The Influential Advisor
Are you a financial advisor looking to stand out as an influential leader and attract the clients you truly want to serve? You’re in the right place. Each episode of The Influential Advisor Podcast explores the art of authoritative positioning—giving you actionable strategies to amplify your expertise, elevate your practice, and become the go-to authority in your market. Join Paul G McManus and industry insiders as they share proven tactics, inspiring success stories, and insider tips to help you lead with influence, build enduring trust, and take your advisory practice to the next level. If you’re ready to move beyond the noise, define your unique value, and grow your business on your own terms, this podcast is for you. Welcome to The Influential Advisor Podcast, where high-impact advisors learn to rise above the rest.
The Influential Advisor
085: Paycheck to Prosperity: The G4 Cashflow Model for Lasting Financial Freedom with Stephen V. Soderstrom
Episode Overview
Financial advisor Stephen Soderstrom reveals why high earners struggle with the paradox of "I make good money, where does it all go?" After watching countless successful professionals face this challenge, Stephen developed a radically simple system that requires no budgeting apps, no expense tracking, and no complicated spreadsheets. Learn how the G4 cash flow model can transform your financial life.
Guest Bio
Stephen Soderstrom is a financial advisor and author who started his career as a teacher before transitioning to finance after an epiphany while watching Oprah. With over 20 years of experience helping clients achieve financial freedom, Stephen developed the G4 cash flow model based on solving real problems in his own life and those of his clients. He believes in teaching money in simple, actionable ways that create lasting transformation.
Key Topics Discussed
The "Financial Cancer" Analogy (17:59)
- Why ignoring financial problems is like ignoring health symptoms
- The importance of early diagnosis and intervention
- How people choose to "change by choice" rather than "change by force"
The High Income Trap (22:32)
- Why making more money doesn't automatically solve financial problems
- The shocking math: A couple making $400,000 needs to save 10x more for retirement than a couple making $100,000
- How lifestyle inflation quietly erodes wealth-building potential
The G4 Cash Flow Model Explained (27:08)
- Capture every pay raise, bonus, and tax return automatically
- Set up a separate "Prosper" account for all income deposits
- Recreate a fixed paycheck to your regular checking account
- Create an "invisible wall" between saving and spending
The CEO Account System (32:35)
- Give every dollar a specific purpose before it hits your bank account
- Set up weekly transfers to a dedicated spending account
- Eliminate the need for budgeting apps or expense tracking
- Stop the "judge, jury, and executioner" dynamic in relationships
Pre-Solving Future Problems (41:53)
- Create specific savings accounts for known future expenses (car repairs, travel, holidays)
- Transform "emergencies" into planned expenses
- Why Christmas shouldn't be a financial surprise
The Happiness vs. Stress Bucket (54:22)
- Understanding the difference between "deserving" and "earning" luxury items
- How material purchases often create more stress than happiness
- Stephen's personal story of selling luxury cars to fund college education
Key Takeaways
- Automatic Success: Like a 401(k), the G4 system works because it's automatic and creates psychological distance from the money
- Weekly CEO Salary: Pay yourself a fixed amount every Tuesday (not Friday) to better control discretionary spending
- Both Partners Must Participate: Financial planning affects both people in a relationship - both need to be involved in the process
- Small Changes, Dramatic Results: Most people vastly underestimate how much their financial life can transform in just three years
Memorable Quotes
"Math is easy, life is hard. If we can get really good at the life side, the math will take care of itself."
"I can't care more about your success than you do. You must care first about your success."
"We're looking for people who want to reach their full potential - that's who we want to be part of their lives."
"Everybody has 100 problems
I have a question for you. Can you tell me exactly where last year's pay raise went? If you're like most successful professionals, that money vanished without a trace. Our guest today, author Steven Soderstrom, knows exactly why this happens and, more importantly, how to stop it. After watching countless high earners struggle with the same paradox of I make good money, where does it all go? Steven developed a radically simple system no budgeting apps, no expense tracking, no spreadsheets that make your eyes glaze over. Just one powerful concept give every dollar you earn a specific purpose before it ever hits your bank account. This single shift created what he calls the G4 cash flow model and is the focus of his new book. Hey, steven, how are you doing?
Speaker 2:I'm fantastic. Thanks, Paul.
Speaker 1:I've been really looking forward to today's interview. I met you, I want to say, about one year ago today at a conference, and since then you've started working with us to publish your book, which is what we'll get into today. I hired you to be my financial advisor.
Speaker 2:Yes.
Speaker 1:I also want to introduce my brother, gabe McManus, who was your book coach. You've, in the past year, have had a big impact on both Gabe and me. We've been really influenced by your ideas, which we'll get into in today's podcast, and so I thought it'd be fun to have Gabe join along, just so that we can recapture the magic of everything that you shared with us as we approached writing and publishing your book.
Speaker 3:Yeah, hey Steven, hey Paul, it's good to be with you guys again and on the podcast this will be fun. Yeah, as.
Speaker 2:I've shared. I'm excited to have Gabe here. He was a great partner in writing the book. I really admired his point of view, the questions that he had there were real questions that real people had and so it was super beneficial. I think I was with him for a reason and I really valued his perspective as we worked through that process. So, Gabe, I really appreciate you being here and take the time out to do so as well.
Speaker 1:I will say one more thing, and part of the reason that I had Gabe work with you is that when you and I first met, steven, you had mentioned that you love personal finance books, and I think Gabe has read like, or listened to, about 30 personal finance books in a year. I thought, okay, these two people are going to geek out over personal finance books.
Speaker 2:And.
Speaker 1:I was right, because typically the coaching sessions that we do are an hour and I think you guys did two hours per session minimum or something along those lines.
Speaker 2:Yeah, we got in the weeds. It was fun. It was a great sparring session back and forth of what you read and then what real life actually means for folks, how to be able to blend those two spaces. So it was really fun. I really enjoyed the conversations.
Speaker 1:Yeah, I did too. I think I'll just add this as we get going is that? One more twist is that Gabe has always or until he met you, has always been, I would say a staunch DIYer, do-it-yourselfer, where he's thought, okay, what's really the value of financial advisor? And just in those conversations that you had during the process, his mindset completely changed to seeing the value of having a financial advisor such as yourself. With all that being said, I'm really excited for today's episode. We're going to do the go a little bit longer form than we normally do today, because we really want to capture as much of the magic that you and Gabe did during the process of writing the book so that our audience can benefit from that. Does that sound good to everyone? Sounds great.
Speaker 2:Sounds great. Thanks, Paul.
Speaker 1:First question this is a big question. Tell us your story. Who is Steven Sutterstrom?
Speaker 2:How'd you get started out and what led you to where you are today? How we had a chance to get into this profession is pretty neat. I went to school to become a teacher. So I was at college. My goal is to graduate with a teaching degree, and I'd always love money, I'd love business, I'd love finance, but I got a teaching degree because I also wanted to be a teacher and if I got a business degree I couldn't become a teacher. If I got a teaching degree I could do that.
Speaker 2:And so I actually graduated and I was in a long-term position at a middle school here in Minnesota and during that time my wife, kelly at the time, actually recorded a show for me on Oprah. So she knew I loved money, knew I loved business, and so while I was at school she taped this Oprah episode and it was her episode on money. Right, somebody was there a book to talk about and it was about money. So I watched that show when I got home and immediately just went out and bought the book and read the book in a day. And that was my epiphany was I'm going to teach money.
Speaker 2:I don't know who, I don't know how, I don't know what it's going to look like, but I'm going to teach people money and it was my favorite thing to learn about. It's still my favorite thing to learn about today, to read about. If you looked at my, all my feeds have finance information on them articles that we read, podcasts that we listen to. It's all based on finance, and so watching that show on Oprah was a wonderful epiphany and a wonderful moment that between my wife, kelly and Oprah. They completely changed my life and since then that's what I've been able to do is actually teach money to people who really need it.
Speaker 1:I'm glad that you said between your wife and then Oprah. I think that was a smart decision.
Speaker 2:Yeah, I feel like that was a smart play as well, but equally important.
