How To Make Decisions That Set You Up For Financial Success With Paul Luchau

ACAN 29 | Financial Success

Life is all about making decisions. But are you making the right ones that will set you up for financial success? In this episode, Paul Luchau poses important questions to help you evaluate how you’re handling your finances. Paul is a speaker, educator, and financial adviser. Today he shares how he helps his clients get started on their path to financial freedom. He explains the importance of savings and the concept of lost opportunity costs. If you want to learn more about managing your money, then this is the episode for you. Join in to get more financial know-how from an expert!

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How To Make Decisions That Set You Up For Financial Success With Paul Luchau

We are going to talk a little bit about finances, something that we have yet to cover in this show. Some of us are idealists. Some of us are thinking about following our passion and dreams. What this means for humanity don’t always want to think about money and finances. Finances are one of the things that prevent a lot of people from doing what they want to do in life. I have seen a lot of different estimates about the number of Americans that live paycheck to paycheck.

Searching through all these estimates, it’s consistently over half, which means that finances in a lot of situations are preventing you from fulfilling your mission in life and going for it. To further discuss this topic, we bring on Paul Luchau from The Momentous Group, who has some great ideas about how we can manage our finances a little bit better and free up that time, as well as free up that slack in our cashflow so that we can go out and pursue what we want to pursue. Paul, thank you for joining us.

Thank you for having me.

Tell us a little bit about The Momentous Group and what you do. There are a lot of financial plannings out there I believe anyone can instantly find if you hit the networking circuit, a ton of financial planners. What does The Momentous Group do that’s so different from your standard financial planning?

I have done this for a long time. I was fortunate when I’ve got into the business in 2000. I spent fifteen years in mortgage banking from ‘85 to 2000 and then leaped over into what I do now. It’s interesting to talk to people over that many years about their money, what they earn, spend it on, save, what their debts are, and so on. We will talk about this, the Law of the Masses and whatnot. I noticed trends. What I noticed were all those years I could count on about one hand the people that I thought had it together financially. The paycheck to paycheck, the numbers of people are high.

I started to realize that most people were doing the same things with their money like everybody else, yet they were expecting a different result. We all know that’s the definition of. It became evident to me. I started this study and tried to understand what those trends were and how to combat them. That’s an aggressive word. How to look at what everybody is doing, go the other way, and get on a journey that the people were emulating were on versus the ones that everybody was doing.

If you do the same thing as everyone else is doing, you should expect the same results that everyone else is getting. When you think of what everyone else is doing, we know it’s more than half living paycheck to paycheck. Even more than that is the number of people that feel like they can’t pursue their passions because they have to keep that paycheck going. They can’t even take a job that may be more meaningful to them but it has a slightly lower salary because of that you are seeing that cause people end up in that situation.

Most people are doing the same thing with their money as everybody else, yet they’re expecting a different result. Share on X

The people that I work with, I teach them principles. I like that word because the principle is foundational. How do you live your life? What are the principles you live your life by? I had that conversation with my clients. I ask them what financial principles they are living by. Most people haven’t thought about that. They don’t have it. I try to teach people principles that will help them become and remain. It’s financial freedom. It’s all about buying back your time. Time is a real commodity. Time is the thing people are after but time costs money. It takes money.

We have to pay attention to that. You asked the question, how have so many people gotten to where they are? The banking industry, Wall Street, the government, and the IRS tell us a lot of stuff. They tell it to us often through advertising, people like me, magazines, books, pundits, talking heads, and all the sources where information comes from. They beat the drum to do certain few things with your money, yet it’s not getting people the results they are looking for. My message is, what if we looked at what they are all doing, and we didn’t do that? We did something different. We’ve got on a different path. Those things that people do are just a few things that the mass tend to do.

One of the things that I try to instill in people is, number one, we’ve got to save. You’ve simply got to put money somewhere and get good at that. Between inflation, taxation, fees, the desire to consume, technological change, planned obsolescence, that takes away a lot of money all the time. We’ve got to build defensive strategies for those things, too. People don’t protect themselves properly.

