Praise for
ADD A ZERO
“Add a Zero is the no-fluff, full-heart financial wake-up call you
need. As someone who’s built an 8-figure business from scratch, I
recognized so many of these steps because I lived them too. Read
it. Text your best friend about it. Then go build the wealthy life
you were made for.”
— Amy Porterfield, author of The New York Times bestseller Two Weeks Notice
“Add a Zero is an incredibly powerful and relatable guide for
anyone looking to overhaul their finances and build lasting
wealth. Rose blends financial wisdom with deep personal insight,
offering a fresh and empowering road map to achieving financial
freedom!”
— Maggie Colette, founder of Think Like a Boss
“This isn’t just a book about money—it’s a guide to reclaiming
your power. Through her personal story and framework, Rose
shows you how to build lasting wealth on your own terms.”
— Danielle Canty, co-founder of Bossbabe and CEO of The Two Percent
“Rose is empathetic and real. Add a Zero gives you a clear,
motivational road map to build wealth—no matter where you’re
starting from.”
— Steve Chen, founder of Call to Leap
“Reading Add a Zero felt like sitting down with a trusted mentor
who gets the real-life struggles and still shows you the way
forward. Rose’s journey from debt to millionaire is powerful—
and her playbook is both practical and motivational. This is for
anyone ready to rewrite their financial story.”
— Mel H. Abraham, money mentor and author of the USA Today bestseller Building Your
Money Machine
“Add a Zero doesn’t just inspire you—it tells you exactly what to
do to level up your money. It’s honest, actionable, and walks you
through each stage of your financial journey with zero fluff. Rose
breaks things down like a friend who gets it. You’ll finish it
thinking, Why isn’t everyone taught this?”
— Sharon Tseung, founder of Good Sweet Homes
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Copyright © 2025 by Rose Han
Published in the United States by:
Hay House LLC, www.hayhouse.com®
P.O. Box 5100, Carlsbad, CA, 92018-5100
Cover design: Jennifer Federico Stimson
Interior design: Karim J. Garcia
Interior photos/illustrations: Tuba Shahbaz
All rights reserved. No part of this book may be reproduced by any mechanical, photographic, or
electronic process, or in the form of a phonographic recording; nor may it be stored in a retrieval
system, transmitted, or otherwise copied for public or private use—other than for “fair use” as brief
quotations embodied in articles and reviews—without prior written permission of the publisher.
The author of this book does not dispense business advice, only offers information of a general
nature to help you in your quest for business success. This book is not designed to be a definitive
guide or to take the place of advice from a qualified professional, and there is no guarantee that the
methods suggested in this book will be successful, owing to the risk that is involved in business of
almost any kind. Thus, neither the publisher nor the author assume liability for any losses that may be
sustained by the use of the methods described in this book, and any such liability is hereby expressly
disclaimed. In the event you use any of the information in this book for yourself, the author and the
publisher assume no responsibility for your actions.
Cataloging-in-Publication Data is on file at the Library of Congress
Hardcover ISBN: 978-1-4019-8012-2
E-book ISBN: 978-1-4019-8013-9
Audiobook ISBN: 978-1-4019-8014-6
10 9 8 7 6 5 4 3 2 1
1st edition, September 2025
Printed in the United States of America
This product uses responsibly sourced papers, including recycled materials and materials from other
controlled sources.
The authorized representative in the EU for product safety and compliance is Penguin Random
House Ireland, Morrison Chambers, 32 Nassau Street, Dublin D02 YH68, Ireland. https://eucontact.penguin.ie
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CONTENTS
Your Journey Begins
CHAPTER 1: What It Means to Add a Zero
GETTING TO $0
CHAPTER 2: Master Your Money Mindset
CHAPTER 3: Take Control of Credit Card Debt
CHAPTER 4: Do a Spending Deep Dive
GETTING TO $10,000
CHAPTER 5: Tell Your Money What to Do (Budgeting 101)
CHAPTER 6: Optimize Your Expenses
GETTING TO $100,000
CHAPTER 7: Earn Your Worth
CHAPTER 8: Stash Money Tax-Efficiently
GETTING TO $1,000,000
CHAPTER 9: Invest and Make Your Money Work Hard
CHAPTER 10: Break Free of Trading Time for Money
Beyond the Zeros
Appendixes
Endnotes
Acknowledgments
About the Author
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YOUR JOURNEY BEGINS
Toes in the sand, I sat there watching the sunrise, thousands of miles away
from home. THIS is what life is all about, I thought. Having the freedom to
experience ALL that life has to offer.
My Moleskine journal lay next to me on the sand, worn and full of train
tickets, flight stickers, and stories from the past year. After 13 months of
backpacking through Europe and Africa, my gap year was coming to an end.
Even though I’d had to bootstrap most of my travels with work-abroad
arrangements and a little bit of savings from waiting tables, I loved waking
up every day excited about the next adventure. For the most part, I could
travel to wherever I wanted and do whatever I wanted with my time.
But now I was set to start college in a few months. Bright-eyed and full of
big dreams, I had no doubt that this was the right move. I’d enroll in New
York University as a finance major, get a big job, make a ton of money, and
live the life of my dreams.
Never mind that my family couldn’t afford private college tuition and that
I’d have to take on boatloads of student loans. According to my parents,
getting a degree from an elite university was the key to a better life . . . no
matter the cost.
Still tan from my travels, I signed my first student loan promissory note—
$18,000 for the first semester. My parents cosigned the loans and
encouraged me to keep going, assuring me that if I worked hard and got a
good job, I’d be able to pay them off quickly. This is what we’re supposed to
do, right? Get a good education, work hard, get a high-paying job . . . then
be successful!
By my last semester, I’d racked up $103,586 in student loans. I was
excited about my job—a Wall Street summer internship turned full-time
offer. But as my graduation date approached, I felt a growing sense of dread
about my finances. I avoided the phone calls from student loan providers for
as long as I could, until one day, I finally answered.
A few minutes into the phone convo, I realized that the payments would
take up half of my monthly take-home pay. I tried not to freak out, but I felt
ashamed. So of course, I took what I thought was the most logical approach:
avoidance. I switched my loans to a $200 per month interest-only repayment
plan. This would reduce my monthly payment, keep the creditors off my
back, and maybe if I ignored my debt long enough, it would magically go
away.
Despite my six-figure salary, I lived paycheck to paycheck, spending
everything I made on shopping, partying, and living an Instagram-worthy
lifestyle. In addition to my student loans, I also carried balances on my credit
cards. Periodically, I’d manage to pay them off, but like that ex who keeps
popping back into your life even after you’ve resolved to move on, a balance
would inevitably reappear. Meanwhile, memories of the freedom I’d felt
during my gap year slipped further and further away.
A few years after graduation and into my first full-time job, I took a
vacation to Cancún, Mexico. Except this time, sitting on the beach didn’t
feel so great. I’d put the whole trip on my credit card because I couldn’t
afford it, so I felt stressed and guilty about it the whole time. I couldn’t help
but think, This is not how I thought my life would turn out. Living paycheck
to paycheck, carrying six-figure debt, and not being able to afford a simple
vacation felt very far from the life I’d envisioned for myself. In fact, it felt
like the opposite of freedom.
My guess is that, like me, you feel stuck. Perhaps you, too, feel
disillusioned. You’ve done everything you’re supposed to do. You got the
degree, the job, and you work hard. Yet you’re still struggling to get ahead,
watching your paycheck disappear each month with little to show for it.
And you’re not alone:
67 percent of Americans are living paycheck to paycheck.1
The average American has $6,380 in credit card debt.2
87 percent of Gen Z and 62 percent of millennials can’t afford to buy a
home.3
One in three Americans have $0 saved for retirement.4
Student loan debt has reached $1.74 trillion nationwide.5
This begs the question: How the heck did we end up here?
WE’RE FOLLOWING THE WRONG PLAYBOOK
The thing is, we’re not given the real playbook for financial freedom. From a
young age, we’re told to work hard, study hard, and get a good job. “Just
keep doing that, and success and happiness will be yours!” And so we do it,
chasing the pot of gold at the end of the rainbow.
But in today’s world, you won’t get to financial freedom by working hard,
studying hard, and getting a good job. I did exactly that, yet where did that
get me? In six figures of debt at age 23.
Schools don’t teach you how money really works, and unless you grew up
rich, you don’t learn it from your family. The status quo isn’t for you to be
financially free. The status quo is to live with debt, live paycheck to
paycheck, and work until you’re 65, not live rich and live free (while you’re
young enough to enjoy it).
I wanted more for my life than the status quo.
I was tired of pressing my nose against the glass, watching others live well
while I struggled with debt. Have you ever felt like rich people are part of
some exclusive club, but you’re on the outside and you can’t get in? That’s
exactly how I felt.
This led me to embark on a quest to piece together the real playbook.
What does it really take to create financial freedom? I read every finance
book I could get my hands on, took classes, and sought out mentors.
What I discovered was that financial freedom isn’t a complete mystery.
It’s actually very simple, and it’s based on a set of principles that the rich
know and use every day. But for some reason, the rest of us never got the
memo. The wealthy pass these principles onto their children, while the rest
of us are taught to be good employees, good borrowers, and good
consumers.
But what exactly is this knowledge that’s being gatekept from us? At its
core, financial freedom is the ability to live life on your own terms, doing
what you want, when you want, how you want, not how your bills dictate.
And achieving this freedom boils down to two things: acquiring the right
kinds of assets and making the right kinds of income. Obviously, this is
very different from what we learn, which is to chase a high salary, to spend
everything we make, and to acquire the opposite of assets—debt!
Once I understood what truly creates financial freedom, I began to take
action. Within seven years, I completely transformed my financial reality—
going from over $100,000 in debt to becoming a millionaire. More
importantly, I now have the freedom to wake up whenever I want and do
exactly what I want with my day.
The path wasn’t always easy, but I now know for a fact that financial
freedom is the natural result of taking the right actions in the right order, not
some unattainable dream.
Think about what this means for you. If I could transform my finances—
going from six-figure debt to complete financial freedom in just seven years
—imagine what you could accomplish starting from where you are now.
Whether you’re in debt, living paycheck to paycheck, or just starting to save,
these same principles will work for you too. Your journey might look
different than mine, but the destination is the same: a life where money
serves you, not the other way around.
Through my Add a Zero framework, I’ll take you through the same exact
steps that took me from debt to millionaire:
PHASE 1: GETTING TO $0
I mastered my money mindset and took control of my debt and
spending.
This is where you’ll learn to think differently about money and take
control of your financial situation.
PHASE 2: GETTING TO $10,000
I learned to budget and optimize my spending.
This is where you’ll build your first real financial cushion and start
feeling secure.
PHASE 3: GETTING TO $100,000
I focused on increasing my income and building wealth in a tax-savvy
way.
This is where your wealth begins to grow significantly and create real
options for your future.
PHASE 4: GETTING TO $1,000,000
I made my money work hard for me and built scalable, time-leveraged
sources of income.
This is where you achieve true financial freedom and break the link
between time and money.
This is the playbook I wish I’d had at the beginning of my financial
journey, back when I felt like an outsider looking in. With my Add a Zero
framework, I’ll help you gather the courage to take charge of your finances
and focus on the things that will actually get you to financial freedom rather
than trapped in a 24/7 cycle of debt and hustling. And slowly but surely,
you’ll get your net worth out of negative territory (because hey, for some of
us . . . that’s our starting point!) and grow it to $10,000 . . . to $100,000 . . .
to $1,000,000! Just like I did.
In many ways, I bet I’m no different than you. You heard my story—
daughter of immigrants, never learned a thing about money, no special
privileges or leg up in life. So if I can do it, you can do it too. The power of
this framework isn’t just my story—it’s in the thousands of lives it’s already
transformed. Through my YouTube videos and online content, I’ve guided
people from all walks of life to apply these principles and create their own
financial breakthroughs. People who started exactly where you are now.
Here’s what some of them have experienced:
The best part? This doesn’t have to take you decades. Have you ever
heard the saying “Most people overestimate what they can do in one year
and underestimate what they can do in 10 years”? Remember, it took me just
seven years to go from negative $100,000 to positive $1,000,000.
It all started with my financial awakening, and now it’s time for yours.
ONE ZERO AT A TIME
Wanna know the secret to transforming your finances and creating your
dream life, even if your current situation doesn’t look anything like it? Take
it one zero at time. Getting from where you are to your first million might
seem like a huge jump, but not if you tackle it piece by piece.
Using my Add a Zero framework, you’ll upgrade your money mindset and
financial know-how at each phase, doing things in the right order without
getting overwhelmed. All you need to focus on is adding one zero at a time.
With each zero you add, you’ll feel an incredible sense of progress and
momentum, and I’ll be your cheerleader and guide every step of the way.
To get the most out of this book, I’d like you to work through it from
beginning to end. It isn’t meant to be read piecemeal. Even if you think you
already know some of what you’re reading, you will fine-tune your
understanding of money in surprising ways by fully engaging with each step
of the Add a Zero framework.
To support your journey, I’ve created a free resource hub at
addazero.com/toolkit with tools, templates, and bonuses to help you
implement everything you learn. Think of it as your digital companion to
this book—there to help you take action and stay on track.
Each zero will take different amounts of time for everyone, and that’s fine.
It is not a race, so no matter your starting point, you are not behind. It’s
never too late. Start where you are. Start now. You are right where you’re
meant to be, and from this place, you will now move forward. As long as
you never give up on yourself, you can and will become financially free.
And hey, if you don’t see that for yourself now, that’s okay too. I promise
you that once you reach the top of the first mountain, you’ll see the next
mountaintop, and the next, and the next. Take it one zero at a time. Before
you know it, you, your life, and your financial future will have become
completely unrecognizable. You owe this to yourself.
So let’s you and I make a deal: You’ll take massive action on what you
read (because let’s be honest, nothing changes if you don’t take action). In
turn, I’ll make it a no-brainer for you by providing an Add a Zero Checklist
with your action steps at the end of each chapter.
As you check off the action steps, share your progress with me. Take a
photo and tag me on social media @itsrosehan so that I can celebrate your
win with you and cheer you on in real time!
Are you ready to add a zero? You deserve this. You can do it. Let’s go!
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CHAPTER 1
WHAT IT MEANS TO ADD A
ZERO
Rich people acquire assets. The poor and middle class acquire liabilities that they think
are assets.
— ROBERT KIYOSAKI, RICH DAD POOR DAD
Have you ever heard the story about the elephant tied to a rope? Even though
it was strong enough to easily break free, it never tried because it had been
conditioned from a young age to believe it couldn’t.
Similarly, a lot of people are stuck in their financial situation because they
don’t believe anything else is possible. They don’t even realize a different
financial paradigm exists. Like the elephant, you are strong enough to break
free from the financial beliefs that shackle you—you just need to recognize
your own power and see a new possibility.
My first insight about this happened when I met a particular college
professor. He had it all—the penthouse, a boat in the Hamptons, a Rolex,
access to the high-roller casino tables in Las Vegas, and the ability to jet-set
wherever he wanted whenever he wanted. And no, his New York University
salary didn’t fund that lifestyle! He loved to teach, but he made his money
through savvy investments and business ventures.
He was an inspiration to me.
Wanting to learn as much from him as I could, I finagled my way into an
internship in his office. Before long, I discovered that every Thursday, he’d
set up a round table in the middle of the office for a game of Texas hold ’em
with his friends. One day, he said, “Hey, you want to stick around tonight for
the poker game?”
At the time, I was really into poker, so I jumped at the chance. It wasn’t
like I had the money to play with the other deep pockets at the table. But I
could watch . . . and listen as they talked shop.
They spoke a different language—the language of money. The way they
talked about it, their latest wheelings and dealings, and even just about life
was a revelation to me. They talked about large sums of money as easily as
they discussed the weather.
Even though I felt supremely out of place, I made sure to go to these
poker games as often as I could. Something in me knew that whatever I
absorbed in that room was worth more than anything I was learning from my
finance degree at NYU.
But despite getting this insider look into the paradigm of the wealthy and
the financially free, it would take me a while to implement these ideas. Like
that elephant, I was still mentally tied to my own rope—the limiting beliefs
about money that I’d grown up with. While I was fascinated by their world,
a part of me couldn’t imagine myself truly belonging in it. I was just a
student with mounting debt, and they were rich, high-rolling movers and
shakers. The gap seemed too wide to cross.
It would take years—and a painful financial wake-up call—before I
finally realized that what held me back wasn’t circumstance but mindset.
Although it took me a while to enter their world, I can tell you now that the
financial paradigm of the wealthy is completely different from the one you
and I grew up in. Adding a zero and ultimately achieving financial freedom
will require you to see money differently, think about income differently, and
turn everything you think you know about money on its head.
Let’s look at the aspects of this different financial paradigm and what it
really means to Add a Zero.
LOOKING RICH VS. BEING RICH
If you were to compare 25-year-old Rose to 32-year-old Rose, you would’ve
thought 25-year-old Rose was doing much better. After landing my first
“real” job in New York City, I moved into a fancy luxury apartment building
with a doorman and elevator. I was making $100,000 a year, I hung out at all
the trendy (read: expensive) spots, and I was always dressed to the nines. I
looked like I was killing it!
The irony is that despite all appearances, 25-year-old Rose rarely ever had
more than two thousand dollars in her bank account at any given time, and
also carried six-figure student loan and credit card balances. One job loss,
one emergency, and my glamorous lifestyle would have crumbled like a
house of cards.
Fast-forward seven years later, and you’d find me living in my camper
van, wearing my favorite pair of ripped jeans every day. Not exactly the
picture of wealth. But here’s what you couldn’t see: Through careful
budgeting, earning, and investing over the years, I had built up a stock
portfolio and investment properties worth more than $1,000,000. I was 100
percent debt-free, and I also wasn’t working—I was taking a miniretirement, living off the income from my investments.
In other words, 32-year old Rose in her ripped jeans was FREE, baby! I
could wake up whenever I wanted and do whatever I wanted with my time. I
had achieved that same sense of freedom I’d felt during my gap year travels.
Maybe I didn’t look rich in the traditional sense, but I was rich in all the
ways that actually matter.
This illustrates a fundamental truth about money that most of us get totally
wrong: There’s a massive difference between looking rich and being rich.
And I get it! We learn from day one that wealth means (1) landing that highpaying job, (2) living in that nice home, and (3) acquiring all the status
symbols that make it look like we’re crushing it. We get major social
brownie points for having all the trappings of a luxurious lifestyle rather than
for building the financial foundation that actually makes it possible.
Look, don’t get me wrong—there’s nothing wrong with having nice
things. I love business-class flights, five-star hotels, and all the finer things
in life as much as the next person. I’m not about to tell you to live like a
monk! But at the same time, the goal here is financial freedom, right?
To me, being rich isn’t about fancy cars, mansions, and designer labels.
It’s about freedom. It’s about having the financial means to spend your time
how you want, not how your bills dictate. When I talk about being rich or
financially free (I use these terms interchangeably), I mean having the ability
to live life on your own terms—whether that means traveling the world,
starting a passion project, or spending more time with the people you love.
But you can’t do any of that if you only look rich! You have to actually be
rich.
So what’s the real difference between looking rich and being rich? It
comes down to one number: your net worth.
NET WORTH: THE ULTIMATE MEASURE OF FINANCIAL
FREEDOM
Think of net worth as a simple financial snapshot that reveals how close you
are to financial freedom. It’s everything you own (your assets) minus
everything you owe (your liabilities). Or think about it this way: If you sold
everything you own and used that money to pay off all your debts, whatever
you’re left with is your net worth.
In terms of what actually counts as an asset versus a liability, let me break
it down super simply:
Assets = Money In
Liabilities = Money Out
Assets Bring Money IN
An asset should bring money into your life, either from ongoing cash flow
thrown off by the asset or from selling the asset for more than you paid for
it. Think:
Cash
Stocks
Real estate
Businesses
Bonds
Gold and silver
Cryptocurrency
All these assets have the ability to put money into your pocket. When you
have a lot of assets, you’re not worried if your job suddenly lays you off
because you have sources of money other than just your paycheck. For
example, you could withdraw cash from your savings account, you could
sell off stock holdings that have gone up in value, or you could live off the
cash flow from a rental property.
Now, here’s something that might surprise you—a lot of things you might
think are assets . . . actually aren’t. Remember that if it doesn’t bring money
IN, it doesn’t count as an asset. That means the following are not assets,
even though you’ve probably been told they are.
Cars. A brand-new car loses 9 percent of its value the moment you drive it
off the lot.1 By the end of the first year, it’ll have lost 20 percent of its
value!2 How can something that depreciates faster than ice cream melting in
the summer sun count as an asset? Not to mention all the expenses that come
along with owning it—car payments, insurance, gas, and maintenance.
Besides, even if you could sell your car for any decent amount of money, all
that money would immediately need to go toward buying another one. After
all, you still need a way to get around! Cars don’t bring money in, they take
money out.
Your House. “But, Rose, my house is definitely an asset—it’s gone up so
much in value!” I hear you, but stay with me here. It’s just like with the car
—even if you could make money by selling your house, that money
wouldn’t benefit you because you’d have to use the proceeds to buy a
replacement . . . at today’s prices. You still need somewhere to live! That’s
why owning an expensive home does not translate to more financial
freedom. In fact, it can do quite the opposite, costing you a lot of money
every single month in mortgage payments, property taxes, and maintenance.
I know this goes against conventional definitions of net worth, but remember
our simple rule: If it’s not bringing money IN, you shouldn’t count it as an
asset. Keep in mind I’m referring to your primary residence, not to rental
property (which is a whole different story and would most definitely count
as an asset).
Designer Items. Sorry to break it to you, but these aren’t assets either, no
matter what the lifestyle influencers tell you. The moment you walk out of
the store with that new Chanel bag or those Louboutin shoes, they lose a
huge chunk of their value. Most can only be resold for a fraction of what you
paid, if you can sell them at all. Don’t confuse the term investment piece
with an asset. While they might be a smart addition to your wardrobe,
investment pieces don’t add to your financial freedom. Plus, a growing
collection would mean you need a bigger closet, which means a bigger
home, which means, you guessed it, more money OUT.
Electronics. Be careful not to count your latest iPhone or MacBook Pro as
assets. Think about how quickly they become outdated—that shiny new
phone you just bought will be last year’s model in a matter of months. The
resale value plummets faster than a skydiver without a parachute. Sure, they
might be tools that help you make money (like if you’re using that laptop for
work), but don’t confuse useful with asset. Electronics can be very useful to
you, but that doesn’t mean they’re generating any income for you—there’s
no money IN. If anything, they’re constantly tempting you to upgrade to the
newest version, keeping you in an endless cycle of spending.
Jewelry. This one hits close to home for a lot of people, especially when it
comes to pieces with emotional value like engagement rings or family
heirlooms. But unless you’re a successful jewelry trader, these pieces aren’t
assets either. Most jewelry sells for way less than you paid, especially once
you factor in the costs of insurance and secure storage. While I’m no expert
on the jewelry market, I know enough to recognize that it’s wildly
unpredictable and often based more on emotional value than intrinsic worth.
That heirloom ring might mean the world to you (as it should!), but it
shouldn’t count as an asset because it’s not bringing money IN.
These are assets
These are NOT assets
Cash
Cars
Stocks
Your House (Primary Residence)
Real Estate
Designer Items
Businesses
Electronics
Bonds
Jewelry
Gold and Silver
Cryptocurrency
Here’s the thing: I’m not saying you shouldn’t own these things. I’m just
saying you shouldn’t count them as assets. Remember what I said earlier—
that financial freedom boils down to acquiring the right kinds of assets and
making the right kinds of income? If the goal is financial freedom—the
ability to wake up and do whatever we want with our time—that can only be
achieved when you have enough true assets bringing money in for you,
whether you work or not.
So go, live your best life. Get that nice car if you can afford it, treat
yourself to that gorgeous designer bag, and buy that dream home you’ll love
living in. Just don’t make the mistake of counting them as assets just because
they’re expensive or because some net worth calculator tells you to include
them!
Liabilities Take Money OUT
Now let’s talk about the opposite of assets: liabilities. Liabilities take money
out in the form of debts you owe, such as:
Student loans
Credit card debt
Car note
Tax debt
Medical debt
Personal loans
Payday loans
Unpaid bills
Mortgages
When it comes to liabilities, credit card debt is perhaps the nastiest of
them all. Those high interest rates mean you’re not just paying back what
you borrowed—you’re paying way more. That $1,000 shopping spree could
end up costing you $2,000 or more if you only make minimum payments.
It’s like paying for everything twice!
Student loans often trick us because we’re told they’re “good debt”—an
investment in our future. But at the end of the day, those monthly payments
are still money out, and they’ll keep going out for years (sometimes
decades!) until you pay them off. Even mortgages, which many consider
good debt, are still liabilities because they take money out of your pocket
each month. When you have liabilities, you’re making payments rain or
shine, whether you like it or not. It’s money out all day, every day.
So there you have it! Once you tally all your assets and liabilities, you
take the difference and, voilà, that’s your net worth. If you have more
liabilities than assets, your net worth will be negative. If you have more
assets than liabilities, your net worth will be positive.
Examples of Assets and Liabilities
ASSETS
LIABILITIES
Cash
Student loans
Stocks
Credit card debt
Real estate
Car note
Businesses
Tax debt
Bond
Medical debt
Gold and silver
Personal loans
Cryptocurrency
Payday loans
Mortgages
ASSETS - LIABILITIES = NET WORTH
The bottom line? Net worth is the true measure of financial freedom. The
more assets and the fewer liabilities you have, the higher your net worth and
the more freedom you have. Why? Because those assets are generating
income without requiring your time or energy. When your assets bring in
enough money to cover your liabilities and living expenses, you’re no longer
dependent on trading your time for a paycheck.
Net worth is the true measure of
financial freedom.
To see how this could play out in real life, let me show you my numbers.
Here’s how different my net worth looked at 25 versus at 32:
25-year old Rose had:
$2,000 in checking account
$4,000 in 401(k)
$100,000+ in student loans and credit cards
32-year old Rose had:
$30,000 in checking account
$70,000 in savings account
$900,000 in stocks and bonds
$800,000 in rental properties
$100,000 in cryptocurrency
$500,000 in mortgages on rental property
The reason I had so much more freedom at 32 than at 25 was because I
had drastically transformed my net worth. That’s why when I talk about
Adding a Zero, I’m talking about adding it to your net worth. Because at the
end of the day, that’s what gives you the power to live life on your own
terms.
“But, Rose, what about making more money? Isn’t that important too?”
It is—but net worth matters more. You know how Forbes comes out every
year with their Richest People in the World lists? They rank by net worth—
not income—for a reason.
Don’t get me wrong—your income matters. In fact, making more money
is a crucial step toward financial freedom that we’ll talk all about in
Chapters 7 and 10. But it’s not about how much money you make, it’s about
what you do with what you make. When you make more money, you can use
it to buy more assets, pay off more liabilities, and create lasting financial
freedom . . . or you can use it to look rich while not actually getting rich.
That’s the key: You need to use your income as a tool to build your net
worth, otherwise you might as well be running on a treadmill—lots of
movement, but not getting anywhere.
EXERCISE: CALCULATE YOUR NET
WORTH
Back when I first started my financial freedom journey and calculated my net worth for the
first time ever, I didn’t even know how much I owed on most of my loans. It was scary! But you
know what? Having clarity on exactly where I stood felt so much better than avoiding it. Now
it’s your turn! Use this chart to calculate your current net worth:
Your Net Worth
ASSETS
LIABILITIES
ASSETS - LIABILITIES = NET WORTH
1) Add up all your assets (the money IN stuff) in the left column:
Every bank account (checking, savings, etc.)
Investment accounts (401(k), IRA, etc.)
Rental property
Any other assets that bring money IN
2) Add up all your liabilities (the money OUT stuff) in the right column:
Student loan balances
Credit card balances
Car loans
Mortgages
Medical debt
Any other money you owe
3) Then just subtract: Assets – Liabilities = Net Worth
FREE TOOLS TO HELP YOU ADD A ZERO
Want to make this even easier? Visit the free online resource hub at
addazero.com/toolkit for a downloadable net worth tracker that does all
the math for you! Scan the QR code to access it instantly.
Whatever your net worth is at the moment, you might have thoughts like
these:
I wish I had more to show for all these years.
I should be further along by now.
I’m so behind.
I have so much debt. What’s wrong with me?
Have you ever seen those videos on YouTube titled “What Your Net
Worth SHOULD Be by [Age]”? Cringe. I never click on these videos
because they prey on our universal, deep fear of falling behind. In what
world does a universal measuring stick make sense?
After all, a lot of factors play into your financial situation. Factors that
you had no say in, like how much you learned about money growing up,
systemic inequities, the presence or absence of a family safety net, economic
conditions while coming of age, and much more.
My take: Your net worth is what it is. No judgment. And if you don’t love
what you see, well—now you can change that! You can only do better when
you know better. You’re exactly where you need to be right now. Doesn’t that
feel so much better than comparing yourself to some arbitrary standard?
Your net worth is what it is. No
judgment.
While we don’t have the power to undo the past, we always have the
power to reframe our thoughts about the past. Rather than entertaining
thoughts that make you want to crawl into bed with a tub of ice cream and
go on a Netflix bender, let’s choose positive, productive thoughts that make
you want to move forward. Thoughts like:
I wish I had more to show for all these years. I’ve always done my best
with the knowledge and resources I had at the time.
I should be further along by now. I’m exactly where I need to be on my
own timeline.
I’m so behind. I’m making progress every day, and that matters more
than how fast I go.
I have so much debt. What’s wrong with me? I’m OK, I’m just human—
learning and growing as I go.
Even after these positive reframes, if you’re still feeling behind, I have
some good news for you: Your first $100,000 is the hardest to achieve, but
after that it gets easier. Much easier.
This is something most people don’t understand: Net worth growth isn’t
linear; it’s exponential. Why? Because in the beginning, you’re mostly
relying on your own efforts—saving, budgeting, and slowly building assets.
It can feel like pushing a boulder uphill.
But once you hit that $100,000 mark? That’s when things start to speed
up. Your assets build a critical mass and begin generating meaningful
returns. Your investments start making their own money. Skills and money
knowledge also compound.
Think of it as a flywheel effect. At first, it takes a lot of energy to get your
flywheel going. You have to put a lot of your own muscle into it. But as it
spins, it picks up more and more momentum on its own, until eventually
you’re barely doing anything to make it spin faster and faster.
This is why it took me four years to get to $0, another two years to get to
$100,000, and only another year to get to $1 million. And it should take me
only another few years to get to $10 million (working on it!).
So if you’re looking at your net worth right now and feeling overwhelmed
by the gap between where you are and where you want to be, remember this:
It gets easier. Getting to that first $100,000 is the hardest. After that, every
zero gets easier and easier to add as your money and your know-how
compounds!
YOUR MONTHLY MONEY DATE
From here on out, make tracking your net worth a monthly habit. I call it my
Money Date—once a month, I sit down (usually with a glass of wine!),
update my numbers, and check my progress:
Are my assets going up?
Are my liabilities going down?
Am I getting closer to adding that next zero?
There’s nothing more energizing than seeing your progress! Even when
I’m tempted to just say “screw it” and YOLO with my money, knowing I’m
updating my numbers every month keeps me accountable. So right now—
yes, right this second—add a calendar reminder for your monthly Money
Date. If you don’t think you’ll stick to it alone, recruit a friend who wants to
be on the journey to financial freedom along with you. You can keep each
other accountable and celebrate your progress together!
Remember: Every financial empire started with someone sitting down and
doing exactly what you’re doing right now—getting clear on their numbers.
Taking this first step—taking stock of your assets and liabilities and
committing to track your net worth—is huge. You’re already ahead of the
game just by doing this!
DEFINING YOUR PERSONAL FINANCIAL FREEDOM
Now that you’ve committed to tracking your net worth, let’s zoom out: What
does financial freedom actually look like for you? Because while tracking
numbers is important, what really matters is what those numbers allow you
to do with your life.
Everyone has their own idea of what it means to be rich and financially
free. For some people, it means having $10,000 in the bank at all times,
living in a camper van, and being able to surf as much as they want. For
others, it means being a multimillionaire, having a house in the Hamptons,
and sending their kids to private school. For others still, it means buying
their very own plot of land, complete with a tiny house and a garden, and
being able to stay at home to raise their children.
For me, because I started out over $100,000 in debt, at first, rich just
meant zero. I’d carried so much debt for so long that even just living debtfree felt like the ultimate dream. I never started out with the goal of
becoming a millionaire. But when I reached that vantage point of zero, I was
able to expand my definition of rich to $100,000, then to $1,000,000 . . . and
the rest is history.
Your definition of financial freedom can be whatever you want, and it can
evolve with you as you grow. But you have to decide and be specific from
the get-go. Being specific gives you clarity and a concrete target to aim for.
If you, like me, are starting out with debt, deciding that you want to get to
zero is a great place to start.
THE THREE KINDS OF INCOME
Remember when I said financial freedom isn’t a mystery—that it’s just
about acquiring the right types of assets and making the right kinds of
income? Now that you’ve learned what truly counts as an asset and how to
calculate your net worth, let’s talk about making the right kinds of income.
Ever since I got my first job in high school as a waitress to save up for my
first car (an old beat-up Mazda Miata), I’ve had dozens of different kinds of
jobs. I was always good at securing a job, being independent, and making
my own money. As far as I knew, if you wanted money, you needed a job.
But here’s the dirty little secret that nobody teaches you in school: The
money you make from a job is not the only kind of income there is. In fact,
making money from a job is the worst kind of income you could rely on. If
schools taught us what we really needed to know, they’d teach us that there
are actually three distinct kinds of income:
1. Employee Income: money you make from a job
2. Business Income: money you make from the profits of a business you
own and operate
3. Investment Income: money you make from stocks, bonds, real estate,
and other assets
These three kinds of income couldn’t be more different, especially when
you look at them through two critical lenses: time freedom and tax
efficiency.
Time Freedom
The Time Freedom Spectrum illustrates how different kinds of income give
you varying levels of control over your time. Let me put it this way: Would
you rather be making $100,000 in Employee Income but have no time
freedom, or $100,000 in Investment Income but have total time freedom?
Not all income is created equal.
As you move from left to right on this spectrum, you gain more autonomy
and flexibility. Employee Income offers the least amount of time freedom,
keeping you tethered to trading hours for dollars. It’s the classic time-formoney trap that limits both your earning potential and your freedom.
Business Income creates a middle ground where systems and people can
work for you, though you’re still somewhat involved. While building a
successful business requires significant time and energy up front, once
established, you can build it to run without your constant presence.
Then at the end of the Time Freedom Spectrum, Investment Income
represents the ultimate freedom, where your money works completely
independently of your time input. Unlike a business—where you still have to
check in every so often—once you make an investment, it generates money
for you whether you’re working, sleeping, or sipping fresh coconut water on
a beach. You literally don’t have to lift a finger for the money to keep
coming in. My stock portfolio, for instance, pays me tens of thousands of
dollars a year in dividends and price appreciation while I do absolutely
nothing to make that happen.
Tax Efficiency
Next, we have the Tax Efficiency Spectrum, which shows how differently
the tax system treats each of the different kinds of income.
Tax efficiency measures how much of your income remains in your
pocket after the government takes its share. This matters because it’s not
what you make but what you keep that determines how quickly you can
achieve financial freedom. As you move from left to right on this spectrum,
you keep progressively more of what you earn. Understanding this spectrum
reveals which kinds of income to prioritize for maximum tax advantages.
Employee Income ranks lowest on the Tax Efficiency Spectrum, because
you pay federal, state, and city taxes on your full income before you see a
dime. That means if your salary is $100,000, you might only take home
$60,000 after taxes. Plus, the more you make, the higher tax bracket you go
into. Even worse? You can’t deduct most work-related expenses. Those
clothes you have to wear to work, that commute to the office, that coffee you
need to stay productive—none of it is deductible.
Moving up the spectrum, Business Income is a lot more tax-efficient for
several reasons. First, the corporate tax rate is 21 percent (as of this writing)
compared to an employee tax rate that can go up to 37 percent. But the real
magic comes from being able to deduct expenses before paying taxes. Say
you make $100,000 in Business Income with $50,000 in legitimate business
expenses—you only pay taxes on the remaining $50,000. This means more
money stays in your pocket to reinvest and grow your wealth. Beyond just
saving you money at tax time, your business can legally cover many of your
lifestyle expenses. That trip for a business mastermind? Deductible. That
fancy camera for your content? Deductible. Business Income offers way
more flexibility and legal ways to cut down on taxes.
At the far right of the spectrum, Investment Income offers the most tax
efficiency of all. Most Investment Income gets taxed at rates ranging from 0
to 20 percent—dramatically lower than Employee Income tax rates. Think
about that—I’d much rather make $100,000 from investments and pay 0
percent in taxes than earn it as an employee and pay 37 percent.
By focusing your efforts on moving toward the right side of this spectrum
—from Employee to Business to Investment Income—you can legally keep
more of what you earn, dramatically accelerating your path to financial
freedom.
WHAT ABOUT SELF-EMPLOYMENT INCOME?
If you’re a freelancer or independent contractor, you might be wondering which of the three kinds
of income you fall under. Self-Employment Income is actually a hybrid between Employee
Income and Business Income. As your own boss, you “own” your job, but it’s still a job
nonetheless. You’re still trading time for money like an employee.
That being said, you do get some of the tax efficiency of Business Income because you can
deduct your expenses from your income before paying taxes on it. In fact, you can be doing the
same work you did as an employee of a company, but just by going self-employed and doing it as
an independent contractor, you would save a lot of money in taxes.
Self-employment is very different from owning a true business. A business can run without
you, while self-employment still requires your direct involvement to generate income. That’s why
many entrepreneurs evolve from self-employment to building a scalable business with team
members and systems. But don’t worry, we’ll talk more about that in Chapter 10.
Remember, to reach financial freedom, you need to go after the right
kinds of assets and the right kind of income. Understanding the differences
in the three kinds of income and how to leverage each one was key to how I
was able to reach financial freedom in my 30s rather than in my 70s.
Like most people, I started with pure Employee Income. But I used it
strategically—maximizing my earnings to pay off debt, build investments,
and eventually seed my own business. Your job income can be powerful fuel
for building other income streams. After all, you need capital to buy
investments and start businesses—these things rarely appear out of thin air!
When I launched my financial education company, I kept my full-time gig
while getting the business off the ground. My income mix gradually shifted
—first adding slices of Business Income and Investment Income while
Employee Income remained dominant. As my business grew to six figures, I
was able to leave Employee Income behind. Today, I’m pouring as much
Business Income as possible into my investments. Since Business Income
offers both tax efficiency and time freedom, it’s the perfect accelerator for
building Investment Income.
This chart shows my journey from 100 percent Employee Income to my
ultimate goal: living purely off Investment Income. This is how you
systematically build freedom—using each kind of income as a steppingstone to the next.
To be clear: I’m not suggesting you quit your job tomorrow. But if
Employee Income remains your only source forever—even a high-paying
job—you’ll never achieve true financial freedom. Why? Because it’s too
time-intensive (no time freedom) and you keep too little of what you earn
(it’s tax-inefficient). Instead, use your Employee Income strategically to
build streams of Business and Investment Income. The sooner you start this
shift, the sooner you’ll wake up with complete control over your time—just
like I do now.
