Investing For Beginners: How Much Should You Pay Yourself First And Why?

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MBA 37 | Pay Yourself First

 

One of the first things you have to learn as a beginner investor is to pay yourself first. Now, many people would tell you to pay yourself 10%, which isn’t bad advice at all. But Solomon Ali says you should do 30%. That is just one of the spins that he adds to what is already a sound piece of advice. In this episode, Solomon plays a video about investing for beginners and throws in his opinions along the way. What Solomon has to say about this is born out of years of investing experience, including a particularly painful and humiliating bout of failure. But you don’t have to suffer the same debilitating experience to learn how to invest wisely and create financial freedom and security for yourself. It’s simply a matter of finding the people who have done these things and listening to what they have to say. Start here!

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Investing For Beginners: How Much Should You Pay Yourself First And Why?

It’s an exciting new year. 2021 is getting off to a wonderful start. I want to thank everyone for joining in. I hope we are able to share some more information that you may find extremely valuable and please don’t forget to share it with a friend. If you know people out there who are trying to be entrepreneurs, trying to start a business, running a business or that have been in business for a while who may have been struggling and things of that nature. MBA can help them to get through some of the minefields and struggles that they may be dealing with and they may not know how to deal with the things because they have never come across that before in their life. That’s what we’re here for to be a support system to try to help you to solve those problems.

A team member has brought a video to my attention. The guy’s name is Stefan and he talks about how to invest for beginners and the exciting thing about it is I looked at it and stuff people send me all kinds of stuff. They want me to take a look at it and things like that and I don’t have a lot of time to take a look at everyone’s stuff because I have other things to do. They thought it must be of great value to the people in this show who are reading it and they got it from a different perspective. We’re going to take a look at what Stefan has done. The guy to me did a hell of a job. He hit it out the park. He stuck with what the basics were, how to do it and everything of that nature.

He walks you through the numbers. Some of the things that he does are a little different from how I do things but you’ve got to understand, I’ve been an entrepreneur for over 30-something years. I’ve grown businesses, I’ve had failed businesses, I’ve started some businesses that never even took off so I know all the different ways things don’t work and a handful of ways that they work. Let’s go ahead and get started. Here’s the video. His name is Stefan with Investing for Beginners. Let’s take a look, and we’re going to stop it at different places and I’m going to give some opinions and things. Please keep in mind that it’s only my opinion. Add your two cents, takeaway and things like that. It’s a learning tool to help you to gather information to make you a better entrepreneur or a better business person. That’s what we’re trying to do here. We’re here to be a support system for you, so let’s get started.

Pay Yourself First

“I’ll give you guys an idea. I started investing when I was eighteen years old. At the time, I didn’t know anything about investing, but I was reading these self-help books. I read some books on finances. I learned some basics about investing and I realized the most important thing is to start as early as possible because the earlier that you have to start investing, the more beneficial it’s going to be later in your life. You can then take advantage of compounding which Einstein said is the ninth wonder of the world.

Warren Buffett and all these investment gurus all talk about the power of compounding. I learned some basic things about that so I knew at eighteen years old, I needed to get started. The earlier that you start, the sooner that you can make mistakes and learn from those mistakes. You have much higher risk tolerance because a mistake that you might make is not going to be as costly as opposed to if you’re in your 30s, 40s, 50s or 60s, where you’ve got to be a little bit more cautious and more conservative in your investment strategy. I was eighteen years old. The first book that I read on investing was called The Wealthy Barber by David Chilton. It’s more of a book geared towards Canadians but it basically taught the principles of paying yourself first and foremost. The number one rule that the most important thing is to pay yourself first and to invest on a monthly basis.”

