“The only thing worse than being blind is having sight but no vision."

Helen Keller


Before we begin, I want to make something very clear: how you respond to adversity when it inevitably strikes is what separates ordinary people from extraordinary achievers.

That’s right, none of us are immune to adversity – and, in fact, the most successful people use the adversity they’ve faced as fuel to move forward stronger and more resilient than ever before.

Today we sit down with Dr Sonja Stribling who has faced enormous adversity her entire life.

She was born into a family as the youngest of 12 children, to parents who only had a second-grade education. At age 15, she gave birth to her first child. And just two years later, at 17 years old, she was raped and left for dead.

Sonja went on to college, but just prior to graduating, she joined the US Army for what would become a 21-year career, including combat tours in war-torn countries like Iraq and reaching the rank of Major.

While in the military, her 18-year marriage fell apart, and she returned to civilian life without any idea of what to do next. Considering taking her own life, Sonja had an epiphany that there was more to her story than what had been written.

Since that fateful moment, she has become an internationally renowned speaker, author, television presenter, and business coach, as well as recipient of the Presidential Lifetime Achievement Award.

In this wide-ranging interview, we talk about:

She holds nothing back and I know you’re going to love it. Let’s win the day with Dr Sonja Stribling.

James Whittaker:
You're one of the strongest people I know. You've also got about the biggest heart out of anyone that I know, and you've helped so many people all around the world. We'll get into the amazing highs and lows of your story very shortly.

But first I wanted to say thank you for your service and thank you for all you do to make the world a better place. I'm deeply honored to have you here today.

Sonja Stribling:
Thank you so much for your continued support James.

What was your life like growing up, especially as the youngest of 12 children?

Honestly, I felt like I was the only child because they were so much older. At the very beginning, everyone was two years apart, but when you get to the last three or four of us we were spread out a little bit. Of course I was what they called the “mistake baby” and the mistake baby came eight years after everybody else. So when I showed up, it was a little different.

I didn't know my dad and I had to dig deep into that later in life, but I remember him being around once. Maybe when I was 9 - 10 years old, but that's about it. So my childhood wasn't the best. It wasn't horrible, but it wasn't the best. And so just being the youngest of 12 and knowing my mom had a third-grade education and my dad had I think second-grade education, that's about all I remember of him. But my mother is a strong woman, for sure.

And your teenage years were particularly challenging. You had a child at 15 and just two years later, you were raped and left for dead in a field. How did those experiences change your mindset at the time, having that happen at such a young age?

Well, I can remember being 15 years old, James, and you will see me look up because I can remember being in that hospital room, giving birth to my first child at 15 years old. I remember them strapping me down to the table. I can smile about it now, but for years I couldn't tell that story.

A 15-year-old should not be giving birth, but I did. It was a blessing later, but during that time I had to grow up really fast – I’m very open and transparent now about my story. My mom was a saving grace. She was there when the rest of my family wanted me to have an abortion. My mother was like, "No, that's not what we do. You made this bed, you're going to lie in it." But it was a blessing. My son will be 34 this year, but it's a blessing that I had a mother like that who insisted I be responsible for this child.

I had to grow up really fast.

And then, as you mentioned before, James, two years later in the wrong place at the wrong time. I grew up fast. I skipped my entire teenage years, and all the fun things we’re supposed to do as teenagers, because I was a mom. I didn't get the opportunity to do that. I was busy with school, busy with a child, busy just trying to figure out my life.

It was a bit much, but at 17 when that happened, it really changed who I was. I didn't think the same. I was very angry. I was very hurt, disappointed. So it was a lot to deal with as a young adult.

At 22, you went and joined the military, which was a career you ended up having for more than 20 years. What was it about the US Army that appealed to you?

It's so funny. I laugh about this because it was just a couple of years ago that I realized that out of 12 siblings, seven of us were in the military. Four of us were retired military. Because they were so much older, they weren't around. And then when I got older, I went to college, played college basketball, and then joined the military. It wasn't the conversations that we had, because I wasn't there. During their adult life, I was younger and with mom. So it was just different.

I always saw the "Be all you can be" army sticker on the door. So when I joined, it just seemed natural that I was supposed to be there, and I absolutely enjoyed my career in the military. I'm glad it's over, but you know once a soldier, always a soldier.

It gave me the opportunity to express how I felt about the heavy things that I couldn’t express previously. So it was a blessing for me to join and serve my country.

Well, doing combat tours in places like Iraq, I'm sure that presented elements of life and humanity that other people would really have no idea about. What did those experiences teach you about the world?

Wow, great question, James. By the way – you ask the best questions ever! Just being in a foreign land… I’m a country girl from Wilson, Arkansas, who had never been on foreign soul. And when I traveled on foreign soil for the first time, I was an Officer, and it was just like, “Wow, am I really in the desert?” Like proper desert, not Arizona or any place like that.

Iraq is a place I never want to go back to – not in that situation and as a mom having to leave my kids for 15 months. I was married at the time. My husband was there and he was about a 45 minute flight away, but you can’t just walk outside of the gate and say, “I'm going to go see my husband.” You had to catch a flight. And of course that was dangerous.

