🎙️ The FAMILY Framework™ | Part 5 - L is for Leverage Assets
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[00:00:00] Hey friends. Welcome back to the Household CEO podcast. It's Calista Anderson here ~and today. ~And today we're continuing the family framework, the system that teaches families how to move strategically ~from financial uncertainty and stress. ~From financial uncertainty and stress into clarity, confidence, and long-term peace of mind.
If you've been listening along, you know this framework isn't random. Each letter builds on the last for a reason, because the goal isn't just to. Quote, unquote get by. The goal is to move from financial stability to financial security, and then ultimately to financial freedom. And today's letter L is ~for lever L, and today's letter L ~for leverage assets ~is ~a major turning point in that journey.
Before we dive in though, a quick note, this podcast is for educational purposes only. Nothing shared here should be considered individualized [00:01:00] financial , tax, or investment advice. Everyone's situation is different and strategies should be evaluated based on your personal goals and circumstances.
Alright, ~let's get into it. And with that.~
~All right, ~let's get into it.
Why we continue the Family framework. I wanna pause for a moment and explain why we even have a framework like the Family Method. Most families are operating in survival mode. They're reacting, they're patching, they're putting out fires. The family framework is designed to help you progress intentionally stability, security, and freedom.
Stability is knowing your bills are paid, and cash flow is managed. Security is knowing your family is protected ~and is resilient. ~And can be resilient ~whenever obstacles arise, ~whenever [00:02:00] obstacles and emergencies arise. And freedom is having options with your time, your income, and your choices. So each letter builds toward that.
And leverage is where families stop feeling like they're pushing a boulder uphill and start feeling momentum. So what does leverage actually mean? When people hear the word leverage, they often think of risk or debt, but leverage at its simplest means using what you already have to create greater impact or opportunity.
Leverage isn't complicated. It's learning what you have and then intentionally positioning what you have.
And make it work for you. Wealthy families don't just accumulate assets. They use them strategically. So let's define assets. Clearly. An asset is anything that has value. And can produce income [00:03:00] grow over time, reduce expenses, or create future opportunity if it helps move your family forward. Financially, it's an asset ~and assets generally fall into a few main categories and, ~and assets generally fall into a few main categories.
I'm gonna go over six categories.
I want you to think about what you have already as I go through these six categories. ~As I go through these categories, as I go through these categories,~
~I~
~so. Okay, ~so category number one is cash and cash like assets, which include your savings, your emergency funds, your high yield savings accounts, ~cash balances, ~cash balances.
And cash value inside certain insurance policies. Like I touched on in the last episode,
~most people can, most people treat cash as hands off a, ~a lot of people treat cash as hands off, untouchable ~or something that they just want to sit there.~
Or something, they just want sitting there because that feels comfortable.
~Y~
when we have cash on hand, we feel more [00:04:00] safe, we feel more liquid, but. We have to make sure our liquidity isn't lazy and that it is flexible.
What do I mean by lazy? ~That means it, it, ~that means it isn't being leveraged,
which can mean positioning cash so it's accessible without permanently interrupting its growth.
Understanding when to deploy cash and when to preserve it,
and making sure your cash is a tool and not just a safety blanket.
Cash is meant to be ready at any time and not frozen. And I'm talking to those of you listening who have worked through bad debt and have a nest egg put away.
You've learned how to save money, ~but you may not have. ~But you may not yet have learned how to make money work for you, because if you are not making it work, it is actually losing value because of inflation.
So I know how it's like to [00:05:00] feel good about savings and having it sit in a savings account, ~and then only to realize. And ~only later realizing that it's actually losing value ~because the interest is so ridiculously low ~because the interest you get in return is so ridiculously low.
So just keep that in mind and use that as food for thought.
Category Number two is income producing assets. These are assets that pay you. It could be a rental property, a business.
~Owning a business, maybe having side businesses,~
any consistent cash flowing asset. Leverage here looks like using ~cash ~cashflow to reduce inefficient debt, reinvesting your profits instead of relying solely on earned ~income. Or turning one ~income or turning one income stream into multiple.
First of all, if you have any income producing assets, that is awesome. Congratulations.
I can appreciate that you've [00:06:00] thought outside the box and started leveraging, ~bridging ~maybe your primary income or.
Had enough savings to seize an opportunity when it arose,
so cheers to that.
Now take a look at that and see if you can multiply it even more.
Category number three is growth assets. These are your retirement and brokerage accounts such as your employee sponsored retirement accounts, 401k ~four oh. ~4 0 3 B, a pension plan, et cetera, ~or an I ~or your IRAs or an SEP for my S corp. Self-employed friends, , also brokerage accounts ~else in ~and any long-term investment strategies.
~This is where many families have leveraged. ~This is where many families might be leaving leverage on the table. ~For instance, for employee, ~for instance, employer sponsored [00:07:00] retirement accounts, ~if your employer offers a match, ~if your employer offers a match, . ~Not taking it is actually ~not taking it is declining free money at a minimum, ~contribute enough to f ~contribute enough to receive the full employer match.
