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Money Lessons I learned from Jay Leno

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Photo: Forbes.com

Everyday and in every way, invest in yourself. Invest in your health and education to help build your wealth. With money comes power and protection. The wealthy are protected. Build up your knowledge and money coffers. A war money war chest is your way to ditch the 9 to 5 and get out of the rat race.

Jay Leno gives advice on how to do just that.

MONEY LESSONS FROM JAY

Jay on starting out

“I wasn’t a millionaire when I started.”

“I would alternate between the two, so it was cars and hamburgers, which are actually still two of my passions.”

He started his career working for minimum wage at McDonald’s in Massachusetts. Jay also worked at a Ford dealership. He discovered the key or secret sauce (pun intended) to getting rich: Developing multiple streams of income.

Jay on working more than one job

“I always had two incomes.”

“I’d bank one, and I’d spend one.”

“I had two jobs because I realized that was the quickest way to become a millionaire.”

“When I got ‘The Tonight Show,’ I always made sure I did 150 [comedy show] gigs a year so I never had to touch the principal.”

He has worked two jobs simultaneously since he was 16.

And there you have it. Basically, if you want riches, then you have to put in the work. If you work 40 hours a week, then find a way to work 50 or 60. Gotta make that paper.

Jay on saving money

“When I was younger, I would always save the money I made working at the car dealership, and I would spend the money I made as a comedian.”

“When I started to get a bit famous, the money I was making as a comedian was way more than the money I was making at the car dealership, so I would bank that and spend the car dealership money.”

“Then I got to the point where the comedy money was, like, five times the other money, so I decided to flip it around and save the comedy money.”

“I would always spend the lesser amount of what the two were.”

Therefore, if you are working 2 jobs or more, then you bank the bigger paycheck and spend the smaller checks. Bank the bigger of the two checks and live off the other.

Forget the pundits that tell you not to save. There is value in saving. You need an emergency to help in case of job loss or illness. Life is full of hiccups. Once you have saved reasonable amount, then you start investing your surplus income.

The key is not to only save, but to also invest. Savings help you live your life to the fullest. In addition, savings can help you fund your dreams. Not having to go to the bank for a loan is an incredible feeling.

Jay on living on one salary

“I pretended as if I didn’t even have the ‘Tonight Show’ job.”

“You know, when you start making money, you get lazy. I wanted to make sure I always had that hunger, so I never looked.”

“It would go directly into a bank.”

Simply put, bank it and forget it.

Jay on patience

It took 22 years to accumulate, “a nice little nest egg.”

You heard it here folks. Building wealth takes time. In many cases, it takes a couple decades. There are no get rich quick schemes. There’s is no free lunch. There are no shortcuts. You do the work, get paid, invest the surplus incomes, and wait to earn interest.

Jay on retiring

“If you do something and it works, then keep doing it.”

You do not have to retire early unless you want to. If you are passionate about something, and can make a living doing it, then do it.

Jay on Buy-And-Hold

“The McLaren F1, I paid $800,000 for it in 1998. The last offer I got was $12 million. … The nice thing is, if you buy what you like, and it doesn’t go up in value, you still like it.”

Warren Buffet likes to buy-and-hold forever. Therefore, don’t even part with your cash, if you don’t want to keep an item to infinity and beyond. Just don’t even open your wallet.

Jay on avoiding credit cards

“I barely use credit cards.”

Words to live by. Either use credit sparingly for a purpose and get it paid off ASAP or don’t even bother using it at all.

Jay on house buying

“I didn’t buy my house until I had cash. When you own something and you don’t have to write checks every month, you’re just better off.”

I learned from James Brown, Dick Clark, Jay-Z, Oprah, JK Rowling and Michael Jackson to own what you do. You can control your earning potential and life, if you own. You can continue to make money off the things you own and control for many years to come.

Regardless, of whether or not you’re still working. You can still earn royalties from work you have done in the past. That is how the rich get richer. Earnings on top of earnings.

