Starr: What’s up, y’all? It’s your girl Starr Washington and you are tuned in to a brand new episode of What The Finance. Y’all please do not crucify me. I know it has been several, several weeks, so much has been going on. My life insurance business has really, really picked up with this pandemic. You know, my market is primarily seniors, but you know what so many of my age group, friends of my age group, family members that my age group, have reached out to me, have passed my information along to their friends and family. So I have been super, super busy, which is an excellent thing. I’ve also moved since we’ve last spoken.
When we last spoke guys, I was living at my dad’s house that, you know, he inherited… that I inherited. Me and my brother both inherited the house and I made the difficult decision to sell my ownership of the house to my brother. And it was a really, really hard decision because I took care of my dad in that house and, you know, that’s also the house that I grew up at and just being there after he passed away really provided a lot of comfort. It also provided a lot of financial help because it was paid off. But you know, you know, guys, it was time for me to move on. So I did. I moved, I have my own place. I have a house and I love it. And it’s forcing me to grow. It’s forcing me to do things out of my comfort zone because you know, now I have more of a financial goal that I have to accomplish. So it’s just making me work harder. And, but it’s also just kind of given me a new lease on things. The lighting in my new home is great. I love the colors. I love the location. I just love it. So, that’s why I have been out of pocket for so long.
But guys on today’s episode, what I really wanted to talk about is just the importance of planning for the future. And I know that sounds really, really general. I know that you guys hear that all the time, but man, y’all, I sit with people at their dinner tables who are at the end of, you know, they’re at the end of life. Not saying that they’re about to die anytime soon, but… My market is people 65 and older. So most of them are done working. I even sit with people who may be a little bit younger, who are no longer working because they are disabled. And I asked ton of questions. The people who are very healthy later in life, I, I always ask them, what’s the secret. The people who have happy marriages, I always ask them, what’s the secret, the people who are in a good financial place, I always ask them the secret.
But you know, guys, I don’t get to ask too many people about. What’s the secret in regards to finances, because about 99% of my clients, aren’t in a good financial place. And what really trips me out about the whole thing and this, and I will shout this off the rooftops to anyone who will listen. Is that a lot of these people, not a lot most of them made excellent decisions growing up. They, they did what they were supposed to do. I feel with. Former teachers, respiratory therapists, attorneys, corporate professionals, blue collar workers, the one guy that I just got off the phone with that actually inspired me to do this podcast today, he used to work for department of defense making $200,000 a year, traveling all over the world.
Everywhere. He wanted to go had all this vacation time, had a beautiful, huge home in the suburb right outside of Houston. And when I met with him that day, he was actually moving into a really small apartment. So as I started to just get his story, because I don’t know, just by talking to this guy, I could tell that, you know, his situation, wasn’t always his situation. I could just tell that there had been a sudden change in his lifestyle. Anyway, this gentleman was 55. He was diagnosed with the skin disease that causes your skin to tighten up really, really hard. It could also sometimes affect your organs, but anyway, the skin diseases cost scleroderma. So anyway, he could not work any longer.
So he had to file for disability. This gentleman went from making $200,000 a year working for the department of defense. To making 1900 a month and disability. And to be honest, the only reason, the only reason his disability was as high as it was, is because he used to make so much money. I sit with people who are on disability all the time that are even older than him. That aren’t quite withdrawing, social security. So, you know, and a lot of times they’re making 11, 12 I’ve even seen 900 a month. But anyway, so he went from making $200,000 a year to 1900 a month. That was his income. He saved, you know, he had a 401k and all of that, but the thing is when you’re on disability, and you’re that young and you’re not social security age.
He doesn’t get any Medicare and I believe, and I said, I would check for him back. He makes too much to get Medicaid. I am also licensed in Medicaid. So I have, I told him, I check when I told him today that his policy got approved, but. He just, I know he never imagined that his life would be like it is today.
But anyway, the reason why he was moving is because his wife divorced him because you know, their whole lifestyle changed. She went from being the wife to, you know, a pretty successful guy to the wife of someone who was basically now bringing in income under the US poverty level. Okay. And he couldn’t or afford the home. He could no longer afford the lifestyle. And I’m not saying that she was right for that. I’m not saying she was wrong for that. Of course I’m not getting the 100% side of the story because I was just talking to him. But the thing is, his change in income has changed in his health, made a drastic change to his entire life.