As ~income grows, increase as your ~income grows, you can increase your contributions gradually.
And speaking of income growth, this could be a whole nother episode.
The people who really get ahead ~is, ~are those people who, when their income does grow.
~They raise, ~they use the growth or raises as leverage opportunities ~instead of a, ~instead of lifestyle inflation.
So when you keep your expenses the same .
And your income grows. That's when speed can really pick up.
~I.~
~Another type of growth asset is a bro. Another type of growth asset are, ~another type of growth asset is brokerage accounts,
whether you're managing it yourself, a self-directed brokerage account, ~or, ~or you're working with an advisor.
You can leverage these accounts by automating [00:08:00] consistent contributions.
And whether you're doing it yourself or have someone doing it for you, , you wanna know what's going on in your account, even if it's on a monthly or quarterly basis,
making sure it's aligned with your goals and your time horizon, meaning how aggressive or conservative do you wanna be? Depending on how close you are to retirement,
I would say the same thing for retirement accounts like the 401k and 4 0 3 B. Many people work past 59 and a half, and that is the age you can actually ~roll, ~roll over your 401k into something more conservative. ~Since at Since when? ~. Because when someone enters. They're sixties, they're usually a few years out from retirement ~and you, ~and that is a period where you typically wanna be more conservative with your investments
because if [00:09:00] the market crashes, you don't have a lot of time to recover. Now, younger people do have more time to recover and can be a little bit more aggressive.
But that's just something to keep in mind for yourself. Or maybe if you have parents who are ~in pre-retirement, ~in pre-retirement age, they don't have to wait till they actually retire ~to be~
to be strategic with ~their retirement accounts. To touch ~their retirement accounts
Alright, category number four is home equity ~and real. ~And real assets. So these include your primary residence, , investment properties or any land.
Most families ignore equity until it's time to sell.
But you can use your equity strategically ~if you have another opportunity to,~
if you have another opportunity to make your money grow.
And for investment properties,
~it's po. ~There's a possibility of improving cash flow by turning a long-term rental into a short-term rental. For instance, [00:10:00] especially today, there are lots of benefits to owning a short-term rental when you are a W2 employee.
Or maybe you have land that has built a lot of equity.
You can roll over that equity into something ~that is income producing to an asset ~that is income producing.
Or maybe consolidate ~some inefficient debt~
~or maybe consolidate or maybe consolidating some in, in, or maybe consolidating ~some inefficient debt that's lurking in the background.
Okay. Next is category number five. Insurance based assets when properly structured. So some insurance is purely protection, such as term insurance. Other policies, when designed intentionally can also function as financial assets.
Permanent insurance such as whole life. IUL and VUL have a separate bucket within the plan that has cash value ~you, ~you can contribute to within a specific [00:11:00] limit.
~So permanent insurances. ~Permanent insurances are under a tax code 7, 7 0 2 ~and other, ~and under that code, all the cash value and its growth is tax free.
~These plans are dual purposed. They have your, they have the life protection.~
These plans are multipurpose. ~The primary, ~the primary purpose is the life protection.
~So when a, a loved one passes away, ~so when a loved one passes away.
There is the death benefit, which is what most people think of when they think of life insurance,
but there's a couple more big things about 'em. ~The cash value, which I've been talking about, ~the cash value, like I mentioned, which grows tax free. ~And has a 0% floor meaning~
and has a 0% floor, meaning if the market goes down, you won't lose any money. But when the market goes up, the growth continues and that growth is tax free. And then ~lastly, it has long-term care, which you can,~
~and lastly, it has things like long-term care~
~and critical illness, and. And A and cri. And ~lastly, it has long-term care, critical illness or terminal illness riders, meaning ~if you were.~
, If you [00:12:00] lose two out of the six activities of daily living, such as dressing yourself or bathing yourself or feeding yourself, let's say, after a car accident or after some sort of diagnosis. ~You would be able to tap into your death benefit. And that's why these types of writers, as we call it, is ~you would be able to tap into your death benefit.
And ~then ~in that case, we call them living benefits because you are using the money while you are living.
~So I,~
A lot of people may have these plans but don't know that they can leverage it. ~And leveraging~
~or not. ~Or not reviewing what they actually have in place, because many things change over time. For instance, people may have gotten a plan when they were younger with no kids or a house, and now they bought a home or a bigger home, which has a bigger mortgage and maybe more children.
And so these types of assets need to be updated.
When these plans are structured correctly, [00:13:00] insurance can be way more than protection. It can be a lever, which is why I am so passionate about this. ~And it is the most value. It is the most valuable safety net, in my opinion,~
it is the most valuable safety net for everyday Americans in my opinion.
