How to Ensure you are Financially Prepared Before Starting Your Nonprofit with Robert Nelson

Hey, welcome back to the show. I’m here today with Robert Nelson Roberts, the mayor of Bay City, TX, and a certified Dave Ramsey Financial Coach. How are you doing today?

I’m doing fine. I’m doing great. I’m blessed every day that I get up. I’m blessed that I get a new day to solve somebody’s problems.

What a fantastic attitude! I love that I got the good fortune of being able to spend a week with Robert at a ranch in Texas. which was one of the most magical experiences of my life. Because you had all these opportunities to learn and grow together and meet phenomenal people like Robert here.

Well, thank you, sir.

I appreciate being there as well as meeting all you great people. We learned so much. I just said you got to meet several people and develop some long-term relationships, which I appreciate.

Please tell us a little bit about yourself and how you became Mayor of Bay City, TX.

This was not in the cars, it’s not something I had planned, it just came about, and I saw where I might be able to use my education and my skills to help other people. So, I retired back in 2015 and went back to school for a couple of years. I was taking finance classes when somebody asked me, “Oh, actually, they had been asking me about being mayor for several years.” my daughter was still young, and I said no, I can’t do this. So, the previous mayor decided he wasn’t going to run again, and my phone started blowing up, and my daughter was older. I sat down with her and her mother, and I said, “I think this is something I want to do, but I need your support.” I can’t do it without the two of you, so they agreed to support me. So that’s what I did. I don’t expect to win since this is my first foray into politics. politics, which I don’t like. But yeah, there was a runoff. There were three of us running. It was a runoff between the two of us. People had to get out and vote again, and of course, the second time around you don’t get as many voters as you do the first time. On election day, I wasn’t even in Bay City. I was in California. And I got a call at the end of the day saying you want. I was shocked, and the first words out of my mouth were, “What do I do now?”

And now you mirror it. That’s what you do.

Yeah, you may have heard of it. No, but it was pretty cool. It was exciting for me. It was scary. At the same time, I just jumped in there with both feet. I knew what I wanted to accomplish. I saw some of the problems that I wanted to solve, and I just got in there, rolled my sleeves up, and started on them. And I am now in my second term, my second term. I ran on the post, so I assume that I’m doing something right.

Well, I mean, if no one wants to challenge you, they either think your grip is too strong in the community and it’s not worth trying, or they’re too lazy, or I don’t think that one is true, or you’re doing a great job and there’s no reason for anyone to try to upturn you out of that. A lot.

Yeah, as of right now, I have quite a bit of support from your community, very. I’m not on Facebook, but I hear lots of comments, and they say at this time there’s nothing negative on Facebook about me, so that’s great.

Maybe I can change that. Maybe I’ll get my team to post some negatives. I don’t know. I wouldn’t even know what to post negative. You know, I wouldn’t like Begley.

I’m good. I’m good.

I wouldn’t even know.

What is that old saying? No news is good news.

No news is good news. Yeah, no, just good news. There’s no such thing as bad press. I think we tell ourselves all sorts of lies.

I don’t know, it’s been exciting, and I love what I do. I do. I enjoy doing it.

That’s good, that’s good. I’m glad you’re in that position where you’re ready for it in your stage of life. I’m not going to say how old you are. But you. My audience would not believe it if I said, “There’s no way.” There’s no way that they would believe it.

I’m proud of how old I am. The Lord’s been good to me, and I’ve been blessed. I have nothing to do with it, so I can’t take credit for how I look other than that I try to eat right and exercise.

I don’t do either of those things right now, and it hurts a lot. I’ve made poor decisions. So, what are some of the things that you were looking to fix in your town when you were running? Were those things you wanted to tackle?

I can say I campaigned on three things. I campaigned on unity, collaboration, and growth. I kept it very, very simple. I didn’t promise to do taxes or to fix every pothole in the first year. I wanted to bring the community together. To talk to each other to get to know each other and then start working together to try to make improvements to this in our town. I adore you. I can’t do it by myself, and neither can any of us. We have to create a good team. We have to decide what direction we’re going in. We need our North Star. And we all decide, “Yeah, this is where we want to go,” and then we start making arrangements to get there. We started making plants. You know, you have your vision, which I tried to get everybody to buy into and understand. And then you have your mission statement on how you’re going to get there, and you just start working and keep going in the same direction. It’s a team.

I love that I don’t claim to know anything or everything about politics. But I find it hard to believe that anyone who says that they can fix people’s problems. I find it hard to believe that they’re telling the truth because no one does anything alone.

But you can’t.

Especially before they get into the office, they don’t know how it works.

No, they don’t. No, I didn’t.

Wait, wait, you can promise the world. I mean, you can know in your brain, you think it might work, but you don’t know in your heart. So you do. I appreciate it. Anyone who has been through this and promised the world before taking office? I wish you the best of luck, Skippy. But well, the problem isn’t the problem. Numerous people believe that they can make it happen. That believes the issue is that we prop up, not you, but these people, and then we leave them to do the thing that we hired them to do, and then we don’t ever talk to them or contribute or show up at town hall meetings to voice our opinion. Or, you know, have our support, like. No, no, we heard you go. Go do that. I’m going to be a citizen when you go to It’s not how it works. What are your current projects? Support the person that you put there.

Exactly, and if you believe me, you must see the vision. Understand it, buy into it, and then help us get there. You know what I ask sometimes to create different groups and teams to get something accomplished, to get people to volunteer. And that’s how we do it. You know, I’m also a part of it. I’m also the President of the Rotary Club in my area, so those groups help in the city, and I get to be a part of that, and people get to see what I’m doing and that I’m standing behind my words. So, the thing that I want to do is show.

Yeah, this is what I want to do and I’m out here with my sleeves rolled up and this is what we’re trying to do. I need you to get on board, get on the team, and we can all get this done together. Then that’s the way I look at it. So anyway, you can get it done. Yeah, no, I love that it’s a great approach and I’m really happy that you’re the man leading the charge, but. We’re not here. Just to talk about you being a mayor. As great as it may be, we wanted to talk to you today about being a Dave Ramsey coach, and the reason I wanted to have this conversation with you is that I get so many people wanting to start nonprofits, which I think is exciting.

