How can I build wealth while in debt? [with the Seesaw Principle]


a little bit of how I felt on the side
of the road so yeah so that kind of led to me just like diving in and getting as
many books as I can and getting as many magazines and just learning everything I
can learn about personal finance and you know and looking into the Bible to see
what it had to say about money because I was surprised but actually had a lot to
say about money and that just kind of led me to one principle that just has
changed everything for me and it’s something we’ve probably heard
just like I had for years and I call this the seesaw principle but there’s
something another way you’ve heard it and but the thing is this is what’s
really important is you’ve probably heard it before but until you actually
get it and get the depth of it you probably won’t have a life-changing
effect on you because that’s how it was for me
you know I’d heard this over and over again multiple times growing up but I
just never got it you know and knowing something is just very very different
than having an understanding of it and Einstein says like this is as any
fool can know but the point is to understand and that’s what I’m hoping
that we can get across tonight I hope you guys understand this at a deeper
level and the depths that might be available to you and so this principle
is to spend less money than you earn and so yes you know you probably already
heard this it’s like wow that’s obvious okay but just like E=mc2
let’s like look at that little thing you know that was Einsteins one of his claim
to fame that like revolutionized so much and there’s just so much more depth to
it then you know what we see just in that little formula so that’s what I
want to dive into tonight and just kind of unpack this a little bit and how you
can use this to really change your financial life and we’re gonna talk about two different ways and how this is gonna work so I call this a seesaw
principle because we all understand how a seesaw works like we’ve probably
played with them as kids and and maybe you’ve had an experience like this
hopefully not too many but you know we all remember playing with one and we
understand like there’s a basic factor that’s in play with a seesaw and a
seesaw can’t function without gravity but gravity is a thing that just makes
it work and so and there’s just no getting around it it’s like we can on
one side of seesaw like we can use our legs to push up but at the end of the day we’re all whatever one is heavier is always gonna
come back down and there’s just no getting around it it just is its gravity
and so like right here so we have this girl on the one side and the wave the
Apple and the other and she can jump up push this thing up and the Apple come
down but we all know that that Apple is never gonna hold her up in the air you
know I mean so this is like major deep revelation so be taking notes of this
but but anyway it’s like we understand this intuitively but for some reason I
think a lot of us tend to forget that the spending lesson we earned principal
I don’t know I just I find so many people are actually fighting against
this principle and the principle actually works exactly the same way it’s
this universal completely unbiased principle that it just is true you know
what I mean and so so many people are fighting against it and that’s kind of
what you know I want to help us kind of break out of today because that’s what I
did for years I somehow I just assumed that someday I would get my money in
order and I’d be in great financial success but I didn’t want to pay any
attention to that and I didn’t want to even care about spending less than I
earn I just wanted to assume well I don’t need to worry about that it’s
gonna work out I’m gonna make more money and everything’s just gonna work out you
know but the fact is no matter how much money you make it doesn’t matter if
you’re making thirty thousand a year or fifty thousand year hundred if you’re
making a million dollars a year or if you win the lottery you’re going to lose
it all if your seesaw is leaning the wrong way so if you’re spending more
money than you’re earning it doesn’t matter it’s just that simple and this is
why we see lottery winners going bankrupt just after a few years because
they’ll get a big influx you know that might tilt the seesaw little bit but
they’re spending so much more than they had coming in and then it just
disappears and this is also why we see people who might be on a thirty thousand
dollar salary and they’ll save consistently and spend less than they
earned for their entire 40-year career and then they’ll have a million-dollar
nest egg from a thirty thousand dollar salary like that’s how this happens is
because people are obeying this principle
and so the bottom line is if you’re spending more than you earn you are
going backwards financially and you are headed down a dangerous path and this is
a path that leads to like maxed out credit cards like where I almost was all
kinds of money stress that most of us are probably acquainted with like bill
collectors bankruptcy and like all this terrible stuff that just isn’t fun this
is the path that we’re headed down when the seesaw is leaning the wrong way and
