Practical Wealth Wisdom with Financial Educator Curtis May and Linda Kreter
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Welcome to Wise Health for Women Radio with Linda Prater. Women are pressed daily to give more, learn more, and be more, often at the expense of mind, body, or spirit. Each week with intriguing guests and topics, we'll bring you fresh ways to view your limited time, encouraging a shift to new, healthier perspectives. Wise Health for Women Radio, helping women thrive. And now here's your host, Linda Prater.

Good morning and welcome to Wise Health for Women Radio. I'm Linda Crater and we are going to talk to you today about money, finances, the things that make the world go round, sometimes more so than we wish to, and the importance of knowing where's your money going and where's your money going.

why did it just disappear? The importance of some small things that you can do to constantly start to catch up because let's face it, the economy is difficult and it's not going to get better overnight, didn't get there overnight. And so we need to take a look at how we do better with what we have and

direct your own money as opposed to having it be taken from you. So I'd love to introduce you to Curtis May, financial advisor who's going to talk to us today. He runs Practical Wealth Solutions and he especially understands that the more you know, the less your risk. So Curtis, welcome to our show.

Thank you, Linda, for having me. I like to call myself a financial strategist or financial educator, right? Perfect. Because I always say it's your money, it's not my money. And so I'm the guide. Okay. Well, we all need those. And I think that sometimes I do know women who have gone to find someone to help them with their finances. And they're not given the credit of

for doing as well as they've done. Say they are a widow or a divorcee or something has happened in their life and they're young and they just don't know where to start to get back on track. And so I think your being able to share this knowledge shows us that, you know, keep going. Not everybody is a good fit.

Yes. I mean, it's, you know, see, so the thing is, you know, I teach something I think we call principles-based planning. And so my overall goal is to teach principles that help our clients become and remain financially free. So, you know, success leaves clues. So our framework, Linda, is principles drive strategy. Okay.

And strategy drives tactics. So strategy is what you do. And a tactic is a, is a, is a, when you get to like a lot of times the financial services, people lead with the product, right? The insurance, the mutual fund or whatever. They are last. Like you don't, you, until you know what you want and why, right?

Nothing else matters. And when, right? And so I always tell people your financial plan, meaning just what you want and why precedes the investment or even the business plan, because how do you know when you've won? You know, what are you trying to do? What do you want your life to look like? Do you want to become financially free, which should be the objective, like, which is

So let's define it because let's begin with the end in mind because typical financial advice is not designed to do this. So financially free, I define as being able to live like you want to live from the income from your personally invested assets without a job if you choose to. So now once you have that in mind, that will order –

what you do because you'll find I'm going to step on some toes. I'm going to go against the grain of what I call typical financial advice. But, you know, I never had a problem with that.

Your toes are strong. Toes are strong. Yeah, their toes are strong, right? Because, you know, my philosophy is, look, money is not that complicated, guys. Two plus two is four, right? And so the industry teaches you, well, you know, you don't have the time, the temperament, or the training to personally manage your own money. So why don't you just give your money to us? If

They taught you at all, you know, if they, you know, break it down. And it's like because they trying to confuse with prospectuses and standard deviation and blah, blah, blah, blah, blah. And it's it's unnecessary. You know, the interesting thing is during the pandemic, a lot of people were at home. A lot of people thought, I know what I'm doing. I'm going to go buy stocks.

And they went and they bought stocks and perhaps they made even money on stocks. But they forgot about the tax implications. And so that's just a simple example of what you can do if you're naive or not fully educated or don't understand the consequences of some of the actions you take. Sure, you can make money, but don't forget about this, this, this and this. Does that make sense to you?

Completely. I mean, let's back up all the way up, right? So is investing the first thing you should do? See, financial planning is not investing.

Okay. So good financial planning is actually five areas is helping families spend cashflow management, save, pay itself first, invest, ensure, and develop a plan for financial independence. Right? So if I were to do them in order, investing is number five, not number one. Right. Okay. And let's go back to what is an investment. This is where I'm going to start with some toes. And so an investment is,

And I always ask my clients, I say, look, have you ever heard of Warren Buffett? They go, yes. I says, have you ever heard of Benjamin Graham? I go, most of the time, not really. I says, well, I'll show him an article from his book, The Intelligent Investor. I said, an investment is something you put your money into where you have safety of principle. OK, and you have a reasonable opportunity to make a profit. If it doesn't fit that definition, you are speculating.

