Ten Principles for Building Real Financial Intelligence
Dave Wood spent years thinking someone who did “10 million dollars” online was rich, until he learned what net income actually means after fees, refunds, and chargebacks. In this episode he lays out ten specific rules for handling money that he wishes someone had handed him before he ever made a dollar: what to track, what never to finance, and why lottery winners and internet marketers keep going broke the same way. These aren’t abstract ideas, they come with real numbers attached, like the $500 spending limit his friend won’t cross without asking permission first. Here’s the episode.
So what’s the financial intelligence shortcut to creating real freedom in your life? In his book, Orrin shared ten transformational principles that will guide your financial destiny by changing the way you think about money. Resolve right now to commit to these ten principles as we change the landscape of our future.
The Ten Principles That Guide Your Financial Destiny
- Accurately identify your net income. When I got on the internet, I remember the first time I heard people talking about how they made $10 million online. What they really meant was they did $10 million in sales. Once you subtract out affiliate payouts, refunds, chargebacks, merchant processing fees, other fees, service costs, technology costs, advertising costs, and everything else, usually that same person actually made around a million dollars, maybe two. Some of them lost money. And then they spent it because they thought they made $10 million and their mind was out of control. Make sure you actually know what your net income is, because you can’t live on “if-come.”
- Document all expenses. Every dime that is spent needs to be named and tracked in order to control it. If you don’t keep track of what your score is, you have no ability to improve it and you’re fighting in the dark. Make a decision right now to track and organize your finances so you can make decisions based on real data. One of the biggest mistakes I made early in my business was not understanding good financial systems and accounting controls. Lack of tracking and accountability resulted in over $1.5 million in operating expenses stolen from me.
- Spend no more than 75% of your net income. Look at the balance sheet in your own life and cut the fat out of it, no matter how much you’re earning. If you spend all your money making $5,000 a month, you’re going to spend it all making $50,000 a month too. I didn’t believe the person who told me years ago that you’d spend the same ratio of your income as your income went up, until I did it myself. If you only spend 75% of your net income, every four months you have another whole month of savings you could live on. Imagine how that compounds over five or ten years. You do that by making a difficult yet powerful decision to shrink your lifestyle, not to your current income level, but to living beneath it.
- Never finance anything that depreciates. Orrin gave an example in his book I’d never thought about: financing a $30,000 motorcycle. After five years, you’ll have paid nearly $60,000 for something that’s now worth only $20,000. Although I’ve never financed anything, my cars are paid for in cash, and so is everything else I own. I never realized how foolish financing was until I looked at that math, and I got a D in geometry my senior year of high school. Nobody ever tells us this. We need to educate people on making better decisions with their finances. I won’t even get into car leases right now, I’ll step on some toes since I know people who love expensive car leases and love wasting their money, so I’ll just leave it there.
- Set a price limit on spontaneous purchases so you don’t get out of control. If you set rules for yourself in advance that prevent you from binging with your credit card, you’ll make better decisions. Set a limit, and if a spontaneous purchase crosses your threshold, sleep on it until the next day, or longer, and talk to a mentor. That alone stops most frivolous, out-of-control spending in its tracks. One of my wise friends runs a business that does five million dollars a month in sales, and he has a spending limit on spontaneous purchases that can’t be crossed without consulting someone inside the company first. How much is that limit? I bet you’ll never guess that it’s only $500. People who think like my friend, they get rich.
- If using a credit card increases your spending, pay with cash instead wherever you can. Look at market research on average spending in shopping malls when people use credit cards versus cash, and be honest about your own habits. Most people spend a minimum of 20% more when they’re using a magnetic plastic card. Parting with cash is harder than swiping, and that disconnects you emotionally from parting with your hard-earned money. If a card makes you spend more, stop using it. Just change.
- Wipe out consumer debt before you start to save. What’s actually happening to your money if your savings account is growing at a massive 1% a year, but your debt is increasing at 10% to 20% interest? You’re losing 9% to 19% of your money in that scenario. Proverbs 22:7 says the rich rule over the poor, and the borrower is slave to the lender. I hear people ranting about freedom and equal rights while they’re spending 20% more than they’re making every year, a slave to the central banking system, to taxes, to lenders, to the job, to the boss. Debt keeps people trapped in a cycle of living for someone else’s dream. Get debt free and learn to multiply your resources by acting in wisdom right now. More money is not going to fix your cash flow issues.