The Wealthy Barber, I haven’t read that particular book, the book that I have read that I enjoy is The Richest Man in Babylon. If you haven’t read The Richest Man in Babylon, in my opinion, and since he is saying The Wealthy Barber, go take a look at those books. The Richest Man in Babylon gives you the principles and what he’s going to be talking about. They’re going to talk about saving 10%. I tell you to save 30% because I’m trying to get you to a place inside 1 or 1.5 years to have your money working as hard as you are to where you have duplicated your income. If you’re making $100,000, I want that at the end of 1 or 1.5 years for you to be making $200,000. You would still be working to earn $100,000. Your money would be working to earn $100,000 as well from your investments and things that are in conservative risk. Let’s get back to the video.

“An ongoing basis so you can take advantage of what is called dollar-cost averaging and have your investments and your money compound over a period of time. I’m going to explain a little bit about those but to go back to my story, I started with about $500 as my first investment in a mutual fund. It was the Bank of Montreal mutual fund here in Canada. I started putting aside $25 a month on a pre-authorized payment plan to constantly buy more shares of that fund on a monthly basis.

The first and most important thing that you have to learn in investing is to pay yourself first.

When I was nineteen years old, I made a $5,000 investment to another mutual fund and invested in a few other different things and I stopped. I was always putting money aside every month paying myself first but I didn’t do any active investing for a while. I did remember a number of years ago, I did buy Apple stock and I had a great return from that. I did buy Facebook when Facebook went public a number of years ago and I made some money from that. At the time, I didn’t have a lot of money to invest.”

He mentioned Facebook. I had the opportunity to buy Facebook as well. It was our private equity company that bought Facebook. When we bought Facebook, we bought it at somewhere around between $7 and $9 a share and when they first came out, the stock was at I want to say it was $31 or $30 a share. That tells you early-stage investing, being able to get in before it goes public because we were in a pre-offering before it became public. It was like, “Wow,” to see those returns. The only disadvantage we had was this, we followed my principles.

My principles say, “Look at what your returns are and take some off the table.” When we hit our number, we took that off the table and that was crazy because if you look at what it’s doing now, if we were held on to the same stock for 1 or 1.5 years, the money we would have made would have been totally phenomenal. We made great money. Don’t get me wrong. To buy something at $7, $8 and $9 a share and sell at $38 that’s pretty significant. We exited at about $38. That’s by almost a 400% to 500% return somewhere.

It can be done but you’ve got to understand the cycle that you might be investing in. Where is the company? How mature is the company? Is the company growing by triple digits? Is the company disruptive? Has it changed the way we do things? Has it solved human problems? Has it made the quality of life better? Do they have a good management team? Can the management team do certain things? These are the things that you’re constantly looking for in an industry. It’s an industry that will grow and continue to grow. Is it a strengthening industry? The top five companies in the industry, what are they doing?

The business that you’re investing in, is it bringing something different from those top five companies? Those are the kinds of things that you have to look for and the company must grow by triple digits and there must be growth in the industry. I’m going to shut up this time and I’m going to try to let this video play a little bit longer so we can all get it. When he mentioned Facebook, I wanted to say we did that one as well so it panned out for us.

“I remember buying $600 worth of shares on Facebook and $800 with the shares on Apple. Even though I did make some good returns percentage-wise, the return was only a couple hundred or thousand bucks or something that. Since then, to give you guys an idea, I’ve done well in business. I’ve learned a lot more about investing. At 30 years old, I bought a real estate property in 2013 that is a rental property that I rent out.”

When you’re investing, you have to find your niche. He’s giving you his portfolio types of investments that he made. My Portfolio is simple. At Solomon RC Ali Corporation, here’s what we do. We help companies that are looking to go public who are looking for capital. Either the company is looking to go public and they’re looking for capital, or they’re a private company, needing capital to be arranged for them whether it be debt money or other investments.

MBA 37 | Pay Yourself First

Pay Yourself First: When you’re investing, you have to find your niche.

 

Most of the time, we’re investing in these companies and we’re looking at them pre-public stage, pre-going public, just before. We’re making sure that they meet, “What is the industry? Is their growth potential in the industry? What is management? Do they have the ability to scale? Because you may be able to manage what you have but can you scale the business? Can you grow it from a $5 million company to a $20 million company?