So the one thing I see. From people who, from retirees, from older people or people who are no longer working, who don’t have to struggle financially. The one thing they did when they were younger, when they were in their prime working years, is that they diversified their income. I’m not talking about saving, I’m not talking about 401k.
What they did was either purchase properties or purchase stocks, bonds. Something that allows them to now get passive and residual income in addition to what social security provides or in addition to what disabilities provides, every single senior that is not struggling financially, that lives on their own, let me add that because some people have moved in with. With their children and with their grandchildren. So they’ve eliminated the, the biggest expense that most people have, which is housing. A lot of them don’t drive anymore, so they’ve eliminated that expense. So, no, I’m not talking about people who’ve just basically just cut down on their their expenses because they were blessed to do so. I’m talking about people, people who still have a home still live independently, still drive still spoil their grandkids can go out to eat with their girlfriends. Can get, you know, cosmetic procedures and I’m not talking about anything as drastic as plastic surgery, but I mean, getting their hair done, their nails done, getting pedicures, massages, just people who wanted some maintain same level of life as when they were working.
The one thing they did is they diversified their income outside of savings. I see it all the time. People who didn’t do that, no matter how successful they were in the working years, they struggle after they stopped working guys, a hundred thousand dollars. Sounds like a lot of money. In a 401k $200,000.
Sounds like a lot of money in a 401k. The truth is most people don’t even say that that amount, most people don’t save $200,000 and the 401K. They just don’t most people don’t put that much money into the 401k, even when they have a system that’s matching, it just doesn’t happen. So y’all just for an example of just how so, how you can see how fast that money goes.
Let’s say that. The last year of your full time job, you were making $60,000 a year. So you have the bills of someone making $60,000 a year. Now, all of a sudden you’re withdrawing socially security. You either can’t work anymore or you don’t want to work anymore. So let’s say now your social security is 1800 a month.
Let’s just say that 1800 a month. Okay. You went from making over 3000 a month to now you’re making 1800 a month. So where do you think the extra money is going come from? You’re going to start pulling month after month after month from that 401k. You’re going to start pulling from it. Now you also have, as you’re getting older, you have more medical expenses.
Okay. You don’t have that great health insurance that you had at your corporate job. Medicare is, you know, a blessing, but guys is not as great as I think we paint the picture in our head. Yeah. Especially when you’re not destitute. Because you still have out of pocket expenses. Okay. So now you have, you’re pulling money to basically supplement your living expenses month after month.
You also need to pull out money for maybe an unexpected medical expense or medical bill. That’s not covered. Okay. Now your grandchildren have graduated from high school. You want to be able to give them a nice gift. Maybe your daughter fell on heart times. You want to be able to give her a little bit of cash to help her get on her feet.
Y’all the money is gone. The money is gone in the matter of five or six years, the money is gone. Okay. So now this person is now 70 years old and all they have is that 1800 a month. They don’t have another dime in it matter that they were making 60,000 a year for the last 20 years, or what have you. Once they’re done working that income stops and all they have is what social security provides and maybe the little bit in their savings.
Guys saving in a 401k is not enough. Saving is not enough. And I’m not even talking about wealth building. Like, that’s my goal, but I’m not even talking about wealth building. I’m keeping it real with you guys. I’m talking about it. Just being able to maintain the life that you’ve become accustomed to never forget when I was working at Geico, my last corporate job before I became, self-employed one of my young coworkers and I love her to death because I can just have real conversations with her about things like this she’s open to the information, she has a lot of questions. She even helps me with a lot of things, but anyway, she was telling me that her Aunt, you know, did really well for herself and she was set to retire, but she said her Aunt paid off the house that you lived and kept the house up. The house is cute, clean, well decorated, well-maintained but she couldn’t understand why her aunt never upgraded. She couldn’t understand why her, I never purchased a bigger, better house because that’s what we do as time goes by when we start getting comfortable, making a certain amount of money, our nature feels like we want us to do bigger and better. I’ll never forget. Like my dad would tell me all the time how a lot of his friends would say you have to move it’s time for you to buy now the car it’s time for you to sell that house and buy another house. And my dad’s reasoning was always well, where was he going to live when he retired?