So that experience in itself is something I can't describe. I wouldn't really want to, but I would just say it really opened my eyes to what was happening around the world. And the fact that I was a part of a war is, I don't know… War is something that I didn’t find myself in, it’s something I volunteered for. I raised my hand and said, “This is what I want to do.”

War is something that I didn’t find myself in, it’s something I volunteered for.

I volunteered to serve my country and that was a part of it. So I wouldn't take it back, but I don't want to go back there either.

When was the moment in your life where you felt empowered for the first time? That you felt maybe you had more power than what you ever thought possible?

In this very home, some years ago, I was lying on my back, James, and I was just reflecting on my life. All the things that we spoke about. I was in a very deep, dark place, depression, all of that. I had recently retired from the military after serving 21 years. I just wanted more.

It was this feeling of, “Okay, you cannot live like this. There's got to be more.” I wanted something that was going to bring me happiness. I just remember crying. My prayer was, "Please don't let me live like this." Because as a woman of faith and a believer in God, it was, “God, please help me. Don't let me live like this.”

I had children and, James, if I can be very honest and very transparent, I was at the moment where I was literally wanting to take my life. I didn't want to be here anymore. It was just way too much. Thinking back: being in the Army for 21 years, having a child at 15 years old, what happened at 17. Those things happened. Then a marriage of 18 years ending in divorce that took three years to dissolve. It was a bit much for a single mom of three kids.

I was literally wanting to take my life. I didn't want to be here anymore.

I sat back and thought, “Okay, there's got to be more. So if you're not going to let me take my life, please just don't let me live like this. Just use me in whatever capacity you think I fit in.”

After that, I found myself very quickly on social media sharing my story, sharing my life about divorce, and all of these women thanked me for helping them, but it was helping me too because everything that was pent up on the inside of me I could share it very openly. Messages, emails, all of that were coming through.

So the turning point was when I realized that there was more for me to do, when I began to bring a smile to somebody else's face helping them get through whatever they were going through, it blew my mind. No one ever talked to me about it. No one ever shared that, "Hey, you can tell your story. You can share," but that's exactly what happened and it changed my life forever.

That honesty and authenticity is such a big part of your personality and one of the things I love most about you. Well, you had this 18-year marriage, which you just mentioned was a really difficult time in your life, but that then went on to inspire your book. Can you tell us a little bit about that experience, what the book means to you, and the lessons in it that help other women today?

The book is called, The Divorce that Saved My Life: 12 Principles to Overcoming a Broken Relationship. You can go and find it on Amazon and at the bookstore. The book was more of my story, but it wasn't just my story. It was tips and tools for women or men – whomever read it – to really help them walk through the journey and to know that divorce is not the end.

Divorce can be the beginning if you want, because in itself that book was my story of how I overcame all of the trauma and the pain in my life and the disappointment in the divorce in itself. It walks individuals through identifying the problems, why you're in broken relationships, and why we choose the mates that we choose, and all of that. So it was a part of my give back, to share the very intimate parts of my life.

And it was just inspired because I had to get it out. One day I was like, “I want to write a book” but I didn't realize how challenging that was. Even to this day, I cannot read it all the way through without crying. I was like, “Who is this and how did she survive?” Knowing that it was me and I was a part of this big movie. But the main thing is that it helps someone else. So that book was just something that I just wanted to give back to help someone else write their own story.

Recently I had mindset and brain expert, John Assaraf, on the show. And he was talking about using the past as a guiding post, not a hitching post. It sounds like you had something similar.

What was it about your life that made you want to work with female empowerment in particular, which of course has led to you having your own TV show and a whole bunch of other amazing opportunities around the world?

Well, truth be told James, I didn't want to really help women. I Just didn't. I wanted to focus on just me, because simple fact, because I'm a woman, I know what we deal with, all the nuances, the ups and downs and the roller coasters and all of that. But of course the universe and God had a different plan for me, and women began to come.

Men do come and I do coach men as well, but my focus in my heart was for women because all of the things we deal with. We multitask so much. We have so much on our plates. We're our husbands' wife and we're our children's mother, and we're the caregivers for everybody else. And people are pulling at us and I realize, “What if I can help another woman get to where I am?” I’m not saying I made it to the mountaintop, but I sure feel like I had, and I know it's just the beginning. So I just decided, okay, let me help some other women build their business.

One day, I had walked off stage after a speaking event, and a woman tapped me on the shoulder. I thought she wanted a signed book, but she said, "No, no, no, I don't want a book. My marriage is great. My relationship is amazing. I want to know how to do what you do."

I thought, “What am I doing!?” I didn't realize I was doing something! I was just doing at the time, what I thought was necessary and needed. It helped me, but it helped other women.

She said, "I need a coach."

And at that moment, that's when I stepped into this role of being someone else, not just a life coach, but someone else's business coach, because all they wanted to know is how do I do what you do? How do I build a six figure or higher business?

I was like, “Wow, I am doing that!”

At that time, I had made a million dollars in my business just helping others, not really thinking of it as a business, which is crazy. That's a whole different story in itself. But then I realized, James is that they were asking. So I began to build something so massive that would help women change generational wealth, to take them on a journey to help other people and really change the trajectory of their life and their business, if that was their choice to have.

You're very candid and open about talking about money, yet it seems to be almost a taboo subject in most countries. Tell us more about this mission to help others build wealth and freedom and why so many people have a bad relationship with money?

