[Script Info]
Title: 
[Events]
Format: Layer, Start, End, Style, Name, MarginL, MarginR, MarginV, Effect, Text
Dialogue: 0,0:00:00.40,0:00:04.94,Default,,0000,0000,0000,,George,
Dialogue: 0,0:00:04.96,0:00:08.68,Default,,0000,0000,0000,,30 years ago, when I started teaching this\Nstuff, I was first teaching people how
Dialogue: 0,0:00:08.71,0:00:15.62,Default,,0000,0000,0000,,to get out of debt, live on a budget,\Nbe generous, live on less than you make.
Dialogue: 0,0:00:15.64,0:00:17.18,Default,,0000,0000,0000,,You have a plan, you avoid debt,
Dialogue: 0,0:00:17.21,0:00:20.50,Default,,0000,0000,0000,,you save money for emergencies\Nand later for investing.
Dialogue: 0,0:00:20.53,0:00:24.94,Default,,0000,0000,0000,,All of those principles work, but people\Nkept saying, Which one do I do first?
Dialogue: 0,0:00:24.96,0:00:27.76,Default,,0000,0000,0000,,I started laying out, Well,\Nyou should do this first and that first.
Dialogue: 0,0:00:27.79,0:00:31.32,Default,,0000,0000,0000,,You should have an emergency\Nfund before you start your 401k.
Dialogue: 0,0:00:32.84,0:00:35.12,Default,,0000,0000,0000,,Then I figured out it's easier to have
Dialogue: 0,0:00:35.14,0:00:37.74,Default,,0000,0000,0000,,an emergency fund if you\Ndon't have any payments.
Dialogue: 0,0:00:37.77,0:00:40.38,Default,,0000,0000,0000,,So you need to get out of debt first.\NBecause, of course,
Dialogue: 0,0:00:40.41,0:00:44.16,Default,,0000,0000,0000,,I learned my lesson the hard way,\Ngoing bankrupt and getting out of debt.
Dialogue: 0,0:00:45.08,0:00:49.96,Default,,0000,0000,0000,,Learning how important it was to be\Ndebt-free as a part of building wealth.
Dialogue: 0,0:00:50.72,0:00:55.70,Default,,0000,0000,0000,,All of that started to formulate after\Na few years of teaching
Dialogue: 0,0:00:55.73,0:00:59.80,Default,,0000,0000,0000,,in various settings and what\Nbecame Financial Peace University.
Dialogue: 0,0:00:59.83,0:01:02.02,Default,,0000,0000,0000,,It used to be called Life After Debt.
Dialogue: 0,0:01:02.05,0:01:06.21,Default,,0000,0000,0000,,It started becoming what\Nwe now call the Baby Steps.
Dialogue: 0,0:01:06.24,0:01:08.44,Default,,0000,0000,0000,,The interesting thing is that now
Dialogue: 0,0:01:08.47,0:01:11.44,Default,,0000,0000,0000,,the Baby Steps have gone\Ninto the Total Money Makeover Book,
Dialogue: 0,0:01:11.47,0:01:17.62,Default,,0000,0000,0000,,which has sold almost 10 million copies,\Nand they have become the proven plan,
Dialogue: 0,0:01:17.65,0:01:21.77,Default,,0000,0000,0000,,the shortest distance between\Nwhere you are now and wealth.
Dialogue: 0,0:01:21.80,0:01:23.72,Default,,0000,0000,0000,,Where you are, if you live like no one
Dialogue: 0,0:01:23.75,0:01:27.48,Default,,0000,0000,0000,,else later, you can live and give\Nlike no one else.
Dialogue: 0,0:01:27.51,0:01:30.64,Default,,0000,0000,0000,,What is the shortest distance?
Dialogue: 0,0:01:30.67,0:01:35.90,Default,,0000,0000,0000,,We need a path to run on because the way\Nyou eat an elephant, it's overwhelming.
Dialogue: 0,0:01:35.93,0:01:41.21,Default,,0000,0000,0000,,Do I do my 401k with a match\Nor my kid's college?
