Gavin, a recent electrical engineering graduate, asks whether he should prioritize saving and investing or move to an expensive city while still in a low tax bracket. I break down the pros and cons of high-cost vs. low-cost living areas and emphasize the importance of investing early for a sustainable millionaire lifestyle.
Join me as I provide actionable tips on how to start your financial journey on the right foot.
We'll cover everything from corporate structures to the power of compounding investments, helping you make smart financial moves from the start.
Ready to take control of your financial future? Grab a pen and paper, and let's get started!
Loral's Takeaways:
Meet Loral Langemeier:
Loral Langemeier is a money expert, sought-after speaker, entrepreneurial thought leader, and best-selling author of five books.
Her goal: to change the conversations people have about money worldwide and empower people to become millionaires.
The CEO and Founder of Live Out Loud, Inc. – a multinational organization — Loral relentlessly and candidly shares her best advice without hesitation or apology. What sets her apart from other wealth experts is her innate ability to recognize and acknowledge the skills & talents of people, inspiring them to generate wealth.
She has created, nurtured, and perfected a 3-5 year strategy to make millions for the “Average Jill and Joe.” To date, she and her team have served thousands of individuals worldwide and created hundreds of millionaires through wealth-building education keynotes, workshops, products, events, programs, and coaching services.
Loral is truly dedicated to helping men and women, from all walks of life, to become millionaires AND be able to enjoy time with their families.
She is living proof that anyone can have the life of their dreams through hard work, persistence, and getting things done in the face of opposition. As a single mother of two children, she is redefining the possibility for women to have it all and raise their children in an entrepreneurial and financially literate environment.
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invest wisely or live expensively. These are financial tips for new graduates. And I'm going to say whether it's high school and you're 18, or you're in college, and you're moving on to your first potential career or job or becoming an entrepreneur, whichever you want to do. So I am a financial advocate, financial literacy instructor. I have taught at schools. I've taught in football stadiums. I have taught and actually the training rooms of football teams. So any of you that are in college, graduating high school, making a decision, the question is from Gavin, and these are all coming from my ask Laurel channel. So I want to read Gavin's question. Who just graduated with electrical engineering. And from the Ask Laurel questions, I'm going to go into a variety of educational points and strategies that I would do and that I did do when I was your age in my 20s. By the way, all of these strategies can work at any moment in your life. So first of all, I'm going to start correcting language. Right? Invest wisely or live expensively. Was the title. I actually use different words instead of invest wisely. I say build your build your assets, then your lifestyle, which is live expensively. See, most of you do it the other way around. It's time you've ever had money in your life, and you're like, oh my gosh, I finally got some money. So I'm gonna go buy a house. I wanna buy a car. I'm gonna go get into extraordinary debt. Why would you do that when you can actually, you don't have any kids. You don't have to have a home. So you build a bunch of assets. So you already know my answer is gonna be assets over lifestyle. Always. I don't care how old you are. But as we get into this, Gavin's question around the s Laurel and what he DMed me over one of my social channels was, I'm about to graduate with electrical engineering degree and find a job. Do I prioritize savings now and live in a cheaper area to max out my investments, or is there time to move and work somewhere expensive, like San Diego, downtown Chicago, and is now the time to do that, since I'm at the lowest tax bracket I'll ever be in great question, and very comprehensive in the way that he asked that. So here's what I'm going to talk about. To answer that question, I'm going to talk about, how do you decide how much to in your words, save or spend? In my words, invest or invest. And then I want to talk about the financial strategies that maximize your investments. Specifically, you're an adult at 18, you need a corporate structure. You need an LLC, a limited partnership, an S corp or a C Corp in the United States. And as you get a family and more wealth than you, put it into a trust. So that is absolutely critical to start your tax process now, like the minute you're 18 years old. My daughter's going to be 18 in a few months. She's getting an LLC for her birthday. So that's how serious we live and take this. And then the third point I want to talk about are the pros and cons of living in a high cost versus a lower cost area, because there are pros and cons. So what are they for? You get a pen and paper. We have a lot to talk about, and when you do this right, or you build your assets, then you get a lifestyle later in your life, I promise you, not only a faster Millionaire is in your pathway, but a sustainable Millionaire is in your pathway. So let's talk about, how do you decide whether to save or spend so again, correct those words at this point in your life, if you're not married, kids, the whole thing this is called, this is your time to invest, invest, invest, get out a compounding calculator. And actually, just think if you put, say, 10,000 