I’m not in the property-casualty business for auto homeowners’ umbrellas, but I do see what people have. Often, they are putting themselves at great risk to lawsuits. The numbers and premiums are low. Think about medieval times. One of my favorite movies is Braveheart. The wealthy landowners built castles back then, and the minute the castle was done, they put a moat and a drawbridge around it to protect the stuff on the inside.

They went to great lengths to do that. We have lost that in nowadays’s society. We either don’t ensure or we do it very inexpensively, or on the cheap. We expose ourselves to problems. I like to make sure people have 6 months or 1-year income storage, not expenses. If you are making $50,000 a year, I would like to see $25,000 or more somewhere. If a job loss occurred a disabling event or God forbid a death of a breadwinner, the family would survive for a while until they can get back on their feet. Some foundational stuff like that, I try to help. I’ve got plenty of clients who make good money and are doing well. We take those a step further and build on them. For the ones in the middle, we’ve got to do some basic foundational things to give them the right frame of mind to move forward.

I have heard quite a bit. That’s a little bit of a scary proposition. I don’t love that phrase and how it’s put. The idea is that if your job brings you in $5,000 a month, you should not be spending $5,000 a month, regardless of what your scenario is. How uncommon is that knowledge? It’s self-evident but it also seems just from the statistics that there were a lot of people who much spend all the money they make between their mortgage, food but then whatever else they decide to purchase.

I know you feel sorry for me but I’ve got three daughters.

ACAN 29 | Financial Success — Financial Success: Have your finances in such a way that you can buy back your time. Time is a real commodity. It’s the thing people are after. But time costs money.

It sounds fantastic.

They are great kids, and I love them to death. They all live near me, which is fun. They all would buy purses and would fill the purse then they will say, “I need a bigger purse,” and they would buy a bigger purse. They would fill the purse. It’s a law where people tend to do that. They gravitate toward that. Not that I’m asking people, I never asked people to change their lifestyle for me to enter their world and help them with their money. If they want to do that voluntarily, then it’s great. We will work with those dollars. We talked through those things about expanding those things.

I’ve got a good friend who’s driving an un-air-conditioned car in summer. It was hot. He sucked it up and did it because he’s got a nice home for his family. They take a vacation every once in a while, and they save a lot of money, and that’s his choice. You’ve got to budget and figure out what works so you can set aside cash. I want you to set aside 12%, 15%, 20% of your income. If you do, as much as that might hurt a little, you will be grateful to have cash resources, to not have to go into debt, to finance a water heater, brakes on your tire or vacation go on a credit card, that you could pay for some of those things and not create the debt that goes with it.

These purses seem like a microcosm for what a lot of people do in general life. It doesn’t have to be a purse, “I will get a bigger one, fill it.” People do that with homes, “I need a bigger home.” They fill it with stuff, then they need a bigger home, and then they fill it with stuff. One of the messages, and I’m not sure this is what you say to your clients but this is a choice even though it doesn’t always feel like a choice because, with the Law of the Masses, everyone is doing it. It’s still a choice. Just because it seems like the thing to do, it’s 85% of Americans are doing, it doesn’t mean it’s not a choice and you are not choosing that priority with your resources.

I was very lucky. This is a little bit of my story. I was in the mortgage business from 1985 to late ‘99. How I’ve got into the financial services field was as a loan officer in the mortgage business, I started calling on financial service firms to acquire clients rather than knocking on realtors’ doors all the time. I started going in the other direction. After a couple of years of doing it, the owner of this firm walked out one day and said, “Paul, you are here so often we think you work here. Have you ever thought about it?” It’s a true statement. I said, “I like your business. I work with one of your guys. He’s my financial advisor. I loved the stories and the messages.”