Speaker 3:So, yes, it's been awesome. That's one of those things in our early conversations really came through is that you have a teacher's heart, and so when you're sharing the ideas about money, it resonated so deeply because that's your beginnings, that was the ability to teach and to help somebody understand complicated ideas. I think that's what got me nodding my head long from the start and realizing that there was such value in the things you were talking about.
Speaker 2:Thanks, gabe. The hard part about what we do, or one of the most important things that we do, is take complicated information, complicated concepts, and just put it into a way that just about anybody can understand. And so no different than a teacher working with every student that's there. Not everybody's a straight A student. Not every walks in is a straight A financial entity as well, and so you've got to be able to take complex pieces so that when they walk out of the office with you, when they walk out of that visit, they go oh, I feel so much better that we spent this time together, or I get this. That makes so much more sense to me than it ever did before.
Speaker 2:And when you have those moments they walk away just like a student walks away more confident, making better choices, better decisions and therefore a better outcome. But it's being able to take complex information, complex strategies. Put it in a simplistic form, teach it to them and they go, oh yeah now I get it.
Speaker 1:That's what we do. Can you take us back to maybe just your early days of starting out? I know that you covered this a little bit in the book in terms of you starting out, what you observed and really why it was that you had to come up with a better system so that you could better serve your clients, so that you could get to the point where you are today.
Speaker 2:What I really believe is that, deep down, we have, pound for pound, the best clients that are out there is that the clients that we have are meeting and reaching their full potential of what's possible within their life. It doesn't mean that every person walks in, is making hundreds and hundreds or millions of dollars every year, or that they have $50 million, which is what makes us a great team. What they're really coming in with, and what they've been able to do, is to reach their maximum capacity. Now, it didn't start there that's not where I started, but that is what I believe our clients have been able to do is to become the best version of themselves possible, and that takes time to do, but that's who they are, which is why I believe, then, we actually have, pound for pound, the best clients in the world, and so that really came from.
Speaker 2:When I started as an advisor, I thought my job would be you would bring me your statements, you'd bring me your investments and I'd tell you where you should hold more international or small cap or large cap and I'd show you charts and graphs and rate of return and I'd talk to you about standard deviation and beta and give you a whole bunch of words that, at the end of the day, you'd walk out going. I don't really know why we're doing what we're doing or what he said. What did he actually say? But, boy, look at how smart he is and what he really did and what I found was a combination of actually real problems that people had that had nothing to do with rate of return, why they should hold more international or large cap or small cap. It didn't have anything to do with what percentage was in their 401k, but they actually had way different problems in their life and if we could solve those problems, that would be a huge lift to their life. So one of the biggest problems that I saw was I make good money, where does it all go? That was one that if you visited with enough families across the board, people were going to walk in and go I make good money, where does it go? I just don't understand some version of that. I should be better off than I am. Why aren't I better off than I am? Things like that. So there's a version of that they're going to walk in with, and I remember this client distinctly and there were so many points that hit me as I was starting out as a young advisor One of those points.
Speaker 2:The client walked in and they came in, they were young professionals and they said hey, we want to retire. And I said great, and we put together a financial plan and I said you need to save $10,000 a year to reach your goals. And they then said I don't have $10,000, right, that's 800 bucks a month. I don't have $833 a month to set aside towards my goals. And I go look, that's what the math says, that you need to save, fast forward six months. They walk back in and they go hey, steve, guess what? I got a $10,000 pay raise and in my mind I went perfect, round, hole, round, peg 10 grand. It's going to go straight to retirement. They're going to make this happen.
Speaker 3:And I said excellent, we're going to put it into retirement.
Speaker 2:You're going to do it. And I thought perfect. And what did they do? They go. We bought a boat, boat, perfect, good choice. We bought a boat. And then the next client we're going on this vacation. We're doing this.
Speaker 2:I quickly realized was that they weren't going to be on track. It didn't matter the rate of return, it didn't matter how much international, how much I tried to tinker with their investments or whatever that might've been, it actually didn't matter. This client was not going to reach their goals. Mattered, this client was not going to reach their goals. And that really broke my heart and I knew that we had to fix this. At the same time, I was getting people walking in, as I mentioned, making $300,000, $400,000 going. Where's all my money going? We've got to fix this.
Speaker 2:And then I watched clients at the same time. If they were older, they would have a 401k or a 403b or a retirement plan through work. That retirement plan would have a lot of money in it. Their personal checking account would have little money in it in comparison. And so what you realize was that if it was set up automatic, if they didn't have to think, they just put this money in and they've accumulated hundreds of thousands of dollars in an account that actually they put very little thought into, proportionately. And then their checking account, where they had complete thought over, they didn't have very much money. So these things were all hitting me as an advisor, seeing so many families come into our office.
Speaker 2:And then what I found was it happened to me was that when Kelly and I were young and we were starting off, we weren't making very much money and we thought next year will be better, we'll get a pay raise, we'll get a bonus, we'll get a tax return, next year will be better and next year would come those things would happen, but we actually didn't feel any better. And then the following year it happened again and I thought, okay, if this is what's happening to me, who's in finance, who's a nerd about money, who loves finance books? Who's reading all of this information? If this is happening to me, I know what I will look like if we don't fix this. And look at how our income has grown over the past three years.
Speaker 2:We don't actually feel better off. That was a real problem, and so we began changing the way that we live, because we could watch people come in with their real problems, their real challenges, and create solutions that were actually just better for me. I knew where I would go if I didn't fix it. I needed to fix something for my own family to be better off than we were on track to become, and that's what we've done and then we shared it with clients, not knowing that they would need it. But I just would say things like this is what Kelly and I now do.
Speaker 2:And they'd go oh.
Speaker 3:I'll try that.
Speaker 2:And then it began to work for them, and then the next client, and the next client, and the next client, and over years it became transformative to where our clients are at today.
Speaker 1:To me. That's what was so relatable, because I think you shared some version of that in when we first met and it just struck me, just as that's me, and I can only imagine that's so many people. And you just nailed it because I'm a big believer in habits and behavior and it's I have a belief that I can make as much money as I want to make, but at the end of the day, if I'm just spending more, inflating my lifestyle, then you end up in the same place. You might have bigger, fancier toys, but are you really better off? Is your stress really down? Have you really accumulated enough? I think that was the thing that struck me so uniquely, because for most other people that I've worked with, it's always about my products better or I can do better for you here. This is why, whereas you're, the way that you communicated that to me was just. That just makes inherent sense to me.
Speaker 3:And that's where, after Steve and I would have these conversations, paul and I would talk and then have another hour long conversation just discussing the ideas behind it. That was really cool because as I moved from thinking, as you said, that a lot of people think somebody is just going to tinker with your investments and do I need more international? That's what I had imagined that the process would be, that I really thought I could take care of this on my own, but because this resonated on a deeper level with me about how I'm spending my money, how I'm really setting myself up for success and how I'm spinning in a cycle of the same problems year after year, paul and I had great conversations about it and it became something that was fun to talk about because of the way that you presented it in our calls.
Speaker 2:Yeah, I really appreciate you guys taking time to do so and continue to have those conversations. It's just, there's so much more value and if we can solve people's real problems. Their real problems weren't what portfolio percentages should they actually have? Their real problems were how do I get a car for my kid? How do I go on vacation? How do I pay off my house faster? How do I put my kid through embraces? How do I pay for college? How do I do these things?
Speaker 2:These were the real problems that people have, and here I was showing them charts and graphs about information that really wasn't that valuable and they'd walk out of the visits. I can only imagine they'd walk out going. I still need this in my life, but I don't really know why. And I still have all these problems over here. None of them are actually being fixed, and I felt like if we could solve real problems in people's lives, the investment stuff is actually easy. That's just math. Math is easy, life is hard, and so if we can get really good at the life side, the math will all. It will just take care of itself, and that's what we've been able to do.