away per year for the next five years of your career, or you put 20,000 away and you invest it at 12 15% those are pretty easy. S and P is getting right around 15. So it's not that difficult to get that number. And then you add to it. So you start maybe with the first 20,000 year or two, you add 20,000 20,000 but you're going to be doing it really, month by month by month. It's not going to be one chunk. So when you compound that over five years, I mean, you have hundreds of 1000s of dollars, then go buy your first home and do some of those kind of things, or just stay in an investment position. And I don't call it a rent position for those of you building assets, because it's okay to be a renter. And I think a lot of people freak out, I'm actually legally a renter, right? I rent from an LLC that owns an enormously fabulous property that I have to live in because I'm the officer and director of the company, and I have a housing allowance and I have to live there. You guys gotten it. Some of you are. Some of you aren't. So continue on. So how do you decide whether to save or spend? Was in the question, I'm always a let's go focus on the compounding power of that money. I Okay, so first of all, let's back up a little bit and say what's the job market look like? Because you can get an electrical engineering job in small markets, medium markets, large markets, wherever you want. So part of it's what's your goal financially? I mean, do you want to start growing, accumulating and compounding? Or. Do you want that first couple years where you are going downtown Chicago, going to San Diego, Gavin, and actually having that kind of a life? That doesn't mean you can't go to the lower or medium sized markets to start looking at some real estate. But if, right now, you just want to put a bunch of money away, in the description below, I'm going to give you a bunch of gifts. So I want you, number one, to come to a millionaire intensive, just so you get the framework of what I mean by living corporate life. I'm not talking work for a corporation. I'm talking about owning your own and again, at 18 years old, that's one of the first financial goals I would set for you. Is even with an electrical engineering degree, you need a side hustle, you need a legal intent to make money in addition to your job, or you cannot activate the tax code of the United States, which is 81,000 pages of code. So that ranges between 81,080 3000 depending on who's in office and the administration that's regardless the point, the point is, if you're not incorporated, you don't get the right to write off your phone, your vehicle, a home office, and you say, well, it's just me. I'm just a single, you know, Gavin, graduating from electrical engineering school. So every Olympic athlete that's over there in Paris right now, because we're filming in the summer of 2024 every student athlete which can get nio money needs an entity, because you are now an enterprise of which you need to put money. So whether you consult, you still tutor. My son is getting an accounting getting a CPA licenses right now, working for an accounting firm that's very specialized in a couple areas in this side he also does tutoring. He does some direct sales. He does some sales. He does follow through database cleanup. There's a whole variety of things he puts in his LLC at 24 years old. So you're still going to have that side hustle, Gavin, because you have got to have the entity to offset your taxes, or this whole strategy does not work. And I'm always a fan of, again, compounding, the more money you can put away and compound into good investments. And right now, again, I give you a another gift. So you're going to get two tickets to our millionaire intensive, which is once a month, and you can just get the VIP ticket if you want, so you can listen to it over and over and over. Second thing is, I'm going to give you a link to iflip. Iflip is a free software that actually takes you in and out of the market. It outperforms Robinhood. You can invest in cryptos. So as somebody young with not a lot of money, you can open account for as low as $50 and just contribute what you can. So if you wanted to go, let's say in Chicago, San Diego, the higher cost areas, then just stockpile your money into iflip or an account like that. Unless you are a day trader, be very careful. Some of you are using gambling and Dray Tate day trading right out of college as your strategies, risky, risky strategies. Unless you really know what you're doing, you're going to get up with the market. You're going to go to bed with to go to bed with the market. You're going to you're going to know the trends, you're going to know the tech. You're going to know all the technology of it. You're going to know all the fundamentals of it. It's a big thing I've been trained in that don't want to do it. I did it for a very short period of time and said, This is not going to be my life, getting up and going to bed with the stock market. That's very emotionally manipulated by Wall Street. So we do over here is we take you off Wall Street into main street. So iflip takes you to Main Street, your own real estate investing takes you to Main Street as you become accredited, which means you're going to make 250,000 a year or more for the next several years. Then you get to buy gas and oil, water rights, aviation. There's so many investments that will just compound that, but you got to have your account set so right out of school or right out of like at 18, I want an entity. I want good tax strategies. I want a legal intent to make money. It can have a variety of ways of making money. It doesn't have to be some big bougie business right now, while you have a job. Now, let's get to the second point.
