¶ Introduction
It's 2026 and I want to ask you a question. What did you accomplish financially in 2025? Did you build your wealth? Did you increase your net worth or did you just survive? Pay the bills, get buy tread water? Because here's the brutal truth most people waste entire years. They have good intentions. They want to save more, invest more, build wealth. But they don't have a plan. And without a plan, nothing happens. So this year is going to be different. Right now, I'm going to give
you a complete financial plan for 2026. Three simple steps. No complexity, no overwhelm, just the things that actually matter. Because I've helped people save tens of millions of dollars over the years, and it's never the complicated strategies that work. It's the simple ones, the ones that focus on the 20% that drives the 80% of your results. So if you're serious
about building wealth in 2026, this is your plan. I'm Lloyd James Ross, a seven figure investor and entrepreneur, and I've helped thousands of business owners and professionals turn financial stress into success if you're stuck in old money habits. Overwhelmed by investing or unsure where to start, this is for you. I'll give you the mindset and strategies to take control, grow your wealth, and achieve financial freedom. It's time to make your money work for you. Step one the Magic
¶ Step 1: The Magic Number (your wealth target)
Number I talk about this in my book Money Buys Happiness, and the magic number is the number at which your net worth needs to be for the income that you can generate from that capital that will cover your expenses. Where this comes from is the definition of wealth by Robert Kiyosaki. And he said, wealth is measured by how many days you can live at your current lifestyle without working another day in your life. That's the definition of wealth, as far as I see it. Yes, because time is
more important than money. So your magic number is the amount of money that which once invested based on the return that it can get from cash, will cover your expenses on a yearly basis. That's the magic number. That's the number you should aim for. So for example, if your expenses are, say, 5000 a month, it would equate to about $60,000 a year in lifestyle expenses. Okay, that covers your
expenses generally. Now, if 60,000 a year is the number to get to the magic number that we should have invested, all we need to do is pull out a little calculator on our phone and we take our annual expenses. So if it's 4000 of us, sorry, 5000 a month, then annually it's $60,000. Yes. Now, if we were to invest that at say, and you can do this in certain ETFs, a 6% dividend rate, then if fully invested in that particular ETF, it would produce enough to cover
these expenses. So it would have to produce 60,000 a year. So here's what we do. We do the shortcut. We we work it back. We back work it. And we divide that number by 0.06 and it's $1 million. So if you had $1 million invested in a specific ETF that paid a 6% dividend, it means that every single year 0.06, you would get paid $60,000 in income. That doesn't include the growth in the actual underlying cash either, but that would be an example. $1 million divided by is the magic
number. Does that make sense? That's your target. That's your goal. So you've got to have a goal. Otherwise you're like, why am I doing this? Why am I going? Why am I flying to the mines twice a week and sacrificing time with my family? Why am I saving y y y y y? You have to have a y reason. This r right. So that's that was my first goal. And now I've got a goal of, you know, 10 million. But we got two goals. Otherwise we don't know what we're doing it for. Right. And on the way to the
goal you'll have financial independence okay. That's the first step getting a goal. Step number
¶ Step 2: Tracking Cash Flow & Cutting Costs
two. To get to that number you have to put your money to work and you have to do it over time, which means you have to have some spare money to actually put to work. And the number one underlying problem I see in every single person that I talk to, that I deal with when it comes to their money, this is the number one thing they don't do well. They don't track their spending, so they don't actually know what money's coming in and what Money is going out. They have no idea. So
if you have no idea, then you can't do this one. And this is to ascertain how much money is left over every month after you live life. Because if there's no money left over no free cash flow, you can't invest, which means you can't do step three. So how do you do this? Well, the first step is to actually look at your bank account. I know I've said this before, but most people don't. And what you have to do is you have to identify what money is coming in from wages,
investments and welfare. Calculate it and tabulate it and sum it up. And then you have to calculate exactly how much money is going out on rent, groceries, insurance fees, school, travel, etcetera, etcetera, etcetera. And you have to make sure that there's more money coming in then going out every month. Now here's the caveat to that. If more money is going out than coming in, the number one thing you need to do immediately is to cut your costs. That's the. And the reason?
