Today, I want to share with you why it doesn’t matter how much you make, but that it matters how much you save.  I could make $1 million dollars in a year, but at the end of the year, if I’ve spent it all, it doesn’t matter. It matters so much more how much you save, and I’m sure you will be convinced by the end of this post.

Saver Sally vs. Spender Sam

I want to share with you a story. I have 2 friends, Saver Sally, and Spender Sam.

Saver Sally makes $60,000 a year at her corporate job. She has a husband and a family, lives in a nice neighborhood, and drives a dependable car. She saves $10,000 a year in her retirement accounts.

Spender Sam makes $150,000 a year through his entrepreneurial efforts. He’s single and loves going to the bar to show off his most recent Rolex. Driving his new BMW to work, and hitting the clubs each weekend, he believes he will be able to save once he cashes out of his equity holdings, and only puts $1,000 a year towards his retirement.

Who is Wealthier: Saver Sally or Spender Sam?

If you saw Sally and Sam at the same time, you’d guess Sam was the wealthier one. With a nice car and great taste in the way he dresses, he has to be the wealthier one… right?

WRONG.

After one year, Sally has $9,000 more than Sam. But, Sam has a nice Rolex and a sweet BMW!

Yes, that is true, but does it really matter? With $150,000 in income, that’s great, and I’m sure he is having a lot of fun. What happens if his business goes belly up? That BMW won’t feel as nice to ride in without his paychecks rolling in!

The Power of Compounding

“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” – Albert Einstein

Compound interest is an multiplier of wealth. Let’s see the impact if Sally keeps saving $10,000 a year, and Sam saves only $1,000 a year. In 30 years, the results are shocking. Sally will be nearly $900,000 richer than Sam. Take a look at the calculations below:

Still not convinced? Who do you think is wealthier now?

Practicing What I Preach – How I Saved 48% of My Income in 2017

I track every dollar I earn and spend. Last year, I made just over $107,000, I saved roughly $51,000, I spent about 33,000 and paid roughly 23,000 in taxes.

While my taxes will be adjusted up a little bit because of my withholding’s on my W2, I can safely say my pre-tax savings rate was roughly 61% and post-tax savings rate was roughly 48%.

Of the $51,000 saved, I was able to put $36,000 of that towards retirement and various other investments (business and taxable account). $18,000 of that went towards paying down various debts of mine (my mortgage). I had a decrease of cash by $3,000 throughout the year.

Breaking Down My Savings into 3 Buckets: Cash Savings, Debt Reduction and Investments

I consider there to be 3 ways to save: reducing my debt, putting money into a checking or savings account, and investing in my retirement accounts, investing in my taxable account, and my business.

Last year, I reduced my mortgage by a little nearly $18,000. This was above and beyond the roughly $6,000 I would have eliminated through the monthly principal pay down. Last February, I thought it would be a great idea to pay an extra $25,000 of my mortgage and get rid of PMI. After starting a business, and putting my money to work elsewhere, I’ve put this goal to the side. I have a 2.625% interest rate, and while $144 in private mortgage insurance adds up, I’m still about $13,000 shy of getting rid of private mortgage insurance. We will see if I get rid of it this year.

Putting Money to Work For the Future

Last year, I ended up putting about $36,000 to work for the future through my investments in my retirement, business, and taxable account.

I ended up doing my Roth IRA contributions in full, and as well as contributing a decent amount to my 401k.

With overall savings of nearly 50% of my income, I’m very pleased with my performance. Obviously, this can be improved, and I’m going to look to save at least 40% of my income in this year. I’ve already maxed out my Roth IRA for this year, and will be looking to max out my 401k. We will see if I can get there!

My Tips for You to Increase Your Savings

There are 3 tips I have for you to increase your savings:

1. Look at your expenses and identify any areas of weakness you could work on
   • Tracking your income and expenses is the first step to financial success. Even finding savings of $10 a day can add up over time. $10 a day is $3,650 a year. $3,650 a year for 30 years at 7% compounded is over $300,000!
2. If you are employed, set up your retirement account and increase your contribution
   • At the end of last year, I was saving roughly 6% of my pre-tax income in my 401k. Bumping it up to 20% only resulted in a decrease of cash to me of $300. I was able to up my investment amount by over $500, while only losing out on $300 in cash, for a net gain of $200 in the long run (ignoring taxes in 34 years).
   • Try bumping your contribution up by 1%. I know you can do it.
3. Look for Unique Ways to Save Money Every Day
   • There are many different ways you can save money just by being opportunistic or doing something yourself. For example, if you are planning a birthday party, there are many ways you could save money. One possibility is filling helium balloons yourself. If you have a lot of balloons, you could save a decent amount of money.
   • Just by considering different options, you could save a bunch of money!
4. Destroy Your Debt!
   • Debt is typically the biggest deterrent of saving cold hard cash. That being said, I consider debt reduction to be savings, even if it’s technically paying back your lenders for previous purchases.
   • Use your identified savings from step 1 to up your debt payment over time.

Two final resources would be to read my article for other ideas, 9 Ways to Save Thousands Each Year. There are so many ways to save money. Hopefully this article provides you some ideas to implement in your life.

It Doesn’t Matter How Much You Make, It Matters How Much You Save

At the end of the day, end of the year, the true winners are the savers, not the spenders.

I hope this article has inspired you to save more. It’s very possible to improve your financial situation through income creation, but also expense reduction and paying down debt.

It doesn’t matter how much you make. It matters how much you save.

Readers: how much were you able to save last year? Do you have any savings goals? Do you have any super saving tips?

Erik

Reading books about personal finance is a great way to learn more about how to improve your financial situation.

I love reading and furthering my understanding of the world.

In the first 6 months of 2017, I read 29 books. By the end of 2017, I had read over forty.

I’ve talked about personal finance podcasts, videos, and personal finance blogs to consume to further your understanding, but really, there’s nothing like a good book.

Today, I present to you 12 personal finance books to read to further your financial education.

12 Personal Finance Books to Read

There are so many great personal finance books to read out there. I’ve picked 12 which I believe are superb, very informative, and helpful:

1. The Simple Path to Wealth

2. Think and Grow Rich

3. The Millionaire Next Door

4. The Richest Man in Babylon

5. Rich Dad, Poor Dad

6. Your Money or Your Life

7. How to Think About Money

8. The Bogleheads’ Guide to Investing

9. The Automatic Millionaire

10. Money: Master the Game

11. How to Win Friends and Influence People

12. The Slight Edge

I’ve provided a brief summary of each of these below:

Personal Finance Books The Mastermind Within Community Members Are Reading

One of the great things about having readers is being able to ask them about their strategies for financial success.  A number of people contributed to the question of which personal finance books they are reading to further their financial education.