Loral Langemeier:How do you even look at maximizing your investments at a young age? Again, iflip is a tool we've been using for a very long time, it outperforms the S and p5 100. And again, we're blowing Robin Hood out of the water. Huge valuation on that business, and it takes you in and out of the market, so you don't have to worry about it. The other thing is, if you did have kids young, you do, I would life insurance is a great investment, but I love fix and flips, and you've got a lot of just, you know, news, either, you know, student athletes, you're either working together or just students, you're working together and you need something to do. And during college, I fixed and flipped an apartment building with a bunch of other people. So didn't really know what I was doing, probably like you didn't know what you're doing. And then I decided to do what most of you need to do, which is I got my first mentor at 21 years old, and then I really started learning how to do good fix and flips. So what I did is I actually chose a moderate cost area, actually, right right out. I stayed in Nebraska, and then I moved to New Orleans, and that was not low cost, but I rented. I wanted to live in the French Quarter, because I was in my young 20s, I wanted to party, and I was flying offshore and helicopters and seaplanes every day anyway, to go to the offshore to build fitness centers. So during that time, though, I just stockpiled money. Right? Exactly? I'm telling you to do. And then as I started buying real estate, I didn't buy a home. I bought a duplex, a fourplex, another fourplex, an eightplex. And then as you start getting a group of people around you who want to do that too, you start buying Bigger, bigger Real Estate projects. So now you're buying doors. Now when you actually get married, have kids or have a relationship, then you can buy a home. But I rented for a very long time. And then fast forward, there are some of you that are older that actually have what I call estate properties, where you may want to put that in an LLC. It's a better investment strategy, and it's a better tax strategy. And then back to a renter you become. So I don't have any weird energy about you become a renter. I have more energy about those of you who think you got to pay everything off and live what I call Dave Ramsey style or Suze Orman style, that is not what we teach. They teach you safe. Safe, right? Stay safe. Stay small. If you need more money, get a second job. If you need more money, get a third job. Now we're going to create an entrepreneur out of you, an investor out of you, and a three to five year millionaire out of you. So Dave and Susie are great at what they do, which is the debt free model and live very, very small, or you go big or go home. What's interesting about the Go big or go home? For a lot of our entrepreneurs who joined us in 2020, 2021, who got those eidl loans that are now in a forgiveness period, don't know if a lot of you knew that where, thank you, that's free money. And I got, I don't know how many clients got, millions and millions of dollars. So think about money, right? First of all, debt is just the cost of money, right? You're either going to pay nothing for it, or you're going to pay up to 15 17% for hard money, or you're going to be hard money, and people are going to pay you 15 to 17% for your money, right? I love being a hard money lender, because that's the greatest rate I get first position. If they screw up the project, they take the project, I sell it off, and I get my money back. So it's a high protection strategy that I do later in life. But I built a lot of doors during my college years, during my 20s, and then bought my first home at 34 so I am a massive fan of build your assets, compound your returns, and pay attention to that compounding calculator. Just notice how quickly, while all your other friends are doing big lifestyle things, your money is accumulating for you later in life, way better choices.
