EP 13: Digging Out of a Financial Mess with Marcus Garrett, Paychecks and Balances
Like many of us, Marcus grew up not learning about money. He soon found himself buried in $30,000 of debt, dug himself out, and along the way he learned how he too could build wealth and become a millionaire. Marcus, author of DEBT Free or Die Trying and co-host of the Paychecks and Balances Podcast, shares what he’s learned about getting out of debt, managing money better, and steps on how to build wealth.
Discover more about Marcus Garrett and Boomer Benefits at https://www.paychecksandbalances.com and https://www.themarcusgarrett.com/
For a complimentary copy of The Millionaire Choice: Millionaire or Not. You Can Choose. and the Creating Millionaire Families eBook, visit themillionairechoice.com.
Digging out of Financial Messes with Marcus Garrett
Announcer: Is money slipping through your fingers. Are you missing your opportunity to become a millionaire? Welcome to the millionaire choice where we talk to millionaires and future millionaires about how to build wealth and what to do with it once you have it. We're here to help you do two things, make your millionaire choice and create your own millionaire plan. Here's your host, speaker, wealth coach, and author of The Millionaire Choice. He made his choice, and he created his millionaire plan at age 25; now it's your turn. Welcome your host, Tony Bradshaw.
Tony: Welcome back to the millionaire choice show. Today on the show, I'm excited to showcase Marcus Garrett, uh, Paychecks and Balances, Media, and author of Debt Free or Die Trying, welcome to the show Marcus.
Marcus: Hello, thank you for having me.
Tony: Yeah. So I've loved getting to know you and watching what you guys are doing, you know, after being on your show last year, seeing you guys grow and expand your influence in the personal finance space. And let's tell the audience kind of where your focus is and what you're doing these days.
Marcus: So Paychecks and Balances is a media company that focuses on working professionals, helping them make money, save money, and get out of debt. Rich Jones, who is my cohost, has worked in HR for about a, oh now it actually is a decade. We used to say about a decade and myself I'd been an audit for a decade. And then, as you mentioned, I also wrote a book about my personal experience with debt and struggling. I got buried in $30,000 in debt, mostly through personal poor choices, and then found a way to dig my way out. By age 30, put a book together around that and release that in 2016.
Tony: Yeah. So you and I actually had that in common. We were out of debt in, uh, at age 32, my wife and I. I was at, I personally, let me brag a little bit here. I was actually out of debt, had my, what I call financial awakening at age 25, and then paid off all my debt about two years after that at age 27. And then I got married. And along came, actually, I got engaged and so along came my wife's death. And, uh, so we spent the next few years trying to pay that off. Once you start picking up all those expenses, I had a really good ride at home. I was living at home with my parents, paying some really low rent and, you know, room and board.
And then I had to move out and get a house for my wife. And so that slowed my payoff plan down. But when we hit at the same time, I guess, uh, you know, for me, it was 2001, early 2001. So I was 30 years old. And, uh, you were 30. What year was it for you?
Marcus: That would have been around 2000. You're testing me. I think it was 2009. Um, so I'm an auditor by trade. I people think I'm good at math, but actually, auditors are good at planning. Uh, so I think as around 2009, when I wrapped that up and then as I said, I released a book a few years later.
Tony: Yeah. Now, so I'm an anti-debt guy. I don't like debt. I stayed out of debt. So I actually, a few years ago, decided I wanted to try to get a credit card to log my airline miles and get those free tickets and those free airline miles. And, uh, my credit zero, I found my credit rating had been zero for a little bit too long because all my debt had been paid off, including my house. And I couldn't even get approved for a Southwest Airlines credit card. And so at that point, I decided just to punt, forget that the rest of my life.
Marcus: It's funny you say that, um, and I don't know, maybe they changed the standards because, uh, so for those doing the math at home, that makes me a millennial and I, it seems like any millennial that went to college in the 2005, 2001-ish range. They have this story where yeah, I was walking down the main mall, and there was Discover Card and American Express, and they just signed us all up in mass, you know, 30 million millennials. And then 10 years later, you hear all these debt stories, and you wonder why they're all over CNBC. Because if you walk through the mall, the main mall of any college campus, there's a lot of, uh, representatives from banking institutions at that time.
Tony: Yeah. And, uh, I've heard, I don't know this to be true or not because I haven't been on any college campuses during this time. But even like during the Greek rashes and things that they're allowed to set up, uh, marketing stations and things like that, sign kids up on campus. Is that true? Did you see that experience?