Dialogue: 0,0:01:41.24,0:01:43.29,Default,,0000,0000,0000,,Or do I have an emergency fund?
Dialogue: 0,0:01:43.32,0:01:46.29,Default,,0000,0000,0000,,Or do I pay on this 18% credit card debt?
Dialogue: 0,0:01:46.32,0:01:50.28,Default,,0000,0000,0000,,Or, or, or, or, and nothing gets done.
Dialogue: 0,0:01:50.31,0:01:52.78,Default,,0000,0000,0000,,You get paralysis of the analysis,\Nyou get frozen.
Dialogue: 0,0:01:52.80,0:01:55.80,Default,,0000,0000,0000,,Absolutely.\NThese baby steps have worked for me.
Dialogue: 0,0:01:55.80,0:01:57.74,Default,,0000,0000,0000,,They've worked for millions.\NIt's really simple.
Dialogue: 0,0:01:57.77,0:01:59.54,Default,,0000,0000,0000,,If you do it, they work.
Dialogue: 0,0:01:59.56,0:02:01.08,Default,,0000,0000,0000,,It It all starts with Baby Step One,
Dialogue: 0,0:02:01.11,0:02:05.72,Default,,0000,0000,0000,,having this foundation, saving $1,\N000 for a starter emergency fund.
Dialogue: 0,0:02:05.72,0:02:07.40,Default,,0000,0000,0000,,This is just a small buffer between you
Dialogue: 0,0:02:07.43,0:02:09.58,Default,,0000,0000,0000,,and life before we\Nstart tackling the debt.
Dialogue: 0,0:02:09.60,0:02:12.86,Default,,0000,0000,0000,,Exactly.\NIf you have $1,000 already, great.
Dialogue: 0,0:02:12.88,0:02:15.14,Default,,0000,0000,0000,,Just set that aside.\NThat's your Baby Step One.
Dialogue: 0,0:02:15.17,0:02:17.66,Default,,0000,0000,0000,,Any money you have that's not retirement,
Dialogue: 0,0:02:17.69,0:02:22.34,Default,,0000,0000,0000,,anything you can sell that is not\Nretirement, you're going to liquidate it.
Dialogue: 0,0:02:22.36,0:02:24.68,Default,,0000,0000,0000,,If it's not retirement,\Nyou got some stock over here that grandpa
Dialogue: 0,0:02:24.71,0:02:27.61,Default,,0000,0000,0000,,left you, you got a gold\Nbar under your bed.
Dialogue: 0,0:02:27.64,0:02:31.28,Default,,0000,0000,0000,,I don't know what it is,\Nbut you got any money that's above $1,000.
Dialogue: 0,0:02:31.28,0:02:32.76,Default,,0000,0000,0000,,Maybe you got $10,000 in savings account.
Dialogue: 0,0:02:32.79,0:02:36.38,Default,,0000,0000,0000,,That's $9,000 you got that you\Ndon't need past Baby Step 1.
Dialogue: 0,0:02:36.41,0:02:39.06,Default,,0000,0000,0000,,We're going to put it all on Baby Step 2.
Dialogue: 0,0:02:39.09,0:02:40.92,Default,,0000,0000,0000,,Baby Step 2 is the famous one.
Dialogue: 0,0:02:40.92,0:02:44.12,Default,,0000,0000,0000,,That's the debt snowball where you\Nlist your debt, smallest to largest.
Dialogue: 0,0:02:44.12,0:02:45.76,Default,,0000,0000,0000,,You pay minimum payments on everything
Dialogue: 0,0:02:45.79,0:02:49.26,Default,,0000,0000,0000,,but the little one, and you attack\Nthe little one with a vengeance.
Dialogue: 0,0:02:49.29,0:02:53.70,Default,,0000,0000,0000,,Side note, Baby Step 1 should\Nnot take you more than 30 days.
Dialogue: 0,0:02:53.72,0:02:54.82,Default,,0000,0000,0000,,Maximum.