Loral Langemeier:How do you even look at maximizing your investments at a young age? Again, iflip is a tool we've been using for a very long time, it outperforms the S and p5 100. And again, we're blowing Robin Hood out of the water. Huge valuation on that business, and it takes you in and out of the market, so you don't have to worry about it. The other thing is, if you did have kids young, you do, I would life insurance is a great investment, but I love fix and flips, and you've got a lot of just, you know, news, either, you know, student athletes, you're either working together or just students, you're working together and you need something to do. And during college, I fixed and flipped an apartment building with a bunch of other people. So didn't really know what I was doing, probably like you didn't know what you're doing. And then I decided to do what most of you need to do, which is I got my first mentor at 21 years old, and then I really started learning how to do good fix and flips. So what I did is I actually chose a moderate cost area, actually, right right out. I stayed in Nebraska, and then I moved to New Orleans, and that was not low cost, but I rented. I wanted to live in the French Quarter, because I was in my young 20s, I wanted to party, and I was flying offshore and helicopters and seaplanes every day anyway, to go to the offshore to build fitness centers. So during that time, though, I just stockpiled money. Right? Exactly? I'm telling you to do. And then as I started buying real estate, I didn't buy a home. I bought a duplex, a fourplex, another fourplex, an eightplex. And then as you start getting a group of people around you who want to do that too, you start buying Bigger, bigger Real Estate projects. So now you're buying doors. Now when you actually get married, have kids or have a relationship, then you can buy a home. But I rented for a very long time. And then fast forward, there are some of you that are older that actually have what I call estate properties, where you may want to put that in an LLC. It's a better investment strategy, and it's a better tax strategy. And then back to a renter you become. So I don't have any weird energy about you become a renter. I have more energy about those of you who think you got to pay everything off and live what I call Dave Ramsey style or Suze Orman style, that is not what we teach. They teach you safe. Safe, right? Stay safe. Stay small. If you need more money, get a second job. If you need more money, get a third job. Now we're going to create an entrepreneur out of you, an investor out of you, and a three to five year millionaire out of you. So Dave and Susie are great at what they do, which is the debt free model and live very, very small, or you go big or go home. What's interesting about the Go big or go home? For a lot of our entrepreneurs who joined us in 2020, 2021, who got those eidl loans that are now in a forgiveness period, don't know if a lot of you knew that where, thank you, that's free money. And I got, I don't know how many clients got, millions and millions of dollars. So think about money, right? First of all, debt is just the cost of money, right? You're either going to pay nothing for it, or you're going to pay up to 15 17% for hard money, or you're going to be hard money, and people are going to pay you 15 to 17% for your money, right? I love being a hard money lender, because that's the greatest rate I get first position. If they screw up the project, they take the project, I sell it off, and I get my money back. So it's a high protection strategy that I do later in life. But I built a lot of doors during my college years, during my 20s, and then bought my first home at 34 so I am a massive fan of build your assets, compound your returns, and pay attention to that compounding calculator. Just notice how quickly, while all your other friends are doing big lifestyle things, your money is accumulating for you later in life, way better choices.