I ended up crossing over and going to work for that company, which was great. The guy that was mentoring me and was my financial advisor said something that I thought was very daring but said confidently to me, “We had a home, my girls, a couple of cars, and we are living life as we all do. I was getting ready to join a golf country club. I’m a golfer. I had been my whole life. I thought it would be nice to have a place to call home, go play and have a locker room, pool, a place to eat meals, and bring my family.” I was telling him about this, “I want to join a country club.” There’s an initiation fee. Back then, it was $5,000 or $10,000. It’s a lot more these days.

He looked me right in the eye and said, “Paul, do you more want to join the country club or be financially independent?” I went, “Are you taking away my country club?” He says, “I’m not doing anything of the sorts. It’s a decision. Do you want to put that money toward your future, and then join the club maybe next year or do you want to do it this year?” I didn’t join the club. I waited until next year. I saw where he was, what he was doing, and what I needed to do for my family and made that decision. That doesn’t make me any different than anybody else. I posed that question and made that call. I’m glad that I did.

You’ve got to save. You simply have to put money somewhere and get good at that. Share on X

You were thinking about financial freedom way back when you were still in the mortgage brokerage game. What made you think along those lines? I oftentimes think about it as a difference between the two games, Monopoly and Payday. Payday teaches you how to live paycheck to paycheck and get through to the end of the month. Monopoly teaches you the importance of buying property and developing assets. What got you in that whole fifteen-year period? I’m not sure when you started thinking about everything but what got you thinking along those lines, that financial freedom was something that you wanted and then share with others?

When I’ve first got into the business, I graduated from college in ‘83, a long time ago. I’ve got my feet on the ground a couple of years later after some moves and things like that. I’ve got into one of this little networking-type of groups. I’ve got asked to join. I was a mortgage banker but they didn’t have one of those. They had a realtor, my financial advisor and whatever. I was listening to the financial advisor in the group. I am going, to be honest. It was not a normal conversation. His name was Jim. I said, “Jim, where are you getting this?” He goes, “I have taken a track off the beaten path, more non-traditional.”

He says, “I read a lot.” They went to these symposiums every 6 months for 2 or 3 days and got a bunch of information. I started to tune into his messages and went, “That’s different.” When I joined that firm, I trained in the same manner that he had been teaching me as a client. It was all about the things I have said, live beneath the mean, save money, protect, use some core foundational economic principles that are around for 100 years that have been cast off and ignored by Wall Street and all these other folks that are out there. I was grateful for it.

One of the things that’s interesting about that story is that a lot of people have a complex relationship with what’s different. It often wows people the same way you are wowed in that networking group by hearing something different. I even think about my own experiences and how sometimes I will go to certain groups or a presentation.

They will hear people saying the same thing over and over again and I’m like, “Whatever.” When you hear that different thing, it catches your eyes. Also, a lot of people are often afraid to stand out for various group acceptance reasons. What do you think is the formula in being comfortable with being different and showing it to people in a way that is going to bring in the right people, the same way your financial advisor back in the ‘80s did in the way you do?

I run the risk of working with a lot fewer people because everybody does it this way, and I’m going to do what everybody does. I have to say, “Good luck with that. I hope that works. Call me if you want a different view.” I read a great deal. I attend a ton of functions. I was in Utah or Nashville, I can’t even remember. I go where there are like-minded people. I learned and listen to talks and build strategies.

He said, “Third-party trump’s first party.” What he meant by that was a book, an article or an expert, trumps me as the first party, trying to tell somebody, “This is what you should do.” I will pull a lot of information. I’ve got a great deal of information on my computer. I’m looking out here. I’ve got a stack of books that I have read, Robert Kiyosaki, Len Renier, Garrett Gunderson, and all these authors that write these amazing books.

The messages are contrarian. It’s like, “I know what everybody is doing but if you do what they are doing, you are likely to get what they are getting, and they are not getting very much. You can either choose to do that or listen to me, let me back it up, prove it, go this way. Set yourself free from the masses and get what you want for yourself and your family.”