Jay on debt

“I don’t carry any debt. I don’t write checks at the end of the month for anything.”

“I didn’t buy anything I couldn’t afford to pay for in cash.”

“Here is the money, give me the thing, transaction over.'”

Jay hates installments, as do I. His cash only solution is what the world needs to adhere by.

I have literally saved for two years or more to purchase items or services I wanted or needed.

When I wanted Lasik, I used my flexible spending and waited about 3 years before I did the procedure. It cost between $4,000 to $5,000. And was worth every penny. Paid cash, not credit.

When I needed dental work done, I saved for 2 years. Paid cash, no installments.

Don’t buy on credit, build a fortune.

Jay on Retooling

“Since high school, I’ve always had two jobs. I worked at a McDonald’s and I worked at a car dealership. … When I was doing the Tonight Show, I’d be on the road at least two to three days a week because I thought, ‘We’ll see how long this lasts.’ ”

Do not ever get too comfortable. Things can change. Always have more than one way to earn a living.

Jay on owning

“I own everything. I own my buildings. I own my cars. That way, if it ends tomorrow, I know what I’ve got.”

His conservative money philosophy gives him peace of mind. When you are out of debt you just feel better. Take control of your finances and this too will help give you some peace of mind.

Jay on old-fashioned values

“I’m not a big splurge guy, partly because I had Depression-era parents: “They just frightened me to death, saying, ‘You gotta save every penny!'”

“It’s a little old fashioned, I suppose, but it seems to work pretty well for me.”

No impulse buying. This is the debt trap. Plan your expenses. Budget just means you plan where your money goes and it gives you permission to spend. Use it.

Jay on Taxes

“I just pay. Fine, I’ll get another job, I’ll work harder. That’s probably not very good tax advice. I don’t have money in the Cayman Islands or any of that nonsense.”

Always pay your taxes. Period!

Jay on being frugal

“McDonald’s sent me these Happy Meal coupons, so one day I’m in the McLaren and I’m going to McDonald’s. I say, ‘Give me two Happy Meals.’ And I give them the [coupons].”

“Now I look like the cheapest guy in the world driving this multimillion-dollar McLaren and I’m trying to get a free hamburger.”

“I’ve never touched a dime of my ‘Tonight Show’ money. Ever.”

He hates spending on clothes and has not touched one dime of his Tonight Show money. At one point, he was earning around $30M a year! It pays to be frugal.

So, you just avoid the mall, invest the money you would spend on clothes and start earning your way to a fortune with compound interest. Delay your gratification. Discipline is the key to wealth. Once you have it, no one can take it from you. Then you can save money to invest. Easy as pie.

Jay on Shifting Gears

“So many friends of mine, all they ever did was the TV show. When the TV show ends, suddenly their life ends, because that was their whole life. I was never that guy.”

It’s great to have hobbies and interests outside of work. See if you can turn a hobby or side gig, into an income. At the very least, have something to do after one thing ends. Remember, no idle hands.

Jay on shopping

“I’m not a big shopping guy. I’m just not interested in clothes outside of the essentials.”

“To me, it seems like a complete waste of money. I just want to have enough clothes to cover legally what parts I have to cover.”

Hear, hear! I used to like shopping. Until I didn’t. That happened once I learned I was losing a small fortune for that new purse or shoes.  Read my post How Millennial Money inspired me to start saving $13,333.06 a year for more on that topic and see how I quit shopping for good.

Jay on Fixing Things

“When you’re in a business like show business, everything is subjective. Some people think you’re funny, some people think you suck. …When something’s broken and you fix it, no one can deny it’s running.”

Very true. Always be tweaking or working toward expanding and doing better. People notice you the harder you work.

Jay on setting high standards

He, like Coco Chanel, believe in setting high standards for yourself. Chanel said, “keep your head, heels, and standards high.”