Loral Langemeier:So the other thing to consider, Gavin, in your question, you talked about being in the lowest tax bracket. So that's true, potentially, but with the right corporate strategies and tax strategies. I'm going to keep you in a low tax bracket, right? That's our entire intent. Is to keep you arbitraging debt. So let me explain what I mean by arbitraging debt. Why that eidl money, or any money that you can get at 01, or two, even 3% now is really good money, so if you can get money, let's just call 3% because that's approximately what an eidl was. And I have a lot of clients who got hundreds of 1000s, several got millions. So let's just take a million dollars invested at 12% 15% right? Is 120 to $150,000 divide by 12, that's between 10 and what, 11,000 a month in printed money, meaning you just made it up on an investment. So you borrowed the money. Yes, you're a million dollars in debt, but you have that money invested, and you're basically making 120 250 some of our clients are even making 180 I mean, you're printing money. Why would you ever worry about being a million dollars in debt or $100,000 in debt is printing an extra 1000. So I want you to really understand money and that going into good debt, arbitraging debt is what banks do, right? So I'm just teaching you, how do you be your own bank, for you and your family and your household family as you grow. I think for a lot of you, again, you might come out with student loan debt. Don't worry about it. Do not pay too much and too fast on those things. Again, the forgiveness programs are interesting, random but interesting. And it's usually really cheap money, and you can actually put deferments on it and like, again, yeah, you owe it. You'll pay that later. That is not the concern right now to me, if I'm you, Gavin, I want to stay in a low tax bracket. I'm going to do that through. That corporate structure. And again, you want to call our office. So in the description below is the first three chapters my millionaire maker, once you read them, do a gap analysis so you actually know where you are and what you want. And as someone young, you probably walking out with some maybe some vehicle debt and some student loan debt. That's okay.
Loral Langemeier:So that kind of debt, as long as you keep a good credit score, you can actually just keep it down at a really low rate. And I want you making money. And I want your money making money as the first strategy. So you say, Well, do I go live in a big area? You could, but again, I would rent. I would compound your money. I would I would power up your money. And if you wanted to go on some business trips now that you have a company, you could go to the Midwest like, I still buy most of my real estate in the Midwest, the Kansas market, Oklahoma market, Missouri market, Iowa, Nebraska, Oklahoma, Texas, that whole area is just great real estate. So consider those as great areas to go into on my next point, I'm going to talk about pros and cons of the different areas. We'll come back to that in a moment. But I want to get the overall strategy. You have a corporate structure, you're employed, and you have a business, you say, Well, I want to work that hard. I know a lot of you young folks feel I work that hard. You don't overpay taxes. So the only way to not is have a side hustle. Does it need to make a lot of money? No, but you can't activate the deductions if you don't have the structure. So once you read the millionaire maker, and you do a gap analysis, then I want you to call the office and have a strategy session with one of our team and what we can do to help you continue this plan. Because money is a lifetime strategy. You wake up with it. You wake up with it. You're born into it. Someone's taking care of you with their money, and usually someone's taking care of you at the end with their money or money you've accumulated. So how you want to live it is your choice. I like to live it the whole time and have a lot so after I built my assets and became a millionaire, that's when I started accelerating my lifestyle. So there is a lifestyle piece you all get to have later. But why blow your money if you look at the pattern of most people and why they can't get out of the rat race, as Robert Kiyosaki says, is because they're making spending making, spending making, spending making going into more debt, spending, spending, spending, spending, just trying to get out of debt. They turn into their 50s and 60s and say, oh my gosh, I only have a couple 100,000 put away, if you started early and just did the 20,000 a year, or call it 2000 a month, or even 1000 a month, your compounding power of that money is going to accelerate you to a millionaire, if that's all you ever did. So clearly, you want to start putting your money away where you live. I think that's up to you. I've always lived in amazing places just, you know, Gavin, and my theory is I'm going to live where I want. I'm going to invest where it makes sense. So before I go to the third point, I want you to subscribe to my channel. I want you here five days a week. Click that notification button, so when it comes into your lovely phone, guess what's the first thing you're going to do every morning? You're going to watch the video. You can also grab a journal. In the description below the journal is what video? What'd you