Speaker 1:There was something else that really struck me early on in working with you and I'm currently in my forties. I have my own business, I'm an entrepreneur, I generally enjoy what I do. My mindset, my thought process at the time was I really need to save because I'll probably work indefinitely not because I have to but because I want to, and I guess that was part of my rationale for not doing a good job. Saving and investing for the future was that was my mindset at the time. So you really helped me shift that mindset to that. Even though maybe I'll work indefinitely because I enjoy it, what I really should be looking for is that optionality, whereas when I hit 60, that if I wanted to retire, I could, if I wanted to keep working, I could, but I really could have that optionality. But just the way that you expressed it in the book was really powerful. Can you share more about that?
Speaker 2:Yeah for sure. Thanks, Paul. What I find with folks is a couple of things. One is to keep in mind is that I think we're a brand new person every 10 years, so the person you are today is not going to be the person that you are going to be in 10 years from now. And think of it 10 years ago.
Speaker 2:It's unlikely you were the exact same person today of who you were 10 years ago, and so one of the pieces that I've been super fortunate to have a chance in and get and gather- as a young advisor was visiting with people who were in their 50s, 60s and 70s all the time, even when I was in my 20s and 30s, and what I found was what I would constantly hear and it didn't even matter how much money they had the clients who had 500,000, 5 million, 15 million when they were in that late 50s, early sixties they all wanted to have relatively three things, and it was just these three things. They wanted time to be able to do with whatever they wanted to do with it. They wanted health so that they could do whatever they wanted to with the time that they had. They didn't want any financial stress. They wanted financial freedom. So time, health and financial freedom were the three things, and it didn't matter. $500,000 worked it right, that's all that. They saved $500,000. They wanted that $15 million. They wanted that as well. So it was beginning to shape towards this. If that's what they wanted, why isn't that what I would want? Why isn't that what you would want?
Speaker 2:And I hear often people walking in going I'm going to work forever. I'm going to work till 65, 70 years old, 75. I'm a workaholic. I love what I do. I have super passion for it. I'm really excited about it. I've also seen those same folks tell me that same message and then get to 60 and go I'm tired, when can I be done? Do I have to go till 65 or 70? And so it's just preparing and thinking about is there a chance that you might be somebody different than you are today? Is there a chance that you might do? And if there is that chance, shouldn't we plan to give you that option? And then what we find is the people who have that option, if they do continue to work, they actually enjoy it more because they don't have to go. That feeling of I'm going here because I'm forced, I'm going here because of the paycheck. The people who get to work. They're no longer working for the money, they're actually working because they really enjoy it Big difference.
Speaker 1:You have this powerful analogy, comparing financial problems to cancer, and that can seem dramatic, but just the way that you articulated it and the reason that you do that, I think was really just really eye-opening. Can you share what, at least in terms of the book, what you meant and what you mean by financial cancer? Thanks for bringing that up and I appreciate the thought of.
Speaker 2:It does feel dramatic. It feels dramatic to relate money to cancer and I completely understand that. But I also think it is is that the money problems that people have they're usually inside, they're usually really deep down and it's a challenge. And so what happened in my life was there's a photo in my office and I've got a wall of photos and there's nine different photos. They're all in the shape of a square and in the bottom left-hand corner of those array is a picture, a family photo, and my dad is in that picture and it's all of us together and we're in. It's around Christmas time and we're all smiling in that photo. Everything looks good on the outside but in the inside. We had no idea that at that time my dad had cancer. There was kidney cancer. That was in there.
Speaker 3:We had no idea at what point did you see the analogy to people's financial lives and when did you make that connection and start talking to your clients about it?
Speaker 2:I think there's so many people that once my dad realized he had cancer and once he had those decisions to make that's when it really hit, because he would come he would feel like I don't feel anything, I feel fine. Why do I have this cancer? What if I do nothing? If somebody came to you and said I have cancer and I'm going to do nothing, you would think that's crazy. That is what are you talking about? There's ways to fix that. There's ways to get better. What I feel is that same thing happens to people every year in their finances is that they know I'm not as good as I could be. They know, ah, maybe I've made a poor choice here. I could have made a better choice there.
Speaker 2:They know, man, why are we still solving this problem? I got a pay raise, I got a $30,000 pay raise.
Speaker 2:Where'd all that go? And yet they choose to do nothing about it. That's a problem that seems silly. If my dad wouldn't have taken steps to resolve the cancer at that time, that would have ended negatively, and no different. If we don't take steps to improve our financial lives, I believe we'll die at our desks. I believe there will be high paying individuals making good money, living in good neighborhoods, driving nice cars that essentially are just will die at their desk. They will have to work forever, and we don't have to. It doesn't have to be that way.
Speaker 1:And that's hearing that and listening to you. That's where I guess I self-diagnosed a year ago, where pay my bills felt that I had good income but the savings wasn't there, the investments weren't there, and that's where I defaulted back to. I like working. I don't need to save for retirement because I don't plan to retirement. My takeaway for myself was that I think I have some form of financial cancer and hopefully, if we solve for it early enough, I'll be okay.
Speaker 3:When I used your system to put my numbers in, it was shocking really to see specifically what my fixed expenses were, what I'm spending just on the day-to-day stuff that comes up, and then when you put it against your income and I thought this is unworkable really. That self-diagnosis really is eye-opening. And then being able to make adjustments to try to get back on track and to move towards financial health, that's a good feeling. I think we both experienced that after you talked to us about it.
Speaker 2:And I really applaud you, but I also applaud every individual who's open enough to have that conversation. Is that it's so easy just to keep ignoring it and say, oh, next year I'll do it myself or I'll get better next year? And so I really applaud everybody that is open enough to say, hey, let's have an internal look, let's have that x-ray, let's have that workup done to be able to do that's really important and I applaud every person who's had a chance to do that. Every one of our clients has. Their lives are better for it. But it is just taking some stock and who are you really? And then, who do you want to become In health and in finance?
Speaker 2:There may come a time where you're going to change by choice or you're going to change by force. Either way you're going to change. Either way, this is going to happen. Changing today you have the opportunity to change by choice. It happen. Changing today you have the opportunity to change by choice. It's so much better. I didn't say it was easier, but it is better than having to change by force later on because I don't have any money or I ran out or something bad happened. Either way, people will change. It's just please, change today, get better today your life. You can improve today. We just have to take action in it.
Speaker 1:I think along those lines. To me this was a relatively new concept, or at least a new understanding for me. You call it the high income trap. I think probably many people have that, which is, I'll just make more money and when I make more money, then that'll solve my problems. Again, I'm a business owner, entrepreneur. I have the capacity to earn more money. I don't need to scrimp and save now because I'll make more money in the future. My problems will be taken care of. Can you share more about what the high income trap is?
Speaker 2:The high income trap really came from watching clients who, as they were beginning to near retirement, say this was the life they wanted to recreate. And so what I mean by that is they're going through their 20s, 30s, 40s and maybe even into their 50s and they're making money, but what are they going to make the most amount of money? They're making the most amount of money right at the end of their career, in the last five years of their life. They're making the most amount of money.
Speaker 2:And so what dollar amount do they then want to recreate? They, want to recreate that last five years of lifestyle. But it seems silly, right? Because all of the years before that they weren't saving, to recreate that number. They were saving at a much lower dollar amount or a much lower pace. All of a sudden at the end, of our life they go.
Speaker 2:I want to recreate this income and it's very challenging for us to do and, very simply, the way that I think of this is that if there's a couple that's out there and they're making $100,000 a year and they retire social security, whether it's here or there this income social security might cover $70,000. So they make a hundred. Their social security is going to cover 70. They need investments to cover $30,000.
Speaker 2:There's another household, they're making $400,000 a year, social security is only going to cover $80,000 between those, which now means a $400,000 couple needs to recreate $320,000 a year in savings and in income and in need. Between incomes 100 to 400 is only four times the difference, but their savings need went from 30 to 320,000 per year that they were now responsible for. So you have four times the income but 10 times the savings requirement for you to live that lifestyle that you want to live in those last five years. It's a real problem. If you're not thinking about those pieces it can be a real problem. And if you don't have enough money and you retire, that's a problem.
Speaker 3:Do you have a lot of clients that come in at a certain point and they just they haven't really conceptualized that fully and that they've been contributing to the 401k but not realizing that they're not even close to making up that gap?