Dialogue: 0,0:02:54.84,0:02:56.72,Default,,0000,0000,0000,,You need to work extra, sell some stuff,
Dialogue: 0,0:02:56.72,0:02:59.46,Default,,0000,0000,0000,,have a garage sale, put the kids on\NCraigslist, whatever you got to do here.
Dialogue: 0,0:02:59.49,0:03:04.66,Default,,0000,0000,0000,,Let's get We're going to get busted\Ninto this, get a thousand bucks quick.
Dialogue: 0,0:03:04.69,0:03:07.58,Default,,0000,0000,0000,,Baby Step Two, you should be\Ndebt free, but your house...
Dialogue: 0,0:03:07.61,0:03:10.14,Default,,0000,0000,0000,,Now, you may have to sell a stupid boat.
Dialogue: 0,0:03:10.17,0:03:11.98,Default,,0000,0000,0000,,You may have to take an extra job.
Dialogue: 0,0:03:12.00,0:03:15.36,Default,,0000,0000,0000,,But most people that have followed\Nthe total money makeover Baby Steps
Dialogue: 0,0:03:15.39,0:03:19.98,Default,,0000,0000,0000,,in Financial Peace University\Nare debt-free inside of two years.
Dialogue: 0,0:03:20.00,0:03:21.64,Default,,0000,0000,0000,,Yeah, and that's doing it with some
Dialogue: 0,0:03:21.64,0:03:24.66,Default,,0000,0000,0000,,gazelle intensity like you talk\Nabout in Financial Peace University.
Dialogue: 0,0:03:24.68,0:03:27.70,Default,,0000,0000,0000,,Once you pay off all that debt,\Nnow you've freed up all those payments.
Dialogue: 0,0:03:27.72,0:03:28.88,Default,,0000,0000,0000,,You have that income back in your life.
Dialogue: 0,0:03:28.88,0:03:31.50,Default,,0000,0000,0000,,Think about what it would be like to have\Nno payments It's about a house payment.
Dialogue: 0,0:03:31.52,0:03:33.70,Default,,0000,0000,0000,,Wow.\NWe're breathing easy.
Dialogue: 0,0:03:33.73,0:03:35.90,Default,,0000,0000,0000,,Then we can move on to Baby Step 3,
Dialogue: 0,0:03:35.93,0:03:40.70,Default,,0000,0000,0000,,where we save 3-6 months of expenses\Nin a fully-funded emergency fund.
Dialogue: 0,0:03:40.73,0:03:42.60,Default,,0000,0000,0000,,This is the final buffer where we say
Dialogue: 0,0:03:42.60,0:03:45.06,Default,,0000,0000,0000,,we're never going back into debt\Nbecause we are the bank now.
Dialogue: 0,0:03:45.08,0:03:47.18,Default,,0000,0000,0000,,Yep.\NGrandma's Raining Day fund.
Dialogue: 0,0:03:47.21,0:03:48.38,Default,,0000,0000,0000,,Why?\NIt's going to rain.
Dialogue: 0,0:03:48.40,0:03:50.34,Default,,0000,0000,0000,,Dave, you need to be positive.\NI'm positive.
Dialogue: 0,0:03:50.36,0:03:51.66,Default,,0000,0000,0000,,It's going to rain.
Dialogue: 0,0:03:51.68,0:03:53.61,Default,,0000,0000,0000,,You need to be ready when crap happens.
Dialogue: 0,0:03:53.64,0:03:56.10,Default,,0000,0000,0000,,There's a pandemic coming\Naround every corner.
Dialogue: 0,0:03:56.12,0:03:58.90,Default,,0000,0000,0000,,There's something coming.\NIf you have $20,000 cash in the bank,
Dialogue: 0,0:03:58.93,0:04:03.98,Default,,0000,0000,0000,,3-6 months of expenses, whatever it is,\Nand you have no payments,
Dialogue: 0,0:04:04.01,0:04:07.48,Default,,0000,0000,0000,,you are the third pig\Nand the three little pigs,
Dialogue: 0,0:04:07.48,0:04:09.38,Default,,0000,0000,0000,,the one that's in the brick house\Nwhen the big bad wolf comes.