Marcus: I know, so now I'm dating myself, so I graduated in 2005 at age 22. I quickly did the math here, so I was completely off to answer your earlier question. I graduated school in 2005. I moved to Denver in 2009, age 27. So around, 30 would have been around 2012 when I paid off that debt. That's the auditor in me, yeah, I can't be wrong. I'm just not good at math in my head. Um, but to answer your question, they were there selling tee shirts, and I was very proud, I bring it up all the time, but I got a yo-yo for my credit card. I stuck out in the crowd. Um, And I don't know if they're still allowed to, I know they try to reduce the, your ability to get access to 18-year-olds. But I don't know if they're, you know, banned, so to speak from college campuses. To your point, I haven't been on a, I guess that's a good thing, I haven't been trolling college campuses anytime recently, so I'm actually not sure what's going on out there.
Tony: Yeah. So back to my question, are you a total anti-debt guy? Are you more of a leverage guy these days?
Marcus: I'm definitely not anti-debt. And I think that surprises some people. So I still use credit cards to this day being the only difference is that I remain informed, and I try to pay them off in full each month. As you pointed out, I still use points. I actually was trying to qualify for a higher tier of product card because I, uh, before the crises hit. So, whenever this release is before or after COVID, I was trying to get travel points, and I wanted this, I think it was Chase Sapphire. I hope they're listening because I am going to name drop, it is like Chase Sapphire Reserve. It is their like the platinum, although it's blue card and they were like, nah, we're good. You can have this Chase Freedom Card. And I was like; I already had that card. So it was really insulting to my ego, but I still use credit cards. I like to use the points. Uh, I've gotten a lot of free stuff with points, so. Really, what I say is using it responsibly. And I just used it irresponsibly, but like anything, if you can't use it in moderation. And that goes back to the personal side, putting the personal in personal finances, I say, yes, don't use them at all. Don't sign up. I still have friends to this day, reach out to me like, "Hey, I'm thinking of signing up for this card." And I'm like, "Nah, I've known you for ten years. I don't; I don't think you need a credit card." But there are other friends that are like, "Hey, you know, I've got $50,000 in savings, I've got $40,000 in investments, I'm thinking of sign up for a credit card," and I'm like, "yeah, go ahead. Cause I know your personality leans towards being responsible."
Tony: And frugal. I guess that's a big word because I know that people tend to overspend when they use plastic, whether it's a credit card or a debit card, you know, the statistics, it used to be 18 - people on average spend about 18% more money. And I would say that's probably true about me because we use the debit card quite a bit. We're spending our own cash, but it's a lot easier to spend, you know, a debit card or credit card. And instead of having stuff come out of your hands and so you still have to watch it either way and, and, you know, be a good manager. And I think if you've got the right personal financial goals. And that's where I kind of operate is, you know, am I hitting my personal financial growth goals that I want to hit? And if you're hitting those goals, then you can be a little bit lose or lax, you know, with your money.
Marcus: Now I'm on the elderly side, somebody, some advice I got senior, senior millennials, they call it. But I got it really early on; it was very helpful for me. I was too young to appreciate it at that time. Usually, as advice goes was to use your twenties to learn, your thirties to apply in your forties to teach and mentor. So I'm, I'm moving towards the teaching mentor side, and I actually combined systems. Now my, my advice is the best plan is a plan that works. People want to know the best stock, the best plan, the best advice. And I'm like the one that works for you is the best. And I say that because even now, you know, 10, 15 years into this journey, if you will, I still combine systems. So I use an envelope for the thing that I'm least responsible about. I'm actually going to start pulling out cash. Because another thing that this quarantine is, you know, we're not, all of us are not going out eating and doing expensive. I had a lot of downturn, so I'm an auditor. I started going through my financials because that's what everybody does. And I noticed I was spending a lot of money on restaurants and I'm like, okay, that's: clearly, like you said, it's just easy to pull out that debit card, and that's a weak spot for me. So I'm really good at controlling my budget. I personally use Mint for just a general tracking, and if you want to talk about that software, we can, but you know, I use, I look at it, and I'm good at it putting the budget together. I'm good at putting the plan together, but like anybody else, I'm human, and eating food that is convenient is my weak spot. And this unfortunate experience has shown me that I was just wasting a lot of money there. So my lesson learned my call to action. My plan to correction will be - okay, that part of my budget, I'm going to use cash and go back to some form of an envelope system because it's a weak spot for me.
Tony: Yeah, I think that's a good point. And when you talk about planning, you know, I think that's one of the biggest things and I would say I'll admit like my wife and I, we have a family of eight, we've got six kids, three boys, three girls.
Marcus: Wow. Very nice.