But here’s the thing: Before you can step into this new financial paradigm,
you need to first address what’s happening between your ears. Your money
mindset—your beliefs, attitudes, and thoughts about money—will either
support or sabotage your journey to adding zeros. That’s exactly what we’ll
explore in the next chapter.
CHAPTER TAKEAWAYS
Looking rich isn’t the same as being rich. True freedom and wealth are
about net worth, not flashy spending.
Acquire the right kinds of assets. Assets grow your wealth; liabilities
drain it.
Not all income is created equal. Business and Investment Income offer
more time freedom and tax efficiency than Employee Income.
YOUR ADD A ZERO CHECKLIST
Calculate your current net worth.
Create a recurring monthly Money Date reminder in your calendar to
track progress on your net worth.
Map your current income sources:
– Percent from Employee Income
– Percent from Business Income (if any)
– Percent from Investment Income (if any)
FREE TOOLS TO HELP YOU ADD A ZERO
Grab your free downloadable net worth tracker (and a bunch of other
wealth-building resources) at: addazero.com/toolkit! Scan to access.
OceanofPDF.com
GETTING TO $0
OceanofPDF.com
CHAPTER 2
MASTER YOUR MONEY
MINDSET
When you begin to think and grow rich, you will observe that riches begin with a state
of mind, with definiteness of purpose, with little or no hard work.
— NAPOLEON HILL, THINK AND GROW RICH
For the longest time, I judged myself really hard for being in so much debt.
As people talked about their plans to buy a house, weekend shopping sprees,
or summer vacations to Europe, I’d wonder how the heck they were
affording all that. I felt less than. I kept playing out the same scenarios with
my finances to reflect the belief that kept playing over and over in my head
like a broken record: “I’m bad with money, I’m bad with money, I’m bad
with money.”
The thing is, I didn’t even recognize this self-judgment until one day,
while journaling on a plane returning from my first-ever Burning Man, I had
a flashback to a moment with my dad.
One evening, back home after the end of my freshman year at NYU, I was
sitting with my dad at the kitchen table. I was so worried about the amount
of student loan debt I was taking on that I was crying. Wanting to comfort
me and unable to offer me any solution other than to help me get into more
debt, my dad reassured me that he would continue to cosign my loans.
That memory hit me like a ton of bricks. In that moment, I realized I’d
been carrying not just a ton of debt, but a ton of shame too—the shame of
owing so much money and the belief that I was somehow fundamentally
flawed when it came to finances.
What I saw clearly for the first time was that I had been just a teenager
making decisions with the limited knowledge I had at the time. My parents
had done their best with what they knew. We were all doing our best. With
that understanding, I forgave myself, and that created the space for me to
shift my mindset and start taking massive action on my finances.
I know you’re eager to dive into strategies and tactics. But before we talk
spreadsheets or debt payoff plans, we need to talk about your mindset.
Because the way you think and feel about money shapes everything—what
you believe you’re capable of, what actions you take, and whether you keep
playing small or start playing to win.
That’s what this chapter is all about: helping you shift your money
mindset from something that’s been keeping you stuck into something that
propels you forward. You’ll uncover the beliefs that have been holding you
back, rewrite the story you tell yourself about money, and learn how to
protect that new mindset as you build the life you actually want.
Because when your mindset changes, your behavior changes. And when
your behavior changes, your results change.
Let’s begin.
DECIDING VS. WISHING
“It’d be great to have more money.”
“I wish I could be rich.”
How many times have you heard that? Moreover, how many times have
you actually said that?
But here’s the thing—wishes are a dime a dozen. Pretty much everyone on
this planet *wishes* they had more money. But have you decided on it?
Just like wishing is not going to get you up Mount Everest, wishing is not
going to get you to financial freedom. You’d be surprised how many people
think they’ve made a decision when all they’ve done is make a wish. In fact,
the word decide actually comes from the Latin word decidere, which
literally means “to cut off.”
When we make a decision, we metaphorically cut off all other options. It’s
like saying, “This is it; I’m all in—whatever it mother-fuckin’ takes!” And
when you do that, something very powerful happens. Suddenly your mind,
body, and soul all have their marching orders, and you begin moving in the
direction of what you’ve decided you want. The snowball is put into motion.
But here’s where most people get stuck. The moment they consider
making a real decision, their brain floods with questions:
HOW am I going to do this? But HOW is it going to be possible? How,
how, HOW???
This obsession with knowing exactly how you’ll reach your goal before
you even start is what I call “the how trap.” It’s that nagging voice that
demands a detailed road map before you’ve even decided on the destination.
And if we don’t immediately see the how, we often play it safe and refuse to
commit to what we really want.
Stop. Doing. That.
This fixation on the “how” comes from our deep desire to avoid failure.
We want proof that we’ll succeed before committing to anything. Knowing
exactly how something will play out before we’ve committed to it gives us
assurance that we won’t fail.
Now, don’t get me wrong, the how is important. You need to know what
steps to take and what road map to follow. But that comes later. Before
worrying about the how, you need to first decide what you will achieve.
Decide first, clarity follows. You have to do things in that order, and that
takes courage!
Decide first, clarity follows.
The “how” trap keeps us stuck in the mediocre realm of “realistic.” And
let’s be honest—realistic is just another word for average. When I made the
decision to become the first in my family to live debt-free, do you think I
had any idea how? Do you think I saw the entire damn staircase in front of
me before taking that first step? Hell no! But did that have to stop me? No,
ma’am! Because once I decided, the steps started appearing in front of me as
I went.
This is not magical thinking—it’s science! When you get clear on what
you want and focus on it, your brain’s reticular activating system (yep, fancy
science term) kicks in.1 It’s the same part of your brain that suddenly makes
you notice every red car on the road after you decide to buy one.
In his 1937 personal finance classic, Think and Grow Rich, Napoleon Hill
called this the power of “definiteness of purpose”—when your mind is
locked onto a specific goal, it naturally begins to identify opportunities,
ideas, and connections that support that goal.
Modern psychology confirms this through research—when you commit to
something, your brain literally starts filtering the world differently. It starts
working for you behind the scenes, scanning for resources, ideas, and
connections that will help make it happen, even when you’re not consciously
thinking about it.2 But this powerful mental mechanism only works once you
make a real decision.
And it’s not just modern psychology that recognizes this phenomenon.
Throughout history, philosophers and spiritual teachers have observed that a
committed decision creates a shift in consciousness that begins to organize
events in our favor. As author Paulo Coelho writes in The Alchemist, “When
you want something, all the universe conspires in helping you to achieve it.”
Whether you see it through the lens of science or spirituality, the message is
clear: Decide first, the how will follow.
YOUR INTRINSIC WHY
Growing up, money was always a source of stress and struggle in my family.
I knew that if I didn’t take charge of my finances, the cycle of lack would
continue—and one day, I wouldn’t be able to show up for my parents in their
old age the way that I wanted to.
Someone had to go first—to break the cycle and trailblaze a freer, happier
financial reality for our family. I decided it would be me. That became my
Intrinsic Why—my own highly personal reason for wanting financial
freedom.
My Intrinsic Why brought me full circle several years later, when one day,
my dad called me and I picked up the phone. My mom had developed
terrible knee pain, and she was struggling to walk upstairs and taking daily
pain medications just to make it through. Desperate for relief, she was
considering an experimental stem cell treatment. “But it’ll cost $8,000 out of
pocket, and insurance won’t cover it,” my dad told me, sounding defeated.
My eyes welled up with tears, and I said, “Don’t worry, Dad, I can pay for
it. Tell Mom to schedule the surgery.” Because of the work I had done to
master my money, I was able to pay for the procedure—in cash—for my
mom. There’s no way I would’ve been able to do that if I’d still been
drowning in debt, never worked on my money mindset, or never worked on
Adding a Zero.
Today, my mom no longer has pain in her knee. Could there be anything
more gratifying than that?
When you know why you want to be financially free, it’ll keep you going
even when it gets hard. Because sometimes it will get hard. Sometimes it
will feel too scary to face your finances. It’ll feel too hard to sit down and
actually learn this stuff. But let me tell you, it won’t be easier when your
mom comes to you with crippling knee pain and you can’t do anything for
her but stand there and be helpless. That’s what isn’t easy. Every time I feel
like reverting to old financial habits of YOLO and avoidance, I draw on my
Intrinsic Why for courage and motivation.
When my boyfriend started thinking about why he wanted to be
financially free, his first thought was his desire to own vintage collection
cars. But let’s be honest—while the ability to afford a 1969 Mustang would
be amazing, was it really going to keep him going when he had to wake up
early to learn new skills, adjust his lifestyle to save money, or make choices
others didn’t yet understand? Probably not. So he dug deeper and realized it
wasn’t really about cars at all. What truly mattered to him was creating a
better life for his single mom and five younger siblings. As the oldest, he’s
always felt a quiet responsibility to step up—especially because their dad
never did. More than anything, he wants to be the one they can count on.
But does your Intrinsic Why always have to be about giving to other
people? Not necessarily. Take my client Melanie. She loves world travel, but
her Intrinsic Why goes way deeper than sipping Moët & Chandon at ritzy
beach resorts (though she’s definitely not opposed to that). For her, travel is
about immersing herself in different cultures, meeting people with
completely different worldviews, and expanding the way she sees herself
and the world. Her desire for financial freedom isn’t just about being able to
travel—it’s about becoming the best version of herself.
If you want your Intrinsic Why to truly keep you going, it needs to
connect you to something bigger than yourself. When it’s just about you, it
feels like a chore. But when it’s rooted in something more meaningful—
whether it’s the people you love, the kind of person you want to become, or
the impact you want to have—it imbues you with a sense of purpose that
feels like jet fuel in your veins. That’s how lifelong smokers find it in them
to quit the moment their first child is born. A strong enough why will make
you do what once felt impossible.
A strong enough why will make you
do what once felt impossible.
EXERCISE: FIGURE OUT YOUR INTRINSIC
WHY
Now it’s your turn to figure out your own Intrinsic Why—your most deeply personal,
emotionally resonant motivation for wanting financial freedom. You need a good reason that you
can feel in your bones. This might require some soul-searching. Ask yourself the following
questions:
Beyond the material things, what will having more money give you?
What do you want more than anything? Why?
What would make your financial freedom journey truly worthwhile for you?
If you won the lottery tomorrow, what would you do with the money? Why?
What do you care about so much that it’s not even an option for you to fail?
Who will financial freedom allow you to be, not just for yourself but also for others?
Dig deep, be honest with yourself, and take a moment to really connect with your emotions.
Feel free to step away, go for a walk, light a candle, journal, or put on music. Whatever gets you
in the flow and in touch with your inner voice. For me, it’s going to the ocean and watching the
waves.
Tucked away inside you are a lot of beautiful dreams, desires, and feelings, and now is your
moment to get deeply in touch with them. Allow yourself to be vulnerable, and if you tear up—
good! That’s a very good sign you’ve hit on your Intrinsic Why!
YOUR MONEY IDENTITY = YOUR FINANCIAL REALITY
Having a powerful Intrinsic Why creates the fuel for your financial journey,
but there’s something equally important that determines whether that journey
will be successful: your Money Identity.
Your Money Identity is the set of beliefs you hold about who you are in
relation to money. It’s the story you tell yourself about whether you’re
someone who is good with money, someone who can build wealth, someone
who can become financially free—or not. Think of your Money Identity as
the big-picture narrative, and your beliefs as the individual lines that make
up that story. Change the lines, and the whole narrative begins to shift.
What I didn’t realize for years was that I’d internalized a negative Money
Identity. My inner script went something like, “I’m bad with money. Debt is
just my destiny. I’ll never get ahead financially.” And that identity became a
self-fulfilling prophecy: always racking up debt, overspending, and being
broke.
Because here’s the thing: We always act in alignment with our identity. If
you see yourself as someone who can’t manage money, you’ll unconsciously
act in ways that reinforce that identity—overpaying, avoiding your bank
statements, living paycheck to paycheck. Even when your income increases,
the pattern repeats. Why? Because your identity hasn’t changed.
That’s why wealth doesn’t start in your bank account—it starts in your
mind. Your Money Identity is what shapes your daily habits, your financial
choices, and ultimately, your bank balance. Your financial situation is a
mirror of what you deeply believe is possible for yourself.
We always act in alignment with our
identity.
If your Money Identity sounds like “I’ll always be in debt” or “I suck at
making money,” then that’s exactly the experience you’ll create with your
finances. But if you believe “I’m capable of creating wealth” or “I’m good
with money,” then attracting and holding on to money will start to feel
natural—because your identity is finally aligned with abundance.
The good news? Your Money Identity isn’t fixed. It’s not an absolute truth
—it’s just a story you’ve been telling yourself, which means you can rewrite
it.
Of course, there will always be things beyond your control—like the
family you were born into or the systemic advantages or disadvantages you
face. But no matter your circumstances, what you choose to believe about
yourself financially is always within your power to change.
Circumstances don’t have to be a life sentence. They can be transcended,
and the way to do that is by changing your Money Identity.
So how exactly do you do that? Do you have to rewrite every single belief
you hold about money? Thankfully, no. At its core, your Money Identity
comes down to one fundamental story you’ve been telling yourself—about
who you are financially and what you believe is possible for you. It’s the
foundational narrative that shapes your entire financial reality.
Maybe your Money Identity sounds something like, “I’m terrible with
money,” “I’ll always be in debt,” or “Financial struggles are just my lot in
life.” While you may hold dozens of beliefs about money, there’s usually one
central identity driving most of your financial outcomes.
The challenge is, these beliefs often live in the background. I operated
unconsciously for a long time too—that’s why I couldn’t seem to get out of
debt. How do you transform something you can’t even see?
That’s where my Recognize, Release, Rewrite™ process comes in. This
simple three-step method is designed to help you transform your Money
Identity from limiting to empowering—and shift your financial reality in the
process.
RECOGNIZE, RELEASE, REWRITE™
Your Money Identity is like background music—always playing, rarely
noticed. But once you tune in, you can start to change the song. The goal of
this process is to bring your Money Identity into clear focus, release its hold
on you, and consciously rewrite it into a powerful new story that serves your
financial goals.
1) Recognize
To rewrite your Money Identity, you first have to recognize exactly what it
is. Start by completing these sentences with whatever immediately comes to
mind—don’t overthink it:
I always . . .
I never . . .
Money always . . .
Money never . . .
Absolute statements like “I always mess up with money” or “Money
always slips through my fingers” often reveal the core narrative you’ve
unconsciously created about who you are and what’s possible for you
financially—your Money Identity.
Finally, trace your money history. Think about your earliest money
memories and the messages you received about money growing up:
What’s your earliest memory involving money?
What did your parents or caregivers explicitly say or imply about
money, wealth, or financial security?
When did money first cause you stress, fear, or shame? What
specifically happened?
What specific money situations trigger the strongest emotional
reactions (like anxiety, shame, or guilt) for you today?
Look for the central story that connects these experiences to how you
handle money today. Often, there’s a single thread running through it all—a
belief that quietly shaped your entire financial story.
For example, my client Ashley realized that her Money Identity was: “I’m
the kind of person who can’t hold onto money.” This explained why, despite
earning well, she never built savings—she unconsciously believed that she
was always destined for lack and struggle. This identity formed when her
family lost their home during an economic crisis when she was 10.
Here are some examples of common Money Identities:
“I’ll never be rich.”
“I don’t deserve financial success.”
“I’ll always be in debt.”
“I’m just not good with numbers.”
“People like me aren’t meant for wealth.”
“I suck at making money.”
“I’m just bad with money.”
Remember, these Money Identities aren’t real—they’re just stories you’ve
told yourself for so long, they feel real. Fixed. Immovable. But the moment
you can clearly name the narrative, you begin to set yourself free.
“The Money Identity running my financial life has been ... .”
Write it down. Look at it. Sit with the awareness that this is an arbitrary
identity you took on at some point in your life, not an absolute truth about
who you are or what’s possible for you financially.
2) Release
Once you’ve clearly recognized your limiting Money Identity, it’s time to
release its hold on you.
Start by acknowledging that this Money Identity likely served you in
some way at one point. Maybe believing “I’m destined to always be in debt”
protected you from the overwhelming responsibility of tackling your loans
head-on. Perhaps thinking “I’m bad with money” gave you permission to
avoid looking at your bank statements when you knew the numbers would
cause anxiety. For some, the belief that “I’ll always be poor” feels easier to
live with than the vulnerability of hoping for something better—only to be
disappointed yet again.
These beliefs didn’t develop randomly—they formed as your mind’s way
of coping with and interpreting your financial experiences. Understanding
this helps you forgive yourself for having these beliefs in the first place.
Now, gently but honestly question your Money Identity:
Is this Money Identity actually true, or just something I’ve accepted as
true?
How specifically has holding onto this Money Identity limited me
financially, emotionally, or in my relationships?
Would I ever intentionally teach this Money Identity to someone I love,
like a child or close friend?
What new possibilities would open up for me if I chose to let this
Money Identity go?
One of the most powerful parts of releasing is forgiveness—both for
yourself and for anyone else who influenced your Money Identity. Maybe
you’ve made financial mistakes. Maybe your family passed down unhealthy
money beliefs without even realizing it. Forgiveness doesn’t mean those
things were okay—it means letting go of the shame that’s been weighing you
down and releasing these beliefs from controlling your financial future.
Try this simple release ritual: Write your limiting Money Identity on a
piece of paper. Read it aloud, then say, “I understand why I believed this. It
made sense given what I knew then. But it no longer serves the person I’m
becoming. I now choose to release it.” Then physically destroy the paper—
tear it up, burn it safely, or dissolve it in water—visualizing your old Money
Identity dissolving with it.
Remember, releasing isn’t always a one-time event. Old beliefs have a
way of resurfacing, especially during stress or challenges. When you notice
an old Money Identity creeping back in, acknowledge it: “Ah, there’s that
old story again,” and gently let it go. Each time you do this, its power over
you weakens a little more.
3) Rewrite
Now comes the empowering part—consciously rewriting your Money
Identity. It’s time to craft a new, empowering financial narrative that honors
both where you’ve been and where you’re going.
Choose a new Money Identity that feels both hopeful and believable. If
you’re just beginning your financial journey, you don’t need to force
yourself to believe something unrealistic like “I’m a financial genius.” Start
with something real and believable like “I’m capable of learning and getting
better with money.”
Think of rewriting your Money Identity as updating the operating system
on your phone—your Money Identity operates in the background, directing
all your money decisions. And it’s time for an upgrade!
Here are some examples of how limiting Money Identities can be
rewritten into empowering ones:
“I’ll never be rich.”
→
“I don’t deserve
financial success.”
→
“I’ll always be in debt.”
→
“I’m just not good with
numbers.”
→
“People like me aren’t
meant for wealth.”
→
“I suck at making
money.”
→
“I can become rich—if I decide
that’s what I truly want.”
“I’m worthy of financial
success.”
“I’m capable of becoming debtfree—I just have to decide and
take action.”
“I can get good with numbers—
it’s a skill I can learn.”
“People like me are meant to
create wealth—and lead by
example.”
“I can learn to make good
money—just like anyone else.”
“What—so I can just choose a new identity, just like that?” Yes, you can!
Remember, your Money Identity isn’t some unchangeable characteristic, like
the color of your eyes or your ethnicity. It’s just a story you’ve been telling
yourself about what’s possible for you financially. So why not start telling
yourself a story that actually supports your financial future? Be super
utilitarian about it: Which Money Identity would be the most useful for where
I want to go financially?
Once you’ve chosen your new Money Identity, the next step is to
reinforce it daily. Write it on your bathroom mirror where you’ll see it every
day. Make it your phone wallpaper. Celebrate evidence that supports this
new identity, no matter how small. The key is repetition until this new
identity becomes your default operating system.
Don’t be surprised if resistance comes up here. The old version of you
might protest: “But it’s true . . . I am a failure with money!” “Nahh . . . I’m
pretty sure I’ll always be broke!” Change is uncomfortable—it often feels
like shedding an old skin. Do it anyway. Choose your new Money Identity.
This is deep work. You’re making the unconscious conscious, and that
takes a lot of honesty and self-reflection on your part. So as you go through
this process, be kind to yourself. No shame, no judgment. Just curiosity,
compassion, and forward motion. I’m so proud of you for doing this work,
and I acknowledge you for your courage!
FREE TOOLS TO HELP YOU ADD A ZERO
Need a daily reminder of who you’re becoming? I’ve got you. I created
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DON’T JUDGE WEALTH (OR YOU’LL NEVER HAVE IT)
So far, we’ve focused on transforming your Money Identity—the stories and
beliefs you carry about your own financial potential. But even with a strong
Money Identity, there’s another sneaky block that can keep you stuck: the
way you judge money itself and the people who have it.
You might want financial freedom, but if you secretly judge wealth or
view money as somehow dirty, then you’ll never allow yourself to have it.
Even without realizing it, these judgments show up in our everyday
thoughts. Take a moment and see if any of these sound familiar:
“Money changes people—and usually not for the better.”
“Wealthy people must have cut corners or stepped on others to get
ahead.”
“Rich people are out of touch with real-world problems.”
“There’s something more noble about struggling financially than having
it easy.”
“You can either make money or do good in the world, not both.”
“Rich people don’t care about others or social causes.”
If any of these resonate, you’re not alone. Many of us carry hidden
judgments about wealth that operate beneath our conscious awareness.
For me, a lot of my early wealth judgments came from watching Kdramas (Korean soap operas). The rich characters were almost always the
villains—corrupt, cold, or just plain evil. Add in church teachings like “It’s
easier for a camel to go through the eye of a needle than for a rich man to
enter heaven” (I grew up Christian) and family comments like “Those rich
people think they’re better than us,” and it’s no wonder I had baggage about
wealth!
And I’m not saying these judgments are wrong—sometimes they’re spoton. But that’s not the point. What matters is that they create an impossible
internal conflict. On one hand, you want financial freedom. On the other,
you believe that having wealth would make you a worse person. It’s like
saying you want to go somewhere but refusing to get in the car that’ll take
you there.
When I first read Think and Grow Rich, I felt so sheepish about it, I
actually hid it behind a different book cover on the subway. I wanted wealth,
but I still felt uncomfortable with how obviously “greedy” the title sounded.
I didn’t want to be seen as that kind of person. One foot was chasing
freedom, the other was stuck in judgment.
Messages like these—whether from media, family, religion, or lived
experience—sink in deep. And whether you’re aware of them or not, they
create an invisible ceiling on how much wealth you’ll allow yourself to
build.
Because why would you become something you secretly believe is bad?
Here’s the hard truth: If you subconsciously judge wealth, you’ll never
allow yourself to build it. Your mind wants to stay consistent with your
beliefs. It won’t let you become something you dislike.
If you subconsciously judge wealth,
you’ll never allow yourself to build it.
Take my client Annika. She grew up around a rich, stingy uncle who
never helped the family, even though he easily could. On top of that, she also
came from a country where corruption was rampant and many of the well-todo prospered while others lived in extreme poverty. She internalized a
simple, powerful belief: “Rich people are greedy.”
And since Annika didn’t want to be greedy, she went out of her way to not
be like them. She gave away time and money she didn’t really have, burned
out at work because of doing too much, and let her tenant live in her
investment property for hundreds below market “because she felt bad.” On
the surface, she was generous. But underneath, her fear of becoming greedy
was sabotaging her from creating financial freedom.
Just like with your Money Identity, you can use the Recognize, Release,
Rewrite process to shift your wealth judgments:
1) Recognize
Start by noticing how you react when you see wealthy people or talk about
money.
What thoughts come up when you see someone sitting in first class?
How do you feel when you hear someone say they make seven figures?
What’s your gut reaction when you see or talk about “rich people”?
Get curious about what comes up for you when you encounter wealth—no
judgment, just awareness. That awareness alone is a powerful first step.
2) Release
Now ask yourself:
Are these judgments actually true, or just something I absorbed?
Can I think of wealthy people who don’t fit these stereotypes?
Would I want someone I love to believe money makes you a worse
person?
This step is about recognizing that your judgments didn’t come from
nowhere—they likely protected you at some point or helped you feel like a
“good person” in the face of lack and struggle. But now, they’re standing
between you and your financial potential.
When you release these judgments, you make space for a new relationship
with wealth.
3) Rewrite
Now that you’ve made space, you get to choose a belief that supports your
desire for wealth and financial freedom.
“Making money means
taking advantage of
others.”
→
“Making money means
providing more value to others.”
“Money causes
problems in
relationships.”
→
“Money creates peace and
ease in relationships.”
“Wanting wealth is
shallow and
materialistic.”
→
“Wanting wealth is responsible
and admirable.”
“Rich people are
selfish.”
→
“Rich people are generous.”
This work is about seeing money clearly for what it is: a neutral tool that
amplifies who you already are. If you’re generous, more money helps you
give more. If you’re a problem-solver, wealth gives you the resources to
solve bigger problems.
Wealth isn’t the enemy. It’s the amplifier.
Start noticing when old beliefs creep in—and consciously choose your
new belief instead. Look for real-world examples of people using wealth in
ethical, powerful, generous ways. After all, you’ll find whatever evidence
you’re looking for!
Wealth isn’t the enemy. It’s the
amplifier.
If you believe money corrupts, you’ll find plenty of stories—shady
politicians, stingy billionaires, greed on full display.
But if you believe money expands your ability to do good, you’ll find
proof of that too: philanthropists funding change, entrepreneurs building
schools, and investors protecting rainforests in the Amazon.
Personally, I choose to focus on the kind of wealth that uplifts everyone it
touches—because that’s the kind of wealth I’m building. You don’t need to
adopt anyone else’s lifestyle, values, or priorities. You get to define what
wealth looks like for you—and use it in full alignment with what matters
most.
But first, you have to stop judging it.
WHAT IF I LOSE PEOPLE?
Let’s talk about a fear that doesn’t get enough airtime: the fear of losing
people if you choose to grow financially.
Sometimes it’s not failure we’re afraid of—it’s success. More specifically,
what success might cost us. If you grew up in a close-knit family or a
community where financial struggle was the norm, then building wealth can
feel like stepping outside the group. Back in the caveman days, breaking
away from the pack used to mean we would die. So we have to stand up to
enormous internal pressure to conform, even if conforming means staying
poor. You don’t want to feel like you’re betraying your people, as if to say
that what you guys have together isn’t good enough for you. It can bring up
a lot of internal conflict: Will my friends still relate to me? Will my family
think I’ve changed? Will they think I’m judging them or that I think I’m
better than them?
But here’s the thing: Outgrowing a dynamic doesn’t mean you don’t love
the people in it. It just means you’re evolving. Wanting more—more
freedom, more ambition, more money—doesn’t make you wrong and it
doesn’t mean you’re leaving people behind. It just means you’re going first.
When I made the decision to pursue financial freedom, I was painfully
aware that I was attempting to “break away from the pack.” Quite frankly,
that’s why I didn’t share about my financial goals with my childhood friends
and my family that much. They had no idea about the actions I was taking—
the books I was devouring, the inner work I was doing to shift my mindset. I
moved in silence. I figured it would be better to let the results speak for
themselves later. And they did.
Now that I’ve created financial freedom, my loved ones all benefit from
that initial decision I made to go first. It’s the best thing I ever did for myself
and for them, because now I have the freedom to show up for them in ways I
couldn’t before. (Remember the story about how I was able to fund my
mom’s knee treatment?) I didn’t leave my loved ones behind . . . I brought
them with me.
Another tangible example is my campervan, which I bought in cash, after
having my first six-figure year in business. It’s not just any campervan—it’s
a luxury house on wheels. And it’s created more memories with the people I
love than I ever could’ve imagined: watching the sunrise at Burning Man,
walking among the giant trees in Sequoia National Park, and stargazing by
the ocean at night. Because let’s be real—who wants to be alone in beautiful
places? That kind of freedom wouldn’t mean anything if I couldn’t share it.
And here’s something else: I’ve made new friends too. New communities,
new rooms, new circles of people who understand where I’m headed
because they’re walking a similar path. I didn’t lose love and connection—I
gained it.
That said, I’d be lying if I said you won’t lose anyone. You probably will.
And some tough love here: You have to be okay with that. When you decide
to walk the path of financial freedom, one of three things will happen with
the people in your life:
1. They’ll come along with you. They’ll grow with you. Your evolution
will inspire them, and they’ll rise in their own time. These people may
surprise you—in the best way.
2. They’ll resist you but stay in your life. They might poke fun, project
their own discomfort, or even criticize your ambition. But underneath
that resistance, they still love you. Family is a perfect example. When
this happens, it doesn’t mean you have to shrink back down. You can
stay connected despite your differences. (See to learn how Belief
Bubbles can help you navigate these relationships with compassion and
clear boundaries.)
3. They’ll resist you and fall away. Your desire for growth shines a light
on how little they’re doing for themselves—and that can be
uncomfortable. So uncomfortable that instead of looking inward, they’d
rather make you wrong and cut you out. And as hard as it is, that’s not
on you. Your job is not to stay small to make other people comfortable.
Your job is to own what you want and go after it unapologetically—and
trust that the right people will stay in your orbit.
Some people will walk the path with you. Some won’t. Either way, your
growth is not an act of betrayal—it’s an act of leadership. The people you
love don’t need you to shrink. They need you to have the courage to expand
—and to show them what’s possible.
STOP WAITING FOR PERMISSION
From a young age, we’re conditioned to ask for permission—for everything.
Permission to speak. Permission to leave. Permission to go to the bathroom.
(Remember in elementary school when we had to raise our hands and ask
just to pee?)
In some cases, sure, this keeps society running smoothly. But when it
comes to chasing your biggest goals? It’s a dream killer. So many of us are
just waiting—waiting for the equivalent of a bathroom pass, some imaginary
green light that says, Yes, you’re allowed to go after what you really want.
Because deep down, we’re conditioned to only want what’s acceptable to
the people around us. To not want too much. To stay in the same lane as
everyone else. And anything more—more money, more success, more
ambition—can start to feel like a betrayal.
Who am I to want more?
Who am I to do this?
And so we wait—for someone, somewhere, to give us permission.
But here’s the truth: Nobody is going to give you permission. There’s no
hall pass. No green light. You have to give it to yourself.
Nobody is going to give you
permission. You have to give it to
yourself.
People who build real wealth don’t just master budgeting and investing.
They heal their relationship with money. They give themselves permission to
have it.
It’s not “Who are you to want more?” It’s “Who are you not to?” Your
future self—and everyone who depends on you—is counting on you to make
this move.
And if you’re still waiting for permission?
Here it is: PERMISSION GRANTED.
YOUR ENVIRONMENT IS EVERYTHING
You’ve done some serious mindset work in this chapter. You’ve rewritten
your Money Identity, loosened deep-seated judgments about wealth, and
started to expand what’s really possible for you financially.
But here’s something most people overlook: New beliefs are fragile at
first. They’re like seedlings—full of potential, but still very delicate. They
need protection. They need the right conditions to take root and grow strong.
Your environment influences your beliefs far more than you think. Which
means if you want your new money mindset to stick, you have to create the
conditions that help it thrive.
Here are three ways to mold your environment with intention:
1) Audit Your Environment
First, become aware of the implicit messages about money you’re absorbing
from your environment. What money beliefs are being reinforced around
you? The most important place to look is your inner circle. Look at the five
people you spend the most time with. Do they have money beliefs that align
with financial freedom or are they destined to hang on to the financial status
quo? Is spending time with them improving or undermining your money
mindset? Don’t judge—simply notice.
The second place to look is in the media you consume—shows, books,
movies, music. For example, many popular TV shows like Succession and
Billions portray wealthy people as ruthless and morally corrupt. Sure, these
shows are entertaining, but they subtly reinforce the idea that wealth requires
sacrificing your ethics and humanity. Can’t imagine that does anything
positive for your money mindset!
Or what about music? “Mo Money Mo Problems” by the Notorious B.I.G.
comes to mind. While it’s a fun song to jam to, listening on repeat about how
wealth and success bring trouble probably isn’t doing your bank account any
favors.
And of course, social media deserves an extra special callout when it
comes to shaping our money mindset. Scrolling through Instagram’s endless
feed of luxury vacation check-ins, designer shopping hauls, and pictureperfect influencer lifestyles might seem motivational, but let’s be real—it
usually just leaves you feeling like crap about your own finances.
Meanwhile, doomscrolling through TikToks about “inflation crushing the
middle class” or those ubiquitous “no one can afford to live anymore” rants
can reinforce scarcity beliefs about money being hard to come by. Either
way, your subconscious is soaking up these messages like a sponge.
So once you’ve done this audit, eliminate or minimize what you can. That
might mean unfollowing certain influencers, skipping shows that glamorize
struggle, or being more mindful of the conversations you engage in. If the
people around you are open to change, great—invite them into your new
perspective. But if they’re not? You don’t have to drag them. Just protect
your energy.
You can’t afford (literally!) to let anything drag down your financial
future.
2) Use Belief Bubbles to Protect Yourself
During my financial freedom journey, there was one particular family
member who always had something to say—usually something negative or
discouraging. It really bothered me, but we were close and I loved her, and
avoiding her completely wasn’t an option. So I came up with a trick to
protect my money mindset and keep my vibe high: Every time she said
things like “I’ll always be poor” or “You just can’t get ahead in this
economy,” I’d think to myself: That may be true for you, but it’s not true for
me.
That’s when I realized: She’s not trying to bring me down—she’s just
living inside her own Belief Bubble. And I don’t have to live there with her.
Picture this: Every person on this planet is walking around inside an
invisible bubble. Inside that bubble is everything they believe to be true
about money, success, and what’s possible for them. Some people live inside
bubbles filled with fear, scarcity, and struggle. Others live inside bubbles
filled with expansion, possibility, and abundance. Everyone on this planet is
living the financial reality of the Belief Bubbles they’ve chosen—whether
consciously or unconsciously.
Now that you’ve started choosing new beliefs, you’re intentionally
revamping your own Belief Bubble into a strong, wealth-positive one. But
family members, close friends, and even your partner might still be living in
completely different Belief Bubbles. If you don’t protect yourself, other
people’s disempowering money beliefs could bring you down.
Since you won’t always be able to distance yourself from people with
limiting beliefs, the next time someone says something like “Money doesn’t
grow on trees” or “People like us can never get ahead,” reinforce your
bubble’s boundary. Visualize yourself standing inside your own Belief
Bubble, filled only with empowering beliefs that you’ve consciously chosen.
See their belief hit the edge of your bubble—and bounce right off. No
need to argue, defend, or convince. Just quietly affirm: That belongs to their
bubble, not mine.
3) Seek Models of Possibility
A Model of Possibility is someone who has already achieved what you want
—like my NYU professor who showed me what a life of financial freedom
could look like: fun, dynamic, and filled with meaningful work. Models of
Possibility aren’t just inspirational—they’re transformative on a deep
psychological level because they provide concrete evidence that your goals
are achievable.
No amount of positive thinking can replace seeing someone actually
living what you aspire to.
After all—how can you be it if you can’t see it?
Spend as much time around people like this as you can: Work for them,
befriend them, study them. The key is to expose yourself to something new
and different, and nowadays with the online world, it’s easier than ever!
Identify a few Models of Possibility to follow online. Read their books, stalk
their social media, watch their videos, listen to their podcasts. Immerse
yourself in their world—whether in person or through their content.
And you can get creative too. When I was just starting out, I didn’t have
any wealthy mentors in my immediate circle. So I printed out photos of my
Models of Possibility (Warren Buffett, Oprah, Kim Kiyosaki, and Marie
Forleo, to name a few) and hung them up in front of my desk. That way, I
could “hang out” with them in my imagination and absorb their ways of
thinking, acting, and being. Call it mindset osmosis. Who says you need
direct access to mentors to start leveling up?
As you surround yourself with these Models of Possibility, pay close
attention to what’s in their Belief Bubbles. Unlike with the naysayers and the
Debbie Downers in your life, this is one time when you want your Belief
Bubble to be permeable. Let their mindset influence yours, allowing their
confidence, abundance mindset, and financial wisdom to filter into your own
thinking. Let their beliefs become your new normal.
Now that you’ve laid the foundation—anchoring into your Intrinsic Why,
rewriting your Money Identity, and surrounding yourself with Models of
Possibility—it’s time to put that mindset into motion. Because mindset alone
doesn’t change your bank account—action does.
In the next chapter, we’re going to take the first concrete step toward
financial freedom: tackling your debt. This is where your financial
transformation truly begins.
CHAPTER TAKEAWAYS
Decide to be rich—don’t wish for it. A firm decision puts everything in
motion.
Your Money Identity creates your financial reality. What you believe
about yourself and money drives your actions—and your outcomes.
Get clear on your Intrinsic Why. When you have a deep, emotionally
resonant reason for wanting financial freedom, nothing can stop you.
You’ll never build wealth if you secretly judge it. Money is not moral
or immoral—it’s a tool that amplifies who you already are.
Protect your mindset like it’s everything—because it is. Your beliefs are
shaped by your environment, so choose it intentionally.
YOUR ADD A ZERO CHECKLIST
Write down your Intrinsic Why. Make sure it’s emotionally resonant
and connected to something bigger than yourself.
Uncover your current Money Identity. Use the Recognize, Release,
Rewrite™ process to shift into a Money Identity that aligns with
wealth.
Audit your environment. Minimize exposure to messages that reinforce
lack, fear, or small thinking—and surround yourself with Models of
Possibility.
FREE TOOLS TO HELP YOU ADD A ZERO
To help your new money mindset stick, I’ve created free Money
Affirmation Wallpapers for you to use on your phone. Head to
addazero.com/toolkit or simply scan the QR code to download.
OceanofPDF.com
CHAPTER 3
TAKE CONTROL OF CREDIT
CARD DEBT
A journey of a thousand miles begins with a single step.
— LAO TZU, TAO TE CHING
I was chilling with my friends on the living room couch on a Saturday
afternoon when my phone rang. It was from one of those shady, spammylooking numbers. I should’ve known better, but I picked up anyway.
“Hello?”
After about 30 seconds of listening to what they had to say, I felt filled
with shame. Citibank was calling about a missed payment and wanted to
know if I’d like to pay then and there.
In a parallel universe, I would’ve graciously apologized for the mistake,
taken care of it, and gone back to hanging out with my friends.
But no. Instead, I mumbled back something vague and hung up as quickly
as possible.
I spent the rest of the afternoon preoccupied, thinking about the $5,000ish credit card balance (among other debts) that I’d been carrying around
since college. As my friends laughed and talked, I wondered if any of them
knew it had been a creditor on the phone.
Stories like mine are the norm, not the exception. Debt—whether it’s
credit cards, student loans, car loans, or all of the above—is a huge problem
for most people. Yet no one talks about debt openly. It’s taboo and shameful.
For one thing, we get zero education about it. Especially about the debt
that’s the most damaging to your financial freedom—credit cards. Think
about it, you learned how to calculate the length of a hypotenuse via the
Pythagorean theorem in school, but did you ever learn how credit card APR
(Annual Percentage Rate) works? Meanwhile, Visa, Mastercard, Discover,
and American Express rake in billions of dollars a year.1
It’s no wonder that:
48 percent of credit card holders carry a balance from month to month,
and many for at least a year.2
Credit card balances are now at $1.21 trillion outstanding.3
The average balance is more than $5,000, and the average amount
added to our credit cards each month is more than $1,500.4
Almost half of people say they used credit cards for essentials, not just
luxuries, and almost half have missed a minimum payment within the
last five years.5
Almost half have carried credit card debt for more than five years.6
So if you’ve ever wondered how so-and-so is affording their vacation in
Europe (or even just affording their life in general), from the look of these
stats, it’s probably with credit cards.