There's a big difference between that. And that's what I was talking about earlier. People were speculating. They had time on their hands. And it's easy enough to load an app on your phone that tells you what your stocks are doing. And then there's a lot of knee-jerk response when you don't know all the other factors. Yep. And so most people, but see, they're told they're saving. Oh, save for your retirement, your 401k. You're not saving.

Savings doesn't have any risk. So one of the things that you have to do is you have to separate savings from investing. And here's a real simple book, guys, The Richest Man in Babylon. Basically, I teach that. I teach chapter two of that, the seven cures for a lean purse or seven cures for an empty bank account. And the first two lessons are

Part start your eye purse to fattening, which means pay yourself first. Your number one wealth builder is your ability to work and spending less than you make. Right. So if you can't write less than you make, you can't win. You have to sort of game is won and lost.

In my opinion, I just got off a client call with cash flow mapping, you know, cash flow management. I'm sorry. Like, you know, basically you have to, we call it telling your money where to go instead of asking where it went. But when the money hits your account, you have to be a good steward of your resources and you have to save first, right? Let me define saving. Safe, liquid, accessible, guaranteed. And I want at least three months, six months of that. So if you don't have three months of your bill money saved,

or your income aside, you know, in a safe place, don't even talk to me about investing. You're not ready to invest. And it's really should be more like six to 12, but I'll start with three. And then everything above three is your opportunity fund for you to look for things that you like, that you understand that can produce cashflow. So investing is more about

becoming something than it is about buying something. Do you want to become a good business owner? Do you want to become a real estate investor? Do you want to become a trader or a private lender? And so I want people focused on cash flow and learning. So your best investments in between your two ears, it's not just throwing some money at the hot tip you just got. Right. I'm going to take a step back further because I think that

These people are not even ready for what you're talking about. And what I am about to bring up is the massive credit card debt in this country. Come on, let's talk about it. Well, but you see what I'm saying? Yes. If you're so far in debt and you have three cards at very high interest rates, et cetera, that's a priority to buy that down. Or I'm not using the right words, but you know what I'm saying. It's not the first priority, though.

Okay, talk to me. Okay, so because does getting out of debt make you money? No. No, it's a wealth transfer, meaning that you are prioritizing Capital One's asset column ahead of your own. Right. Okay, so that's a wealth transfer. And some debt is good to have because you're on the tax side. Yeah, so there's good debt and bad debt. Or there's a better way to say it. There's constructive debt.

and destructive debt okay so if you because and here's the thing see linda they didn't get it you didn't get into it overnight so you're not going to get out of it overnight right so what people say oh i got to pay my debt off and then and then you know i can start saving but okay so you're out of debt you're still broke now because you haven't put any money away excellent point first

Since you don't have any capital or access to capital, guess what? You got to go into debt, which means you spent money you have not yet earned. Right. So your first goal is, you know, what I teach is you've got to save money.

15% of your gross income. I just got a phone from a client and she was making like $130,000 and so had a couple hundred thousand dollars in debt. So I literally just had this conversation, right? And I said, listen, you need to save, I want you saving

What did I tell her? What was it? $19,000 a pay? $19,000 a year, which worked out to about $750 a pay. Which sounded like a huge chunk to her, I'm sure. Oh, it is a huge chunk. I mean, she said, how much? I said, I can't do that. I said, well, how much can you save? $100. Okay, let's start with that.

OK, now the key is to have a goal. Right. People don't save because they don't have a reason to save. Right. And so you have to pay yourself first. Now, the formula is this is really the only thing I will say the only thing. But this is what I like about Dave Ramsey. All right. Is that is the snowball thing. So the formula, if you're in debt. Right. So the formula is even though I said 15 percent, I will say save 10 percent.

