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I Promise You Don't Know Everything
And if you do know everything you'll be able to answer each of these questions correctly
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Have you heard?
We’ve rolled out a new 7-day course helping you go from a H.E.N.R.Y. (High Earner Not Rich Yet) to wealthy! If you haven’t signed up yet, this is your chance. For those who have signed up, you’ll be well on your way to implementing the ideas and strategies that will take you from a high earner to having self-sustaining wealth.
We’ll dive into some questions related to the course, so for those who’ve completed the course you can check your comprehension. For those who haven’t taken the course, you can see just a fraction of the knowledge you’ll gain from signing up.
Question 1
What is the minimum healthy savings rate?
A. 5%
B. 10%
C. 15%
D. 20%
Question 2
Define free cash flow:
A. Free cash flow is the money received from selling investments minus the total income earned throughout the year, showing your financial growth.
B. Free cash flow refers to the sum of your monthly savings and variable expenses, indicating how much you can invest or spend each month.
C. This is your total monthly income minus your fixed expenses, meaning expenses that must be paid every month. You can choose to spend or save this money, and it will dictate the capacity you have to achieve financial freedom.
D. Free cash flow is the total of your fixed expenses and taxes subtracted from your total assets, showing your net worth every month.
Question 3
A healthy emergency fund covers…
A. 2 months
B. 3 months
C. 5 months
D. 6 months
Question 4
A Self-Sustaining Cash Flow cycle covers expenses with…
A. Investment income
B. Employment income
C. Money from savings
D. Money in checking account
We’ll have the answers after the break
Are you totally lost?
Yes?
Then…
You know what time is
Enroll in the course and you’ll know all the answers to the questions above.
Answers
Question 1
Answer: D (20%)
This is your ratio of monthly savings to monthly income. A healthy savings rate is above 20%, a stable savings rate is above 15%, and an unhealthy savings rate is below 15%.
Question 2
Answer: B (Free cash flow refers to the sum of your monthly savings and variable expenses, indicating how much you can invest or spend each month.)
Free cash flow is the money left over after you’ve paid all your necessary, recurring expenses, like rent or loan payments. It represents the cash you can use however you want, whether that’s saving, investing, or spending. It's a measure of how much financial flexibility you have each month.
Question 3
Answer: D (6 months)
A healthy emergency fund can cover 6 months of expenses. A stable emergency fund can cover 3 months of expenses. A minimal emergency fund can cover 1 month of expenses, and a flawed emergency fund is anything below that.
Question 4
Answer: A (Investment income)
Generating enough investment income to cover your expenses creates a self-sustaining wealth system because your investments generate cash without the need for active work. As long as your investment income exceeds or matches your living expenses, you can maintain your lifestyle without depleting your assets. Over time, as investments grow or are reinvested, your wealth continues to compound, further increasing your financial stability. This allows you to achieve financial independence, where you no longer rely on a paycheck to sustain yourself.
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