Dialogue: 0,0:04:09.41,0:04:12.06,Default,,0000,0000,0000,,You're ready for life.\NYou're ready to go.
Dialogue: 0,0:04:12.09,0:04:13.90,Default,,0000,0000,0000,,Now you're ready to build wealth.
Dialogue: 0,0:04:13.93,0:04:16.66,Default,,0000,0000,0000,,But you just now You've\Ngotten up to ground zero.
Dialogue: 0,0:04:16.69,0:04:18.78,Default,,0000,0000,0000,,You've just now gotten up to even.
Dialogue: 0,0:04:18.80,0:04:20.52,Default,,0000,0000,0000,,When you have that emergency fund
Dialogue: 0,0:04:20.52,0:04:21.76,Default,,0000,0000,0000,,and you're debt-free,\Nnow you're ready to build wealth.
Dialogue: 0,0:04:21.78,0:04:25.42,Default,,0000,0000,0000,,In Baby Step 4, you put 15% of your income
Dialogue: 0,0:04:25.45,0:04:30.82,Default,,0000,0000,0000,,aside into good growth stock\Nmutual funds in retirement plans.
Dialogue: 0,0:04:30.84,0:04:32.42,Default,,0000,0000,0000,,Start where there's a match.
Dialogue: 0,0:04:32.45,0:04:34.86,Default,,0000,0000,0000,,Beyond the match, always do Roth.
Dialogue: 0,0:04:34.89,0:04:37.64,Default,,0000,0000,0000,,If you've exhausted Roth and match
Dialogue: 0,0:04:37.66,0:04:44.18,Default,,0000,0000,0000,,and still are not to 15%,\Nthen go on to a traditional 401k or IRA.
Dialogue: 0,0:04:44.21,0:04:48.78,Default,,0000,0000,0000,,But do Roths before traditional\Nand do match before Roths.
Dialogue: 0,0:04:48.80,0:04:52.16,Default,,0000,0000,0000,,It's mathematically in your\Nfavor to do that up to the 15%.
Dialogue: 0,0:04:52.19,0:04:57.34,Default,,0000,0000,0000,,Don't do 20%, don't do 11%, do 15%.
Dialogue: 0,0:04:57.36,0:04:59.28,Default,,0000,0000,0000,,While you are doing Baby Steps 4,
Dialogue: 0,0:04:59.28,0:05:01.90,Default,,0000,0000,0000,,you're also going to be doing\Nfive and six simultaneously.
Dialogue: 0,0:05:01.92,0:05:05.52,Default,,0000,0000,0000,,Absolutely.\NBaby Step 5 is where we're saving for our
Dialogue: 0,0:05:05.52,0:05:08.00,Default,,0000,0000,0000,,children's college fund, and this is\Ngoing to look different for everyone.
Dialogue: 0,0:05:08.00,0:05:11.50,Default,,0000,0000,0000,,There's no set number here because\Nit really depends on your situation.
Dialogue: 0,0:05:11.53,0:05:14.86,Default,,0000,0000,0000,,Did you have the baby last\Nweek or is the baby 18?
Dialogue: 0,0:05:14.88,0:05:17.12,Default,,0000,0000,0000,,That makes a difference on how\Nmuch you need for college, right?
Dialogue: 0,0:05:17.12,0:05:18.52,Default,,0000,0000,0000,,What you got to do for college.
Dialogue: 0,0:05:18.54,0:05:22.10,Default,,0000,0000,0000,,Is this an oh, crap moment or, Hey,\Nwe're going to be diligent and safe?
Dialogue: 0,0:05:22.13,0:05:23.84,Default,,0000,0000,0000,,Did we wait almost until too late?
Dialogue: 0,0:05:23.86,0:05:26.06,Default,,0000,0000,0000,,Now, they have to go to college debt-free.