There are a lot of mechanics in there going from 10 employees to maybe 100 employees and crossing state lines. I remember the first time when we started doing business in multiple states, we found out something as simple as, “From our checking account in California, we couldn’t pay somebody in Texas, who was an employee. We couldn’t pay someone in Oregon who was an employee.” We had to use a bank and pay the employees from accounts within those particular states. They know that. These are the kinds of things that they learn, “We didn’t know that when you cross the line, the insurances change state by state.” It wasn’t all of a sudden. When we started out in California, we had all of these insurances and all employees were covered.

When we went to Texas, it was different insurance that we had to set up. These are the things that you want to know that management knows and that they have the right team around them so they don’t stumble and bumble or basically cost you money if you’re investing in it. You want to know that the management team has the ability to do the acquisitions because that’s how you make money and that’s where we like to be. It’s to look at where they’re going. Help them to figure it all out. Why do you need the money? What’s the use of proceeds? Management can do it. We then look at, “Does this business have triple-digit growth potential?” Can you go from a $5 million company to a $15 million company whether it’s 12, 24, 36, or 60 months? Is it possible for you to make that growth and make that leap?

We then look at, is the company reinvesting in their business for this growth? What are they getting the money for? That’s what we look for. Here’s what we do. We make loans to companies. The different people that I normally work with in my network and everything makes a loan to a company. They’ll go in the company and say, “We need this amount of money.” We will go ahead and put the package together. I’m RC Ali. I have a group of attorneys, our CPAs, marketing people and all of our little analysts. We put that package together to meet the needs of the various lenders or investors and things like that.

Once we got that all done, what we do is introduce the two parties together. We don’t act as a promoter, broker, dealer, market makers, or anything like that we don’t even act as analysts. We do the due diligence because we understand what needs to go into the due diligence. We understand what needs to go into an investment decision because we’re making investment decisions as well. What we turn around and do is this. After all that is done, we introduce them to the two parties together, and they do a deal. Now, you’ve got a party that’s bringing the money to a management team and an enterprise that have the things that were normally looking for, which creates opportunities for investors who are looking whether you’re investing $1,000, $50,000, or $100,000. You can now get in before the company is going public.

The company normally will loan them money. They loaned their money, and I want you to pay attention to this, how many of you have gotten a 15% return on your money in 2020? When the company loans money, the company normally reserves the right to convert a portion of that loan to equity in the company at a discounted rate. Yes, you read that correctly. Investors who follow me already know this. This is how we were able to start a private equity company with $250. You read that correctly.

We started a private equity company and by the end of the year, we’re loaning out millions of dollars to companies. That’s for real folks. That’s no BS. We were loaning out millions. What did we do? We converted the loans that we were loaning out and we were getting the equity in the companies at a discounted rate. Because we got it at a discounted rate, I’m going to give you an example. If we lent a company $1 million and that would have been monies that were arranged, they will have to pay us $1.25 million for example because each transaction is different. It depends on what the parties negotiate.

When you invest with the right company and the right people, your money will tend to grow.

The investor or the lender loans the company the money, the company receives the money. They agree to pay that money back and give a 25% or whatever. You get to buy the stock by calling that lender and saying, “I’ll help you get out a portion of your possession and pay you back on their behalf if you sell me $100,000 worth for that loan.” You buy a $100,000 loan, the original lender keeps the difference, you turn around and you’re able to get that $100,000 loan piece that you got for $125,000. It’s already worth $125,000.

I’m using simple numbers. Now, you’ve already up. Most of the time, it’s only a 15% discount. That’s what you will experience if you go and buy a portion of a loan. You’ll get about a 10% to 15% discount so you’re already in the money. You’re able to sell that within a year. Here’s one important thing. A lot of people don’t talk about this when they’re talking about investments so I need you to understand this. Taxes have got to be paid.

If you sell equity in the first year, you’re going to pay higher taxes. They’re going to be capital gains. You’re going to pay higher. If you sell it in one year, one day, you will pay lower taxes on that money. This is what you need to know because it’s not about making an investment and making money on the investment decision that you made and things of that nature because your investment could be partially wiped out by what? A portion of the taxes.

