a borrower. They borrowed from themselves and then made payments back to themselves to get back to where they were before they made their purchase, thereby giving up the interest their money would have. And they reset the compounding interest, which was a devastating effect to their long term wealth accumulation. I know plenty of people that borrow from their own savings accounts, retirement accounts, to pay themselves back the money that they took out of their account. So how many people pay themselves back all the interest they lost? While the money was out of the account, everyone pays themselves back for what the cost is like the net value, but did they pay them back the lost opportunity value that was taken out of that account? By removing it? True wealth creators understand the principles of banking and economics. wealth creators understand the rules, they understand how to use other people's money to maximize the efficiency of their money. They know the power of accumulation, and increasing pool of money that provides them accessibility control and uninterrupted compounding, interest and growth. So what are we saying, basically, seek to put yourself in control of your money, you must maintain liquidity. In other words, keep it out of government sponsored plans like retirement accounts, 401, k's and so forth. Because once you give it up, you ain't getting it back without paying interest or a penalty. Use the control of your money all the while earning uninterrupted compounding interest. It really is this simple. It's the concept you just have to understand that you will not see in the mainstream media you will not see marketed by the financial entertainers. And you won't read it in every financial book that you see going out there, you are either going to operate and think like a bank, or you will be the consumer of the bank. When you truly understand the rules, you will only then begin to maximize the efficiency of your money today in the future and look further on fuel legacy itself. Remember, it's not your rate of return or where your money is that matters, but rather how your money works. So I know further on in these episodes, we're gonna start jumping into this and one of the next couple episodes we have coming up is the four rules of a financial institution. And as simple as it may seem, no matter how educated many people are, when they gets to sit down and watch our seminar when it comes to this concept, it always raises a couple of eyebrows to how obvious this is how they work, but how we've never sat back and really looked at that concept. So keep an eye out for that episode when we come out again, this is Harry Luca I love the fact you took the time to get through this webinar or this podcast with me here today. I welcome you again to visit us at the wealth and overdrive podcast. Please comment, share, subscribe, and pass this on to anyone that you know and love that you do believe will bring great value to their lives when they listen to this content. I love it so much you're here with us today will speak to shortly.