Speaker 2:Yes, and it's usually these are folks who believe I'm doing well. We just had a client walk in. They're in their mid forties, they're in this 400,000, we've got $1.5 million, we're getting stock, we've got 401ks, they've got good money coming in, they're making good income. They've actually have over a million dollars in savings and they're thinking we're doing all right. Once you actually extrapolate these pieces out and put some real data to it, it becomes pretty clear oh man, maybe I'm not doing as well as I thought I was doing and thank goodness they are giving themselves enough time to pivot, adjust, make decisions. So our job really, for high income individuals, what we believe is that they're smart people who can make smart decisions, but they need smart information to be able to do and it'll become very clear. The answers will absolutely show themselves and they will make, and have made, much better choices. Their futures will be better for it.
Speaker 3:You had talked to me at one point about the analogy to Michael Jordan choosing his coaches that when I was talking about do it yourself, that I'm thinking I'm going to save a few dollars by not paying a financial advisor to manage my money. Could you share what you were talking about with an athlete the way that they think about the coaching and the advice that they get in their lives?
Speaker 2:I keep a couple of things in perspective there and it's easy to say I can do these things on my own, but I think it's also more successful to go. Here are the coaches that are helping me get there, even as we know that as top pros in athletics, it's easy to look at that these are the best in the country, best in the world, and all of them have a coach all of them. The likelihood that somebody is making it to the Olympics, that somebody is winning a world championship, that somebody is making it to the Olympics, that somebody is winning a world championship, that somebody is reaching their maximum potential without a coach, is a very small percentage of people that can actually do that. And I hear all the time I don't want to pay that person for this. And then I just think what do you think the richest people in the world pay for? Their accountants and their financial planners? How many millions of dollars do you think they're paying for these individuals, the accountants?
Speaker 3:alone are making a ton of money.
Speaker 2:Michael Jordan. If you're thinking of these pro athletes and their coaches that are with them all the time, those are pretty high value coaching positions to be had and yet they're creating the greatest results. That's what I mean by our clients are the best of the best. They are reaching their maximum potential. That's what's most important and that's what's possible through coaching and leadership is that you're going to reach your maximum potential.
Speaker 1:This whole book is centered around what you describe as the G4 cash flow model. What is the G4 cash flow model?
Speaker 2:The goal with the G4 cash flow model is to solve. What we have is the biggest problem that clients are actually walking in with, the biggest feeling that they're actually walking in with, and very simply, that is I make good money. Where does it go? And this dawned on me in a couple of ways when I was starting out as an advisor. I knew how much my dad was making at 30 years old and I knew how much he made at 60 years old. It was a pretty big gap and clients would walk in and they'd say things like I'm making good money, I don't know where it goes, but next year will be better. The next bonus, the next pay raise, the next tax return, that will be better.
Speaker 2:We would ask the question what did you make three years ago, what do you make today and where is that difference? If we could find the difference, could we achieve your goals? The answer was, more often than not, yes. The best part was is that three years from now, you're going to make more money again in the next three years? So if we could just find that gap, what were you making three years ago? What do you make today? If we could find that gap, what were you making three years ago? What do you make today? If we could find that gap, we could achieve your goals faster and the best part was, three years from now, you were going to make more money.
Speaker 2:So what we built was this model that we could capture and find every pay raise moving forward. The way that we did this was setting up a checking account just where your deposits went to. What we found was that this checking account at a completely separate financial institution was really crucial. We deposit our clients' checks. We actually deposit them into what we call a Prosper account here at our practice here in G4. It's their account, their name on it, their money. But at G4, we deposit these funds into a Prosper account here at Ameriprise. Then what we do is we recreate their paycheck down to them and down to their own bank.
Speaker 2:So whatever bank it is that they're using. We then recreate that paycheck and figure out okay, you need to live on X amount of dollars every single month. You come up with that number, we don't come up with it. You come up with that number, what it is that you need to live on every single month, and we will just send you that dollar amount. Really, nothing should change at the most basic At home dollar amount. Really, nothing should change at the most basic at home. Nothing should change except for when you get a pay raise, when you get a third paycheck, three paycheck month, when you get a tax return, when you get a bonus. Because if we do this correctly and we keep sending you the same dollar amount now, we've instantly captured that bonus, pay raise and tax return and invariably the clients come back with the best question, which is what do I do with all of my money? Not where did my money go, but now it's what do I do with all of my money? And that has been the key to this whole piece.
Speaker 1:How do you create that structure, that discipline? This is how much money I get every month and I determine the number. How do you help people determine that number?
Speaker 2:There's just an exercise that we go through at the beginning, and one of the pieces that I just asked clients for is I'm not asking you to go back the last year, six months, and average out every expense and where did it all go, and I don't need all of that information, I just need a good ballpark for us. To start with is that I always feel like if you give us 10% effort around filling in some data, we're going to get 90% of the results.
Speaker 1:I think I gave you 10% effort initially because I spent about 15 minutes before our first call and said okay, this is all I got. This is perfect.
Speaker 2:That's all that it takes. If you just give me 15 minutes, we're going to be 90% correct and then we're going to feel it out. After that, we're going to just try things Like how does it feel? Because what I would find is whether it's in the apps, whether I put a spreadsheet together right Again, here's who I am.
Speaker 2:I'm a spreadsheet person. Could you imagine how enthusiastic Kelly would be when I bring up a spreadsheet and I go hey, honey, I want to talk about this line item on a spreadsheet. Could you imagine how that goes? That's not a great. That just doesn't work. We have on the spreadsheet that we're only supposed to do this. That's not real life. So we needed to create a way that we didn't have to think that it could just be automatic, that we could capture these funds instantly and create. Really. The secret sauce to this piece is that there's just an invisible wall, that. What I hear from clients is that and what I felt personally is that there's this invisible wall between the money that they deposit, the paychecks that they deposit into this account over here and then their spending account over here.
Speaker 2:There's this invisible wall and they feel like, well, I can't really go back and get that money. And we know, if we're really truthful with ourselves and I said there's money in your checking account, at minimum you're tempted to do something cool with it and spend it At minimum we're tempted to do. But if it never showed up in your account, it wouldn't actually even cross your mind, you wouldn't even spend it. And so creating that invisible wall where clients go, that's not even my money. I hear that, no, that's not even my money. In my Prosper account, it is their money, it is their future's money, it's building wealth for them at a faster rate. But they perceive it as it's not even my money because it's not at their bank at home.
Speaker 1:And I think the best analogy is that it has a similar dynamic to the 401k.
Speaker 2:Yes, that's exactly. It Is that this idea that people could build a 401k by just putting 10% of their money into a 401k and have it build up over hundreds of thousands of dollars. It's their money, their name is on it, they could access it at any time they wanted, but they never do, but it's their money. And so that exact same idea I felt like when I built this. It was why are we just funding a 401k at 10%? What if that idea could work with 100% of our paycheck? And so that's all we did was, instead of just using 10%, we said let's build that idea with 100 and go from there, and it has been a huge game changer since.
Speaker 1:Can you drill down on what you call the CEO account? And so I get that you're sending over a fixed amount every month from the one institution into, say, my primary check account. How do I make sure that lasts the full month?
Speaker 2:Yes. So the first problem Kelly and I solved was hey, our income is going up. How do we capture the growth in income?
Speaker 3:So that was our first step.
Speaker 2:Then the next problem that we found was still at home. Again, I am the spreadsheet person. This is who I am is this individual who watches all of the accounts? And my wife? She is a normal person. She's the one responsible for getting everything for our family. She does it all. She's wonderful. I would joke that really I'm just the bum of the relationship. I just show up to work, I go home and I'm really just the bum.