They want to help out their fellow men, their fellow people in the community, which I also love. But a lot of them don’t yet have their household finances together. Every time I’ve seen someone that’s been in that situation, that’s trying to start and run a nonprofit, especially because a huge part of nonprofit work is understanding money, they have such a hard time, and I would rather they have an easier time. I also happen to love Dave Ramsey and his plan. What would you say? They can benefit from the same group of people that can benefit from Dave Ramsey and his seven baby steps.

Those that are struggling, those that don’t make a lot of money, don’t know how to manage their money. I have an old saying: they could step back for a minute. Kids don’t listen to their parents, but they emulate their parents. OK, so if the parents are struggling and using credit cards as their emergency fund, and everything they buy is on credit and all their paychecks go to credit, more than likely the children will be Will they be the same, and will the cycle continue, and what will happen? What I would like to see happen is that the cycle is broken. And help these young people understand financial concepts that they were not taught about, so they can break free from the cycle. A path to a generation of wealth

Oh see, I love that I was a child of, you know, trailer parks and foster homes. I didn’t know anything about money growing up. I had a wife who did. But she didn’t do a good job of convincing us, not for me, not to get ourselves into some financial trouble. When I found Dave Ramsey and his baby steps, I was upset like, “Why aren’t people talking about this?” Why aren’t people teaching? This is because if anyone had shared with me some of this stuff ahead of time, you know I would have had a much better chance of not being a train wreck in my mid-20s. And I know a lot of people are just by nature. If you don’t have a lot of money yet, the big thing is that, as you said, we got into credit card debt and didn’t understand how to use it properly. You know, we used it to go out to dinner and all this. That’s not how it’s supposed to work. We used it as our casual let’s do things and have fun now and pay it off later, and eventually, that pain started crushing us. We do. I looked into this stuff. I read Financial Peace by Dave Ramsey, and then we took the first big step. I had a classic 1963 Chevy, which is a very interesting car.

Oh wow.

It wasn’t that fancy. We decided to sell that thing for $2,500 to start our journey toward paying off our debt. I know baby step number one is getting that first $1,000 into your emergency fund. Your baby’s emergency fund What does that mean and what? What does that look like?

Travis, that is so important because most people are in that position. All they know is that I have a credit card. And if there’s a number, CI can just go charge it. I’m good at not realizing that when you max that credit card out, you’re paying so much in interest rates that people don’t. I understand whatever that is. The $100-$1000 item that you purchased or used that credit card for is costing you that. Plus, the 1020% interest that you’re paying overtime. And that’s per year. And if you don’t pay it off for several years, you’ll be almost double what you paid for that item. So, you need to understand that and understand interest rates. Effective interest rates, which a lot of people don’t understand because over time it costs you more than what that annual percentage rate is,

So, what you want to do is get in a position to have at least $1000, and that’s what Dave Ramsey suggests. You have a minimum of $1000 in an emergency fund, so when something happens when you do have an emergency, you have the funds there to pay for it and you don’t have to put it on a credit card and pay all that. Start with extra money. That’s where he wants you to start. They can’t get out of credit card debt, and they can’t do it anymore. But years ago, when young people, seventeen to eighteen years old, went off to college. What’s the first thing they ran into when they got to the college campus with somebody giving away free T-shirts? If you sign up for this credit card, they don’t understand how it works. I’m great. I got a free T-shirt. I got a credit card, and I could go out and buy whatever I wanted. But they didn’t tell him about the part that well. You have to pay for it. You’re in college. You probably have a part-time job waiting tables, which is not going to cover your overhead and they wind up getting themselves into trouble at a very young age and it’s many, many, many years before they get out of it.  

Oh, absolutely. When people hear the first $1000, they either think it’s a lot or thinking it’s very, very little. Here’s the deal: A replacement water heater will cost $1000. It’s going to pay for a car insurance deductible. It’s going to buy a ticket home if you’ve got to fly home for a funeral. $1000 isn’t a lot, but it covers a lot of pain. When we got our first $1,000, I know my wife felt a lot more comfortable with our monthly finances. The second step is to pay off all consumer debt. We mentioned credit cards. What’s interesting about credit cards? A couple of things: My wife and I work for pay when you’re in a position where you’re putting things on credit cards and you can’t pay them off. We’re off every Friday. If we’ve played the game before, we know how it works. We pay it off every week. We weren’t always in. We weren’t in the position where we needed to make sure we weren’t putting anything on there, but if you’re carrying a balance, that means everything that you purchase. You are guaranteeing that you’ll pay more for it. So, I turned it on. It was on sale for 20% off. If you pay for it for six months, it’s more than the original price ever was. As a result, if you save for two months, you can buy it even if you put it on the card and pay it off again. Dave Ramsey doesn’t recommend using the card at all.

Yes, that’s true.

You end up saving money in the long run. The second thing is that every month your balance is more than 50% of the limit. Your credit score goes down every single month, provided you’re making all your payments and it’s not going down for other reasons. If your credit is less than half the limit, including zero, that means your credit score goes up every month. We had credit cards that we would buy. We would get them. We would activate them, shred them, and never use them, so it showed an open line of credit. It showed on my credit report that that account was good every month. giving me a little boost in my credit score. I think I got up to 847 or something like that. while I was trying to play the game. And you can know the kid and keep it at zero and have the benefit every month. I’m not recommending you play the credit card game if you’re at this step in the game here, you know, but we sold that Chevy. That first $2,500 helped us pay off our first three small debts, and then we used those payments to build. Our debt snowball Robert, do you want to tell us a little bit about the debt snowball?