I want to dive a little deeper into this statement you made. In some way, afraid to leave their job but still looking for something more. In their day-to-day lives, they go to work, and it’s 8:00 to 5:00 because that’s what Henry Ford compromised his employees back in 1905. We never updated that dictates. What does that mean to their lives? What does that mean to someone in that position? Third-party trump’s first party, what should they be doing to incorporate that into this exploratory phase of, “What do I want to do? What brings me passion? What should I do to get out of where I am now?” and get to a better place that’s financially free and full of the activities that they want to do?

For some people, the idea of financial freedom is not on the radar screen. I get that. I always tell people it’s a journey. You may not ever get to financial freedom and have millions of dollars sitting in a vault somewhere but it is a journey. You either choose to get on it or not to get on it. When I acquired a newly referred client, which I’m grateful for, it’s how I built my practice. We meet and have an introductory talk. I unfold some of these ideas and concepts to people. I almost always get, “This is different. It’s not what I have heard before.” I always say, “Is that going to be a problem?” Most are like, “No, I would like to know what you know, and it doesn’t sound the same, so let’s explore it.”

After that meeting, I will put together an email recapping the conversation. I will attach a couple of articles. I might send them or give them a book, and I’m going to send them a couple of links to some documentaries that are on YouTube. If you watch these two documentaries and don’t call me back and say, “What do I get to do?” You weren’t listening.

They are back from 2010 and 2013 but we have been around for thousands of years. Nothing much has changed. You listen to those. It should because you need to ask a lot of questions and then I can start the backfill with you, the reasons why, and you start to get a picture and an understanding of where we are going and how it might benefit you.

Interestingly enough, we have talked in previous episodes on this show about finding your niche. One of the things it sounds like is that your niche is people who simply don’t want average and are willing to think in a different way to get that not average. Does that sound correct?

It does. No offense, anybody but with their money who care about that thing that it’s working right that isn’t cavalier and it’s all going to be okay. It might not be, and we get to make decisions. Is the status quo okay? Would you like something different? 7 out of 10, 8 out of 10 would like something different. What have you got in mind that we start the conversations and move forward?

One of the things that I often encounter, and I’m sure you encounter real encounters from time to time, are people with a certain unhealthy attitude toward money. There’s an undercurrent in certain sectors of our culture, not as much financial independence but the pursuit of wealth is inherently, morally bad or deficient compared to the pursuit of other things. What do you have to say to anyone who’s thinking along those lines?

Failure might be one of our best teachers, yet we’re taught not to do it. Share on X

Money is neutral. If you do bad things with money, it is bad. If you do good things with money, it is good. I’m going to do the best I can to paraphrase this story. There’s a book written by Gary Keller, and it’s The Millionaire Real Estate Agent. There are a couple of pages in there where he hires this sharp, young, smart person to become a real estate agent. He said, “I will train you. I will work with you. I’m the owner of the company. I will spend the time and the effort, and I will help you.” He does. This realtor gets great education, knowledge, and experience. He’s got all the potential in the world. He works a couple of days a week, sells 8 or 10 houses a year.

When Gary Keller comes back to him, he says, “Why aren’t you applying yourself? He goes, “Gary, I’ve got low bills. I make plenty of money. It’s all I need.” Gary Keller says, “What if you are at work one day, you are selling your eighth house in November, and you are maybe going to do nine this year. The phone rings, and it’s your mom? She says, ‘Honey, Dad’s had a medical emergency in the hospital. We need you here immediately. Can you get here and bring all the resources you can? This is going to probably be a big deal. We’ve got to take care of your dad.’ You think yourself, ‘I could have done so much better than I was. Now mom calls, and they need my help. I haven’t applied my skills to do the best I could to help my family. I have been on the taking, and it has all been fine. Is that okay with me?’”

That’s how that conversation goes. I’m not judging anybody. I will meet you where you are at but if you would express to me that you want something other than what you’ve got, then let’s get busy and have some conversations, let me help you and so forth. I don’t ever try to push out of their comfort zone but sometimes give them that book and let them read that passage. They come back and go, “I never thought like that before. That makes perfect sense. I’m a talented person. I’ve got an education. I’ve got skills. Should I maximize those?” Yes or no. If you say yes, I will run with you. If you say no, I will shake your hand. We will part as friends and pass again some other time.