Tony: Yeah. And it's a, yeah; it's, it's a chore to feed everybody. And when you look at that budget item, and you understand the principles, and this is what's so important, like your, your, your budget and your money's going to go where you plan for it to go. And for us eating out with a big family like that, it's, it's easy for us to get to a $60-$80-$100, you know, meal ticket. Especially if you include a tip. And so I can feed my family at home for probably around 20 bucks and a really good meal for 30 bucks per meal per dinner, you know, and we go out, and it's easy to drop. I laugh about this, but going to Schlotzsky's Deli, which we love Schlotzsky's sandwiches and I get the check back, and I'm like, that costs us $70? $80? I'm like, I'm glad when one of my kids is busy doing something else. When we go out to eat, I'm like, cause it saves me money, you know? And, uh, but yeah, that's a big hole for us in our budget and just planning around that's good. So let's wind back the clock a little bit for you. So you're on your path. You've started learning about finances. You've made the, the intellectual investment to educate yourself in finances, you've applied the principles. But you weren't always wired that way. And so you grew up in a kind of a more middle income, upper-middle-income family. But those principles didn't necessarily transfer to you. Walk us through that journey, what your life was like as you described it.
Marcus: It is very interesting because if you look on paper, if you were to do like a sociologist analysis of my life, I should be very fiscally responsible. So my background, both of my parents still together, actually been married 38 years. Middle to upper-middle-class income over that timeframe, both retired, I would say fairly early for their age, both in their fifties, you know, went back and worked at it from, from time after that opened up. My first savings account at age 16 helped me put a budget together and promptly, as you heard, I went to college, signed up for a credit card, and buried myself $30,000 in debt. And so people would look at that and say, you know, how can something be? So in conflict with one another. And I think it's because we didn't talk about finances in the home. Now, my mom, who listens to the show, has greatly debated this with me over the years, as she has debated many topics, and she'll probably debate this very show, but I think that's what it is. Is she probably talked about it, as I recall, one time; she probably thinks it was a hundred times. But I think that emphasizes the point of you need to revisit the topic. There is, and I have proven time and time again, no finish line to finances. And another quote that I heard recently, I love to read. It's actually, Atomic Habits by James Clear is people think they rise to the level of the occasion. No, you fall to the level of your planning. And I have fallen many times because I didn't have a plan in place. So when I buried myself $30,000 in debt, I had no plan. And similar to your story, that's actually a very quick timeframe. The time that it takes to get you in debt tends to be longer when you're focused, then the time to get out, uh, depending on the size of the debt, of course, because when you're spending, that's fun. You're going to Schlotzsky's with the family. You know, you're maxing out the card, sliding it through it. Who cares? Everybody's eating extra cheese, extra guac; everybody's having a good time. That's so fun. You know, getting out of debt, putting the plan together. Um, that part it's; actually, we had a financial planner on, and he said your personal finance plan should be boring. It should put people to sleep. And unfortunately, that's true as far as the difference makers. And I think we're going to talk a little bit later about some other things you can do to still make it exciting. But that's what happened for me is they're getting out of debt side was not near as fun as just spending and having fun. And I forgot those principles that my parents instilled in me for 16 years, 18, if you count the next two, which I stayed at home and went off to college and that's how quickly and easily it was to erase all of them, all of that, that they tried to instill in me.
Tony: Yeah. And you mentioned that to me, I thought this was interesting too, is because your parents were upper middle income, middle income, upper and middle income. But you grew up with this poor mindset. You thought you were poor.
Tony: That's a very interesting dynamic to be in.
Marcus: Well, my parents also, um, more so on my mom's side, and I think she'll appreciate this. She says my father's middle class to upper, and she was, you know, poor and struggling to get by. Uh, and I say that because I think both of them took from their experiences growing up. That we should not spoil or give our children a lot of money, they provide it for us, and they did very well. And they did provide a lot for me, but it wasn't, I wouldn't say it's so like I could be the next, uh, equivalent of a Kardashian or anything like that. It was more so we were provided a roof over your head. We will provide for college and schooling and the things that we believe will help you get to that next step in life. But I don't think they had that mindset of; we should tell you why, it was more, we are, we're your parents, we run the money, we run the household. Um, and it's sort of like that saying when a kid's like, Hey, can we have McDonald's it's like, do you have McDonald's money? And my perspective of that from kids, I'd be sitting in the backseat, and I was like, I can't wait until I have McDonald's money. I didn't take away that I should be responsible with money and planning. I was like, I can't wait to spite them and have McDonald's money. And so as soon as I got that opportunity to have McDonald's money, which was in the form of a credit card, I went out there, and I went crazy. Like all the borders are off of me. I was like; I'm heading McDonald's every night, there wasn't any right or wrong to that. It's just, now that we're older, we actually probably have more conversations around money and finances (of course, I have the podcast) than we ever did in the first 16, 18 years of my life.