Debt snowballs are awesome. So how does it work? According to Dave Ramsey, I want to give him a plug here. Is that ok with you? If you have several credit cards, you start with the one with the lowest balance, and that’s the easiest one to pay off. A lot of people talk about paying them off with the highest interest rate. That doesn’t always work. Get rid of that. Paint that with one payment. You pay your daily minimums. Just say you have 5 on four of them, the 5th. You want to pay as much as you can on that one to get rid of it. Once you get rid of that one and get it paid off, you take that same amount of money and put it towards the second one. So now you’re making the minimum payment plus the amount that you were putting on the first card. So now you’re throwing a lot more money at it at once, and that’s going to help. Get that balance and then you continue through that. You do the same thing with the third. Now you have the payments from the first card, the second card, plus your minimum payment, and you’re putting that on the third one, so it gets paid off a lot quicker, and that’s what you want to do. That’s how the debt snowball works. It’s like a snowball rolling down a hill.

Oh, absolutely, and debt is something that you can pay off down to zero and then never have to pay it again. I’m not talking about the Netflix bill. I’m not talking about your credit card monthly service. I’m talking about your phone monthly service. I’m talking about something that you can pay off down to zero and then never have to pay it again when you want to know how big your debts are. Snowball can get it because you might. You might find that you can. You can squeeze an extra $100 into that pot. But if you take every minimum payment you’re making and add them all up together, you might discover that you’re paying $500 per month on all of these payments, which is difficult to consider when you’re in it. I remember I looked at it. I was. I couldn’t believe just how much we were putting into this. Stuff like that. I couldn’t even tell you what We even spent it. We had this credit card debt and you’re like, “Was this for our dinner?” You can’t even remember what the heck it’s for, or you’ve got loans for your furniture or loans. You know, for all this stuff or jewelry. Don’t get me started on it for jewelry. They’ll give you that same month, for the next 12 months, the same as cash. What they don’t tell you is that if you don’t pay it off in under 12 months, they won’t tell you. They charge you all of the fees.

Old, that’s fair.

So, you hit month 13, and all of a sudden, your balance shoots through the roof because you didn’t read the fine print that got you to say if you couldn’t get it paid off in that year, you owed back interest. So, make sure if you’re looking at that and you’re in that place where you want to do that, that you can afford the payments that make it 0 by the end of the year. If that’s something that you’re looking at, but that is designed to go down as long as you don’t keep adding to it, and it took us many years to do this thing. But when you look at that total, you look at all the money you’re putting into your debt for stuff you don’t even remember buying. Let’s say it’s $2,500. And you’re like, “My life sucks.” We never get to do anything. All these people are having fun and taking vacations and stuff, but we can’t do anything. Well, if you had $2,500 per month. All that stuff was paid off, and that $2500 a month was going into a vacation fund. Every four months, you will have saved ten grand for a vacation. Do you know how much extra breathing room you will have in your monthly finances when that $2500 arrives? is going to be something you want. instead of something you can’t. I even remember buying

Yeah, something I try to tell people is that if you’re working hard every day, you should pay yourself first, but that’s your money. You earn that money, but what you’re doing is you’re paying with credit card companies, and you’re making them richer than they already are, and you’re just digging yourself a bigger hole. So, you have to think about it. I mentioned it again. It’s about attitude, starting attitude, and understanding what you’re getting into and what you’re paying for. It’s not just, you know, I put it on here and I pay it off each month. You’re not paying yourself, and that impacts not only you but your family. And you already know this fact: marriages that end in divorce are usually caused by financial issues. That’s number one. And it’s not understanding. Typically, you get, and you know this. You’ve got a spender and a saver, and you’re not talking to each other. And the spender usually wins.

I got to admit, I was the spender. I didn’t know any better. I didn’t. No one told me, you know what I mean? Like if I found out, I tried to find out what my trigger was for me. If I checked the bank account, those of you that have a bank account app on your phone, and you’re the spender. Get rid of that thing. If I looked at my total and saw that I had money, I would go spend it. And I had to stop looking at the bank account because otherwise, I would just go spend it. I don’t know why I did it. I don’t know, I didn’t buy anything worthwhile. I can tell you that for sure, but that that was me when you talked about, you know, paying that interest rate by looking at it in the city or in the town that you’re in. Especially if you’re in the city and they’ve got some. The ice cream. I guarantee you that a couple of those, depending on, like I’m in Oklahoma, are the biggest buildings or energy buildings, but in most cities, the big buildings are banks.

The banks

Every time you make an interest payment, you’re building a bigger bank. Do we need any more banks?

No, we don’t.

In this country, we do not. Right, they charge you to use your own money. It’s insane the way that works. I don’t need to build bigger banks. They don’t need my help in doing it. They’ve got plenty of other suckers for that. I’ll let all the other suckers build bigger banks, and I’ll build my family and my legacy and change my family tree because of the decisions that we make now. Not to have nonsense debt. But that $2,500 in our example here goes great for number 3 because then you start building up three to six months’ worth of emergency savings. And how fast do you think that gets built up? If you’re pumping 2500 dollars a month into it,

Oh, it’s going to get built up quickly. It goes fast if you don’t spend it. So, the thing I tell people is, you have a checking account and that’s what you pay your bills out of. You have a savings account. It’s not a spending account, it’s a savings account. You’re supposed to save them up, and don’t do like Travis did and look into the account and say, “Oh, there’s money there.” Let’s go and spend it. We don’t need this.

It’s one of those things where we had a situation where something happened that my wife and I decided was an emergency. We did this by making every payment a minimum. And it turns out our snowball was big enough to handle that problem, and we didn’t even touch the emergency fund, and then the next month, that money, instead of paying off a problem, went right back into our snowball. But I’ve had friends that said they had to. They’re like, “You told me to do this, man.” No, I have got something that happened. That was like, use your emergency fund to pay for it. You’ve got $800 for the thing. You owe it. You set all of your payments to the bare minimum. You take that snowball you have and how many months it takes. You build back up that baby emergency fund till it hits that thousand again; because while it’s not there, you’re at risk. Yeah, right? So, they got back up to 1000. It took him three months to get that built back up. It took a snowball. They put it back on the debt, and they were like, “Oh my God, it works.”