I think it's all from our childhood around the world. I mean, I used to think it was just for women and men who were in the US. But then I began to travel to the UK, Australia, and Canada, I realized it was everywhere.

Money makes the world go round. I don't care what anyone says. Most people who say it's not important, normally don't have any, which I not necessarily their fault. It is just more about what we've been taught along the way.

Money makes the world go round. I don't care what anyone says.

We can sit at a table and talk about money, but if I look at the table men talk about money, no problem. But women are very shy about having conversations about someone paying for their services. I wanted to change that thought process of you sitting at the table and being very confident about who you are and what you bring to the table, because you wouldn't allow someone to do that in a job.

You know what you're worth, but why is it so different when it comes to business? That's the pathway I want to change for women to know that they are worth so much more than what they give themselves credit for and what they allow others to put a price tag on them.

There was something I heard you say in another interview, “If you didn't come from a wealthy family, let a wealthy family come from you.” What does that mean exactly?

Oh, wow. So I was sitting in church some years ago with my son who was in his freshman year of college, and the pastor said something very similar to that. At the time, my son elbowed me and said, "Mom, he's talking about you." Oh my gosh, James, my face at the beginning just swelled with tears. I started crying so har, just from the simple fact that my youngest realized that our lives or his life, his children's lives, are different because of that.

So when you hear me say publicly and in books and wherever that if you didn't come from a wealthy family, let a wealthy family come from you. Just because you came from nothing doesn't mean your family has to carry on that tradition. It means you get to create whatever lifestyle that you want. And so it's just been my mantra.

Just because you came from nothing doesn't mean your family has to carry on that tradition.

I don't want my children to suffer the way I did or the way my mother did. It's not just about the money. Being rich is more about teaching them different ways that they don't have to always go get a 9:00 to 5:00 and always have to go to school because school is not for everyone, but there are other means to create wealth. You just need to know where to find those ideas and the strategies and the tips and tools to do so.

This year in particular has really shone a light on social injustice. To me, one of the most alarming statistics is that the average net worth of a black American family is $17,000, whereas for a white American family it's $170,000. At a community level, or at whatever level you think you want to talk about, what can be done to help balance this wealth gap? Because clearly a very real problem exists somewhere.

There's so much. I was having this conversation with one of my sons at home, and he plays in NFL at times, and then he was coming over to Canada to play, but of course they closed the borders. And we were talking about the years from slavery and all the things that were happening.

And by the way, James, when this took place, I think for eight days at the beginning, I cried every day. Every single day. I had to stop watching social media. I literally felt like it was happening to my family. I have three young black sons, so I called them all the time to check in. One was home, one went back to college, and the oldest one was in Arkansas. So I was constantly on the phone to sure that they're okay.

And then even during the pandemic, I'll be honest, my business tripled. It is simply because I got the opportunity. I worked from home, but I was doing a lot of traveling before COVID, but I just made the pivot and I start working from home. I started thinking about not just the community but what about us as African Americans and what we can do. I truly believe what has happened is we have not been educated at the same level that others have.

What I mean by that, talking to some of my Caucasian friends or anyone outside of the black community, the conversation that some of them are having at their kitchen table wasn't about survival. It was about, "Hey, when you get 18, if you don't go to college or you need to go to college, you can get more education. So you can be the accountant in our business, or you can do those things." They were having conversations about business.

But we weren’t having those conversations in my community. I know I didn't have that conversation with my mom. Not at nine sitting at the kitchen table, it was just, "Hey, we're going to eat today. What are we eating? And do you have homework?" It wasn't about the future per se, other than graduate, get a good job, go to college, get a good job. That was the conversation. And what I believe our community is missing is that education.

I’ve been in the military 21 years. Did I see racism? Yes. However, most of the time when I was in the room, James, I was a senior person, so people said, "Hey, you may not want to do that with her." It was just a respect thing that was mandated through the military. When I retired, I saw the world different. So I felt like I'd been sheltered a long time. I'm not saying racism doesn't exist in the military because it absolutely does. But what's happening in the world now is at a whole different level.

And so I think for us, we haven't been shown a few things, but I also think we have to take responsibility and not think it's about looking good and having these nice things or nice hair and all of that. There's so many other things that I've learned along the way. Just to say that I'm the first millionaire in my family is a big deal. Sometimes I get choked up about it. My children know, my family knows I'm the youngest, but I had to take on opportunities when they weren't always offered to me. I had to go find them.

You mentioned access to education, which I think is so important. In my experience, where I’ve learned the most in a practical sense is actually doing things – it’s solving real life and business problems. It's not necessarily what I learned at elementary school or high school of which I really remember probably zero. It was from having my own businesses.

I know that there's a lot of associations out there working with communities now to try and give people real life business experience through simulations, training, and programs, and I hope that style of education continues, especially in low income communities, all around the world. Entrepreneurial skills, especially now that the barriers to entry are so low where all you really need to start a business is an internet connection and a phone.

Oh yeah, 2020 is a year of the expert. If you have some life experience and knowledge... This year, James, I launched a new platform called Kitchen Table CEO. It's just that. It is more of taking your life experience and the knowledge that you had to be able to create generational wealth, because people are picking your brain all the time. They're asking you your opinion on things, and we just give it away and not thinking that you actually have something on the inside of you that many people want.