Grant, a blogger and friend of mine likes The Millionaire Next Door!

My favorite personal finance book is a little outdated, but ‘The Millionaire Next Door‘ was very eye opening. I also liked ‘The Science of Getting Rich‘.

Dom, a blogger from Gen Y Finance Guy, loves The Slight Edge:

The Slight Edge. It really covers personal finance and overall personal development all in one.

I completely agree with you Dom!  ‘The Slight Edge’ had the biggest impact on me of any book I read this year. Thank you for contributing!

Conclusion

Learning personal finance early in life will alter your perspective forever. The book recommendations above will get you to your financial goals and beyond.

Whether you’re looking to learn about investing, or want to understand the philosophical properties of money, there’s a book in this list for you.

You could experience financial success beyond your wildest dreams! Being financially free is a great feeling, will you get there?

There’s a wealth of information that can be provided through video.To give us a little break on the reading, I scoured the internet for eight great, silly, informative, amazing, and cheery personal finance related videos for your enjoyment.

Grab some popcorn, a refreshing beverage and sit back and relax! Hopefully you learn something! 🙂

8 Great Personal Finance Videos

Below are 8 silly and fun personal finance videos for you to watch. I’ve included a short summary of each in addition to embedding the YouTube video into the page.

A Day in the Life of a Financial Advisor

I can only imagine being a financial advisor full time. People are irrational and don’t always think critically about their situation. I know I don’t always take a step back to think about what I’m saying some times.

The following video is pretty funny and is a meeting between a 45 year old person who wants to retire in five years, has $100,000 in savings, hates fees, wants to invest in gold, but doesn’t want to listen to the financial advisor.

I laughed quite a bit watching this one!

The 12 Days of FI Christmas

On the 1st day of FI Christmas, my true love gave to me!  An awesome music video for you and me!

My friend, I Dream of FIRE, came out with this music video just last week, and let’s just say, it’s amazing.

Combining Legos with anything is a great combination – but to then add personal finance, financial independence, and Christmas to the mix, and you definitely have a winner.

Santa Baby for Money Savers

“Santa Baby, please max out my four oh one K, all the way!”

Another great video that combines money and Christmas! My friends from Northern Expenditures have put a spin on Santa Baby.

If you’re a personal finance nerd like me, please give this a listen – I know you’ll love it.

As a bonus, this couple came out with another video this year! Here it is: Don’t Have to be Old to Retire

Everything You Need to Know About Finance – Presented by William Ackman

Do you want to be an investor in the stock market or in businesses? If so, it’s a requirement to understand the in’s and out’s of finance – particularly, the income statement and balance sheet.

In the following video, William Ackman, CEO of Perishing Square, breaks down everything you need to know about finance – going through an example of starting a lemonade stand business.

Regardless of what you think of hedge fund CEOs, this video has a ton of information, and helped me understand how businesses are valued and how finances are calculated and viewed to investors and business owners.

How the Economic Machine Works – Presented by Ray Dalio

Why does the economy experience booms and busts? Why do events like 2008 happen, when a credit bubble forms, and subsequently pops?  What are the main inputs to the economic environment?

Ray Dalio, Chief Investment Officer of Bridgewater Associates, answers all of these questions and more in his video, How the Economic Machine Works. Combining this video with the previous video by William Ackman will instantly make you smarter than 90% of the population when it comes to personal finance, economics, and the world.

Personal Finance Basics – Presented by Ramit Sethi

Building a solid personal finance foundation is essential to financial success.

Getting the basics from a personal finance expert will only add to your knowledge of the space – and will make you that much more potent as a budgeter, saver, debt destroyer and investor.

7 Simple Steps to Financial Freedom – Presented by Tony Robbins

We previously featured Tony Robbins in our post on the seven steps to financial freedom.

I included this video because I love the way Tony Robbins inspires me to be a better person with his anecdotes and way with words.

Watch the following video for inspiration and motivation, but also for his message.

Calculating Numbers on a Rental Property – Presented by Brandon Turner

For all you real estate enthusiasts out there, here’s a great video from Brandon Turner over at Bigger Pockets that you can add to your personal finance toolbox.

Many people, including myself, are interested in rental properties. I think real estate is an amazing way to build wealth through the appreciation, cash flow and tax benefits the investment class provides.

However, when buying a new rental property, it’s important to run the numbers to make sure it’s a good investment. Without further ado, I’ll let an expert show you how to calculate the numbers on a new rental property:

Conclusion

I hope these eight personal finance videos have been helpful! After watching these videos, I know I feel a little happier, but also ready to tackle my finances.

There’s so much to learn in the world, and it’s great to combine the information with some jokes. I like to keep things light here at The Mastermind Within – pure information is boring. Spicing it up is the way to go!

I hope you enjoyed these eight personal finance videos – maybe you’ll learn something new! 🙂

Personal finance is just that, personal.

Personal finance is not about what your friends are doing with their money, what your parents are doing with their money, or what some celebrity is doing with their money.

Personal finance is the science and application of how you earn, spend, save, track, invest, and build your wealth over time. It’s personal – taking control of your finances is totally on you.

Personal Finance is Personal

When thinking about personal finance, thousands of questions can come up:

• How much should I save?
• How much should I invest?
• What should I be investing in?
• What companies or assets could give me the best return on my investments?
• What banks or credit cards should I be using?
• Who can I turn to for advice with my finances?

Before asking any of these questions, we should first turn inwards and realize it’s crucial to realize that personal finance is personal. We must first ask ourselves the right questions and figure out what our goals are.

Some questions to get started are below:

What kind of lifestyle do you want to live? What do you love to do? Do you want to travel around the world? What about spending more time with your family? Do you want to spend Minnesota winters in Florida? Do you want to go to the Super Bowl? Would you want to eat out every week? Do you want to start your own business? What about retiring at 45, 55, or 65? Do you want to pay for your children’s college?

The most crucial question you need to ask, and one that will have the greatest effect on your finances, is:

What is your relationship to money?

Once you’ve figured out where you want to go in life, and what lifestyle you want to live, then you can start crafting a plan, and finally start building the life of your dreams.