Especially if you’ve never had it before, something you know you can’t even imagine, but you have to envision that, and I think I’ve heard you say this before. You have to feel it. How is it going to feel when you have that much money in the bank? It makes you not talk about that earlier in a conversation. It makes you feel better as a person. You know your attitude changes. Yes, I do. Can we do this? You know, and you can teach your children how to do it, which is even more important. So, they don’t make the same mistakes that we do.

Change that family tree.

It does, it does, and I understand the couple of things I want to mention. Understanding how banks work and how they get to have the biggest buildings on every corner in every city is key. Understanding how they work will help you with your finances and when you talk about credit cards. And using them, there’s a date. People know their end date and their pay. Date There’s another People date in there. Most people don’t realize that, and you can call the credit card company and find out if it is your reporting day. When do your creditors report to their credit card companies? How much do you use your card? How much debt do you have on your card? You need to know that date because you can pay it off before that date and that helps your credit score go up because when they look at it, oh, they’re only using one or 2%. So that’s a date that a lot of people don’t know about. That would help them. And then when you use your credit card, just say from the 1st to the 30th of the month, you get your bill in and they say, “Well, you have another 20 or 30 days.” To pay for this You haven’t stopped using your credit card, so if you used half of it in the next 30 days before you make your payment, you’re using the other half. You’re using 100% of your credit card. You’re only paying off. What if 510%, so you’re showing 95 or 90 to 95% usage every month because of that grace period?

On that day of reporting your more than 50% of the total allowed, your credit score goes down because you’re using more than half and they’re assuming all the credit score. They say they are keeping a record of your relationship and your trustworthiness with someone else’s money. That’s all there is to it. It’s a record of how responsible you are, and the more responsible you are based on their algorithm, the higher your score is. I had a cousin that I was chatting with, and he was like, “I did exactly what you did with the credit card.” He didn’t move my score one bit. I was like, “Well, that’s only one piece of the puzzle.” What else was happening? He told me he missed five other payments. Of course, your credit score went down. Because it’s not the only piece of the puzzle that only works and helps you if everything else is going well.

I had to prove it to him. You’ve got to prove it’s home. But like that 2500 bucks, if you put that away for 10 months, you’ve got 25 grand in the bank, yeah? You’ve got to be feeling pretty good with 25 grand in the bank.

And then another piece to that. 

It can be missing. Any payments, as tough as it ever got for us, as tight as it ever got for us. We fortunately never missed a payment. 

Yeah, pay something. They always pay something, and it’s making payments is not the only thing they look at. They look at the type of debt. Is it a credit card? Is it a mortgage payment? Is it you know that because there’s a car payment, all those things are looked at? And what type of credit card is it? So, if you go and get a Target card, which is probably a Tier 5, You don’t get as many points for that as if you had a Chase card or an American Express card. It’s higher than your card. You get more points for that in your credits. Your credit score is higher. This is another thing people don’t understand. So, the type of credit makes a big difference.

So, getting into step number four hits one through three are the hardest steps. People spend the most amount of time, energy, and effort on getting their consumer debt paid off and then getting their emergency fund fully funded. When you’re at that point, we’re using 2500 for our argument today for our example. Everything else becomes so much easier because if you have something pop up and you have that $2500 margin of oil room in your budget, you can buy some of that bigger stuff. Outright one shot, wait till it goes on sale. Get it decided between If it’s you. Get an accountability buddy. If you have a partner in crime, if you have a significant other, agree on something. My wife and I, when it was our thing we had, we had our budget. We had the things that we had decided on. And there’s always something that pops up that’s outside of our normal budget. It happens all the time, right? Oh, you know, they want us to come home for Thanksgiving. Well, for us, that’s like 800 miles. That’s not something small, right? That’s a big deal. So, we set a dollar amount. We said if it’s under $50, please.

Right?

Not required, no. No consent is required. You make a good judgment call because at this point you’ve been working on it. It’s like if it’s over $100. You’ve got to have consent from both partners. Right, if it’s over 100 and you have to have things under 100 bucks. I’m sorry, we have to have consent like, hey, I got it. I want to get this thing that usually it’s just a quick yes. Or no one. Why was it over 100 bucks? You have the right to consent. You have to agree to it, and you have to wait a day. OK, you have to wait a day. A lot of times, if you just sleep on it, you wake up and be like, “I didn’t need that stupid thing.” Whatever the whatever, the dumb thing was. And then it was over $200. My wife and I had a contest for a week to see who could find the cheapest deal. And then, because we worked hard to save on it to save money on it, the winner got half of the difference. You know, we found something for 500 bucks. We ended up finding it for 400 bucks. The winner, my wife or I, would get 50 bucks to spend on whatever we wanted. No consequences, no questions asked. Cool, we stopped doing that when we saved $18,000 on a truck. I was like, “I’m not going to take the nine grand.” But it creates money as a game. It is. It’s just a tool. It’s a way to interact in the world, and not having it doesn’t mean anything. And having it doesn’t mean another thing. It’s how you use the tool for you, for your benefit, for your family, for your household. It’s how you use the tool that matters. It doesn’t matter what the neighbor says. He’s never had a real thought in his entire life. Why do you care about the neighbor’s things?

The way you explain this is like a game, and it is. You’re playing a game with yourself, uh, I know. So, for my funds and my budget, I’ll take X amount of dollars out for myself for the money that I put in my pocket. And I do whatever I want to do with it. That’s mine. And remember that when you go into a store and look at something and think, you know, I want that, or I have got to have that. Don’t go home; sleep on it when you get up the next day. So, do I need that? Is it worth spending the money on 9 times out of 10? It’s not because most of our purchases are emotional, especially in vehicles. We want the nicest vehicle with all the bells and whistles. And we want it to look pretty, and we want it to, you know, drive down the street and impress all of our friends. It’s an emotional purchase, and you have to be careful with those because they’ll get you in the truck.

You talk about what you mentioned as status. Right, yeah, what I noticed when I was completely broken at the trailer park. People cared highly about having a big TV. I don’t know if it’s changed or not. That was the thing. Whatever the thing was, as I got a little bit more money, my wife was worried about what purse she carried, and most of our friends cared about that. What cars do they drive? The more money I earned, the more that care changed. Most of the quoted luxury vehicles or luxury brands are not owned by millionaires. They’re owned by people that want to look like millionaires. They’re spending exorbitant amounts of money to look the part, regardless of what the bank account says. And it’s right. It’s an emotional purchase. I’ve got a watch on. I was never a watch guy.