Tony: Yeah. I mean, that makes a lot of sense. It makes me think about my children, too. Cause my parents were lower-income when I grew up and didn't manage their money well and, you know, had that and had bad credit and all that kind of stuff. And I didn't really get any money principles. It was more like do, as I say, don't do, as I do, which was, I was told to save money. But not the principles behind it, or, you know, instructed my mom; my mom and dad weren't good at saving money either, but as I got older, now, you know, I've got my own children. I'm like, how do I transfer, you know what I've learned from age 25 till now and pass that onto my kids, you know? Cause my kids are frugal. Well, very similar to yours, where I love going into one of the stores, and the kids start begging you for stuff or begging me for stuff. Candy bars, drinks, whatever the item is. And I'm like, did we come in here for that item? You know, then we're not leaving with that item. Now, I've lightened up on that a little bit, mainly because my girls have me wrapped around their fingers. And so they do get the occasional candy bar on the checkout line. You know, my parents, though, that was very different because my parents had to do without, and so they, they kind of went the other direction with me and spoiled us a little bit. Quite a bit. And so I could, I learned that I could beg for things in the store, and if I begged long enough, I would get what I wanted. Now that was to the detriment of the family and detriment to the financial behaviors. But I don't, I didn't want to repeat that with my kids. So I've gone kind of the other extreme with my children. And so we don't buy them a lot of knickknack items here and there, they have to, you know, get their big gifts, either earn them or through birthday presents or Christmas presents, you know, those gifting times of year. And, uh, other than that, we don't do a whole lot of purchasing for the kids.
Marcus: Well, you said a lot, there is very fascinating to me because I mean, specifically, how do you transfer that information into your children? And I think that's every parent's goal not limited to finances is how do I transfer all the positive lessons and none of the negative leave as many negative behind as possible. And I, I mean, For me, I don't have any children yet. So that question will still be to be determined or be outstanding. And how do you connect those dots? I'd say two things. Number one, now that I'm older, I actually have more of an appreciation for what they were trying to teach me and trying to instill in me.
Cause I was like, Oh, that's why we were shopping at TJ Max. And my dad's still shots at TJ, Mexico, probably proud of it and Ross and things like that because they were trying to keep more money and the house. And the clothes and those things weren't that important. And we were in a nice home. Um, really the only time and I didn't, it didn't click for me at the time, but the really, the only time I became aware that my parents were doing well is from dating. So I would go out on a date and then come home, and people would be like, wow, you live here, you live in this neighborhood. You live on the nice side of town. I'm like, what are y'all talking about? I've lived here for 15 years. So my only reality is, you know, the nice side of town and that's number one. And then another story that I tell is it was really, I guess, a transfer of that information is that there was one Christmas. I was a little bit older, but I was still getting Christmas presents, and I wanted this remote control car so bad. I harassed my dad for this remote control car like the second quarter of the year. I'm like, "In December, I want this remote control car." I was cutting out articles and like, they'd updated. I was like, "Oh, I'm going to need the battery pack." And I like harassed him for about six months, you know, for the remote control car. At some point in there, they were like, "you can have it," I guess they saw how much it was. I think they ignored me for like the through the summer months. And they were like, "we're not paying that much for this car. We'll pay half." And by that time I was, uh, I was working, I was 16, uh, which, you know, some people were like, "why is he still getting gifts at Christmas?" Other people were like, "yeah, of course. Why didn't he get, why didn't he get a car?" But anyway, I wanted a remote control car. And I was like, by that time I had a job and I was like, you know what? I have McDonald's money, and I started working extra and overtime and everything like that. But what's funny is, first of all, it's funny in two ways, my parents were like, that's the one thing he remembers - 16 years, he remembers this stupid remote control, all the stuff we tried to teach him over the years. But what I also remember is I played with their car like twice. And I spent months like, man, I worked so many hours working at the movie theater. Um, and I was like, I spent so many hours. I made $5.15 an hour. So I can't like, you know, I can't do the math in my head, but that's a lot of hours to save up for whatever $200-$400 remote control car I wanted. And that was really the first time it clicked for me that, "Oh, you know, working does not translate very easily to all these assets," even though this asset was a remote control car, that was very important to me. And that was probably my, one of my first aha moments where the things don't make you happy.