Right. 10, 20, 70. So 20 percent to savings. Now, I'm sorry. I'm sorry. 10 percent to savings, 20 percent to debt elimination. And you have to try to live on 70 percent. But what you have to do is you have to really I don't and I don't like budgeting.

Because budgeting is focused on scarcity. What I teach people to do is have a spending plan. We call it a building a cash flow map. And then, okay, when money hits your account, you got to tell it, okay, 10% goes here. We teach people how to set up multiple accounts.

So you have an income account, you've got a savings account, you've got fixed bills, which is the debt is part of, and then you have variable bills. Right. And so you don't have to micromanage because I want you looking forward. See, budgeting looks at history, right? And it's like driving a car, looking through the rear view mirror. Okay. So I want you to look at forecasting, forecasting. Your look is like driving a car, looking through the windshield. Right.

You want to look forward, and so you want to assign each dollar a job. So yes, you've got to attack your debt, but let's break the debt down. Because if I didn't do them in order, you want to pay off debt that as you pay it down, it improves your cash flow. So if you pay down a credit card or a line of credit,

One, it improves your debt ratio, so it makes your score go up. And as you pay it down, your access to capital increases because you don't want to cut them off. You just got to get better at cash flow management. And then you want to, you know, because it will lower your payment. Like to me. So, for example, there's an order of priority. So sending extra payments on a car, waste of money. Sending extra payments on your mortgage, waste of money.

All right. Because why does think about this? If you send extra payments to a mortgage, does the value of the house go up? Does not. Does not. Does the payment go down?

It does not. It does not, right? And so it's because it's a term loan, so it doesn't matter. So yes, you're saving money and interest. This is what people with settler's programs do, but saving money and interest doesn't make you money, okay? And so if you do that, you turn the house into another version of what I call a qualified plan, meaning that you can't get to the money, okay? And it's risky because if you pay it down too much, you just make yourself more foreclosable,

Oh, that's interesting. Right. And so what happens is you have to pay yourself first because you have to build a pool of capital that you control. And then I would tack the credit cards. And I like starting lowest balance to highest balance. I don't really care about the rate because I want the emotional benefit of momentum. Good point. Right. And then you stack that up.

And then, you know, because let's say you want to pay off a car. Right. So if you had a $10,000 balance on a car, I would pay off the other stuff. And then once I had, you know, let's say the balance went down to five grand. And once you have five grand that I paid off all at once. But we're not saying because if you again, same thing with a car or even with student loans, you send in extra payments. It doesn't.

Right.

you know, or that kind of stuff. If you could save, you know, 15% of your income, I don't care what you do the rest of it. Right. As long as you pay your bills, you're saving and everything is covered. Then, you know, because what's the point if you're not, you know, money's to do something. So, you know, I want you to travel. I want you to, I was, you know, if you're in business, if you're hearing this, I believe I heard this from Dan Sullivan, you can't double your income until you double your time off. How about that?

And so I'm not the party pooper. But you do have to manage your cash flow at the point of contact. I think that's everything, right? That's where the rubber meets the road is cash flow management. And then once we find the money – see, what I do that's different, Linda, I think, is I – there's only two ways that somebody can help you in the financial space. One is to help you find better investments –

That pay a higher rate of return, which is what most people want. They think they want that. Right. And but the only way to get a better return is to take more what risk risk. Right. And see, people are brainwashing the quiz. You are right. So this is how I talk to my clients. I try to give answers. I make them.

Talk to me. Right. Cause it's your money. It's not my money. And, uh, and so what happens is see risk means probability of loss. It does not mean opportunity for gain. Right. And so you think, Oh, more, I want to take more risks cause I want a higher return and you know, no guts, no glory. No, stop losing money. Right. And so I kind of take the opposite tack. I think there's more opportunity in minimizing your losses than

in your life than it is trying to pick winners. Right? So if you've got a bucket and you're trying to fill it up with water, but you got holes in the bucket, debt, interest, opportunity costs, taxes, it's better to plug the holes first. Right? So if you don't turn up the volume of the money, your bucket will still fill up. And so, you know, I'm not to do a visual. I'm the hole plugger guy. Right? Where are the holes? Cashflow management. Right? Uh,

How people pay their mortgages, you know, 15 year mortgages, sending extra payments, guys, in today's economy, that's all a complete waste of money. Right. That's a very middle class mindset because I got to get out of debt. I get get rid of my mortgage. There's an order to this stuff. Right. Right.