Crafting a Personal Finance Plan

It’s so simple, and yet, so many people don’t actually put in the time to first ask themselves the necessary questions and then put their plan into action through tracking your financial progress each month – be that through budgeting, saving X% a month, or paying down debts for the future. Again, it’s all up to you on how to put your plan into action.

Writing out your goal as a SMART goal can help in this situation:

SMART = Specific, Measurable, Attainable, Realistic, and Time Frame.

Specific:  What dollar amount is attached to your goal?

Measurable:  Can you measure your goal in some way?

Attainable:  Is the goal possible, like, “I’m going to get one new client a month for my side hustle”?

Realistic:  Is it realistic?  For example, we know I’m not going to make 1 billion dollars next year.

Time Frame:  Can you accomplish it in the next X months, years, etc.?

Write your goal down, work backwards from your goals, and create a plan.

Make a list: what is the smallest actionable item you can do today to get you going towards your financial goal?

By doing these 3 things, asking yourself the right questions, figuring out your wants and needs, and making a plan to reach your goal, you will be better off financially than before.

You will understand what your personal needs are financially, and can make adjustments over time to better align your actions with your goals.

My Money Story

When I was a young boy, I was exposed to personal finance through my parents and my grandparents. My mom showed me how to balance a checkbook, budget, and how making a list for the grocery store can save money.

During the summertime, I’d visit my grandparents, where my grandma would give me $12 for the week to spend on whatever I wanted. She would make sure I understood that the $12 was all I got – if I spent the $12, I wouldn’t get any more.

From a young age, I understood the value of saving and building wealth for the future. Going into high school and college, I realized the power of saving over time, but now I needed to focus on building my income.

In high school, I was working as a lawn mower and trimmer for a local business, and refereeing basketball on the weekends. I was getting paid $9/hour cutting lawn, and $15 per basketball game.

I was using all of my earnings to go towards paying for college and not saving too much. Luckily for me, my parents had helped save up a little bit for my college education and I was able to get through my undergrad degree debt free.

Increasing my Income through Higher Education

During my senior year of college, my father’s company needed some help in the accounting department. For $12 an hour, I was offered to help out with bookkeeping, invoicing, and payroll. In the Fall, I would be pursuing a Master’s of Financial Math, and wouldn’t be looking for a job in the meantime, so I took the offer and started work.

In 2.5 years of working in the hotel management industry, I increased my pay to $16 an hour, and was able to leave my Master’s program with just $8,000 in student loans.

Before graduating with my Master’s degree, I took a job in the risk management department of a regional bank, which paid $63,000 a year, plus an 8% bonus.

In 5 years, I went from making $5,000 a year, to $20,000 a year, to $63,000 a year.

Building Wealth through Real Estate and Growing my Income

After graduation, I aggressively paid down my student debt, and started house hacking as a way to continue to build wealth.
In the summer of 2015, I bought a 3 bedroom house and had 3 roommates paying me $1,650 total a month. With a mortgage of $1,820, I effectively paid $170 in “rent” and banked the equity.

In the past 2.5 years, I’ve received more than $39,000 in rental income! This has helped me grow my income to nearly $100,000 a year.

While all of this was happening, I bought a used 2014 VW Jetta for $13,000, and promptly paid off the auto loan I took out.
In addition, I was proving my worth at work and in the past 3 years of working, I’ve increased my salary from $63,000 to $88,000.
Finally, I’ve been starting to hustle more on the side to increase my income. I’m blogging, performing statistical analysis and consulting for doctors, and doing various things as a small business owner.

Now, I’ve positioned myself in a great spot to pursue my goals.

My Goal and How I’m Applying the #1 Rule of Personal Finance

My goal is to build wealth for my future self, my future family, and to learn and grow over time in order to impact the lives of others.

For me, I’m looking to increase my income. I track my expenses each month, and identify where I’m succeeding and where I’m failing, but for me, increased income will help me save more and invest more. This will be much more impactful than reducing expenses each month.

I save about 35% of my income a month. I spend a little more than I should on housing, and eat out a little bit more than I should, but personal finance is personal. Yes, I could save 45-50% a month, but that would force me to adjust my lifestyle to move houses (potentially leaving a good commute situation), or start bulk cooking and packing lunches for work. In both cases, I’d only be saving a few hundred bucks more a month.

Through my hustle, I can add a couple hundred bucks a month in income much easier than cutting my expenses.

This is in line with my goals as well: increasing my income can help me increase my wealth. I’m adding many skills to my toolbox and learning a tremendous amount. These skills will translate into my ability to provide value to future employers and business partners. This value will be compensated for in a higher income in the future.

I know my goal, and I’m living it. I’ve identified my goals, and I hope this will inspire you to do the same.

My goal is to build wealth for my future self, my future family, and learn and grow over time to be able to impact the lives of others.

Other Potential #1 Rules of Personal Finance

When I was thinking about the number one rule for personal finance, there were a number of things that popped up in my head:

• Live within your means
  • “Living within your means” means spending less than you make. If you never spend more than you make, you will never be in a situation where you are strapped for cash. Over time, your nest egg will increase, since you’ve had a net positive cash flow throughout your life.
• Save X% a Month
  • Saving X% a month is similar to living within your means, but it puts a mathematical spin on the situation. If you are saving a certain percentage of your income a month, theoretically, you are living within your means. You aren’t spending more than you are making if you are saving.
• Track all of your income and expenses
  • This is my #2 rule and a piece that is overlooked in many areas of life. What gets measured gets managed. The simple act of pulling in your transactions and categorizing them into an organized fashion to identify weaknesses and strengths of your spending habits can lead to improvement.

Here’s the thing though: all of these can be summed up with the statement, “personal finance is personal”. Really, if you want to be someone who travels the world, then you will start to adjust your budget, live within your means, and track your expenses to optimize your money situation to be able to do that.

Start with the why, and go from there!

The #1 Rule of Personal Finance According to The Mastermind Within Community Members

What’s great about having readers and being involved in the personal finance community is I can ask for help in gathering what others believe is right for their situation. I asked others what their #1 rule of personal finance is.

Grant, a blogger from Life Prep Couple, said the following:

Find an important reason why. Once you have a why, then you will figure out how.

A succinct and powerful thought in alignment with personal finance is personal. Thanks, Grant, for your contribution!