But here’s the good news: Debt is a solvable problem, not a chronic life
condition that you need to resign yourself to. In this chapter, we’ll tackle
how to take control of all your debt and break free from it.
CREDIT CARD DEBT: A CODE-RED EMERGENCY
If someone charged you $6.85 per day just for breathing, would you like
that? Well, that’s exactly what’s happening to you if you’re carrying a credit
card balance! That’s what your interest charges would amount to on a
$10,000 balance at 25 percent APR.
The danger with credit cards is that the real cost is hidden by minimum
payments. You think, “Look! I can swipe my card for this $1,000 iPhone and
just make $30 payments a month—how convenient!” But here’s the truth:
That phone will actually end up costing you $2,820 and take you nearly
eight years to pay off! Would you have bought the same iPhone if the price
tag said $2,820 instead of $1,000? Probably not. But that’s exactly what
you’re doing when you put something on a credit card and only make
minimum payments.
Let’s look at exactly how credit card interest works. When you carry a
balance on your credit card, interest isn’t just added once—it compounds
daily. That means you’re not only paying interest on the money you
borrowed, but you’re also paying interest on the interest that’s already
accumulated. It’s a vicious cycle that keeps snowballing the longer you carry
a balance.
And credit card interest is not cheap. Most cards charge between 20 and
30 percent APR, and that interest racks up quickly. What seems like a
manageable minimum payment can keep you stuck in debt for decades
without you even realizing it.
Here are some examples that show you how long it would take to get out
of debt if you only made the minimum payments on your cards:
Credit Card
Balance
How Long It Will Take to Pay Off the Balance
Total Amount
of Interest You
Will Pay
$500
50 months (more than 4 years)
$235.91
$1,000
127 months (more than 10½ years)
$1,402.48
$2,500
218 months (more than 18 years)
$4,527.51
$10,000
342 months (28½ years)
$14,423.16
$25,000
441 months (almost 37 years)
$45,193.00
*Assumes 25 percent APR and interest + 2 percent minimum payment.
Remember that Justin Timberlake song “Cry Me a River”? After seeing
the eye-watering amounts of interest you pay when you carry a credit card
balance, I hope you’ll think twice about charging with a “buy now, pay later”
mindset. When you pay credit card interest, you might as well be flushing
money down the toilet—money that could be going toward adding a zero to
your net worth instead. That’s why taking control of credit card debt is the
crucial first step on your financial journey. You can’t get ahead paying 25
percent.
Now, if you’ve already racked up credit card debt, don’t worry. I’ve
helped thousands of people pay off credit card debt, so I’ve got you!
HOW TO PAY OFF DEBT THE SMART WAY
When it comes to paying off debt, most people fall into one of two camps:
They either frantically attack everything at once, throwing money at their
credit cards, student loans, and car payments, or they do what I used to do—
stick their head in the sand and avoid doing anything about it at all.
Neither approach works. The first leads to overwhelm and going nowhere.
The second keeps you stuck in a prison of your own making.
I know because I’ve been there. When I was over $100,000 in debt, I
spent years avoiding it, too overwhelmed by it to look at it. But everything
changed when I made one crucial decision: to be bigger than my debt. Not
just to deal with it, but to completely dominate it. To look at that six-figure
number and say, “You don’t scare me anymore.”
That decision, combined with a strategic step-by-step approach, is how I
eventually became debt-free. And that’s exactly what I’m going to share with
you now. No more scattershot efforts, no more hiding from your statements.
Instead, we’re going to tackle this with a clear plan.
Step 1: Stop Using Your Credit Cards
It might seem obvious, but if you find yourself in a hole, you have to first
stop digging. That’s why until your balances are fully paid off, you’re going
to stop using your credit cards cold turkey and use only your debit card for
purchases.
If you find yourself in a hole, you have
to first stop digging.
When I was paying off my credit card debt (and yes, I did finally pay it off
and stop getting those embarrassing phone calls), I’d proudly pull out my
bright red Bank of America debit card when the dinner check came around.
Meanwhile, everyone clanged their platinum, gold, and black metal cards
onto the table. Sure, I didn’t look like one of the cool kids, but you know
what? At least I was on my way to becoming debt-free. That’s something
only 23 percent of Americans can say for themselves.7
I know what you’re thinking: But, Rose, I need my credit card! So let’s
talk through the biggest concerns people have about temporarily ditching
plastic.
But I like putting things on my credit card because of the rewards! A 2001
MIT study found that students were willing to pay up to 100 percent more
for tickets to sporting events when using a credit card instead of cash.8 The
sneaky thing about credit cards is that when you can enjoy a purchase now
while avoiding the pain of paying in cash, you tend to spend more. You
might be earning 2 percent cash back, but what good is that if you’re
spending 50 percent more than you otherwise would? We’ll talk about smart
ways to maximize credit card rewards in Chapter 6, but for now, let’s focus
on breaking free from credit card debt.
But credit cards are safer than debit cards! You’re right that credit cards
typically offer more fraud protection than debit cards. But there are ways to
make debit card transactions just as safe. Use third-party payment systems
like Apple Pay, Google Pay, or PayPal whenever possible—they add an extra
layer of security. You can also keep just a small amount of money in the
checking account linked to your debit card. That way, if it does get
compromised, your potential loss is limited.
But I need my credit card to build my credit score! I get it—your credit
score is important. But guess what? You don’t need to carry a credit card
balance (or even actively use your credit cards) to maintain or build your
credit. Your score is primarily based on five factors, and the most important
one—payment history—accounts for 35 percent of your score. That means
as long as you’re making your payments on time, you’re already doing the
most important thing for your credit.
Another huge factor? Credit utilization, which measures how much of
your available credit you’re using. If you’re maxing out your cards, your
score actually takes a hit. Keeping your credit card balance at zero does
more for your score than carrying debt does.
And if you’re worried about your credit history disappearing, don’t be.
Even if you’re not using your cards for a while, your accounts will stay open
and continue contributing to your credit age (as long as you don’t close
them).
So no, you don’t need to stay in credit card debt to have good credit. And
let’s be honest—having a great credit score doesn’t mean much if you’re
drowning in interest payments. Let’s focus on getting out of credit card debt
first, and then we can talk about credit scores.
Remember, this is just temporary. I’m not asking you to quit plastic
forever. I’m just asking you to take a small break while you get out of credit
card debt.
Personally, when I was detoxing from my credit addiction, I cut my card
in half and threw it in the trash. Heck, freeze your credit card in a block of
ice if you have to! Months later, when I had paid off my balance once and
for all (yay!) and was ready to use it again, I called the bank and had them
send me a replacement card.
P.S. I’ve never met anyone who has actually frozen their credit cards in a
block of ice—but if you do, please take a photo and tag me at @itsrosehan
because I will totally get a kick out of it!
Step 2: Save $2,000 in an HYSA
After you stop using your credit cards, you might be surprised that the
second order of business is not to start paying off your balances at all; it’s to
save $2,000.
Why? Because emergency expenses are the leading cause of credit card
debt. It’s not lattes, Uber Eats, or online shopping. It’s the urgent-care visit
that’s not covered by insurance, the blown car engine, or the emergency vet
expense that throws a wrench into your finances. From there, with sky-high
APRs and maybe another emergency or job loss, you can see how credit card
debt spirals out of control.
That’s why to get off (and stay off) the credit card treadmill, you need to
get together a li’l financial cushion first. Why $2,000, you ask? According to
a survey by PYMNTS, $1,400 covers most unexpected emergencies.9 So
we’re rounding up to $2,000 to give you extra breathing room. Later on, in
Chapter 5, you’ll build a full-size emergency fund that will cover you for six
months’ worth of living expenses. But for now, I want you to start with a
$2,000 baby emergency fund.
This starter emergency fund does three powerful things:
1. Covers you for most emergencies, protecting you from falling back into
credit card debt
2. Gives you a quick psychological boost to build momentum, since it’s a
relatively easy amount to save up
3. Raises your “financial setpoint”—the baseline amount of money you’re
used to having
Speaking of financial setpoint, you know how we all have a dollar amount
that feels “normal” in our accounts? There was a time when I never had
more than $1,900 to my name at any given time. That’s because my
paycheck was $1,900, and because I lived paycheck to paycheck, I rarely
ever had more than that (maybeeee $2,200 on a good day). My financial
setpoint was $1,900, as that’s what felt normal to me. If I could talk to my
younger self, I’d say, “Oh, honey, can we raise your standards for what feels
normal?”
This starter emergency fund will begin the process of raising your
baseline. Little by little, you’ll raise your financial setpoint to $10,000, then
$100,000, and beyond. But you need to walk before you can run, and it starts
with $2,000.
Now, what if you have an emergency that depletes your budding fund? No
biggie! If that happens, your fund did exactly what it was supposed to do—
buffer you from debt. Just make sure to top it up again as quickly as you can.
Think of this $2,000 as part of your permanent wealth—you will not allow
yourself to go below this baseline.
Put all your focus on this. Make it your top priority. Even if you have
credit card debt, make only the minimum payments until you get together
this $2,000 starter emergency fund.
WHAT’S AN HYSA?
Let me introduce you to your new favorite thing, the high-yield savings account (HYSA)—a
special type of bank account that pays you higher-than-usual interest on your money. You’ll want
to open one of these right away as you build your $2,000 starter emergency fund. And later on
when you build your full emergency fund, you can either open a second HYSA or just keep
adding to the same HYSA where you saved $2,000.
HYSAs are usually offered by online-only banks, which have lower overhead costs compared
to brick-and-mortar banks. As a result, they can pass on the savings to you in the form of higher
interest rates, and many of them don’t require a minimum deposit to get started. For example, as
of this writing, Chase offers just 0.01 percent APY (annual percentage yield) on its standard
savings account. But Capital One and Ally are offering around 3.70 percent APY on their highyield savings accounts. That means if you parked $2,000 in a regular Chase account, you’d earn a
whopping $0.20 in interest over a year. But in an HYSA earning 3.70 percent, you’d make around
$74—without lifting a finger. That’s $73.80 more, just for picking a smarter place to park your
cash.
It may not sound like much—but that’s free money for doing absolutely nothing. And when
you’ve added a zero to that balance? That $74 becomes $740. That’s the power of letting your
money work for you.
Although rates vary a lot (sometimes they’re high, sometimes they’re not—it depends on the
Fed), if you can squeeze a little more interest from your money than a regular ol’ bank account,
why not?
Another reason why I want you to keep your emergency fund in a high-yield savings account
is that it’ll be separate from your regular checking account. That way, you won’t be tempted to
tap into it for nonemergencies. Out of sight and out of mind! Fun fact: I haven’t logged in to look
at my emergency fund for so long that I don’t even remember the password. I just know that if I
ever need the money, it’ll be there and it will have grown with interest. That’s a good feeling!
FREE TOOLS TO HELP YOU ADD A ZERO
Visit addazero.com/toolkit for the latest list of my top-recommended
high-yield savings accounts.
Step 3: Pay Off Your Credit Cards, Starting with the
Smallest Balance
Once you have your $2,000 starter emergency fund, paying down your credit
cards comes next. But don’t just throw money at your cards randomly. We’re
doing this the smart and strategic way, remember? When you’re tackling
credit card debt, the best way to do it is to knock it out one card at a time,
starting with the card with the smallest balance.
Why start with the smallest balance first and not with the balance with the
highest interest rate? After all, paying off the highest-interest-rate card first
(known as the Debt Avalanche method) would make the most mathematical
sense. Pay off the highest rate first, pay less overall in interest, and get out of
debt faster, right?
But here’s the thing: It’s not always about crunching the numbers. In fact,
if it were about crunching the numbers, you wouldn’t have gotten into credit
card debt in the first place! (Remember those sky-high APRs?) Your credit
card debt probably got accumulated emotionally, so it needs to be dealt with
emotionally.
When I was paying off my own debt, I discovered something powerful:
Getting quick early wins was like rocket fuel for my motivation. You get a
much bigger dopamine rush from knocking out one entire piece of debt (no
matter how small) than from slowly chipping away at another. That’s why
I’m a huge believer in what’s called the Debt Snowball method—where you
tackle your smallest balance first while making minimum payments on
everything else.
Here’s how it works:
1. List out all your credit card balances from smallest to largest.
2. Make minimum payments on all cards except the smallest.
3. Put every extra dollar you can toward that smallest balance.
4. Once that card is paid off, roll all that money into attacking your next
smallest balance.
5. Repeat until every card is paid off.
HOW MUCH EXTRA SHOULD YOU PUT TOWARD
CREDIT CARD DEBT?
Not sure how much to put toward your debt? The answer: as much as possible. Look at your
budget (see Chapter 5 to learn how to create a budget) and figure out the maximum amount you
can throw at your smallest balance while still covering essentials. Every extra dollar makes a
difference, and the faster you knock out that first balance, the faster you gain momentum!
The beauty of the Debt Snowball method is that it gets easier as you go.
As you knock out card after card, your payments will cover more and more
ground, like a snowball rolling down a hill. And even though your last card
has the biggest balance, you’ll pay it off faster than the previous ones
because you’re no longer diluting your payments across multiple cards.
Every zero balance becomes proof that you’re making real progress. It’s
like getting a taste of what debt freedom feels like, and it will motivate you
like nothing else to keep going.
Every zero balance becomes proof
that you’re making real progress.
If you still insist on paying off the highest-interest-rate card first, I’ll leave
you with this: a study from the Kellogg School of Management at
Northwestern University found that consumers who tackled their smallest
balances first were more likely to eliminate their overall debt—even if that
approach doesn’t make the most mathematical sense.10
Bottom line: Forget the logic and just stick with what actually works. Pay
off the card with the smallest balance first.
What About Other Debts?
By now you might be wondering: What about my student loans? My car
note? My mortgage?
Here’s something that might surprise you: Paying off your other debts
shouldn’t necessarily be your next priority after tackling credit cards. Let me
show you why by introducing something I call the Financial Waterfall—a
proven sequence that shows the exact order to tackle all your financial goals.
Just like water fills one pool before flowing to the next, I want you to
focus on fully funding one goal before moving to the next. Right now,
you’re working on Tier 1—that $2,000 starter emergency fund. Once that’s
done, you’ll move to Tier 2—paying off all credit card debt.
Don’t worry about the rest of the Financial Waterfall yet—we’ll unveil the
rest of the tiers as you’re ready for them. Just know that you don’t need to
pay off student loans, car notes, and mortgages (debts with single-digit
interest) until much later in the Financial Waterfall.
Simply continue making the required minimum payments for now. These
debts are much lower priority than credit card debt because:
1. Their interest rates are much lower (there’s a big difference between 6
percent and 20 percent!)
2. The interest might be tax-deductible (in the case of student loans and
mortgages)
3. Unlike credit cards, these loans have a fixed end date—you know
exactly when they’ll be paid off if you stick to the schedule
As a rule of thumb, if the interest rate is in the single digits, it can wait.
Think of it like triaging in an emergency room—you take care of the most
critical cases first. Credit card debt is your financial emergency. The other
debts? They can wait their turn.
Of course, paying off all debt will certainly be part of your journey to
financial freedom, but after credit card debt, other financial goals like saving
and investing need to come first.
For now, stay laser-focused on:
1. Building that $2,000 starter emergency fund
2. Paying off your credit cards using the Debt Snowball method
3. Making minimum payments on everything else
There’s nothing better you can do with your extra cash than saving
yourself a 20 to 25 percent APR. (Even investing in the stock market would
only earn you 8 to 10 percent on average!) By tackling one goal at a time,
you’ll maintain momentum and see faster progress. That motivation is
crucial—you literally can’t afford to lose steam at this point!
STAYING MOTIVATED
Most personal finance advice fails us miserably at this one thing:
acknowledging that we’re humans, not robots.
If you’ve tried to get out of debt before but failed to stick with it, my
guess is that it was because of one of two reasons:
1. You felt too deprived (“I’ve done enough, now I deserve to treat
myself!”)
2. You lost motivation (“I’ll never get out of debt anyway, why bother
trying anymore?”)
I hinted at this earlier when I recommended paying off the card with the
smallest balance first. Taking control of your debt isn’t just about following
a bunch of logical-sounding steps. It’s also about staying motivated and
taking care of your emotional state. After all, if becoming debt-free were just
about math, we’d all be debt-free by now!
Think of your debt-free journey like running a marathon. You’re going to
be in it for a while, so you need to pace yourself. No runner goes full steam
ahead for all 26.2 miles—they’d burn out long before the finish line.
Your journey works the same way. A sustainable pace means enjoying life
while paying off debt. Want to grab dinner with friends or take that weekend
trip? Do it! Just plan for it and pay cash. Constant deprivation and guilttripping every time you spend leads to burnout—and eventually, giving up
altogether.
The key to success isn’t white-knuckling your way through deprivation—
it’s making the journey sustainable and (dare I say it?) even fun. Yes, fun!
Through hearing from hundreds of subscribers, I’ve discovered that the ones
who succeed aren’t necessarily those with the highest incomes or the
strictest budgets. They’re the ones who turn debt payoff into a game they
actually want to play.
Let me share two powerful strategies that will help you gamify your debt
payoff journey—and stay motivated all the way to that beautiful zero
balance.
Stay Motivated Strategy #1: Debt Payoff Sprints
Tired of slow, steady progress? That’s where debt payoff sprints come in—
short bursts of intense focus designed to make a big dent in your debt fast.
Think of a sprint as a 10-day challenge: just you, your debt, and your most
resourceful, scrappy self. Unlike your regular, steady pace (which is about
sustainability), a sprint is about intensity—going all-in for a short period to
make serious progress.
This “short burst” structure works especially well because most of us can
do anything for 10 days. It’s enough time to see real results—but not so long
that you burn out. Plus, a sprint gives you a sense of momentum and proof
that, yes, you can move the needle on your debt quickly.
Here’s what a sprint might look like:
Find quick ways to hustle up some extra cash. For example, sell stuff
on OfferUp or Facebook Marketplace (c’mon, I know you have an old
cell phone in a drawer or some fancy kitchen appliance you’ve only
used once). Offer to tutor or babysit for your neighbors’ kids. Get on an
app to make deliveries or walk dogs. Anything to quickly bring in
money to throw at your debt.
Cut out all nonessential expenses. I know that cutting off things like
eating out, coffee, and massages doesn’t sound like fun, but the beauty
of a sprint is that it’s a short-term burst of effort, not a long-term
lifestyle change. You can do almost anything if it’s just for 10 days.
The idea is to (1) make a serious dent in your debt, and (2) prove to
yourself that you have the power to change your financial situation. Don’t
underestimate what 10 days of intense focus can do!
After each debt payoff sprint, don’t forget to celebrate your progress. This
is important! Look back at all the debt you’ve knocked out and do something
to commemorate your badassery. It doesn’t have to cost money, but it’s
important to reward yourself and feel good about what you’ve done!
You could take a day off from work, bake yourself some cookies, or treat
yourself to a full-on Netflix and chill weekend. It can be anything, as long as
it doesn’t involve splurging on your credit card.
You don’t have to always associate debt with feelings of heaviness and
negativity. The debt has to be dealt with regardless, so might as well make it
not suck, amirite? You can allow yourself to enjoy the journey. Make that
choice now.
You can allow yourself to enjoy the
journey.
From there, you can ease back into your sustainable pace. Then when
you’re up for it again, do another sprint. The point is to make this sustainable
so that you don’t binge-spend and end up right back in debt. This
combination of steady progress (the marathon) with occasional intense
pushes (sprints) keeps you moving forward without burning out.
And when you do your sprint or pay off any of your cards, tag me on
social @itsrosehan with the amount of debt you’ve paid off so that I can
celebrate you!
Stay Motivated Strategy #2: Debt Payoff Coloring Sheets
Let’s be honest—watching numbers slowly tick down in a spreadsheet isn’t
exactly thrilling. Enter the debt payoff coloring sheet: a surprisingly
effective tool that turns abstract numbers into visible progress.
Here’s how it works: Each coloring sheet has 100 squares. Each square
represents a portion (1/100th) of your credit card balance. As you pay off
chunks of debt, you get to color in the corresponding sections. Start by
writing your total balance at the top, then calculate how much each square
represents. For a $20,000 balance, each square would represent $200. For a
$5,000 balance, each square would represent $50. Breaking up a large sum
into these smaller, bite-size chunks makes your debt feel much more
manageable. You can use one coloring sheet per credit card, or just use one
coloring sheet for all your credit card debt—up to you! Later on, when you
move further down the Financial Waterfall and begin tackling other debt like
student loans and car loans, you can use these coloring sheets for those too.
The magic happens when you start coloring. There’s something incredibly
satisfying about physically marking your progress. Your brain releases
dopamine—the “reward chemical”—every time you get to fill in another
section. Before you know it, you’re actually looking forward to making your
next debt payment just so you can color in more of your sheet. Even if you
think it sounds childish, don’t knock it ’til you try it!
FREE TOOLS TO HELP YOU ADD A ZERO
Download your free debt coloring sheets at addazero.com/toolkit. Put
them somewhere visible—on your fridge, your bathroom mirror, or your
desk. Let them serve as a daily reminder of your progress and motivation
to keep going!
Every time you complete a coloring sheet, or reach any other debt-payoff
milestone, once again, don’t forget to celebrate it! Take a victory photo, have
a dance party in your living room, or treat yourself to something special
(paid for in cash, of course). And whenever you hit these milestones, don’t
forget to share your wins with me @itsrosehan so that I can celebrate with
you!
You are bigger than your debt. Every journey begins with a single step, and
you’ve already taken that step by reading this far. You have the tools, you
have the knowledge, and most importantly, you have the power within you
to make this happen. Your future self is cheering you on, ready to embrace a
life free from debt. And let me tell you, living life debt-free is pretty damn
awesome. So I look forward to seeing you on the other side when you get
there.
It’s time to take massive action—you’ve got this!
CHAPTER TAKEAWAYS
You are bigger than your debt. No matter how deep in debt you are, you
have the power to take control and become debt-free.
To get out of a hole, first stop digging. Temporarily stop using credit
cards and build a $2,000 starter emergency fund to get out of the
revolving debt trap.
Staying motivated is the key to becoming debt-free. Use the Debt
Snowball method for quick early wins, and gamify the debt payoff
journey with sprints and debt coloring sheets.
YOUR ADD A ZERO CHECKLIST
Build your $2,000 starter emergency fund in a high-yield savings
account.
Temporarily stop using your credit cards until your balances are paid
off.
Start directing all extra payments toward the card with the smallest
balance.
Schedule your first sprint into the calendar, and brainstorm ideas to
come up with quick, extra cash.
Plan your debt-free celebrations for specific milestones.
FREE TOOLS TO HELP YOU ADD A ZERO
Track your progress with free debt payoff coloring sheets at
addazero.com/toolkit, or scan the QR code to access!
OceanofPDF.com
CHAPTER 4
DO A SPENDING DEEP DIVE
The truth will set you free, but first it will piss you off.
— GLORIA STEINEM
During my Wall Street days, my commute home involved walking to Grand
Central Station every day. Before catching the subway to the Upper East
Side, I’d often find myself wandering into the shiny retail stores along the
way. Those window displays really know how to draw you in! Tired after a
long day of work and with my willpower low, I’d blow $200 on clothes,
just like that. This happened several times a month.
On and on it went, spending on autopilot. The only time I ever checked
my bank account was every other Friday, just to make sure payday had
landed. Otherwise, I preferred not to know what was going on in there.
But everything changed the day I finally made peace with my spending
habits. I realized that my spending didn’t have to mean anything about my
worth as a person. In fact, I was the one loading it with meaning—that I
was bad with money, that I sucked at life, that something was wrong with
me.
There’s immense power in facing the truth. When I finally looked at my
spending, it wasn’t scary—it was empowering. Just like tracking what you
eat or counting your daily steps, it simply gave me information and realtime feedback about whether I was on track with my goals.
More importantly, it showed me exactly what I needed to change in order
to reach financial freedom faster. After all, if you spend everything you
make, what will you use to pay off debt, save, and invest? You can’t get to
$0—let alone to $1 million—if you’re unconsciously leaking money
everywhere!
That’s why in this chapter, I’m going to take you through a process called
the Spending Deep Dive—a complete review of where your money has
gone over the last three months. This will finally answer the question that
haunts so many of us: “Where does all my money go?”
I’ll also help you understand the psychology behind your spending
patterns. Because if you never get to the bottom of why you spend what you
spend, you’ll never feel totally in control. Often, we feel like our money
controls us, when really, we are always in control of our money—if we
choose to be.
I know you’ll be tempted to skip the Spending Deep Dive. After all, it’s
all too easy to let yet another month go by without looking at why your
credit card statement is always higher than you expect. But you know
what’s really hard?
Living paycheck to paycheck.
Feeling stressed, guilty, and out of control with your money.
Never having the means to live the life you want.
Plus, the Spending Deep Dive is an essential first step before creating a
realistic budget, which we’ll tackle in the next chapter.
So no more keeping your head in the sand! Let’s shine a light on your
spending and put yourself squarely in the driver’s seat of your life, where
you belong.
YOUR SPENDING DEEP DIVE: A TWO-PART PROCESS
Ready to get real about your spending? The Spending Deep Dive consists of
two equally important parts. First, we’ll use a simple highlighter exercise to
identify the emotional truth about your spending. Then we’ll dive into
reflection questions that will help you understand the psychology behind
your spending patterns and how to make lasting changes.
You’ll need:
One hour of uninterrupted time
Your last three months of bank and credit card statements
Two highlighters (green and orange)
A journal or notebook
An open mind and some self-compassion
Favorite drink and snack (make this comfortable!)
Part 1: Highlighter Vibe Check
First, we’re going to start with a “vibe check” of your spending—what felt
worth it and what didn’t. Don’t worry—if you’re afraid of what you’ll find,
I want to remind you that we’re not here to judge. Think of yourself as a
curious scientist digging for insights. What fascinating patterns will you
discover?
Step 1: Gather Your Statements
Pull up your bank and credit card statements from the last three months.
Download them and print them out. Yes, I recommend printing them out
and doing this manually! Call me an old-fashioned millennial, but
sometimes I daydream about the good old days of analog (remember having
to rewind VHS tapes before returning them to Blockbuster? No? Just me
showing my age here . . .). There’s something about marking your spending
with your hands that gives it more meaning and helps you get more out of
it. Our goal is to get connected with our money, after all! Of course, if you
swear by digital, then just look at your statements on your screen. Include
everything: checking account, credit cards, Venmo, PayPal—anywhere
money moves in and out.
Step 2: Do the Vibe Check
Now for the fun part! Grab your highlighters—green and orange. (Green for
“go, this was worth it” and orange for “meh, not worth it.”) If you don’t
have those exact colors, just choose two contrasting ones and keep your
color meanings consistent.
Before we dive in, let’s be clear about what we’re highlighting and what
we’re not. Skip over your essential expenses like rent, utilities, groceries,
minimum debt payments, toothpaste, etc. Those are necessities—the
nonnegotiables you need to survive and maintain yourself. We don’t need to
vibe check your electricity bill or your student loan payment! This exercise
is all about your discretionary spending—the stuff you choose to spend
money on beyond the basics.
Go through your transactions one by one and highlight them based on
your gut reaction:
GREEN: Spending that felt intentional, aligned with your values, and
totally worth it. These are the expenses that make you think, “Hell
yeah, I’d do that again!” For example:
– The $7 daily matcha latte that’s your little piece of joy in a hectic
workday
– That gorgeous coat you splurged on for $500 that you wear
everywhere
– The $200 you spontaneously donated to your favorite elephant
sanctuary
– The $500 festival tickets that gave you memories for a lifetime
– That $80 airport taxi ride you treated yourself to because you had
tons of luggage
– The $150 monthly massages that keep your back pain in check
ORANGE: Spending that felt impulsive, wasteful, or gives you that
“ugh” feeling in your stomach. You know the ones:
– That $80 subscription you never got around to canceling
– The $300 dress that still has the tags on
– That fancy $20 salad place you keep ordering from even though it’s
always wilted
– The $75 parking ticket because you forgot to read the sign
– The $90 unplanned grocery store visit that resulted in a lot of
random snacks and gourmet ingredients
– The $1,200 you spent on a destination wedding you felt obligated to
attend
– The $150 gym membership you’re too busy to use
– Countless $15 Uber Eats delivery fees for food that arrives cold
Don’t overthink this! Your first reaction is usually the right one. If you
have to pause and think too hard about whether something was worth it, it
probably wasn’t. Mark it orange and move on.
Of course, some transactions might be harder to categorize than others.
That fancy dinner might have been overpriced, but the conversation with
your best friend was priceless. For these mixed-feeling purchases, I want
you to focus on the overall vibe. Did it ultimately feel worth it, even if it
wasn’t perfect? Green. Did it leave you with a nagging feeling of regret,
even if there were some good aspects? Orange. Don’t overthink it.
HOW MANY HOURS DID THAT COST YOU?
If you’re really unsure whether a purchase was worth it or not, here’s a helpful tool to get you
clear: Convert the cost into hours of your life. This powerful way to assess spending comes from
Vicki Robin’s Your Money or Your Life. She teaches that every purchase isn’t just about money
—it’s about exchanging your life energy for things.
To get a quick estimate, divide your monthly take-home pay by the hours you work to find
your real hourly wage. Then calculate how many hours a purchase really costs you.
If you make $30 per hour after taxes:
A $90 dinner out = 3 hours of work
A $300 shopping spree = 10 hours of work
A $60 boutique fitness class = 2 hours of work
Suddenly a “small” expense might not seem so small when you see how much of your life it
took to earn. This isn’t meant to make you feel guilty—it’s just another way to assess value. The
question becomes: Was it worth those hours of your life?
For a deeper dive into this concept, check out Your Money or Your Life by Vicki Robin—it’s a
life-changing read!
As you do this vibe check, keep in mind this isn’t about good or bad
spending. It’s about understanding the spending that actually adds value to
your life versus the spending that’s just draining your bank account without
adding much joy or meaning. And that can be different for everyone! To
one person, their coffee shop visits could be orange because they’re just out
of habit rather than any sense of true enjoyment, while your coffee shop
visits are green because that’s where you do your best work and catch up
with friends. There’s no universal right or wrong here—it’s about what feels
right and worth it to you.
It’s about what feels right and worth it
to you.
Once you’re done, take in the overall view—is there more green or
orange? Don’t judge, just notice. After all, that kind of data is very useful to
know!
Now take a deep breath, because you’re doing great!
Part 2: Deep Dive Reflection
Now that you’ve done your highlighter vibe check, it’s time to dig a little
deeper and reflect on what those orange and green highlights revealed.
We’re doing the equivalent of grabbing a microscope and getting up close
and personal with your spending habits, so cozy up with a journal and your
favorite drink or snack. Then answer the following three reflection
questions.
Reflection #1: What patterns can you spot in your spending?
Try to notice any patterns in when, where, and with whom you tend to make
your orange-highlighted purchases. Look for:
Time patterns: Do you spend more on certain days, times, or seasons?
People patterns: Do you spend differently with certain friends or
family members?
Location patterns: Are there certain stores or websites where you
consistently overspend?
You’re not trying to find every single pattern—just the ones that jump out
at you. As you review your highlighted statements, a few obvious patterns
will emerge. For example, one of my clients noticed that most of her
orange-highlighted purchases happened on paydays—she’d feel flush with
cash and treat herself to a shopping spree, only to feel strapped for money
by month’s end.
I discovered my own spending patterns when I looked closely at who I
was with during purchases. I used to spend a lot with a friend who loved
going out to bougie bars and restaurants. She’d text me about new spots we
“had to try,” which inevitably led to $100+ dinner bills that weren’t really in
my budget. Meanwhile, when I hung out with a different friend, we’d spend
Saturday mornings on free trails, catching up over a hike and a nice view.
Same goal of connecting with friends, very different impact on my
spending!
Location patterns can be especially revealing. One of my subscribers
noticed that every time she “quickly stopped by” the Whole Foods on her
way home from work to get stuff for dinner, she’d load up on overpriced
snacks and gourmet ingredients. The location can be digital as well—
personally, a lot of my orange highlights would come from Amazon!
Don’t judge these patterns—just notice them. What story do your
spending patterns tell?
Reflection #2: Does your spending reflect your values?
Now that you’ve identified your spending patterns, let’s talk about whether
your money is going toward what truly matters to you. What do you care
about most in life? Is it travel, personal growth, generosity, family, health,
creativity, or something else? If a random stranger looked at your
highlighted statements, would they be able to tell what you value?
Here’s what I mean. Let’s say you claim travel is super important to you,
yet your statements show most of your discretionary spending goes to
shopping and takeout. Or maybe you say you want to make art and learn
and grow, but a big chunk of your spending goes toward mindless
entertainment.
Look, there’s nothing wrong with shopping, takeout, or Netflix! But if
your spending doesn’t match what you say you value . . . well, money talks.
I learned this lesson myself. I used to say health and wellness were
important to me, but I was spending hundreds on shopping while saying I
couldn’t afford massages. Once I got honest with myself, I realized my
spending was completely misaligned with who I wanted to be.
There’s no such thing as good or bad spending. There’s only spending
that aligns with your values and spending that doesn’t. Spending that helps
you become the person you most want to be versus spending that keeps you
stuck where you are. The more your spending aligns with your values, the
more satisfaction you’ll get from every dollar.
There’s only spending that aligns
with your values and spending that
doesn’t.
To help you think about this, here are my top-three values and how they
show up in my spending:
1. Health and wellness (organic groceries, acupuncture, massages, yoga
classes)
2. Fun and adventure (yes, those music festivals!)
3. Being generous (gifts for loved ones, donations to causes I care about)
If you look at my bank statements, these three categories are where most
of my discretionary money goes. You won’t find many other major
discretionary expenses because that would take away from what I can spend
on my top three. And you know what? I don’t feel deprived at all. When
your spending aligns with your values, it just feels right.
But sometimes there’s a gap between our values and our actual spending.
And that’s where our next reflection comes in—understanding what pulls us
off track.
Reflection #3: What are your spending triggers?
Spending triggers are situations, emotions, or external factors that prompt
you to spend money unintentionally or impulsively. This is where we get to
the root of why those orange-highlighted expenses happened in the first
place.
But don’t worry—we’re going to approach this with playfulness and
curiosity! Picture yourself having afternoon tea with the GEICO gecko (yes,
the one from the commercials—he’s actually a fantastic financial therapist
on the side). He’s wearing tiny reading glasses, sipping Earl Grey from a
miniature teacup, looking through your highlighted statements. In his
charming British accent, he says, “Oh, darling, do tell me about this fancy
air fryer purchase at 2 A.M. last Tuesday!”
You might reply, “Well, I was feeling really stressed about work,
scrolling through TikTok, and suddenly all these amazing air fryer recipes
popped up.”
The gecko nods sympathetically, jotting down “stress shopping” and
“social media influence” in his tiny notebook.
Take a moment right now to look through your orange-highlighted
transactions and pinpoint as many of your spending triggers as you can.
COMMON SPENDING TRIGGERS
Emotional Spending
Stress shopping (Buying yet another houseplant after a tough day at work, even though your
windowsill is already full)
Retail therapy when feeling down (Adding items to your cart at 2 A.M. because you can’t
sleep and feel lonely)
Boredom buying (Chilling on the couch while scrolling through your favorite shopping app
in search of a dopamine hit)
Shopping to feel in control (Buying an expensive skincare routine when your life feels
chaotic)
External Pressure
People-pleasing (Agreeing to split the bill evenly at a fancy restaurant, even though you only
ordered a salad and water, because you don’t want to be seen as cheap or difficult)
FOMO (Buying tickets to a music festival that all your friends are going to even though
you’re not really into the lineup)
Social comparison (Getting the latest iPhone just because all your co-workers have one)
Social media influence (Buying that viral Stanley cup even though you already have several
perfectly good water bottles)
Lack of Planning
Poor planning (Forgetting the train doesn’t run on Sunday mornings, so you end up taking a
$60 taxi)
Subscription neglect (Forgetting to cancel that free trial that just auto-renewed for an entire
year)
Rushed decisions (Buying yet another flimsy umbrella from the corner store because you
didn’t check the weather forecast)
Convenience costs (Ordering takeout three nights in a row because you didn’t grocery shop)
Marketing Manipulation
Flash-sale pressure (Getting a “24-hour flash sale” e-mail from your favorite clothing store
and buying something you don’t need because “the deal is too good to pass up”)
Scarcity tactics (Buying another limited-edition Starbucks tumbler because “once it’s gone,
it’s gone!”)
Payment-plan temptation (Getting that expensive couch you can’t really afford because “it’s
only $50 a month”)
Spending-threshold tricks (Adding a $30 item you don’t need to your $70 cart just to get free
shipping)
Aspirational Spending
Wishful thinking (Buying expensive athleisure outfits but never actually going to the gym—
definitely NOT speaking from personal experience!)
Fantasy-self purchases (Buying fancy cooking equipment while still ordering takeout five
times a week)
Status seeking (Getting an expensive designer bag that’s way over budget just to fit in at
work)
Here’s where this gets really interesting: Sometimes there’s usually a
surface trigger masking a deeper trigger. Let’s say you spend a lot on food
delivery. The surface trigger might be poor planning (“I’m too tired to
cook”). But dig deeper—why are you always too tired? Maybe the deeper
trigger is that you hate your job, and ordering lavish takeout is your way of
rebelling against a life that feels too restricted.
That was my story with those Grand Central shopping sprees I mentioned
earlier. On the surface, I told myself I “needed” nice clothes for work. But
the deeper truth? Shopping was my way of decompressing from a job that
felt suffocating. Those shopping bags full of feminine, colorful clothes were
my way of expressing my stifled creativity, which I couldn’t really express
in my rigid, corporate Wall Street work environment.
For each trigger you identify, I want you to keep asking “Why? Why?
Why?” until you get to the root cause. Go deep until you get to the actual
spending trigger, not just the surface one. This is important! Until you really
get to the root cause of your spending, any changes you try to make will
take a ton of willpower and they won’t really work. You might try to stock
up your fridge with ready-to-go meals, but if the real reason behind your
takeout habit is that you’re unhappy at work, that rebellious spending will
come out in other ways.
It’s like a weed in a garden—cut the leaves, and it keeps growing back.
But pull it up by the root, and it’s gone for good. Get to the root of your
spending triggers, or they’ll just pop up in new ways.
Heads up: This might bring up some stuff. Real stuff. As you dig into
your spending triggers, you might uncover self-esteem issues you’ve been
hiding, relationships you might need to let go of, or career unhappiness
you’ve been masking with retail therapy. That’s okay. Actually, it’s more
than okay—it’s powerful.
Going through your spending like this can be like 10 intensive therapy
sessions rolled into one, except it costs nothing (well, maybe a box of
tissues). Give yourself all the compassion and love you’d offer to your
bestie. If you need to have a good cry, have that cry. If you need to journal
about what you’re discovering, journal. These spending behaviors
developed for a reason, and now that you’re becoming aware of them, you
can start making different choices.