Number one, wealth transfer is taxed, especially if you're a W-2. Most business owners overpay their taxes. Most people with jobs have their W-4 filled out incorrectly. Yes. I've never been a fan of letting the government hold my money and getting –

It never made sense to me. Right. Refund means your money again. It means they have it and I don't have it. They're not paying you any interest and some people actually will pay extra to these tax people to get their money back faster. I know.

I know. As opposed to why not you store it somewhere, have access to your money all year long, and you have control? Because what people do, they have too much withheld. Then they have bank fees because their cash flow is limited. Then they run up credit card bills. And then when you get the refund, you just pay off the credit card bills. Well, that or people blow it.

Or go shopping. Yes. Or they go on a vacation or they do. You know, they've they've been so penurious. They've been so buckled down that now they deserve to do this. I mean, how many times do you hear someone just in the grocery store line saying, I can't wait for my refund? I'm going to do X, Y, Z. But I think, you know, it's so funny because you talk about middle class values, et cetera. When I was growing up.

My parents had, they were budgeted and my father would literally cash out. They were huge savers. So they put that aside and we were able to do some amazing things because of what they were able to save. But in terms of living, there was a food envelope, weeks one, two, three, four.

There was a gas envelope for commuting and et cetera, et cetera, a miscellaneous envelope. My sister and I can still see these gray envelopes in our minds. And we have never adopted this for traumatic reasons. But I have to give my mother enormous credit and my father credit because we never spent over budget. And she always found ways to have money left over.

And I think there is something to being raised by parents of Depression era. Yeah. Parents, grandparents. And there's nothing wrong with being frugal. We were not instant gratification. We saved before we could purchase. So I see from both sides in terms of budgeting. But what you're talking about in terms of cash flow is so incredibly important these days.

Because just going to the grocery store is a traumatic experience. Right. Right. I think that you – I don't – I love what you just said. Like I think that – Do you? I thought it was so old-fashioned. No, no, no. I've never known anybody else who had experienced that. But I don't have negative feelings about it. I haven't experienced it. My parents didn't do that. But I think that you – because I kind of am teaching that. I only have four.

Four envelopes, but I don't use envelopes. We use checking accounts, right? Okay. So if I were to teach the system that we teach, it's like, all right, you should have...

an income account so your direct deposits go into an account then what i teach linda is to create what i call a wealth capture account so what i so this is here's a tactical thing that a couple from shows they've said they did this and it started working so i'll give you a tactical thing so create a wealth capture account and then see if you can you know whatever 10 or 15 of your income is

Take that number, you know, take your gross income and then create, it's just a checking account. And what I want you to do is go to HR or go to your portal and see if you can have 15% of each check go into that account.

Right. And then you have a, another account that your bill pay money. So you have to organize your money and say, okay, look, here's because you have certain bills that are static, right? You have them go into one account. Then they go. Yeah. And especially if you're going into debt, cause you're going to make them go up because you keep adding to it. Right. And then you have another account we call variable. So variable is cause when people say I was just working with women last week and it was like, we were going over stuff and it was like, all right, he got, we got, we pulled it right off her paycheck stuff.

And so I have a system that does it, right? And then we, all right, she was saving. I had her actually lower her qualified plan contribution to the match, right? Because she was putting too much money in. Right, right, right. Putting too much money out of your control. I wasn't going to give that.

That wasn't going to get matched. And if you don't have any money, why are you locking money up for 30 years in an account you can't touch? You basically are putting it in jail and you don't have three, four, five, six months of cash flow. So you have to, there's a time and place for that.

You know, most of the people that find me, they want work optional income. So they're like business owners, real estate investors or people that want to do that. And they already know they can make or they start once we kind of edge came through our process, they realize that they could make their money, make more money than some fund manager you never met.