Diego, a regular reader of The Mastermind Within, says:

What gets measured gets managed. It brings self-awareness, which is quintessential in personal finance. But a few other rules I follow are: don’t share numbers with anyone, don’t brag, don’t envy, stay focused, and celebrate all milestones.

I love it – what gets measured gets managed is so important! Thanks Diego.

Trail to FI, a blogger focused on Financial Independence, says:

Automate your savings. For example, setting up your IRA contribution to be withdrawn from your bank account each month is great as it removes one more thing to worry about. It also keeps you from seeing extra cash in your bank account that you might be tempted to spend on stuff you don’t need.

I completely agree with this advice as well. If you never actually see the money, because it’s automated away from you, you can’t spend it! Thanks Trail to FI for your contribution.

These few contributions prove personal finance is personal. Everyone has a different spin on what’s important to their situation!

Conclusion

By starting with why, and figuring out what you want to do in life, you will be able to improve your financial situation.

It’s so simple, and yet, so many people don’t actually put in the time to first ask themselves the right questions, and then following up by putting their plan into action – whether that’s through budgeting, saving X% a month, or paying down debts for the future.

After reading this, I’d like you to assess where you are at financially. What is your dream? What kind of lifestyle do you want to live each and every day? Are your financial habits and actions in alignment with your goals?

Once you are done with this assessment, then you can make adjustments and changes to get you going towards your goals and dreams.

Today, I have a guest post from a special friend: The Grounded Engineer. The Grounded Engineer has been on the financial independence path for a few years now and has amassed a solid portfolio before 30 years old. In this post, he is going to share with us how furthering his education has affected his income, savings rate, and investment portfolio for the future.

Thanks, Erik for having me on to guest post today. I tailored my post based on the inspiration I get from reading your blog. I’m thoroughly impressed with what you’ve been able to accomplish at such a young age. Specifically, increasing your income close to 6 figures, purchasing a rental property right out of college and making a nice income from it, and watching how you set goals and tackle the goals you set are awesome feats.

As a fellow math/engineering nerd that has about 5 years on you, I want to discuss my journey for increasing my income and how a high savings rate coupled with a high income is an ideal recipe for achieving financial independence.

The role of education on income

I’ve experienced a strong correlation between my education and my income. Let me walk you through myjourney of how I ended up in my current position as a Technical Sales Engineer.

I started working at age 12 or 13 picking strawberries. I got paid by the pound of strawberries picked and because I’m a naturally competitive person, I did quite well.

Also, getting paid was great.

Picking strawberries in Wisconsin is a seasonal job. After strawberry season, I had to go out and find a full-time job. I landed a job at a catering company as a jack of all trades. I washed dishes, served food, and mowed lawn – I did pretty much anything that was asked of me. My starting pay was a whopping $5.15/hour until I turned 18, when I got a raise up to $6/hour.

Now, at the time, I worked hard because that was how I was raised. I wasn’t trying to increase my income; honestly, I worked hard because I wanted to get more hours and with more hours, I would make more money. The thought of asking for a raise never crossed my mind. I held this job for about five years and eventually left after going off to college.

Entering college

As I finished up my senior year of high school, I contemplated becoming a math teacher or electrical engineer. I took an electronics class my last semester of high school and I really enjoyed it. Additionally, I found out that I was accepted into the Technology Institute (engineering school) at the University of Minnesota. This meant that I didn’t have to start in the College of Liberal Arts and apply for the Institute of Technology after my freshman year. This made the decision to pursue electrical engineering easy.

During college, I worked as an audio-visual technician during the school year because the job had a flexible schedule. There was also a lot of downtime, so I was able to work on my school work (or watch Lost). I made a little over $8/hour at this job. In the summers, I had a few different internships I worked while also working as an audio-visual technician.

For my first internship, I worked for a manufacturing company and increased my hourly rate by almost 30%. The following summer I only increased my hourly rate by a dollar, but I followed that up with another 30% increase at my last internship (making $16/hour). My last internship was technically a COOP position through the University of Minnesota. It was great because I not only was making money, but I received a total of 5 upper-class credits.

My first job

I graduated in 2010 and the job market was still pretty soft. I could have stayed on as an intern at the COOP position I had. But, I also received two job offers. One job was for an Electrical Engineering position at a company that makes hearing test equipment. The second job offer was a Sales Engineer position with a small manufacturer’s rep.

A manufacturer’s rep is a sales company that companies hire as their sales force in a given territory.

I really had no idea if I would be good at sales, but the job sounded exciting and the people were more upbeat than the hearing test equipment company. Also, the offer at the manufacturer’s rep was about $2k more in salary per year.

So, I took the Sales Engineer job! The salary was in the range as a normal engineering position, which at the time was in the $55k – $65k range.

In addition to a nice starting salary, the sales position had the upside for quarterly bonuses. Interestingly enough, a friend of my wife’s minored in Engineering Sales – a minor I never knew existed. Check out Iowa State’s program here.

The college education definitely paid off. I increased my salary almost 40% with my first post-college job.

Leaving my job in less than a year and then coming back!

I really enjoyed the Sales Engineer position. But I also enjoyed the company where I had my COOP position (even though they were not able to offer me a full-time job). After about 10 months working as a Sales Engineer, I received a call from my old boss at the COOP informing me they had a full-time engineer spot open and they wanted to know if I had interest.

This was a very difficult decision for me…

I decided to switch jobs because I wanted to try my hand as a real life, full-time Electrical Engineer. Now, I’m sure you’re thinking: typical Millennial. Switching jobs to increase your salary.

Well, I actually took a little bit of a pay cut switching jobs, which is not common.

I enjoyed my Electrical Engineering job, but I didn’t like the miniscule raise I received at my yearly review, even with high remarks in every area I was scored in. Right around the same time I had my yearly review, the manufacturer’s rep company had come back asking if I was happy and if I wanted to return to sales…

Those pesky student loans

One thing that I should mention is the significant amount of student debt I had after graduating college. I finished undergrad with my electrical engineering degree, very little money saved up, and roughly $65k in student debt.

I am proud to say that I did have a plan to pay down my student loans. Many of my friends strung out their payments over 30 years, meanwhile, I had a plan to pay off my debt in 10 years or less.

Getting back to the job decision – stay in a design engineering role or switching back into technical sales. It was almost two years that I had been out of college and aggressively paying down my student loans. By now, I realized that the more money I could make the more I could put toward my student debt.