Money is neutral. That’s a different narrative to people that will say something along the lines of money is the root of all evil. It seems like it depends more on what you want to do with the money.

I do a lot of public speaking, and I enjoy it. Every so often, that will come up in my class. I will grab a highlighter. I will say, “Is this highlighter bad?” They will go, “No.” I will say, “It’s neutral. If I throw it at you, it’s probably bad. If I write on the board and give you a concept that helps you in life, it’s probably good but by itself, it has no value, it’s just neutral.” Dollars are the same way. If you buy drugs with it and sell it to grade school kids and one of them dies, it’s bad. If you give it to a charity and someone gets to have a house or it gets to have a life that they wouldn’t have otherwise had, it’s great. That’s our call.

In the discussion about you getting that phone call from your mom, you alluded to what we all need to be doing regularly. One of the things a lot of people think about is what’s now. “My mortgage is $1,500 a month. I spend this much on my food. I want to go out to eat once a week. I want to do this.” That adds up to $2,500 a month and maybe $500 in taxes. There are certain things that I believe people need to be doing regularly, regardless of the scenario, just because these situations come about. In this situation, I feel like the typical way is to start a GoFundMe or find a way to try to get donations.

I’m curious about this list because I feel like you might have some things to add to it. I feel like on a regular day-to-day basis, you should always be, 1) Storing away some money and excess funds. 2) Do something to improve your physical and mental health, all those things. 3) Establish good relationships with people in your community, your family or neighborhood town. Is there anything you would add to this list of things that people should always be doing on a day-to-day basis because you never know when you are going to have a rainy day?

The first thing that came to my mind, you said physical health, I think of mental health. Read a book, volunteer somewhere that can be helpful to your community. Educate yourself. I mentioned Robert Kiyosaki often. I have read all his books. He talks about experience and education being a great teacher going forward. You might know, he wrote the famous and number one bestselling business book in the world, Rich Dad Poor Dad. He went to his rich dad often with questions, and the rich dad’s answers weren’t always what he was expecting. “How do I get here?”

He goes, “I don’t know, go learn how to do that because that’s not my expertise. My expertise is in the factory that I’m running and the real estate that I have purchased. If you want to learn how to be a real estate investor, go learn, read the books, go to seminars, do what you were going to do to learn that, and then go try it.” He talks a lot in his books that we are too afraid to fail in this country. Failure might be our best or one of our best teachers. Put that bubble around you and be careful versus poke through and stick your hand out, and maybe get it slapped once in a while but go, “I don’t want to do that again but I now know something.” That’s an important piece of the equation.

Interestingly enough, I also read Rich Dad Poor Dad. I don’t know if it was in the book or if it’s in his podcast or his YouTube channel where he says, “There are certain things we need to have that good cashflow, and we need to not spend money on frivolous things.” Learning experiences, education, and our intellectual curiosity did make the list of among things that he said are worth the money you spend on it most commonly. If those things are worth the money, we would say education, experiences, giving back to the community, he also mentioned charity and being a giving person, what do you believe are the things that people need to be spending less money on?

When I give my seminars and my public speaking talks, I’ve got a slide in one of my things that talks about the three kinds of money. There’s your lifestyle money, which is what you have. It’s the house you live in, cars you drive, vacations you take, the meals you eat. It’s how you live your life. I’m not here to change that. There’s accumulated money and, sadly in our country, the rate of savings, I don’t mean the interest rate but the amount of money we set aside is very low. It’s not over 2%. If you make $100,000, you are saving $2,000 or less a year by and large. Long-term to retire at some given age in the future isn’t a workable solution.