- Learn the difference between investments and expenses. You can invest in external assets that multiply existing wealth, and you can invest in yourself to multiply your own power to create wealth. Both are valuable. Benjamin Franklin said an investment in knowledge always pays the best interest. Investing in your education is putting money into improving your most valuable asset, which is you, because your knowledge, experience, and creative power have the ability to create unlimited assets through free enterprise.
- Focus on the quality of life and peace of mind that comes with wealth. I’ve met a lot of people who have a personal aversion to wealth, and they use God as a justification for it. Money is not evil. Having money is not evil either. No spiritual belief actually teaches that. But an endless thirst for money over people distorts your mind and heart, and that’s not the meaning of life. A love of money instead of the people you serve, yes, that’s wrong. Money is a form of energy, an exchange for market value when created properly, and it can bring a multiplication of you into the world. If money is an exchange of market value, it’s an exchange of how you’re serving people, and therefore money is a positive reflection of who you actually are. It’s a good thing to make a lot more of it, because you can do a lot more good with it, and money can buy you the time to do the things you want. Being wise with money frees your mind from attachment to it, and puts you in the position of the one who manifests wealth on demand, instead of the borrower who is slave to the lender. When I started making all of my money online in 2009, I immediately moved to Costa Rica and began pursuing my dreams and passions. I started doing martial arts, went to the beach, later moved to the mountains with a big house. It was amazing. That radically transformed who I was and got me out of that endless, desperate pursuit of the dollar.
- When you become wealthy, remember to be a blessing to others. When you go into the world realizing that you are a beautiful creation, a human being with a mission placed in your heart and mind from a divine source, you’re going to realize something I discovered years ago. All human beings are meant to be beautiful. The world is full of human beings who were created for a reason that is no more or less important than yours. You’re designed, created, and evolved to create the dreams that are put in your heart. So are your children, your spouse, your neighbors. If we can inspire the world by changing ourselves first, we create a transformation that lifts up the lives of the people around us and changes the world into a better place. That’s what making money is actually all about, if it’s done the right way.
Are You Finally Ready To Change Yourself?
Holding his brother’s hand as he was taking his final struggling breaths, tears rolling down the sides of his cheek, my wise old friend I mentioned in yesterday’s episode asked his brother a question. He looked him in the eye and said, “Are you finally ready to change yourself?” The world changed that day, as a shift echoed through time. Because you matter. And when you change, the world changes too.
Full episode transcript
Lightly edited from the original recording — fillers removed, nothing added. Income disclaimer.
Hey there, it's Dave Wood talking to you from my home out here in Eskizu, Costa Rica. And I'm thinking about how much your life is going to continue to change as you apply these principles in today's episode. These really are revolutionary concepts that I wish I would have learned years ago. Some of these ideas would have made me millions of dollars more and way wealthier. In your free bonus PDF worksheet and audio of today's message that I'm giving you below, I'll walk you through applying these strategies in your own business and life in a way that will completely change the way that you think about creating your dream life because that's what the daily shortcut is all about.
Helping change the world by helping you build a business while you build a life at the same time. So pay attention to this episode and take notes on what you're learning because if you simply write a thoughtful, detailed comment about what you're learning right now, you could actually win. It's not $100 or a free copy of the book that I'm reading right now. It's called Resolutions, shipped to your house on me for free. And that's my way of saying thank you.
Just watch the episode with the intention of winning. Write the best comment and then share your comment on Facebook with a link to this page and you could win. So what's the financial intelligence shortcut to create real freedom in your life? Well, in his book, Oren shared 10 transformational principles that will guide your financial destiny by changing the way that you think about money. And I'm going to expand on them right here.
Resolve right now to commit to these 10 principles with me now as we change the landscape of our future and we learn the secrets of my wise old friend that I mentioned in yesterday's episode. Number one, accurately identify your net income. Well, what they really meant was they did $10 million in sales, right? When they subtract out affiliate payouts, refunds, chargebacks, merchant processing fees, other fees, service costs, technology costs, advertising costs, and let's just call the rest of it other, usually the same person actually made around a million dollars, maybe two. Some of them lost money.