Yes. You can increase your income and I encourage it. Of course you should increase it. You should be working to increase your income as much as possible. However, your cost structure is the first thing that you can control, and it is the thing within your control because you can literally make a decision today that stops that money going there. Here's an example. Let's say you've got Disney, Netflix and stand and you see that in your expenses. Here's how you address that. Oh I have
three streaming channels. I'm entitled. Hmm. Maybe I should cancel two. Perfect. Boom, boom. Save yourself 40 bucks a month. Done. It's like that. It's that or. Oh, we ate out four times this week. Maybe we should not do that. So, honey, we're not going to go and eat there and there anymore. We're just going to eat there. Are we saved ourselves $200 that month. You see how this works? This is identifying
where you're sending your money and stopping it. This is to stem the bleeding to to plug the holes. And then at the end of the month you can go, oh my God, we got $1,000 here. There's a student that I was dealing with. Uh, he's one of our programs and he's from the USA. And he did this one exercise, and the first month he did it, he said, Lord, you wouldn't believe it. I said, what? He goes, there's
$6,000 in my account. I'm like, huh? You don't say. I mean, you know, if you can't measure it, you can't manage it. So as soon as you started measuring it, he can manage it. And he created 6000 in a single month. That's 70,000 a year, right? So imagine what you could create if you knew where things were going. And most people don't do this. They're just so reactive. They have no idea. So it's about
getting in control of your money. That's step two. Just quickly. If you're ready to take control of your finances but feel stuck on where to start, I have a solution. In my book, Money Buys Happiness simplifies Investing and Wealth Building with practical steps to help you achieve financial peace. Get your copy via the link in the show notes and let's get your money working for you. Now back to the episode step three the Final step. Because you have some free cash flow, because
¶ Step 3: Investing Simply with ETFs
you're tracking your expenses and you have a goal of getting to $1 million, which is a wonderful goal. Then the next step is to get there. And what you want to do is you have to understand that saving your way there is the hard way. So the thing is, if you put it into a high interest bearing account, I say for 4.5%, the government will take 30% of that is taxed because they tax interest income. Uh, and so and then you don't get any underlying growth in the cash in the bank. So
savings are not ideal. You want to be able to grow your money sensibly and safely and consistently above the rate of inflation. And so one of the most simple ways of doing it is to take the cash and invest it into a simple exchange traded fund, which is like a basket of stocks fully
diversified by one of the major fund managers their low cost index funds. Warren Buffett has mentioned this many times at his shareholder meetings at Berkshire that if you just were a lay investor and you just put your money into a broad based index fund or an ETF, you can compound your money at between eight, nine and 10% a year. That's well above the inflation rate. Over long periods of time, your money grows. Plus you get an income from the dividend. And this is the most sensible,
safest, most effective and predictable way to get your money to work harder than you do. And the beauty of this is you can pull up your phone. You can download an online broker platform to your phone. There are many. I'm sure you can find one if you just google it, download it, open up like a bank account, put your money in there, select the ETF that you desire and purchase it with your
free cash flow you're creating every single month and repeat that for the next ten years. That's the plan for certainly repeat it in 2002 and in 2026, because if you just did those three steps, you had
¶ Building a Repeatable Wealth System
a goal. You understood why the goal was in place. You had savings each month because you're watching and managing your money nice and simply. It's not crazy. And you took some of that free cash flow and invested it into an ETF. At the end of 2026, you're going to have a money system that's repeatable for the rest of your life. And the philosophy of wealth is finding the simple, effective things that move money forward and avoiding the stuff that doesn't. You don't have to
be super smart. You don't have to have a high IQ. You don't even have to like numbers. You just have to do the basics well and again and again and again. It's about iterations of doing that over long periods of time that makes you wealthy. So if you don't have a plan now, you do. You've got a three step plan to actually execute in 2026 that will markedly see your money start to grow in savings, in building wealth, and of course, keeping things simple. And that's
really what happens because simple scales and complex files. So hope it makes sense. I'd love to know what step are you on? Leave me a comment below. Tell me what step you're on. What's your magic number? Pop it in the comments below and keep me posted in 2026 on how you're going at the end of the year. Shoot me a DM and let me know. Hey, I implemented that money plan and it's doing so well. Thanks so much. That'd be amazing. All right, see you soon. Thanks for listening to Money Grows
on Trees. If you enjoyed the episode, leave a five star review on Apple Podcasts and Spotify, and subscribe to us on YouTube so you never miss an episode. And if you're serious about building wealth, make sure to check out the links in the show notes and follow me on all social media platforms at Lloyd James Ross for more. See you in the next episode.