Financial Order of Operations: Steps Eight and Nine Explained

Financial order prioritizes wealth maintenance and personal goals, allowing individuals to dictate their financial journey.

### Understanding the Financial Order of Operations: Steps Eight and Nine Explained
* 💬 KP asks about the financial order of operations, specifically why **step eight precedes step nine**, prompting a discussion on the **rationale behind this sequence**.
* 📊 Brian emphasizes the importance of understanding the journey through financial steps, highlighting that step nine involves considerations of **earning potential and happiness** across different life stages.
* 🏠 He notes that many financial gurus have misled people regarding mortgage debt, particularly during financially challenging times when families need **larger homes for their chaotic lives**.
* 💸 Brian explains that after establishing a financial foundation in step eight, individuals can begin **funding children's college** or exploring **investment opportunities**, while step nine focuses on **prepaying mortgages** for those over 45.
* 🧠 He shares insights on how paying off low-interest mortgages may not be the best financial decision, suggesting that individuals should **prioritize their financial goals** rather than conforming to societal pressures.
* 🎯 Bo adds that money is merely a tool to achieve one's goals, and steps eight and nine allow for **personal prioritization of financial objectives**, such as **becoming debt-free before pursuing other aspirations**.
* 🔄 The discussion concludes by differentiating the purpose of steps one through seven in wealth creation from steps eight and nine, which are geared towards **maintaining and multiplying that wealth for future generations**.

[Music] kp's question is up next. He says, Hi Brian. Didn't say hi to Bo. I don't know why that just struck me as I read it. So this one, I don't know, Bo. You could just sit this one out if you want. Anyway, here's the question. He says, 'I am new to the financial order of operations, and I'm trying to understand why step eight comes before step nine. I would have expected these to be flipped. So can you elaborate on the order of these steps and maybe give a little more nuance to it?' Yeah, I mean, I, this is one because I, I just think about your journey, remember, and I guess I'll have to go from, and this is why I really am proud of myself in Millionaire Mission. If y'all didn't know, I wrote a book. Did you write a book? I wrote a book. But um, step nine, I do three graphs where I talk about, you know, when time is restricted versus your income, you know, it's basically earning potential, um, happiness.

factor of people by age and then a layout. You know, all these things culminate into the fact and also then how the money wealth multiplier of what the potential of what every dollar can become. And I think when you look at all those things, you realize that Mortgage Debt is one of those things where a lot of financial talking gurus have misled us in a lot of ways. It's because we're in our poorest of moments. We're also in that traditional messy middle where you're short on time, you're short on money, but yet you got kids, you got chaos. You need as much house as you can get just so you can live in that chaos. You need to spread out that house because you need time to see your income catch up to all your earning potential and everything else. So, we needed an honest conversation from somebody who kind of laid out all these things where I took into account the time, I took into account the money, I took into account the wealth multiplier, and the value of

compounding growth, and what I came up with is that for the majority of people out there, I know we're in a unique time right now where interest rates on mortgages are, you know, 6%. I have heard a few go below 6% recently, and I think that's going to start to become the trend again. But you're going to quickly find out that you need rules that let you build in all the life stuff, but also allow you to have that nice house to raise your family in. But then you're going to reach step eight, and you're going to say, Hey, this is the point where I laid out my financial foundation, and I now need to start funding the kids' college. Or maybe now I'm at the point where there's still some things I want to do for building my wealth, like maybe it's residential rental, maybe it's, you know, investing or building up cash for investment opportunities or other things. But then I laid out in Step nine, If you're over 45, 'cause this is going

to take time to reach, go through all these steps of the financial order of operations. Yeah, by all means, I want you to prepay that mortgage, to pay it off because you will have not sacrificed your living your best financial life because you did things out of order. Um, I saw a post last night from somebody, and I see them all over social media right now, where people are still, they paid off 3% or less mortgages, and they're still trying to tell us how they're all so proud of that decision. It's not a regret, and I'm like, why do you keep posting this? It's almost, and I've told this story where I had a neighbor, he's moved away now, um, where every time I saw him, he knew what I kind of did, and he'd tell me about how he was doing penny stocks, and he bought Monster Energy before it was Monster Energy, and how he missed out on all this money, but it was okay. And people just tend to C, I'm trying to give you the

best where I give you the mindset. I give you the math so you don't have those regrets where you're posting why it's so awesome that when you were 32 years old, you paid off your mortgage over and over and over, trying to make everybody feel better about the decision you made. I tried to give you the balance to where when you pay it off, you feel completely comfortable about it, and um, and I hope that that what would you add to that, even though KP didn't ask you for your, you don't care about my opinion, but I'll, you know, never pass up an opportunity to talk. Uh, I what I think is interesting is that money is nothing more than a tool. It's not a goal. Uh, so we have to Define what our goals are and how our money can help us get there. What's great about step 789 of the financial order of operations is this is where goals really like come into play. And so you may decide, hey, once I get into the hyper accumulation phase, once I'm saving more

than 25%. One of my goals is to be debt-free, and if that's a high-priority goal for you, it's okay if you prioritize doing that before you fund other abundance goals. Like, maybe you want to be debt-free before you save for college or before you save for that trip or before you save for whatever you, as the financial mutant and you, as the author of your own financial journey, get to dictate that. What we tried to lay out in the financial order of operations is the optimal or the way to maximize your dollars, and that's where the order comes from. But once you get into that final tier, once you get into 789, you control the goals. And if you choose to accelerate step nine into step or before step eight, that's totally okay. You're at the point in your financial journey where you get to make choices because you want to, not because you have to. We're just trying to lay out for you the optimum solution, optimum strategy. It's, you know, steps one through seven is

to make the wealth stages, you know, so we can actually, you know, it's not just guaranteed you're going to be wealthy. The majority of Americans don't ever make that success level. So, that's what steps one through seven. Steps eight and nine are more about maintaining the wealth because you're risking. And then I want you to even go, and I cover this when I go, especially M millionaire Mission, when I went beyond what I do with. I talk about my money and other things. I want you to multiply your wealth too and build the Legacy, do the other things. So, that's really the big answer. Steps one through seven is to make the wealth. Steps, you know, eight and nine are to maintain the wealth. And then I'm hoping this entire Journey, what you're doing with the money guys show, is going to help you multiply the wealth.

The Real Reason Step 8 Comes Before 9 in the Financial Order of Operations

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Understanding the Financial Order of Operations

Step eight comes before step nine in the financial order of operations, as it addresses the common struggle of being short on time and money during the messy middle of life.

The need for a larger house during this chaotic period is crucial for stability and managing responsibilities.

The order of these steps is designed to consider the impact of time, money, and the wealth multiplier on one's financial journey.

Interest rates on mortgages are currently around 6%, with a trend of going lower.

Building a financial foundation involves funding children's college, investing, and creating cash for opportunities.

For those over 45, prepaying the mortgage can be a viable option without sacrificing financial goals.

Money is a tool to help define and achieve personal goals, rather than being a goal itself.

The financial order of operations provides a framework for maximizing dollars, but individuals have the power to prioritize their own goals.

Once in the hyper accumulation phase, it's okay to focus on high-priority goals, like becoming debt-free, before funding other abundance goals.

The process of building wealth is divided into nine steps, with the first seven focused on making money.

Steps eight and nine are geared towards maintaining wealth and managing risks.

The goal is to not only build wealth but also to multiply it and create a lasting legacy.