I don’t recall exactly what the tax rate is now but President Obama and they had a vote on when he was still in office and they had changed that. It’s 23% now if it’s long-term. If it’s short-term, it’s around 18% or 21% but it’s somewhere in there so it’s significant. You want to think about that and that’s a serious piece of your investing strategy. It’s to know if I sell it quickly if I buy equity possession or investment and I sell it within a year, I will pay higher taxes on that money. If I sell it after a year, in one day, I will pay lower taxes, that’s important because employees, depending on how much income you make, where you are. You’re going to pay 30%, 33%, 35%. Some of you are paying 40%. That’s important. That helps you to increase your actual investment strategy and your overall average. Let’s get back to the video guys.

“I make a little bit of a passive income from that as well as the capital growth of that. I also got an over $1.6 million investment portfolio of stocks. I no longer invest in mutual funds. I do have one mutual fund still but primarily a stock portfolio that consists of blue-chip stocks, index funds, a variety of different sectors, a lot of dividend paying stocks, some real estate investment trusts, and bonds. It’s a number of different investments and I have also invested in private businesses. I’ve also done a loan as well so I’m going to go over some of the strategies and give more basic advice but I want to give you guys an idea that I started from nothing. I’ve been able to build myself up to becoming a millionaire. What I’m going to share with you can definitely help you. If you’re getting started, it can take time, but I’m going to share with you some basic principles that are important for you to understand. The most important thing is to pay yourself first.”

Paying yourself first. Most people say 10%. Solomon Ali says, “Pay yourself 30%.” Here’s why 30% is important. Let’s say you’re making $100,000 a year, you pay yourself $30,000. You take that $30,000. You use some of it to invest and everything like that, but you’re going to invest in the example I showed you. I’m only talking about what Solomon Ali is going to do. I’m going to take the $30,000 and I’m going to buy a portion of that note or of that loan. When I do that, I already got a 15% return on my money just on buying it and knowing where to go to purchase it. I get a 15% return on my money.

I’m already making money now and I’m making serious money. Many times, what I haven’t shared with you is the stocks that you buy or these portions of these loans that you buy, when you convert them to equity, you won’t get a 15% return. Your returns may be as high as 300% to 400% because you’re investing in the right companies that are doing the right thing within their industries. Some of you don’t know me, but for the ones of you who do know me, you know this. Have you heard of the Ring Doorbell camera? We own the intellectual property of that.

MBA 37 | Pay Yourself First

Pay Yourself First: Follow the instructions of the people who are doing it. They can’t guarantee that their strategy is going to work 100% of the time, but it usually works more than it doesn’t.

 

We licensed that out to companies like SkyBell, CPI, other smart home security companies and things of that nature. We were the ones they came in and invested in that it was disruptive in the industry there. I’m the CEO of that particular company but that’s what we did. We turned around and invested in an energy company. One of the largest minority energy companies was the largest minority energy company in the United States with well over $100 million in sales. That’s what we did.

When you invest with the right company, the right people who are putting their money and your money will tend to grow and you will hear a lot of it. If you’re listening to people that’s around you, that’s not where you want to be, stop listening to them. You need to follow the instruction, whether it’s me or someone like me. You need to follow the instructions of people who are doing it. There are some simple principles. This stuff is not rocket science.

Can we assure or guarantee it’s going to work 1,000% of the time? No, we can but what we can say is that it works more than it doesn’t. If it’s on a scale of 1 to 10 it’s probably going to work 7 or 8 times and that’s a significant number of times for something to be successful especially when you’re dealing with large numbers. Large numbers is being like, “I’m looking for a company that’s going to have triple digit growth. I’m looking for a company with a good management team, a proven track record that can do certain things and they’re not going on a learning curve with your money.” Why would you want to go, “You figure it out and we’ll invest?” That’s why I said I read the book, The Richest Man in Babylon. It’s an important book. It changed my life. It helped me to see things totally differently. That’s what I’m trying to share with you.