Speaker 2:Kelly runs the whole household, but what we found one of the challenges that we had on a personal level was that Kelly would go to the store. She'd come home with three bags and every single time we have four kids, mind you She'd come home with three bags and every time I would ask her a question how much did you spend? Every time I'd ask her how much did you spend? So, if you're on, if you can relate, that's every time. And then I'd have a second question Did we need that Every single time? It wasn't that I didn't love Kelly. No, I love Kelly. I know that she's getting things for our family, but what it felt like to me was that, very simply, there was a slight friction. Every time she would walk in the door, whether it was intended or not. It felt like I was judge, jury and executioner. Every time she would walk in the door, and it just wasn't a fair way to run a family at all, and so we had this real problem. So we had to find a way to solve it.
Speaker 2:Now, as the planner that I am, and many are, they can tell you what your property taxes are for the whole year. You can tell you what your mortgage or your rent is for the whole year. You can tell you within a couple of bucks what your utilities might be, what your streaming services cost For the whole year, if you're CEO of a business, ceo of a company, ceo of a family, for the whole year, what these are going to cost. What you weren't sure of is what were you going to spend on food, gas, groceries, dining, entertainment, clothes, hobbies, what were the real things that you were going to spend in life?
Speaker 2:So all that we did was not knowing exactly what we were going to spend. We just created a target and we created a second checking account and we said we're going to move money from checking account one to checking account two at our bank every single week and that's what you get to spend, and you can spend it on anything. We created a CEO account that is designed for spending. It's supposed to be guilt-free If Kelly comes in with three bags. It's three bags. That's what it is. There's no conversation regarding it. That's just what it is.
Speaker 3:We know that we're running the family, but it's an account with money that's in it designed specifically to be spent for our family's benefit. Now, what happens if, before the following week, you run out of the money in your CEO account? Do you go on your credit cards at that point? What's the answer at that?
Speaker 2:Good question there, gabe. So a couple of things that we found valuable. One is we found that moving money from the main account to our CEO account every week was actually one of the most important steps to this is that usually people get paid every two weeks. Right, maybe they get paid every 15 days, and if you had to go that entire time, there's a chance that you might get run out of money. Things might get tight. You might be then forced to put things on a credit card, but we found that actually, if we paid people every single week, is that the client would actually be better off. We were better off, and so I think of this very simply is that what usually people get paid on.
Speaker 2:Friday. So you get paid on Friday. Who wins? What do you do on Friday night?
Speaker 3:Saturday, Sunday.
Speaker 2:You're going to ball games, you're going to the movies, you're going out. You're spending all of the money. So it's easy to pay yourself on Friday. You spend it all over the weekend. By the time you get to the next weekend, you're out of money. If you could pay yourself every two weeks and you can pay it on a Friday. So we found that if you pay yourself on a Tuesday, by the time you get to the weekend you could spend all of that money guilt-free. Whatever's left, spend it, have fun with it, don't worry about it. Now, if you get to Monday and you don't have any money left, you might have to eat leftovers.
Speaker 2:So make sure you might need to eat the leftovers, but on Tuesday you could pay it again every week and it's the same dollar amount. So just like you know what your property tax bill is for the year, you know what your mortgage or rent is for the year. We now know what your spending is for the year. It's X times 52. And I don't necessarily need to know what it's on or where it goes. And all the apps that track where you spend all the money those are all reactive apps. This I can be proactive.
Speaker 2:My wife and I can look at the checking account. We know exactly how much money is in there. We don't have to think, we don't have to talk about it. We know exactly how much money we can spend. There's really no need for us to do anything else. We can communicate without having to communicate. So setting up a separate checking account, paying yourself on a Tuesday, having a set dollar amount and trying to challenge each other to live within that piece, it'll change the mindset that you have around spending money and how much you can actually spend.
Speaker 1:I've been doing exactly that for six plus months. I haven't deviated it from at all. I haven't quote unquote, cheated at all. I've stayed completely within those boundaries. That's for both my wife and me, and that goes towards just the discretionary spending. It goes towards food, grocery store, any restaurants, amazon, target, gas, things of that nature. In that six plus months, I think there's only been one or two times where it's starting to get a little bit low. For example, I didn't go to the movie that weekend because I was getting low, so I'm not going to go to the movie, and this has happened twice.
Speaker 1:And the irony there, though, is that's in the CEO account, whereas in these other accounts, I see just starting to accumulate massive amounts of money. But I'm disciplined based on this one account, which is just fascinating to me. Also, I will add, I don't have to track it. I don't have a budget app. I don't have to track what I spend at here or there, because it's all just this one account. Look at that one account. If there's money, I can spend it. If there's not, I start scaling back, but it replenishes every week. We've adjusted, and we simply don't spend that much money.
Speaker 2:Money I equate kind of money to like that tube of toothpaste is that when you get a fresh tube of toothpaste and you're putting it on your toothbrush, you got toothpaste for days and you're putting it on there and you can put all kinds on, but then you get to the end of the toothpaste and you're squeezing it to.
Speaker 2:Your thumb hurts and you're pushing it so hard because you're like by golly, I know I can get another day out of this thing, it's just challenging you. So when money is in the accounts, when we get pay raises and bonuses, it's constantly just we're not paying as close attention to it as maybe we could should. By not paying attention to it, we're losing out on really the goals that are important for people, the goals that they really want to achieve, whether it's retirement or college, or buying a car in cash or being debt-free, whatever it might be.
Speaker 2:We're losing out on it, because we're just not paying attention to the day-to-day pieces as well as we could. So I had to create a way that I didn't need a spreadsheet to do, so we could always know exactly how much money we could spend. We could live the life that we wanted to. So we haven't tried to change your lifestyle dramatically at all, but what we've really just stopped was an increase as your income went up your lifestyle did it.
Speaker 1:We captured the game. If I didn't have the system, if I wasn't grounded in the system, I would do the natural human thing. Oh, I got a bunch of money in my account. I probably deserve to go to places and spend it and I know that I can live off of it and I'm happy living off of it. It's the accumulation in my savings and investments is skyrocketing where it's out of sight, out of mind.
Speaker 2:It's taking the idea that over time your income will go up, how fast it goes up, when it goes up, whatever that looks like. But again, we challenge. I knew what my dad made at 30. I know what he makes at 60. I know that there's a wide gap in there. I understand inflation is a thing, but it's still. The pay raises are larger than what the inflation is there, larger than what the inflation is. There's an opportunity for us to capture those dollars. That's all that we've done.
Speaker 2:I had an advisor, a friend of ours, that we were working with and the client came in and they were making $500,000 a year and they had a million dollars portfolio at that time and I said what's the greatest way that you're able to get them an extra $100,000? He came up with here's the investment idea that I would do to get them $100,000. My answer was can you help them just save $100,000? Could you help them find $100,000? Or, when their income goes from five to six, could you find that 100,000? Because they can guarantee that it just went up $100,000. Their net worth just improved. So we don't need a fancy investment piece to make it happen. If they can just make it happen, they can control the outcome. It's so easy for us to go, oh, it's rate of return is why I'm not being successful.
Speaker 2:No, you can actually out-save rate of return, Then when you combine, the two are fantastic together. But we've just got to get in on being able to build the assets the way that we have and our spending is. Usually the largest culprit that we have is just not paying attention to day-to-day spending.
Speaker 1:We talked about the CEO salary. There's some other savings buckets that are very specific. These are part of that monthly amount that you send over from the one institution to the other institution the other day. I also have an automotive account that you helped, that you encouraged me to set up. You're going to have maintenance every so often At some point, you're going to buy a new car, et cetera. So I've just been systematically putting money in there every month for this future problem that I know I'm going to encounter. And the bill was like 1200 bucks. I'm like great, here you go, and it just came out of the savings.
Speaker 1:So it didn't come out of the CEO account because that's separate. It didn't go, it just came out of these other accounts that you help people anticipate. It's not an emergency fund. The real question is, how does this differentiate from the idea that some people have of an emergency fund, because it's more planned spending that you know you're going to have in the future?
Speaker 2:No, that's exactly it, paul is. What I would really try to think of is what are the problems that I know I'm going to have Right now? What problems do I know that I need to solve over the course of the next one, three, five-year timeframe? And if I needed to, what would I do today to solve that problem? For example, like travel, kelly would like to leave the state. We live in Minnesota. We'd love to leave the state, especially in the wintertime. I'm a fan of leaving the state, especially in the wintertime, so we know that's something that we want to do is to be able to do that, and so we had to figure out a way to solve that problem.