I’d love to hear what insights come up for you during this process.
Seriously—slide into my DMs at @itsrosehan and share what you’re
discovering about yourself. Not only will it help you process your
revelations, but your story might also help others who are on the same
journey. You should be proud of yourself for doing this deep inner work!
FREE TOOLS TO HELP YOU ADD A ZERO
Ready to take control? Grab your printable Spending Reflection Journal
to walk you through your own Spending Deep Dive—step by step. It
includes a Highlighter Vibe Check walk-through, guided Deep Dive
Reflection questions, and a list of the most common spending triggers so
you don’t miss a thing. Grab your copy at addazero.com/toolkit.
QUICK, EASY WINS
Even just the new awareness from your Spending Deep Dive will naturally
start to shift your spending. When you know your spending triggers, you’ll
catch yourself before making those impulse purchases. When you know
your values, you’ll think twice about spending on things that don’t align
with them.
Think of it like decluttering your house—once you notice that pile of
junk mail on your counter, you can’t “un-notice” it. You might not clean it
up immediately, but that awareness will influence your actions. Maybe
you’ll start recycling the mail right away instead of adding it to the pile.
Maybe you’ll unsubscribe from some mailing lists. The same thing happens
with your spending after doing the Spending Deep Dive.
But why not make it even easier on yourself? Just like it’s easier to keep
your counter clean when you put a trash bin right next to it, there are simple
ways to set up your environment to support better spending decisions.
These aren’t about restriction or willpower—they’re about making it easier
to do what you already want to do.
Here are some simple changes you can implement right now:
Unsubscribe from all marketing e-mails (or use a service like
Unroll.Me)
Remove saved credit card information from your phone and browsers
Unfollow accounts that trigger impulse purchases (goodbye, fashion
influencers!)
Set up app limits for social media during your vulnerable spending
times
Delete shopping apps from your phone (especially Amazon)
Move remaining shopping apps to a folder on your last screen
Take a different route home to avoid trigger locations
Put things in your digital shopping cart and sleep on it for 24 hours
before pulling the trigger
Buy some yummy freezer meals you can heat up for dinner when you
get home
Store credit cards in a drawer instead of your wallet
Of course, your Spending Deep Dive might have revealed the need for
some deeper life changes. These take more time and effort, but they address
the root causes of overspending:
Look for a new career that better aligns with your strengths and
interests
Make time for hobbies and friends to avoid shopping out of loneliness
Have honest conversations with friends about your financial goals
Start therapy to work through emotional spending triggers
Join communities that support your values rather than lead to
comparison
Create evening self-care rituals to replace late-night browsing
Find ways to reward yourself that don’t involve spending
Develop healthy stress-management techniques
Start a gratitude practice to combat comparison
Remember, you don’t need to implement every change at once. Pick one
or two that feel most relevant to your situation and start there. As those
become habits, you can add more. The goal isn’t to restrict yourself—it’s to
create an environment that supports conscious, fulfilling spending.
Now that you understand your spending patterns, you’re ready to create a
budget that actually works. Notice how we did the deep inner work first?
Most people try to budget without understanding their spending psychology
—and then wonder why they can’t stick to it. But you’re not most people.
You’ve done the hard part. You’ve taken control.
And now you’re officially at the turning point. You’ve laid the foundation
to get to $0, and that changes everything.
No more limiting money beliefs holding you back.
No more debt keeping you stuck.
No more wondering where your money went.
Now you’re in charge.
In the next chapter, we’ll take all the insights from your Spending Deep
Dive and use them to create a budget that actually works—one that
maximizes your cash flow, aligns with your values, and helps you add those
zeros fast.
Because you’re no longer just getting to $0. You’re on your way to your
first $10,000.
CHAPTER TAKEAWAYS
Understanding what you spend and why is the first step to financial
control. When you know where your money goes, you can start
directing it with intention.
There’s no universal definition of good or bad spending—only what
feels worth it or not worth it to you.
Impulse spending is usually a symptom, not the root cause. Dig deeper
to uncover what’s really driving your spending habits.
Awareness is power. Simply paying attention to your spending patterns
will naturally start to shift them in the right direction.
YOUR ADD A ZERO CHECKLIST
Do the Highlighter Vibe Check (Part 1 of the Spending Deep Dive).
Answer the Deep Dive Reflection questions (Part 2 of the Spending
Deep Dive):
– What patterns can you spot in your spending?
– Does your spending reflect your values?
– What are your spending triggers?
Make one quick change that will support more mindful spending (see a
list of ideas).
FREE TOOLS TO HELP YOU ADD A ZERO
Download your Spending Reflection Journal—a printable companion
that guides you through every part of your Spending Deep Dive. You’ll
get a walk-through of the Highlighter Vibe Check, thought-provoking
reflection prompts, and a curated list of common spending triggers to
keep you focused. Go to addazero.com/toolkit to download it!
OceanofPDF.com
GETTING TO $10,000
OceanofPDF.com
CHAPTER 5
TELL YOUR MONEY WHAT TO
DO (BUDGETING 101)
You can afford anything, but not everything.
— PAULA PANT
I had never seen so much money in my life. My first Wall Street bonus had
just hit my account: $30,000! I immediately got to work, spending it as fast
as possible. I felt rich, and I reveled in the feeling of being able to buy
whatever I wanted.
After a few weeks of shopping, a trip to Miami, and a lot of bougie
dinners, all $30,000 evaporated into thin air just like a magic trick. Only you
can bet I didn’t applaud that trick at the end.
I’ll be honest with you—budgeting and I had an on-and-off relationship
for most of my adult life. Even after that sobering experience blowing my
first Wall Street bonus, I really resisted the idea of budgeting. I liked my
freedom, and I didn’t want to feel deprived.
But then I gradually realized that living paycheck to paycheck didn’t feel
like freedom at all. And constantly transferring money to savings in an
attempt to “save for the future” only to take it right back out because I’d
forgotten about upcoming expenses? That got old real quick.
So despite my reservations, I gave in to the idea of budgeting. It was a
clunky learning process and I didn’t get it perfect. But I gradually started to
appreciate the feeling of control that it gave me over my money. It felt good
to see my hard-earned money go toward making the memories and building
the life I wanted, rather than let it slip through my fingers.
Now, several years into my budgeting journey, I’ve paid off six figures of
debt and built a seven-figure net worth. And don’t think I deprived myself of
having any fun along the way! Last year, I spent $9,876 going to music
festivals alone. I also buy $7 lattes and $15 avocado toast all the time.
Sometimes the avocado toast even comes with a fancy edible flower on top.
When festival season rolls around, I pay for my tickets in cash (well,
technically I put them on my credit card for the rewards and then pay it off
with cash I’ve set aside—but more on that later). Then I get to enjoy myself
1,000 percent at the festival, with zero guilt looming over me about a credit
card hangover waiting when I get back home. In fact, one of the most
important line items in my budget is my Just for Fun category. Because to
me, fun isn’t optional—it makes life worth living.
Like me, you have things in your life that make it worth living. Things
that you just can’t do without. And guess what’s going to allow you to say
yes to all those things? Budgeting, baby! At the end of the day, budgeting is
what allows you to truly YOLO.
So let’s get this straight: Budgeting is not about cutting your expenses
down to the bone, even as you’re working toward financial freedom.
Budgeting is about telling your money what you want it to do for you. It’s
about planning ahead so you can be ready for every expense that comes up,
while still spending on the things that make you happy. It’s about going on
that once-in-a-lifetime trip to Italy and enjoying every damn minute of it,
because your budget helped you pay for it without getting into debt.
That, to me, is true financial freedom. And that’s what I want for you too.
So repeat after me:
Budgeting ≠ Deprivation
Budgeting = Freedom
The best part? It doesn’t even take much time. I spend about 15 minutes a
week looking at my budget, and the rest of my time living my life to the
fullest. But those 15 minutes make everything else possible—stress-free and
guilt-free.
Listen, if the girl who used to overdraft her bank account as a way of life
can figure out how to make budgeting work for her, so can you. Let me walk
you through exactly how to do it.
BUILD YOUR BUDGET: GIVE EVERY DOLLAR A JOB
I have a problem with most of the budgeting how-to advice out there. It
rarely helps you actually understand budgeting. Have you ever tried to sit
down at your desk to *finally* figure out budgeting, only to get lost in all the
conflicting Internet mumbo jumbo, all the different methods, apps, and
spreadsheets, and left even more confused than ever?
There’s only one thing you need to do to make a budget that actually
works: Give every single dollar a job to do, then do your best to make sure
your dollars actually do those jobs. Some dollars’ jobs might be “cover next
month’s rent” or “buy groceries,” while others might have bigger jobs. The
key is that when you budget, you’re giving every single dollar a specific
purpose. Do this with all of your income until you have zero dollars left to
assign.
Give every single dollar a job to do,
then do your best to make sure your
dollars actually do those jobs.
This is also known as zero-based budgeting, because when you take your
income minus expenses minus savings and debt payoff goals, it should add
up to zero. Like this:
But wait—zero-based budgeting doesn’t mean you have zero dollars left.
It just means you have zero unbudgeted dollars left. For example, let’s say
you have $5,000. You haven’t budgeted yet, so those dollars don’t have jobs
yet. But once you’re done budgeting, all the $5,000 will be spoken for.
And voilà, that’s zero-based budgeting for you! I know the term sounds
like some sort of niche, fancy budgeting methodology, but honestly it’s the
only type of budgeting there is: where every dollar is given a job and
accounted for. After all, what’s the point of a budget that only accounts for
some of your money but not all of your money?
When you budget this way and account for every single dollar, you’re not
going to wonder where your money went at the end of the month. On the
contrary, you’ll know exactly where it went, because you’re the one who
told your money what to do! It’s super empowering.
Plus, it helps you spot opportunities to reassign some dollars to more
important jobs, like adding zeros to your net worth. Budgeting is how I
stopped letting money slip through my fingers and got to my first $10,000
and beyond faster than I ever thought possible—all while still making room
for fun!
So as we go through the following steps, remember that’s the overarching
idea: to give every dollar a job.
Step 1: List All Your Income
Before you can assign jobs to your dollars, we first need to know exactly
how much money you’re working with. List out all your income sources.
This includes:
Your regular paycheck
Any side hustle income
Freelance payments
Really, any money that comes into your life
Mind you, we’re working with take-home pay only—that is, after all taxes
and deductions have been taken out. For paycheck income, it’s the amount of
money that hits your bank account. For side hustle and freelance income,
make sure it’s only what you have left after setting aside a portion for taxes.
(Because you are doing that, right?)
Also, if your income is irregular, look at your earnings over the past year
and use the monthly average. You can always adjust your budget when you
earn more or less than average, but we need to have a baseline number to
work with first. See more tips on how to budget with an irregular income.
Step 2: List All Your Expenses
Okay, now you know what’s coming in—so it’s time to plan for what’s going
out. Your expenses will fall into three main buckets:
Needs
Wants
Financial Goals
Needs
These are the essential expenses you absolutely must pay: housing, utilities,
groceries, minimum debt payments, transportation, insurance.
As you list out your Needs expenses, think beyond just monthly bills and
everyday stuff—remember to include those pesky irregular expenses that
always seem to catch you off guard. You know the ones—annual insurance
premiums, quarterly property taxes, Christmas presents, new tires, dental
work, and so on. The last thing I want is for you to forget to include these in
your budget, get hit with an unexpected expense, and then give up on
budgeting (“What’s the point? Something always comes up!”). That would
suck and that’s demoralizing!
Here’s what typically goes in your Needs bucket:
Housing (rent or mortgage)
Utilities
Groceries
Transportation (gas, car payment)
Insurance (both monthly and annual premiums)
Car repairs and maintenance
Home maintenance
Medical/dental expenses
Phone/laptop replacement
Pro tip: Don’t forget to include a Miscellaneous category. There’s almost
always going to be something you forgot to budget for, so it’s good to create
a little bit of wiggle room. That way, next time you need to overnight ship a
replacement charger because your cat chewed through your only one, your
Miscellaneous category has got you covered, no sweat.
Wants
This is where the fun stuff goes—all the discretionary spending that makes
life enjoyable. If you need a refresher, go back to your Highlighter Vibe
Check to remind yourself of your values and the expenses you regretted:
Dining out
Entertainment
Travel and vacations
Shopping
Hobbies
Gifts (holidays, birthdays, weddings)
Subscriptions and memberships
Nonessential home upgrades
Optional car upgrades
Financial Goals
Think of your Financial Goals bucket as expenses you’re choosing to pay to
your future self. Just like you budget for your rent or groceries, you need to
budget for these financial goals.
As for what those financial goals should be, remember the Financial
Waterfall from Chapter 3? That Waterfall is your road map, showing you
exactly which goal to focus on and in what order.
When we first looked at the Financial Waterfall, we focused on the first
two tiers: getting your $2,000 starter emergency fund and paying off credit
card debt. Now it’s time to reveal the next two crucial goals you need to
budget for:
Here are the first four tiers of your Financial Waterfall:
1. Getting a $2,000 starter emergency fund in place (Chapter 3)
2. Paying off all credit card debt (Chapter 3)
3. Getting your full employer 401(k) match (to be discussed more in
Chapter 8)
4. Building a full six-month emergency fund
Let’s talk more about that fourth tier—your full emergency fund. While
the $2,000 starter fund from Chapter 3 gives you a basic safety net, a full
emergency fund provides complete financial security. This means having
enough saved to cover six months of essential expenses—things like rent,
food, insurance, transportation, and minimum debt payments (basically,
everything in your Needs bucket).
Think of it as your financial fortress. With six months of expenses saved
up, you can survive any unexpected job loss, medical emergency, or life
event without spiraling into stress or debt. Some people prefer to save 12
months’ worth for extra security, but six months is enough for most
situations.
You can build your full emergency fund in the same high-yield savings
account (HYSA) as your starter emergency fund. The key is to keep it
somewhere safe, separate from your daily spending, that earns interest and
remains accessible when you need it.
Building this up takes time, so be patient with yourself. The key is making
it a regular part of your budget—treat it like any other bill that needs to be
paid. (Check out my advice on how to automate your finances.) Every time
you get a windfall, like a bonus or tax refund, consider putting a chunk of it
toward your fund to speed up the process.
Once you have this fund in place, your financial life will fundamentally
change. Beyond the rock-solid peace of mind, it gives you options. If you
ever find yourself in a toxic job (or worse, a toxic relationship), you’ll
always have the ability to walk away without money being a concern. You
can’t put a price on that kind of freedom!
Which Financial Waterfall tier are you on? Every dollar in your Financial
Goals bucket should flow there first. In other words, tackle one tier at a time.
If you try to budget for several different tiers at once, it could take forever to
finish any of them! But if you funnel all the money you’ve allocated for
Financial Goals toward just one tier, you’ll knock it out three times faster.
This creates momentum because you can actually see yourself making
progress.
When you’re done listing out your expenses in all three buckets (Needs,
Wants, Financial Goals), you should have something that looks like this:
Your Monthly Budget
INCOME
Paycheck
Side Hustle
NEEDS
Rent
Groceries
Utilities
Car Payment
Car Insurance
Phone Bill
Gas
Medical and Dental
Credit Card Minimum Payment
Student Loan Minimum Payment
WANTS
Entertainment
Eating Out
Gym Membership
Shopping
Self-Care
Gifts
Travel
FINANCIAL GOALS
(Your current Financial Waterfall tier)
FREE TOOLS TO HELP YOU ADD A ZERO
Grab a spreadsheet version of this budgeting template for free at
addazero.com/toolkit.
Of course, this template is just a starting point. Feel free to customize your
categories to reflect your life and your spending patterns.
Here are some tips for creating good budget categories:
If you spend a meaningful amount on it regularly, make it its own
category. For example, when my dog Jupiter was a puppy, I spent
enough on him that I had a category called Spoiling Jupiter
(I’m the
queen of emojis). This is where I budgeted money specifically for toys,
treats, and whatever the hell I wanted for him. I’ve gotten rid of that
category since, but the takeaway? You do you, boo! Your categories are
your own.
If it’s something you do once in a blue moon, lump it into a broader
category versus creating its own separate category. I hardly ever
drink coffee anymore, so I don’t have a Coffee category. I just lump
coffee purchases into my Dining Out category. If you buy shoes twice a
year, there’s no need for a Shoes category—just include it in Clothing
or Shopping.
Make your categories specific enough to be meaningful to you, but
not so detailed that it becomes overwhelming to track. There’s
nothing scarier to look at than a budget with 237 categories. You don’t
need separate categories for Coffee Shop Snacks, Coffee Shop Drinks,
Socks, Underwear, Fruits, Legumes, Vegetables. This will only create
decision fatigue later on when you’re categorizing your transactions.
Instead, create a manageable number of categories specific to your
needs.
Bottom line is, before you add a category, ask yourself: Is this actually
going to make a difference in how I manage my spending?
Step 3: Allocate Your Income
Now comes the fun part—giving every dollar a job!
Except here’s where most people go wrong. Most people handle their
Needs first, Wants next, then think about their Financial Goals if there’s any
money left. Problem is, there rarely is!
That’s why we need to flip the script. Rather than allocating your income
in this order:
Needs → Wants → Financial Goals
Do it in this order:
Needs → Financial Goals → Wants
By putting Financial Goals before Wants, you’re “paying yourself first”—
making sure your future is funded before spending on the nice-to-haves. It’s
the difference between hoping you’ll have money left to save versus
guaranteeing you will.
So what does this look like in practice? It looks like committing to a
specific amount to allocate toward your Financial Goals every month, and
sticking to it. It looks like adjusting your Wants based on what’s left after
Financial Goals, versus the other way around.
As for what percentage to allocate to each bucket, it really depends, as
everyone’s financial situation is different. There’s no one-size-fits-all budget,
but to help you find a realistic starting point, here are three common budget
breakdowns:
The Power Saver (50/30/20)
If your necessary expenses are relatively low (maybe you have roommates
or live with your parents) or your income is very high relative to your
expenses, you can be aggressive with your Financial Goals. This split
dedicates a full 30 percent to adding a lot of zeros while maintaining a
comfortable 20 percent for fun stuff.
50% Needs
30% Financial Goals
20% Wants
The Balanced Builder (60/20/20)
This is a sustainable middle ground that works well for many people. You’re
dedicating a healthy portion to Financial Goals while maintaining breathing
room for both necessities and enjoyment.
60% Needs
20% Financial Goals
20% Wants
The Steady Starter (70/10/20)
If you live in an expensive area or have high fixed costs relative to your
income, this might be your reality right now. That’s okay! The key is to start
somewhere, even if it’s just 10 percent toward Financial Goals. As you
optimize expenses (Chapter 6) and grow your income (Chapters 7 and 10),
you can work toward the other allocations.
70% Needs
10% Financial Goals
20% Wants
Notice how all three allocations maintain 20 percent for Wants? That’s
intentional. While it might be tempting to eliminate all nonessential
spending to reach your goals faster, that’s usually not sustainable. The goal
isn’t to make yourself miserable—it’s to find a sustainable balance that you
can stick with for the long haul.
Which allocation resonates with your current situation? Remember, this is
just your starting point. As you grow your income and optimize your
expenses, you can start allocating even more to the Financial Goals bucket.
WHEN THE MATH ISN’T MATHING
After creating your first budget, you might discover you’ve been spending
more than you earn (i.e., living on credit cards or running down your
savings). Don’t panic! This awareness is actually the first step to fixing it. If
your expenses exceed your income, you’re dealing with one of two issues
(or both):
1. An Expense Problem: Your spending needs some trimming. Good
news—the budgeting system in this chapter will help you identify
where to cut back while still enjoying life. Plus, in the next chapter,
you’ll learn how to optimize your expenses.
2. An Income Problem: If your expenses are already bare-bones and the
math still isn’t working, you don’t need to cut back—you need to earn
more. Hang tight until Chapters 7 and 10, where we’ll tackle growing
your income through salary negotiation and additional income streams.
Remember: The whole point of budgeting is to get clear on your numbers
so you can make changes that work for you. There’s power in discovering
the truth and facing reality head-on. Now that you know where you stand,
you can do something about it!
The whole point of budgeting is to get
clear on your numbers so you can
make changes that work for you.
LIVE YOUR BUDGET: DAY-TO-DAY IMPLEMENTATION
All right, you’ve built your budget, now what? Even the most beautiful
color-coded budget won’t get you anywhere if you don’t use it. If building
your budget is like creating a fitness plan (“I’m going to lift weights three
times a week”), living your budget is like the actual lifting of the weights at
the gym. You gotta keep doing it to get the results! But here’s the good news
—it doesn’t have to be anywhere near as hard as lifting weights.
These next few dos and don’ts are my hard-earned secrets for making a
budget actually work in real life. They’re the difference between a budget
that gives you more financial freedom versus one that just sits pretty in a
spreadsheet.
Do #1: Pick a Budgeting Tool That Works for You
Before you can start implementing your budget, you need a way to track
your transactions. There are tons of options out there—everything from apps
to spreadsheets to pen and paper to cash envelope systems.
My personal favorite? Apps all the way. They make budgeting almost
effortless by connecting to your bank accounts and credit cards and
automatically importing your transactions. All you have to do is categorize
each transaction to update your budget in real time. Easy-breezy!
But listen—while I’m obviously team budgeting app, what matters most is
picking a tool you’ll actually use. Whether that’s a simple spreadsheet or a
fancy app doesn’t matter. So pick your poison!
FREE TOOLS TO HELP YOU ADD A ZERO
Visit addazero.com/toolkit for my top recommended budgeting apps and
a free budgeting template if you prefer the spreadsheet route!
Do #2: Track Your Spending as You Go
One of the biggest mistakes I see people make? Waiting until the end of the
month to figure out where their money went. By then, it’s too late! The key
to making your budget work is tracking your spending as you go, so that you
can make informed tweaks in real time.
When you spend money (including on credit cards!), update your budget.
When you buy $500 tickets to see Taylor Swift, subtract $500 from what
you’ve budgeted for entertainment. If you make a $300 student loan
payment, subtract $300 from your debt payoff category.
You don’t need to update your budget every single time you spend money,
but the more often you do it, the better. Weekly if you want, but monthly is a
little too light. When I’m really on top of it, I do it daily at the end of the
night just before getting ready for bed while brushing my teeth. With the
help of my budgeting app, it only takes a minute or two at most!
TAMING THE AMAZON CART
Let’s talk about Amazon for a second because I know that’s where a lot of us do damage! That
app makes shopping way too easy—one click and suddenly a cart full of “essentials” arrives at
your door.
When tracking your Amazon purchases, you might be tempted to lump all of them into one
generic Shopping category, but that can blur the reality of where your money is actually going.
Yes, it’s a little extra work, but I strongly recommend breaking down your Amazon spending by
category. That single order might contain groceries, a home decor item, gifts, and maybe a treatyourself purchase or two (not that I would know anything about late-night impulse buys . . .). I
won’t kill myself to get the breakdown accurate down to the cent, but I’ll at least make some
rough estimates.
This makes it easier to see patterns in your spending and helps prevent those “quick restocks”
from turning into $200 shopping sprees.
Do #3: Budget Your Money Every Time You Get Paid
If you try to budget your money before you get paid, you’re working with
imaginary money so it feels too abstract. But if you wait ’til after you get
paid, your money might be gone by the time you get around to budgeting it
(oops!).
That’s why the best time to sit down and make your budget is when you
get paid (or right before payday). That keeps your budget real, useful, and
tied to your expenses and financial sitch right now.
For Regular Paychecks: When you get paid on a set schedule, you can
confidently allocate each paycheck in priority order:
1. Needs (for bills and essentials before next paycheck)
2. Financial Goals (your current Waterfall tier)
3. Wants (everything else)
For example, if you get paid $2,000 biweekly:
Needs: $1,200 to cover any bills due in the next two weeks as well as
essentials like food and gas
Financial Goals: $400 toward your current Waterfall goal to pay off
credit cards
Wants: $400 for entertainment, shopping, fun stuff!
Then when you get paid again in two weeks, you can do the exact same
thing. The key is to budget the money you actually have when it comes in.
Not money you think you’ll have, not money you’re getting soon, but money
you have in your hands right now. This keeps it real and relevant.
For Irregular Income: Freelancers and gig workers need to build in extra
security since you never know exactly when or how much your next
payment will be. If this is you, I want you to work on getting two months
ahead on your Needs. We’re talking a buffer that covers the bare minimum
you need for essentials like rent, utilities, groceries, and minimum debt
payments.
Whenever money comes in, allocate it in this order:
1. Needs (to cover bills and essentials until the next time you get paid)
2. Buffer (two months’ worth of essentials)
3. Financial Goals (your current Waterfall tier)
4. Wants (to cover all the fun stuff until the next time you get paid)
Why two months of buffer? Because clients pay late, projects end
unexpectedly, and slow season comes around. But your bills don’t stop!
So as tempting as it is to go a little crazy with your spending in a good
month (“I’m richhhh, woohoo!!!”), try to rein that in until you get two
months ahead on your bills. Create that buffer so that you don’t have to
panic in lean months and you create stability. Once you have that stability,
you can get out of the freelancer feast-or-famine cycle and finally focus on
your bigger financial goals.
For Windfalls (Bonuses, Tax Returns, Inheritances): Don’t make the
same mistake I did with my $30,000 bonus. The moment you know a
windfall is coming, give each and every dollar a job to do.
Sure, go ahead and use some of it to splurge on a lil’ something for
yourself. But don’t waste an opportunity to also cover some serious ground
in your Financial Waterfall. Imagine using a windfall to knock out all your
credit card debt and get your full-size emergency fund, all in one go. How
awesome would that be?
Do #4: Master Budgeting with Credit Cards
Even the most carefully thought-out budget can go off the rails with credit
cards. But I’m not about to tell you to cut them up—otherwise you’d miss
out on all the free flights and hotel stays you can get from using your credit
cards (more on maximizing those perks in Chapter 6).
The secret to using credit cards without derailing your budget is simple:
Only charge what you already have cash for in your budget.
Here’s exactly how that works: Let’s say you have $300 budgeted for
eating out this month. That means you should have $300 sitting in your
checking account, earmarked for restaurants. When you charge a $60 dinner
on your credit card, update your eating out budget from $300 to $240. Why?
Because even though the $60 hasn’t left your checking account yet, that
money is already spoken for! You’ll need it to pay your credit card bill at the
end of the month.
Think of it like this: Every time you swipe your credit card, you’re
actually spending the real dollars in your checking account—just on a delay.
By tracking your credit purchases against your budget categories right away,
you keep your credit card spending in touch with reality. This is how you
keep yourself from accidentally spending more money than you have. This
approach gives you all the benefits of credit cards while maintaining the
safety of cash-only spending. The only difference? Your spending decisions
are guided by your budget, not your credit limit.
The bottom line: Treat your credit card like a debit card. Before you swipe
that card, check whether you have the real dollars to back it up somewhere
in your budget—even if your credit limit says you could spend way more.
If you have a tendency to slide into credit card debt and/or are shocked by
your credit card balance every month, this will be an absolute game changer
for you!
Do #5: Plan for Irregular Expenses
You know those expenses that seem to come out of nowhere and blow up
your budget? I’m talking about annual insurance premiums, quarterly
property taxes, holidays, gifts, car maintenance, and all those other financial
curveballs. The secret to handling these like a pro is to turn them into
monthly expenses.
Here’s how: For each irregular expense, divide the total cost by the
number of months until you need the money. That amount becomes a
monthly line item in your budget. For example, if you know you’ll need to
replace your car tires ($800) in about six months, set aside $133 monthly
($800 ÷ 6) for the next six months. When it’s time, you’ll have the cash
ready to go—no stress, no credit cards, no scrambling!
The best part? You can use this same strategy for fun stuff too! You know
you want to go to Barcelona next summer? Figure out the estimated cost for
the trip ($4,000 total for flights, Airbnb, your tapas and sangria budget, etc.),
divide by the number of months until then (let’s say there’s eight months to
go), and voilà—you need to set aside about $500 per month. Saving for a
fancy laser skin treatment ($3,000)? Start putting away $250 monthly for a
year. By breaking these bigger expenses into monthly chunks, you can make
almost anything happen without derailing your financial goals or going into
debt.
Pro tip: Open a separate high-yield savings account for these types of
“sinking fund” savings. That way, your new tires fund or your Barcelona
fund doesn’t accidentally become your weeknight takeout fund! Plus, you’ll
earn a little interest while you save.
When you plan for irregular expenses this way, you’ll never have to
choose between building your emergency fund or your car tires. Or between
paying off debt and going on that once-in-a-lifetime trip. You can do both.
Now, that’s what I call financial freedom!
Do #6: Stay Flexible
Your budget isn’t meant to be a financial straitjacket—it’s a living document
that should evolve with you. Sometimes you’ll need to move money between
categories, and that’s absolutely okay!
Here’s how this could look in real life: Let’s say you’ve already blown
through your Entertainment budget for the month, and now your friends
want to go snowboarding this weekend ($200). Because you’ve been
tracking your spending (high five!), you see that you could easily free up
that $200 by cutting back a little on groceries and skipping your nail
appointment this month. Boom! Now you get to go snowboarding 100
percent guilt-free because you know exactly where the money’s coming
from. Adjusting your budget like this isn’t failing at budgeting—it is
budgeting!
Or maybe you look at your budget and realize that there isn’t much room
to cut elsewhere and the $200 would have to come out of your debt payoff
goal. You decide that your debt payoff goal is more important than going
snowboarding this weekend. Aside from a little bit of FOMO (okay, maybe a
lot), you feel really good about your decision—your debt-free date is so near
you can almost taste it! Either way, you get to choose because you’re the
master of your money! The important thing is making these decisions
consciously, fully aware of the trade-offs.
Look, budgeting will take some trial and error. Even I sometimes slip back
into old habits when life gets busy—because hey, I’m human too! And you
know what? That’s okay! If you slip up (it’s gonna happen!), just dust
yourself off and get back on track. Your budget isn’t meant to be a constant
reminder of how you’re failing—think of it as your supportive, patient BFF
who will always welcome you back with open arms no matter how many
times you go back to that not-so-great ex.
Just wait until that moment when, for the first time ever, your friend group
chat lights up with Coachella? and instead of reaching for your credit card,
you realize you’ve already got the cash set aside. Or the first time you log
into your student loan account and realize you’ve knocked an entire zero off
your balance because you’ve been steadily chipping away month after
month.
Those moments feel incredible. Trust me—once you experience the
empowerment of having a budget that works for you, you’ll never want to go
back to wondering where your money went. This isn’t just another financial
to-do. It’s your ticket to experiencing financial freedom and living life to the
fullest, right now.
CHAPTER TAKEAWAYS
Budgeting isn’t about restriction—it’s about taking control and telling
your money what to do, instead of always wondering where it went.
Give every single dollar a job to do, then do your best to make sure
your dollars actually do those jobs.
Prioritize Needs → Financial Goals → Wants, always funding your
future before nonessentials.
Focusing on one Financial Goal at a time creates momentum and faster
progress.
Stay flexible, track spending as you go, and protect your Financial
Goals like they’re nonnegotiable.
YOUR ADD A ZERO CHECKLIST
Get a handle on all your income and expenses.
Choose a budget allocation for your income (will you go with 50/30/20,
60/20/20, or 70/10/20?).
Choose and set up your budgeting tool.
Create a calendar reminder to review your first batch of transactions.
Put your first paycheck through your new budget.
FREE TOOLS TO HELP YOU ADD A ZERO
To jump-start your budgeting, grab your free budgeting template and a
list of my top recommended budgeting apps at addazero.com/toolkit!
OceanofPDF.com
CHAPTER 6
OPTIMIZE YOUR EXPENSES
The quickest way to double your money is to fold it in half and put it back in your
pocket.
— WILL ROGERS
Early in my career, I got transferred to Brazil for a yearlong work
assignment. The global investment bank I worked at was sending me to
their São Paulo headquarters. Everything was new and exciting, except for
one thing—I was getting paid in Brazilian reals and my student loan
payments were in dollars. The currency exchange rate was shitty at the time
(just my luck!), so every month my student loan payment took up a huge
chunk of my salary. This left very little room in my budget for caipirinhas
and pão de queijo.
Desperate to save money anywhere I could, one day I found myself
staring at my Wi-Fi bill. Even though it wasn’t particularly high, I thought,
What if I could get this lower? At this point, I need every Brazilian real I
can get!
I gathered my courage (and my beginner-intermediate Portuguese) and
called the Internet company. After squinting through an endless chain of
dial menus, I finally made it to the rep and bravely asked if they could
lower my bill. To my shock, they said “Sim!” and offered to reduce it by 30
percent!
I couldn’t believe it was that easy. Here I was, a foreigner with zero
ability to sweet-talk a customer service rep, and I’d just saved money with
one slightly awkward phone call. That made me wonder—if I could
negotiate a bill in a foreign country in a language I barely spoke, what else
could I negotiate?
Since then, I’ve done the same thing in the U.S., cutting my bills on
everything from credit card interest rates to banking fees to insurance
premiums. It’s saved me thousands of dollars—money that went straight
toward adding zeros to my net worth.
When most people think about getting rich, they focus on earning more
money. While increasing your income is crucial (and we’ll talk about that in
later chapters), optimizing your expenses is just as important. Here’s why:
Every dollar saved is worth more than a dollar earned. When you
earn an extra dollar, you lose some of it to taxes. But when you save a
dollar, you keep the whole thing.
Expense optimization has a multiplier effect. When you reduce a
recurring expense, you save that money month after month, year after
year. Cut $100 from your monthly bills, and that’s $1,200 per year you
can invest instead.
The less you need to spend, the more financial freedom you gain.
Lower expenses = more breathing room = more choices.
And one of the fastest ways to optimize your expenses? Learning to
negotiate.
THE ART OF BILL NEGOTIATION
Most people assume their bills are set in stone—just another nonnegotiable
cost to live with. But here’s the truth: Almost everything is negotiable.
Companies build a cushion into their pricing because they expect some
customers to ask for a better deal.
But most people never ask.
Whether it’s your Internet bill, credit card APR, insurance premium, or
bank fees, you’d be surprised how often a simple phone call can get your
costs lowered. (Heck, it even works by accident when you don’t even speak
the language!) And even if you don’t get an immediate discount, you can
often secure a better rate, an upgraded service, or hidden perks just by
knowing what to say.
I know negotiating can feel intimidating—especially if you’ve never
done it before. But remember: You’re not being difficult. You’re advocating
for yourself. You’re being smart. Companies expect some people to
negotiate, and those who do end up with better deals. Why not be one of
them?
So how do you actually do it? Let’s break it down.
Negotiation Trick #1: Anchoring
The first price thrown out in a negotiation sets the tone—and if that price
comes from the seller, it usually benefits them, not you. That’s why you
want to take control by setting the first number.
Instead of starting from their high price and trying to work it down, you
start from a lower number and negotiate up. This is called anchoring—a
strategy where the first number mentioned acts as a reference point for the
entire conversation. By anchoring the negotiation to your price, not theirs,
you flip the script and make it much easier to land at a deal that works in
your favor.
Example 1: You’re shopping for a used car, and the dealer asks for
$15,000.
❌ ❌Without Anchoring
“Hmm... $15,000 sounds like a lot. Can you do better than that?”
✓ ✓ With Anchoring
“I researched similar models with this mileage, and many of them were priced
at around $12,000. So that’s closer to what I had in mind.”
Here you’ve anchored the negotiation at $12,000 rather than at the
dealer’s price of $15,000. If your target price was, say, $13,000, you’re
much more likely to get that if you’ve anchored the conversation at $12,000
versus $15,000!
Of course, for this tactic to work, you need to do your research on a
credible anchor price. Don’t just throw out a random number that you can’t
justify with at least one data point, but ideally with as many data points as
you can find. As long as you can justify it, it’s fair game!
Example 2: You’re negotiating your credit card APR.
❌ Without Anchoring
“My credit card interest rate is currently 25%. Can we talk about lowering it?”
✓ With Anchoring
“I’ve received offers from competing credit card companies for as low as 21%,
but I’d prefer to stay with you if you could match that.”
This one works like a charm on credit card companies. They already
make so much money off you, they’d hate to lose you to another credit card
company over a few percentage points. Besides, you already know how
much credit card debt costs you, so if you can lower your rate while you’re
paying off a card, do it!
If they say yes, be sure to ask for the effective date of the change. Will
they backdate the rate adjustment for the previous month? Yes? Amazing—
how about refunding past interest charges for the past six months . Yes?
Great! Would they also consider waiving the annual fee?
When you really get the hang of this, you’ll start to realize there’s never
any harm in asking. Ask for as much as you can possibly get away with!
They might say yes, so why the hell not? If you don’t ask, you don’t get!
Negotiation Trick #2: Framing
Framing means presenting your request in a way that emphasizes the
benefit to the other person, not just to you.
People are more likely to say yes when they see how it benefits them.
Instead of focusing solely on what you want, position your request in a way
that highlights the value for the other party. Tell them what’s in it for them.
This shifts the conversation from a simple discount request to a win-win
outcome so that you’re more likely to get what you want.
Example 1: You want a reduction in your car insurance.
❌ Without Framing
“Can you lower my insurance rate?”
✓ With Framing
“I’ve maintained a perfect driving record for 5 years. As someone who’s
proven to be a low-risk driver, I’d like to discuss a rate that reflects my safe
driving history and helps you retain a good customer.”
See how the framed version highlights what’s in it for them? Instead of
just asking for what you want, you’re showing the insurance company the
value they get—a proven safe driver and customer retention. This makes it
hard for them to say no!
The better you get at identifying what they want, the better you’ll get at
getting what you want. And that part is easy, because every business pretty
much wants the same things: retention (it’s cheaper than acquiring new
customers), referrals, and revenue. The part you might need to practice
more is identifying what is already true on your end that you could point
out in a negotiation. Most people never do this—they just pay their bills for
years and years and years and never consider what leverage they might
have to speak up! But if you look, you’ll always find something. Let’s look
at another example.
Example 2: You’re negotiating with a contractor for renovations on your
house.
❌ Without Framing
“This quote is way too high. Can you lower it?”
✓ With Framing
“I have several home renovation projects planned this year. If we can agree
on a good rate, I’d love to establish a long-term partnership and have you
handle them all.”
As you can see, a well-framed request makes all the difference.
Sometimes, it takes a bit of strategic timing to deploy framing effectively. If
you know you’ll be doing another renovation project soon, then that’s the
time to negotiate since you have a strong angle to use in a framing
argument!
The better you get at identifying what
they want, the better you’ll get at
getting what you want.
EXERCISE: FLEX YOUR NEGOTIATION
MUSCLES
Now it’s time to put framing and anchoring into practice. Take a look at your current bills and
expenses, and make a list of the companies you want to call. A negotiation hit list, if you will.
Here are some good ones to start with:
Cell phone plan
Internet service
TV streaming services
Insurance (auto, home, renters)
Credit card interest rates
Gym memberships
Medical bills
Start with the company you feel will be easiest to call—like your smallest bill. If this is your
first time negotiating anything, it’s way less intimidating to practice on a $60 phone bill than a
$2,000 medical bill.