you know and this was another thing that I thought I always thought well I’m just
a few steps down this road so I can kind of turn around you know but the truth is
it’s like that’s the direction that you’re headed and the momentum is taking
you that way and every step you kind of get out of sync you’re just getting
further and further down you know and so if the financial pressures that you and
I have now are bad as well I kind of go in that wrong direction
it’s just gonna get worse like for every step that we move down that path and so
the goal and the key is to tilt the seesaw the other way you know and just
flip it so that we’re earning more than we’re spending and the wonderful and
amazing thing about this is that it doesn’t matter how much money you and I
make as long as we are have our seesaw leaned this way we have a bright
financial future ahead of us and we are moving forward our net worth is going to
be growing we’re gonna be able to pay off our debt we’re gonna be able to have
retirement savings take vacations buy a house give more than we ever thought
possible it’s like that is the result of having the seesaw leaning the right
direction versus having it leaning in the wrong direction
it takes us down that other dark path and a lot of times you don’t see this
immediately it’s not something you might notice from one month but if you look at
it from more a macro view and you look at a one-year or five-year or a ten-year
phase with having that seesaw lean in the wrong direction or right direction
that’s where you see just huge huge differences in where you end up and so
this is another mistake I used to make as well where I used to think well I’m
just gonna try to I’m gonna expend exactly what I earn and I’m just cuz
that’ll be good enough and in theory it could be but it’s basically impossible
you know so looking at this picture you probably know from your seesaw
experience that it’s really really difficult to
you get it perfectly balanced and most times we’re gonna spend a little bit
more money than we anticipated so the key is to not try to do it exact but to really tilt it in the direction that we want it to go so the first key and secret
to all this is to flip the gap and so most people when they’re starting
out they’re spending more money than their earning and so the goal is to see
that gap that we have kind of laid out over here so we have a gap over here and
so we want to flip that you know so that we’re earning more than we’re spending
over here and let me just share a little story with you about this so there was
this old retired Air Force pilot shared this interesting fact about flying and
it just illustrates this point really really well and he said for every single
degree you fly off course you’ll miss your target landing spot by 92 feet for
every mile you fly so that amounts to 1 mile off target for every 60 miles flown
and so to put this in a bigger illustration if you start at the equator
and fly around the earth one time one degree just one tiny degree off you
would land 500 miles off target that’s just like insane to think about you know
so the longer you travel off course even if it’s a tiny bit even if you’re
spending 10 15 dollars more than you earn each month you’re like headed way
way off target you know now obviously if you’re 5 or 10 degrees off it’s like
you’re gonna go so far off target but but even just being a little bit off
target can make a really really big difference and so like I was saying most
of us when were starting out we’re spending more than we earn you know and
when we’re doing that this gap is working against us and so just like the
pilot for every dollar that we spend over what we’re earning we’re getting
further and further away from our financial goals and for every dollar
it’s moving faster away from our financial goals our first goal should be
to shrink this gap until it’s eliminated and then ultimately we just kind of flip
that so the seesaw flips in the other direction and then as soon as we do that
we are now on our way to making forward progress and so we’re on our way to
paying off debt to saving for things or really any other financial success
and as long as we keep the seesaw tilted in the right direction
we just can’t lose we’re just gonna keep making forward financial progress so the second key
here in the second secret and thing to really maximize this is to
after we flip the gap in the right direction we want to widen the gap as
much as possible so you know and they’re in those a couple different ways to do
this but the biggest thing is that by widening this gap we’re going to be able
to speed up our process or progress so much faster so flipping the gap kind of
points us in the right direction so that we’re making forward financial progress
but widening the gap is where we can really really see some major progress
and see it a lot faster and there’s two key ways that we can do this by reducing
our expenses and by earning more money and it is a fairly intuitive and fairly
obvious but when you see it as these are really the only two knobs that I can
turn the only two leverage points that I have it just really I don’t know for me