So I want people to lean into that and position money so that you have liquidity use and control. But you've got to set aside – but you've got to start with being intentional about, okay, here's money that I'm setting aside on purpose to make new money. The only thing I don't – this is what I don't like about budgeting is that it's a scarcity thing.

uh it's focused on scarcity we didn't ever talk about abundance or scarcity growing up i mean that we were just a lower middle class family and we did fine um but those kind of buzzwords they did they didn't exist then yeah yeah i mean i understand what you're saying entirely yeah but it was simpler then yeah it's i mean because now then first of all was no inflation

Right. The dollar was still backed by gold or it was still, you know, low. Right. You could still get a house. Yes. But I have been of the era where I had a 17 and a half percent mortgage rate in the 80s. Oh, yeah. My. So, I mean, when you've lived through those sorts of things, you're very careful to refinance when it went under 3%.

you know, that sort of thing. I mean, I'm being, so you have to look, no, I mean, that's, that's where you need to look at. You need help that will somebody that will look at your situation holistically. Right. And, uh, so I, I lay out like fundamentals, right? So I'm, so I'm talking about paying yourself first and then I teach five principles, right? So I'll just give those to you real quick. We can go back into them if you want to, but after you find the money and you start saving, because I'll, so my first principle is say 15% of your

gross income. Right. So what I just gave was a tactic to do that. Like you have savings has to be automatic and systematic. What most people do is they pay their bills and if they have any money left over, they'll see if they can save it. Like that's a mistake. Nope. I want it out of sight, out of mind. You got to put it out of sight. So all I'm doing is making it happen. And people are amazed that they don't have to go into it.

And then you start looking forward to it. And you want it because what you want to do is I want you to think from a prosperous mindset. So I want you to live within your means, but I want you focused on expanding your means. It's just a better thought process. Right. So that so the first principle is saved. The second principle is protect.

Right. So you have to play defense. So that's, you know, you have to protect your stuff. So it's like proper liability coverage in your car and house, your liability coverage. A lot of people are leaving themselves susceptible to unfortunate incidents. Well, some people are going naked because they just don't have the funds to do it. And one of the biggest ones is auto insurance. It's up 30 percent this year.

Yeah, it's crazy. And a lot of times, and they were spending a lot. So like auto insurance is one place where you're not saying it, let your finger, well, this is, I'm dating myself, right? But let your fingers do the walking. That's okay. I'm even older than you, I think. But I do remember that, but I know you have to shop around and I know that you can bundle and there are tricks you can use that will help you save as much as possible. But when the rates are going up,

They're going up. Yeah, you just have to. You have to shop and then you got to work with somebody that is not just like the insurance industry does to themselves. Like they're they they teach you to shop on price. Right. And so most people, they're walking around with minimum coverages. So if you were to be in a false accident, you'll find you're underinsured.

Most people are underinsured with life insurance. Most people don't have disability insurance. They don't have a will. Long-term care. A lot of times, a better way to do that, though, is you can get life insurance with living benefits and you actually get more coverage with that. One of my specialties is insurance, life insurance and those type of things. What was the other thing I was going to say? Protection. You're on number two. Number two. Number three is

is full replacement

assets at death guaranteed. Okay. So one of the things, so really that is out there to go against what I call the myth of self-insurance, right? Because people will say buy term and invest, and you should have term. I'm not saying that. That's what I'm saying. I'm saying is that what people will say, well, when you have money, now you can let the insurance go. Why would, you know, that's not true. I mean, and think about this, Linda, if you had a house and

and you paid your mortgage off, would you drop your homeowner's insurance? I think not. Not, right? Now, think about this. Your house worth half a million dollars, and you've got a half a million dollars set aside because you are self-insured in the house fund. Would you drop your homeowner's insurance then? Of course not. Of course not, right? Because now the insurance gives you permission to spend the half a million dollars wherever you want to.

Same thing with life insurance, right? So you never not need insurance. People are saying that are crazy, okay? And the fourth principle, I could go, I could do an hour on that, but the fourth principle is save, right? I'm sorry, liquidity. Most of the biggest problems I see is that they just don't have access to capital, right? Because we think the 401k is saving, right?