Here’s what’s called transferred money. That’s the money that we are unknowingly and unnecessarily losing every day to all kinds of things, fees, taxes, and lost opportunity costs. There’s a lot of them. I’m not a coffee drinker but I go to Starbucks and do meetings. For a while, I was going to a particular Starbucks in Littleton quite frequently and meeting people there. The same fifteen people are lined up out the door. Every single time I was there. I no longer call it Starbucks. I call it Sixbucks because it’s $6 to get out of there with a cup of coffee. Not pointing any fingers, but 7 days a week times $6 is $42 times 4.33 weeks in a year is $175 times 12 months. It’s a couple of thousand dollars.

That’s not that much money but it’s $2,100. Could you do without that? I never asked my clients that but oftentimes they will go, “I never thought about it. Every time I stop in or I’m leaving $2,000 a year behind, that over the long haul at some nominal rate of return could be $10,000 or $12,000 times my wife and I. There’s some money there.” My job is not to point fingers whatsoever. It’s to help people discover what they are doing and let them make adult decisions about what they want to then do going forward. I will help them with that.

A big piece of that I feel like is awareness. I know the group that we met through is called Conscious Business Connections, which on episode twenty, you can hear all about within life. Give me the formula, give me the solution. A good portion of it, I feel like it’s awareness. You figure it out. I’m aware of where this is all going. I’m going to look through it and decide for myself what that means for what I do going forward.

Money is neutral. If you do bad things with money, money is bad. If you do good things with money, money’s good. Share on X

It’s awareness, and I will throw in the word process. We are bombarded by, “Just do it. Do it now.” Maybe 1 year or 2 later, it has been sold because they couldn’t afford the payments. They had to do something different. Awareness, if I can help people get onto a plan, we are systematically and automatically set aside some money, and then putting it in the right places to build this financial freedom thing. That’s a victory. Do people like doing that? No, savings isn’t fun. It’s not easy. It’s hard.

The decision, I’m going to bring home my paycheck. You mentioned $5,000 but I’m going to put $500 or $750, 10% to 15%, and pretend I don’t have it. People don’t like that. If they do that, they will build their life, and it will bring down the stress. If the stress comes down, the happiness factor goes up. If the happiness factor goes up, they save you more money. It feeds on itself over time and it begins to work. That’s the simplest of things, is to set aside money by savings in some of the strategic stuff that we do later that helps grow everything where you want it but you’ve got to get the foundation started.

What do you say to the person that just doesn’t want to think about money? “I don’t want to think about my budget. That’s not where I want my mental energy to be.”

I think about the 1 of 2 ways. I either say, “Thank you and goodbye or let’s automate it. Let’s set it up where you don’t have to think about it.” As much as I hate auto withdrawals, sometimes we have to impose that bad word, maybe but it helps them to understand that, to do it. Normally, I’ve got a husband and a wife most often. Lots of individuals and business owners. If he is that way, she will do it and vice versa or she will say, “Paul, you work with me on that. We will let Joe here to go to work, and everything is fine.” It will work for him that way. We’ve got to find common ground.

I also want to make sure we cover to the more advanced. It seems like the basics are you are saving money for a rainy day, and you are being aware of your purchases, making sure that what you buy is something you have consciously chosen that’s worth that money. When people start setting aside money, a lot of people are worried about inflation. Even without this extra weird scenario of inflation, there are more significant things people can start doing with their money. Once you have $5,000, $10,000 set aside, then have it in a savings account that now is not earning anything. It’s not keeping up with inflation.

You bring up a good point. For some reason, when I was quite young, like 7 or 8 years old, my father seemed to think he ought to drum into me this idea of lost opportunity costs. I picked up the game of golf at seven and managed to become reasonably prolific in 1 year or 2 of playing. Back then, 9 holes were $3, and 18 holes were $5. It’s just ridiculous but I didn’t have the $3 or $5. I went to a course and picked the range for $0.25 or $0.50 an hour, hand-picked it with one of those popper things with the bag on it and poured it a buck, and kept doing it.