it just kind of brings some clarity with the whole thing so what all this means
is that well there’s a snowball effect to this like an amplification factor and
this is why you often hear people say the rich are getting richer and the poor
are getting poorer and essentially what it is it’s this thing working against
you or working for you and so if you have money and/or it doesn’t even matter
if you have money if you’re seesaws lean the right way it’s just gonna amplify
what you’re doing and everything is just gonna build on it just like a snowball
and move faster and faster and faster at the same time if you’re leaning the
wrong direction with it that’s why the poor are getting poorer because it’s the
same principle over and over and over again where you’re just going backwards
like the pilot you’re going further and further off course and you know
unfortunately it doesn’t matter whether it’s fair or not it just is true it’s
just a principle just like gravity that we can choose to work with or we can
choose to fight against yeah and I prefer to work with it and reap the
benefits as much as we can so here’s a quick illustration of where we were or
when my when my wife and I got married well I should say where she was
and she’s giving me permission to talk about this when we first got married
I had like a year or two head start on her trying to get our finances in order for
my finances at that point in order and when I married her she was living at
home really had very few expenses but was masterful at using a credit card
just brilliant at her use of a credit card and so anyway so essentially she
was earned in $1600 a month with her job and she was spending about $2,200 a
month so I mean she was really far leaned in the wrong direction and so as
a result when we got married she had a good amount of credit card debt maybe
five figures I remember exactly how much he had but but a good amount of credit
card debt and you know in every single month she was doing that she was going
about $600 backwards in debt you know in over a course of a year that’s over
$7,000 in debt and you know if you if you take just one year that’s seven
thousand dollars in debt and if you have a salary of sixteen hundred dollars a
month that is going to be really really hard to pay off it’s gonna take a long
time and you’re going to have to tilt that seesaw really far in the other
direction to like start being able to make progress on that and that’s what we
did she for better or worse married me and as soon as we got married I was just
determined that we were gonna pay off her debt and so that’s what we did we did
every single thing we could do to to widen the gap on our seesaw to just make
that spread wider and wider and wider so that we were earning considerably more
than we were spending even though we didn’t have big incomes we just reduced
our expenses said next to nothing so that we could start paying off our debt
and and really move a lot faster through the progress you know once my wife Linda
and I once we successfully shrunk the gap and we’re finally spending less than
we are and like I said we were just really focusing on widening it to pay
off our debt we focused on decreasing spending increasing earnings and in the
goal there was just to be able to pay this down a lot faster and then some a
couple of the unexpected benefits of doing this and some of you are probably
familiar with these some of you might have experienced some of these already
but as are as we kind of started this process that’s a snowball thing really
made things exciting because every single thing we did it amplified in
which is moving faster and so those a momentum
it’s a forward momentum that’s like really really fun to be part of and so
anyway bottom line everything our whole financial situation begin to improve a
lot quicker than both of us expected and we had run the numbers and figured out
it’s gonna take us seven years to pay off all of our debt or whatever in everything just
moved a lot faster than we both expected and so that was a really cool unexpected
benefit another thing was that money stuff paying bills paying debts
whatever organizing money like all this stuff actually became fun that was like
super unexpected cuz that was never fun for me and it was never fun for her
because we just hated it because we were going backwards and so we would bury our
heads and pretend like it wasn’t happening or whatever else but once we
were making forward progress it suddenly became fun to do the budget because we
saw wow we’re paying off her debt and each month we get to see how much we’re
paying off and just seeing that progress is incredibly motivating and then
another awesome unexpected benefit was that we were fighting less you know I
think we all know that marriage fights are very often about money as it began
getting a little bit more organized we became more and more on the same page
and we were just fighting less and that was like awesome so that that benefit of
having that extra marriage piece was just really really nice so with that I
want to kind of give you some homework some step to kind of start applying this
now and start taking some practical steps towards moving forward with this so first one I want you to regardless of where you are even if your debts paid