Make sure you actually know what your net income is because you can't live on if come. Let me repeat that. Make sure that you know what your net income is because you can't actually live on if come. Number two, document all expenses. Every dime that is spent needs to be named and tracked in order to be able to control it.
Like I mentioned in a previous post, if you don't keep track of what your score is, you have no ability to improve it and are fighting in the dark. Make a decision right now to track and organize your finances so you can make decisions accurately that are based on real data. One of the biggest mistakes that I made early in my business was not understanding good financial systems and also accounting controls. Lack of tracking and accountability systems resulted in over $1.5 million from operating expenses stolen from my mind. Number three, spend no more than 75% of your net income.
Look at the balance sheet in your own life and cut the fat out of it no matter how much you're earning. Just trust me on it and just do it. I didn't believe the person that told me years ago that you would spend the same ratio of your income when your income went up until I did it. If you only spend 75% of your net income every four months, you actually have another whole month of savings that you could live on. Imagine how cool that would get over a period of five or ten years.
You can do that right now. By making a difficult yet powerful decision to shrink your lifestyle, not to your current income level, but to living powerfully beneath your means, beneath your income level. Number four, never finance anything that depreciates. Oren gave an example in his book that I had never thought about. He gave an example of financing a $30,000 motorcycle.
That's a lot of money. That's a lot of money. Let me repeat that again. Although I've never financed anything, my cars are paid for with cash and actually everything that I own is, I've never honestly realized how stupid that was until I looked at that math. I got a D in geometry in my senior year in high school.
I could look at that. could realize how foolish it is, but nobody ever tells us. We need to educate people on making better decisions with their finances. I won't even get into car leases right now because I'll step on some toes and I know some people love very expensive car leases and love to waste their money. So right now I'll just say I won't get into it.
Number five, set a price limit on spontaneous purchases so you don't get out of control. If you set rules for yourself in advance that prevent you from binging with your credit card, you're going to make better decisions. Set a limit and if a spontaneous purchase crosses your threshold, sleep on it till the next day or longer. Talk to a mentor. That alone is enough to stop most frivolous, out of control behavioral spending in its tracks.
Be wise with your money and it will multiply. One of my wise friends runs a business that does five million dollars a month in sales and he has a spending limit on spontaneous purchases that can't be crossed without consulting someone inside of the company first. How much is that limit? What do you think? I bet you're never going to guess that it's only $500.
People who think like my good friend Rob, they get rich, right? Number six, if you're using a credit card and that increases your spending, pay with cash instead wherever you can. Look at market research data on the average spending in shopping malls when people have credit cards or cash and be honest about your habits. And if your habits with credit cards make you spend more money, which most people spend a minimum of 20% more if they're using a magnetic plastic card, if you're spending more, stop it. If you're parting with cash and you've got to give it up because it's harder than swiping, right, and that disconnects you emotionally with parting with your hard-earned money, then don't do it.
Just change. Be wise investing your money. Number seven, wipe out consumer debt before you start to save. Let me ask you a question. What's actually happening to your money if your savings account is growing at a massive 1% a year, but your debt is increasing at 10% to 20% interest?
Well, you're actually losing money by not paying down your debt. You're losing 9% to 19% of your money in that scenario is what's happening. There's a great saying that people always quote from Proverbs. In Proverbs 22.7, it says this. It says, rule over the poor.
That's not the part people quote, but they quote this other part. And that says, the borrower is slave to the lender. The rich rule over the poor, and the borrower is slave to the lender, right? I hear people ranting and raving about freedom and equal rights while they're spending 20% more than they're making every year. A slave to the central banking system, to taxes, to lenders, to the job, to the boss.
Here's the facts. You're a slave, to who you're borrowing money from. Debt keeps people trapped in a vicious slavery cycle of living for someone else's dream. Get debt free and learn to multiply your resources and create a new future by acting in wisdom right now. More money, more money.
Let me repeat this. More money is not going to fix your cash flow issues. Number eight, learn the difference between investments and expenses. You can invest in external assets that multiply existing wealth, and you can invest in yourself to multiply you and increase your power to get wealth. Both are valuable.