They didn’t have the nice machines that do it in a few minutes but I made enough money to pay for golf once in a while. One day, my dad and I were standing in the hallway of our house. It must have been Saturday or Sunday. He was home. I said, “I didn’t want to work. I want to go play golf.” He said, “Son, understand what you said to me.” I’m like, “What?” He goes, “You are going to forego earning money and go spend money. Think about the doubling effect of the loss that’s creating in your life.”

I was 8 or 9 and I said, “Dad, I’m 8 years old. I want to go play golf.” He goes, “I understand, son. Remember, rather than making money and having that you will spend it, there’s a cost to those two things. Pay attention to that.” I’m like, “Okay.” I went and played golf or I didn’t. I’m not sure what I did that day. A little higher-level stuff with people is lost opportunity costs. Every decision you make with a dollar is at the expense of all of the other choices that existed. Did you maximize that choice? Did you buy the cup of coffee or did you put it into a marketing piece that got you a new client that created some future income and all those things?

I pose those questions to people. The other thing I will mention since you brought this up is, with no disrespect to the banking industry but think about how banks work. For a bank to exist even number one, they need our money. How do they get it from us? They entice us with a rate of return, football tickets, a blanket, whatever. We are doing better than that thing where your money is at.

They want your money on an ongoing and frequent basis. In fact, every time you get paid, they would like a little slice of your paycheck. You can check a box and make a draft into some company savings plan. They have accomplished their goal. Number three is they want to hang onto your money for as long as they can. If getting it often is good, they want to keep it for as long as they can.

Number four, they want to give you back as little as they possibly can through all kinds of penalties and fearmongering. Those are the rules they work by. If you understand those four simple rules, you will know how to operate financially. The bank is employing something called the velocity of the money multiplier effect. We as consumers don’t understand that or don’t employ it. It kills us.

We take a dollar and put it in an account when we are 30 years old, knowing full well, we can’t get to that dollar for 30 years. Meanwhile, that institution is investing your dollars, buying buildings, taking trips, investing in research and development, hiring new employees, doing whatever. We are letting it sit there for 30 years. We defy how money gets built by those institutions and don’t understand it sometimes. I bring those messages to people to get their dollars ignited and do more for them than just one thing.

Getting dollars ignited, it sounds like, first of all, investments in assets but second of all, investments in yourself. Would you say that those are the things that we should be doing with our dollars as much as possible when we all need to go out and have a good time sometimes? I know I have sometimes overindulged a little bit on having a good time to be a hunch and honest. Is that the proper category of what people should be thinking, “Now that I have $5,000, $10,000, $20,000 saved, I should be having it doing more than just this account where it’s sitting somewhere?”

I will talk about Robert Kiyosaki one more time. It’s all about flow. It’s not about how big the pile is that you arrive with. It’s what the pile can do for you, what it can produce. He says that he likes real estate, and he’s got a lot of it, investing in real estate. That creates cashflow. Cashflow can be reinvested in more real estate or gold and silver or intellectual capital.

He’s got his board game, CASHFLOW 101. Cashflow for Kids, in all of his books, is intellectual capital. You could buy a franchise. The point is, commonly, people work and earn, lock away, and wait to see what happens. Kiyosaki says, “Work and earn, invest, create more cashflow.” If you have ever played the board game and you get out on the fast track, you get on a fast track because your passive income exceeds your monthly expenses.

Every decision you make with a dollar is at the expense of all the other choices that exist. How do you maximize that choice? Share on X

Now you are free to do with your time what you want to do. To put money into the account and just leave it there for 25, 30 or 35 years under a bunch of rules, penalties, and future taxes versus putting it somewhere that creates a new sum of money that gets invested, that creates another new sum of money, and sit back and build an engine that supports your lifestyle, you are getting to where you want to be. One of you can walk away.

How is that defined? What constitutes passive income?

Passive income is you invest in some kind then spits off, whether it’s dividends, interest, rental income, whatever. It is income earned for no effort put in.

