Dan and Lisa Hawkins’ Financial Story
Warren Buffet is one of the wealthiest people in the world. He created his wealth through wise investment. In a CNBC interview, Warren Buffet gave advice to college students. Not surprisingly, his advice is spot on for helping people get out of Financial Matrix:
CNBC: “What is the one thing that young people should be doing about money?”
Buffett: “I tell them two things, generally. One is stay away from credit cards… The second thing I tell them is to invest in themselves.”
In a nutshell, his advice breaks out into two categories. 1) Live Debt-Free and 2) Invest in Yourself. First, learn the Defense of finances to get out of debt and then invest the savings to go on Offense in the number one asset you have, namely, yourself. Buffet, perhaps the greatest investment manager of all time, emphasized the importance of self-investment when he asked a group college students if they would take $50,000 cash for 10% of the future pay. When nearly half the students raised their hands to accept the offer, Buffet pointed out that they must be worth at least $500,000 since 10% of $500,000 is $50,000. Then he drove the message home by asking the students how many other $500,000 assets they currently had. Of course, all the hands went down. YOU, in other words, are your greatest return on investment period.
Dan and Lisa Hawkins Apply Financial Fitness Program
After a slow start, Dan and Lisa Hawkins took this advice to heart. It seemed like every time they attempted to go on Offense, the lack of capital hindered their efforts. To use a football analogy, they never seemed to get on offense because their defense never let the offense on the playing field. Through mentorship from Orrin Woodward and George Guzzardo, however, the Hawkins got serious about debt reduction. Although only making $50 thousand per year combined, Dan and Lisa wiped out debt quickly by applying the proper financial principles. For instance, Dan spent $8-10 every day on vending machine snacks and drinks with another $5-10 for lunch. These were quickly cut, and Dan began packing a lunch from home and curtailing his soda pop consumption on the job. The Hawkins family also cancelled their cable subscription and began to read more, stopped spending on movies and restaurant meals, and put the money toward investing in business training materials.
Gaining confidence in practicing delayed gratification, Dan sold his hotrod Mustang and paid cash for a $3,000 replacement vehicle. He then used the remaining cash to pay off Lisa’s car and effectively eliminated $600 of monthly payments through applying the proper financial principles. Dan and Lisa paid off one credit card and then another, and over a couple of years, they eliminated two car loans, several credit card balances, an ATV loan, a computer loan, student loans, and finally their mortgage!
Dan and Lisa disciplined themselves to follow four simple principles:
- When you receive income, immediately put 10% toward tithing and 10% toward savings.
- Then, minimize expense (self-entertainment) and maximize investments (self-education).
- Then, pay the minimum payments on your debts plus any extra from cutting expenses upon the balance of the highest interest rate date outside of house.
- After the first three items are done, pay the rest of the bills.
Once the process was rolling, the victories achieved created momentum for future successful outcomes. Not surprisingly, thanks to the disciplined approach to finances, the Hawkins family eventually accumulated thousands of dollars in savings. With the business income continuing to grow and all debt eliminated, their nest egg grew rapidly. This allowed them the freedom to purchase a house three times as big as their previous one with a substantial down payment. As the Hawkins’ built up their savings, they retired debt and used the increase cash flow to increase investment in themselves and their growing business. Newer cars and better vacations followed as the Hawkins family lived a cash lifestyle in which they only spent money they had already earned. Still, they kept saving a portion of all income. Amazingly, through increases in their business and financial discipline, the Hawkins family went on to buy an 8,500-square-foot custom home on over twenty acres, paying almost 50% equity at closing. Dreams do come true for those who read, listen to, learn, and apply the timeless principles of financial fitness.
Today, the Hawkins’ lead a multi-million dollar LIFE Leadership company and speak around North America teaching financial and leadership principles to others. By following the Buffet’s two key wealth-building principles of getting out of debt and investing in themselves, the Hawkins’ went from living in dread to living their dreams.