The investors out there who already follow me and everything, they know that you go to SolomonRCAli.info to find the notes or the loans that you want to participate in. We give you all the research and we share all the research. We’re not promoters. We’re not market makers or broker dealers. Were none of that. All we’re trying to do is provide educational information to you so you can make sound decisions because there are so many people that have had to bootstrap their companies, they don’t know where to go to get the money. There are so many people who are comfortable with what they do for a living but they’re looking for a different investment.

They’re happy working where they’re working doing what they’re doing but they’re like, “I need to make a good investment in the company. I don’t want to do the work. I don’t want to beat entrepreneurs. That’s not what I do. I want to make an investment in the right company and know that, “My money is secure. The people are going to be around tomorrow and the business will thrive and things of that nature. I can share in that growth.” If that’s you, that was me. That’s how I looked at it. After I lost everything, I wasn’t looking to run a company anymore. I don’t want to run anybody’s company. What I was looking for is to help people out.

In fact, I wasn’t even looking for an investment opportunity. I was through with business. I was totally done but I got an opportunity because some people believed in me, and they said, “Can you help this company get the money?” I turned around, I helped him get the money and here’s what I did. I did and provided all my services for a full year for free but that was because I could afford to do that because I understood what I had and my capabilities. I believed in me. When they say they can do what they said they could do, I trusted that they could do it if they had the resources.

The decisions that you have made have taken you right to where you are today. You can’t blame anyone else.

I got them the resources that they need. They did what they said they could do and it grew. What they owed me at the end of the year was supposed to be $250,000 and $250,000 ended up being almost $1 million in a single year. That’s what I’m saying. That’s the impact of making investments in the early stages of these companies but it’s got to be the right company. It can’t be risky and stuff like that. We’re going to get back to it because this guy is on fire. He’s sharing his story. I’m glad that my team member found this so we can share it with you. We’re going to get back to the video.

“What I’m going to share with you can definitely help you if you’re getting started. It can take time but I’m going to share with you some basic principles that are important for you to understand. The first and most important thing is to pay yourself first and that’s the first thing that you’re going to learn in any investment book or financial book out there. You need money to invest, you need money that you can put aside to save, invest or whatever it is. If you don’t have that, if you can’t take a percentage of what you make and put that aside, there’s no hope for you to be able to grow your net worth and be able to make more money.

Live Below Your Means

Whatever amount of money that you’re making now, whether it’s $1,000, $2,000, $5,000, $10,000, or more, you’ve got to make a decision. The most important financial decision of your life, which is that you’re going to take a percentage of what you make and I recommend 10% at minimum. Take 10% and you’re going to put that aside and pay yourself first. You’re going to put it in a savings account, an investment account, or some other account that you’re not going to touch. It’s important. You might be saying, ‘I don’t have the money to do this. I live month to month,’ maybe the step before that, that’s even more important is you got to manage your money.

You’ve got to manage your finances, and you got to pay attention to it on a weekly and a monthly basis because you should never be in a position where you’re living month to month. That’s a horrible position to be in. That position means that you’re never going to be able to get ahead in your life because living month to month basically means that your expenses are here and your income is here. Whatever income that you’re making is going towards your expenses.

The only other options to be able to pay yourself is either you need to make more money and keep your expenses where they’re at so make more so you have a positive cashflow. You can then take that money and pay yourself first or you have to lower your expenses. For most people, the best thing to do is to lower your expenses. Cut down on your current living expenses because if you’re living month to month that you can’t afford to live the way that you’re living. You’re living beyond your means.”

What he is giving you some good solid advice. Let me add my spin to it. If you’re earning $5,000 a month and we’re going to just assume it’s after taxes. You’re earning $5,000 a month after taxes and your expenses are, let’s say $4,000 a month. Most of you, I know your expenses are probably $5,500 a month. I know you’ve maxed out the credit cards, the whole nine yards. Here’s what you do. Decrease your expenses by at least 20%. Take your expenses down. If it’s $4,500, if that’s your expenses, decrease it by $900. Figure out a way to decrease that by $900. There are some simple ways to do that but that’s going to be your first step. If your budget is that tight, you need to decrease your expenses by at least 20% right out the gate so, in this scenario, that’s $900.