Speaker 2:Instead of every year being a thing that we had to get into, what we did was we just set up a separate savings account. We literally we just nicknamed it travel. Every month we moved money in there. This really came from the problem of getting to that time of the year, wanting to leave and then going. Where's the money for it. And the real problem from this would come because I am who I am again and Kelly is who she is. I'm the nerd and she's normal. She'd come to me and say, hey, here's this really cool vacation. Our friends are going on. Can we go? And what would I say? No, immediately no, I wasn't saying no because I'm a bad guy. I wasn't saying no because I'm a bad guy. I wasn't saying no because I don't love Kelly. I was saying no because I'm trying to preserve my family's success, right, preserve the funds that we have. What if something were to occur? Do we have money to take care of it? What if something bad were to happen?
Speaker 2:And so what we began doing was just moving money into an account just designed for a specific goal Was that we took money and we created a bill, moved it into a savings account, nicknamed it travel. And if money went into that account and it was in there, we travel. That was it. Whether we were going on the trip or not, we would put money into a travel account. And when she would say, let's go on this trip, I'd say, is there money in the travel account? She'd say yep. I'd say book the tickets. Piece of cake.
Speaker 2:And then we did that for all the other problems that we had in our life as well. So, car you mentioned you had some car repairs. We've got cars they need repairing. We've got cars, you might need a new one. How would you organize that today if you needed to put money into a car account just to solve that problem? Today we have kids activities, we have Christmas, we have gifts. I would hear people say things like I have a savings account, but the money didn't have a purpose. They didn't know why they had it, they didn't know what it was for, they didn't know what it could solve and they didn't definitely then didn't know if it was enough by organizing the money into accounts specific for a purpose, when that problem arose solved.
Speaker 3:That was one of the eye-opening things that when we were talking, you said Christmas birthdays we act like we don't know that these things are coming up every year. We just have to face it when we get to Christmas. And I thought that's true, that I could be putting aside money throughout the year. So when Christmas time comes, I say I'm prepared, I have money ready to go for this.
Speaker 2:Yeah, we know that credit card debt increases during Christmas time. We know that February, financially, is a depressing month because there are, financially is when the credit card bills are now showing up and they have to pay those. We know that as a nation, we can see that all the data points to this thing. Clients would come in and they go oh Christmas. You know how expensive Christmas is and I would think come on, we know it's coming, you know it's happening. It's almost it's the same date every year. Is that you're going? We know that you're going to spend more money during this timeframe. Why are we surprised by this? I really just try to figure out ways to pre-solve problems and if we could pre-solve them, they were no longer a problem. Christmas would just get solved, birthdays solved. We know that if you own a home, or if you're right, we know that you're going to need new things. It could be a new TV, a new computer, a new dishwasher, a new air conditioning unit. We know that's going to come up. So if we plan for it today, put it in the budget, assume that we had it and all of a sudden your air conditioner goes out. It's no longer a.
Speaker 2:Where do I get the money. It's oh, I have money specifically in this account for this specific problem. Boom solved. I've shared and you shared. When I go and get new tires on the car, I go in and get tires, they go. It's $1,500 for tires. I literally just log into my bank, I transfer $1,500 for my auto account into my spending account and I use the debit card and I walk out. That's it. I'm not wondering where am I going to get the money from? I'm not worrying if it's on a credit card and I have to pay for it later. I've already solved the problem in advance. And if we can pre-solve those problems, people's lives are so much better off and then they're not going. Oh, I spent this money and now I need to withdraw money for my savings account. Oops, or oh, I know I need to pull from here. No, we've already planned for you to do so. There are very few surprises that we should actually have in life.
Speaker 1:I think it also helps balance out. Sometimes, I think there's a situation where, because 401k contributions tend to be automatic and someone might be saving up hundreds of thousands, if not millions of dollars in a 401k, yet they're heavily in debt because they don't manage their day-to-day.
Speaker 2:Solve these real problems like plan for them, and we know that it's not the next pay raise that's going to solve it. So if we can just organize the money and give it specific purposes, a plan and a purpose for every dollar that you're going to generate, the way that I think of this is what did you make three years ago?
Speaker 2:What are you making today? Where is that gap? And if we gave it a purpose, would the problems that you have today still be problems? If you're making $250,000 a year as a family over the next 10 years, with pay raises, with bonuses, inflation, if you make 250 today over the next 10 years, you're gonna make what? $3 million over the next 10 years? If we organize $3 million really well, could we achieve the goals that you have and could we do so in an easier manner than you're doing it right now. That's what we've been able to do Solve real problems and then the rest of it's easy.
Speaker 1:You shared a lot about how a lot of what you've come up with just is based on your own life and you and your wife Kelly and you just came up with solutions for yourselves and then you started sharing these with clients. I think the couples dynamic is really interesting. I think research shows, and probably just our gut knows, that one of the biggest stressors in marriages can be money and just a couple spying about money. Can you share any stories or just what? In terms of the people don't come to you for marriage counseling, I imagine. But what's some of the impact that you're having on people as a result of setting up these systems, which the first time you do it it might sound like a little bit complicated, but I can tell you that once they're set up, they're automated. You don't even think about them for the most part. It's so simple to follow once they're set up.
Speaker 2:Relationships and money is such a hot topic and such an opportunity for discontent or frustration among individuals that the value of having some conversations, the value of having a third party. In most families there is a person who is the money person that is a normal thing and then there's this other person in the relationship who maybe runs the family, does other. In my family, I was the money person. Kelly was responsible for the kids and the activities and all of that. Those were the roles. Usually we see people where there's one couples where there's one person who's the money individual. That can create some sort of disappointment, frustration amongst each other, because one wants to save it all and the other is just trying to manage the household. Really well, by having these conversations, in an unemotional position with a third party, focus on the goals that you both actually want to achieve together. You both agree on them for the first time. In many cases they're now on the same page of the same book, reading at the same and all moving in the same direction, and now we know why something is happening or why we can or can't spend money, or when we can spend the money, which is also an important metric to be able to actually go. No, you should go on those trips. You should do these things. You do have the capacity to do. We don't need to save every penny for this stuff, because life is worth living. It's having some sort of a third party to be able to come in and go. You are doing great, or we do need to get better, and here's why I don't have to raise a family with you. I don't have to see you up in the morning, I don't have to see you at Thanksgiving or Christmas or any of those holidays. By having that third party to be able to provide some guidance during those conversations has been really valuable.
Speaker 2:Yes, we've absolutely heard it. This is not what I expected to be a part of, but I've absolutely heard. You've saved our marriage. Our relationship is better because of you. That's absolutely happened time and time again. That wasn't the goal of this, but that has been the outcome of it. It's far more continuity, solidarity, focus towards the goals and understanding of what it is that we're actually trying to achieve, towards that, and then people are, because they're on the same page. They're actually end up being able, in a loving way, to hold each other accountable towards the goals we have. They know this was what we wanted to achieve. Does that actually do that for us? Yes or no? And if it does, it becomes a very easy answer to say yes to it, and so they can hold each other accountable in a very loving way as well.
Speaker 1:The first time that my wife and I we've been married for over 20 years really talked about money was in one of our meetings, which is just. I think myself I didn't ever track my money really. My wife and I never really spoke about it. It just at some level. It seems absurd to me to look back and do that, and the amazing thing is that part of what you do is you encourage me to make sure that both of us were on the meeting, even though we're doing this through Zoom or.
Speaker 1:Teams or whatever. I'm like I can do it, my wife's like you can go do it. But you encouraged us to both be there and we were, and it was funny because we weren't really apart and so just having the conversation you helped us to align it towards our goals. We both bought into it. There's just been very smooth sailing ever since.
Speaker 2:That's a great point, paul. You know, what I find is that because there's one person in the relationship who's the money person, that's the person who thinks I'm going to go visit the financial advisor, I'm the one who's going to do it, I don't need this other person. And that just seems silly, because who lives the goals? You both live the goals. Just because I'm the money person in my family doesn't mean that Kelly's goals aren't any more important. They're like we all know they're more important than my goals. We know that's true, to have her there.