This is an Invicta. This is like a $500 car. Watch I didn’t buy the watch. It was given to me as a gift by someone that I greatly admired. He wanted me to have something nice. I don’t know why he picked a watch, but he did, and I would never have purchased this watch on my own. It was never a thing for me. I never even wore a watch, and I was like, “Yep, I like it.” I’m going to wear it right. I think. I got compliments on it, but I didn’t wear it. go out and spend the money on it. It wasn’t me. Right, I got it. If you’re watching this right now, I’m wearing a hat that my dad gave me. I’m wearing a Target V-neck T-shirt that was bought for eight bucks, and I think I’ve got an $18.00 target short. I don’t care what people think. Most of the time, that first impression nonsense is wrong, unless you’re talking about right, something scary. That gut feeling is that something was wrong. Your first impressions are always wrong. Do you see how they dress when I go out? I dress a little nicer, but it’s not expensive. ” “Nice” doesn’t mean expensive. My wife and I have been doing these estate sales. I bought a sports coat. Four shirts and two sweaters for $18.00.

But you look like a million.

Travis, you look good, it’s Apple miss, says the millionaire.

That’s right.

My jacket was in Saint Louis this weekend. They’re like, Travis, what did you clean up? Well, I was like, “For guys, it’s easy.” You just throw on a jacket. And you’re like, “Wow.” It completely floored Jack. It cost me, I think, $10 off the pile. You don’t have to spend the money. You don’t have to buy new because most of it doesn’t even matter.

No, then that takes me to a good point. Travis is applying knowledge. People keep saying that knowledge is power. No, applied knowledge is power. If you don’t apply it, it doesn’t mean anything. It’s just that it’s sitting there and you’re not using it. But once you apply the knowledge that you have, that’s something nobody can take away from you. They can take your money. They can take your house. They can take your car. They can take everything. They can not take your knowledge. You can always rely on that to get back on your feet because I’ve been there for several months. I never. I don’t know if I shared the story with you about how I got to Texas. But when I got here, I was deep in debt. I had a wife and two kids. I had no vehicle and if I had stayed where I was, I would have been living under a bridge. So, I applied the knowledge that I had. We built my life and got me to where I am now.

Oh absolutely. I commend you for doing that, Robert. When something happens, a catastrophe happens. You’re not starting at zero. You’re starting with all the knowledge and experience that you’ve accumulated over your lifetime to help rebuild the person that you’re going to become.

Exactly.

Oh, it’s so wonderful. So, we’ve got steps one through three covered, and we’ve got $2500. We’re playing with the next step is to put 15% of your household income into retirement savings. That could be a Roth IR A, which is the most recommended one because taxes are already paid, so it grows tax-free the entire life. Whatever the numbers in the account are, that’s the match you got.

And you can invest that money and make it grow. And it’s all that it grows tax-free. As opposed to an IR, a person’s growth tax is deferred. So that’s another good point. I’ve had people ask me I said, well, everybody keeps saying to save money. Well, how much are you supposed to say? Is that a good place to start? Save at least 15%. And if you’re working for a company that has a match, a 401K match, max it out. You know, if they’re paying you half or whatever, you put in 510%. Max it out and get the most. That’s free money that you’re getting.  

Yeah, it’s 100% if you’re. If they’ve got 5% matching and that number is $500, then for every $500 you put in, you get a free $500. But again, that’s only 5%. So that extra 10%, that 15% go above and hit that number, don’t just do what they match, but as much as you’re legally allowed to put in when you get to that point. Our next number is a big one. Child Education Fund 

exactly right.

Step #5

Yes, that’s an important one. Well, we all know that when you have kids, the day that they’re born. Most of us want our children to go to college. You have 18 years to plan. Don’t wait until they’re fifteen (16-17) years old and then decide, oh, little Johnny or Susie wants to go to college now; we don’t have the money. You had an opportunity to start from the very beginning. As soon as they’re born, start putting that money away and you will. Never miss it. Even if you get raises throughout the year, typically most of us, if we’re working for somebody, get a raise every year. Take it if you’re already living it. Within your means, you’re doing OK. Take that raise that you’re getting, whatever percentage that is, and put that into something. Put it in your savings account rather than a college fund, and it will grow much faster. Don’t spend it by saying it’s usually you spend what’s left after saving and don’t save what’s left. after spending, but she won’t get it.

Oh yeah, absolutely. I got. I’ve got a couple of things I want to say about this. One thing that we did, especially being away in the military, We talked to all the grandparents, so my mom lied that her mom heard that and then whatever grandparents were alive And we said, “Hey, we’re going to put it in.” We decided for us, 4040 bucks a paycheck for each kid. We got two kids for 40 bucks. Each paycheck goes into the kids’ account, and we convinced the grandparents to each put in

Right? 

Between $5 and $10 in the account every month, you’re not around. You’re not going to get birthdays not doing this. That and the other, and they’re not going to miss 5 or 10. Well, what does that mean over their lifetime? They’re putting thousands upon thousands of dollars into at least their savings, and you can set whatever minimum number you want, and then everything that goes above that number you’re putting into something like college savings. There are a couple of different ways to do it. There’s also Something like an utma, an utma that allows it to grow an account and the reason I prefer a UTMA to the College Savings Plan personally is if they get there. There are all sorts of ways to be successful in life and you put them into a nut when they get to that age, and they decide that they’re going to technical college, or they want to start a business. You can’t use the money in the College Savings plan for those other things, so we used it. I’m in Utah for that and then, I also want to talk about some other college stuff, because I’m tired of it. People do not understand. I like the free college that’s available because they talk about all this student loan stuff. You don’t mind if I borrow. You talk about some of this stuff, do you?  

No, go ahead, no problem. 