You don't need 100,000 people to make a $100,000 anymore. You need a handful of people who are willing to invest in themselves, and you take them on a journey. When I learned that, it changed the game for me.

You don't need 100,000 people to make a $100,000 anymore. You need a handful of people who are willing to invest in themselves, and you take them on a journey.

I was sharing with one of my colleagues who was in the military 28 years. He was talking about how he had just written his book and he's doing all these great things. I said, “If I would've known what I know now…” and I've invested a lot, James – and I'm sure you have as well – in my self-development but also in the business that I saw for myself.

Did I imagine one day it would be a multimillion-dollar business? Absolutely not. I just wanted to make $10,000. I wanted to replace the income from the military and that began to happen not just by the month and by the week and by the hour. It was like, “Wow, I have my hands on something.” If I had learned this years ago, while I was active duty military, I probably would have gotten out early. So it happened at the right time, but I've learned so much about wealth, the difference in wealth and riches and just really creating your own table.

And I love to say write your own check. When you're able to do that, no one can take that from you, not even a pandemic.

Yeah, it's so true having that resourcefulness and of course the resilience that you've forged from a life of challenges that you've overcome. And a lot of the mutual friends we have are all about making sure that we can learn the lessons from adversity and that it's never fatal unless we accept it as such.

You mentioned systemic racism before and it's been a major spotlight in 2020, not just in the US but around the world. Now that a bit of time has passed, how do you feel about the activism that's happened this year? And since we seem more divided than ever, what can people do to move forward united?

Well, the social injustice that's going on right now has led me to learn more about history than I've ever done. I didn't know anything about Black Wall Street. I learned about that, the killing and the massacre of a whole town and black business owners. They burned the city to the ground – just wiped out families.

It made me reflect on what happened in our history that made us think that because of someone's skin color, that they're less than. You have to think about how imbalanced someone is to think on that level and for it to carry over hundreds of years, even to today.

And when you hear the conversation about black lives matter, and then you say all lives matter... It's almost like, James, your wife coming to you and saying, "Honey, I'm not happy today because this is what you did."

The wrong thing for James to do is to say, "Well, I'm not happy either," right?

Whoa, wait a minute – I came to you first! This is not a tit for tat. I came to you to let you know that I'm not happy and to see if you could help me work through this. It is not the time to say all lives matter. Because all lives matter is not the point right now, it is about black lives matter. It's not saying everybody's not important. We're not saying that. We're saying right now, what we see in society is there a lot of black people being killed. There's a lot of injustice for the black community and we want something done.

And so when I sat back, I never really thought about this before. Again, I was in the military. I believe I was very much sheltered from what was happening in society. Well, I'm no longer sheltered. I'm wide awake. I see what's happening and I'm not very happy about it. At one point I was very angry, mainly at the fact that I missed it. So what I believe is happening is just some of the old thought processes that people have had. They have instilled it in their children.

But as far as unity, it's just time. I'm loving that Nike and Sprite and all those folks, national platforms are bringing awareness. You see tennis pros wearing a t-shirt with ‘Say her name’ and things like that.

But there's still some people who are quiet. Why? It could be about the bottom line, what's on their paycheck.

We’re going to get to a place where it's not all about the money. It is about justice and being right and fair. But we have to do something. We can no longer go back to the way we were. I'm very interested to see what the upcoming years look like about social injustice and when we ever get to a point, it's going to be a process for sure, but I'm curious to see what it looks like at the end of the road, at least during the time that I'm alive.

Can you imagine us all working together and that in itself, I would love to see that. I believe we're on our way. We have some ways to go, but it has to start from the very top from leadership. And that's the thing that needs to be changed and challenged more so than anything.

You're a mom to three boys, and I'm a new father. It's funny when you become a parent, it's like the fears that you have for yourself get passed down where you worry about what’s going to happen to your children rather than yourself. And it seems weird that the fear I have for my one child could be amplified by three because of the three children that you have, and parents who have even more children! As a mother, what is the greatest fear that you have for you children?

That they will be judged by the color of their skin and that they will not get a fair shake in life. All three of my boys now have dreadlocks; it’s not something I'm a fan of, right? Not because of a race or anything – I like clean-cut military, but they look very nice in their dreads. They are athletes too. So it is just assuming that all young black men are thugs or gangsters or whatever. They're very educated, highly respectful young men but my fear is that they will not be treated fairly because of their skin color.

But the second fear I have is that they will have a poverty mindset, and I know I have a responsibility in that. Not under my watch. We're not playing that game at all. I'm adamant about that, that it is not a ‘woe is me’ scenario, even though there's a pandemic happening, even though there are leaders who are not looking out for your wellbeing, and all of that. I want to give them something pandemic-proof, but at a minimum to make sure they don’t have a poverty mindset.

Now, as they get older, if they make decisions along the way and they do that, that's fine. But I don't want to raise them in that thought process. So a lot of the ways, James, that I used to think about things have changed because of what's happening right now. A lot of people are having to make decisions because of the pandemic, such as what they do financially.