Tony: That's good wisdom, man. That's good wisdom. And, and uh, I like to say like, thinking way back then to that car, this will probably break your heart, but have you done the math on like what the future value of that car was that you wanted so badly back at age 16 and that's, I think that's the principle we teach people is like, you can have that thing you want, but are you really counting the future cost of it? Out there in the, you know, where it's, where it's really gonna matter.
Marcus: You know, I'm smart enough to try to avoid those. You know, if you, if you gave up coffee today, you'd be, you'd have $2.4 million in a 401K. You know, I try to avoid those analyses as much as possible. That remote control car is probably worth at least $800,000 in lost revenues and investments and dividends at this point. So, you know, again, it's knowing yourself, putting the personal in the personal finance. I don't bother doing that analysis that money's gone and, uh, you know, the opportunity cost is also gone. I just move forward.
Tony: Yeah. I think, uh, you make me, when you say it that way, I'm a little bit sad. Cause I think about, I moved in when we moved into this house that we're in now; we were making really, really, really good money. And so, I just decided, "Hey, it's time for me to get a big screen projector for the house." And I went down, I'm like, Oh, this is $5,000 projectors on sell for 3,500 bucks and
Marcus: Tony, it's a deal!
Tony: Swipe, swipe the card, man. Swipe the card. Well, what's going to be funny. That was ten years ago. So we got some, we had some great family time. So I'll look at that as like a family investment, you know, it's a 120-inch screen, um, had a lot of fun with it, but yes, where that projector is right now.
Marcus: It's either collecting dust or trash cans somewhere.
Tony: It's not in the trash can, it's waiting for a $200 replacement bulb to be put into it. And so
Marcus: I was going to ask, I have it, is it not in the trash can because of the emotional attachment or is it still actually projected, you know, is it 10 80 quality?
Tony: Yeah, I moved it up to my kid's room and let him do some gaming off of it. And, uh, he, he gamed a few too many hours on those bulbs. They're only good for about 2000 hours. You have a great saying, I think, that is very valuable to people. And I think you should share that like and, and I'll lead it into just a little bit, but you made your first...
Marcus: All my great stories are my most painful stories, unfortunately. I share them on the website. So I wrote a story at paychecks and balances.com. It's called, "I made my first million, and I'm still broke." And there were actually two inspirations behind it. So number one, I read 15 now, 18 personal finance books, and I did a review of each, um, and it's at paychecks and balances.com/books. I do a review of, at the time, I was just like a personal challenge. I just wanted to see if there was some grandiose lesson that could be learned about personal finances. I went and researched the best out there, and I read those and did a review of each and. The second inspiration was, um, the one that inspired that particular post was Your Money Or Your Wealth. And I posted an Instagram story, uh, which was my mistake, you know, the internet and the trolls. They do exist, and they are very real. And I was doing a, a mentorship talk, uh, for like a group of, uh, high school students, like I said, that's where I am now in my life. So I'm the guy that's like, don't do as I do do, as I say. And one of the slides was your first million is the hardest, and I've done this presentation a hundred times. The math is still sound is still accurate, and I've changed it up a little bit but never thought anything of it. And that happened to be the slide behind me and the still photo. And that got posted to Instagram, and somebody was like, you know, you ain't no, you ain't no millionaire. And you know how you, you know, yada yada yada it's trolls do. Now, this goes back to the personal side. First of all, he didn't know I was an auditor. Second of all, he didn't know I was very petty. So I was like, I bet I have made a million dollars, I actually never did do the math. And so I sat down, and for the folks who don't know, you can go to the ssa.gov, social security administration.gov, and you can download all the money you've ever made that the government is aware of, I should say. And so I went and looked at how much money I've made, and I discounted, I took off 18, so I said, let me look at my income after college. So I looked at it from 22 to 36, and this was all plotted on the website. You can see there's literally a graphic there. It's a very sad story and tragic for me anyway. And it kind of walks through where all the money went from 22 to 36. So the main story is I made 1.1 million gross. You know, obviously, a lot of that went to taxes, but not enough to justify the net worth that I have today, uh, which at that time was probably around a quarter million. Uh, it's probably gone down like the stock market since then. Um, and I'm also accounting, some things that will be future revenue. So I've been fortunate. Another benefit of my age is that I had access to pensions. So I had access to two pensions, and I'm working on my third, uh, that I can invest in and all that breaks down to, so some people read the story. There's usually three takeaways. Some people are like, "this is a long, boring, and winding story." They click out, and they go home. Some other people are like, "wow, you made so much." Cause the first that I came, the first job I had out of college was $20,000. So I quadrupled my income over the years, and you can see that plotted as well. And other people are like, "well, what's the takeaway here?" And, uh, if you read, which I did, The Millionaire Next Door," they do a breakdown of what your net worth should be based on your income. And I should have a net worth at this age, that time around $300,000. If I follow the principles outlined in that book, it's also one of my favorite books, and I didn't, as you know, I spent $30,000 in debt. And kind of what I had to take away for myself was this is graphically represented and narratively representative of what happens when you are your own barrier to wealth creation and building. So the choices I made