learn? What are you going to do about it? And you start building this 365, day financial plan for you, and every year you be shocked. I actually just found a whole box of my journals from my 20s and 30s. Was fascinating, how I thought then about the life I was going to design. Lot of it came true, and a lot of it I took a very, very different path and moved to Lake Tahoe in 2002 1001 and the rest was history. After that, that wasn't part of my plan. Was gonna stay in the Bay Area, live on the ocean, blah, blah, blah. So I think a lot of you you want to watch your trajectory of what were your goals? What did you want? And where did you make very clear New Chapter decisions and actually do a big divergence. What now the big divergence I did after I built my real estate portfolio, became a real estate millionaire. Gas and oil Millionaire is I went to businesses. I said, if I can do it in real estate, I want to learn how to do it in business. So again, hired more mentors, learn how to buy and sell and flip companies. Flipped. A supplements company made millions of dollars. Did a recycled glass company made millions of dollars. Yep, and I've had a few like a little pizzeria where I made $40,000 so it doesn't matter money's money is, are you in the game, or are you just sitting on the sideline? And most people sit on the sideline. Gavin, so you got to get to the playing field and understand money. The knowledge of money is the highest power you're ever going to give yourself, because you've got to have it to live. And a lot of you don't pay attention to that. So well, all of you, though, also that are just graduating or that have, and I want to speak to one other group, those of you in college with nil money, you have got to get incorporated, and you've got to live through a tax strategy. There are so many athletes, I know, making 20,000 a month, 30,000 a month. And I want you to cut this section. I want you to see. Send this to me because I have a whole bunch of athletes want to send this to, because I want to speak to that if you're not incorporated, you're going to spend a quarter million dollars, say, 20,000 a month, 240,000 on average, depending on how your CPA or you cut it, you're going to spend 70 to 80,000 in tax. You say, Well, I don't have to pay that. The school pay. The school is not going to pay it for you, and the people who give you the NIO money is not going to pay it for you. This is you as a brand enterprise needing to do proper deductions. And this is where you start, including your family, your siblings, your parents, into that entity. I have a complete college plan for those of you are on nio, including you international students, how to get you here to officially, legally be able to take Nile money in the United States, most of you that are international athletes, mostly basketball, baseball players, soccer players, you don't know how to take nil money because you're not a US citizen. You're on a visa. We know how. I know how I cut the strategy with our tax team, and I cannot wait to help you guys. So the last point is the pros and cons of bigger or smaller markets. Again, I've lived in Manhattan Beach, New Orleans, in Dallas, in Houston, in Sausalito, which is Marin County, California, Lake Tahoe. I love to live in great places, so I either rent or I buy, if it makes sense. But a lot of the bigger markets, you're not going to get the value get in lower in sub markets, like mid to lower markets. Again, like I said earlier in the video, I love the Midwest as a market. Every area has zip codes. The other thing you need to pay attention to, though, as you're doing pros and cons of where you're living, I can just tell you the four worst states to live in for tax is California, number one, New York, New Jersey, Pennsylvania, and actually, Minnesota is right up there now because of their lovely changing administrative laws. So you want to pay attention to where you're moving into, also downtown, like downtown Chicago, way higher taxes than what you're going to get. But you go to San Diego, it's even worse when you look at real estate. Pay attention to landlord laws wherever you live. There are some states where you cannot do some of the things you can in other states. And like, for example, California is entertaining, if not already imposed in some cities, a 12 month squad of rights. So you want to start buying Airbnbs or apartments they can squat. So there are some states that I would avoid at all costs. I wouldn't even move there. It'd be like worse than moving to a third world country. It's that bad, in my opinion, on money. So there, you know my opinion about some places I'll visit them won't live there again. So you take all these things into consideration. You say, Well, what do I have? And what if I want to kind of go down the middle, put as much away as you can into an investment portfolio, pack your iflip account for now, and then you can start using that money. It takes 48 hours to liquidate to another account. And you can start buying some real estate with that. Get a whole bunch of other people to do it. Don't do it alone. This is not a self made millionaire plan. It's teammate millionaire. So we're here to answer any question. Go to ask laurel.com A, S, K, L, O, R, a, l, ask a question, make a request. We're here every day. I expect you to be too. Okay?