MBA 37 | Pay Yourself First

Pay Yourself First: If your dreams are to come true, you need people around you who believe in you.

 

You’re still at the same $5,000 coming in. What I want you to do is increase your revenue. It may mean for some of you, you have to work a little over time. It may mean for others, you’ve got to get a part-time job. Whatever it is, you’re going to have to do but I want you to increase your revenue by at least 15%. If I was making $5,000, I need to bring in another $750 a month. A lot of you might say, “There’s not a lot, I can do that.” We don’t want it to be a lot because we don’t want you to get taxed and everything and work yourself to death but the difference of what you’ve increased your revenue, by adding maybe a few hours extra work a week, you end up with another $750.

That’s important because now you’ve got the $900 that you saved and you add the $700 and now you’ve got $1,600 or $1,650. Every month, you can also use that to attack that debt and liability to bring it down. Do you follow me? You can bring that down quickly so in approximately seven months, you can bring all of those expenses and liabilities down to a more manageable number so you’re only left with your mortgage payment or your rent payment. If you’ve got a car payment, you shouldn’t have a car payment.

There are some other people out there that teach velocity banking and everything. I strongly urge you guys to find them, look it up and look into velocity banking because it can help you to bring everything down and give you more money to invest. You’ve got to get serious about this. This is your livelihood. This is based on the decisions you have made up to this point and have gotten you to where you are. You can’t blame anyone else. I couldn’t blame anyone else. The decisions that you have made have taken you to where you are now so now let’s change it around.

All I’m trying to do is give you some information because I was living in an 18,000 square foot home there and about. There was a $307 electric bill we couldn’t pay. We didn’t have the money to pay for it. I had the Mercedes and the Porsche. The Porsche got repoed the other cars didn’t get repoed for some reason. I don’t know if they couldn’t find them or whatever but I was going to take my own life. We went from making millions and millions of dollars every month, paying our people and everything of that nature, and could pay a $300 electric bill. You can’t imagine how embarrassing that was with a business that we thought would last forever. This is the stuff I’m trying to keep you from. This is the stuff I’m trying to share with you.

The sad part about it was this, I had all the tools I knew what to do. I didn’t get lucky. I didn’t build the business by osmosis. We built it by skill, but because one person made a few mistakes and they didn’t like some things about me, or whatever the case was, they did some things, and because I didn’t use all the tools that I was exposed to, here’s what happened. I couldn’t pay that bill of $318 living in this big home and everything like that. Now a company that gave me the tools was a company that was 50 years old now. I’ve been doing business with them for many years.

It was with Laughlin. They helped me to set up an irrevocable trust. They helped me to set up my corporations and my LLCs in the right structure so the pain wouldn’t come back home. Here’s what I did. I bought the program and everything. I spent thousands of dollars and I sat it on the shelf and I said, “If I have time, I’ll get to it. I’ll implement it.” The program was a Warbucks strategy and I liked the name Warbucks. I bought in and spent thousands of dollars. In fact, my mother helped me to pay for it back in the day and I sat it on the shelf.

When everything went wrong, I realized, if I wanted to implement the things that I had already bought that I already had at my disposal, it would have saved me. I would not have lost everything. I wouldn’t have lost over $100 million in assets and things like that. I may have lost the business but we would still and all the properties, the commercial properties, and things like that. We would have still owned the cars. What I’m sharing with you is this is personal but you have to understand that you’ve got to acquire knowledge. I’m giving knowledge for free. I’m not charging anything. I don’t want anything from you.

No learning, no earning.

In this show, I’m trying to help people who look like me or people who are bootstrapping a struggling business or a business and need funds. They need capital and they don’t know where to go or people who are looking for the right investment and they don’t know how to find that investment. They don’t know where to go and where to look for that. That’s why my team is doing all this research. They’re trying to help people.