in that early part of the year is, had I been saving and investing correctly. Like we said, if I had given up coffee and put it in an investment account and not bought that a remote control car, how much would I have? Those opportunity costs are forever lost. Um, And my book details what I was doing. And mostly I was going on spring break. I was balling out of control. I was buying McDonald's cause I got McDonald's money, but you know, that's the dichotomy. You said, okay, you buy these things. Uh, you brought the projector. Uh, I actually bought a flat-screen TV that was 32 inches. Mine was $3000. And so like you buy these things. So on one half, you can look at man, I spent, you know, $3000, I could have invested at that. And then in the stock market and the 7% growth rate, et cetera, over the next 20 years, the other side also look at, cause I bought a car with rims along the way is, you know, I have so many memories from that car with rims. I have all those spring break memories. And another question that someone asked me is, do you regret it? I think that's a very difficult question for anything that happens in our life, because if I wasn't out there spending and doing all this, what is, you know, honestly, admittedly at least some stupid stuff. I lose five, ten years of memories, too, with friends and family. And yeah, a lot of it was partying and things like that, but I cannot lie to the listening public and say that I did not have a lot of fun spending that $30,000. In fact, it was probably the funnest period of my life. And so, you know, there's a, I wouldn't even say it's a balancing act, but I, I've, as I've grown over the years, I try to empathize with people is like, you know, spending money is fun. And so that "the best plan is the plan that works," that came to me probably five, ten years later when I was like, you know what? I just wish I had a plan earlier. And I realized that I could still have fun and saved money. I thought it was either-or. Fun or spend money. And now, I've realized I'm a little bit more fortunate than I was at age 22. And some people that I can do both, but I really never broke it down and looked at it. And I put a four-step plan together in the second version of the book. Real simple call to action for "How am I going to go about achieving my financial goals and still have fun and enjoy life." And that's actually one of the taglines that I've gone through a number of them, uh, but being.
Debt-free and enjoying life are not mutually exclusive goals.
Tony: Yeah. I think that's brilliant, the way you're putting that is because it's really about making the right choices, but having a balance within those choices you, cause you can skew all the way to the build wealth side and miss out on important years of your life. Cause none of us know how much time we really have. And so you don't want to put all your eggs in that basket, but at the same time, you don't want to put all your eggs in the fun basket, because that could skew you the other way and cause problems later in life. So it really is about, you know, the balancing I think, and, uh, you know, genius, the way you're talking about it is most people don't have a plan for their money. And that is. You know, a number one, one of the biggest issues is, is having that plan. So let's turn the corner and talk about the plan. What goes into your plan for your finances?
Marcus: Well, I'll address it two ways. So for those like myself who were in debt, Uh, I used to have a very black and white approach to debt. And we talked a little bit about this before we get to start it here is, you know, debt bad, all debt bad, debt never use, cut up all the credit cards. And really my philosophy has advanced on that. Or I wouldn't say advanced cause some people still believe that, but it is definitely changed. Um, that, uh, for example, I have a car. Um, and I, I paid a car note on it, and because of the choices I had made earlier, I was able to get a 1.9% interest rate on this car. So over the totality of it, I'll probably pay about $2000 in interest. I mean, I had a plan that you hear that keyword. I was like, okay, I don't want to spend any more than, uh, 10%. I went and did an analysis of this on my of my budget towards this car. So, what car can I afford at 10% of my budget? And then, because I had a great credit score, I was able to get this great rate. In fact, I saved $2,000. I wrote about this story, as well. Because I went to the dealership, and they're like, "Oh yeah, we can finance that car for you." And they announced some APR; it was during Christmas. And I was strategically shopping during Christmas. Cause I know, they're trying to get rid of the inventory. And um, they're like, "Oh yeah, we can do this. We can beat that." And all the other stores were closed, and I was like, "Eh, I think I can do better than that." And they're like, "well, no, you can't. And then, if you leave this lot, this car is gone." I was like, "look cool, whatever." And I was about to walk out, and they're like, "no." And they're like tackle me in the parking lot. And long story short, I was able to get a lower discount rate two days later when my credit union opened back up because I had a plan, I was not subjected to the winds of the car dealership. I say all that to say on the wealth-building side, you know, and you, you made this point as well is people aren't going to remember you for your fully funded 401k. You know, no one's going to be reading your obituary and like, you know, Marcus leaves behind a term life insurance plan, a funded 401k, and a personal finance podcast. Like if that's what they remember me for, I've done something wrong. And so I tell people to really focus on actually starting backward like what's important to you. And then build a plan around that because for some people they might say, I don't want to leave anything behind. I want to spend down to my last penny, and my children are on their own. And it's like, well then maybe the 401k and the investment route and building wealth isn't for you. I'd be a little sad for your children, but at least you're very clear on your plan and what's important. So for me, what's important is building wealth. And I'd actually would like to leave something behind for my children. And I'd like to give them a headstart in life like my parents did.