Next, gather your ammo. Research competitors’ rates, check how long you’ve been a loyal
customer, note any service issues, and find anything else that strengthens your case for a
discount.
When you get on the phone, confidence is key. Be polite, friendly, and relaxed. Start by
complimenting their service or product, and feel free to crack jokes and make small talk with
the rep. After all, they’re human too!
If they won’t budge on price (even after deploying all your best dad jokes, and all the ninja
anchoring and framing tactics you just learned), don’t give up just yet. Ask to speak to a
supervisor or to the retention and loyalty department—these teams often have more power to
offer discounts. Stay polite but persistent. And if that still doesn’t work, just try again later.
Different day, different rep, and that could mean a totally different outcome from one day to the
next.
FREE TOOLS TO HELP YOU ADD A ZERO
Not sure what to say? I’ve got you covered. Grab my word-for-word
negotiation scripts for different bills at addazero.com/toolkit before
making your first call. Just plug and play, baby!
Regardless of the outcome, the point is you’re exercising the muscle of
advocating for yourself, and that by itself is already a huge win! Every time
you negotiate, you’re proving to yourself that you have the power to take
control of your finances.
It’s you taking care of you. So yes, even if you’re a recovering peoplepleaser like me, you can get over it and learn to be a bad-ass negotiator.
And once you master this? You’ll realize you can negotiate just about
anything—including your salary (more on that in the next chapter!). Every
dollar you reclaim is a dollar that works for you. So pick up the phone, ask
for what you want, and start keeping more of what you make—because you
sure as hell work hard enough for it.
Every dollar you reclaim is a dollar
that works for you.
THE BIG THREE: YOUR HIGHEST-IMPACT
OPPORTUNITIES
Now that you’ve built confidence negotiating smaller bills, it’s time to
tackle the biggest money-drainers—housing, transportation, and food. For
most people, these Big Three costs make up 70 percent or more of monthly
spending.
Think about it: Trimming small expenses is fine, but optimizing your Big
Three could save you $1,000 or more every month. When you get these
major costs under control, you create breathing room—for investments,
financial freedom, and yes, guilt-free guac.
Housing
A good rule of thumb is to cap your housing costs at 30 percent of your
take-home pay (although in high-cost-of-living cities, 45 percent might be
more realistic!). But if you’re pushing toward big goals, like early financial
freedom, this is one of the best places to optimize. Targeting 25 percent of
your take-home pay can really fast-track your path to freedom.
Here are some ideas to dramatically lower your housing costs.
Get a Roommate
It doesn’t have to be forever, but this is single-handedly one of the most
guaranteed ways to cut your housing expenses in half—or more. Even if
you’re out of college and have been living solo for a while, don’t write it
off. A year or two of shared space could save you $10,000+ and buy you a
huge head start toward your financial goals. Plus, with the right roommate,
it might even be fun (hello, built-in dog sitter and shared Netflix
subscription!).
Move to a Cheaper Location
Whether it’s moving to a different neighborhood, city, state, or even
country, the trade-offs you make in terms of how far your money will be
able to go and how much your quality of life will improve once you’re not
constantly stressed about making rent might be worth it.
Try House Hacking
This is when you rent out a portion of your home, apartment, or garage in
order to offset your housing costs. This strategy is a favorite among real
estate investors, but you don’t need to own property to make it work.
Depending on various regulations, you could consider such things as adding
a temporary wall to make a “third bedroom,” renting out space on your land
to RV tenants, or short-term renting your apartment while staying
elsewhere.
Consider “Tiny Living”
Downsizing can look different for everyone, whether it’s a tiny house, a
camper, a converted shipping container, a micro-apartment, or an off-grid
cabin, but no matter the form, it is a cost-saver.
Move in with Family (Temporarily)
This is certainly not an option for everyone, but you did it once before, and
if you think you could do it again, it could result in massive savings toward
making a nest egg for a place of your own. Look, I know you’re probably
rolling your eyes at some of these ideas. But if cutting your housing costs
meant being able to quit a job you hate, take a sabbatical, or reach your
goals faster—wouldn’t it be worth considering?
Transportation
Next to housing, transportation is typically your second-largest expense.
The average American spends over $800 per month on car payments,
insurance, gas, and maintenance. That’s nearly $10,000 a year you could be
using to grow your net worth instead! Here are some tips on how you can
keep more of that money in your pocket.
Only Buy Cars Used
New cars lose 20 percent of their value in the first year alone—ouch.1 A
two- to three-year-old car is 30 to 40 percent cheaper and insurance is often
lower! That’s why it makes more financial sense to buy used cars only.
In addition to buying used, do your best to pay for your car in cash. The
average car loan charges 7 percent interest, which adds up fast—over
$3,750 in interest on a $20,000 loan! A great strategy is to start setting aside
what would have been your monthly car payment while your current car is
still running. When it’s time to buy, you’ll have enough to buy outright or at
least make a decent-sized down payment.
Trade in Your New Car for a Used Car
This won’t make sense for everyone—but if your car payment is crushing
your budget and you’re constantly stressed about it, it might be worth
considering. Even if you have to pay a bit extra to get out of your current
loan (since cars often lose value quickly), trading in your new car for a
reliable used one can dramatically lower your monthly expenses.
Walk, Bike, or Use Public Transportation
This one isn’t realistic for everyone, but even cutting back how often you
use your car can save money on gas and maintenance—and give your
health a little boost while you’re at it. Walk, bike, or take public transit
whenever you can.
Food
Between groceries, workweek lunches, weeknight takeout, and weekend
brunches and dinners with your friends, food might be eating up (ha!) more
of your budget than you realize. When I had one of my clients track her
spending for a month, she was shocked to find she was spending over
$1,000 a month on eating out—or $12,000 a year. That’s a fully funded
emergency fund for most people! Luckily, food is the easiest of the Big
Three to optimize. Here’s how to eat better while spending less.
Eat Out Smartly
Look, I’m not going to tell you to never eat out again—that’s unrealistic.
Eating out is a huge part of our social lives, so we might as well find some
smart ways to do it:
Use apps like Too Good To Go to get restaurant leftovers at 70 percent
off. I regularly get $20 worth of sushi for $6 to $7.
Make the most of happy hours. Not the sad kind with watered-down
drinks, but the ones at nice restaurants where you can get half-price
appetizers as your meal.
Sign up for restaurant loyalty programs and actually use them. Many
give you a free meal on your birthday or points that add up to free
food.
Do brunch instead of dinner with friends. Same social experience, but
usually 30 to 40 percent cheaper.
Batch Cook Your Meals
Rather than spending $50+ a day on eating out for lunch and dinner, how
about making a big batch of curry, stew, rice, or chili that costs $50 and
lasts you the whole week? All it would take is spending two hours every
Sunday.
Pro tip: Pick three go-to recipes that freeze and reheat well (slow-cooker
chili, sheet-pan fajitas, one-pot curry) and keep them on rotation. I also rely
heavily on self-timed cooking devices like a slow cooker or Instant Pot, so
that I don’t have to stand there stirring anything. Batch cooking doesn’t
need to be hard or complicated!
Subscribe to a Meal Delivery Service
If you absolutely, positively hate to cook and feel like you can’t even boil
water, try one of those meal delivery services that send you prepared meals
for the week. Sure, they’re pricier than cooking yourself, but still cheaper
than constant takeout and delivery fees. Compared to $25 to $30 for typical
restaurant delivery, meal delivery services average $10 to $12 per serving.
That’s $300 to $400 monthly savings even without stepping foot in the
kitchen.
Plan Your Grocery Shopping
Make a menu for the week, make a list of groceries for that menu, and then
stick to your grocery list at the store. Try to minimize the midweek grocery
runs. Shop at different stores for different items. Maybe Trader Joe’s for
snacks and produce, Costco for bulk items, and your local grocery for
everything else. You can do a lot of this online too, so that you don’t waste
time running around to multiple stores. (Because time is money too!)
Most importantly—never shop while hungry! That’s when those impulse
buys sneak into your cart. With a little planning, you can cut your grocery
bill by 20 to 30 percent while reducing food waste.
HACKING CREDIT CARD REWARDS
I’ve used credit card rewards to fly business class to Bali, stay at the Four
Seasons (hello, heated bathroom floors!), and get access to exclusive airport
lounges—all for freeeeeeee. Hands down, playing the credit card rewards is
my favorite way to subsidize expenses while still living the good life.
But—and that’s a big but—you have to play it right. Credit card rewards
are only worth it if you pay off your statement balance in full every single
month. If you’re getting 2 percent cash back but you’re paying 25 percent
APR in interest, you’re not really winning.
When choosing a card, ask yourself:
What kind of rewards do you prefer? (Cash back or travel points?)
Where do you spend the most money? (Groceries, gas, travel, or
dining?)
Which card will earn you the most rewards for purchases you’d make
anyway? (Some cards give 1x points on dining, others 3x!)
Pick a card that earns rewards you’ll actually use and maximizes the
spending you already do.
To keep it simple, I recommend having one primary rewards card where
you concentrate most of your spending. That way, you rack up points faster
and get that free flight sooner rather than later!
FREE TOOLS TO HELP YOU ADD A ZERO
Want my recommendations on the best rewards credit cards? I gotchuuu
—go to: addazero.com/toolkit!
If your credit card has an annual fee, make sure the rewards outweigh the
cost. For example, if a card has a $95 annual fee but gives you 6 percent
cash back on groceries, and you spend $5,000 a year on groceries, that’s
$300 in cash back—way more than the fee, making the card totally worth it.
So go ahead—pick the perfect rewards credit card and milk the perks for
all they’re worth. As long as you pay off your balance every month, rewards
are an amazing hack to offset expenses (especially travel).
But be honest with yourself. If you don’t 100 percent trust yourself with
credit cards, hold off. I used to justify overspending on my credit card
“because of the rewards”—don’t fall into that trap. If needed, revisit my
advice on budgeting with credit cards.
SETTING FINANCIAL BOUNDARIES
The hardest part about managing your expenses isn’t the math—it’s the
social pressure. Your friends plan a pricey ski trip. Your cousin asks to
borrow money (again). The group insists on splitting the $300 birthday
dinner evenly, even though you only had a salad.
You can negotiate every bill and maximize every credit card point, but if
you don’t have strong financial boundaries, your expenses will always be
higher than you want.
Sometimes you just have to politely decline and do your own thing. It
can be as simple as:
“Let’s get separate checks.”
“I need that Venmo back by Saturday.”
“That trip is outside my budget right now.”
“I can only afford to send $100 home every month.”
When setting financial boundaries, be direct and clear—no need for
lengthy explanations. After all, your boundary is your boundary. But if it
helps, you can soften the delivery by offering alternatives:
“How about we do a potluck at my place instead?”
“Let’s grab coffee rather than dinner.”
“I can’t join your birthday trip, but I’d love to celebrate with you
locally.”
If you’re ever caught off guard, “I’ll check my budget and get back to
you” is always a reliable fallback.
Of course, some things require a longer conversation. Maybe your
college roommate invited you to her destination wedding in Tulum. Sit
down over coffee or send her a heartfelt text: Thank you so much for the
invite . You know I love you, and I’d be honored to watch you get married .
But I’ve gotta take care of my finances, and I just don’t have the budget
right now to attend your wedding.
A little kindness and communication go a long way in protecting your
money without damaging your relationships. And if anyone gives you a
hard time about your boundaries, remember: That’s about them, not you.
People with a healthy relationship to money will understand and respect
your choices.
The truth is, you can’t afford not to have strong financial boundaries.
Remember your commitment to financial freedom and to your Intrinsic
Why (Chapter 2). Every time you stand firm in your money choices, you’re
not saying no to others—you’re saying yes to your freedom. And that’s
worth more than any overpriced group dinner or destination wedding could
ever be.
Now you have an arsenal of strategies for optimizing your expenses:
negotiating bills, cutting the Big Three, and setting clear financial
boundaries. These strategies alone could save you hundreds or even
thousands of dollars each month and fast-track you to $10,000.
Next stop: $100,000.
Which means now, it’s time to shift our focus to the other side of the
equation: your income. In the next chapter, let’s make sure you’re earning
what you’re worth.
CHAPTER TAKEAWAYS
You have more control over your expenses than you think. Negotiating
bills, optimizing your biggest costs, and setting financial boundaries
put you in charge of your money.
Big wins come from big moves. Cutting small expenses helps, but to
really accelerate your financial goals, focus on reducing your Big
Three (housing, transportation, and food).
YOUR ADD A ZERO CHECKLIST
Make your Negotiation Hit List—a list of companies you’ll call to
lower your bills.
Negotiate at least one bill using anchoring or framing. (Start with an
easy win like a phone or Internet bill.)
Research one specific way to optimize a Big Three expense and
calculate the potential savings.
Decide on a financial boundary you need to set, and practice saying it
out loud. (“Let’s get separate checks” is a good start!)
Review your credit card rewards strategy. Do you have the best card
for your spending habits?
FREE TOOLS TO HELP YOU ADD A ZERO
Grab word-for-word negotiation scripts, expense optimization tools, and
my rewards credit card recommendations at addazero.com/toolkit.
OceanofPDF.com
GETTING TO $100,000
OceanofPDF.com
CHAPTER 7
EARN YOUR WORTH
It’s up to you to believe in yourself and what you bring to the table—not others.
— ROSE HAN
Imagine two people, Jackie and Aubrey, who start working at the same
company. Jackie accepts the first offer of $65,000 and gets standard 2
percent raises each year. But Aubrey negotiates her starting salary up
$10,000 to $75,000. Like Jackie, she gets the same standard 2 percent raises,
but every two years, she also negotiates an additional 2.5 percent increase.
Now fast-forward 30 years. Aubrey’s making $186,935 a year, while
Jackie’s making $115,429. Over their careers, Aubrey has earned a total of
$3,688,957, whereas Jackie has earned $2,636,925. Aubrey made $1.05
million more than Jackie—all because she had the courage to negotiate and
advocate for herself throughout her career.
Let that sink in for a moment: one million dollars. That’s the cost of
staying quiet and not asking for what you deserve.
You’ve spent the last few chapters reviewing your expenses, budgeting,
and optimizing every dollar. But while trimming costs is powerful, there’s a
limit to how much you can save. Your income, on the other hand, has no
ceiling. Boosting your earnings is how you reach $100,000—and beyond—
faster.
There are countless ways to increase your income, but let’s start with the
lowest-hanging fruit: getting paid more at your current job.
CONFIDENCE = CASH FLOW
Before we dive into strategies for earning your worth, let’s talk about
something even more fundamental: confidence.
Ah . . . confidence. Don’t we all wish we had more of it! Confidence is a
deep-seated knowing that you bring incredible value to the table. And when
you have that, the cash flows.
Let me share a personal story about how I began cultivating confidence.
At my Wall Street job many years ago, I discovered my male colleague was
making significantly more money than me for the same role. It stung, but I
tried to rationalize it: Maybe he had more experience? Some secret sauce
that I didn’t have? There had to be a reason, right?
Mind you, I was more than qualified. But I was the only female trader on
the entire trading floor, and that kind of isolation has a way of subtly eroding
your confidence.
Looking back, I’m embarrassed that I never spoke up, but that experience
taught me a valuable lesson. I needed to be my own best advocate. At my
next job, when I joined a real estate firm run by a guy named Albert, I started
taking a lot of initiative early on. I spent late nights in the office studying the
ins and outs of financial statements and became a self-taught accounting
whiz. Pretty soon, I had made myself indispensable to the company.
Resolving to do things differently this time, I decided to ask Albert for
more money. At the time, I was still climbing my way out of debt and could
really use a boost of income to pay it off faster. If I didn’t want to be old and
gray-haired by the time I was finally debt-free, I knew I’d have to make
some moves.
My palms were sweaty, and it felt awkward as hell. To my shock, rather
than make me feel bad for asking (which is what I expected), he told me how
much he appreciated my efforts and then offered me a percentage of
upcoming deals.
Over the next year, this alone brought me an extra $50,000 (well, $30,000
after taxes). And guess where that money went? Straight toward adding a
zero, straight toward making a serious dent in my student loan debt!
And all I’d had to do was ask.
I tell you this story because my guess is that you could use more
confidence too. I hate to break it to you, but rainmakers aren’t usually the
smartest people in the room. But they are the most confident. Because when
you believe in your worth, others will too.
It’s up to you to believe in yourself and what you bring to the table. It’s up
to you to ask for what you deserve and ensure that you earn your worth. No
one else is going to do it for you.
That’s why I live by this mantra:
Confidence = Cash flow!
Repeat it after me!
Confidence = Cash flow!
Don’t be one of those talented, silent people who stay on the sidelines and
never ask for much. Don’t let people who are less talented than you rise up
the ladder and rake in the big bucks while you settle for mediocre pay, just
because they had confidence and you didn’t.
Even if you don’t think you’re good enough (yet), the good news is that
confidence can be built from scratch. In fact, that’s the only way confidence
happens. No one is born confident, not even Beyoncé. You have to build it—
brick by brick.
BUILDING UNSHAKABLE CONFIDENCE
Ready to build your own unshakable confidence? Here are my best tips for
transforming self-doubt into earning power. While there are many ways to
develop confidence, these are the ones that have helped me the most. Try
them yourself, and I’m confident (see what I did there?) they’ll help you too!
Tip #1: Create a “Why I’m Awesome” File
Our brains have a frustrating tendency to focus on our failures and
shortcomings while discounting our achievements—psychologists call this
“negativity bias.” To combat this, create your very own Why I’m Awesome
file. Keep this folder in your phone or wherever you like (I keep mine in
Google Drive), and in it, save any and all evidence of your achievements,
both personal and professional. Nice e-mails from colleagues, client
testimonials, screenshots of compliments you’ve received from friends via
text—seriously, anything is game! If it makes you feel good about yourself,
it goes into the file.
Review it regularly to remind yourself how awesome you are, and if
imposter syndrome ever hits (and trust me, it will), this file will snap you out
of it. Trust me, this folder is going to be your new confidence secret weapon,
and it will come in handy when preparing for your next salary negotiation,
which we’ll talk more about in a minute.
Tip #2: Take the CliftonStrengths Assessment
Here’s something that might surprise you: You have superpowers. Yes, you!
Except that you’re not aware of what they are, because they come so
naturally to you that you assume everyone can do what you do. But trust me
—they can’t. Your greatest strengths are often invisible to you.
This is where the CliftonStrengths assessment comes in. It’s not just
another personality test—it’s a tool that reveals your unique talents and
shows you how to leverage them. When you know exactly what your
superpowers are and you leverage them, that’s when you become
unstoppable.
Taking this test and learning my own Top 5 strengths (Achiever, Learner,
Futuristic, Competition, Activator, for anyone who’s interested) marked a
turning point in my life.
I finally understood why I gravitated toward certain career choices, why I
succeeded at certain things and failed at others, and most importantly, how to
position myself for $$$$$-making opportunities that aligned with my natural
talents. If you’re feeling a little lost and insecure, like you don’t know your
place in life or what you have to offer the world, you need to take this test
now!
Tip #3: Recruit Your Hype Team
Writing this book taught me something crucial about confidence: It’s not a
solo sport. During countless moments feeling paralyzed by imposter
syndrome (who am I to write a book? will anyone even read this?), my
friend Azhelle became my lifeline. One particularly rough day, I sent her a
panicked voice note confessing all my fears. Within moments, I got a longass voice note back from her. It was a full-on digital hype session that made
me feel like I could conquer the world (or at least finish this book without
spiraling into a black hole of self-doubt)!
That’s the power of a good hype team—they believe in you even when
you temporarily forget how to believe in yourself. Trust me, if you want to
level up in your career and in your finances, having this support system isn’t
just nice—it’s necessary. So don’t leave home without it!
Tip #4: Do It Scared
Here’s the dirty little secret about confidence that most people get backward:
Confidence is the byproduct of taking action, not something you need to
have in order to start. Waiting to feel confident before taking action is like
waiting to get in shape before going to the gym—it makes no sense!
Confidence is the byproduct of taking
action, not something you need to
have in order to start.
Remember when I told you about asking Albert for more money? My
palms were sweaty, my heart was racing, and I was terrified. But I did it
anyway. And you know what? That experience taught me something
invaluable: Everyone you see making big moves in their career is probably
also nervous as hell—they’re just better at hiding it.
You don’t need to feel confident to take action. You can do it scared. Most
people who are up to big things are all doing it scared! This principle applies
to everything in your career: asking for raises, taking on challenging
projects, or changing jobs. I even applied this principle when I started my
business later on (which you’ll hear more about in Chapter 10). Start before
you’re ready. Do it scared. The confidence will follow.
Meanwhile, this is your reminder that no matter what, you are good enough.
You do deserve to earn top dollar. And if you don’t believe that yet, well, I
BELIEVE IN YOU. Borrow the confidence I have in you, keep showing up
with courageous action, and one day, you’ll realize that you believe in
yourself too.
Now that you’re well on your way to building unshakable confidence, it’s
time to put that newfound self-belief into action by earning what you’re truly
worth, whether you’re a salaried employee, self-employed, or a freelancer.
EARNING YOUR WORTH: THE THREE GOLDEN RULES
Here’s the truth: Earning your worth isn’t just about working hard and being
really good at what you do. It’s about how you carry yourself, how you
advocate for yourself, and most importantly, the standards you set for
yourself. If you’re willing to accept mediocre pay, guess what? That’s
exactly what you’ll get.
Too many of us were conditioned to just be grateful for what we’re given.
Maybe you grew up in an immigrant family like I did, where even just
having a good job was seen as the ultimate achievement. Or maybe you were
taught that it’s not polite to talk about money, let alone ask for more.
Whatever your background, I say this with love: You need to raise your
standards.
Because earning your worth isn’t just about negotiating a bigger paycheck
(though we’ll definitely cover that). It’s about showing up differently. It’s
about making strategic, calculated moves. It’s about carrying yourself with
the quiet confidence of someone who knows their value.
In this section, I’m going to walk you through my Three Golden Rules for
reaching your full earning potential and accelerating your path to financial
freedom.
Golden Rule #1: Make Yourself More Valuable
This is literally the secret to making as much money as you want! The more
value you provide, the more you get paid. It’s a simple equation, but most
people never figure it out. They think their salary is about time served or
checking off tasks on a to-do list. But in reality, your compensation is
directly tied to the value you bring to the table.
The more value you provide, the
more you get paid.
Think about it: Companies exist to create value, and they’re willing to pay
handsomely for people who help them do that. Whether it’s generating more
revenue, cutting costs, improving efficiency, or solving critical problems—
the more value you create, the more indispensable you become. And
indispensable people command top dollar.
If you just show up and do the bare minimum, you’ll get paid the bare
minimum. But if you’re always looking for ways to provide more value,
you’ll be in a position to command premium pay. Here’s how to do it:
Master High-Impact Skills: Identify the skills that are most in demand
in your industry and go get them. For example, if you’re in marketing,
learning data analytics could help you measure campaign ROI more
effectively. If you’re in sales, mastering a new CRM system could help
you close deals faster. Take courses, get certifications, or teach yourself
—the more you know, the more you’ll earn.
Take on Strategic Projects: Don’t just volunteer for any additional
work—be strategic about it. Focus on projects that directly impact the
company’s bottom line or solve significant pain points. Creating a
process that cuts costs by 30 percent will be more valuable than
organizing the office holiday party.
Think Like an Owner: Look for problems before they’re apparent to
others. For instance, you might notice that customer complaints often
stem from confusion about a specific product feature, so you create a
video tutorial that reduces support tickets. Come up with solutions
nobody asked for. This kind of foresight and proactive problem-solving
is incredibly valuable to employers.
As for documenting all the ways you’re adding value, remember that Why
I’m Awesome file we talked about earlier? Make sure you’re using it to
document your career wins too. Here’s how you might record your
achievements:
I boosted regional sales by 10 percent in six months by introducing a
targeted e-mail campaign and optimizing customer outreach strategies.
I revamped our ticketing system, which reduced customer wait times by
an average of 20 minutes within three months and boosted overall
customer satisfaction ratings by 15 percent.
I implemented a new patient triage system in the emergency department
that reduced patient intake times by 25 percent over three months.
Notice how all the above examples include a very specific action or
project (introduced a targeted e-mail campaign), a quantifiable result
(boosted regional sales by 10 percent), and a time frame (in six months). The
more specific your points, the more concrete the evidence of your value.
That being said, providing more value alone doesn’t automatically
translate to higher pay. For that, you will likely need to implement Golden
Rule #2.
Golden Rule #2: Ask for More Money
You don’t ask, you don’t get. That’s how things work in life—and especially
so when it comes to your pay. Even if you hit it out of the park for your
company, unless you point it out to your boss and explicitly ask to be
compensated for your contributions, chances are slim anybody will just hand
it to you.
I know, I know, negotiating your pay is scary—way scarier than
negotiating your utility bill. You don’t want to come across as greedy, and
you’ll feel like crap if you get a no. Plus you might just feel grateful to have
a seat at the table. For all these reasons, I’m fully aware that it’s more
comfortable to not ask. But comfort will cost you a lot.
So let’s me and you have a pep talk. You want financial freedom, right? If
you want something you’ve never had, you have to be willing to do things
you’ve never done.
If you want something you’ve never
had, you have to be willing to do
things you’ve never done.
There are moments in your journey that define you—moments when you
can choose to do what’s comfortable or choose to try something brand new
to create a new result. This could be one of those defining moments.
If you want to add a zero, you’ll have to stretch yourself at times and do
things beyond your comfort zone. Negotiating your pay is one of them.
Remember that negotiation is a skill, and like any other skill, it can be
learned. And the more you do it, the easier it becomes.
To help you master this skill, here’s a play-by-play breakdown of how to
negotiate a raise.
Build Your Case (Six Months in Advance)
Start moving in silence, building your case for why you deserve a raise.
Take on additional projects and responsibilities that move the needle for
your company and find ways to provide more value. If you’re doing Golden
Rule #1, all of this should already be happening. Don’t forget to keep adding
work achievements to your Why I’m Awesome file, focusing on quantifiable
impacts: revenue generated and costs saved.
Research Market Rates (One Month in Advance)
Start with salary benchmarking sites like Payscale, Glassdoor, and
Salary.com. For tech roles, Levels.fyi offers detailed compensation data from
major tech companies. LinkedIn is also a great source of salary data.
But don’t stop there. Talk to recruiters and headhunters in your industry—
even if you’re not looking to leave, they can provide valuable intel about
current market rates.
Chances are, you’ll find that your job has a pretty wide salary range. This
is actually good because that’s what gives you room to negotiate! As you
gather your data points, what you’re looking for is an idea of the salaries by
percentile, so that you can see where you currently fall within that range. For
example, let’s say you’re a product manager with three years of experience
living in San Francisco. According to Salary.com, here are the salaries by
percentile for this market:
10th percentile
$130,920
25th percentile
$152,056
50th percentile (median)
$175,271
75th percentile
$202,133
90th percentile
$226,589
Armed with this information, you now know what’s “reasonable” to ask
for in your negotiation.
Craft Your Pitch (Three Weeks in Advance)
Whenever you’re negotiating anything—especially your pay—you always
need to answer “why.” Why do you deserve a raise? Why do you deserve 20
percent more and not just 5 percent more? Why, why, why? You need to
have good answers, because simply asking for more without any backup is
not going to fly.
So this is where your market research on salary percentiles and everything
you’ve been working on really comes into play:
Why do you deserve a raise? Because of all the extra value I’ve added
to the company (documented in your Why I’m Awesome file).
Why do you deserve 20 percent more? Because based on my market
research, I’m currently getting paid the median, but my outstanding
performance warrants 75th percentile pay.
See how that works?! When you go into a negotiation with cold, hard data
on your side, you take the emotion out of it. You’re using cool-headed logic,
and that’s hard to argue with.
For wiggle room in the negotiation, ask for a bit more than you’re willing
to accept. If you’re hoping for 10 percent more, ask for 15 percent.
Schedule the Meeting (Two Weeks in Advance)
E-mail your manager to schedule a one-on-one meeting to talk about your
compensation. Don’t make the actual ask in the e-mail—just give them a
heads-up about the topic so they’re not caught off guard. You don’t want to
take them by surprise! This allows them to prepare and shows
professionalism on your part.
In the days leading up to the meeting, practice your pitch until you can
deliver it confidently and naturally—in front of a mirror, with a friend, or
even with your dog (they’re great listeners).
Make the Ask
On the day of the meeting, dress professionally, look at your Why I’m
Awesome file, and exude confidence (even if you’re secretly terrified). If
you make eye contact, sit up straight, and speak calmly and clearly, no one
will be able to tell that you’re nervous. Start by expressing gratitude for your
boss’s time, then launch into your prepared pitch.
Get It in Writing
After the meeting, send a thank-you e-mail recapping what you discussed
and any next steps. If the answer was yes, confirm when the new salary will
be effective. If it was no, ask about specific goals and milestones needed for
a future raise. If you got a “maybe” or “I’ll get back to you,” ask if you can
provide any additional information to support your request.
FREE TOOLS TO HELP YOU ADD A ZERO
Grab my step-by-step cheat sheet with word-for-word scripts, proven
salary negotiation strategies, and links to salary data sources—all in one
place. Download it at addazero.com/toolkit and start getting paid what
you’re worth.
WHAT IF THE ANSWER WAS NO?
So you asked for a raise . . . and your boss said no. Ouch.
First, take a deep breath. A no today doesn’t mean a no forever, so don’t let one rejection shake
your confidence—or worse, stop you from trying again. Here’s how to turn a no into a strategic
next move:
Ask Why and Get Clarity on Next Steps: Instead of walking away discouraged, use this
as an opportunity to gather intel. Ask your boss: “Can you share what factors went into this
decision?” or “What would I need to accomplish to qualify for a raise in the future?” This
turns a hard no into a road map for getting a yes later. If they give vague answers, push for
specifics—what performance metrics, projects, or achievements will make you eligible?
Get it in writing if possible.
Negotiate for Other Benefits: If a salary bump isn’t on the table right now, consider
negotiating for other benefits. More flexible hours, a remote work option, additional PTO,
a one-time bonus, a professional development budget—don’t walk away empty-handed if
you can help it! Sometimes, a company’s budget constraints make salary increases
difficult, but perks may be easier to grant.
Set a Follow-Up Timeline: If your boss says “Maybe in the future,” lock down a
timeframe. Don’t leave the conversation open-ended. A good way to phrase this is: “I’d
love to revisit this conversation in three months after I’ve had a chance to make an even
bigger impact. Does that sound reasonable?” This keeps the door open for future
negotiation and shows initiative.
Whether you stay and work toward a future raise or leverage your skills elsewhere, remember
that you are in charge of your earning potential. Keep advocating for yourself, because no one
else is going to do it for you. And regardless of the outcome, I’m proud of you for trying!
Golden Rule #3: Keep Your Options Open
No, I’m not saying you should keep swiping on Tinder when you’re already
seeing someone (although no judgment if that’s you). What I am saying is
you should always keep your options open job-wise.
The best way to do this is by building a strong and extensive network. Get
out there and meet others in your industry. Make connections on LinkedIn.
Go to conferences. Talk to headhunters and recruiters (even if you’re not
looking, because why not?). Offer to grab coffee or lunch with people you
admire in your industry. Heck, just go out!
I kid you not, I even once got a job offer just while partying. When I was
an analyst working on the trading floor at HSBC, there was a whole crew of
other analysts my age who worked in the same department at other banks.
We’d talk shop, hang out, and party together on the weekends. One night,
one of them told me they were looking to add a team member, and I’d be a
perfect fit. After one round of interviews, I got a job offer for double what
I’d been making. No one ever tells you that if you want to make it rain, it’s
all about who you know, not what you know.
Imagine if at any given moment, if your current job isn’t paying you
enough, being able to call at least five people at other companies who could
help you get something better. That’s what earning your worth looks like,
baby!
The truth is, when it comes to your job, loyalty is overrated. According to
Pew Research Center, from April 2021 to March 2022, 60 percent of
workers who switched jobs saw an increase in real earnings, with half of
them getting a raise of 9.7 percent or more. Meanwhile, only 47 percent of
workers who stayed at the same company saw any real wage growth in that
same period.1
It’s the opposite of what should happen, but the harsh reality is that the
longer you stay at a company, the more likely you are to be underpaid. It’s
called the “loyalty tax.” People who jump from one job to another keep
getting market rates, while those who stay in jobs tend to get a smaller raise
percentage.
While I’m not saying you should bounce from job to job every six
months, you should always keep your resume updated, your network warm,
and your eyes open for opportunities. And if you do get a great offer
elsewhere? Don’t be afraid to take it or at least use it as leverage to negotiate
a raise at your current job. When you tell your boss you’re considering
leaving, they might suddenly find room in the budget to give you a big raise.
Funny how that works, huh?
You have to remember, your job doesn’t care about you. Your boss might
care about you, and your teammates might care about you. But your
company doesn’t. If the economy gets tough, and your company has to do a
round of layoffs, you’ll be just a number to them.
So be smart and strategic. Look out for yourself. Master these Three
Golden Rules, and you’ll be well on your way to making more money and
adding zeros to your net worth. You (and your bank account) can thank me
later!
Know When to Get the F*ck Out
Let’s get real for a minute. All these tips for earning your worth work, but
only if you’re at a job where you (1) can add value, and (2) get paid and
recognized for that value.
Sometimes no matter how much value you bring or how hard you work,
it’s just not going to result in any career advancement, let alone getting paid
more. While I’m all for building confidence and asking for what you
deserve, I also believe in being strategic about where you invest your energy.
Remember what I said about raising your standards? You deserve a
manager who champions your growth and advocates for you. You deserve a
workplace that recognizes your contributions and invests in your
development. If there’s zero path for growth, the company culture is stingy
AF when it comes to recognizing good work, and you’re not feeling
supported, then it might be time to peace out. Sometimes the fastest path to
earning your worth is just finding an employer who recognizes, supports,
and compensates good work. They’re out there!
If you’re feeling stuck, it’s time to activate that network we talked about
in Golden Rule #3 and start exploring other opportunities. And pro tip: The
best time to look for a new job is while you still have one. You’ll negotiate
from a much stronger position when you’re not desperate.
EARNING YOUR WORTH AS A FREELANCER
If you’re self-employed, everything we just talked about still applies—you just need to think
about it a little differently. Instead of one boss, you have multiple clients. Instead of a salary, you
have rates. But the core principles? They’re exactly the same.
Golden Rule #1 (Make Yourself More Valuable) means becoming the go-to expert in your field
and consistently delivering stellar results for your clients. Golden Rule #2 (Ask for More Money)
means routinely raising your rates and having the confidence to price yourself at premium levels.
And Golden Rule #3 (Keep Your Options Open) means building a strong network that brings you
referrals and new opportunities.
Let’s talk specifically about raising your rates, because this is where most freelancers get stuck.
Do you keep charging the same rates year after year, even as you get better at what you do? (And
as inflation keeps rising?) Don’t be that freelancer.
Another huge mistake I see: pricing based only on the actual time you spend doing the work,
without factoring in business costs. Your rates need to cover everything: your expertise, your
overhead, your equipment, your taxes, your benefits (which you’re paying for yourself), and the
time you spend on admin work and finding new clients. Don’t price yourself like an employee
when you’re actually a business owner!
Here are some tips for raising your rates.
Test the Market with New Clients
Always quote higher rates to new clients than what you charge existing ones. This lets you
gradually increase your average rate without having awkward conversations with current clients.
Plus it’s a way to test the market—if new clients keep saying yes to your higher rates, that’s a
sign you can probably raise rates with existing clients too. So if you’ve been scared to do it, start
with new clients where the stakes are lower. Then use that as leverage and a confidence boost for
raising rates with existing clients.
Time the Conversation Strategically with Existing Clients
As for when to raise rates with current clients, the best time to have that conversation is right
after you’ve just knocked a project or service out of the park. My hairstylist did this beautifully—
she had just spent seven hours turning my hair into the most beautiful pink col- or, gave me a
blowout with beachy waves, and right when I stepped out of that chair feeling like a million
bucks, she dropped the news on me. “By the way, starting next month, my hourly rate for new
clients will be increasing by $50 in order to reflect the increased cost of doing business. Since
we’ve been working together for a while, I wanted to give you a heads-up. For you, the new rate
will be $30 (so less than what I’m charging new clients).”
I gotta hand it to her—she pulled that off beautifully! I happily agreed, set my next
appointment with her, and walked out. Her timing was perfect—telling me right when I was most
pleased with her work and aware of her skill. But she also did a few other clever things here.
Let’s dissect:
Gave me advance notice—nobody likes surprises if it involves paying more
Made me feel special with a “loyalty discount” that new clients weren’t getting
Positioned the change as something that’s already decided—this conveys confidence
Provided justification for the rate increase, which made it easy for me to agree
As you can see, all the principles of a successful salary negotiation still apply to freelance rate
negotiations. If you’re going to ask for more, you need to do it with confidence, and you need to
have justification.
For the confidence part—always go back to that Why I’m Awesome file. There, you should be
keeping a running list of your best work, client testimonials, and concrete results you’ve achieved
to remind yourself and your clients of how good you are.
As for the justification part, anything along the lines of needing to pass on increased costs or
needing to be more selective with your clients due to increased demand for your services are
always two solid justifications to put forth. Obviously, don’t make things up, you gotta be honest,
but make sure to come up with something to back up your case!
FREE TOOLS TO HELP YOU ADD A ZERO
Need help raising your rates with confidence? I’ve put together a cheat
sheet with negotiation scripts, rate-setting strategies, and tips for handling
client pushback—so you can charge what you’re really worth. Grab it at
addazero.com/toolkit.
CHAPTER TAKEAWAYS
Your earning potential is limitless. There’s only so much you can cut,
but there’s no cap on how much you can earn.
Confidence creates cash flow. The more you believe in your value, the
easier it is to ask for—and get—what you’re worth.
Negotiation is a skill, not a personality trait. You don’t have to be
aggressive or extroverted—just prepared.
Asking for more is how you get ahead. Raises and higher rates don’t
just happen—you have to go after them.
YOUR ADD A ZERO CHECKLIST
Create your Why I’m Awesome file and add at least three achievements
to it.
Take the CliftonStrengths assessment to discover your superpowers.
Make a list of three to five people who could be part of your hype team.
(For employees) Make a game plan to increase your salary
(For freelancers) Audit your rates—are they keeping up with your
expertise, demand, and market value? Adjust accordingly!
FREE TOOLS TO HELP YOU ADD A ZERO
Free resources I’ve put together for you to help you start earning your
worth:
For employees: A step-by-step guide to negotiating a raise, with
scripts and salary data sources.
For freelancers: A rate-setting and negotiation playbook to help you
charge what you’re worth.
Grab them at addazero.com/toolkit or scan the QR code.
OceanofPDF.com
CHAPTER 8
STASH MONEY TAXEFFICIENTLY
It’s not how much money you make, it’s how much money you keep.
— ROBERT KIYOSAKI
Every year, I save tens of thousands of dollars in taxes by strategically
putting money away into tax-advantaged accounts—money that goes straight
toward building my net worth instead of going to Uncle Sam. Most people
don’t realize just how powerful these tax-advantaged accounts can be. I
certainly didn’t at first. But it was one of the key ways that I got to my first
$100,000 faster than I thought possible.
