Lessons - The STRIP Framework for Wealth | Vivian Tu - Financial Expert

In this lessons episode, uncover why financial stress keeps people stuck and how simple steps can kickstart your wealth journey. Learn how the Strip Method simplifies personal finance through savings, debt strategy, retirement planning, investing, and goal setting. Learn why finding credible financial advice online is essential and learn how to calculate your own FU number to build lasting financial freedom. People have a hard time focusing on all the other versions of rich when they're not even making enough money because they're so stressed out about paying next month's rent. I mean, it's interesting why financial content does so well. Because I know why it does well. People are stressed out they're not making enough money. They feel like they can't afford to live cost of living increases, but even with all the financial content, I feel like people aren't taking that financial content and actually implementing it into their lives. I mean, for example, your first piece of content, how many followers did it get you? That first piece of like 100,000 followers. So obviously there's a niche for it. But when you because now you have a whole bunch of fans and I'm sure you talk to some of them and some of them give feedback and I'm sure some of them have taken the advice and ran with it. But there's a whole bunch that have not taken the advice and not done anything and they just consume. Why do you think that is? I think comfort with the status quo and fear of change is a big one. Like it's easier to be slightly uncomfortable, always feeling like you're living paycheck to paycheck. Then it is to put yourself in a place of discomfort for six months to pick up a side hustle. It requires you to do something new or different and people don't like change. But I will challenge and say that it depends on the piece of content. I think people are in my audience at least very, very willing to try something. I think certain pieces of content still feel a little out of reach. So if I'm talking about, these are ways that you can save on when you're buying a home. Some people, that's just out of reach for some people right now and that's okay. Not every piece of content has to be for every BFF. But for the simple stuff, I do think people take huge advantage in their trying to implement it in their daily life. I think something that people also struggle with is actually being able to discern who on the internet is qualified and has the credentials to be talking about this versus who's just selling snake oil because there are a lot of financial gurus out there who don't actually have any qualifications. They don't have a finance background. They're just good marketers. They just know how to make a hook on Instagram. Welcome to the internet. Welcome to the internet. So if my content is literally slotted directly after that person, they're looking at that video and then they watch mine. They may be fearful of taking action on the helpful tip that I've shared because they don't know if they can trust what I'm saying because maybe the person before me was unscrupulous. I agree that finance education through traditional means is lacking. I mean, you don't get financial education in high school and university and college the way that you should. So the answer is independent content creators. But I truly do believe, and this is something that I just feel. I would probably have to pull an audience to really get some feedback on it. But I feel like we are in this era of people trying to just consume, consume, and not take action. And I think that that's what I'm trying to actively fight against. But to your point, it's how do you discern who's who's legit? Who's not? What information is credible? What information is not? So when somebody's going on this finance journey, that's a great, that's a great question that they would be asking, like, how do I figure out where to start? How do I figure out where to start getting rich, building wealth? Who do I listen to outside of outside of you? What are the first steps that I should take that aren't too risky, that at least to sort of get me going in the right direction? Because there's so many concepts around wealth building and making more money. Again, it could seem like drinking from the fire hose and then there's a compounded problem of not being even able to trust the person that you're listening to. So where does that person start if they want to get rich and be wealthy? Yeah, I always tell people that if people want to get rich, they should strip. And then they're like, oh, didn't realize is this kind of a podcast. But strip is an acronym. It's just kind of a really easy five-step method of like how to get yourself into a really like stable place that you can really start making some impacts in your life. So first and foremost, S is savings. You want to have an emergency fund in your savings. I would put it into a high yield savings account. So you want three to six months of living expenses set aside for this rainy day fund, this emergency fund. And this is going to help prevent you from going into further financial duress in case something happens. You break your leg, the wheel rolls off your car, your roof caves in, something that happens. Then once you have that emergency fund set up in a high yield savings account, we're earning more interest. You move on to T total debt. And the reason it's a T is because people who pay down their debt will just pay it down willy nilly. And that is mathematically not the right way to do it. So what you actually want to do is rank your total debt from highest to lowest interest rate, make the minimum payment across everything to keep your credit score in good standing. And then any additional pay down funds, you're actually going to put towards the debt with the highest interest rate, typically credit cards. So this is going to help you pay your debt off faster while paying less and fees. And this is the mathematically correct way to pay down debt or retirement. We talked about this earlier. You got to have a plan for future you. And so I encourage people to take advantage of tax benefits. Legislators write the tax code and the IRS enforces it. And the way that the tax code is written incentivizes us to do things that they want us to do and