TICM 164 | Garrett Gunderson | How To Create Long-Term Wealth
/Garrett is Chief Wealth Architect at Wealth Factory and author of the NY Times best-seller, Killing Sacred Cows. As well as authors of other books such as What Would the Rockefellers Do? How the Wealthy Get and Stay That Way ... and How You Can Too
His company, Wealth Factory helps entrepreneurs optimize cash flow, streamline their finances and keep more of their hard-earned money so they can make more powerful investments in their best wealth creator: their business.
Garrett has appeared multiple times on ABC News Now, Your World with Neil Cavuto on Fox, CNBC’s Squawk on the Street and more — and his first firm made the Inc. 500.
WATCH THE VIDEO INTERVIEW:
[02:16] Save Your Wealth and Don’t Diversify
Garrett learned life by learning from his mistakes. From the time he was young he was curious how to become wealthy. He first launched some business detailing cars at the age of 15. He took the money he earned to get out of his small town and move to a metropolis. This led to an internship that gave him the framework to get started.
Being a shining example of how to be wealthy and successful is important to Garrett. He learned everything that he could about being successful. He learned that he was the master of none. He ended up doing things that he wasn’t passionate about. He found the world of finance to be the transformation his life needed.
A lot of time people are swayed based on emotions. Principle and sustainability is important to focus and act on. Garrett is communicating a message that is generally dry and boring. To be effective at it he challenges himself with stand-up comedy to deliver on his complex topic.
[09:00] Look for the Value in Your Wealth
Money is sometimes looked at as a taboo topic. When trying to understand and study money we only look at the effect. We need to look at the value. Perspective is value. Focusing on what we can contribute to people and the impact will increase your wealth. If we hold the value within ourselves, it doesn’t lead to wealth.
Most people live within their means. They think they have to cut back to do this. Cutting back takes away the fun and passion out of your life. You need to be more resourceful and efficient when it comes to your finances. If you can find ways where you can earn money and expand your means, you can deliver more value. Reaching more people and delivering more value leads to increased wealth.
Mental capital multiplied by your relationship capital is the bridge that drives the financial capital. Finance isn’t just stock and bonds. It’s a bi-product of value creation. Understand your personal finance and determine what you need to make your foundation. Once you have your foundation you can begin to focus on your growth. It seems overwhelming but remembers there’s always someone who has more.
We neglect money because we don’t want to confront it. When we have to budget and have scarcity it keeps us stagnant. When we focus on budgeting we miss the opportunities around us to monetize. Instead of focusing on budgeting, focus on where you can earn more money. Take benefits of the opportunities available. Taxes and financial situations differ between Canada and the US. If you have a working framework you can adapt it to any country.
[19:54] Do What’s Right for Your Wealth, Not What Others Are Doing
Diversification is a notion of how to manage and mitigate risk, but it comes from ignorance. You rarely hear about how diversification can go wrong. Stretching yourself too thin can harm your performance. When you have only one investment you can have better risk management. Some people don’t have enough knowledge to understand when to pull out on an investment. We need to think critically about how to relate to the investment. Focus instead on diversity to increase your wealth. The risk isn’t on the investment. It’s in the investor
People feel sometimes they are missing out if they don’t invest in what everyone else is. It’s important to invest high risk only if you can afford to lose. Preserve and protect your capital, don’t speculate on investments.
[24:40] The Importance of Liquid Wealth
Liquidity is extremely important. Savings is liquid money that doesn’t have a risk of losing money. When the market goes down that’s the biggest time for opportunity to buy but not sell. People are scared to take that guaranteed loss. Liquidize your money so when a surprise comes you’re ready. When an opportunity comes along ensure that you have liquid assets, so you can take advantage.
[28:12] Wealth Factory
Wealth Factory helps people become more financially knowledgeable. Garrett incorporates one on one and group learning sessions. They go over all aspects of their financials along with opportunities to increase your wealth.
[30:30] Wealth in Legacy
Family and legacy make a huge difference in wealth. A family constitution helps protect and increase your wealth. Have family retreats to talk about money, legacy, and philosophy. You begin to look more at your human value than financial value. Your family unit begins to protect you and helps your growth. Some families use life insurance to put back into the family wealth.
Garrett is passionate about having a family unit. Legacy begins with where we put our attention and time.” Garrett creates rituals and habits with his family. It’s important for him to spend time with his family. He doesn’t tolerate dramatic people or those who live in urgency. Legacy to Garrett isn’t the money he’s left behind, but the knowledge on how to earn money.
[38:19] Garrett’s Definition of an Inner Changemaker
Someone who meditates and allows space for creativity. He encourages taking the time to not have the noise of the world around you. It will make a big difference to your presence in the world.
Episode Outline
Introduction: Having Wealth and Live Your Own Means
[02:16] Save Your Wealth and Don’t Diversify
[09:00] Look for the Value in Your Wealth
[19:54] Do What’s Right for Your Wealth, Not What Others Are Doing
[24:40] The Importance of Liquid Wealth
[28:12] Wealth Factory
[30:30] Wealth in Legacy
[38:19] Garrett’s Definition of an Inner Changemaker
Resources and Sponsor
What Would the Rockefellers Do?
Follow Garrett Gunderson: Twitter and let us know what you took away from the episode!
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