Here’s the truth: Taxes will likely be your single biggest expense over
your lifetime. Yet while most people spend hours searching for ways to save
a few hundred dollars on everyday expenses, they completely overlook legal
ways to save tens of thousands in taxes through strategic use of retirement
accounts.
Think about it—would you rather:
Make $100,000 and keep $60,000 after taxes, or
Make $100,000 and keep $80,000 after taxes?
If you want financial freedom, you won’t get there by paying more taxes
than you need to every year. When you know how to use tax-advantaged
accounts strategically, it’s possible to save tens of thousands of dollars in
taxes each year. Year after year, those tax savings add up!
The accounts you’ll learn about in this chapter are your answer to the big
question:
“How can I keep more of my money by being smart about
taxes?”
ACCOUNTS VS. INVESTMENTS
Before we dive into the different types of accounts, let me clear up one
common point of confusion: An account is just a place to hold your
investments. It helps to think of your account as a shopping cart. The
“groceries” are the investments, and the “shopping cart” is the account.
Something that trips a lot of people up is that once they open an account
(such as a Roth IRA), they mistakenly think they’re investing when, in
reality, all they’ve done is stash money away into an account that offers
some cool tax benefits. That doesn’t mean that money is going to grow! The
actual investments you buy with that money (like stocks and bonds) are what
will make your money grow. The shopping cart itself isn’t what you’re really
after. What you’re really after is the groceries!
That being said, grabbing the shopping cart is the place to start. Why?
Because first of all, it’s a necessary step—you can’t buy stocks and bonds
without opening an account first.
Second of all, by grabbing the right shopping carts, you’ll save a boatload
of money in taxes. You can put the exact same investments (stocks, bonds,
etc.) in either a taxable account or a tax-advantaged account. But by
choosing the right shopping cart, you can save thousands in taxes on those
identical investments.
For example, $10,000 worth of stock investments could generate $1,000+
in tax bills each year in a regular account, but grow completely tax-free in a
Roth IRA. Same groceries, very different tax implications based on which
cart you choose.
For now, don’t worry if terms like stocks and bonds make your eyes glaze
over—we’ll cover which investments to put in these accounts in the next
chapter. In this chapter, let’s just focus on understanding the different types
of shopping carts available to you.
Two Flavors: Traditional vs. Roth
Most tax-advantaged accounts (we’ll go over the different types in the next
section) come in two “flavors”—traditional and Roth. And unlike choosing
between chocolate and vanilla ice cream (where I never know which one to
pick!), choosing between traditional and Roth is actually pretty
straightforward once you understand the tax implications.
Traditional accounts are what you call “tax-deferred” accounts. You don’t
pay taxes on what you put in (your contributions) because traditional
contributions are tax-deductible, i.e., you contribute pre-tax money.
However, you do pay taxes on what you take out (your withdrawals). You’re
deferring your taxes for later down the road.
On the other hand, Roth accounts are what you call “tax-free” accounts.
You pay taxes on your contributions, because Roth contributions are not taxdeductible, i.e., you contribute after-tax money. Then because you already
paid tax on the money up front, you don’t have to pay taxes later when you
withdraw.
Both accounts—traditional or Roth—allow your investments to grow taxfree. As long as the investments are held inside these accounts, they are
shielded from taxes on capital gains, dividends, and interest.
The key difference between Roth and traditional-style accounts comes
down to when you get the tax benefit: With traditional accounts you get the
tax benefit now, whereas with Roth accounts you get the tax benefit later.
Let’s make this concrete with an example. Meet Maria, who has $10,000
to put away for retirement and is trying to decide between traditional or
Roth. Let’s assume a 25 percent tax rate (just to keep the math simple):
If Maria chooses traditional:
Contributes $10,000 pre-tax, pays no taxes on that income
The $10,000 grows tax-free to $46,609 (assuming an 8 percent return
over 20 years)
Pays taxes on the $46,609 when she withdraws it (25 percent of
$46,609 = $11,652)
If Maria chooses Roth:
Contributes $10,000 after-tax, pays $2,500 in taxes on that income (25
percent)
The $10,000 grows tax-free to $46,609 (assuming an 8 percent return
over 20 years)
Pays no taxes on the $46,609 when she withdraws it
With the traditional, Maria pays taxes later on the amount withdrawn
($46,609). With the Roth, she pays taxes now on the amount contributed
($10,000). Maria can choose to either get the tax benefit up front
(traditional) or later (Roth).
So which is better? Well, first let’s be clear: Either traditional or Roth is
better than nothing at all. After all, in a regular taxable account, there’s no
tax break for anything—whether it’s on what you contribute, on your
investment growth, or on your withdrawals.
But when it comes down to choosing between traditional or Roth—it’s a
no-brainer when you think in terms of total dollar amount in taxes paid—the
Roth would save you a lot more. Paying taxes on $10,000 is a lot better than
paying taxes on $46,609! It’s better to pay taxes on the smaller amount going
in, before it gets invested and grows to a much bigger amount.
When you choose Roth over traditional, you’re playing the long game—
footing a slightly higher tax bill today in return for a tax-free retirement
down the road.
Now there is one scenario where traditional beats Roth: if Maria’s tax rate
goes down by a lot between now and the day she withdraws. Maybe it went
from 25 percent to 5 percent. In that case, she’d owe $2,330 taxes on the
traditional withdrawal, compared to the $2,500 taxes she paid on the Roth
contribution.
In short, if your tax rate decreases drastically in the future, then traditional
beats Roth. But that’s a big if. Who the hell knows which tax bracket you’ll
be in decades from now? Who knows what the government will do to tax
rates between now and then?
That’s exactly why I recommend locking in your tax situation up front
with Roth accounts rather than having to face looming, uncertain tax bills in
the future with traditional accounts.
Of course, you don’t have to choose just one. In fact, as we’ll discuss,
having a combination of both traditional and Roth flavors is a smart move.
Ahh, isn’t it great when you can have both chocolate and vanilla?
Having a mix of both traditional and Roth accounts gives you valuable
“tax diversification.” Maybe tax rates will go up, maybe they’ll go down.
Maybe you’ll be in a higher bracket, maybe lower. By having both types of
accounts, you give yourself flexibility to manage your tax situation in
retirement.
TL;DR: Roth is typically the better bet, but having a mix of both accounts
is a smart way to give yourself options for the future.
PLAYING THE TAX-SAVINGS GAME: RULES &
REQUIREMENTS
Like any game with valuable prizes, tax-advantaged accounts come with
specific rules you need to follow to claim your tax savings. Think of these as
the terms and conditions for getting thousands of dollars in tax breaks.
Age Requirement
The government gives you tax breaks on these accounts because they want
you to use them for retirement, not short-term spending. That’s why you
generally need to wait until age 59½ to withdraw your money. Taking it out
earlier usually means paying taxes plus a 10 percent penalty.
If you’re wondering, “Why would I want to lock up my money until I turn
59½?” here’s some good news: There are legal ways to access your money
sooner if needed. While these accounts are designed for long-term retirement
horizons, they’re actually more flexible than most people realize:
Roth IRA contributions (not earnings) can be withdrawn anytime
without penalty.
Many 401(k) plans allow you to borrow up to 50 percent of your
balance while you’re still employed (you’ll need to pay it back with
interest, but you’re paying that interest to yourself).
You can build a Roth conversion ladder to access retirement accounts
early without paying penalties. It’s a great strategy for early retirement.
(See Appendix A for a step-by-step breakdown on Roth conversion
ladders.)
The key is proper planning. Despite the age restrictions, don’t let that stop
you from taking advantage of the powerful tax benefits. With the right
strategy, you can build wealth tax-efficiently and maintain flexibility to
access funds when needed.
Contribution Limits
Each account type has annual limits on how much you can contribute. Think
of these as your yearly tax-break allowance. Since these limits typically
change each year, I’m not listing specific numbers in this book, but suffice it
to say that you could easily shelter at least $30,000 a year from taxes by
using these accounts! Visit IRS.gov for the most up-to-date annual
contribution limits for each account.
Miss a year? That tax-saving opportunity is gone forever. That’s why
maxing out these accounts when possible is so important—you can never go
back and get those tax breaks later.
WHICH ACCOUNTS ARE FOR YOU?
Now that you understand the basics of how these accounts save you money
on taxes, let’s look at which specific accounts are available to you. But I get
it—this stuff isn’t easy to learn when you’re starting out. I once saw a meme
that said “Signed up for my company’s 401(k) but I’m nervous cuz I’ve
never run that far before. LOL #relatable.” It made me laugh because it
perfectly captures how confusing all these accounts can feel at first: 401(k)s,
IRAs, HSAs—it’s like alphabet soup!
At first, I found all these numbers, letters, and rules super intimidating
too. But once I understood how each account could help me keep more of
my money instead of giving it to the IRS, I got excited. Really excited. So let
me break down each type of account and its tax superpowers in plain
English, starting with ones anyone can use.
For Everyone
These accounts are available to anyone and everyone who has earned
income, whether you work for yourself or for somebody else:
Traditional IRA—Reduce your taxable income by at least $7,000 per
year (check IRS.gov for current annual contribution limits). You can
open this type of retirement account on your own at any brokerage firm,
completely separate from your employer. Just like a traditional 401(k),
you get a tax break now and pay taxes when you withdraw in
retirement.
Roth IRA—The Roth version of an individual retirement account. Like
all Roth accounts, you pay taxes on the money going in but never pay
taxes again—even on all the growth! One catch is that if you make too
much money, you may not qualify to contribute directly to a Roth IRA.
But there is a “backdoor” way . . .
Backdoor Roth IRA—A special strategy for high earners who make
too much to contribute directly to a Roth IRA. Instead of giving up on
the awesome benefits of a Roth IRA, you can contribute to a traditional
IRA and then convert it to a Roth. It’s like getting backstage access to a
sold-out concert—there’s another way in if you know the secret!
For Employees
If you have an employer, you probably have access to one of these:
401(k)—Reduce your taxable income by at least $23,500 per year
(check IRS.gov for current annual contribution limits). This is the most
common employer-sponsored plan, and it comes in both traditional and
Roth flavors. The best part? Many employers will match your
contributions. This is called “401(k) employer match” and it’s free
money! If you saw a random stranger on the street throwing money in
the air, you’d probably try to grab some, right? That’s exactly what
you’re passing up if you don’t take advantage of your employer match.
At my first job, the employer offered a three-for-one match—$3 for
every $1 I put into my 401(k), and you can bet I took advantage of it.
It’s the best hack I know to get to $100,000 net worth fast!
403(b)—This is basically the public sector version of a 401(k). If you
work for a school, hospital, or nonprofit, this is likely what you have.
Just like a 401(k), it comes in both traditional and Roth versions and
might offer an employer match.
TSP (Thrift Savings Plan)—The government’s version of a 401(k) for
federal employees and military personnel. Same deal—comes in
traditional and Roth flavors with potential matching.
WHAT HAPPENS TO YOUR 401(K) WHEN YOU
CHANGE JOBS?
If you’re changing to a better job—congrats! But don’t be so excited that you forget to take your
401(k) or 403(b) with you! There are several options for the plan you had at your previous job.
Option 1: Keep the Money Where It Is
You can do nothing and keep the money in your old employer’s 401(k) plan, but this is my least
favorite option. The average person changes jobs 12 times in their lifetime,1 so imagine how
many different 401(k) plans you’d go through over your career! Each time you leave a job, you
leave behind a 401(k) and you risk forgetting about the money. Yes, forgetting! According to a
2023 report, there are approximately 29.2 million forgotten 401(k) accounts in the U.S., holding
around $1.65 trillion in assets.2 That’s why I favor these next two options the most.
Option 2: Transfer the Money into Your New Employer’s 401(k)
If your new job offers a 401(k) plan, you can move your old 401(k) into the new plan, essentially
merging them. Not all employers will allow this, however, so check with your new company. I
like this option better because it keeps all your 401(k)s in one place, where it’s easier for you to
keep track of it and manage.
Option 3: Do a 401(k) Rollover
A 401(k) rollover is when you transfer (i.e., “roll over”) the money into an IRA. If you’re rolling
over a traditional 401(k), you’ll need to roll the money into a traditional IRA. If you’re rolling
over a Roth 401(k), you’ll need to roll the money into a Roth IRA. In such cases, your IRA might
be referred to as a “rollover IRA”—although it’s really no different from a regular IRA. The
difference between keeping your money in the 401(k) versus rolling it over to an IRA is that with
an IRA, you have to choose your own investments. With a 401(k), the plan chooses your
investments for you.
After doing a 401(k) rollover, don’t forget to invest the money! Once the
401(k) lands in your rollover IRA, that money is no longer invested. It is
transferred as cash and it won’t grow.
For Business Owners and Self-Employed
Work for yourself? You’ve got some powerful options:
Solo 401(k)—Just like a regular 401(k), but for one-person businesses.
The cool part? You get to contribute as both the employee and the
employer, which means you can stash away three times more money
than with a regular 401(k). Comes in both traditional and Roth versions.
SEP IRA—Another great option for self-employed folks or small
business owners. The paperwork to open one is also much simpler than
opening a Solo 401(k). Also comes in both traditional and Roth
versions.
Other Important Accounts
Beyond retirement accounts, there are a few other tax-advantaged accounts
you should know about:
HSA (Health Savings Account)—This might be the best deal in the tax
code! Triple tax advantage: tax break when money goes in, grows taxfree, and withdrawals are tax-free if used for health-related expenses.
This can include doctor visits, contact lenses, dental work, acupuncture,
therapy, and all sorts of other things. Despite its name, the HSA is a
full-blown investment account where you can buy stocks and bonds just
like an IRA. There’s a catch though: to be eligible for an HSA, you
need to be on an HSA-eligible, high-deductible health plan.
529 Plans—If you have kids (or plan to), these can be a great way to
save for college in a tax-savvy way. Investment growth is tax-free and
withdrawals are tax-free if used for education expenses. Also,
depending on your state, contributions may be tax-deductible at the
state level.
Brokerage Accounts—Regular investment accounts with no special
tax advantages, but also no age restrictions. You can withdraw anytime,
and you can also contribute as much as you want each year—there are
no limits. While not tax-advantaged, they’re great for building wealth
beyond retirement accounts.
If all of these different kinds of accounts have your head spinning, here’s a
handy chart to help you keep them straight:
Master Account Comparison Table
Account Type
Who Can Use It
Access to Funds
Key Features
Traditional
401(k)
Employees with
employer plan
Wait until 59½, otherwise
10% penalty applies
Employer match
High contribution
limit
Reduces taxes now
Roth 401(k)
Employees with
employer plan
Wait until 59½, otherwise
10% penalty applies
Employer match
High contribution
limit
Tax-free growth
Traditional IRA
Anyone with
earned income
Wait until 59½, otherwise
10% penalty applies
Flexible investment
options
Lower contribution
limit than 401(k)
Reduces taxes now
Roth IRA
Anyone with
earned income
(income limits
apply)
Contributions accessible
anytime; earnings have
10% penalty before 59½
Flexible investment
options
Lower contribution
limit than 401(k)
Tax-free growth
Solo 401(k)
Self-employed
with no
emplyees
Wait until 59½, otherwise
10% penalty applies
Highest contribution
limit
Can contribute as
both employer &
employee
Available in
traditiomal or Roth
SEP IRA
Self-employed
or small
business
owners
Wait until 59½, otherwise
10% penalty applies
Highest contribution
limit
Easy setup
Available in
traditiomal or Roth
HSA
529 Plan
Those with highWithdraw anytime for
deductible
qualified health
health plan
expenses, otherwise 20%
penalty + income tax
apply before 65; after 65
only income tax applies
Triple tax advantage
Anyone saving
for education
expenses
Tax-free growth for
education
10% penalty + income tax
on non-education
withdrawals
Can invest the
money
Becomes retirement
account at 65
Account Type
Who Can Use It
Access to Funds
Key Features
Highest contribution
limits
Can change
beneficiary
FREE TOOLS TO HELP YOU ADD A ZERO
Not sure where to open your investment accounts? I’ve got you covered.
Get my list of recommended brokerages for each type of account—Roth
IRA, HSA, Solo 401(k), taxable brokerage, and more—at
addazero.com/toolkit.
YOUR PERFECT TAX-SAVVY ACCOUNT COMBO
While each account offers powerful tax benefits on its own, the real magic
happens when you combine them strategically. Think of it like assembling
your own tax-savings dream team. Use the flowchart below to figure out
which combo best fits your situation—then read on for a breakdown of each
option.
The Employee Express
Perfect for: W-2 employees with a company retirement plan
401(k)
Roth IRA
HSA if eligible
This is your classic starter combo—like the burger and fries of retirement
accounts. Simple but powerful!
The High-Roller Package
Perfect for: High-income employees who exceed Roth IRA income limits
401(k)
Backdoor Roth IRA
HSA if eligible
Brokerage account for additional savings
When you’re crushing it income-wise but bumping into contribution
limits, this is your move. Max out that 401(k), then use the backdoor Roth
strategy to still get some tax-free growth. Add an HSA if eligible—at your
tax bracket, those tax savings are especially valuable!
The Solopreneur Special
Perfect for: Self-employed individuals with no employees
Solo 401(k) (both employer and employee contributions)
Roth IRA
HSA if eligible
One of the many benefits of being your own boss is that you get to make
Solo 401(k) contributions as both employer and employee. This allows you
to contribute way more than a regular 401(k). Plus you can add a Roth IRA
for tax diversification.
The Freelancer Flex
Perfect for: Self-employed individuals who want simpler administration
SEP IRA
Roth IRA
HSA if eligible
If the Solo 401(k) paperwork makes your head spin, this is your simpler
alternative. The SEP IRA is super easy to set up and maintain, and you can
still add a Roth IRA for some tax-free growth. Think of it as the lowmaintenance combo that still gets the job done!
These are the most common account combos. But feel free to swap things
in and out based on your own unique situation. The key is knowing you’re
not limited to just one account!
HOW TO PRIORITIZE YOUR MONEY: THE FINANCIAL
WATERFALL
Once you open the right combination of accounts, the next question is:
Which ones should you fund first? After all, most of us don’t have enough
money to max out every account right away.
Remember our Financial Waterfall from earlier chapters? We covered the
foundational tiers 1 to 4: building your starter emergency fund, paying off
credit cards, getting your full 401(k) employer match, and building your full
emergency fund. Now it’s time to reveal the rest of the Waterfall tiers that
show you exactly how to prioritize your tax-advantaged accounts:
Tier 5: Max Out Your Roth or Backdoor Roth IRA
Maximize your IRA contributions. For reasons already discussed, stick with
a Roth if you can—it’s the most tax-efficient way to stash your money! And
if you make too much for a direct Roth contribution, consider the backdoor
Roth strategy we discussed earlier.
Tier 6: Max Out Your HSA
If you’re eligible for a Health Savings Account, fund that next. Why? It’s the
only account that gives you a triple tax advantage: tax break when money
goes in, grows tax-free, and withdrawals are tax-free for medical expenses.
Even if you don’t need it for health care now, you can invest it for the long
term. It’s too good to pass up!
Tier 7: Max Out Your 401(k) (or Solo 401(k) or SEP IRA If
Self-Employed)
By now, you’re already getting your full 401(k) employer match (Tier 3),
and if you’re also done with Tiers 4 to 6, then it’s time to circle back around
to that 401(k) and contribute up to the annual limit. If you’re self-employed,
you skipped the 401(k) employer-match tier but now’s the time to max out
your Solo 401(k) or SEP IRA!
Tier 8: Pay Off ALL Other Debt (Except the Mortgage)
Once you fund all the retirement accounts, now would be a good time to
eliminate any remaining non-mortgage debt, like car loans or student loans.
Follow the same Debt Snowball strategy you used to pay off credit card
debt.
Tier 9: Fund Taxable Brokerage Account or Save for
House/College
Taxable accounts come later, after maximizing all your tax-advantaged
accounts. After all, why pay more taxes than you have to? Once you reach
this tier, you can also work on goals like buying a house or saving for kids’
college, which should always come after retirement savings goals. Why?
Because you can borrow for a house or for college, but you can’t borrow for
retirement.
Tier 10: Pay Off Mortgage Early
Paying extra on your mortgage comes last because mortgage rates are
typically lower than long-term investment returns. Plus you get a tax
deduction for mortgage interest.
By moving through the Financial Waterfall in this exact order, you build a
rock-solid financial foundation, rather than building a financial house of
cards. For example, what good is maxing out your IRA if an emergency
could force you to dip into it prematurely and pay penalties? That’s why
building a full emergency fund comes before the Roth IRA.
Not only this, but by following the Financial Waterfall in this order, you
save every dollar as tax-efficiently as possible. Think of it like a game of
tax-advantage Tetris—you want to fill up the most tax-efficient accounts first
before moving to less advantageous options. This is how the rich keep more
of what they earn: not just by making more (though that helps), but also by
being strategic about where they put their money.
Every tier is intentionally placed to save you the most in taxes, protect you
from backtracking, and get you to $100,000 and beyond as fast as possible.
The bottom line? Follow the Financial Waterfall!
THE FINANCIAL WATERFALL IN ACTION
Let’s see how this Waterfall plays out in real life. Here are two examples of how different people
might implement these principles:
Meet Alex: Entry-Level Employee
Makes $60,000 per year
Company matches 401(k) contributions up to 3 percent of salary
Has completed Tiers 1 and 2 (starter emergency fund + no credit card debt)
Alex’s Step-by-Step Strategy:
Contributes 3 percent ($1,800) to 401(k) to get full employer match ($1,800 of free money!)
Puts aside all extra money toward reaching full six-month emergency fund
Halfway through the year, Alex finishes building his six-month emergency fund. He then
routes his savings to a Roth IRA.
Alex only has enough money to just barely max out his Roth IRA for the year. When he gets
more money to cover more ground in the Financial Waterfall, he’ll move on to his HSA next.
Go, Alex!
Meet Sofia: Self-Employed Consultant
Makes $200,000 per year
Completed Tiers 1 to 4 (starter emergency fund + no credit card debt + 401(k) match + fullsized emergency fund)
Has some student loans left to pay off
High earner who can’t contribute directly to Roth IRA
Sofia’s Step-by-Step Strategy:
Maxes out backdoor Roth IRA contribution for the year
Maxes out HSA contribution for the year
Maxes out Solo 401(k) contribution for the year (both the employee and employer portions)
Throws what’s left toward her student loans to pay them off early. Go, Sofia!
Notice how each person moves through the Financial Waterfall differently based on their
situation, but they all follow the same basic Waterfall principle: cover your bases first, then make
the most tax-advantageous moves next, working your way down the list.
AUTOMATE YOUR FINANCES: STEP-BY-STEP
BLUEPRINT
One year, I realized I’d paid $10,000 to my credit card but hadn’t saved
nearly as much for myself. Like . . . what?! I was so good about paying the
credit card company, but when it came to paying myself? Not so much.
That’s when it hit me—I needed to treat saving for my future the same way I
treated paying my bills—as nonnegotiable.
And the best way to make something nonnegotiable? Automation.
Think about it: How many times have you kept paying for a subscription
because you forgot you were paying for it? Subscription businesses make a
ton of money off people due to that exact tendency. So when you automate
your finances, you’re using this same “set it and forget it” psychology to
make yourself richer. Automation works!
All it takes is some setup up front. Let me show you exactly how to do it.
For Employees
The great thing about being an employee is that your steady paycheck makes
automation pretty much foolproof. You already have a predictable flow of
money coming in—now it’s just about directing that flow to work harder for
you.
As you set this up, make it your goal to have your money hit your
priorities before you even have a chance to spend it. That means automating
contributions to your retirement and savings accounts first, then setting up
autopay for bills and debt payments. And wherever possible, batch your
payments so they happen around the same time each month—it keeps your
cash flow cleaner and your mental load lighter.
It might take a little fine-tuning at first to line up your transfer dates with
your payday, but once it’s rolling, this system runs itself. You’ll be growing
your net worth on autopilot.
Here’s your step-by-step automation blueprint:
1. Set up direct deposit for your paycheck to go straight into your
checking account
2. Set up 401(k) contributions to be automatically deducted from your
paycheck before it hits your checking account
3. Create automatic monthly transfers from checking to:
– Roth IRA (fixed amount)
– High-yield savings account (fixed amount)
– Debt payments (on a set day)
4. Use one rewards credit card for all your spending, then set up monthly
autopay for the full balance
5. Set up monthly autopay for any remaining bills that can’t go on the
credit card
For Self-Employed
To automate your finances as a freelancer (or anyone with irregular income),
the goal is to create routine and predictability in your personal finances, even
if your business income fluctuates. It starts with separating your business
and personal accounts. Open a dedicated business checking account for all
your business transactions—it’ll make tax time so much easier.
Next, pay yourself a fixed monthly “salary” from your business checking
account to your personal checking account. Automate this transfer for the
same amount each month, and aim for a number that comfortably covers
your personal living expenses.
I know this can feel tricky, especially in the early stages of your business
when income is inconsistent. But that’s exactly why it’s so important. Paying
yourself a steady salary helps you create consistency in your personal
finances, even when your business has leaner months. (Refer back to how to
build a two-month buffer in your business account to handle the ups and
downs.)
Here’s how to set up your automation flow:
1. Have all business income flow into a dedicated business checking
account, where you’ve built up a buffer of two months’ worth of living
expenses
2. Set up an automatic transfer for a fixed monthly “salary” that you pay
yourself to a personal checking account
3. From your personal checking, create automatic transfers for:
– Roth IRA (fixed amount)
– High-yield savings account (fixed amount)
– Debt payments, all scheduled on the same day for simplicity
4. Use one rewards credit card for all your personal spending, then set up
autopay for the full balance each month
5. Automate any remaining bills that can’t go on the rewards credit card
Unfortunately, you can’t really automate Solo 401(k) and SEP IRA
contributions. That’s because the amounts you’re allowed to contribute to
your Solo 401(k) or SEP IRA vary every year (depending on your business’s
net income for the year). So it doesn’t make sense to automate those
contributions monthly. But here’s what I do: At the beginning of each year, I
estimate what I’ll be able to contribute to my Solo 401(k). Based on that, I’ll
set up automatic monthly transfers from my business checking account to a
high-yield savings account to get ready for my Solo 401(k) contribution at
year-end. Then I’ll use that money to fund my contribution (usually give or
take a few thousand dollars) once my accountant tells me what I can
officially contribute for that year. It’s not 100 percent automated, but it’s
pretty close!
Once you set up your automated system, it’s no longer a question of
whether you’ll save, how much you’ll save, or when you’ll save every
month. It just happens! You’re paying yourself first, staying on top of bills,
and increasing your net worth—all without having to think about it. It’s an
awesome feeling, and your future self will definitely thank you. So take an
hour this weekend to set it up. Then move on with your life!
Next, it’s time to figure out which investments to actually put inside your
tax-advantaged accounts to make your money grow and add another zero to
your net worth. After all, opening these accounts is just the first step—like
having an empty shopping cart ready to fill. In the next chapter, we’ll dive
into exactly which investments to choose to help you reach financial
freedom faster!
CHAPTER TAKEAWAYS
Taxes will be your single biggest lifetime expense. Use tax-advantaged
accounts to stash money for the future and keep more of what you
make.
Traditional versus Roth is all about when you pay taxes. Roth often
wins because you pay taxes on a smaller amount up front instead of a
bigger amount later.
Use the Financial Waterfall to allocate your money in the right order.
Start with tax-advantaged accounts before moving to taxable ones.
YOUR ADD A ZERO CHECKLIST
Roll over any old 401(k)s if needed.
Identify the right accounts for you. Use the decision tree to find your
perfect tax-savvy account combo.
Open and fund your first tax-advantaged account. Whether it’s a Roth
IRA, Solo 401(k), or HSA, take action today.
Set up automation. Schedule contributions so saving and investing
happen without effort.
FREE TOOLS TO HELP YOU ADD A ZERO
Go to addazero.com/toolkit for my list of recommended brokerages for
each type of account!
OceanofPDF.com
GETTING TO $1,000,000
OceanofPDF.com
CHAPTER 9
INVEST AND MAKE YOUR
MONEY WORK HARD
How many millionaires do you know who have become wealthy by investing in
savings accounts? I rest my case.
— ROBERT G. ALLEN
I’ll never forget the day I finally logged into my 401(k) after ignoring it for
three years. I was in shock when I realized my account had grown by
$17,342 thanks to stock market growth. It wasn’t much, but my mind was
still blown. I’d earned money that I didn’t have to work for—and that kind
of money just hits different. I was hooked.
That’s what investing is all about—making your money work as hard as
you do. In 2024 alone, my investments made me $152,301.09! And they will
continue to make me more and more money with zero work on my part.
Investing my money wisely was key to me getting to $1,000,000.
While budgeting, optimizing your expenses, negotiating a higher salary,
and stashing money away into the right accounts are crucial steps toward
financial freedom, investing is how you accelerate your journey to that first
million—without doing all the heavy lifting on your own.
I get it if investing feels new and intimidating to you. Don’t worry. I’m
here to give you the no-BS lowdown on how to do it from scratch, what to
invest in, and most importantly, how to stay invested for the long haul.
LET YOUR MONEY DO THE HEAVY LIFTING
Meet Karen and Anna. They’re the same age, live in the same city, and make
about $70,000 a year. Karen is careful with her money and diligently
deposits $500 a month in her savings account. Equally frugal, Anna puts
away $500 every month, except not in a bank account. Instead, she invests it
in an S&P 500 index fund (more on what that means later).
Here is how their identical monthly contributions grow over time.
Saving vs. Investing: $500 Monthly over Time
Karen
(Saving)
Anna
(Investing)
10 Years Later
$60,000
$99,932
20 Years Later
$120,000
$359,139
30 Years Later
$180,000
$1,031,422
Note: Investment values are based on historical S&P 500 performance since 1926, with
dividends reinvested. Actual future returns may vary.
Isn’t it wild how $500 a month snowballs into over a million dollars?
Even though they each contributed the same amount of money ($500 a
month), Anna let compounding stock market returns do most of the heavy
lifting for her, growing her $180,000 in total contributions into over $1.031
million. That’s $851,000 in “free” money!
When you invest, your money compounds. Compounding is when you
earn money on your money, and then that money earns money. Over time,
compounding creates an exponential snowball effect, helping you add a lot
of zeros even if you’re starting with very little money. Compounding is what
grew Anna’s small but consistent investments into such a huge amount.
When you invest, your money
compounds.
On the other hand, Karen’s money did not compound. She has exactly
what she put in—$180,000—no more, no less. That’s why Anna is looking
forward to spending her retirement swimming in the blue waters of the
Amalfi Coast in Italy and eating pain au chocolat in cute Parisian cafes,
while Karen is going to have to keep working well into her 70s just to afford
basic living expenses.
By now, you get the point I’m trying to make here—be an Anna, not a
Karen (ha). We can all agree that it would be better to have our money
working hard for us than to have it sitting idle in a savings account collecting
dust. Yet why do so many of us choose to keep our money “safe” in lowinterest savings accounts, guaranteeing we’ll never reach financial freedom?
That’s why we need to address the elephant in the room: FEAR.
ADDRESSING THE ELEPHANT IN THE ROOM
“But what if I lose all my money in the stock market?”
I hear you. Put your money in, then watch it all evaporate—that’s
everybody’s greatest fear. After all, you worked too hard for that money to
lose it, right? But let me share two powerful examples that might change
how you think about this.
Let’s say you invested $100,000 at the absolute worst possible moment in
market history—at the top of the market right before the Great Depression.
Do you want to know what would happen 20 years later? Your $100,000
would have turned into $184,508. That’s over 1.8 times your money, or a
3.11 percent annual return. Definitely nothing to write home about, but isn’t
it comforting to know that even with the worst market timing ever—
investing at the height of 1920s market excess and enduring over a decade of
the worst economic conditions America has ever seen—you still would have
made money?
Or let’s look at something more recent. Remember the dotcom crash?
Let’s say you invested $100,000 at the peak of the dotcom bubble in 2000,
right before tech stocks came crashing down.
That poorly timed $100,000 investment grew to $324,363 by 2020—20
years later. That’s 3.2 times your money, or a 6.06 percent annual return.
Mind you, this is despite living through both the dotcom crash and the 2008
financial crisis during that period!
Twenty years is a very important time horizon. Why? Because
statistically, over any 20-year period, the stock market has never lost money.
Read that again.
Through wars, recessions, financial crises, terrorist attacks, global
pandemics—if you stayed invested for 20+ years, you never lost money. In
fact, in most cases, you made a lot of money! Here are the stats:
In 25 percent of cases, you made at least 12.1x your money
In 50 percent of cases, you made at least 8.2x your money
In 75 percent of cases, you made at least 4.8x your money
In 100 percent of cases, you made at least 1.8x your money
That just goes to show: It’s not about timing the market, it’s about time in
the market.
But Rose, you might be thinking, I don’t have 20 years to wait!
Don’t worry—even over shorter periods, the odds are still in your favor.
Even looking at 10-year periods, the stock market has delivered positive
returns 95 percent of the time.
The Longer You Stay Invested, the Higher Your Odds of
Success
Time Period
Chance of Positive Returns
1 Year
75 percent
5 Years
88 percent
10 Years
95 percent
20 Years
100 percent
Note: Based on historical S&P 500 returns over rolling time periods. Past performance does
not guarantee future results.
Moral of the story? Plan to stay invested for at least 10 to 20 years. You
don’t need to time the market if you have time in the market.
You don’t need to time the market if
you have time in the market.
But here’s the real kicker—while everyone’s worried about the next stock
market crash, there’s actually a much bigger threat to your money right now
...
The Real Risk: Inflation
Remember our girl Karen, who kept her money “safe” in a savings account?
Sadly, she’s in for a rude awakening, because she soon discovers that the
$180,000 she has saved isn’t going to take her very far. Despite her frugal
habits, her money doesn’t have as much buying power as it did 30 years ago.
Both her rent and her grocery bills have doubled over the years. A simple
lunch, even at a fast-casual restaurant chain, is $30 when it used to be $15!
Sucks, I know! But that’s inflation for you.
On average, inflation causes the dollar to lose about 2 percent of
purchasing power every year. Check out how the purchasing power of the
U.S. dollar has changed since 1980. That’s a 50 percent decline in my
lifetime alone!
Anna is dealing with the same rising costs, but she doesn’t feel the pinch
because she has a lot more money than before while her investments
continue to grow at a rate that outpaces inflation. Most years, her investment
growth alone is enough to fund her spending!
I know it’s a lot easier on the nerves to keep your savings right where you
can see it—in your bank account where the balance never fluctuates. But
don’t be fooled by the illusion of safety. Inflation virtually guarantees that if
you don’t put your money to work, you’ll be a lot poorer decades from now.
That’s why learning to invest your money is not just nice to do. It’s a must.
TWO POWERFUL WAYS TO REDUCE RISK
Luckily for us, there are many ways to invest safely. We already talked about
one of the ways to virtually eliminate risk—which is to stay invested for 10
to 20 years (remember the Great Depression and the dotcom crash
examples?).
Now let me show you two more powerful strategies that can help you get
started while minimizing your risk.
Dollar-Cost Averaging
Think of entering the stock market like getting into a pool. You could
cannonball in all at once (investing a large sum in one go) or wade in
gradually (investing smaller amounts over time). Dollar-cost averaging is
like wading in—you invest the same amount at regular intervals, regardless
of what the market is doing.
Let’s say you have $12,000 to invest. Instead of cannonballing all $12,000
into the market at once, you might wade in by investing $1,000 every month
for a year. This approach is called dollar-cost averaging, and it’s one of the
smartest ways to start investing.
Why does this strategy work so well? Because it automatically leads to
smart buying behavior. When stock prices are high, your $1,000 buys fewer
shares. When stock prices are low, your $1,000 buys more shares. Over time,
you naturally end up buying more shares when they’re “on sale” and fewer
when they’re expensive.
Here’s an example, so you can see exactly how this plays out with real
numbers:
Month
Stock Price
Amount Invested
Shares Bought
1
$100
$1,000
10.0
2
$50
$1,000
20.0
3
$75
$1,000
13.3
See how you bought more shares when the price was low? Now, that’s
smart! This is the magic of dollar-cost averaging—you’re essentially
becoming a smart shopper without having to think about it.
Dollar-cost averaging isn’t just about the math—it’s also about making
investing psychologically easier. After all, think about all the mental blocks
that keep people from investing:
“What if I invest and the market crashes tomorrow?”
“I should wait until things look less uncertain.”
“I heard there’s going to be a recession soon; maybe I’ll wait.”
Sound familiar, right? These are the thoughts that keep many people stuck
on the sidelines, watching opportunities pass by.
Everyone always wants to know the answer to the billion-dollar question:
When’s the best time to get in? And then because no one knows the answer
to that question, we remain in analysis paralysis, too anxious to pull the
trigger. Welcome to the cycle of investment paralysis:
I’m going to call it out right now: Most people never end up investing
(even though they know they should), precisely because they get stuck in
this cycle of investment paralysis and never get out of it.
Dollar-cost averaging is the solution to breaking out of this cycle. Instead
of agonizing over whether now is the “perfect” time to invest, you remove
that pressure entirely. It’s never a question of if or when—you just stick to
your dollar-cost averaging schedule.
Diversification
Remember that saying “Don’t put all your eggs in one basket”? That’s
diversification in a nutshell. Instead of betting everything on a single
company or investment, you spread your money across many different
investments. But let me show you exactly why this is so powerful.
Imagine if you had invested all your money in Blockbuster back in the
day. At one point, Blockbuster was everywhere—the undisputed king of
movie rentals with over nine thousand stores worldwide. It seemed like a
sure bet! But then Netflix came along and, well, we all know how that story
ended. Blockbuster went from being worth billions to basically nothing.
Or look at Meta (formerly Facebook)—in 2022, the company lost over
$600 billion in value, more than 60 percent of its worth, in just a few
months. Even tech giants that seem unstoppable can take massive hits when
faced with challenges like privacy concerns and competition from TikTok.
The lesson? Don’t bet everything on one company—or even a handful of
companies. Unless you’re a professional like Warren Buffett and know how
to analyze financial statements, study competitive advantages, and value
businesses properly, investing that way is incredibly risky.
This is where diversification comes in. Instead of trying to pick winners
(and risk picking losers), invest in hundreds or even thousands of different
companies at once. It’s like owning a slice of the entire economy instead of
betting on individual businesses. This is very easy to achieve via index funds
(which we’ll get into next).
In a nutshell, if you want to reduce risk when investing:
Buy gradually (dollar-cost averaging)—wade into the market instead of
diving in all at once
Buy everything (diversification)—own thousands of companies instead
of trying to pick winners
By combining these two strategies—wading in gradually through dollarcost averaging and spreading your risk through diversification—you’ve
already eliminated most of the major risks that make people nervous about
investing.
But you might be wondering exactly how to put them into practice. What
specific investments should you buy to get the diversification you need?
WHAT TO INVEST IN
Remember how in Chapter 8, we talked about how an investment account is
just a shopping cart for holding your investments? Now it’s time to fill that
cart with the right stuff!
When it comes to what to actually invest in, there are really just two main
categories: stocks and bonds. Each plays a different role in growing your
money.