I vividly remember going to a local coffee shop to meet my old boss from the manufacturer’s rep company and discussing pay. I recall fighting for a high salary because I knew if I worked hard the bonus part of the package could have significant upside.

By the end of the discussion, I was able to negotiate a sizeable salary increase and within a year and a half, I had increased my total income by almost 40%… for the second time in my career!

Graduate school

After being back at the manufacturer’s rep company for two years, I decided I wanted a more formal training on the business side of things. The typical path that most people in my shoes would take is to pursue an MBA.

Instead, I found a more technical program called Management of Technology. Basically, this is a fancy name for an MBA that is tailored for folks with an engineering background and are looking to couple the technical and business side of things together. This program was great and it positioned me to move into Sales Management in the last year and a half.

Additionally, I’ve been included in more strategic discussions about how to position my company for the future. And I’ve been included in the discussions for the future leadership of my company.

I started school about three years ago and I graduated last May (2016). During this time, my income has increased almost 30%. I’ll let you run the numbers to get a rough estimate of where that puts me 🙂

How I eclipsed $100k in my 401(k) before age 30

If you are pursuing financial independence, you know that you need to save your money. The best way to save you money is to not spend it on useless things. You can really crush your pursuit of FI if you combine saving money with a high income.

Don’t follow the norm of saving 10% of your income. Break out of what is considered normal and start saving a significant amount of your income. If you are in debt, develop a plan to eliminate your debt so that you can start to save more. Create a debt snowball or avalanche plan. Once you eliminate your debt, take what you were paying each month for debt and start to save.

Trust me, your nest egg will start to grow and it will grow quickly.

In December of 2015, I was introduced to the FI community by Scott Alan Turner. I followed the debt snowball method and I paid off $97k of debt (student and car loans). Once the debt was paid off, my family took that debt snowball payment and applied it to savings/investments each month.

The results:

• I was able to eclipse the $100,000 mark in my 401(k) shortly after I turned 29, and I didn’t really start saving until I was 24…
• My family’s only debt is our mortgage
• Once our debt was eliminated in 2016, we increased our savings rate to over 40% in 2017.
• In December of 2015, my net worth was around $34k. Today, it is over $250k in investable assets, not including $90k in home equity. That is over $200k upside in less than 2 years.

I turn 30 in a couple weeks. My family is on track to achieve FI in our late thirties and we are still discussing what our plans will be when that day comes. I really like the idea of giving back and going into teaching. Teaching allows me to continue to earn an income, save, let my investments keep growing, and taking the summers off to spend with my family.

So readers, did pursuing a higher education degree help increase your income?

Thanks again, Erik for letting me write this guest post for your audience. You can check me out on Twitter, Facebook, and over at my blog The Grounded Engineer.

Ahh, to win the lottery – what an experience that must be.

Not everyone is able to win the lottery, but at some point in our life, we will probably come into a large sum of money: a stock you picked goes wild, a family member who was smart with their money passes away unexpectedly, or maybe you just found $20 on the ground!

What would you do with that money? Would you save it? Invest it? Spend it? In this post, I want to present you with a windfall experiment: what would you do with $5,000,000?

First, I want to talk a little bit about windfalls in general, and second, I want to work our way up to $5,000,000 by first answering the questions: what would you do with $5, $20, $500, $2,000, $50,000, $200,000, and finally, $5,000,000.

What is a Windfall?

As defined in the Merriam-Webster dictionary:

Windfall: an unexpected, unearned, or sudden gain or advantage

For me, I define a windfall as any sum of money that I come into where I didn’t work for it and is unexpected. A windfall is something that I did not budget for and now am reaping the benefits of. Some examples include: finding a $20 bill on the ground, receiving a bonus at work, getting unexpected consulting work, etc.

What Most People Will Do with a Windfall

We have all heard the stories of how professional athletes have gone broke (see here) and how lottery winners aren’t much happier than before they won, and also go broke (see here and here). Most people’s natural tendency is to spend! You just got multiple thousands and millions of dollars? Why not spend it all:

BOTTLE SERVICE AT THE CLUB, LET’S GO!

A new car? Why not 3 new cars and a boat??

Sure, that house on the hill looks really nice!

If a person wants to keep up with the Jones’, then by all means, spend your money, but as someone focused on financial freedom, I’m going to take a different approach.

The Windfall Experiment: What Would You Do with $5,000,000?

The moment we have all been waiting for… The Windfall Experiment!!

Please follow along with me and answer the following questions. First, a few warm-ups:

What Would I Do with $5?

I find $5 on the ground. I put it in my wallet and save it for coffee or a drink later in the week. It’s not going to burn a hole in my pocket, but I will use it for a small expense later in the week that I already would have purchased. The key point here, is that I would use it on something that I already was planning on buying, not something that I didn’t plan to buy.

What Would I Do with $20?

I find $20 on the ground. I put it in my wallet and save it for lunch or coffee later in the week. It’s not going to burn a hole in my pocket. Similar to the $5 windfall, I’m not going to go and spend it right away.

Enough with the warm-ups, now let’s take a step up:

What Would I Do with $500?

Just this July, one of my friends from college stayed in the extra room in my house for $500. It didn’t change my spending or saving habits. I just kept on with normal life and put the $500 into my checking account for the mortgage payment.

What Would I Do with $2,000?

Now, we are getting a little higher..

With $2,000, I’d look at my debt situation and assess whether or not I should pay off some of my mortgage or any outstanding credit card balance. This August, I received a property tax refund for $1,417… again, I just put it into my checking account and used it for everyday expenses and my mortgage payment at the end of the month.

What Would I Do with $50,000?

$50k? Now I can actually do some damage!

With $5,000, I’d max out my Roth IRA. With $10,000, I’d prepay my mortgage to get rid of PMI. With the remaining $35,000, I’d have to figure out where I’m living, because I could do some serious home improvements with that money. Otherwise, I’d keep it in savings and look to wisely allocate some of it to taxable accounts or keep it for a future down payment.

What Would I Do with $200,000?

With $200,000, I’d do similar things with the $50,000 but could make a serious dent on debt and retirement accounts. $200,000 isn’t quite enough to retire on, but it would be a good start.

With $5,000, I’d still max out my Roth IRA. With $10,000, I’d prepay my mortgage to get rid of PMI. With the remaining $185,000, I’d still want to assess where I’m living. If I want to stay in my current house OR believe that it is a valuable use of my capital for a rental property, then I’d use some of the money for debt paydown and some of it for home improvements. My mortgage balance is roughly $250,000, so with $185,000, I could definitely make a dent and get close to becoming debt free.