But it's not. You can't tap it. You can't tap it. So now because you have too much money out of your reach, now you don't have any savings. So now you go into debt because you don't have access to capital. Right. And so the substitution for that, most people, if they came out of their house and somebody slashed off for their tires.

they would have a problem. A conniption. Yeah, and they couldn't solve that problem without reaching for plastic. So I want, we teach in our principles six to 12 months of liquidity. Okay. And then the fifth one,

Now take a breath. Is velocity, right? See, we've been trained on what I call the accumulation theory. Buy and hold, dollar cost average, get out of debt, buy term investor difference. But if you study institutions, that's not what they do. No.

No, they use other people's money. Use other people's money. So leverage, they focus on velocity, which is, you know, Mr. Wonderful, for example, if you're at Shark Tank, he'll say, well, listen, if I give you this $500,000, how soon am I getting my money back?

With friends, right? So you can put it somewhere else. That's velocity. Or if you're in real estate, the Burr method. So it's moving money through assets. It's cash flow. If it doesn't generate cash flow, it's not a very good asset, to quote Kiyosaki. And then they...

You know, this is a niche thing, but, you know, what you'll find with big corporations, they buy a lot of permanent insurance. That's what a bank store, their tier one capital and permanent life insurance. Right. So what I found, because I was a typical advisor the first 15, 20 years of my career, I discovered that those what I call corporate finance strategies work in personal finance and they're safer.

You know, it's so interesting. We are running out of time. So I'm going to have to curtail you here. But you have so much information to spread. I want to make sure that we tell people where to go to find out more information. And that would be at practicalwealth.net.

And you've been doing this, you speak this language so fluently. It's obvious that you are well invested in, haha, no pun, well invested in how to address people's needs wherever they are. As you say, you probably have a client niche of certain things, but there's always an educator for everyone. And the more you know, you mentioned a number of books in here.

And I think that's also a very low cost way to learn.

I fear that people don't read anymore. They would rather watch videos. But, I mean, I'm a massive reader and I've learned a lot through that. And so I would recommend that people do listen to the books that you mentioned. Are they listed on your website by any chance? They are listed on my website. If there's a section that says movement and then it goes to our recommended reading list, some of them. I've got to make it bigger, but you have to

I challenge people to read, you know, eight, 10, 12 pages a day. I'm the girl that read 120 books last year. There you go. I want to challenge people at the end of the year is what are the. Well, I stopped watching television. So it, it kind of, you know, you have to fill it in, but I also love reading. Don't get me wrong, but I think these books often really help people and it, it's another way, but it's,

Going to your website, practicalwealth.net, you know, Curtis, this is an amazing amount of information you were able to build in here. And thank you so much for sharing it.

You're welcome. I mean, I'm a financial educator, right? Because I like that term. Yeah, it's because, you know, as your knowledge goes up, your risk comes down. And so like when you buy products, products should be a result of your knowledge, not a substitute for it. Mm hmm.

And my goal is hopefully in this show, I've given you more questions than you have answers because that's usually the case. Yeah. Yeah. You got it. You got, you need to start to think, I want you to challenge what you've been thought and then go read a book, go listen to some of my shows, you know, and I'll, you know, I'll challenge and research and question, you know, whoever they advise with. I mean, it's, it's very interesting. Do your own research. I can't impress people enough on that.

And if you're in a bad place, by all means, don't put your head in the sand. There's someone out there that can help you. I have no original thoughts, right? So I always... There's nothing new under the sun anyway. So I study bigger brains than me. My superpower is I'm a really good curator and teacher. Like I can read a book and think about it and draw to you on a yellow pad. That's what I found I was good at.

And then implementation. Perfect. Well, Curtis, thank you again for all of this help. And don't forget, listeners, to go to practicalwealth.net. And Curtis has a wealth of information, and that pun was intended, to share with you. So thanks again. You're welcome. Thanks for having me. My pleasure. Make it a great week. Thank you for tuning in today. You can find more shows at wisehealthforwomenradio.com.