Tony: Yeah. I think that's wonderful because I think the simpler way to talk about it for the audiences. Like if you're going to take a trip across the country. You, there's some things that you need, if you want to get to where you're going first, you need a plan. You don't want to get, you know, halfway across the country or quarter way across the country or on that dark desert deserted, street and run out of gas. And then try to figure out what's happening in that moment. You know, that part of your plans missing, um, you, you need to have that. You need to have a map if you don't have a map. Now, today is, of course, GPS and iPhone, but what if your Google maps not working, what's going to happen? You know, you're going to get lost on the journey, and you're, you could end up in a very bad place. You can go North instead of South; you could do all kinds of things. And I think that's the same way with the financial plan. And you got to do it with the best information you have in the moment that you're in. When I got started at 25, it was tech stocks, a new technology, a little bit. And I was learning about investments. So actually there's mutual funds and tech stocks. So I put half my money in the mutual funds and half of it into tech stocks and was able to create some pretty good returns. I didn't have a lot of money to work with, but that was what I knew at that time. Nowadays, I'm more into real estate and playing around with cryptocurrency. And so I've learned a little bit more and got some different results and doing startups, more of the startups, more of the higher risk type investments, um, versus just sticking all my money into mutual funds. So it just, like you said, it's, it's really a journey you start on and then as long as you. And, and it's safe. You can make the safe investments early. I think that's the important thing is make the safe money steps, the safe part of the plan, the early stages. And that way, you can continue building on that foundation. And as you build on that foundation, you may or may not want to take more risks.
Marcus: You said two things that I really want to pull out there as well. I'll start with the first one. Start. That's what I try to really emphasize to. Especially younger individuals is, you know, where do I go here? Do I invest in crypto? Do I invest in the stock market? Do I invest in real estate or invest in REITs, and I'm like, start! Choose one of those getting as informed as possible. Figure out your risk allocation and start. Uh, cause I hear people we've actually, we literally have it documented in some cases where a guest will write in, they'll leave a comment like, Hey, I'm thinking about, and then they'll write in every year, usually around January around the new year's resolutions to like, Hey, I'm thinking about starting, I'm thinking about starting. And I started thinking about that. They call it their coffee again. I'm like, man, if they invested that cup of coffee in the stock market, they probably have 50,000. So again, start. I'd say that'd be step number one. Um, the other thing that, especially to your roadmap metaphor, whether it's an actual map or an iPhone or Android, whatever the case may be is one thing I completely lacked in my plan was how will I self-correct when either life throws a curve, or I throw myself a curve. So I had these great plans that would only work when perfect. And what I realize, uh, more recently, uh, getting back into a relationship and tying it back to the car story. I had a perfect budget for a bachelor for the next 40 years. And that's why I was like, yeah, I'm going to drive this, you know, this V8 Charger for the next ten years, obviously. And I was like, I'm just going to shove the kid back here in his one foot of backseat space that I have. And then I, I, I think, you know, as, as the relationship naturally evolves, I think she was in the car one day struggling to fit in, and she's 5'2". And she was like, you know, "where the kid's going to sit?" I'm like, yeah, back... back here, in this 16 inches of space in this backseat on the red interior that I have in this car. And she kind of raised her eyebrow. It didn't last too much longer, but that's what I was saying. That was, that was a pivot. That was a pivot where I should have started changing the finances a little bit and start thinking maybe I should start pricing out minivans, or at least find a compromise in an SUV that we could both agree on, a crossover vehicle or something to that effect.
And that, and that's what I'm talking about is, you know, the plan, the best plan is a plan that works. And as soon as you start to master that, there will inevitably be a curve or a turn on the path. But what I learned is because of all these mistakes and turns in the path, I'm, I'm much more comfortable that doesn't derail me. It doesn't scare me. It doesn't frighten me because I've had so much experience with, "Well, I've survived other curveballs." So let's get back. Let's look at the finances. Let's look at the plan and see what needs to change.