At the same time, $185,000 is a lot of money for some parts of the United States. In some areas in the Midwest, I could buy 3-5 properties with 20-25% down and have positive cash flow. This is something I would have to consider.

Now… the moment you’ve all been waiting for:

What Would I Do with $5,000,000?

This is an interesting one. Enough with the small stuff – 401ks and IRAs? I don’t even qualify for you – I’m BIG TIME NOW BABY!!

With $5,000,000, I’d definitely leave my day job and probably stop any small scale entrepreneurial endeavors (except The Mastermind Within, because I love writing 🙂 )

With $2,000,000, I would look to buy Commercial Real Estate in vibrant communities, specifically, multi purpose buildings (think business space on the bottom floor, and apartments up top). Commercial real estate has all the tax benefits of residential real estate, but also can charge much higher rents, and is a benefactor of economies of scale since multiple units are under 1 roof.

I would put $500,000 into broad stock market index funds, $750,000 into dividend paying stocks for dividend income, and another $1,000,000 into various fixed income instruments for increased interest income.

With the remaining $750,000, I’d use $500,000 to buy precious metals (silver and gold) and then use the rest of the money to move to an energy efficient house that is to my liking. I don’t know if I want to live in my current house forever… with $250,000+, I definitely could find a great place to live!

Takeaways from the Windfall Experiment

I’m a natural saver and would hope that if I received $5,000,000, I would take steps to secure my financial future. Commercial real estate, done right, is a fantastic investment – buying apartment or multi purpose buildings in vibrant areas would help me grow my cash through income and appreciation (not to mention the tax benefits!)

Another thought is diversifying your investments is a lot easier when you have millions (vs. thousands). Throw a couple hundred thousand in a few buckets and you will probably be able to stay wealthy!

Some spending would be necessary as well. Traveling is something I want to continue to do more of. Lately, I’ve been driving all over the Midwest to see friends and family, and I even went to Las Vegas for the first time earlier this summer! As mentioned, I’m going to FinCon this October, and also going to California with my parents and sisters. Exciting times!

5 Steps for Managing A Windfall

Here are 5 steps for managing a Windfall:

1. Take a Step Back and Assess the Situation
   • What are your goals? Do you have debt that could be paid off? Do you want to make some investment contributions first?
2. Make a Plan
   • Figure out your financial needs.
   • Assign priorities to your needs and devise a detailed plan to allocating your new cash
3. Take Action on Your Plan
   • Ideas and plans are only worthwhile if you take action.
4. Track your Expenses and Distributions
   • My number 1 tip for personal finance is to track your income and expenses – it’s even more crucial to do so when you haven’t budgeted for unexpected income.
5. Go Back to Living a Normal Life
   • A windfall is just that, a windfall. Yes, it’s possible with enough money and planning, you could retire early or make massive lifestyle changes, but for most windfalls, they aren’t going to tip the scales. Go back to living within your means and be thankful for the fortunate event.

Conclusion

When getting a bunch of cash, so quickly, the best thing to do is take a deep breathe and assess your current situation. What are your financial and non-financial goals? What are your needs, not wants that should be addressed first? After addressing your goals, then take action to save, invest, and if you must, save a little bit on yourself 🙂

Readers: what are your results from the windfall experiment? What would you do with $5, $20, $500, $2,000, $50,000, $2,000,000 and $5,000,000? Have you ever received a windfall before and what did you do with it?

Erik

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Hey readers. Today, I’m excited to welcome Patty Moore, a Blogger at WorkingMotherLife.com. Patty mostly writes about her experience as a nurse and life as a single parent. Today, she shares with us 5 tips to maintain a work-life balance for busy, busy people!

Raise your hand if the last time you painted your fingernails was three weeks ago during that spare moment between waking up and doing morning chores before going to the grocery store. If you’re raising your hand right now, you should know that you’re not alone. It can be stressful to try to juggle a full time career, kids and a family, finances, and also try to make a little time for yourself somewhere so you don’t completely pull your hair out every night.

It may seem totally impossible to do everything you need to do, especially if you have kids, you can do it. Let’s look at some tips for maintaining a good work-life balance.

5 Tips to Maintain a Work-Life Balance for Busy, Busy People

Below are the 5 tips to maintain a work-life balance for busy, busy people like yourself!

1. Pencil in time for yourself.

This is the most important: that’s why I’m putting it first. You have to make time for yourself. You have to put your own life vest on before you start helping everyone else. And the best way to do that is to just schedule yourself in like everyone else. For example, from nine to nine thirty, it’s your time to take a nice bath and relax. Once it’s penciled into your schedule, you won’t feel guilty about taking that time for yourself because you’ve already balanced your self care with your career, finances, and family.

2. Make (and use) a planner.

I’m sure everyone says that, but if you’re a person that feels easily overwhelmed and like you can’t manage everything, you absolutely need to use a day planner. A planner allows you to organize everything going on in your life so you don’t forget things or feel like you’re forgetting things (even if you’re not). Some people do very well with a running list of items to get done, and other people do much better with a planner where you can map out every hour of the day. Regardless of the style of planner you like, a planner can be incredibly beneficial for keeping your life organized.

3. Pay your bills first and live below your means.

The best way to manage your money is to pay your bills first and track your spending so that you know where all your money is going. As soon as those bills come in on the first of the month, pay them off as soon as you can. You save on late fees when you pay your bills on time. Then, once your bills are paid, you know what you have left. When spending, think about every transaction. Just because know you can afford something, doesn’t mean you have to have it. Make and follow a strict budget. Using an budget and expense tracker can keep you accountable and realistic.

4. Rethink your errands.

If you’re going to the grocery store and spending an hour getting groceries and still forgetting half the stuff you need, you’re doing it the old fashioned way. Did you know you can get groceries delivered? Or curbside pick up? You can make your list, send it to your favorite grocery store, and then within a couple of hours you can pick up your groceries or even have them delivered right to you. For non-grocery related errands, there are courier services that will pick up and deliver all sorts of items if you’re in a pinch. Don’t waste your time running all over town when you can get a service to help.