Dialogue: 0,0:05:26.09,0:05:28.76,Default,,0000,0000,0000,,They cannot participate in this epic
Dialogue: 0,0:05:28.79,0:05:32.82,Default,,0000,0000,0000,,student loan system failure\Nthat is called America right now.
Dialogue: 0,0:05:32.85,0:05:34.58,Default,,0000,0000,0000,,It is horrible out there.
Dialogue: 0,0:05:34.60,0:05:36.22,Default,,0000,0000,0000,,Do not let your kids go in debt.
Dialogue: 0,0:05:36.25,0:05:37.90,Default,,0000,0000,0000,,You do not have to go to debt.
Dialogue: 0,0:05:37.92,0:05:40.34,Default,,0000,0000,0000,,Go to community college\Nfor free for two years.
Dialogue: 0,0:05:40.36,0:05:45.62,Default,,0000,0000,0000,,Go to in-state school,\Nwork six jobs, get scholarships.
Dialogue: 0,0:05:45.65,0:05:48.36,Default,,0000,0000,0000,,Our student loan problem\Nis a parenting problem.
Dialogue: 0,0:05:48.39,0:05:52.46,Default,,0000,0000,0000,,Mom and dad let kids sign up\Nfor crap they couldn't afford.
Dialogue: 0,0:05:52.48,0:05:54.90,Default,,0000,0000,0000,,Bad mama, bad daddy.
Dialogue: 0,0:05:54.92,0:05:56.94,Default,,0000,0000,0000,,They got to have the conversations.\NThat's where it starts.
Dialogue: 0,0:05:56.96,0:06:00.54,Default,,0000,0000,0000,,There's a reason you say Baby Step 4,\Ninvest for yourself before for the kids,
Dialogue: 0,0:06:00.57,0:06:03.54,Default,,0000,0000,0000,,because there's 100% chance\Nyou're going to retire.
Dialogue: 0,0:06:03.56,0:06:06.82,Default,,0000,0000,0000,,There's a 50/50 chance or less these days\Nthat your kid is going to go to college.
Dialogue: 0,0:06:06.85,0:06:08.12,Default,,0000,0000,0000,,And graduate.\NYeah.
Dialogue: 0,0:06:08.12,0:06:08.13,Default,,0000,0000,0000,,Yeah.
Dialogue: 0,0:06:08.15,0:06:11.32,Default,,0000,0000,0000,,This is less than 50% chance\Nthey're going to graduate.
Dialogue: 0,0:06:11.52,0:06:14.74,Default,,0000,0000,0000,,This is important.
Dialogue: 0,0:06:14.76,0:06:17.48,Default,,0000,0000,0000,,While you're doing 15%,\Nyou do whatever you need to do for your
Dialogue: 0,0:06:17.48,0:06:19.26,Default,,0000,0000,0000,,kid's college, whatever you decide\Nto do for your kid's college.
Dialogue: 0,0:06:19.28,0:06:21.14,Default,,0000,0000,0000,,Beyond that, if you can find any money,
Dialogue: 0,0:06:21.17,0:06:24.18,Default,,0000,0000,0000,,you do that on baby step 6,\Nand that's pay off your house.
Dialogue: 0,0:06:24.20,0:06:25.58,Default,,0000,0000,0000,,Start chunking on the house.
Dialogue: 0,0:06:25.60,0:06:27.94,Default,,0000,0000,0000,,Now, when you're in one through three,
Dialogue: 0,0:06:27.97,0:06:30.70,Default,,0000,0000,0000,,you are so intense,\Nyour friends are freaking out.
Dialogue: 0,0:06:30.73,0:06:33.02,Default,,0000,0000,0000,,Your grandmother thinks\Nyou need counseling.
Dialogue: 0,0:06:33.04,0:06:35.32,Default,,0000,0000,0000,,You are gazelle intense like\Na gazelle running from a Cheetah.
Dialogue: 0,0:06:35.35,0:06:39.92,Default,,0000,0000,0000,,When you're in four through seven,\Nyou're not intense anymore.
Dialogue: 0,0:06:39.95,0:06:41.78,Default,,0000,0000,0000,,You are now intentional.