About a week ago, I started a real estate company for my kids. That was the best feeling in the world, that I can change generational wealth because of how much I've invested in myself, the things that I've learned, so they don't have to go down that pathway and they can create their next level, if they want. Do they still have to deal with some racism? Yes. But I don't want them dealing with racism and being in poverty.


Check out the YouTube or podcast version where Sonja does the Win the Day Rocket Round, answering questions about her favorite quote, what advice she’d give her 18-year-old self, her favorite book, and a whole lot more 🚀


That mindset is such a big thing. The reverse of the poverty mindset is the growth mindset, or wealth mindset as some people might call it. I think a growth mindset is about as good a gift as you could give any child on their journey through life.

Final question, what's one thing you do to win the day?

I wake up every single morning and I ask myself, “Who can I serve today to get to their next level?”

Resources / links mentioned:

📷 Sonja Stribling on Instagram

⚡ Sonja Stribling website

📙 The Divorce That Saved My Life: 12 Principles To Overcoming A Broken Relationship by Dr Sonja Stribling

“The only thing worse than being blind is having sight but no vision."

Helen Keller


Before we begin, I want to make something very clear: how you respond to adversity when it inevitably strikes is what separates ordinary people from extraordinary achievers.

That’s right, none of us are immune to adversity – and, in fact, the most successful people use the adversity they’ve faced as fuel to move forward stronger and more resilient than ever before.

Today we sit down with Dr Sonja Stribling who has faced enormous adversity her entire life. She was born into a family as the youngest of 12 children, to parents who only had a second-grade education. At age 15, she gave birth to her first child. And just two years later, at 17 years old, she was raped and left for dead.

Sonja went on to college, but just prior to graduating, she joined the US Army for what would become a 21-year career, including combat tours in war-torn countries like Iraq and reaching the rank of Major.

While in the military, her 18-year marriage fell apart, and she returned to civilian life without any idea of what to do next. Considering taking her own life, Sonja had an epiphany that there was more to her story than what had been written.

Since that fateful moment, she has become an internationally renowned speaker, author, television presenter, and business coach, as well as recipient of the Presidential Lifetime Achievement Award.

In this wide-ranging interview, we talk about:

She holds nothing back and I know you’re going to love it. Let’s win the day with Dr Sonja Stribling.

For the video interview, click here.


Resources / links mentioned:

📷 Sonja Stribling on Instagram

⚡ Sonja Stribling website

📙 The Divorce That Saved My Life: 12 Principles To Overcoming A Broken Relationship by Dr Sonja Stribling

"It takes as much energy to wish as it does to plan."

Eleanor Roosevelt

Take a moment to close your eyes and think about what your definition of “wealth” is. Have you got something in mind?

To me, wealth is freedom. Specifically, freedom of choice. When we're financially independent, we can structure our day exactly how we like and we have the means to fully experience life. It also offers the resources to contribute to the causes we care about, say, helping to find a cure for a disease that may have impacted your family.

Many people, sadly, have a negative connotation of wealth. It’s completely up to you to create your own definition, but I urge you to ensure it’s written in the positive. Reframing your mindset is one of the most fundamental steps in transitioning to being a financial winner.

Yet, we don’t teach this in schools.

Wealth does not guarantee you’ll be free of problems. In fact, for many people, building wealth creates a whole host of new problems because their same bad habits are just amplified. However, if you’ve got the right blueprint, wealth is an enormously powerful force for good in your family, your community, and the world.

With an idea of what wealth looks like to you, take another moment to think about what "lifestyle" you want. A lot of people over-complicate personal finance, but all we’re essentially doing is thinking about what life we want to live and then setting up the pieces that are going to enable us to enjoy that lifestyle.

Simple, right?

So close your eyes and fast forward to 5, 10, 20 years down the track: What does your ideal life look like?

Can you vividly describe your house, and where you are? Who are the people you’re enjoying it with? In that moment, what is making you the happiest?

Like with any worthy endeavor, we get the best results by beginning with the end in mind. With that foundation, let's explore some proven strategies you can immediately apply to achieve financial independence and become a financial winner.

1. Start now.

We see this with every goal—people have the best intentions, always promising to ‘get around to it' but never do. Make the commitment to start now:

If you’re not willing to make personal finance a priority, none of the other steps will help you. As the Chinese Proverb says: “The best time to plant a tree was 20 years ago. The second best time is now.”

2. Know where your money is going.

If you can measure it, you can manage it. In previous episodes, we’ve spoken about the importance of auditing your energy so you can stay happy, and we’ve spoken about auditing your time so you can stay productive. This is the version we do for managing your money.

Track every dollar you earn and every dollar you spend using a spreadsheet or, the old-fashioned way, on a piece of paper. (You can also use ASIC’s Budget Planner, which although designed for Australians is just as applicable globally).

Write down your:

Income:

Expenses:

Add these five expense fields together and multiply to create your Annual Expenses.

Next, take your Annual Income and subtract your Annual Expenses. How much is left? This answer will show whether you’re trending in the right or wrong direction. (Warning: This might be confronting, especially if you discover that your expenses are more than your income, but it’s much better to be aware now so you can take steps to fix it.)

Now, we’ve got a clear idea of where your money is going. Just remember: the aim is to have as much money working for you as possible, rather than the other way around.