OK, so the only things that require a specific degree are doctors, lawyers, dinners, venison engineers, and some very specific other fields. Those other things require a specific degree. Any other degree in any other place, like it’s not required, like an MBA, is nice, but it’s not required. You might eventually do that for your whatever. Tech schools are a lot cheaper, and a lot of schools, community colleges, and tech schools allow students to attend both high school and tech school. At the same time, and a lot of places were in Oklahoma City, they have free partnerships with them, and they bus the kids to the tech school for half. OK, and they’re finishing their degree at the same time they’re finishing their high school degree, so they’re getting a jump on that. a jump starts on life, and I don’t remember if it’s the same year or the year after that they graduate, but it’s also free for them to attend. 

I don’t know if they have this in your area, so I’m in Oklahoma City. We’ve got more Norman tech centers partnered with Oklahoma City Community College. I think it’s official. I know they were working on it with an O triple C. Oklahoma City Community College also has a partnership with OU, and why that matter is that all those credits you attain in any one of those schools are fully transferable. which is super helpful. All of the military academies, including the Naval Academy at West Point, the Merchant Marine Academy, and the Coast Guard Academy. 

If you get an appointment at one of those places, like the Air Force Academy, it’s completely free. No matter who you are, you’re getting an Ivy League education, and you’re getting a stipend every month as part of being there as a student. You’re getting paid to go to college. I have to pay to go to a free Ivy League school. Ivy League schools Princeton, Harvard, MIT. They are income-based tuition. You have to look up the specificity of your school, but if you make sure your family makes under a certain dollar amount every year, the kid qualifies for these institutions. You can get free tuition, room, and board for families making under 60,000 a year, so don’t think that if your family is not making the bucks, they can’t go to an Ivy League. They can, because if you’re making under 150 grand a year as a family, you get some level of discounted tuition. Check with your college to make sure you have the college of your choice to see how that works if you don’t. You should be aware that there are numerous schools in the United States. They run their classes based on sweat equity, meaning you’re putting 10 to 20 hours of work into the university a week, but you get free school. Cooper Union College of the Ozarks and Deep Springs College. 

There are free schools in America, and you’re like Travis. We don’t want to go to an Ivy League school. We don’t want to go to these. Right, we don’t want to go to the military. You can go to Europe and go to school for free. It’s not required that you be a citizen. Most degrees are taught in 100% English. There are at least 44 schools. Taught in Europe, where Americans can earn their bachelor’s degree for free? Yeah, you might have to pay for an apartment, but paying for an apartment for four years is a lot cheaper than paying for four years at university, and you’re like, well, Travis, I’ve already got an advanced degree. Sweden does free Ph.D. programs.

That’s pretty awesome.

You didn’t miss it, right? In the US, there’s a gal called Gabrielle McCormick. She runs on scholarships, and before that she was, uh, Gabriel, a 2-sport athlete that got in a car wreck right before her senior year and lost all her scholarships. She then took the rest of the year. And she earned herself $153,000 in scholarships and grant money. And she teaches you how she did it. People don’t know this, but in 2011 there were $400 million in unused scholarships in this country. This means people didn’t apply for him or they didn’t qualify. There’s far more available than just FAFSA and Pell grants. There is tons of money available and you can do this from your phone. Right, so I’ve had a couple of parents that I know that paid their kids $10 for every application they filled out. You can download Skali, which is the Ufldl Fastweb scholarship. You put in your demographics, and it spits out this whole list of things you qualify for, and you can sit, and you can fill them out on your phone. Some of them have video submissions; some of them don’t even require that you write a paper, but kids are sitting down during their lunchtime in high school, filling out scholarship applications. 

Go to the library, get some big books, figure out what the owners qualify for, and send it in. There’s an app for that. Download the app. Sign me up for these things. Visit Oklahoma’s universities, state schools, and low-cost locations. When I got my undergrad in 2011, it was about 10 grand. Last year, I had a buddy that was a waiter at Outback Steakhouse. He worked Thursday, Friday, and Saturday. Every week, he paid for his entire school by being a waiter. He finished his degree with no school debt and even had a paid-for car by the time he was done with it. And some so many employers pay for your schooling. “Military.” But Lowe’s, Home Depot, Walmart, McDonald’s, and Starbucks all pay their employees to go to college. 

So please, dear God, look up some of these things. I’m sure some of the things I’ve said are outdated. That’s from my list I put together years ago when I was doing things that Robert was doing, but there are things available. Look up Free College. Dear God, please do it. Don’t just sign up for a loan just because. There are so many. Every university has a list of private grants that they don’t advertise that you can go in and look at. Ask the bursar’s office and say what the grants are. Or people are available here that people aren’t applying for. And they’re like, “Yeah, I can’t believe people are applying for this.” They’ll give you a whole list. You can just apply for one. Them all. And no, they’re not only going to be $30,000, but some are also going to be $100. Do you have 500 bucks or 1000 bucks?

Hey, everything that helps.

But they add up. Can you imagine putting it in? 10 applications a day. I think the average school day is like 179. Imagine putting in 1700 applications by the end of the school year because you’re doing 10 a day. You’re going to get some of them. You will not receive all of them, but we will receive some of them.

It adds up to everything else.

Heads up, it does.

And unfortunately, I see some of the same things here. We have several companies here that do offer scholarships to kids. They don’t apply to them. I had had a meeting with it several times, so we know we have all these fellowships. We sent him to school, and I have my daughter in high school, so I asked her why she said no. I had never even heard of it. So, there’s a disconnect. Somewhere but you, as you said, will. On the Internet, you have access to anything that you want, so get on there and look these things up. So maybe it’s outdated, but there may be some rules out there that you can find, but you don’t have to go into debt to get a college education. You talked about trade groups.

I am fortunate enough to be in the military. They paid for my whole undergrad. I think I paid 700 bucks for my undergrad, and then I got my master’s degree while I was still in, and they have some special rules that force incurred time for officers, and I was like, I’m not forced to incur any more time, so I paid for the last two classes out of pocket, which is like 14. firebug. But because I had been through Dave Ramsey’s plan, I had the cash to do that. I had to ask to make that kind of decision. You know, I didn’t have that when I was younger, but I was busy making mistakes. Do you know what I mean?