Speaker 2:I always think like one person might deal with the money, but you both live the goals. And so having both parties come in is really important, because we want to hear both sides, we want to understand what's important to both parties. But then we also want people to know why we're doing what we're doing, so that both people can take positive steps towards achieving those goals. And that's what happens. So, yes, we hear it often in that, oh, usually he just did it and I go. No, we want both of you to have a chance to come in. Or she's the money person, she makes the money, she'll come in. No, we want both of you to come in. If you have goals, we want to hear both sides of those and we're going to help improve both of your financial lives and outlook.
Speaker 1:And it's amazing that she took to Japan. Our nephew is getting married and she wanted to gift him $1,000 and do all these things. As you said, if the money's in the account, great. We have a gift account, we have a travel account. It's like the money's already been pre-allocated. Go for it. Zero resistance, because I'm not worried about savings investments. Everything is on track and, if anything, we're over-accumulating in all these different accounts, and so my financial anxiety, as I call it, is essentially about a zero, and that has never been the case. It's always been how am I doing and what's going to happen and how will that impact me? And since we've been meeting, working together, the anxiety is at literally a zero.
Speaker 2:Most of that anxiety comes from not knowing what. If something bad happens, can I handle it? Will it be okay if I have a slow quarter? If their house needs a huge repair? If our car breaks down, can we handle it? So there's anxiety for these things that are unknown. If you can just plan for those and have a way to answer those questions oh, if the car breaks down? Oh, I've got money to solve it. Okay, let's check. If the AC goes out, I've got money to solve it. If you can organize the money in a way that it can really solve most of the problems that you might come up with In most years we know what those problems are going to be you can solve all of those ahead of time. It really diminishes that stress level that you might be having.
Speaker 1:I want to get into another practical application or just, I think thing that we face. I've been blessed this past year. My income has been going up quite nicely and at the same time I think you told me this is that you actually want to have these systems in place before the next raise, before all these other things. Otherwise you're just going to default to normal behavior. I'm very lucky that we met when we did. When does someone deserve to spend more money or when should they be spending more money?
Speaker 3:Steven from your book about the idea of the happiness versus the stress buckets. Could you put it in the context of that about when we deserve these things?
Speaker 2:The goal in the end is to elevate your lifestyle. That's, in the end. That's what we want for all of our clients is to raise their lifestyle, is to have luxury items, is to have jet skis, is to have cool stuff, is to go on great trips, is to buy nice cars. That's the goal in the end. But we need to differentiate between I deserve these things and I've actually earned these things. There's a very big differentiation in that we do want you to get there, but there's a big difference between deserved and earned, and a lot of that is just going to be in the stress that's created from getting these things.
Speaker 2:Gaben mentioned this happiness bucket idea and, very simply, what that is in my mind. We're all carrying on this bucket. This bucket can only be filled by two things, two things only. It's either happiness or stress. That is it. There's only two things in our bucket happiness and stress. And the challenge here is that stress will always fill our bucket first, always, and then happiness will come in second. As you're filling your bucket, you've got to be very careful of what it is that you're putting in your bucket. But in fact, if we just can find a way to remove stress, you automatically have more room for happiness, to the point that, as you said, my stress now my financial stress is zero. You now have full opportunity to fill your bucket with happiness, but as soon as stress shows up, happiness leaves. And now I have the stress to deal with.
Speaker 2:In our society today, we confuse things that I deserve and things that I earn, and people go. I've worked really hard, I deserve happiness, so therefore I deserve a luxury vehicle. I know, because I did it right, I work really hard, I deserve something nice. And we, right, I work really hard, I deserve something nice, and we go out and we buy it because we believe this will be the thing that brings us happiness. This is what we're working for, this is what the world tells me I should be getting. Is this really nice vehicle, this really nice house, this really nice boat? Whatever it might be, because that's what's going to make me happy. But as soon as we get those things, countless studies will show that happiness is futile. It only lasts a little bit while we have those things and then, inevitably, we're filled with stress because now I've spent money on it, which now means I have to go to work, which increases my stress level, to make the money to pay for the thing that I thought would bring me happiness. Now I have this thing that I bought that now needs to get repaired. Now I've got to take it and it's got to get fixed. And I've got to pay more insurance on it, and I've got to. I've also got to make sure I feel pressure to use it. If I go and buy a boat, I've got to use this boat, right, I want to make sure I use it and so I feel pressure that I have to use it. The stress of all of these items, just by adding in those items, removes the fact that I can actually fill my bucket with happiness.
Speaker 2:Kelly and I had this same thought process was that we were working really hard. We were in our late twenties, early thirties, by golly. We deserved some luxury vehicles. We did it. We each had matching luxury vehicles. They were awesome, they were very nice, but there was a problem associated with them. It wasn't really aligned with the long-term goals that we actually had for our family was to have these luxury vehicles, and so in the moment it felt like we deserve these things. We worked really hard. Look at what we've gotten to. We deserve these vehicles, but at the same time, we were doing so at the expense of our kids' college funding and our kids' college education.
Speaker 2:If we were to really look forward in our lives 10 years from now, what really was going to bring us more happiness? The fact that we used to have some really nice luxury vehicles that are now 10 years old, or the fact that we could put our kids through college and they could walk out completely debt-free? Even though we felt like we really wanted these things, it was a poor choice that we made in getting those. We actually had to turn around, had a conversation with Kelly Fortunately Kelly is completely understanding opened all of these pieces. We sold those vehicles, bought very mundane vehicles.
Speaker 2:At that time I'm sure our neighbors were wondering, oh no, what happened over there at their house. But I can tell you today, as we're going through it exactly today, we've got a junior in college. He's going to be a senior in college and a freshman in college. They are thrilled and we are also thrilled with the decisions that we've made by having a chance to transition those vehicles to actually then go towards college education. It felt like a tough decision at the time, but now the happiness is absolutely flown through by removing a stress that would be how am I going to cover this large expense for college? It's now just solved and it leaves a whole lot more room for happiness.
Speaker 3:How have you seen this applied in your clients' lives that? Is it a tough sell? Or do they get it fundamentally and then start to feel the benefits of filling or removing the stress from the bucket and letting the happiness rise, even though they're not getting any things initially?
Speaker 2:It comes in one of two ways. One is maybe, if they're coming in younger, they've maybe seen stress from other people and they go. I don't want that. They've seen people and they go. I don't want that They've seen it and they go. I don't want to stress over those items. More often than not, though, people walk in already feeling stressed from some of the decisions that they've made and they're going. I just don't want this stress. How do I get rid of this stress? How can I build a better model, moving forward, not everybody and I don't think very many have ever sold their vehicles and then repurchased some mundane vehicles.
Speaker 2:Those were steps that we did, but those are not conversations that we go you should sell your car, you should sell no, none of that. What we're trying to do is just think better in the years moving forward than we thought maybe in the last three. Let's think better in the next three and so that we can look back three years from now and be really proud of what we've done. And so people, if they're younger, they walk in saying I don't really want this stress to get added. I see it's happened to my parents, my family, my aunts, uncles. I see the stress they're under. I don't want it. Let's build a better model. Or more often than not they're walking in going I make really good money, but I'm still stressed out. I'd really like to remove that stress from my life. And how do I do?
Speaker 2:And then again in the end, our goal is that they can actually do everything they want in life, that they can actually elevate their lifestyle, that they can increase their spending. That's actually our goal is that they can increase their spending. But the way that we do that, as covered earlier save money, buy assets, use those assets to then pay for an increased lifestyle, and that's what we're trying to build. That's what we're trying to do. It's a sustainable method of increasing your lifestyle. It'll never go backwards, it won't create panic, it won't create concern, but create a sustainable model for an increased level of lifestyle, and you should be able to do that then forever.
Speaker 1:You use a term in your book move on to cooler problems, Cooler problems.
Speaker 3:Yes.