5. Learn how to say “no” at work.

This is a hard one, but it’s true. You need to learn how to say “no” to things. To have a good work-life balance, you can’t let your work take over your life. This means you’re going to have to learn how to stand up and say no when the project is going to take too long or be too stressful. I know (as women), we want to do it all, but the sad reality is that it’s impossible to do it all. And at the end of the day, life comes before work. So when it comes down to that extra project that the boss handed you on Friday evening and needs on Monday morning, say “No” and enjoy your weekend!

Conclusion

Even if your life is crazy and you have a lot to do every day of every week, it’s possible to keep yourself and your family on track. You can manage to get everything done and even save a little money if you stay organized and focused on taking care of yourself as well as everyone in your family. Work/life balance is just what it sounds like, and maintaining a balance between your career, finances, and family isn’t hard if you put in place some good habits.

Check out Patty’s wonderful writing at WorkingMotherLife.com. Patty mostly writes about her experience as a nurse and life as a single parent. You won’t want to miss her latest articles!

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I’m sick of being single. I’m sick of paying lots of taxes. Guess what, it’s 2017! I can do whatever I want with my life! It’s official: I’m looking for a wife to reduce taxes. Who needs love, it’s all about the MONEY, BABY!!!

Time to take action, in this post, I lay out my reasoning and give my dating preferences for prospective applicants 🙂

The Tax Code is in Favor of Married Couples

Personal finance bloggers always talk about the importance of fees in investing. I love index funds because the fees are super low (.1%! vs. 1% or 2% for actively managed funds.) Guess what is the biggest fee that people don’t always look to optimize? TAXES.

Yesterday, I was doing some light reading on Physician on Fire about Roth vs. Traditional IRA Contributions. (Maybe not the best way to start the article for attracting my future wife)

In Physician on Fire’s post, a table was included showing the tax rates for single and married couples. I knew about the difference in the past, but it never hit me like it did yesterday. Looking at the table below, married couples have a huge advantage from a tax perspective.

In 2017, I’m pushing the 28% bracket. Last year, I made $93k gross and my adjusted income was $77k. This year, I’m on pace to make roughly $110k and as a result, my adjusted income will come in around $95k. Looking at the chart above, it’s OBVIOUS I need to wife up. An extra 3% a year will introduce a lot of drag on my wealth.

This is ridiculous, I need to act now.

Looking for a Wife to Reduce Taxes!

Here’s my pitch to prospective applicants: I’m not asking too much here. I’m 24, healthy, motivated, and looking to help people – does that sound reasonable to you?

For my future wife, I’m looking for the following:

• A woman who understands the importance of living below your means.
• A woman who is willing to sacrifice today to live like a king and queen tomorrow.
• Someone who invests in themselves and is optimistic about the future.
• A woman who will support me in my crazy endeavors, such as buying houses or starting businesses.
• Someone who will help with house work (hey, gotta make the ask! this is my ideal wife we are talking about 🙂 )
• No job experience required. Student loans or other debt not required. No future job prospects required either. (The tax code is favored towards stay at home mom’s 😉 )

Conclusion

It’s possible my standards are too high. It’s also possible I’m just being silly and love is the way to go. Love makes the world go round… though love isn’t certain like death and taxes. Hm… I’ll continue thinking about the topic of getting a wife to reduce taxes!

Married readers, is my idea flawed? Should I wait for love? What have been some money successes you’ve had from getting married? Who would be your ideal partner for financial success?

Erik

This is a guest post by Buy, Hold Long. Buy, Hold Long is a blog where smaller and sometimes unusual dividend growth companies are analyzed. His blog was created in late 2016 and shares insights into different investing methods and the story of the author’s net worth over time. Check out Buy, Hold Long and say G’day!

Dividend Definitions

There are a number of publicly listed companies provide what is known as a dividend– a cash payment for being a shareholder of the company. Shares of a company can be bought and sold in different markets. Many people will focus on the appreciation of equities over time, but not today. Rather, we will focus on the dividends paid per year.

Many large companies past the growth stage will pay a dividend. They pay dividends because they don’t necessarily want to put their cash to work in new markets or products and would rather increase shareholder value.

When a company decides to pay a dividend at a certain time, they will nominate how much the dividend will be and when the payment will occur. The holders of these shares will receive that dividend in either a cash payment or in more shares, through a Dividend Reinvestment Plan (commonly known as DRP or DRIP). Most dividends are pay out on a quarterly basis.

Essentially, if you own shares in a company and the company issues dividends, you will receive a portion of profit from the company in the form of cash payments.

Now on to the analysis of dividend yield and dividend growth to determine which is best for long term investing.

Dividend Yield

Dividend yield can be considered as a stocks dividend payment divided by the stocks price. For example, if a company has a current stock price of $100 and pays you a yearly dividend of $2.25 per share, then the dividend yield is 2.25%. Note, dividend yield is a annual rate. As mentioned above, most dividends are paid out quarterly, so care will have to be taken when going from quarterly to annual. This is a simple calculation.  Below is the formula to use to calculate dividend yield:

Let’s do a real life example.  I want to analyze McDonald’s Corp Stock (MCD) to get their dividend yield. We know their last dividend payment per stock owned was $0.94 per quarter. To get the annual dividend payment, multiply $0.94 by 4. The current stock price as of today (March 27th, 2017) is $129.34.

Therefore, our calculation would be:

McDonald’s stock as pays us back 2.907% per year just for owning this stock. One thing that should be noted is that both the stock price and dividend can fluctuate. Not all companies increase their dividends and not all stock prices will go up.

Dividend Pop Quiz

Let’s take a pop quiz, the share price of McDonald’s falls to $115 per share from the current $129.34 per share, but the company decides to keep the current dividend of $0.94 per quarter per share. Does your dividend yield go up or down?

That’s right, it increases. As the price goes down and the dividend payment remains or increases, your yield goes up.

Comparing Companies

The next natural question is what is a good dividend yield? Is 2.907% good or bad for dividend yield? Let’s look at another company to compare. We already looked at McDonald’s (MCD); now let’s analyze Mattel Inc (MAT). Both are well known, respected companies in their field that pay dividends.
McDonald’s, as we have discovered, pay out a dividend yield of 2.907% per share owned. Currently, Mattel pays a dividend of $0.38 per quarter per share and their current share price is $25.16. Uusing the formula from above, we get a dividend yield currently of 6.04%.

So in reality, you would be getting double the cash payments from Mattel through dividends than you would be getting back from McDonald’s, right? While that statement is fundamentally true, the logic is flawed.