Yeah, you, you, and I both. I learned this unfortunately as I got older, and that’s why I’m trying to teach my kids about it. It doesn’t bother me. If I had learned it earlier, it wouldn’t have given me a lot better than it’s doing now, but at least I can help them out.

Oh yeah.

The same thing here.

Take the opportunity to do things with your kids. I had my daughter, who was in 7th or eighth grade, and Cameron. Which grade did she come in? She’s like, “Dad, I want a snake.” Like, what do you want to take? I don’t know. I don’t know what I would do. I was like, how much? How much does Snake have? She’s like, “Dad, it’s only $600.” Only she’s so cute. She’s 7 or 733 at this point. I was. Are you insane? No, it’s $500. I was like, OK, I was. Well, look you, uh, at the time she wasn’t getting the best grades. I was like, “You’re not even doing your job.” She’s like, “Dad, I’m a kid, I don’t have a job, it’s like school is your job.” She’s like, well. If school was my job, I’d be getting paid. I was like, OK. OK, it’s like you want to get paid for grades, and she’s like, “Yeah, I want to get paid.” I was like, “I’m only going to pay A’s.” She’s like a mother. I was like, no, I was like, “You’re going to get all A’s and get 500 bucks, or you’re going to get 1B and get nothing.” And she took it as a challenge. He says, “OK, dad.” She brought home straight A’s.

It says, “Look how capable you are.”

I hereby raise the challenge. I raised the bar, and she jumped up to meet it. Good for her. And she’s just like my dad. Let’s go get a snake. I was like, alright, you did a great job earning the money. I put a bank account outside of her wall in her bedroom. I put $500 on it. She’s like, “Let’s go buy it,” as if to say, “No, now I’m going to show you.” We discussed how to spend the money, and we did. After three days of research, we found someone in town that had a Ball Python and a tank and a heater. And we got all of them together for 60 bucks. However, because she did the work, she got paid, and then we learned a little bit about how to spend the money. So, she then bought, I think, a big fancy dresser for herself and some other stuff, but they had $500. She had learned a lesson that she could question. She taught herself and when and when she gets paid, she learns. She can figure it out. She wants to find the best way to spend the money to get the thing that she wants. That’s it.

Not to get your first paycheck and then blow it.

Yeah, my son, most of what we have is a conditioning, isn’t it? My wife and I are suffering from the programming that was laid out for us early in life. We took our son shopping all the time when he was young because that’s just how it goes, and I noticed there was this growing collection of like Hot Wheels, Matchbox cars, or whatever. every day. I was like, why does he? He has so many cars, he’s like, “Well, every time I take him to the store.” He’s good and I got him a little car. I was like, you know, I wanted to have all the things I didn’t have. I was like, “I was like a baby.” can’t do that. She’s like we can. We can do it. We can. We can afford it. We’ve worked hard. You can afford it. That and the other, I was like, “I don’t care.” About the car: It’s not about the car. The problem is the behavior. You’re telling him that if he’s well behaved, every store he walks into he’s got to walk out with something.

It hurt my wife a little bit to say something like that. I was like, “I was like, our kids are not wanted in any way.” They have plenty of toys. Right, we can’t just buy him something for good behavior, because that’s programming our kids to say that every time I go out I should come home with something. You should not come home with something. Dear God, no one can tell you. No one can afford that stuff. When my son got a little older, we were in Walmart and he was looking at stuff and was like, “Son, look at this.” That’s kind of crap. You know, poor quality, the set, and the rest. He’s like my dad. I didn’t ever really get anything. I was like, “Here’s the deal; we can buy it.” Anything and everything in this store we can get. We’re at that point in our lives. We can buy anything here we want. But is the thing you’re wanting to buy worth it? Are you going to pay for it for a weekend and not touch it for months? And then it ended up in the garage sale this summer. He’s like, he’s like, we can afford him. Is anything here, anything you want? We can go buy it. But what is it? It will be well worth your while. And he was like, “Yeah, that’s crap.” I don’t want that. It’s the desire to get because you feel you don’t have what he was experiencing, and now that he knows that it’s all available and everything is capable, he’s like, yeah, why would we waste money on it? That doesn’t make sense. Do you want to meet? wants and needs, wants and needs, wants and needs do you want to meet?

Our next baby step is paying off the home early, and that’s where we’re at. We’re on the pay-off-the-house early plan. We’ve made it that far. We’ve not yet hit baby step 7 in our household, but we are working on paying extra on the house. My check goes to all the stuff that happens all the time. All the recurring things are paid, and my wife is gracious enough to use a carving knife to carve $1000 out of her paycheck every month. So, teamwork makes the dream a reality, and we’re gradually chipping away at saving. tens of thousands of dollars in in-house interest payments, all good. Oh, my goodness, if you’ve got a house, if you’ve got a mortgage and you haven’t done the math, pull up one of those pay-off home early calculators and put 100 bucks in there. It is determined by where you are and how much it costs. How many thousands of dollars will you save just by getting an extra $100 a month? Our goal is for our son to start in 9th grade. Our goal is to have the house paid off before he graduates, so when he’s graduated, we can do whatever the heck. We want it, we’ve got no more. Bills, we bought the house. What the heck is the year? It’s 2022, nine years ago. So in 13 years, we’ll have a 30-year mortgage paid off.

That’s awesome. That’s awesome. And and and you’re not living. It’s like paupers doing it.

No, now once you clean up some of the behavior because all money is not money. It’s never a money problem. It’s a behavior problem.

But hey, get the problem right, remember?

It’s a behavior problem.

What if it’s just a tool?