Stocks
Stocks are like owning a tiny slice of a company. If the company is like a
whole pizza, stocks are the slices. When you buy stocks (or “shares” or
“equities” in Wall Street jargon), you literally become a part owner in that
business.
When the company does well, your slice becomes more valuable. Some
companies even share their profits with you through something called
dividends (hello, passive income!). Of course, the flip side is that when the
company hits rough patches, your slice can temporarily lose value too.
You can buy stocks individually—like buying shares of Costco. You can
also buy stocks as part of a fund—a bundle of lots of different stocks. If
buying an individual stock is like buying one slice of one pizza, buying a
fund is like buying lots of slices of different pizzas—pepperoni, cheese,
veggie, BBQ chicken, mushroom, and margherita.
For everyday investors like you and me, the best way to buy stocks is to
buy them as part of a fund. When you buy a stock fund, you get safety in
numbers—it’s that diversification that we talked about earlier.
Bonds
When you buy bonds (Wall Street calls them “fixed income”), you’re
basically becoming the bank. You loan money to a company or government,
and in return, they promise to pay you regular interest payments and
eventually give you your money back and charge them interest. Think of it
like an IOU—like when you loan money to a friend and charge them
interest, you basically invest in a bond!
While bonds typically don’t grow as much as stocks over the long run,
they’re generally more stable and predictable. For that reason, stocks and
bonds go really well together—they’re complementary!
Just like with stocks, you can invest in bonds individually or as part of a
fund—a bundle of lots of different bonds. Once again, the safest (not to
mention the most convenient) way to buy bonds is to buy them as part of a
fund. Why? Because, you guessed it—diversification!
Stocks vs. Bonds
Stocks (Ownership)
Bonds (Lending)
You are...
An owner
A lender
How you earn
Growth + dividends
Interest payments
Risk level
Higher
Lower
Growth speed
Faster
Slower
Index Funds (and Why They Beat Active Funds)
Now that you understand stocks and bonds, and how you can buy them as
part of a fund, let’s talk about the smartest way to invest in funds: index
funds.
But before we dive into why index funds are such a powerful choice, let’s
briefly contrast them with their opposite: actively managed funds.
There are actually two types of funds you can choose from. The first type
is actively managed funds, where some really smart person (a “fund
manager”) uses their expertise to handpick which stocks and bonds go into
the fund. They’re constantly buying and selling, trying to pick winners and
avoid losers.
Then there are index funds, which take a much simpler approach. Instead
of trying to pick winners, they simply copy an index—like a financial
“playlist” of companies. For example, an S&P 500 index fund automatically
invests in all 500 companies in that index. Think of it like this: actively
managed funds are like hiring an expensive personal chef who’s always
experimenting with fancy ingredients, while index funds are like following a
tried-and-true recipe that’s been working for decades.
The difference between these two approaches might seem subtle, but it
leads to two massive advantages that make index funds the clear winner.
First, index funds charge way lower fees than active funds. While active
funds typically charge 1 to 2 percent of your money every year for all that
stock picking, index funds charge as little as 0.1 percent (and in many cases,
even less!). That tiny difference might not sound like much, but look at the
difference it makes to your investment balance over time:
See the difference? Just 1 percent in extra fees adds up to over $400,000
less in your pocket over 30 years. If you’re not careful, fees will quietly eat
away at your money.
But here’s the real kicker: These expensively priced, active funds actually
perform worse than index funds. It’s Wall Street’s dirty little secret: The vast
majority of active funds fail to beat the market. (Quick note: When we say
“beat the market,” we’re really just saying “beat index funds,” since index
funds track the market itself.)
The data is staggering:
Why Pay More for Worse Results?
Time Period
% of Active Funds That Failed to Beat the
Market
1 Year
59%
3 Years
73%
5 Years
78%
10 Years
85%
20 Years
90%
* Source: S&P Dow Jones Indices SPIVA U.S. Scorecard
As you can see, the longer the time frame, the more active funds fall
behind. Over 20 years, a staggering 90 percent of active funds fail to beat the
market!
It’s actually pretty logical when you think about it. Active funds charge
high fees that eat into returns, try to predict which stocks will do well (which
is impossible to do consistently), and make lots of trades that rack up costs.
Meanwhile, index funds keep costs ultra-low, don’t try to predict anything,
and simply own everything and let the market do its thing.
The best part? Index funds are incredibly simple to buy and own. No need
to watch the market or stress about which stocks to pick. Just choose a lowcost index fund and let time do the hard work for you. That’s why when we
talk about building your investment portfolio later on in this chapter, we’ll
be focusing entirely on index funds. They’re the foundation of smart, stressfree investing.
ETFs: A New Type of Index Fund
I have one more thing to say about index funds. On your investing journey,
you’ll also encounter ETFs (exchange-traded funds), which are a newer type
of index fund.
Originally, index funds used to all be mutual funds. A mutual fund is an
investment that pools money from many investors to buy a collection of
stocks, bonds, or other assets. You can only buy or sell mutual funds once
per day. But then later on in the early 1990s, the ETF came along to make
index fund investing even more efficient and accessible.
When it comes down to it, mutual funds and ETFs are just two different
ways to structure an index fund, but they both accomplish the same thing:
low-cost index investing. The main difference is that ETFs trade like stocks
—you can buy and sell them instantly during market hours—while mutual
funds can only be traded once per day after the market closes.
Think of them like two different cars that can take you to the same
destination. They both track the same indexes and invest in the same stuff,
just with slightly different features under the hood.
I generally recommend mutual funds for most people who are just starting
out investing. Why? They’re built for long-term investors and work perfectly
with the steady, automatic investing approach we talked about earlier. You
can only buy or sell them once per day after the market closes, which
actually helps protect you from making emotional trading decisions when
markets get wild. Plus, they’re what you’ll typically find in your 401(k), so
you might already be familiar with how they work.
ETFs have some unique advantages too. They’re typically more taxefficient, which makes them especially good for taxable brokerage accounts.
They also offer more flexibility since you can trade them throughout the day
like stocks. Some experienced investors use this flexibility for advanced
strategies, but remember—just because you can trade more frequently
doesn’t mean you should!
Whether you invest in index funds structured as mutual funds or ETFs,
either option will serve you well. The most important thing is to pick one
and start investing consistently. Focus on getting started, rather than getting
caught up in the small differences between the two. After all, the real
million-dollar difference comes from actually investing—not just thinking
about it!
FREE TOOLS TO HELP YOU ADD A ZERO
Want a list of the best low-cost index funds to invest in? Go to
addazero.com/toolkit or scan the QR code for my free investing cheat
sheet!
WHAT ABOUT REAL ESTATE?
“Why not just buy rental properties?” I hear this question a lot, and trust me—I get the appeal!
Real estate can be an incredible way to build wealth. I’ve done it myself with my own rental
properties. But here’s something I learned the hard way: Real estate investing isn’t nearly as
passive as those Instagram gurus make it seem.
Take the time when I got a phone call one evening, just before going to bed. A car had crashed
into one of my properties, taking down an entire structural wall. Yeah, you read that right—an
entire wall! Good thing I had both the right team and deep enough pockets to fix it, otherwise that
one incident could have wiped me out financially. That experience taught me a crucial lesson:
Successful real estate investing needs three things: significant expertise, serious capital, and a
rock-solid on-site support network.
That’s exactly why I tell everyone to wait until they have at least $500,000 in net worth before
diving into rental properties. Real estate is super concentrated (your money is tied up in one
property) and extremely capital-intensive (large down payments, surprise repair costs, you name
it).
But hey, want exposure to real estate without all these headaches? Let me introduce you to
REITs (real estate investment trusts). These are basically funds that invest in real estate—
everything from apartment buildings to shopping malls to office towers. The cool part is that by
law, REITs are required to pay out 90 percent of their taxable income as dividends to
shareholders. This means you’ll typically get much higher dividend payments than regular stocks,
so it feels just like rental income!
REITs are basically stocks—real estate stocks—so you can buy them through your brokerage
account. They give you professional management (no more midnight maintenance calls!), instant
diversification across many properties, and the ability to sell anytime versus being locked into a
property. Plus, you can start with any amount of money—no massive down payment required.
BUILDING YOUR PORTFOLIO
Now it’s time for the fun part—putting it all together! Let me show you how
to combine stocks and bonds in a way that helps you sleep at night while still
growing your wealth. In investing lingo, this is called your “asset allocation”
(fancy term for how much of your money goes where).
The goal is to find a mix that matches both your timeline (when you’ll
need the money) and your comfort with market swings. Just like there’s no
single perfect workout routine—it depends on your goals, schedule, and
what you’ll actually stick with—there’s no universally right investment mix.
Let me walk you through three proven portfolio models that have stood
the test of time:
The Stability Portfolio (Conservative)
Perfect for you if: You’re close to retirement (5 years out or less) or if seeing
your account drop more than 15 percent would keep you up at night
40% stocks / 60% bonds
Historical returns: 6 to 8% per year
What to expect: Smaller ups and downs, but also slower growth
The Balanced Growth Portfolio (Moderate)
Perfect for you if: You’re about 5 to 15 years from retirement or if you can
stomach your account dropping 25 percent occasionally
60% stocks / 40% bonds
Historical returns: 8 to 10% per year
What to expect: A nice balance of growth potential and stability
The Ultimate Growth Portfolio (Aggressive)
Perfect for you if: You have 15-plus years until retirement or you wouldn’t
panic-sell during big market drops of 40 percent or more
80% stocks / 20% bonds
Historical returns: 10%+ per year
What to expect: More dramatic swings but historically higher long-term
returns
Choose your asset allocation first. Then all other investment decisions—
like which specific stock and bond index funds to buy and how much to buy
of each—stem from there. But how do you choose?
Here’s a simple starting point: Take 100 minus your age—that’s roughly
the percentage to put in stocks. For example, if you’re 30, you might put 70
percent in stocks and 30 percent in bonds. But fair warning: That guideline
leans on the conservative side. You could even modify this to be 120 minus
your age. So if you’re 30, you might put 90 percent in stocks and 10 percent
in bonds. It all depends on whether you’re willing to put up with bigger
fluctuations in your portfolio in return for more growth.
Let me share my own portfolio as an example. Even though I’m in my
30s, I roll with a more aggressive 90 percent stocks / 10 percent bonds mix.
Why? Because:
1. Market drops don’t phase me (I’ve trained my investing mindset)
2. I have other income streams besides just investments
3. I’m investing for the loooong haul (even hoping to pass on generational
wealth!)
The key isn’t picking the perfect allocation—it’s picking one you’ll
actually stick with when things get rocky.
Remember: Any of these asset allocation models beats keeping all your
money in a savings account. The most important thing is getting started with
a reasonable plan and staying consistent. Your future self will thank you!
DIY OR DONE FOR YOU? CHOOSING YOUR
INVESTMENT PATH
Now that you understand what to invest in and how to build a portfolio, you
might be wondering: Do I really have to manage all this myself? Actually,
no! You’ve got several options, ranging from fully DIY to completely handsoff. Let me walk you through them.
Option 1: Do It Yourself (DIY)
This is my personal choice—handling everything myself through a low-cost
brokerage like Vanguard, Fidelity, or Charles Schwab. It’s like being your
own chef instead of ordering meal delivery. You control every ingredient and
can adjust the recipe whenever you want.
Perfect for you if: You enjoy learning about investing, want maximum
control, and don’t mind checking up on your portfolio at least once a year
Costs:
Just the underlying fund fees (can be as low as 0.03%)
Pros:
Lowest possible costs
Complete control over investments
Flexibility to adjust anytime
Cons:
Requires learning investment basics, like choosing your asset allocation
and picking out your own funds
Need discipline during market drops
Option 2: Target Date Funds
Remember when we talked about finding the right mix of stocks and bonds?
Target date funds handle all of that for you. Just pick the fund with the year
closest to when you plan to retire (like Target Date 2055 Fund), and it does
everything else. The fund automatically adjusts from aggressive to
conservative as you age—like a self-driving car that knows exactly when to
slow down. Also heads up: 401(k) plans usually put you into these
automatically!
Perfect for you if: You’re investing in retirement accounts only and want the
absolute simplest yet cheapest solution
Costs:
Usually around 0.10% to 0.75% per year
Pros:
Completely automated management
One-decision strategy (just pick your retirement year)
Built-in professional diversification
Cons:
Less flexibility to customize
Slightly higher fees than building your own portfolio
One-size-fits-all approach
Less tax-efficient if held outside a retirement account because they
don’t optimize for taxes
Option 3: Robo-Advisors
Robo-advisors are like having a smart investment algorithm in your pocket.
They use technology to manage your money, giving you many features of a
human financial advisor but at a fraction of the cost. Perfect for you if: You
want a hands-off investing approach but prefer more personalization than a
target date fund, and you’re investing in a taxable account where taxefficient strategies like tax-loss harvesting would make a difference
Costs:
About 0.25% per year ($25 on a $10,000 account) plus the underlying fund
fees
Pros:
Advanced portfolio management at a fraction of the cost of human
advisors
Often offers sophisticated features like tax-loss harvesting
Easy-to-use apps and tools
Cons:
Less personal touch than human advisors
Limited financial planning support
Another layer of fees on top of fund costs
Option 4: Human Financial Advisor
Think of this like having your own personal chef—it’s the premium
experience, at premium costs! A good advisor does more than just manage
investments—they help with tax planning, estate planning, insurance, and
other complex financial decisions.
Perfect for you if: You have a complex financial situation or don’t mind
paying extra for a full-service, personal touch
Costs:
Usually 1 percent of assets per year ($1,000 on a $100,000 account) plus the
underlying fund fees
Pros:
Personalized guidance and holistic financial planning
Help with complex financial decisions
Human relationship during tough times
Cons:
Most expensive option
Quality varies significantly
Potential conflicts of interest
Here’s a simple decision tree to help you choose:
Investing isn’t about making a perfect choice from day one—it’s about
getting started and adjusting along the way. You might start with a robo-
advisor and later decide to go DIY. Or you could begin with a target date
fund and shift to a financial advisor when your finances become more
complex.
Investing isn’t about making a perfect
choice from day one—it’s about
getting started and adjusting along
the way.
The key is to pick the option you’re most likely to follow through on
today, knowing you can always refine your strategy over time. The best
investment approach isn’t the most sophisticated—it’s the one that actually
gets you investing!
SHOULD YOU INVEST IN CRYPTO?
There’s no way I could cover investing without also touching on crypto! Cryptocurrency emerged
as this fascinating new asset class, and nowadays, it’s become mainstream.
What I love about crypto is that it’s decentralized, borderless, and has the potential to be a
hedge against traditional, government-run financial systems. But what I don’t love is that it’s not
a productive, income-producing asset the way a stock is. It operates more as a store of value. In
that sense, it’s a lot like gold.
Personally, I believe in crypto’s long-term potential. But you have to be smart about it. Think
of crypto as that friend who’s either having the best day ever or the worst day ever—no inbetween! Your investment could double overnight . . . or get cut in half just as fast. If you thought
the stock market was volatile, it’s nothing compared to cryptocurrency!
That’s why I recommend keeping the bulk of your portfolio in proven assets like stocks, bonds,
and real estate, and allocating no more than 10 percent to crypto. It should be the cherry on top of
your investment sundae, not the whole dessert.
If you’re thinking about getting into crypto, Bitcoin is the safest entry point—it’s the longeststanding cryptocurrency with the strongest track record. Because of crypto’s extreme volatility,
this is where dollar-cost averaging (buying in gradually over time) on a monthly or weekly basis
would really come in handy!
And finally, take the time to learn how to store it properly—the crypto world is full of horror
stories about people losing millions because they didn’t secure their crypto properly. What’s that
saying? “Not your keys, not your crypto!”
MAKING IT LAST: YOUR LONG-TERM SUCCESS PLAN
You’ve got your investments set up—awesome! But let’s be real: Starting is
actually the easy part. The real keys to investment success? Automation and
consistency.
Automation
When left to our own devices, life tends to get in the way of us investing. We
forget, we’re too tired, we’re stuck in analysis paralysis, or we just don’t feel
like it. But something as important as investing for your future should not be
left to chance. It should be nonnegotiable.
That’s why when it comes to investing, the name of the game is
automation, baby! Don’t count on memory or willpower! We already talked
about automation. Now it’s time to make sure that the money that’s landing
in your Roth IRA every month is getting invested into index funds, all
preselected by you. That way, your money is working for you 24/7, and you
won’t have to lift a finger.
Here’s how to do it:
Decide on an amount you can stick to. Start with whatever amount
you can—even $100 per month adds up over time.
Set up automatic recurring transfers from your paycheck to your
investment account (you can set this up at your brokerage).
Schedule the transfers right after payday, before you can spend the
money!
Set up automatic recurring purchases to buy the same index funds
each time. The amounts should be proportional to your asset allocation.
For example, if your asset allocation is 80 percent stocks, 20 percent
bonds and you’re investing $1,000 per month, then your recurring
purchase should be for $800 worth of stocks and $200 worth of bonds.
The other cool thing is that by automating your investments, you’re
inherently doing dollar-cost averaging—remember that risk-reduction
strategy we talked about earlier? You’re systematically investing the same
amount at regular intervals, which means you are naturally buying more
shares when prices are low and fewer when they’re high.
By doing something once (setting up a recurring purchase), you can set
yourself up for life. That’s powerful! Failing to do this could mean the
difference between ending up like Karen versus Anna. So don’t forget this
step!
By doing something once, you can
set yourself up for life.
FREE TOOLS TO HELP YOU ADD A ZERO
For a step-by-step guide on how to buy your first index fund (and how to
automate it!), visit addazero.com/toolkit.
Consistency
Here’s something else I’ve learned: It’s not market drops that kill investment
returns—it’s how people react to them. Most people freak out and sell when
they should be buying more!
Here’s my simple framework for handling market downturns like a Zen
master:
1. Expect Them—The stock market drops 10 percent or more about once
a year on average.1 It’s like catching a cold—not fun, but totally normal
and temporary. Spare yourself all the emotional ups and downs of
watching the market fluctuations and just don’t look at your portfolio!
2. Reframe Them—Instead of seeing market drops as disasters, view
them as sales. Would you panic if your favorite store had a 20 percent
off sale? Of course not! You’d probably buy more. Sadly, the stock
market is the only place in the world where everyone does the exact
opposite. Train yourself to see crashes as opportunities, not problems.
3. Stay Invested—Remember, it’s not about timing the market, it’s about
time in the market. Vanguard’s research shows that over a 10-year
period, a disciplined investor who stayed the course through market ups
and downs would have earned $19,175 more than an average investor
who tried to time the market.2
The bottom line: The stock market is like a roller coaster—the only people
who get hurt are the ones who jump off in the middle! Don’t get caught up in
fear or greed, and play the long game.
Let automated, steady investing become a lifetime habit. That habit,
maintained over at least 10 years, is one of the ways you’ll get to a million.
But what if you want to speed it up? What if you don’t want it to take 10+
years? In the next chapter, we’ll explore how to accelerate your path to
$1,000,000 even faster by creating leveraged income streams that can
supercharge your investing.
CHAPTER TAKEAWAYS
Saving money won’t get you to a million, but investing will. Through
the power of compounding, investing is how you turn small amounts
into a mind-blowing amount of money over time.
As scary as investing feels, the real risk to your money is inflation—the
steady erosion of your purchasing power.
It’s not about timing the market, it’s about time in the market. Plan on
staying invested for at least 10 years for the best odds of success.
Strategies like dollar-cost averaging and diversification drastically
reduce your risk.
Index funds are the go-to investment, offering instant diversification,
low costs, and a proven track record all in one package
YOUR ADD A ZERO CHECKLIST
Select your asset allocation mix based on your timeline and risk
tolerance:
– Conservative (40%/60%)
– Moderate (60%/40%)
– Aggressive (80%/20%)
Choose your investment approach:
– Do It Yourself
– Target Date Fund
– Robo-Advisor
– Human Advisor
Set up automatic investments to occur right after each paycheck.
FREE TOOLS TO HELP YOU ADD A ZERO
Visit addazero.com/toolkit for my comprehensive investing cheat sheet!
OceanofPDF.com
CHAPTER 10
BREAK FREE OF TRADING
TIME FOR MONEY
Give me a lever long enough and a fulcrum on which to place it, and I shall move the
world.
— ARCHIMEDES
$ 160,000.
This was not a typo.
I had launched my first digital course in my online financial education
business and had just made in seven days what had taken me two years to
make at my previous job. Not only had thousands of students enrolled to
transform their financial lives, but I had also built something once that could
be sold over and over. In other words, I had found a way to make more
money while spending less of my time. And that changed everything.
I had grown up conditioned to think about income in a very linear way:
Want to make more money? Work more hours. Want to double your income?
Get a second job. This “more time equals more money” mindset was deeply
ingrained.
But here’s the problem: Making money this way is slow, slow going—I
call it the slow lane. And even high-paying jobs like surgeons or lawyers are
stuck in this slow lane—they just get paid more per hour.
But when you figure out how to break free of trading your time for money,
you can shift into the fast lane. Rather than making money at a linear pace,
you make money at an exponential pace.
It’s the difference between walking and driving a race car. With linear
income, you inch forward, step by step. But with exponential income, you
build momentum that keeps compounding on itself. It starts slow, but once it
picks up speed, you’re flying past the limits of time-for-money income.
Here’s what that looks like visually:
See how exponential income eventually leaves linear income in the dust?
That’s what it looks like when you finally leave the slow lane behind.
In the last chapter, we discussed one way to break free of trading time for
money: investing. Investment income is the purest form of leveraged
income, because it has no link to how many hours you work. But at the end
of the day, you can only invest what you earn, right? Investing $1,000 is
certainly better than nothing, but you know what would be even better?
Investing $100,000.
By figuring out how to make money exponentially, you will be able to
pour a lot more money into your investments and accelerate your path to
financial freedom.
But that raises the question: How do you actually make the leap from
linear to exponential? How do you work less and earn more?
The answer lies in one word: leverage.
IT’S ALL ABOUT LEVERAGE
Throughout history, humans have used leverage to achieve the seemingly
impossible. The ancient Egyptians used simple wooden levers to help build
the pyramids, moving massive stone blocks without modern-day machinery.
The printing press allowed a single book to reach millions of readers instead
of being painstakingly hand-copied one at a time.
In each case, leverage completely transformed what was possible.
When it comes to earning money, leverage means going beyond just
trading hours for dollars. It means finding ways to serve more people and
create more value without requiring more of your time. This is how to unlock
exponential—as opposed to linear—income growth.
The Three Levels of Leverage
Imagine the personal trainer working 1:1 with clients. She can only train one
person at a time, charging $100 per hour, and her income is completely
limited by the hours in her day. Assuming a 40-hour workweek, her max
income potential is $4,000 a week. This is what it looks like to have zero
leverage.
Now imagine if this personal trainer started offering group fitness classes
with 10 people per class at $25 per person. She’s now making $250 per hour
while serving multiple clients simultaneously. It’s the same hour of her time,
but she’s now serving more people and providing more value. She went from
serving 1:1 to serving 1:many. Assuming the same 40-hour workweek, her
max income potential has now gone up to $10,000 a week! That’s what it
looks like to have more leverage.
Now let’s take this up a notch—what if she creates a $200 digital fitness
program with professionally filmed workout videos, meal plans, and training
guides that clients can purchase and use anytime? Now it doesn’t matter
whether she works 40 hours or zero hours. Through automated systems to
bring in sales, she can sell it infinitely to clients worldwide while she sleeps.
Max income potential? Unlimited.
Essentially, there are three levels of leverage:
Level 1: One-to-One (Trading Time for Money)
Level 2: One-to-Many (Multiplying Your Time)
Level 3: One-to-Infinity (Transcending Time)
Look at anyone making extraordinary income, and you’ll find leverage at
work—even if it’s not obvious at first glance.
When Taylor Swift releases music or merchandise, she’s not personally
singing to each fan or selling each T-shirt. She creates once, then her work
and brand generate income while she sleeps. When she sings to a stadium of
70,000 fans on her Eras Tour, that’s One-to-Many. When the recording of her
Eras Tour becomes a documentary on Disney+, that’s One-to-Infinity. Of
course, her talent and fame amplify everything, but behind it all, it’s the
leverage that made her a billionaire.
In the business world, Jeff Bezos didn’t become the world’s richest person
by working more hours than everyone else. He built a system (Amazon) that
could serve millions of customers simultaneously. That’s Level 3 leverage at
an extraordinary scale.
But you don’t need to be a pop star or tech mogul to harness leverage. No
matter what profession you’re in, there is a way to incorporate more leverage
in the way you make money.
Remember that $160,000 in seven days? Reaching the ultimate level of
leverage (One-to-Infinity) is how I did it. One and a half years after starting
my YouTube channel, I launched my first digital course teaching financial
education. I had created something once that could serve an unlimited
number of students, and by building systems to market the course, it could be
sold over and over without requiring more of my time. That same course
continues generating income years later, whether I’m sleeping, chilling at the
beach, or sitting on the toilet.
Bottom line? Leverage is the hidden force behind all significant wealth
creation. If you want to make more money, find ways to serve more people
with less of your time. Go from 1:1, to 1:many, and if you can, 1:infinity.
Leverage is the hidden force behind
all significant wealth creation.
THE TWO KEYS TO UNLOCKING HIGHER LEVELS OF
LEVERAGE
Climbing the ladder from 1:1 to 1:many to 1:infinity isn’t a mystery, nor is it
something reserved for the privileged few. There are just two keys to
unlocking higher levels of leverage and scaling your income:
1. Technology
2. Teams
No matter your industry or line of work, technology and teams are what
enable you to create exponential income and finally break free from trading
time for money.
Key #1: Technology
At its core, technology helps you build systems that work without you. These
systems—from automating tasks to using platforms that deliver your work to
more people—let you reach a wider audience without trading more time.
A system is simply a repeatable process for getting things done. Think of it
as the recipe behind the scenes that keeps your business running smoothly.
Sometimes it involves software; other times, it’s a clear set of steps anyone
on your team can follow. Either way, systems create consistency, save time,
and allow you to serve more people without reinventing the wheel every
time.
The best part? Many of the tools that make this possible are free or
surprisingly affordable. Before the internet, scaling like this was out of reach
for most people. It required warehouses, deep pockets, and massive
resources. But today, anyone with a laptop and Wi-Fi connection can build
an online business, serve customers worldwide, and generate income, even
while they sleep.
Social media platforms are a perfect example of this kind of baked-in
leverage. Once you create and publish a piece of content, the platform’s
algorithm continues working for you—expanding your audience and driving
traffic. Personally, I’ve used YouTube to do exactly this. My videos continue
attracting views, generating ad revenue, and selling my products 24/7, long
after they’re uploaded. That’s 1:infinity leverage in action.
To make this really practical, here’s how you can use technology to unlock
higher levels of leverage in your income:
Unlocking Leverage with Technology: From 1:1 to 1:Many
and 1:Infinity
Target Leverage Level
1:Many (Level 2)
How to Use Technology
Use scheduling tools (like Calendly)
Automate onboarding e-mails for new group clients or
customers
Host group workshops or webinars via Zoom
Use e-mail broadcast tools to reach your entire audience
at once
1:Infinity (Level 3)
Build evergreen sales funnels that sell your products while
you sleep
Use course platforms (like Teachable or Kajabi) to deliver
content automatically
Publish content on algorithm-powered platforms like
Youtube, TikTok, or Instagram
Automate fulfillment for digital products so customers
receive instant access
Key #2: Teams
But technology isn’t the only key to leveraging your income. Think about it:
Your time is your most precious resource. You can always make more
money, but you can’t make more time. But you can bend it. How? By
building a team.
Teams are one of the two keys to breaking free of trading time for money
at the 1:1 level. No matter how smart, capable, or hardworking you are,
there’s a limit to how much you can do alone. A team multiplies your efforts,
allowing you to serve more people, create more value, and grow your
income far beyond what’s possible as a solo operator.
One of my biggest money regrets is taking too long to build my team. For
a year and a half, I insisted on doing my own video editing. I spent countless
late nights on my laptop, tinkering with cuts and captions in iMovie—
something someone else could have done faster and better. It also took me
two whole years to hire my first virtual assistant—two years of drowning in
admin tasks that were holding me back from real growth.
Now, I have a team that handles everything from video editing to customer
support, freeing me to focus on creating content, building relationships, and
growing the business.
You may be thinking: Must be nice to have the money to hire all that help.
But keep in mind you don’t need a lot of money to start harnessing the
power of teams. This doesn’t mean you need a giant staff. Today, you can
build a lean, remote team of contractors and freelancers from anywhere in
the world, at rates that fit your budget. Even one part-time virtual assistant
can make a massive difference in helping you step out of the weeds and
operate with more leverage. One of the most powerful team members you
can add today is AI. With AI, you have a high-end research assistant, a draft
writer, a brainstorm partner, or even a data wrangler—all in one.
As you grow, keep asking yourself:
What parts of my business could someone else handle, so I can focus on
growth?
What’s the next role I can add to my team to scale my impact?
How can I make my business less dependent on me, and more powered
by other people?
Here’s how building a team helps you scale beyond the limits of your own
time:
Unlocking Leverage with Teams: From 1:1 to 1:Many and
1:Infinity
Target Leverage Level
How to Use Teams
1:Many (Level 2)
Hire freelance editors, designers, or admin help to serve
more clients at once
Hire co-coaches to run small group programs
Bring on virtual assistants to manage customer inquiries
so you can focus on delivery
1:Infinity (Level 3)
Build a customer support team to handle FAQs and
manage your community
Hire course managers or fullfillment assistants for
physical/digital products
Work with affiliate marketers or sales reps to grow your
reach infinitely
Use AI assistants to help manage content creation and
customer service at scale
Together, these two keys—technology and teams—are what move you
from working harder to working smarter. To bring this to life, let’s look at
how this progression plays out across different professions and industries.
Your Road Map to Exponential Income: How to Go from
1:1 to 1:Infinity in Any Profession
Career Field
1:1 (Trading Time)
Knowledge
Workers
Freelance
consulting for
individual
clients
(Marketers, UX
Designers,
Programmers,
Writers)
Custom project
work
Hourly coaching
1:Many (Multiplying
Time)
1:Infinity
(Transcending
Time)
Group
workshops and
masterminds
Online courses
and digital
products
Managing a
small agency
SaaS products
Teaching
courses live
Books and
instructional
content
Licensed
templates and
frameworks
Creative
Professionals
(Artists, Musicians,
Photographers)
Commissionbased artwork
Art classes and
group lessons
Private lessons
Performances
or gallery
events
Custom photo
shoots or
performances
Photography
workshops
Online courses
and digital
products
Print-ondemand
products
Stock
photography/m
usic
Digital asset
marketplaces
Licensed
creative work
Service
Providers
(Fitness, Coaching,
Consulting, Hair
Stylists)
One-on-one
coaching
Group fitness
classes
Personal
training
Membership
programs
Custom
consultations
Group coaching
programs
Online courses
and digital
products
App-based
fitness
programs
Physical
products
(kettlebells,
hairstyling tools,
etc.)
Certification
programs for
other trainers
Licensed
methodologies
1:Many (Multiplying
Time)
Career Field
1:1 (Trading Time)
Health Care
Individual
patient care
Group therapy
sessions
Personal health
plans
Health
workshops
One-on-one
therapy
Community
health
programs
(Therapists,
Nutritionists,
Practitioners)
1:Infinity
(Transcending
Time)
Online courses
and digital
products
Health apps
and technology
Books and
educational
content
Training
programs for
practitioners
Trades &
Service
Direct service to
customers
Managing a
team of workers
Franchise
model
(Plumbers, Cleaners,
Landscapers, A/V
Technicians)
Hourly labor
Project-based
work
Subscription
service models
Training/certicat
ion programs
Batch
processing
clients
Physical
products
(plumbing tools,
A/V equipment,
etc.)
Service tech
platforms
No matter your starting point, this road map shows there’s always a path
to more income and more freedom—if you know how to unlock it.
FREE TOOLS TO HELP YOU ADD A ZERO
Ready to see it in the wild? Check out real-life case studies from everyday
people using leverage to grow their income—with links to their websites
and socials. Grab them here: addazero.com/toolkit.
DO I HAVE TO START A BUSINESS? THE TWO PATHS TO
$1 MILLION
Now that you understand leverage, you might be wondering: Do I have to
start a business to make this work? Let me be clear—while building a
business is the fastest path to wealth, it’s not the only path.
There are two ways to reach $1 million through leveraged income.
Path A: The Steady Climb
This is the FIRE (Financial Independence, Retire Early) approach: stay
employed while investing aggressively. People like Kristy Shen and Bryce
Leung, authors of Quit Like a Millionaire, retired at 31 with a $1 million
investment portfolio using this method.
But be prepared—this path requires:
A high-paying job ($150K+ annually)
An extreme savings rate (50+ percent of income)
Unwavering discipline for 10 to 15 years
Living well below your means
Consistently strong market returns
You’re using non-leveraged income (your salary) to build leveraged
income (investment returns). It works—but it’s a slow grind. You save,
invest, and wait for compound interest to do its thing.
Path B: The Fast Lane
This is the entrepreneurial approach we’ve been talking about in this chapter:
build a scalable, leveraged-income business while investing the profits. This
is the path I chose, going from $100K to $1 million in just two years.
Could I have done it the way Kristy and Bryce did? Absolutely. But it
would’ve taken me at least a decade—and frankly, I liked this way better.
Here’s why:
You control your income ceiling—no more limits set by your employer.
Multiple income streams protect you from job loss and economic ups
and downs.
Instead of pinching pennies with an extreme savings rate, you can
actually upgrade your lifestyle—and let your business cover many of
your expenses.
Plus, Business Income ranks higher than Employee Income on the Tax
Efficiency Spectrum (remember that from Chapter 1?).
You get freedom to work when and how you want.
And for me personally? It’s deeply fulfilling in a way no job ever was
for me.
No matter how you slice it, building something of your own is the best
way to dramatically speed up your timeline to financial freedom.
Remember my digital course that made $160,000 in a week? You better
bet I used every dollar of that to grow my net worth. (Well, I did treat myself
too. And pay my taxes, but you know what I mean!) By taking Path B
instead of Path A, I accelerated my journey far beyond what a regular salary
would allow.
That’s why the rest of this chapter focuses on Path B—the freedom fast
lane.
But don’t worry if entrepreneurship feels overwhelming right now. You
don’t need to quit your job tomorrow or have everything figured out. I’ll
walk you through how to start small and scale up later, just like I did.
WHAT BUSINESS WILL YOU START?
By now, you’re probably excited to start building your own leveraged
income stream. But maybe you’re stuck on one of these common questions:
“I have no idea what business to start.”
“I have too many ideas and can’t decide which to pursue.”
“I have an idea, but I’m not sure if it’s the right one.”
If any of these sound familiar, I’ve got you. The key is finding your sweet
spot—where three crucial elements intersect:
1. Things I’m good at
2. Things I love doing
3. Things people pay good $$$ for
What you’re looking for is the overlap—the sweet spot where all three
circles meet. This is where you’ve got the perfect mix: something you’re
naturally good at, that you love doing, and that people pay good $$$ for.
When you hit that zone, you’ve found your winning business idea that has
the potential to turn into a lucrative, leveraged income stream.
Let’s break down each of these three circles.
Circle 1: Things I’m Good At
Sometimes we’re so close to our own talents, we don’t even see them as
special. But chances are, there are things you do so naturally that make
others say, “Wait, how did you do that?”
This includes both technical skills and natural abilities. Think about:
Technical skills:
Hard skills like coding, design, writing, or sewing
Professional expertise from your career
Practical abilities learned through hobbies
Technical knowledge you’ve acquired
Specific tools or software you’ve mastered
Natural talents:
Soft skills others compliment you on (“You’re so good at explaining
complex things!”)
Ways you instinctively solve problems or organize information
How you naturally connect with or influence people
Abilities that come so easily you barely notice them
Approaches or perspectives unique to you
Don’t dismiss either category. We often undervalue our technical skills
because others can learn them too, while discounting our natural talents
because they feel effortless. Yet both types of abilities can form the
foundation of a successful business.
For example, you might combine your technical skill in graphic design
with your natural knack for visual storytelling to create social media graphics
for small businesses. Or you could take your photography skills and your
natural way of making people feel comfortable to specialize in personal
branding photo shoots. Or you might pair your coding abilities with your gift
for simplifying complex topics to build a business teaching people how to
code.
Circle 2: Things I Love Doing
These are the activities you’d happily do even if no one were paying you
(yet). Also, the “love” part is crucial. Do not chase a business idea just
because it seems lucrative. You’ll spend countless hours building your
business before seeing significant results, so you want to choose something
that you love enough to show up day after day, even when progress feels
slow. Passion is fuel!
Consider:
How you like to spend your weekends
Activities that make you lose track of time
Topics you read about just for fun
Skills you’re always eager to improve
Subjects you naturally gravitate toward in conversation
A quick tip if you feel stuck: Think back to childhood interests, or notice
what kinds of videos, podcasts, or books you consume in your spare time.
Circle 3: Things People Pay Good $$$ For
We’re not just looking for things people might pay for. We’re looking for
things they already pay money for. And not only that—pay good money for.
Where are people happily pulling out their credit cards for speed,
convenience, results, or transformation?
This is about spotting where money is already flowing. If people are
shelling out big bucks for something today, that’s a flashing neon sign that
there’s demand—and that you can build a profitable business around it, too.
Clues to look for:
Businesses that are already making serious money doing this. Sounds
counterintuitive, but this is actually a very good sign—it means there’s
real demand and proven willingness to pay.
Industries where customers are used to paying premium prices (like
health, wealth, relationships, convenience, status).
Moments of high stakes— think job changes, weddings, home buying,
business growth—where people spend more freely to get it right.
Recurring problems or urgent pain points where people urgently seek
solutions and are ready to pay for relief (think: hair loss, heartbreak,
health challenges, career stagnation).
Bonus tip: Reflect on your own spending habits! What services or
products do you happily whip out your credit card for?
Chances are, you’re not the only one.
EXERCISE: BRAINSTORM YOUR WINNING BUSINESS
IDEA
Grab a notebook and start filling in your ideas for each circle.
CIRCLE 1: THINGS I’M GOOD AT
What skills and talents come naturally to you—or that you’ve developed over time?
What technical skills have you learned in your job, hobbies, or studies?
What tools or software do you know well?
What soft skills do people compliment you on?
What problems do people often come to you for help with?
What abilities feel so natural to you that you hardly notice them?
CIRCLE 2: THINGS I LOVE DOING
What activities light you up, make you lose track of time, or feel exciting to pursue?
How do you love to spend your weekends or free time?
What topics or skills are you always curious to learn more about?
What books, podcasts, or videos do you consume just for fun?
What kinds of conversations energize you?
What did you love doing as a child?
CIRCLE 3: THINGS PEOPLE PAY GOOD $$$ FOR
Where is money already flowing? Where are people willing to pay premium prices for solutions,
speed, convenience, or transformation?
What businesses or services in your area of interest are already making serious money?
What industries are known for customers paying top dollar (health, wealth, relationships,
convenience, status)?
Are there high-stakes moments where people spend more freely (career changes,
weddings, home buying, etc.)?
What recurring or urgent problems are people actively spending money to solve?
What do you personally spend money on without hesitation?