Tony: Yeah. And I think when you say that starting is good. And for me, it was getting moving in a direction, and just, you may, you may get sidetracked. Like, you know, you may get married, and your wife may have $20,000 in debt. You may have a kid, and you may have to spend $1,500 on diapers. You know, originally, I wanted to avoid the $1,500 on diapers and do the cloth diapers, just wash them out every day. My wife wasn't having that, but you know that maybe the things you want to do, but at least you're moving consistently in that direction. And that's where you got to have a goal and a destination as part of your plan. Like where do you really want to go with your finances? And I think that's one of the big problems with a lot of people's finances is they don't have any goals. They don't have any plans. They don't have any destinations they want to go. They just keep, you know, kind of like being on the gerbil wheel right there, just kind of keep doing the same things, going to work, coming home. So they work money. They spend money; they work money for money. They spend money. So earn it, spend it, earn it, spend it very few people save it. And even fewer people invest it the way it needs to be invested. And that's why you end up with this 78% of people living paycheck to paycheck society is because they don't have a plan for their finances. They don't have a plan for their future.
Marcus: Yeah, and this isn't my quote, so, unfortunately, I'm going to butcher it. But, uh, we had a financial planner on the show, and they said something to the effect that kind of really resonated to me is that most people they don't have financial goals. They have financial obligations, so they have life goals. They have asset goals; they have things that they want to buy. They have house goals, they have HGTV goals, and then they buy all those things, and then they have financial obligations. And if it is important to you to separate that gap and move towards wealth, or even just move towards financial security, you really got to flip that on its head. So the goal is the thing you want. But the plan and, or the system is how you're going to achieve it. And I, I kind of, well, I didn't kind of, I definitely failed at that, and I mean, I'm not perfect. I still fail at it now, but I'm at least more clear when I'm off the system. I'm off the plan because not aligning with the goal, the outcome, the output, the thing that I want on the back end; I want the remote control car. Although the remote control car has grown in size and speed over the years, but it's still a remote control car. How am I going to go about getting this? What is arguably a fiscally irresponsible and the thing I don't need that still aligns and falls within the plan? And I was able to do that, go to a dealership with confidence, and they didn't know what was coming. I had looked at this car for two months ahead before I ever walked into the dealership, and they, you know, probably saw me out there. They're like, "Oh, another, another victim." And I walked out of there with a great deal, uh, with exactly maybe even less than what I want to spend and manage to save my money before I ever signed, because I was like, I think I can beat that APR. You know what I know I can, and I'm not pressured to buy this car today anyway.
Tony: Yeah. And I think what goes through my mind when you talk about that is, you know, unfortunately, yes. A lot of us, as consumers, don't have a plan for our purchases. We don't have a plan for our finances, but the people who are taking our money, they have a plan. And so the companies that are selling us things have a plan to market their things to us. The banks that want to, uh, to keep us in debt or put us in debt, they have a plan to take that. And then, you know, your company, when you, you use the car as an example, they had a plan to put you in the most expensive car. They could put you in at the most expensive price with the highest interest rate, but you didn't like their plans. So you said that plan is not working for me. Let me get it. Let me change that plan because my plan is to have a low-interest rate and spend less on my car and have 10% of my income going to my vehicle. So you actually had a plan for this vehicle that you were buying, and it was counter to the plan that the car company had for you, the car dealership did. I think it's wonderful stuff. So, Marcus, thanks for being on the show and sharing your wisdom. I really love your thought processes and what you're doing with Paychecks and Balances, and your book, uh, Debt Free Or Die Trying. How do people find out more about what you're doing and the things that you guys have available, like your eLearning platform?
Marcus: So I've made it very simple. Everything you need to know about Marcus Garrett is available at themarcusgarrett.com. Uh, people who visit, they can get a free chapter from the second edition of the book, Debt Free Or Die Trying. You can find everything you need to know about the podcast, as well as our course platform, but we help make money easy, easy to master.
Tony: Well, awesome, man. I appreciate it. And thanks for the impact you're having in the society. And just, I think the more people that are out there, you know, communicating, teaching, and just interacting with people about their finances, we're going to make this world a lot better.
Marcus: I appreciate it. Thanks for having me.
Announcer: That's a wrap for this episode of The Millionaire Choice. Remember, wealth is a result of getting smarter with your money. Wealth helps you enjoy life and help people. For resources, tools, and a community that will accelerate your millionaire journey, go to themillionairechoice.com. The Millionaire Choice Show shares the opinions and experiences of people and should not be considered financial advice. Before making your own financial choices, please seek out the registered financial advisor or certified financial planner.