And then lastly, category number six, human and intangible assets. This is us. ~These are often the most overlooked assets that we have. ~These are often the most overlooked assets that we have. ~Licenses, uh.~
~Our education, ~ these are our skills, our education, our experience, maybe licenses we got in the past. It's our network and our time.
~Time is valuable and hopefully. ~Time is valuable and we can set aside some of this time ~and make it an ~and make it an income producing asset.
For many families, this is the first asset they can leverage. And leverage here looks like monetizing your [00:14:00] skills, creating additional income streams, partnering instead of starting from scratch, turning your knowledge into opportunity.
So going back to episode nine, multiplying your income and Income streams. There are so many ways to do a side business to help accelerate your financial progress. ~One of the most practical examples of leveraged income streams I've seen, especially for busy families, is working as a licensed financial professional.~
One of the most practical examples of leveraged income streams I've seen, especially for busy families, ~is working as a, is working as a licensed,~
~is working as a licensed financial professional.~
Is working as a licensed financial professional. And I'll explain it a little more because I don't think I went too deep into this on the previous episode. So this business has very little startup costs.
~So a lot of these, so ~a lot of licensed financial professionals ~actually don't come from the financial, ~actually don't have a background of finance, going to college ~or, or getting a, ~or getting a degree in the financial industry.
[00:15:00] But it is something that can be learned pretty quickly because there are a lot of basic things in finances. Things that they don't teach us in school.
This business has very little startup costs ~compared to as, ~compared to, let's say, buying a franchise or some other sort of brick and mortar type of business.
~You don't need an office though. You can certainly have an office. In our world of internet days, ~you don't need an office, though. You can certainly have an office or work your way up to getting an office, but this business is mostly done online or ~on kit, ~on kitchen tables, talking with
friends and families.
~Another ti. Another clients. ~Another clients. ~Or just out about, ~or just out and about in your normal life, which is why I have found that this is the easiest type of business and income stream to add for busy families. ~And the bulk of it is providing education so that we can help. And the bulk of it is providing education.~
And the bulk of it is providing education so we can help families with solutions. It's one of the few professions where you can ~increase your own financial IQ while helping other people do the same.~
~It's one of, it's one of the few professions where you ~increase your own financial IQ while helping other people do the same. [00:16:00] This is actually why I chose this path. I was looking to help my own family and in learning all the things I didn't know,
I decided I wanted to spread this financial education ~for regular people,~
I found it flexible
with low overhead ~and that it can really, ~and that it can be built part-time and over time, can grow into something much bigger.
Most families cannot just walk into a big financial firm, you know, the firms that help the top 5% of America ~and have a minimum ~and have a minimum of a million dollars , to help them grow their money
on this platform, we help families that might only have a hundred dollars a month or a couple hundred dollars a month,
And if they don't have that and really wanna learn and help others, this platform offers the additional income and business opportunity.
It is really made for everyday Americans who wanna elevate their families into a better position. And when we [00:17:00] teach our children ~this,~ the same principles, this is when we can get generational wealth going. Maybe our kids and grandkids can go to these high net worth firms in the future.
The saying is so true for this industry. The harvest is plenty, but the workers are few.
So many people need this type of help, but there aren't enough people to help them.
If any of this piques your interest and you wanna learn more.
You can email me directly at callista@callistaanderson.com or DM me on Instagram at Callista Anderson.
So let's. Circle back to the beginning ~and,~
and connect everything. We've gone over ~this series, ~this series so far,
and how leverage fits into the family framework. ~So F, so ~F was for fund and manager cash flow, which creates your stability. ~A was for ~A is for attack debt, which [00:18:00] removes friction. M is for multiply your income stream, which builds your momentum. I ensure what matters, ~which provides you. ~Which provides protection for you and your family.
L. Leverage assets which accelerates your growth, and next week we'll go over Y. Your legacy passing down your hard work.
Leverage is where families begin moving from security and towards freedom, not by necessarily doing more, but by using what they already have better. Okay.
This week, take a look at your own assets, your current assets, and ask which ones might be idle, which ones are underused, or maybe which ones are doing a job they weren't designed for.
~It may give you some, ~it may give you more clarity ,
and maybe it'll help clarify some actions you can take.
~If today's episode helped you, ~if today's [00:19:00] episode helped you think differently about your money, I'd love for you to continue following the podcast
~if today's episode helped you think differently about your money.~
Someone else might too. ~Please share this episode. ~Please share this podcast with someone who could use this conversation.
And if you have a moment leaving a rating or review wherever you're listening to, this will help. ~This message helps ~this message reach more families who are looking for clarity and peace ~around home, ~around their home, family, and finances.
~And if you'd like, seeing how your own assets and if you'd like, and if you'd, ~and if you'd like help seeing how your own assets could be positioned more intentionally. My team and I are here to help.
~Um.~
Thank you so much for being here, for learning, and for stepping into your role as the household CEO. I'll see you in the next episode.