Dialogue: 0,0:06:41.80,0:06:44.84,Default,,0000,0000,0000,,You're just doing it on purpose,\Nbut you're no longer on beans and rice.
Dialogue: 0,0:06:44.84,0:06:46.46,Default,,0000,0000,0000,,You're on beans and rice, rice and beans,
Dialogue: 0,0:06:46.48,0:06:50.18,Default,,0000,0000,0000,,scorched earth on one through three\Ntill you get those three things done.
Dialogue: 0,0:06:50.21,0:06:52.46,Default,,0000,0000,0000,,Now, get that house paid off.
Dialogue: 0,0:06:52.48,0:06:54.40,Default,,0000,0000,0000,,The average person following this stuff is
Dialogue: 0,0:06:54.42,0:06:57.62,Default,,0000,0000,0000,,paying off their home\Nin about seven or eight years.
Dialogue: 0,0:06:57.65,0:07:01.78,Default,,0000,0000,0000,,Now, that tells us that the whole\Nprogram is taking about 10 years.
Dialogue: 0,0:07:01.80,0:07:03.72,Default,,0000,0000,0000,,The average Baby Steps Millionaire,
Dialogue: 0,0:07:03.72,0:07:06.02,Default,,0000,0000,0000,,the average everyday millionaire\Nthat we've studied,
Dialogue: 0,0:07:06.04,0:07:10.18,Default,,0000,0000,0000,,we're finding them become a millionaire\Nfrom the time they start with intensity,
Dialogue: 0,0:07:10.21,0:07:15.50,Default,,0000,0000,0000,,followed by intentionality, become a\Nmillionaire in about 10 and a half years.
Dialogue: 0,0:07:15.52,0:07:16.96,Default,,0000,0000,0000,,11.\N2 years, 10.
Dialogue: 0,0:07:16.98,0:07:19.86,Default,,0000,0000,0000,,6 years are the two numbers\Nwe keep running into.
Dialogue: 0,0:07:19.89,0:07:21.92,Default,,0000,0000,0000,,So this is completely possible.\NYeah.
Dialogue: 0,0:07:21.92,0:07:23.18,Default,,0000,0000,0000,,And once you pay off that house,
Dialogue: 0,0:07:23.21,0:07:27.06,Default,,0000,0000,0000,,it's time to build wealth and give\Noutrageously in Baby Step 7.
Dialogue: 0,0:07:27.08,0:07:28.00,Default,,0000,0000,0000,,That's where it ends.\NYeah.
Dialogue: 0,0:07:28.00,0:07:29.64,Default,,0000,0000,0000,,You will be a millionaire shortly after
Dialogue: 0,0:07:29.67,0:07:32.18,Default,,0000,0000,0000,,your home is paid for if\Nyou don't at that moment.
Dialogue: 0,0:07:32.21,0:07:34.70,Default,,0000,0000,0000,,And then you continue to build wealth
Dialogue: 0,0:07:34.73,0:07:38.22,Default,,0000,0000,0000,,and you raise your generosity,\Nand you continue to build wealth,
Dialogue: 0,0:07:38.24,0:07:41.52,Default,,0000,0000,0000,,and you raise your generosity,\Nand you enjoy the money at that point.
Dialogue: 0,0:07:41.52,0:07:43.16,Default,,0000,0000,0000,,That's where it gets fun.\NYou're giving it away.
Dialogue: 0,0:07:43.16,0:07:44.40,Default,,0000,0000,0000,,These are the only three things you can do
Dialogue: 0,0:07:44.42,0:07:47.26,Default,,0000,0000,0000,,with money, and you should do\Nall of them at Baby Step 7.
Dialogue: 0,0:07:47.28,0:07:48.76,Default,,0000,0000,0000,,That's the route you're going.
Dialogue: 0,0:07:48.76,0:07:50.34,Default,,0000,0000,0000,,That's where you are, that's who you are.
Dialogue: 0,0:07:50.36,0:07:52.76,Default,,0000,0000,0000,,That is the Baby Steps.