Speaker 2:Yes, that's exactly. It is that I believe that success, financial success, is actually based on the problems you're solving. I always think everybody has 100 problems. Everybody has 100. Just which ones are you solving? And you can't get to the next set of problems until you've adequately solved this set of problems. But think of it is that the person with $300,000, says the $300,000 problems. The person with $3 million still has problems. They're just different ones. The person with $30 million still has problems. They're just different set of problems. And the 300,000 person's going. I would love the 3 million or the $30 million problems, but you have to solve this level of problem to get to this level. And to get to this level, the goal is to get to cooler problems, get to solve better problems, and so if we're solving the same problem every year, we're actually not building ourselves a way to get to the next level of problem. That's the goal Solve the next level, Solve this problem so you can solve the next level of problems.
Speaker 1:In the book. You mentioned a three-year transformation. What happens in three years?
Speaker 2:I love three years. There's so many visits that we have that in our team. We do just a progress report, a check-in, and it's been astonishing to go hey, here's where you started with us, here's where you're at today. Did you think this could happen? Whether the client sheepishly say, oh yeah, I knew that would occur. It's amazing to see the results of what's possible over a three-year timeframe.
Speaker 2:We consistently really underestimate how much our lives can change over three years and our clients have seen incomes grow. Your income can grow, but so can your net worth significantly. That's what we try to build. I just think of it in a small changes creating dramatic results.
Speaker 2:Think of somebody that you'd seen three years ago and if today they physically have transformed, they're now in shape, they're ripped, they look right, they look great, they're all of those things, you notice it and you bring it up instantly and go oh, my goodness, how did you do it? And they have a chance in three years. They could be a completely different person in three years. The goal is, if they just had a personal trainer and they went there three times a week, they ate right, they took all these steps, there's a huge opportunity for them to change their physical appearance in three years. It's no different than for them to be able to change their financial life in three years. And that's what we do. You look back after three years. I'm astonished. They're astonished regarding the results that they've been able to achieve.
Speaker 1:I know. I have to admit that I don't know if I fully buy into this whole three-year thing, because I feel like in three months I've essentially lived the transformation.
Speaker 2:Thank you. It has been awesome to watch you. It's awesome to watch clients who do these things faster. The speed of how fast it can happen is really up to them. It's up to what steps do they want to take? How much are they going to buy into that process? How much will they let me? How much trust are they going to give into this entire process? And the ones that do? It really is amazing to be able to see what they've done. It's super exciting. To be frank, it's actually why we keep growing as a team and as a business and as a firm is because now people are going oh my gosh, you're somebody I don't even recognize. How did you do it? And they go. Oh, here you go. And then they show up here and they're getting ready to begin their journey as well. It's actually the reason our business has grown is because the transformation that's really happened in people's lives. But yes, it doesn't take three years. It's really just how fast will they let us be a bigger part of their life?
Speaker 1:When you were looking to write the book, so a year or so ago, and you had said something to the fact that we're not looking to work with everybody, we're looking to work with. I think it was 3%, the 3% that want these results. To me, that was that stood out, because because everything that you're describing here today, the results that you can, I believe, fairly consistently deliver to people based on the conversation that we've had, the only prerequisite is that you need to want it. Part of the reason that we wanted to have excited to help you publish your book, but also part of the reason that we wanted to do this long form interview with you today is just to help inspire and motivate those 3% that are like I want this. Who's a good fit? Who's not a good fit? What would you tell those 3% that are at this point in the conversation with us and they're like that makes a lot of sense. How do I do this?
Speaker 2:That number really came from when I was a teacher walking into a classroom, and back in middle school I knew that when I walked in, not many kids actually cared about what I was going to say. I remember myself in middle school, right. I wasn't super stoked every single class I was walking into to sit there and learn and be a part of it for that 50 minutes or that hour to be there. What I also saw through teaching, though, was I saw C students, d students, f students who really wanted to get better, who really actively wanted to improve, reach out and improve and make huge strides. I saw C students become A students. I saw A minus students become A plus students. I saw so much progress in the kids who actually wanted to be a part of my class.
Speaker 2:That, to me, was that's who we want to teach, is that mentality of people who want to have a chance and get better. So I'm not there. We're not here for just to have a chance and help you, ho-hum, be a part of it. We're not here to talk, just to talk. We want to change your life, and you have to be actively involved in changing your life.
Speaker 2:We're one of the few places that will tell you I can't care more about your success than you do. You must care first about your success. We will care right behind you, but you're going to care most about how successful you're going to be and we're looking for the people who care that much to take action. It's much less about who are you walking in, it's who do you want to become. That mentality, that person, is who we want to have a chance to be a part of. That covers all income ranges. That can be somebody who's making $150,000 to $1.5 million. The ones who are going. I want to reach my full potential and I'm willing to take steps to do. That's who we want to have a chance and be a part of their lives, because we will dramatically change your life. That's what I love to do.
Speaker 1:What are the next steps that someone should do, either to get the book or to have an opportunity to talk to you and or your team?
Speaker 2:A couple of things. First of all, I just believe that people have the potential to reach their financial goals and improve their lives. I remember running spreadsheets in my own life and being the no person and trying to balance the finances with my wife and family and watching clients go through the same things. It's taught me that their personal life and these strategies really work, not only for my family, but for thousands of other folks, and over 20 years we've seen it change lives. This is my favorite thing to do. The easiest way to go about doing this is going to g4financialfreedomcom Request a copy of the book. We'll have a chance, we'll get it right out to them and we'll have an opportunity to begin changing their life right then. And there, g4financialfreedomcom, they can begin having these conversations with spouses, significant others. What are the goals that you really want to have a chance to achieve? What really is important to you? If you could make something happen, what would you want your life to look like three years from now? And we begin. We build it now. Let's do it now.
Speaker 1:This has been fantastic. I've really enjoyed the conversation. I really feel that the conversation we've had today is almost like the audio book version of the book. This is what I was able to. This is what you and Gabe, the conversations you had I was able to listen in vicariously, so I really hope that the listener really gets a sense of the kind of impact that the G4 cashflow model, which is what your book's all about, can have and, by extension, what you and your firm are all about. I'd love just to and finally, wrapping up and I'll give this to either one of you, gabe, just as Stephen's book coach, and just your own learnings throughout this process Is there any insights or any takeaways or any thing that you'd like to share before we wrap this up? And then I'll ask Stephen you the same question.
Speaker 3:Paul, after Stephen and I would have our conversations and then you and I would talk and discuss these ideas.
Speaker 3:I found myself out on the golf course with friends and the subject of money would come up and they'd talk about some of the different problems they were having. Maybe their wife was spending and they were asking those same questions how much do you spend and what's in the bag? But I found myself bringing out the ideas that, Stephen, that you were sharing for your book, and realizing that they're helpful not only in Paul's life, my life, my friends that I was talking to on the golf course or just coming into contact with. I really love the idea, too, of the three-year transformation because I think that, just from my perspective, putting money in a 401k and thinking maybe 10, 20 years down the road this is going to amount to something is not as tangible and real as thinking that what can I do this year? That's going to make a significant difference in my life and I'm appreciative of the ideas that you've shared with me, that you've got out there in your book and that are making a difference.
Speaker 1:Thank you, Stephen. Final thoughts before we go.
Speaker 2:I think the biggest piece to me is you can do this. This is regular people making tremendous strides to become the best version of themselves they can be. Is that this isn't about what I did yesterday or oh, I would have, should have or couldn't have done that. This is just about how can I be great today, moving forward and it runs the income gamut from clients in the hundreds of thousands to millions of dollars are walking in with these same ideas of how can I get better, how can I reach my full potential. And it's possible, and your life can be changed in significant ways. And my goal for our clients and those that we're fortunate to work with, my goal for those reading the book, is that they get to look back 10 years from now and just be proud. They get to be so proud of what they've done, the progress that they've made, and their confidence in their future has really increased. That's my goal for them through this process is to really change, improve, and that they look back so proud of who they are today.
Speaker 1:Fantastic. Thank you so much for your time today. I've really enjoyed the conversation. Thanks Stephen, thanks Gabe, thank you, paul. All right bye for now.