This is our way of giving back to help you so you can understand that it’s possible to get a 300%, 400% or 1,000% return. I was accused of making stocks go up over 30,000% by the SEC. They accuse me of going 30,000%. I don’t think anybody else could make that claim. They made it go up 30,000%. In fact, I still don’t make the claim, but they made the claim in a complaint against me. Life is not over. What it means is this, do your work. You don’t have to lie. You don’t have to cheat. You don’t have to steal in business. You have to be able to do the work.

If you’re an investor looking for the right investment and you don’t know what to invest in, we don’t do market making and all that or promoting but we do try to educate people. Look us up. Go to SolomonRCAli.info. Look us up, go there. Figure out what companies we’re working with and use it as a tool so you know what to invest in. The companies that we’re working with, you might not be interested in, to be frankly honest but at least you can pick up the toes and learn, “This is how they’re doing it. This is how they’re making money. I can use the same tools and do the same thing because now I understand how to make investments and get that type of return.”

Don’t throw your money at chance. Don’t go buy a stock because everybody else is buying a stock. Don’t buy a stock where you don’t know the management team, you don’t understand what they’re doing, the industry, and things of that nature. You need to read. You need to find out the information and you will make money. No learning, no money. That’s the bottom line. You’ve got to go on a quest for knowledge to learn and if you’re learning your earning will go up. I can promise you that one.

“It’s not smart financially. Most people that live in a house, rent an apartment or rent something that they can’t afford. They have a car that they can’t afford. They’re buying food and luxuries that they can’t afford. You’re going to make a sacrifice and this is coming from someone who was in debt. I was in debt at one point in my life. When I came to this realization, I had to make a sacrifice. For example, I had to move back into my parents’ house or I had to live with my friend on his couch for several months.”

I had to do that too. This wasn’t too long ago and this one we doubled down. I had to move in with some in-laws for about 1 to 1.5 years. I was like, “It was the most embarrassing thing,” and it was the second time. I hadn’t lost everything. The first time I lost everything, my wife ended up finding a job, and they took care of our housing and everything like that. The second time was after we made a whole bunch of investments and we were owed about $20 million in investments and stuff from various companies. I won’t tell you what company it was but it was dealing with smart technology.

We had to go out and start suing everyone who were infringing on our technology. The first thing everyone told us, “It’s going to take you 3 to 5 years to win any of these lawsuits.” We told them that right is right and wrong is wrong. Let’s go. Let’s keep moving forward. The first five companies settled in less than 120 days after seeing our intellectual property. Sometimes people, you have to surround yourself with people who believe in you and you have to believe in yourself. That’s why you don’t have to lie, cheat or steal. You have to know and be confident in what you’re doing and why you’re doing it.

MBA 37 | Pay Yourself First

Pay Yourself First: You need to have at least a year and a half in reserves if you want to survive the next crash.

 

We all have the stories. You hear he has a story. His story wasn’t as harsh as mine. Sometimes the lower you fall, the higher you bounce back. I don’t know if that’s a universal law that God put in place but I am thankful and grateful for the world that we live in and for how everything has turned out. It will turn out that way for you as well. You don’t have to go learn the principles, stumbling, bumbling and trying to figure it out. Let us help you get through the minefield so you can get to the other side because there is a path to this so you can start making money and have a nice life. If that’s what you’re looking for.

“Eat at home, not eat out as much, not go out as much or take the bus and get rid of my car. These are all sacrifices that you might need to make in order to bring down your expenses so you have that positive cashflow. It’s important. Look at your current lifestyle now. Look to see and set a budget for yourself that you’re not going to spend more than X amount of money. Anything in excess, you’re going to save that you’re going to pay yourself first.”