That paves the way for step three…

3. Spend less than you earn.

One of the easiest ways to give yourself a pay rise is to spend less! Just as one of the easiest ways to give yourself a pay cut is to spend more. This is one of the most painfully obvious and simple tips, yet it eludes so many people.

The digital world means we’re constantly bombarded with advertisements, while at the same time getting hammered with posts on social media that fire up our human drive to keep up with the Joneses. If you’re not sure what it means to 'keep up with the Joneses', it’s trying to match the social status of your neighbors and friends by doing foolish things with money you don’t have, such as buying a new luxury car, just to impress them.

When you make a habit out of spending less than you earn, you have more money at your disposal to create greater wealth in the future. For example, if a bill arrives, you can pay it now without incurring an additional interest charge. If there’s an essential purchase you need to make, you might find there are favorable terms for an upfront payment, or a penalty for paying in installments.

If you’re currently in debt, do everything you can to pay off bad debt (i.e. debt that is not tax deductible) as quickly as possible, making sure to prioritize items that have the highest interest rate (e.g. your credit card). For example, if you’ve got $1,000 available, it would be better to put it towards a credit card bill that is incurring 18% interest, rather than a student loan that might only be incurring 5% interest. Aim to reduce and then eradicate your reliance on credit cards altogether.

(Note: some people can do well out of the bonus points assigned to new credit card recipients; however, it often requires a lot of research, an in depth knowledge of the fine print, and an ongoing focus to avoid penalties, so my preference for most people is to avoid credit cards altogether if possible.)

Again, the aim is to have as much money working for you as you can.

4. You don't miss what you don't get.

It’s human nature to spend all that we get—that’s why tax agencies like the IRS and ATO tax your employer first before you receive your wages. Yet, funnily, if we don’t have it to spend, we don’t miss it.

Personal finance classic The Richest Man in Babylon by George S. Clason suggested that one of the key wealth creation tips was to “save at least 10% of everything you earn.” You might think that losing 10% of your income would be unlivable, but if the government introduced an additional 10% tax on income, most people would be able to adjust their lifestyle to accommodate. You might even be motivated knowing that 10% will be returned to you at a later date … with interest.

Rather than seeing how much is left in your bank account after you’ve enjoyed the week, make the commitment upfront—the moment you receive your pay—and save at least 10% of everything you earn.

There are even apps out there, like Acorns, that round up to the nearest dollar from everyday purchases and invests that tiny amount into a diversified portfolio recommended for your risk profile. For example, if you bought a $3.25 coffee, $0.75 would be invested into the portfolio. That might not sound like much, but you would be amazed at how much it adds up over a year, especially when you are able to harness the power of compound interest (more on that in the next post) and have the option of adding more anytime you like.

5. Make it a habit.

Too many people ignore the benefit of good money management because they believe they aren’t earning enough. “I’ll do it when I get my next pay rise,” they say. Only they never get around to it.

Regardless of how much you’re currently earning, get into the habit of good financial decisions.

If you struggle with change, technology is here to help! There are services out there nowadays that make the process automatic, so the habit is done for you. Previously, we spoke about apps like Acorns that enable you to contribute a portion of everyday purchases into an investment account. However, here are two other simple options to help:

Generally, you should follow this order when you receive your pay:

  1. Investment.
  2. Essential fixed expenses.
  3. Essential variable expense.
  4. Contingencies.
  5. Whatever is left can be made available for discretionary expenses.

Get into good habits as early as you possibly can.

6. Put your money to work.

Due to fear about losing all their money in the stock market, many people opt to leave their money in a savings account. However, this is about one of the worst things you can do with money you’ve set aside to invest.

Let’s look at a few countries to inspect their interest rates and compare them to inflation:

CountryInterest RateInflation
Australia1%1.3%
Canada1.75%2.4%
Japan-0.1%0.7%
United Kingdom0.75%2%
United States2.5%1.6%

Source: Trading Economics (July 2019)

In many cases, inflation is higher than interest so you’re actually losing money keeping it in the bank.

Financial winners invest their money wisely. An easy way to get started is to invest in an index fund, which provides low fees, diversification, and a decent annual return—ensuring you opt to reinvest all dividends and stick with it over the long-term. The stock market has one or two volatile years each decade, but historically has returned around 9% per year.

You can also use dollar cost averaging, which is a strategy to smooth out any volatility. The idea is that you continue to buy X number of shares each month, no matter what. When the market is performing strongly, your portfolio will be doing well, and when the market is weak, you can buy more shares at a cheaper price. This strategy protects against the futile task of ‘timing the market’ and over the long term you will have a lot more money working for you than you would have otherwise.

For example, if you invested in the Nasdaq-100 Index Fund in the US 10 years ago (between 2009 – 2019), you would experience the usual volatility but enjoy a strong overall average annual return:

Source: Yahoo Finance (July 2019)

If you invested in the Australian All Ordinaries Accumulation Index for that same 10-year period, the average annual return would be 10%, again assuming dividends are reinvested. Performance will vary based on the fund you choose and at what time you start, but remember:

For most people, keeping your money stuck in a savings account is far from ideal. Just remember that obtaining professional advice for your unique situation is extremely important because it can vary significantly depending on your circumstances, investment goals, and risk profile (we’ll touch on this more later).