Yeah, people are like, “Well, you’ve got it so lucky.” As in, right now, right now. That was two decades’ worth of work, making sure that we did things that we were supposed to do the way we were supposed to do them. We took care of it along the way. We went to Hawaii. We went on cruises. We did all these things, but we had to get those for those first three steps, which were the hardest. That’s $1000 in the baby’s emergency fund. Paying off all your debt other than the house and not accumulating new debt and then only funding that emergency fund when that thing is done. You will feel so amazing when you’ve got six months’ worth of emergency funds. I retired from the Navy earlier this year and we said, “Well, well, more than the baby emergency fund set up.” And we needed Is that why my paycheck got cut in half? But luckily, our spending and behavior were under control, but my wife had brain surgery the month I retired, which means her earnings were zero. And I lost more than half of my paycheck. But because of what we did and how we set it up and the behavior we have with the money we have in the bank, I’m not working another job, and she just started back a couple of weeks ago because she’s got to get out of the house and to be honest, I need her to leave the house.

Yeah, you’re right.

It’s hard. It’s hard to enjoy life when the only outlet you have is one other person. Please go to work in Tulsa. So, please tell me about your problems.

Go to the mall. Just don’t spend a lot of money. Do something you know. Once you get set up like that, you have that plan. It’s so much easier to do because you’re not just throwing good money after bad, and you recognize what’s going on, and it’s easy to say, you know what, I don’t need that right now. If I can, it’s not a big deal and I want to see us continue to grow this nest egg. It helps you and your children see that, and they’re going to have that same behavior when they get out there. Grow and you can start creating that generational wealth and it’ll continue for generations to come.

The vast majority of kids model exactly what they see from their parents. If you have any relationship problems and you think it’s OK to scream at each other in public or at home, they’re going to do the same thing when they have a relationship. If they see you working in the community and showing up to community events, the Rotary Club is making a difference in the town. Chances are they’re going to do the same thing if they see you taking care of your money and being a decent human being.

Chances are they’re going to model that for very few kids. I have the wherewithal or the capability to say this is an example, but for me, I’m not doing it that way. Very few kids can do that, so whatever you’re modeling, and this is, this goes beyond. This goes beyond all this other stuff, right? Well, I’m a You know, my mom was a single mom, and I can do it if there’s no one around. Abuse is going on. And you’re just getting bored. Stick it out, be that generation that says you know what, kids, I’m going to show you what it looks like for good times and bad with sickness, sickness, and health. Richer or poorer? What does it look like to stick together? She’ll give those kids an example that they can be proud of and show you know what? I know my mom and I know my dad went through some. Hard stuff, and here we are on the 30th anniversary. And I’m so glad I had that example. I’m going to stick it out with my spouse again, barring any kind of abuse. I’m not advocating that kind of behavior.

Yeah, I understand.

A lot of people just say, “Oh, we grew apart.” Marriages are not 50/50, it’s 100/100. You can’t expect half of what is expected to work out.

I agree. Yeah, I agree. I will tell you something I did with my daughter. I have three children, but I have one. She’s very young. So, she’s a college fan. What we did was start building it up, but what I do when I do investments is to invest in real estate. We use her college fund to invest in real estate, and it’s in her name, and when her interest checks come back in, they come back in her name. She gets to sign it and deposit the money into the account, so she gets to see it grow, and she looks forward to those interest checks every month. I asked him and I said, “What did you do to earn this money?” And she looked at me. Kind of funny. She says, “What do you mean?” I said, “What did you do to earn this money?” She said, “Well.” I didn’t do anything. I said that’s the point I want you to get. Your money is working for you, so she’s learning that as a young teenager, you know. And seeing that, I’ve seen her funds grow and she’s not working for it. So, it’s a good lesson for her too.

Oh, that’s phenomenal. That is way cool. I’m proud of you for doing that. Are you paying attention? There are only three ways to make money. There is the money you make for yourself, AKA going to a job. There is money other people can make for you. Think of it as you being a business owner and having employees right there making money for you. And the third one is the one Robert just had as his example: is your money out making money?

I’m waiting for you.

There are only two passive ways. And that’s real estate and investments where your money is just working for you. Yeah, that’s so fantastic. If you listen to all this stuff and you’re like, “Hey, we’re just not in that situation.” Like if you’re good with your credit. Put your kid’s name on a credit card. If you’re doing well, if you’re not missing payments, add their name so they can start building credit so when they hit 18, nineteen, or 20 years old, or get their first car, their first apartment, whatever they have a credit history in, it’s a good history to save them money upfront, so they’re not paying extra just being penalized. Due to their age.

That is an excellent point. good point. There is a way. And again, it’s this knowledge that people don’t have. Get it, learn it, get on the Internet. There’s so much that you can learn to help yourself, but then apply it and make it work for you and teach your children so you can keep it going.

We are at the best time in society’s history. Everyone has a smartphone. Dang near everyone got it. One, as well as access to YouTube University. Whatever you want to learn about whatever free podcast out there, find whatever subject you’re weak on that you need to bolster for your family. They need to get stronger. Maybe it’s nonprofit work. You listen to Travis. Maybe it’s you’ve got to figure out your household finances, so you pull up the Dave Ramsey Show. Maybe it’s investing or mergers and acquisitions. There’s a podcast about all that stuff where the experts are telling you exactly how they did it. Don’t just turn it off. Turn it on. You’re watching. three or four hours. You might as well try something that’s going to help you change your family tree. Start with that generational wealth and truly start living your life and having an impact on this world. Robert, thank you so much for being my guest today. What parting words do you have for our audience?

Well, first of all, thank you. It’s my pleasure to be here and to share this information with you. You recorded this right? People can go back and listen to it again. Go back and listen to it and pick up on some of the nuggets that Travis is not talking about today to help you. There’s somebody out there that’s in a situation where they need help and don’t know where to go. Get that help. Listen to this. You can always go listen to Dave Ramsey. He’s got podcasts and gets that information to help you get out of the situation on your end. It’s a negative situation, but you can turn it around to help yourself, your family, and your children, and pass that along. so important.

Thank you so much, Robert. If you enjoyed what you heard here and want to start your podcast, tune in to this episode. Shoot me an e-mail. We have the resources to help this get going for you, your business, and your things. Heck, I mean, I even talked Robert into starting a podcast as the mayor. We’ll see how that goes. Tune in next week. We’ve got a new show every single Tuesday. I look forward to hearing from you all. Thank you so very much.