Benjamin Franklin said, an investment in knowledge always pays best interest. Investing in your education is putting money to improve your most valuable asset, which is actually you. Because you and your knowledge, experience, and creative power have the ability to create unlimited assets through free enterprise. Benjamin Franklin at one point was vegetarian. Do you know why?
Well, I'll share that with you in a future episode. I promise that you won't know the reason if you don't actually know the history behind it, because the reason is actually not what you think. Number nine, focus on the quality of life and peace of mind when you become wealthy, right? I met a lot of people who have a personal aversion to wealth, and they use God as a justification for their wealth. I met a lot of people who have a little bit of a recommender for their wealth.
And they don't even establish their value. They make it up to their wealth. And what this fears is all about is that if I make up the money for helping those people who I could help at work, kind of pick it up in many ways that I wasistles, and then I make up the money for the poor, I make up around that money for helping my neighbors out, and then I make it up. And that is one of the key things of being a meno. It's not that I'm ought to be considered a person of honor.
It's mostly these people are just in this moment, who partudos and are doing things just for ä And that's for the religious people out there, for the people that have spiritual beliefs. Money is not evil. Having money is not evil either. It's ridiculous. No spiritual belief actually teaches that.
But an endless thirst of money over people distorts your mind and heart and is not the meaning of life. A love of money and not the people you serve, yes, that's wrong. Money is a form of energy and an exchange for market value when created properly and can bring a multiplication of you into the world. Now think about this here for a second. If money is an exchange of market value, right, it's an exchange of how you are serving people.
And therefore, money is a positive reflection of who you actually are. Once again, it's not evil. It's actually a good thing to be able to make. A lot more money because you can actually be doing a lot more good. A better, healthier, more radiant creation you can make.
Because money can actually buy you time to do the things that you want. Being wise with money and having the power to create wealth on demand like we teach you in the Total Shortcut System. You can claim in your bonuses, freeze your mind from attachment to wealth, and puts you in the rightful position of the one who manifests wealth on demand instead. Of the borrower who has slaved the lender. When I started making all of my money online in 2009, I immediately moved to Costa Rica and I began to pursue my dreams and passions.
I started doing martial arts, I went to the beach, I later moved to the mountains with a big house, it was amazing. That radically transformed who I was and allowed me to build my life from vision and get out of that endless desperate pursuit of the dollar. Lack of need for money produces an inseparable, well, detachment. Loving the right things, which to me is God and people, produces an ethical flow of giving that multiplies in the marketplace and it builds trust with the people that you love and serve, like the way that you and I communicate. Number 10, finally, when you become wealthy, remember to be a blessing to others.
When you go into the world realizing that you are a beautiful creation, a human being with a mission placed in your heart and mind from a divine source. And that you make it. You're going to realize something that I discovered years ago and that's this. All human beings are meant to be beautiful. The world is full of human beings that were created for a reason that is no more or less important than yours.
You're designed, created and evolved to create the dreams that are put in your heart. So are your children, your spouse, your neighbors. If we can inspire the world and change it through change. Through changing ourselves, we will create a radiant transformation that will lift up the lives of beautiful souls around us and change the world into a better, more beautiful place. That's what making money is actually all about.
If it's done in the right way. Holding his brother's hand as he was taking his final struggling breaths as tears were rolling down the sides of his cheek. My wise old friend I mentioned in yesterday's show asked his brother a question. He looked him in the eye and he said, Are you finally ready to change yourself? The world changed that day as a shift echoed through time.
Because you matter. And when you change, the world changes too. Thank you for being here. I'm here to bless you. Make sure to grab your bonuses that are going to be mentioned in the video that's about to play.
Right now. This is a special time and you're a special human being. Decide to lock arms with us and get the total shortcut in the palm of your hands today. And align with us in your daily action plan to be the change that you want to see in the world like Gandhi so lovingly says. Remember to leave a detailed and a thoughtful comment below.
Paste that comment on Facebook and link to this page in your Facebook post. Telling your friends what you've learned and you could win $100. Let's go ahead and do that now as we create a shortcut for everyone. As we continue transforming the world through one episode at a time through each new day with the daily shortcut. I appreciate you my friend.
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