7. Spend money on items that appreciate in value.

Financial winners build a diverse portfolio of quality assets that appreciate. In contrast, financial losers spend all their money (and then some) on items like jet skis and new cars that depreciate.

Let’s use an example. In 2009, Jenna’s after-tax salary was $50,000/year, and she decided to setup an auto debit for 20% of her pay each fortnight (equaling $10,000/year) going to a new account that she couldn’t touch for everyday purchases. Jenna’s skills increased in that time, and so did her salary, but she kept her contributions at $10,000/year.

The funds were invested into an index fund that averaged 9%/year. Prior to tax and inflation, here is what Jenna’s account would be worth:

Remember, this is just from 20% of her take-home pay from 10 years ago! Imagine if Jenna held the commitment of 20% of her income as her salary increased?

8. Harness the power of compound interest.

Albert Einstein once said: “Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn't, pays it.” It’s the key to understanding how small sums add up, leading to enormous gains for financial winners and extreme losses for financial losers.

Let’s reflect again on Jenna in the last example. The longer she left her investment, the quicker it multiplied. Let’s add two more periods:

That’s the power of compounding!

Financial losers spend all their pay, and often borrow even more on credit cards, for items that depreciate, such as travel, clothing, and new cars. To illustrate the power of compound interest working against you, let’s think about Jenna’s friend, Luke.

In 2009, Luke didn’t listen to Jenna and decided to borrow $20,000 for a European holiday and some new clothes. Luke made these purchases on a credit card because the bank, who he trusted, said his financial history was good. The interest rate on the credit card was 20%.

Luke returned from holiday and noticed that each bank statement said he only needed to pay 2% of the balance ($200/month), which he did diligently. He met with Jenna who informed him of the problems with spending money on credit cards, so Luke cut up the credit card and never used it again.

However, the statements kept coming.

Eventually, after nine years, Luke was free of his credit card debt. Paying more than $23,000 in interest alone had taught him a valuable lesson. He realized that banks know compound interest better than anyone, and that’s why they seem happy to lend indiscriminately. Luke learnt the hard way that “Compound interest on debt was the banker's greatest invention, to capture, and enslave, a productive society” as Albert Einstein said.

9. Don’t put all your eggs in one basket.

At a recent haircut, the hairdresser, Michelle, was telling me how her life was going to change. A friend-of-a-friend had approached her about an ‘amazing opportunity’ in Las Vegas where they were going to pool their money, borrow some additional funds from the bank, and buy property that was guaranteed to return 15% per year.

Michelle was young and inexperienced with investment, and clearly too trusting of this acquaintance. Alarm bells should ring if anyone comes to you with an opportunity that boasts guaranteed returns, especially high ones. As the adage says: “If it’s too good to be true, it usually is.”

Previously, we have spoken about investing in an index fund. For the average investor, this is a reliable strategy because it provides good exposure to the market (i.e. diversification) at a low cost. You can sell all (or part) of your investment at any time, and it’s regulated by the authorities such as the SEC or ASIC. If one company on the index fails, you’re still protected by the strength of the other companies.

On the other hand, if you invested all your money in a single company, you might wake up one day to find that the company has gone under and you’ve lost all your money. A parcel of many companies has much smoother returns and less risk than a single company.

For most people, buying a home is the goal. A benefit of this is the forced saving commitment as you work to pay off the loan. However, if you need to access funds quickly, you cannot sell the kitchen. If you’ve got a background in building or property, buying a house can be lucrative but, for the average person, starting with an index fund is often the better option.

If you do buy property, remember that most of the value is in the land, which should dissuade you from buying brand new apartments off the plan, lest you find yourself in a situation like this.

For speculative investments, such as cryptocurrency, only use money you’re willing to lose.

10. The best investment is knowledge.

I love the Zig Ziglar quote: “Rich people have small TVs and big libraries, and poor people have small libraries and big TVs.” The best investment you can make is in yourself. A commitment to your ongoing education will help you not only identify opportunities but recognize potential danger too.

For example, if in 2008 when the stock market crashed, you paid attention to the doomsday news stories and sold your index fund investment, you might’ve felt satisfied in the short-term thinking you had avoided further disaster. However, if you had invested in yourself too, you would’ve understood that the stock market is driven in large part by greed and fear, and that all you did was crystallize a loss. After all, the index fund was invested in real companies who have come through these downturns before. As a result of selling, you missed the growth that has happened since, which likely far surpassed the point where you sold.

The right book or podcast could be worth more than a million dollars to you, but most people would rather watch TV. The best investment you can make is in yourself.

11. Communicate with your partner.

Approximately 50% of marriages end in divorce (divorce rates by country), and if you’ve ever been involved in a divorce or witnessed one firsthand, you’ll know it’s definitely one of those things you want to avoid.

Financial issues, which in most cases can be alleviated through communication and planning, is the leading cause of relationship stress and marriage breakdown. Here are some interesting statistics:

Schedule time regularly to ask your partner about their goals, and then share your own thoughts. It might feel like an awkward conversation at first, but it will save you a lot of heartache—and potentially tens of thousands of dollars—down the track.

12. Seek professional advice.

This is an extremely important one. I strongly urge you to seek professional advice where your unique circumstances, goals, and risk profile can be evaluated, and an investment plan prepared for you after taking all that into account.