disincentivizes us to do things that they don't want us to do. So an incentive they want is for us to save for retirement and invest for retirement because the government does not want to take care of you in your old age. They want you to take care of you. So you're going to get tax benefits by tapping into an employer-sponsored retirement plan like a 401k for a 3B TSP if you're in Canada RRSP. So many letters and they all totally make sense, right? But also tapping into things like a traditional IRA or a Roth IRA, those stand for individual retirement account. You want to be able to leverage tax advantage accounts like a 529 if you want to help save for your kids education. There's lots of options. But it's not enough to just open these accounts. You actually have to fund it with cash and then I invest. So people always say, what's the perfect investment? There's no such thing. Okay. When I worked on Wall Street hedge funds would call us regularly and being like, you know, we made a couple of bad calls. We got to unwind all of our trades were blowing up. If these people who have very literally billions of dollars of technology and research at their fingertips can't seem to get it right. What makes you think 15 minutes on Yahoo Finance is going to help you get there? You're not. What I say is invest in a diversified portfolio of index funds that track the broader market. So instead of buying an entire bag of almond joy candy bars, you're getting the Halloween bag, which is KitKat Twix, almond joy Snickers, you know, would have you. So you're getting a little bit of everything. That's going to really help diversify your portfolio. And if you're listening to this and you're like, well, that was still gibberish, just utilize something called a robot visor. You sign up for the account and you take a quick quiz about your money goals. So what you have, what you earn, how old you are, what your family looks like, where you live, when you want to retire. Yeah, yeah, yeah. And then it spits out a diversified portfolio that makes sense based on your financial situation. And then the email you once or twice, I would say probably once every one year or two years to retake the quiz. So then if you've made a lot more money or something has happened or you got divorced risk tolerance. Correct. It'll rebalance your portfolio for you. And then last but not least is P everybody's favorite plan. You have to have a plan of what you're happily ever after looks like. Some people's happily ever after is I retire at 35. I live in an air stream. I never wear shoes again. Not me, not me. I would rather retire at a more traditional age 60 65. But I better have a vacation home. I better still be able to go on vacation. I better still be able to go and travel. I better be able to take care of pickles my fat English bulldogs like heartworm medication. Like I want to be able to have certain things in my life. And I don't want to have to worry about money. And if that's the case, like you need to know what's that what's not going to cost because retirement number one in the air stream and retirement in your vacation home look very very different. So I know you have a number. So your number is 25 million. Yeah, that's my FU number. That's your FU number. Okay. Yeah. Obviously that's for and you know what though I've thought about this because I was again, I'm listening to the podcast that you've been on before. And I was thinking about that number. And it's an FU number if you had it now because there's ways you can make them money last. But when you're like 65, that's like it's an FU number then, but ultimately, I mean, if you made that over years and you were taxed on it and then you invest it like it's, it's, it's a lot of money. But it's still a cost of living has been to increase too. Yeah. So that 25 million at 65 may afford you a very comfortable last few years of your life. But I mean, you still have to understand how to invest it strategically. So you don't just blow through it either because you can still F that up. I mean, people F that up all the time. And the best examples that we see are athletes who get these huge sums of money then they're going bankrupt by the time they're 30. So it's really easy to fuck this up if you don't know what you're doing. So first of all, why is 25 million your numbers? I know that you're very strategic and you've done some, them some math around why that's your number. And also, how should someone else calculate their number? Like what's the, what's the mechanics? Obviously, you don't know someone else's life. But what's the thought process that you went through the somebody else can use? Yeah. So my FU number is 25 million dollars because 25 million dollars invested earning a very conservative 4% return every single year would give me about a million bucks in returns. And even after paying capital gains taxes on that, I would still be able to fund my lifestyle, fund my homes, fund my travel, fund any sort of expenses. And frankly, probably still be able to even help out my kid if I needed to. That's what it would take for me to have a very comfortable, very comfortable average life. This does not get you to private jet. This does not get you the yacht. This does not get you living in a million a year. Monaco, million a year. And then if you, if you took a four, you'd still have to pay capital gains on that. So yeah, okay, so you pick capital gains on that pay capital gains. So you're roughly ending up with about 850 850. And then I mean, if you had a two person household and you had life three or four kids going to private school, like I'm not saying three or four, are you crazy? Yeah, one to two. Don't put that juju on me. I'm just saying, yeah, that money goes quick. It does. Money goes very very quick. So you can have an FU number like 25 million, but you still have to have a, but that's also my baseline. Yes, my baseline FU. Obviously, frankly, I haven't even really thought too much about like what's my top top end of it, but like I would say a hundred million dollars, like I would not work anymore. Thanks for tuning in. If you found this valuable, don't forget to hit that subscribe button so you never miss an episode. And if you want to dive deeper into this conversation, check out the links in the description to watch the full episode. See you in the next one.