It’s important take into consideration dividend growth and the possibilities that they can create in themselves. Also, just because the company is paying a higher dividend, this doesn’t necessarily mean they are more financially sound than companies paying a lower dividend. The money could be borrowed, from a previous year’s cash holding or a company effort to attract more investors.

Let’s dive into dividend growth and see how it affects the analysis.

Dividend Growth

Dividend growth is the concept of a stock that pays a dividend that will continue to grow over time. When a company increases their dividend over time, with dividend growth, it increases your original dividend yield.

Let’s go back to the two companies we looked at earlier, McDonald’s (MCD) and Mattel (MAT). I’ve plotted the annual dividend payments over the past 17 years to show the dividend growth. The blue columns are MCD dividends and the red columns are MAT dividends.

In the year 2000, Mattel had a higher dividend payment and yield than that of McDonald’s. In 2003, the two companies had the same dividend payment. Now, we must remember that the prices of the two companies are vastly different, so while Mattel’s dividend was the same as McDonald’s dividend, Mattel’s yield was a lot higher as the price was lower.

As you can see, over time, Mattel’s dividend has fluctuated drastically.  This volatility leads to uncertainty for the shareholder. To add to that point, if you bought the stock in 2000 at a great dividend paying year, you would have been severely disappointed in the following couple years. Mattel cut their dividend in 2001 and 2002!

McDonald’s has continued to grow for many years since the 2000’s. Currently, the dividend yield might be a little low compared to other companies, but it’s growing each and every year.

What if You Had Bought in 2000?

Consider the following: what would your dividend yield today be if you bought in 2000? As I stated, if you bought MCD today you would have a 2.907% dividend yield and if you bought MAT today, you would have a 6.04% dividend yield.

Back to the question, if you bought in 2000, your dividend yield would be 28.5% dividend yield for MCD and only a 11.20% dividend yield for MAT. The conclusion is obvious, dividend growth is a powerful tool to harness in your investment portfolio!

Conclusion

As you can see from this analysis, dividend growth beats dividend yield when you are looking to invest for many years. I am a buy and hold for a very long time type of investor – this style fits my personality greatly.

Even if a stock has a relatively low yield, if there is potential for dividend growth, the potential will outweigh the temporary low yield. This is why so many investors favor low dividend yields with high growth over a volatile high yield with low growth.

Thanks for writing Buy, Hold Long! Buy, Hold Long is a blog where smaller and sometimes unusual dividend growth companies are analyzed. His blog was created in late 2016 and shares insights into different investing methods and the story of the author’s net worth over time. Check out Buy, Hold Long and say G’day!

A few of us took some interest in the freelancing site Fiverr this week without having a plan down to use it and after my previous post of cold calling and Whitelisting arbitrage. In this post, I we’re going to go down to its most minimal actionable level. Brace yourselves, because this entire post is spoon-feeding you exactly what you need to to make passive income via Fiverr Service Arbitrage -a fancy phrase to mean paying someone else to work for you over a cheap freelancer website.

I made a lot of mistakes in Fiverr, whitelisting, outsourcing, and purchasing freelancing work. You’ll learn from my mistakes so you can save a year long struggle of getting things right.

This post is split into four parts, each with their own segment. I ask that if you’ve gotten value from this post to say so below in the comments.

0. SCOPE OF THE WORK & REQUIREMENTS

Fiverr Service Arbitrage can be done can be completely hands off. Depending on your experience on WordPress and your hustle, it does not matter what your level of expertise is for this website builder. Depending on your skill set, you will be outsourcing work to developers for web design services which is completely scale-able. You can assemble a team of people who will spend a few hours to complete their part and profit the rest.

At the end of the day, you will be able to create a website with the core pages a basic site needs as you hand off the website to your client. Given everything you do is based off the work of an individual on Fiverr, charging $250 for the design will net you $200 in profit. If you offer a five-page website, the cost and revenue breakdown is as follows:

• Spend $5 a week for local Craigslist ads in an effort to get a payment of $250 to start the project.
• Next, you’ll spend 2-4 hours with the client collecting all the needed details for the site.
• You will earn $65 off a BlueHost affiliate purchase when you tell your client to purchase a domain and hosting via BlueHost.
• To Install WordPress, you can either use EasyEngine.io to rapidly start using it OR pay someone $20 to install WordPress and a good looking premium theme (2 hours of their time or 5 minutes via installing via EasyEngine.io)
• For $30, you pay someone to fill out the rest of the core pages that you negotiated for the basic website:
  • A home page
  • An about us page
  • A contact us page
  • A product/service page
  • A privacy policy page
    • Any additional pages you can up-sell for $50 per page while charging $5 or $10 for a 1k word article on a website.

At this point, you will have your client’s website completed and will have paid $50 in labor. At this point you deliver the website back to the client. Once you deliver, you need to be front and center explaining what the website has. At this point, the client is eager to get started. Explanation might take an hour and an hour of ‘support’ such as answering questions such as, “What’s my password again?” and “Where’s the Admin Page?”

That is the scope and high level summary of what the rest of the post will touch on. Now, on to the details!

1. COPYWRITING AND CRAIGSLIST

Copywriting is the art of marketing aimed towards creating a sale through the written word. It is also a numbers game. I welcome you to post this SAME ad and see where that gets you – you can also purchase a virtual assistant who can post twice every day to your Craigslist account but you will find the same level of success by offering this to your friends and family off Facebook.

Contact EVERY single person, and show them this ad. You could press urgency and say that you’re looking to get a client this week; otherwise, at the end of the week,  you would bump it up to $500. I’ve had cases where someone was told that, beat around the bush, and paid an extra $250 as a “hesitation tax”.

Get a SEO Optimized Website made for $250 right here in Minneapolis!

2. CONNECTING WITH THE CLIENT

Now, let’s say you actually got someone interested. It’s time to get them to agree to give you $250 of their hard earned money. This is a question-based methodology that helps cement your position as someone who can genuinely help them.

Here’s how the story goes. You get a trickle of inquiries once or twice a day if you’re really good or one a week if you’re only posting ads.

For each one you follow the following mindset: you establish yourself as a salesman and an expert before offering your solution and price. First, you need to establish credibility. To show you know the market, ask them STATUS questions where it’s a one word answer to qualify them and understand where they’re at.

Status Questions

Uncover Their Issues

After you ask those, they know that you have some level of competency. The next step is to build rapport while uncovering ISSUES. These are longer form questions where you want them to talk a bit more.