What’s the best way to find a good financial planner?

Once you’ve done the above, make a list of 3-4 people, or companies, that you think would be a good fit, and then take an initial consultation to see who takes the time to understand you. One of the best ways to judge the merits of a prospective financial planner for you is by the questions they ask and how attentive they are to your responses.

Onwards and upwards always,
James Whittaker

In case you missed it:
11 Tips to Supercharge Your Productivity

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50 Best Personal Finance Quotes

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

“‘A part of all I earn is mine to keep.' Say it in the morning when you first arise. Say it at noon. Say it at night. Say it each hour of every day. Say it to yourself until the words stand out like letters of fire across the sky.” ― George S. Clason (The Richest Man in Babylon)

“Too often, a vast collection of possessions ends up possessing its owner.” – Warren Buffett

“It’s good to have money and the things that money can buy, but it’s good, too, to check up once in a while and make sure that you haven’t lost the things that money can’t buy.” – George Lorimer

“Buy when everyone else is selling and hold until everyone else is buying. That’s not just a catchy slogan. It’s the very essence of successful investing.” – J. Paul Getty

“The power of compound interest the most powerful force in the universe.” – Albert Einstein

“Never spend your money before you have it.” – Thomas Jefferson

“We make a living by what we get, but we make a life by what we give.” – Winston Churchill

“If money is your hope for independence you will never have it. The only real security that a man will have in this world is a reserve of knowledge, experience, and ability.” – Henry Ford

“You only find out who is swimming naked when the tide goes out.” – Warren Buffett

“The individual investor should act consistently as an investor and not as a speculator.” – Ben Graham

“Not everything that can be counted counts, and not everything that counts can be counted.” – Albert Einstein

“It takes as much energy to wish as it does to plan.” – Eleanor Roosevelt

“Successful investing takes time, discipline and patience. No matter how great the talent or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant.” – Warren Buffett

“An investment in knowledge pays the best interest.” – Benjamin Franklin

“Happiness is not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort.” – Franklin D. Roosevelt

“Life is full of uncertainties. However, I can guarantee you one thing: those who put an investment program in place will have a lot more money when they come to retire than those who never get around to it.” – Noel Whittaker

“Someone’s sitting in the shade today because they planted a tree a long time ago.” – Warren Buffett

“Empty pockets never held anyone back. Only empty heads and empty hearts can do that.” – Norman Vincent Peale

“Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give.” – William A. Ward

“To attain emotional maturity, each of us must learn to develop two critical capacities: the ability to live with uncertainty and the ability to delay immediate gratification in favor of long-range goals.” – Noel Whittaker

“A successful person is one who can lay a firm foundation with the bricks others have thrown at him.” – David Brinkley

“How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.” – Robert G. Allen

“Don’t keep knowledge trapped in your head or your money stuck in a savings account.” – James Whittaker

“The stock market is filled with individuals who know the price of everything, but the value of nothing.” – Phillip Fisher

“Money is a terrible master but an excellent servant.” – P.T. Barnum

“Becoming wealthy is not a matter of how much you earn, who your parents are, or what you do … it is a matter of managing your money properly.” – Noel Whittaker

“What we learn from history is that people don’t learn from history.” – Warren Buffett

“Wealth is the ability to fully experience life.” – Henry David Thoreau

“If you understand compound interest, you basically understand the universe.” – Robert Breault

“Wealth is not his that has it, but his that enjoys it.” – Benjamin Franklin

“Be fearful when others are greedy, and greedy when others are fearful.” – Warren Buffett

“If you’re in the luckiest 1% of humanity, you owe it to the rest of humanity to think about the other 99%.” – Warren Buffett

“I’m a great believer in luck, and I find the harder I work the more I have of it.” – Thomas Jefferson

“Every time you borrow money, you're robbing your future self.” – Nathan W. Morris

“I’m only rich because I know when I’m wrong…I basically have survived by recognizing my mistakes.” –George Soros

“Compound interest on debt was the banker's greatest invention, to capture, and enslave, a productive society.” – Albert Einstein

“Too many people spend money they don’t have to buy things they don’t need to impress people they don’t like.” – Robert Quillen

“Rich people have small TVs and big libraries, and poor people have small libraries and big TVs.” – Zig Ziglar

“Sometimes a very expensive life lesson can be worth every penny.” – Noel Whittaker

“If you don’t value your time, neither will others. Stop giving away your time and talents. Value what you know and start charging for it.” – Kim Garst

“I just sit in my office and read all day.” – Warren Buffett

“Understanding both the power of compound interest and the difficulty of getting it is the heart and soul of understanding a lot of things.” – Charlie Munger

“The four most expensive words in the English language are, ‘This time it’s different.’” – Sir John Templeton

“Long ago, Ben Graham taught me that ‘Price is what you pay; value is what you get.’ Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.” – Warren Buffett

“Good and evil increase at compound interest. That's why the little decisions we make every day are of infinite importance.” – C. S. Lewis

“It is not necessary to do extraordinary things to get extraordinary results.” – Warren Buffett

“There’s always a way if you look hard enough.” – Noel Whittaker

“A journey of a thousand miles must begin with a single step.” – Lao Tzu

“The asset I most value, aside from health, is interesting, diverse, and long-standing friends.” – Warren Buffett

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