off I still want you to do this I want you to look at your last three months
bank statements and see where you stand I want you to determine which way you
seesaw is tilted it is possible you have your debt paid off and you are leaning
the wrong way or it’s possible that you think you are leaning the wrong way but
you’re leaning the right way it’s awesome your your might not be making as
much progress as you like but you might be moving forward there will be a lot of
you who think that your seesaw is leaning the right way but it’s actually
the wrong way so I want you to do with determine for sure I want you to look at
the last three months bank statements see how much you spent each month and
let’s average that over three months and then see what you earn for those three
months and then let’s look at it and see how
those earnings to the amount you spend and the amount you earn compared so
that’s what I want you to do for the first step next one and this is really
important I want you to measure the gap I want you to figure out regardless of
what side it is will regardless of which way your seesaw is leaning
I want you to see what it is are you spending an average of a hundred dollars
more each month than what you earn are you spending a hundred dollars less than
what you earn each month I want you to know that exact number of how much
you’re spending each month more than you earned and so what we’re gonna do with
this is this is our first goal we get this number and this is the first goal
where we can really focus on having something measurable that you can change
that you know is going to set you on a strong financial path and so that’s why
we’re doing this and that’s why this number is so important so if your number
is fifty dollars a month then all you need to do is find a way to come up with
fifty one dollars a month to flip it and so what that means is we either have to
find a way to make an extra fifty one dollars a month or we have to find a way
to reduce expenses by fifty one dollars a month and once we do that if your
number is 50 then we have flipped it and so that’s what we’re trying to do here
so it’s really important to measure this just so we have that kind of marker
in the sand that we can go from and so then next after that I want you to ask
yourself you know whatever that number is if it’s 200 if it’s ten dollars
whatever I want you to be asking yourself in thinking what can you do to
flip this gap this month without waiting three months or six months it’s like if
you had to do it this month if you had to find a way to you know start coming
up with an extra $50 or two hundred or however many dollars a month what would
you do to do that and it’s really important that you ask this question
because you know I’ve read about this in multiple books about how our
subconscious mind is just always working in the background and in when we ask
ourselves questions that we don’t have answers to our subconscious mind is like
working trying to find the answer and to reveal it to us so that’s one of those
things that it’s just really important that you constantly be thinking about
this and just asking yourself and you will find an answer especially if we’re
talking about fifty dollars is like there’s gotta be a
way to do this there’s got to be a way to reduce your grocery bill like fifty
dollars a month there’s got to be a way to work some extra overtime or pick up
this side job over here or something to do that and I really appreciate you
stopping by and joining us on this have a wonderful rest of the day rest of the
week whatever it is for you and we will talk to you later

16 thoughts on “How can I build wealth while in debt? [with the Seesaw Principle]

  • So grateful for you and your family. Thank you for sharing your God given wisdom with us!! I am praying for God to use the money He has given us for His glory, it's all His anyway.

  • Love the simplicity Bob. I think people get overwhelmed by their money and give up before even getting started.

  • Thanks for this! My favorite takeaway is the seesaw principle – that no matter how hard you try, if your seesaw is leaning the wrong way, you're not going to get out of debt. But if you lean it the right way, you're on your way to success! Paying off debt! It's a very hopeful illustration.

  • This is awesome information. I love simplicity yet deep meaning to finding the deficit amount. I can’t wait to apply.

  • I love the ideal about the seesaw effect. It took me several years to get out of debt, and I'm just starting to earn more than spending.
    Thank you for your knowledge!

  • BLESSINGS. Thanks for the video.
    Can I be honest with you. I feel like I can do better if I stop lending money to my sister who always need money and don't believe she should pay back.
    Jesus did say to give to them that ask. And GOD care about people more than material things.
    I also had a lady who look me in my face ( GOD say your family take advantage of you) she said that GOD send her to me.
    But how come GOD never do anything about my sister.
    She was there when the lady said that to me

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