When you’re done, step back and look at your diagram. See where your circles overlap? That’s
your sweet spot—the intersection of passion, skill, and profit potential.
When I sat down to fill out my own Venn diagram, I’ll be honest: I had a
lot of ideas that could work. In Circle 1 (Things I’m Good At), I was good at
cooking, writing, finance, building spreadsheets, and encouraging others. For
Circle 2 (Things I Love Doing), I was passionate about finance, cooking,
interior design, dancing, and spending time with dogs. All of these
overlapped with Circle 3 (Things People Pay Good $$$ For)—people
already pay a lot for cooking classes or chef services, interior design
services, dance classes, financial help, and dog training!
At first, it felt a little overwhelming. There were so many possible paths in
my sweet spot. Should I start a cooking business? Teach financial education?
Become a dog trainer? The options were wide open.
So here’s what I did: I asked myself a simple question to cut through the
noise—“Which one do I feel the most excited about building into a serious
business right now?”
For me, the answer was finance. Not only was I good at it (thanks to years
of personal experience and obsessively learning everything I could), but I
also felt a deep sense of mission around it. I knew from my own journey how
life-changing it could be to get your money right, and I felt a genuine calling
to share that with others.
With a finance education business, I could clearly see that people were
willing to pay good money for it (so it was a proven market) and I felt
energized just thinking about the possibilities—from one-on-one consulting,
to group programs, to digital courses that could scale infinitely.
That clarity didn’t come from overthinking. It came from trusting the
overlap in my circles and choosing the option that sparked the most energy
for me in that moment.
Remember: You’re not making a forever decision here. You’re choosing a
starting point. Your business will evolve, just like mine did. But you need to
pick something to build momentum. So once you’ve mapped your sweet
spot, circle your best idea, and let’s keep going!
FREE TOOLS TO HELP YOU ADD A ZERO
Need extra help finding your winning business idea? I made you a
printable Three Circles worksheet with guided prompts to help you
brainstorm your sweet spot and get clear on your next move. Grab them
here: addazero.com/toolkit.
YOUR FIRST STEPS: FROM IDEA TO ACTION
1. Choose ONE service you can offer right away from your Three Circles overlap.
Start simple. I always recommend beginning with a service because it allows you to make
money immediately, learn directly from real clients, and keep your up-front costs low.
2. Serve 3 to 5 clients at the 1:1 level.
Focus on delivering amazing results. This is your testing ground to refine your offer,
understand what people really need, and build social proof. Don’t worry about scaling yet
—just go deep with a few clients.
3. Document your process as you go.
Every time you serve a client, take notes: What worked? What questions came up
repeatedly? What steps could be streamlined or automated later? This will make it 10 times
easier to eventually scale without reinventing the wheel.
4. Look for just one way to start leveraging.
Once you’re confident in your offer, think about your first move toward 1:many or
1:infinity. Maybe it’s turning your process into a group workshop, packaging your service
as a productized offer, or hiring someone to help you deliver.
Don’t try to build the whole empire overnight. Step by step, you’ll build a business that
not only creates leveraged income but also gives you the freedom and flexibility you’re
after.
HOW TO MAKE IT WORK WHILE EMPLOYED
Let’s get real for a minute. You want to build something of your own, but
you’re caught in the classic catch-22: You need time and energy to build a
business, but you have a full-time job that takes all your time and energy.
I get it because I’ve been there. Before I launched my online business, I
was trading time for money as a full-time, freelance bookkeeper. My days
were packed with meetings, my brain was fried from complex problemsolving, and the last thing I wanted to do at night was sit down to create
something. But I knew if I didn’t find a way to make it work, I’d be stuck
trading hours for dollars forever instead of building something that could
scale without limits.
The unique challenge of building something new while working full time
is something that’s not talked about enough. Here are a few tips that helped
me navigate this period—and that can help you too.
Get Your Finances Ready
This is the time to make some headway on at least Tiers 1 to 4 of the
Financial Waterfall we covered in Chapters 3 and 5. Even though you can
start a business regardless of what your finances look like, I’d love for you to
have a six-month emergency fund and little to no credit card debt. Getting a
business off the ground financially is already a lot to handle, so the more
stable your finances are on the personal front, the better.
Another aspect of getting your finances ready is reducing your overhead.
This is where all those budgeting and expense optimization decisions we
discussed earlier become crucial. When your overhead is low, you don’t have
to work as much just to stay running in place. This gives you the flexibility
to switch to part-time or even to a lower-paying but less demanding job in
order to create bandwidth to work on your new business.
When I was building my business, I made a radical decision: I left New
York City, one of the most expensive cities in the world, and I spent time in
places like Bali and Berlin, where my money went further. Was it scary?
Hell, yes. But that lower cost of living gave me something priceless: options.
It allowed me to take on less work, reducing my income to $2,000 a month,
so I could spend more time making YouTube videos and creating my digital
course business.
Use Your Job to Seed Your Business
Rather than viewing your current job as this thing you need to escape from
and “put up with” in the meantime, see it for what it really is: the seed
funding for your future empire.
Whatever leveraged income stream you’re launching, you’ll need to pay
for stuff like software subscriptions, equipment, and freelance help. It’s
pretty stressful to take on costs like that when you’re just starting out and not
making money yet, so it’s a really good thing to have a paycheck that
removes the financial pressure!
Plus, don’t overlook the additional benefits your job provides: good health
insurance, professional connections you can leverage later, and relevant
skills you’re developing on someone else’s dime. I learned communication,
spreadsheets, and advanced investing skills from my former jobs, and all of
that helped me so much with launching my financial education business.
Get Selfish with Your Time and Energy
Now is the time to get super selfish with your time and energy. You need to
treat your business-building time as sacred and nonnegotiable. Instead of
trying to find time (which never works), you need to schedule it.
Make specific “micro-commitments” that you can realistically keep:
Early Bird Strategy: Wake up just 30 minutes earlier to work on your
business before your day job drains your mental energy
Lunch Break Power Hour: Use 2 or 3 lunch breaks weekly for focused
work—45 minutes here and there adds up
Weekend Focus Block: Schedule one 2- to 3-hour distraction-free
session each weekend (Sunday mornings tend to work well)
For me, this meant going into what I call “monk mode” for a period. I said
no to almost everything that wasn’t absolutely essential. Friends probably
thought I’d fallen off the face of the earth. But I knew this season of intense
focus wouldn’t last forever and the freedom on the other side would be worth
it.
Be Emotionally Protective of Your Plans
Here’s something nobody tells you about this bridge period: It’s not just
unglamorous—it can be pretty lonely.
I learned this the hard way when I visited Korea one summer to see my
relatives. Over a typical dinner of rice, soup, banchan, and kimchi, I shared
with my uncle that I hoped to start my own thing one day, and he tried to talk
me out of it. Mind you, my entire (and super Korean, I might add) family is
very gung-ho about getting elite degrees and climbing the corporate ladder of
a prestigious company.
That’s why I made the decision to keep my dreams close to my chest and
only share them with a select number of friends who I knew would
encourage me. I didn’t even tell my parents (as much as I love them) until
the day I made that $160,000—when I felt the results could speak for
themselves.
This might sound extreme, but your early-stage dreams are incredibly
vulnerable and they need protection. If you’re trying to build something that
will get you to levels you’ve never been to before, the people around you
may not understand. Share your vision only with people you know will
support you. Then let your results do the talking later!
THE MENTAL LEAP TO LEVERAGED INCOME
Looking back at my journey from trading time for money to making
$160,000 in seven days, I can see that the strategies and tactics were actually
the easy part. The real challenge? Completely rewiring how I thought about
making money: from trading time for money to earning it in a leveraged way.
I used to look at successful entrepreneurs and think they must know some
secret I didn’t. Then I realized the truth: It wasn’t about what they were
doing—it was about how they were thinking. We have to fundamentally
change how we think before we can change what we earn.
So while we spoke about money mindset earlier, I also want to talk about
the specific mental shifts required to break free from the time-for-money
trap. These shifts are what allow you to think in terms of leverage, scale, and
exponential growth—even when every instinct is pulling you back to the
familiar comfort of trading hours for dollars.
Progress Over Perfection
“I’ll start when my setup is perfect.” “I’ll launch once I’ve figured
everything out.” “I’ll do it once I have all the answers.”
These are all just fancy ways of saying “I’m terrified of looking stupid.”
I know this fear better than anyone. That’s why it took me four years to
start my YouTube channel. Not months—years. While I was stuck in
perfectionism purgatory, I missed out on countless opportunities to serve
people and build something bigger than myself. I kept telling myself I
needed better equipment, a proper studio setup, more polished scripts. But
really? I was just scared shitless. What would people think? What if Internet
trolls tore me apart in the comments? What if my old co-workers saw my
videos and laughed at how amateur they were? And worst of all, what would
I think? No one judges us more harshly than how we judge ourselves.
But here’s the truth about starting anything new: There’s never going to be
a magical moment when all your fears disappear and all of a sudden you feel
ready. Never.
The key is to start before you’re ready. Do it scared. Do it anyway. Come
to terms with the fact that sucking at something is the prerequisite to being
good at something.
My first YouTube videos sucked. My hair was awkward, the quality was
bad, and I was literally shouting at the camera. My first digital course was
just me recording in the corner of my bedroom, wearing the same outfit for
three days straight so the videos would look consistent.
But those messy, imperfect videos were the first step toward building a
platform that now reaches millions. If I’d waited until everything was
perfect, I’d still be waiting.
Besides, what are we so scared about anyway? Most people are too busy
worrying about themselves to even notice what you’re up to. And the few
who do criticize? Let them. Other people’s opinions won’t pay your bills or
make you a millionaire.
Selling Is Serving
Here’s something else that makes most people break out in a cold sweat:
selling.
I used to be allergic to selling. Like many people, self-promotion felt icky.
Marketing seemed manipulative. I was raised to be modest, to keep my head
down, and to let my work speak for itself.
Well, guess what? Letting your work “speak for itself” is a fantastic way
to stay broke.
That’s why at the beginning of my entrepreneurial journey (even before
starting my YouTube channel), I gave financial education workshops for free
in the basement of a co-working space. For two whole (and very broke)
years, I was too afraid to charge for my services.
But here’s something that helped me get over my fear of selling: Instead of
viewing it as this icky thing I had to do, I realized that it’s just telling people
about something that will help them.
Have you ever used some amazing product before and raved to all your
friends about it? Why does it have to be any different when it’s for your own
product or service? If you have something that can genuinely help people,
keeping quiet about it is actually doing them a disservice.
So let’s reframe: Selling is actually serving.
In fact, that’s exactly what good selling is—it’s connecting people with
solutions to their problems. It’s helping them get from where they are to
where they want to be.
Good selling is connecting people
with solutions to their problems.
Look around and you’ll notice something interesting: The people making
serious money aren’t necessarily the most talented or knowledgeable in their
field. Instead, they’re the ones who understand how to market and sell what
they do.
Remember: Money flows where value goes. But that value needs to be
communicated. Otherwise, you’re just running a charity (which is awesome
if that’s your goal, but it will not get you to your first million). Selling is the
mechanism by which value is communicated and money is transferred. You
have to get over your fear of selling. Period.
Play the Long Game
Most people aren’t okay with playing the long game—they want instant
gratification. That’s why it’s so comfortable to rely on a steady paycheck.
Show up, put in the hours, and two weeks later—boom, payday. But when
you’re building leveraged income, that cycle is different. You might pour
energy into creating something now and not see meaningful returns for
weeks, months, or even longer. Especially if it’s something where you can
create once and earn forever.
That’s why you need to play the long game.
But how do you stay motivated and keep going when the payoff feels far
away? I have two tips for you:
The first is to track progress you can control. Early in my YouTube
journey, I couldn’t control views, subscribers, or sales. But I could control
how I showed up. That became my focus: publish one video a week, give
each one my absolute best, and try to improve with every video.
Second, it’s about changing your attitude to enjoy the process itself,
instead of enjoying only the results of the process. Because results lag. So if
you’re holding your breath until those results show up, you might give up
long before.
Most importantly, stay connected to your Intrinsic Why—your deeply
personal reason for wanting financial freedom—which we talked about in
Chapter 2. For me, it was about breaking the cycle and building a different
future for my family. That bigger reason kept me going, giving me the
stamina to stick it through that very vulnerable, humbling period when I was
working super hard yet not seeing any success.
You now have all the tools you need to go through the steps of adding a zero
one by one until you reach $1,000,000 . . . and beyond. Believe it! I know it
might still feel a little overwhelming, but just take it one zero at a time. And
be patient with yourself. If you do that, you’ll get there faster than you think.
Seriously—if I can do it, you can do it.
But before I leave you, turn the page. I’ve got a little more last-minute
advice to help you get there.
CHAPTER TAKEAWAYS
Leverage is the secret to escaping the time-for-money trap and
accelerating your path to financial freedom.
The two main tools for creating leverage are: technology and teams.
Use them to serve more people with less time and move from 1:1, to
1:many, to 1:infinity.
When you combine the right skills, passions, and profit potential, you’ll
find your winning business idea.
Mindset matters as much as strategy. Progress over perfection, selling is
serving, and play the long game.
YOUR ADD A ZERO CHECKLIST
Map your winning business idea using the Three Circles.
Pick one idea to start with—this is your launchpad.
Offer a simple service to 3 to 5 clients to get early momentum.
Identify one way to start using technology or teams to add leverage—
whether it’s automating a process, building a simple system, or getting a
few hours of team support.
FREE TOOLS TO HELP YOU ADD A ZERO
Want more support starting your entrepreneurial journey? I’ve put
together case studies and guided prompts to help you find your winning
business idea. Grab it all here: addazero.com/toolkit.
OceanofPDF.com
BEYOND THE ZEROS
Ironically, this book is about adding a zero and getting to a million, but you
and I both know it’s not just about the zeros. After all, money is just . . .
well, money. What good is a bank account full of zeros if you don’t even
like yourself? If you feel miserable and alone?
Let’s not forget that the real measure of success is how much joy you feel
every day, the quality of your relationships, and how good you feel about
yourself. None of that requires money. And while money can certainly
facilitate these things, it only matters to the extent that it helps you become
the person you most want to be, whether that’s someone who enjoys all the
freedom in the world, gives back to others, or is always there for their loved
ones. My biggest wish for you is that you’ll be able to look in the mirror
every day and feel damn proud of the person you’ve become.
For me, the most rewarding thing about my journey going from $100,000
in debt to becoming a millionaire hasn’t been the money. It hasn’t been the
oceanfront apartment, the social brownie points, and not even the freedom
to book last-minute luxury trips on a whim (though all those things are nice
too!). It’s who I’ve become in the process.
The version of me that avoided her debt for years, thinking it would
define her for the rest of her life, couldn’t be more different from who I am
today. I’ve learned that true wealth starts in your mind long before it shows
up in your bank account. Here are the most powerful lessons I’ve learned
along the way.
GRATITUDE CREATES ABUNDANCE
If there’s one thing I’ve learned, you can’t scarcity-think your way into
money. In order to have lots of money, you have to match the energy of
money first. And there’s nothing that matches the energy of money and
abundance as much as the energy of gratitude. After all, when you’re
grateful, you’re telling the universe “I appreciate what I have and I’m ready
for more” instead of “Nothing is ever enough.” The former pushes money
away, while the latter welcomes it in.
FOCUS ON WHY YOU CAN, NOT WHY YOU CAN’T
I could’ve come up with 4,237 reasons why I’d never get out of debt: I can’t
because I don’t make enough, I can’t because of inflation, I can’t because of
taxes, I can’t because I suck at making money, I can’t because of how my
parents raised me, I can’t because of my boss/partner/family, I can’t because
I’m not good with money . . . the list could go on and on!
But if I’d focused on all the reasons why I couldn’t, I’d still be in debt
today. The power to change starts with taking your power back. And that
starts with recognizing that there are always reasons why you can.
You can because you are resourceful and can figure things out.
You can because you’ve overcome challenges before and will do it again.
You can because there are always new ways to make, save, and grow
money.
INVEST IN YOURSELF
While you’re busy investing in stocks, bonds, real estate, crypto, and what
have you—don’t forget to also invest in you. After all, you are your greatest
asset! Invest time, money, and energy into reading books, attending
conferences and masterminds, and learning from coaches and mentors to
strengthen your mindset, raise your confidence, and learn skills that will
make you money.
I’d even go so far as to say that investing in yourself should go before
anything else on the Financial Waterfall. Why? Because you’re the one who
has to go through the Financial Waterfall, so if you’re in good shape, you’ll
move through it that much faster.
Like everything else in the material world, money comes and goes. But
the confidence you’ll find within yourself and the opportunity to dig deep
and see what you’re made of—that stays with you forever.
Now when I watch the sunrise, it’s not just a beautiful view—it’s a
reflection of how far I’ve come since that morning on the beach with my
Moleskine, dreaming about the life I wanted but had no idea how to create.
I’m not just wealthier. I’m stronger, freer, and deeply rooted in the certainty
that I can create, build, and shape my own future—no matter the
circumstances.
And you have the power too. It’s in your hands. Don’t let anybody ever
tell you otherwise. You’re right where you need to be.
Thank you for being here—it means so much to me to have been able to
connect with you through these pages. I hope you’ll highlight, mark, and
dog-ear the shit out of this book, and use it to transform your finances. I’m
@itsrosehan on every social media platform, so don’t be a stranger! Share
your updates, wins, and aha moments with me every chance you get. I
would be honored to witness you.
Now go become the best damn version of yourself you could ever
imagine!
To freedom,
OceanofPDF.com
APPENDIX A
Roth Conversion Ladders: A Trick to
Withdraw from Retirement Accounts Early
Some people tell me they don’t want to put money in a retirement account
because they can’t withdraw any of it until their “official” retirement age of
59½ (soooo arbitrary, but hey that’s what the government says). Otherwise,
the withdrawals are subject to a 10 percent penalty. Ouch!
Well, luckily, there’s a trick to get around this is by doing a “Roth
conversion ladder,” which is a strategy that allows you to access your
retirement funds early without incurring the penalty. It involves taking
advantage of a little loophole called the “five-year rule.” It states that after
converting money from a Traditional 401(k) or IRA to a Roth IRA, you can
do an early withdrawal of the converted amount tax-free and penalty-free,
provided it’s been five years since the conversion date.
Keep in mind that you still have to pay taxes on the converted amount in
the year of conversion, so be sure to plan for that. Furthermore, since the
converted funds need to “age” in the account for five years, you’d have to
ladder out your conversions in such a way that you have enough funds to
live on during each five-year waiting period. Nothing you can’t pull off
with a little planning ahead and potentially some help from a tax
professional.
OceanofPDF.com
APPENDIX B
So You Want to Buy a House?
Says the boomer who bought their house for $60,000: “Don’t rent, buy! It’s
the smartest investment you could ever make!” I’ll bet you that all your life,
you’ve been told that as a renter, you’re throwing away your money, and
that buying your own home is the best investment you could ever make.
I have two problems with this advice. First off, it’s completely tone-deaf
to the fact that these days, most people rent, not because they enjoy
“throwing away” their money, but because they have no other choice. Home
ownership just isn’t as easy as it used to be.
Secondly, if you’re living in the house, it’s not an investment. It’s your
shelter. A rental property that generates investment income would be an
investment. But a house that you live in actually costs you money in the
form of mortgage payments, maintenance and repairs, property taxes, and
insurance. Something that costs you money can’t be an investment.
So let’s at least get that part straight: Buying a house is not an investment
if you live in it. But here’s what buying a house actually is:
A way to lock in housing costs. When you buy, you never have to
worry about your landlord raising rent on you. On average, rents go up
by 3 percent a year, but you never know when your rent will shoot up
by a lot more than a routine annual inflation adjustment. On the other
hand, your mortgage payments will stay the same . . . no matter what.
Of course, property taxes, insurance, and other costs associated with
homeownership will go up with inflation, too, but these make up a
much smaller portion. When your housing cost is (mostly) fixed, you
can feel a lot more confident financially.
An emotional investment. Rooting down and making a home is a
very personal process that might be core to your happiness and
security (it is for me!). That’s why perhaps looking at it purely in terms
of dollars and cents is wrong to begin with. For most people, it’s much
more an emotional investment than a financial one, and that’s perfectly
okay.
If you do decide to buy a house, be careful not to end up “house poor”—
which is when so much of your income goes toward homeownership
expenses that you barely have money left over for anything else. It’s a trap
that too many people—starry-eyed with the dream of homeownership—find
themselves in. To avoid falling into this trap yourself, here are two things to
consider so that buying a house helps you add a zero instead of cost you
zeros:
Is this cost a reasonable percentage of my income? Ideally, you
want to keep your total housing cost to 30 percent of your take-home
pay.1 If you live in a high-cost-of-living city like San Francisco or
New York, cap it at 45 percent of take-home pay. Remember, this
housing cost should include all the costs associated with owning the
home. People get in a lot of trouble when they forget to factor in things
like property taxes, homeowners’ insurance, utilities, HOA fees, and
maintenance/repairs. The one that really gets people is
maintenance/repairs. According to Angi’s 2023 “State of Home
Spending” report, homeowners spent an average of $2,458 on home
maintenance costs and another $1,667 on emergency costs.2 A good
rule of thumb is to budget 1 to 4 percent of your home’s value annually
for maintenance/repairs. One percent on the low end for new homes
and 4 percent on the high end for older homes in weather-prone areas.
If you can’t afford to set aside enough money for the maintenance
budget every month, you can’t afford the house!
Have you completed the key steps in your Financial Waterfall?
Before you buy, make sure you’ve built a strong foundation by
working your way through the priorities in your Financial Waterfall.
Ideally, I recommend waiting until you’ve reached the tier where
you’ve paid off all major debt—like student loans and car loans. A
home is a huge commitment, and it comes with its fair share of
surprises, so the fewer monthly debt payments you have, the more
financial breathing room you’ll enjoy. But if you’re set on buying
sooner, at the very least, make sure you’ve cleared your credit card
debt, built a six-month emergency fund, taken advantage of your
401(k) match, and opened a Roth IRA. Personally, that’s the minimum
I’d want to see before making such a big move. (If you need a
refresher, flip back to see the Financial Waterfall.)
Overall, I’m not saying that buying a house is good or bad. I just want
you to have a realistic perspective on it. If you’re going for it, make it a
truly beneficial financial decision rather than one that sucks your bank
accounts dry! Don’t give up financial freedom for that roof over your head.
OceanofPDF.com
APPENDIX C
Watch Out for Investment “Opportunities”
As you near $1,000,000, people will come out of the woodwork pitching
you on the latest investment “opportunity”—cryptocurrency projects, hedge
funds, the next venture capital fund, a friend’s new startup, a friend of a
friend’s new startup—you name it! It really is like the Wild, Wild West out
there.
This can be veryyyy seductive. You might think, “Now that I’ve reached
a certain amount of financial success, I should be playing at a bigger level!!
I’m hot shit now!” Or at least that’s what happened to me. I invested
$20,000 in a friend’s startup and promptly lost it all. It was a good lesson in
sticking to the basics, not getting too loose with my investment standards,
and most importantly, not letting success get to my head.
Making money is one thing . . . preserving it is another! Avoid getting
swayed by the siren song of sexy and exotic investments, and don’t forget
to stick with the principles that got you where you are. Even though
investing consistently in diversified, low-cost index funds sounds really
boring . . . boring works!
If you find an opportunity that truly feels promising, and you really want
to take a chance on it, invest no more than 5 to 10 percent of your money. If
you have some money you can afford to lose, you might decide it’s fun. It’s
like hitting up the roulette table in Vegas and dropping some cash that you
know you might go home without. When you get into a risky, sexy
investment with money you can afford to lose, you’re taking a chance that
could pay off more than any traditional investment ever could (bitcoin
millionaire, anyone?), while also ensuring that if it doesn’t work out, you’ll
live to fight another day.
OceanofPDF.com
APPENDIX D
Protect What You’ve Worked So Hard to
Build
I’m not a lawyer or an insurance agent, so I’ll keep this pretty short. But I’d
be remiss not to mention a few key things you absolutely need to have in
place in order to financially protect
yourself and your loved ones.
A will, also known as a Last Will and Testament, is a legal document that
states how you want your assets distributed when you leave this world. It
can also include instructions for end-of-life decisions, such as medical care,
and naming guardians for children and pets.
Be sure to also set beneficiaries for your retirement accounts, bank
accounts, brokerage accounts, and life insurance policies. Creating a will
and naming beneficiaries are all part of creating your estate plan.
Look, I know the last thing you want to think about is what will happen
when you pass, especially if you’re young. But if you don’t have an estate
plan in place and something happens to you, the probate court gets to
control what happens to your assets. From there, it’s a total crapshoot. The
court could grant your assets to a family member you haven’t spoken to in
decades, while your longtime live-in partner for years gets nothing. Nobody
wants that!
I truly believe that money is drawn to those who take care of it and
understand the true purpose of it. Money can be many things, but at its
essence, it’s a resource that enables you to take care of yourself, your loved
ones, and the causes you care about. By creating an estate plan, you
demonstrate your understanding of the purpose of money, the power it has,
and that you take that power seriously. As the saying goes, with great power
comes great responsibility.
The other piece to protecting yourself is having adequate insurance. Here
are the absolute musts:
Health insurance—Just one serious health emergency is enough to
wipe you out financially, so don’t tempt fate!
Car insurance (if you have a car)—As much as I believe in you and
your driving skills, I would not trust other drivers! Protect yourself
from unexpected repair costs, liability, and medical expenses.
Homeowner’s insurance (if you’re a homeowner)—You never want to
have to pull from your income or investments to replace losses due to
flood or fire.
Life insurance (if you have dependents)—Ultimately, your goal is to
get to a point where you don’t need life insurance because you can
“self-insure.” That means having enough in investments so that your
dependents can live on that investment income when you’re gone. But
until you get there, a cheap 20-year term life policy will do the trick!
Then there are nice-to-haves, such as:
Disability insurance—If you got sick or disabled for a while and
couldn’t work, this insurance would replace at least some of your
regular income and keep you from falling too far behind financially.
Although I listed disability insurance as a nice-to-have, if you have
dependents, you should strongly consider it.
Umbrella insurance—This is useful for expensive situations where
your regular insurance coverage isn’t enough. For example, let’s say
you drive your car into a building and cause extensive building
damage. Your auto insurance policy would pay first, and then your
umbrella policy would cover the rest.
OceanofPDF.com
APPENDIX E
Your Team of Advisors
Once you reach $100,000 net worth or higher, you eventually want to start
thinking about hiring a team of advisors to help you instead of doing
everything yourself. For example, you’ll want to consider hiring an estate
planning lawyer for your will and an insurance broker to help you find the
best policies for your needs. Additionally, you might want to consider
hiring:
A Certified Public Accountant (CPA). When you’re single, renting,
have only W-2 income and very little savings, TurboTax will do just
fine. But when your finances get more complicated, especially if you
run a business or own properties, a savvy CPA who is up-to-date on the
latest tax savings strategies is worth their weight in gold. My CPA has
already saved me over $100,000 in taxes!
A family law attorney. If you plan on getting married, consider drafting
a prenuptial agreement, especially if you have a lot more assets than
your partner. This is a very personal decision for everyone, but it’s
definitely a smart thing to do!
A Certified Financial Planner (CFP). A CFP provides comprehensive
financial planning advice, including help with investing, retirement
planning, estate planning, insurance, and taxes. Think of them as
someone who helps you with the big picture and can coordinate the
rest of the advisors on your team. They’ll let you know if you need
more insurance, explain what tax savings strategies you can explore,
and review your investment portfolio or even manage it for you. If you
have a lot of assets, it’s never a bad idea to meet with a CFP and make
sure you have all your bases covered.
To find the best people for your team, one trick is to ask one trusted
advisor to refer you to another advisor. For example, I asked my CFP for a
CPA recommendation, and that turned out to be a great move. Otherwise,
ask friends, colleagues, and family for trusted referrals, and if all else fails,
check Google and Yelp reviews. Then set up an interview with the advisor
and ask them questions like:
1. What’s your fee structure? Do you charge by the hour or by a fixed
fee?
2. What are your credentials, and how long have you been practicing in
this field?
3. Are you a fiduciary? (This means they’re legally obligated to act in
your best interest.)
4. How do you communicate with clients, and how often?
5. Do you have any conflicts of interest I should be aware of?
6. I need your help with [XYZ]. Can you explain how you’d approach it?
7. What other questions should I ask you?
Pay attention to how well they explain complex concepts. A good advisor
should be able to communicate clearly and make you feel smarter, not
dumber. Lastly, ask to talk to two or three of their current clients so that you
can ask about their experience.
Always take your time hiring anyone, and make sure you feel 100
percent comfortable with them. After all, these advisors will be handling
crucial aspects of your financial life, which means they’ll learn a lot of
private things about you!
OceanofPDF.com
ENDNOTES
Your Journey Begins
1. “How Two-Thirds of American Consumers Managed Their Paychecks in 2024,” PYMNTS,
December 27, 2024, https://www.pymnts.com/consumer-finance/2024/how-two-thirds-ofamerican-consumers-managed-their-paychecks-in-2024.
2. Jack Caporal, “Average American Credit Card Debt in 2025,” Motley Fool Money, February 14,
2025, https://www.fool.com/money/research/credit-card-debt-statistics.
3. Hope Wallborn, “Survey Finds Americans Are Concerned About Housing Affordability,”
Pennsylvania Association of Realtors, January 22, 2024, https://www.parealtors.org/blog/surveyfinds-americans-are-concerned-about-housing-affordability/.
4. Elyssa Kirkham, “1 in 3 Americans Has Saved $0 for Retirement,” Citizens Debt Relief, April 3,
2025, https://www.citizensdebtrelief.com/blogs/1-in-3-americans-has-saved-0-for-retirement.
5. Matt Schulz, “Student Load Debt Statistics,” Lending Tree, August 16, 2024,
https://www.lendingtree.com/student/student-loan-debt-statistics.
Chapter 1
1. “How Fast Does My New Car Lose Value?,” Edmunds, September 24, 2010,
https://www.edmunds.com/car-buying/how-fast-does-my-new-car-lose-value-infographic.html.
2. Chris Hardesty, “How to Beat Car Depreciation,” Kelly Blue Book, October 17, 2024,
https://www.kbb.com/car-advice/how-to-beat-car-depreciation.
Chapter 2
1. “Reticular Activating System: Intention in Attention,” Contemporary Psychology, December 7,
2022, https://www.contemporarypsychology.com.au/reticular-activating-system-intention-inattention/
2. E. A. Locke and G. P. Latham, “Building a Practically Useful Theory of Goal Setting and Task
Motivation: A 35-Year Odyssey,” American Psychologist 57, no. 9 (2002): 705–717.
https://doi.org/10.1037/0003-066X.57.9.705.
Chapter 3
1. Jack Caporal, “This Is How Credit Card Companies Hauled In $176 Billion in 2020,” Motley Fool
Money, February 14, 2025, https://www.fool.com/the-ascent/research/credit-card-companyearnings/.
2. Kelton, Katie, “Survey: Nearly Half of American Credit Card Holders Still Carry Debt, Many for
At Least a Year,” Bankrate, January 8, 2025, .https://www.bankrate.com/finance/creditcards/credit-card-debt-survey/.
3. Center for Microeconomic Data, “Household Debt and Credit Report (Q4 2024),” Federal Reserve
Bank of New York, https://www.newyorkfed.org/microeconomics/hhdc.
4. Matt Brannon, “Credit Card Debt: 1 in 4 Americans Fall Deeper into Debt Each Month (2023
Data),” Clever, September 18, 2023, https://listwithclever.com/research/average-american-creditcard-debt-2023/#average.
5. Gabrielle Olya, “Jaw-Dropping Stats About the State of Debt in America,” Yahoo! Finance,
January 17, 2024, https://finance.yahoo.com/news/jaw-dropping-stats-state-credit130022967.html.
6. Olya, “Jaw-Dropping Stats.”
7. Adam McCann, “What Percentage of America Is Debt Free?,” WalletHub, November 25, 2024,
https://wallethub.com/answers/cc/what-percentage-of-america-is-debt-free-2140664784.
8. Drazen Prelec and Duncan Simester, “Always Leave Home Without It: A Further Investigation of
the Credit-Card Effect on Willingness to Pay,” Marketing Letters 12 (2001): 5–12,
https://link.springer.com/article/10.1023/A:1008196717017.
9. “New Reality Check: The Paycheck-to-Paycheck Report: The Emergency Spending Edition,”
PYMTS, August/September 2022, https://www.pymnts.com/study/reality-check-paycheck-topaycheck-consumer-financing-emergency-expenses.
10. Ray Boyer, “The ‘Snowball Approach’ to Debt,” Kellogg School of Management, Northwestern
University, August 7, 2012,
https://www.kellogg.northwestern.edu/news_articles/2012/snowballapproach.aspx.
Chapter 6
1. Chris Hardesty, “How to Beat Car Depreciation,” Kelly Blue Book, October 17, 2024,
https://www.kbb.com/car-advice/how-to-beat-car-depreciation.
Chapter 7
1. Rakesh Kochhar, Kim Parker, and Ruth Igielnik, “Majority of U.S. Workers Changing Jobs Are
Seeing Real Wage Gains,” Pew Research Center, July 28, 2022,
https://www.pewresearch.org/social-trends/2022/07/28/majority-of-u-s-workers-changing-jobsare-seeing-real-wage-gains.
Chapter 8
1. Bureau of Labor Statistics, U.S. Department of Labor, “Number of Jobs, Labor Market
Experience, Marital Status, and Health for Those Born 1957–1964,” news release USDL-23-1854,
August 22, 2023, https://www.bls.gov/news.release/pdf/nlsoy.pdf.
2. “The True Cost of Forgotten 401(k) Accounts (2023),” Capitalize, June 14, 2023,
https://www.hicapitalize.com/resources/the-true-cost-of-forgotten-401ks.
Chapter 9
1. “Market Corrections Are More Common Than You Think,” Charles Schwab, February 22, 2022,
https://www.schwab.com/learn/story/market-corrections-are-more-common-than-you-think.
2. Francis M Kinniry, Ted Dinucci, and Chris Tidmore, “The Difficulty and Rewards of Staying the
Course,” Vanguard, March 28, 2024, https://advisors.vanguard.com/insights/article/the-difficultyand-rewards-of-staying-the-course.
Appendix B
1. Jaclene Begley and Mark Palim, “What Are the Biggest Costs of Home Ownership?”
FannieMae.com, March 9, 2022, https://www.fanniemae.com/research-andinsights/perspectives/biggest-costs-homeownership.
2. Angi. “The State of Home Spending 2023.” Angi. 2023. Accessed April 2, 2025.
https://www.angi.com/research/reports/spending/.
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ACKNOWLEDGMENTS
In my early days living in NYC, I spent countless Saturdays at Barnes &
Noble flipping through books in the self-help section, hungrily searching
for answers. Robert Kiyosaki and Tim Ferriss—your books forever changed
the way I thought about life, work, and money. How unreal that I now get to
pay it forward, in the same way your books did for me. I stand on the
shoulders of giants.
To Cez, my rock, my home, and my fellow adventurer/partner-in-crime—
thank you for your patience during all my late-night writing sessions, for
taking care of me, and for always knowing how to make me laugh. You’re
the best thing that’s ever happened to me.
To Jupiter, my furry best friend—thank you for the cuddles during
writer’s block, for the beach walks that cleared my head, and for being the
best emotional support anyone could ask for. You’ve been by my side
through every word.
To my trusty campervan, the Jupitermobile, which wasn’t just a vehicle
but my home and sanctuary during my nature writing retreats, and a living
embodiment of the financial freedom I preach. Thanks for showing me that
wealth isn’t about fancy possessions but about having the freedom to live
life on my own terms.
Mom, Dad—thank you for your unwavering love and belief in me, even
when the path I chose wasn’t the traditional one and you didn’t always
understand what I was up to. You taught me the value of hard work and
persistence that made this book possible.
To my agent, Steve Carlis—thank you for pushing me to write this book.
(Although there were some late nights when I really wished you hadn’t!)
I’m very grateful because I finally got to realize my longtime dream to
become an author. And I’ve grown so much in the process.
To my amazing editors—Lisa, Monica, and Melanie—thank you for your
brilliance, patience, and dedication. You challenged my thinking, refined
my words, and helped shape this book into something so much better than I
could have created alone.
To my incredible team—Vix, Sandra, Agni, and Mark—thank you for
being absolute fucking rock stars. Your dedication allowed me the space to
pour myself into this book. A special shout-out to Vix and Sandra for
keeping everything running smoothly while I often disappeared into writing
mode. And Glodine, you the OG over here at Team Rose! I love how much
we’ve helped each other along on our own individual journeys and continue
to create synergies.
To my friends Azhelle, Sandy, Bridgette, Tanya, CJ, and Kyla—thank
you for your support, whether it was brainstorming title ideas with me,
being my personal hype woman, reading my e-mail newsletters, or just
checking on me. Friendship is the ultimate wealth! And Juno, Wogahta—
even though you’re both far away now, I’ll never forget how supportive
your friendship was to me in the early days of sharing my finance content
online.
To Danielle Canty, my mentor—your guidance has been so supportive
for me in more ways than you can imagine. Thanks for being an inspiration
and pushing me to grow. To Amy Porterfield and Marie Forleo, my mentors
from the early days, thank you for showing me how to make income in a
leveraged way while doing work that I love. To Elsa Isaac, who made sure I
looked the part for my photo shoots, and to Luvvie Jones, for your no-B.S.
advice on key decisions like the cover design and the book’s core message.
And finally, to you, dear reader—thank you for picking up this book and
joining me on this journey. Your financial freedom matters, and I’m
honored to be a small part of your story.
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ABOUT THE AUTHOR
ROSE HAN is an internationally renowned money expert, educator,
traveler, and book nerd on a mission to show others how to create financial
freedom. On her wildly popular YouTube channel, she’s shared her entire
financial journey of going from $100K in debt to becoming a self-made
millionaire. Rose has been featured in The Wall Street Journal, Business
Insider, and on CNBC, and has helped millions of people pay off debt, start
investing, and build wealth.
rosehan.com
@itsrosehan
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@itsrosehan
Hay House Titles of Related Interest
THE SHIFT, the movie,
starring Dr. Wayne W. Dyer
(available as an online streaming video)
www.hayhouse.com/the-shift-movie
***
HIGH PERFORMANCE HABITS: How Extraordinary People
Become That Way, by Brendon Burchard
BUILDING YOUR MONEY MACHINE: How to Get Your Money
to Work Harder for You Than You Did for It! by Mel H. Abraham
MAKE MONEY EASY: Create Financial Freedom and Live a
Richer Life by Lewis Howes
MONEY, AND THE LAW OF ATTRACTION: Learning to Attract
Wealth, Health, and Happiness by Esther and Jerry Hicks
THINK LIKE A BOSS: Stop Playing Small and Start Thinking Big
by Maggie Colette
TRUE WEALTH: 9 Lessons from a Grandfather on Happiness
and Abundance by Ken Honda
TWO WEEKS NOTICE: Find the Courage to Quit Your Job,
Make More Money, Work Where You Want, and Change the World
by Amy Porterfield
All of the above are available at your local bookstore or may be ordered by contacting
Hay House.
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