A great example, a lot of people have stock accounts. I have my Merrill Edge account there, and I will look at the dividends. I have a spreadsheet where I calculate the sum of my dividends, just so I know what my annual passive income is from that particular source. Passive income is you are getting the dividend or you are getting the rent on the real estate property or anything else like that.

Not everybody is going to participate. My dad worked at IBM for 31 years and brought home a paycheck, and that was our livelihood. He did nicely but he didn’t purchase any assets that did that. He got some IBM stock through the purchase plan but not a great deal. It’s very successful but he just traded hours for dollars. Kiyosaki and others were saying you might have to trade hours for dollars for a few years to get your tool started but then go make an investment.

You’ve got to be smart about it. He talks about the number of failures he had in real estate, buying a property and having it go sour, losing the property and the money he had put in, and all that until he got more experience, education, and available resources to defend against those things. He got off and ran. He talks a lot in his podcast and in his book about learning about real estate by playing the game Monopoly. He played the game almost daily with his rich dad, his rich dad’s son, and Robert, and got the greenhouses, the red houses, and the hotels. He said, “That’s how I learned to buy real estate.”

It sounds like passive income is the path to financial freedom because once you said on that fast track where your passive income exceeds your monthly expenses, all of a sudden, you don’t have to work. Once you don’t have to work, you are not beholden to anyone. You can choose to spend your time on whatever you want to spend your time on.

Going back to the beginning of this discussion that dream you had that you said, “I don’t want to think about money. I just want to think about what service I want to provide for society, what I want to do.” If you get onto that fast track, if you get enough passive income where you don’t have to spend all your energy or a good chunk of your energy at a regular job, that becomes enabled.

That seems like, from the standpoint of people wanting to not be greedy, a great motivation for wanting to achieve that level of financial freedom. It doesn’t even have to be a life of luxury. You can say, “I want to live on $3,000 a month only. Once I get a passive income of $3,500, I can have my one-bedroom flat, and then use my time to build community, help people with mental health or start a suicide hotline,” whatever your noble pursuit you want to do. Given that, I want to give my readers a chance to get ahold of you. If they were interested in working with you, what’s your company website, and what’s the best way that someone could contact you and talk to you about how to get on that track to financial freedom?

A cell phone, a text or an email is by far the best. I will tell you about my email. My email is just my name, PaulLuchau@Gmail.com. My cellphone number to call or text me is (720) 291-5090. I’ve got in front of my computer a lot. I’ve got my cell phone here. I wrap up my day every day at the end of the day. I never leave loose ends. I will get back to you.

That’s a good way to get ahold of them. Regardless, I encourage all my readers out there to think about these financial implications, especially in the context of how it’s going to enable the lives that we want. Hopefully, we can all get to a much better place. Paul, I would like to thank you so much for joining us. I wish you the best of luck getting more people out of the rat race, to borrow another Kiyosaki term. Everyone out there reading, stay tuned for more conversations about people who pursue their passions oftentimes like Paul have some insights for what you can do to get to a better place in your life.

Stephen, thank you very much.

Thank you.

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About Paul Luchau

ACAN 29 | Financial Success Paul Luchau was born and raised in Rochester Minnesota. He entered the financial services industry in 1985 as a mortgage lender and immediately began to educate others about how money works. After observing so many individuals and families doing with their money what everyone else was doing with theirs, he set out to understand how the wealthy got to where they were.

Paul is committed to education. He enjoys public speaking and teaches a 2-hour CE class to the Real Estate community where he equips Real Estate agents with the skills needed to help their clients participate in real estate ownership.

In 1999 Paul expanded his expertise in another area of money and finance when he joined the insurance and investment advisory business in Minneapolis Minnesota. Unlike so many others in his field who concentrate on rate of return, his work focuses on showing the wisdom of avoiding wealth transfers – monies that are often transferred away – unknowingly and unnecessarily. In the Fall of 2005, he moved to Colorado bringing that same passion to teach and enlighten others with his experience and knowledge.

Paul attended the University of Minnesota, receiving a Bachelor of Science Business degree from the Carlson School of Management with a Minor in Economics.