So people don’t think of that. Yeah. You are living well now because you don’t have, you know, rent. You don’t have a mortgage, not too many people, not too many people, unless they’re independently wealthy can afford to pay off a whole mortgage on a retirement income. You know, my you may hear me talk about is wealthy.
She invested then the stock market, she and her husband invested in the stock market, in their twenties all the way up to currently still investing. So, you know, They have their social security. Her husband worked as an attorney. And until he was like in his mid seventies, but their income, the way they’re able to help their grandkids and pay for their college education and pay for their private high school education is because they’re living off of the residual income from their investments that they made years and years ago.
But even her house is paid off. And even her counterparts at would ask her why she never upgraded when she has a beautiful home, but it’s just like, people feel like you should have more and more, more, and more and more not understanding that it costs more and more and more and more to have more. And you have to look at not what your financial situation is currently, it’s what is going to be down the line. And if you’re, if you know that you didn’t prepare, like if you’re a retiree and you know that all your income is going to be. Is your social security, your savings and your 401k. Why would you get an expense of 14-1500 a month? Because if you’re upgrading your home, yeah that’s exactly what it’s going to be. So I explained that to her and she’s like, Oh, I didn’t think of it that way. She didn’t think of it that way, because she was only 26. And you know what, honestly, even at 39. I wasn’t thinking of it that way. I didn’t think of it until after my dad passed away until he was able to leave a legacy to our family and I understood why he held on and understood. So guys. I just wanted to come to you while this was on my heart. Like I said, I know it’s been awhile, but I said, you know what? I have got to get back on my podcast. Okay. And I have, I have to share this information with my listeners.
I meet with about 20 seniors a week in person, all ages, all races, all cultural backgrounds. Y’all know I’m telling you what I see. I’m not telling you what statistics say, I’m not telling you what’s passed around on social media. I’m not even giving you information just from my own experience. I’m telling you what I see and I see this all the time prepare, prepare, prepare. Everybody’s not meant to be self employed. Everyone is not meant to be. An entrepreneur and everyone may not want to be. That’s fine. People get really, really testy when you start talking about additional streams of income that automatically start thinking, you’re talking about being a boss, quitting your job, doing this, doing that.
I’m not talking about that. I’m talking about finding a way. To make passive and residual income when you are no longer to make active income. And I gave you some ways in which you can do that. You can. Get into real estate, you know, you can get into real estate rental income is considered residual income.
Okay, you can and best into the stock market. If you’re young, start now, start now because you need time for it to build that compound interest, but stocks and bonds, there are ways that you can build residual income. You could start a business, a little side business, while you have a job that when you can no longer do your job or you no longer desire to do your job, you can make money from the side business, specifically businesses that you can do forever, things online, eCommerce. You know, or something where you can have a system in place when you can no longer do it, someone can do it for you and you still can be reaping the financial benefits. Okay. That’s an example. I’m actually starting open enrollment. I’m going to be helping seniors with their Medicare. The great thing about helping seniors as with a Medicare is that not only do you get paid for when they make a switch to an insurance company, but these insurance companies pay us for as long as the client lives, as long as they stay with that company.
So I’m diversified, I’m figuring out ways to do that. So, guys just research, research, research. If you have any questions about your options or, or questions about what I see when I’m out in the field, that’s what we say. We’re out in the field. And I really feel like man, I’m out here because you know, I get to see things firsthand and it’s real. Y’all, it’s real. They advice that you see floating around about additional strings of income and you can’t save your way to wealth, y’all, it’s not a lie. I know it seems right. Cool. But it’s true. So please take head. Please. All right. So thank you guys for tuning in to this episode of what the finance, I hope this be.
It’s beneficial to you as always, please reach out to me. If you have any questions, you can always find me on Instagram at T H E star S T A R R Washington. I’m on Facebook at Starr Washington, and actually have a new business line. It’s 8324648525 and I’m working on my website that’s going to be able to deliver a lot of financial and just lifestyle information to you also. All right, guys. Thank you so much for tuning in. Have a great day. Bye.