When I had to start over, I was a single man, and the young lady I was interested in, we were friendly with each other but I was interested in her. I said, “I’d like to take you out.” She was like, “Okay.” I said, “You’re going to have to pay for the bills because my money is funny.” She was like, “I never heard that line before.” I said, “No, I’m serious. You’re pretty and smart but if you give me an opportunity, I promise you won’t be where you are working the job that you’re working in.” Guys and ladies, a guy has to be bold to tell a woman that he’s interested in her that his money is funny. “I want you to take me out and you pay for the meals and stuff.”

She gave me a chance. She took me out and we went out on many dates and things like that where she paid but she’s a millionaire now. She wasn’t a millionaire when I met her. She was working a job where she was making about $50,000 or $60,000 a year give or take, maybe a little bit more. That is what having the positive people, the right people who have the knowledge and the expertise can do. I could have been that guy that sat over there but I changed her life. I changed her family’s life. She changed my life because it was someone who believed in me.

People, you have to find people to believe in you. If your dreams are going to come true, you need people around you who believe in you. I wanted to share that with you because when he was saying what he was saying, I thought about how I was cutting my budget. I told people that my money was funny. You want to sit and talk. Even my boy friends and stuff like that where we’re just going to hang out, I was like, “I’m not buying anything because my money had to go to an investment.” Everybody that knew me knew that about me. When I asked this young lady out, she was like, “I haven’t heard of that before.” It was pretty cool though, so I got the date and she got what she wanted in the end, which was sort of me but we no longer have that but she did become a millionaire.

“They say pay yourself first is because you’re supposed to pay yourself that money before anything else, before you pay your bills, your rent, or anything else. That’s how important you have to make this. That’s the first step. Maybe I’ll do another video that goes into managing money and financing but you’ve got to pay yourself first, 10%. I don’t care if that’s $100, $25, or $1,000 a month. You’ve got to make sure that you’re doing that. To give you guys an idea, I started that way but now because my business and my cashflow is big, I’m able to pay myself, 80% of what I make because I have low expenses and high margins in my business.

Create An Emergency Fund

Therefore, I’m able to have tens of thousands of dollars every month, invest that to be able to grow my portfolio and everything like. You want to be in that position where you have positive cashflow, number one. Number two is you need to make sure that you have an emergency fund of savings. It’s important. If you don’t have that, you’re going to be in trouble. Typically, what all the financial books say you want to have at least 3 months to 6 months of savings, which is typical of your expenses.”

He’s getting that from the financial books and everything he’d read. If any of you remember what happened in 2008, 3 and 6 months wasn’t enough. Most people did not get another job. It took them over a year. I will tell you that if we ever go through another crash, you need to have at least 1 to 1.5 years in reserves if you’re going to survive that crash. Those days of 3 and 6 months, that is crap is over with. It’s taking people a lot longer to replace their income to find a new job, so you need to have at least 1 to 1.5 years to be able to replace your income or to live off of until that time comes.

I’m running out of time because I’ve been so long-winded and everything of that nature. Please forgive me for that but I still gave you some valuable stuff that you could get. Seek knowledge. Don’t be afraid to pay for knowledge, go to the seminar, and go to different things. Get the knowledge that you don’t know. Hire the consultants, hire the right people around you to help guide you, because they’ve already gone through it. They can keep you from making the mistakes that they have made because they have learned already and that will help you to get there.

The next thing is please don’t hire somebody as a consultant that’s just starting out and don’t know anything. Don’t hire someone that is doing their job, day by day and that’s it. You want the top guy. You want to find the top ten people in their industry doing what they do. They’re going to have a bigger network. People are going to like them and you’re going to be able to leverage their networks. That’s what we do in Solomon RC Ali for our clients. We help to leverage our network for the benefit of our clients. That’s extremely important.

I’ve got a book coming out in 2021. It’s a must read. I’m not going to compare to The Barbershop book or The Richest Man in Babylon or anything like that, but here’s what I’m going to say. If you read the book, it will change your life. It will get you to where you’re trying to go. It will keep you from stepping down those minefields. Thank you, guys, so much for tuning in. If you have questions or anything, reach out to my team and me at SolomonRCAli.info. Thank you so much for reading and have a wonderful week.

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