Jay learned this attitude while working at McDonald’s. A key pillar of success: You can never go too far to ensure you’re producing a great product.

He would go home every night after work and write jokes. Jay would go through hundreds with his staff and get it down to the top 20. He would record himself and then re-listen for timing. Tedious? Yes, I know. But effective. The hard work paid off.

Jay on idle hands

“I meet with the writers at about midnight or so and work until about 4:00 a.m.”

“I sleep four hours, maybe five.”

The way he saw it was, “if you have time to complain, you don’t have enough work to do.”

I am notorious for going to bed thinking of work and getting up to work. Sometimes I get up in the middle of the night to write down ideas about work. I work so much I barely have time to breathe.

I learned that from Pat Benatar who was a workaholic in the 80’s.  But guess what? She wrote hits songs for like a decade. When there are times I need a break or pick me up while working, I’ll listen to her songs Invincible, Shadows of the Night or Love is a Battlefield.

For those who may not know or remember those songs, check out the links below. Good stuff.

Jay on failure

“You learn a tremendous amount from the mistakes.”

I have learned to fail better. It makes you stronger. It also humbles you and makes you more empathetic to others.

Jay on money to blow

“So many people get to be the age I’m at now and they’ve got nothing because they just blew it all.”

“I put my money in a hammock and say, ‘You relax. I’m going to go work.’ And when I come back, I put some more money in the pile.”

It’s your money. Don’t blow it.

Jay on Life

“Life is not that complicated … if you’re kind and decent, and try to be honest, it’ll probably work out. Yeah, you’ll get screwed once in a while. I certainly have, but that’s okay … don’t dwell on it.”

Pick yourself up, dust your wallet off, and get back into the grind. Don’t rest on your laurels. Put your head down and work. Stay humble and stay hungry. Generate multiple streams of income, diversify your earnings, increase your savings, and build your wealth. Get that net worth pumping in that interest faster than Arnold Schwarzenegger did lifting weights in Pumping Iron and you will start rolling in the dough!

Just FYI: Jay is worth over $300 million dollars. Has no debt. Is a self-made millionaire. And still works at the age of 68.

Financial Independence, Saving

Become your own bank

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“If you would be wealthy, think of saving as well as getting.” —Benjamin Franklin

Growing up one of my favorite toys was my piggybank.

I used to put all the spare change and money I found or received into it.

It was my ice cream truck money.

I just loved having my own.

It was such as source of pride, freedom, and independence because I was allowed to spend my money on the things I wanted.

That is how I want everyone to feel.

A sense of ownership and accountability over oneself and your actions.

In order to do this, you have to go back to saving the old-fashioned way, like putting money inside that old piggybank.

Here’s how.

A HOUSE IS NOT A PIGGYBANK

First, you need to stay away from borrowing. And if you truly must borrow, make sure to only get what is absolutely necessary. Every dollar you borrow just keeps you in debt.

Case in point, if you do a cash out refinance on your home, that can reset your mortgage debt-free clock and cause you to owe more interest over the life of the loan.

No one wants that.

You need to keep your hands off of large piles of cash. This includes the equity in your home, your 401(k), and easy access savings accounts.

It’s like losing weight. You have to keep your hands out of the cookie jar. In this instance, it’s the money jar. If you keep taking out of it, you will never reach your goals.

Forget taking out huge auto loans and personal loans. You do not need to drive a BMW to the airport on the way to Jamaica. That is the road to broke, if you cannot afford it.

I would rather you drive a Honda to the Grand Canyon, if this will keep you out of debt.

HOW TO START SAVING YOUR COINS

The most important step is to decide to save. If you want to save more, you have to earn more, slash expenses, or both.

Set a goal.

I started out with a goal of $50 per month and worked my way up to saving $13,000 a year by increasing yearly savings goals.

You have to write it down. Otherwise, it is a wish and not a goal. A goal requires action. It starts with writing it down. A written plan is 80% more likely to succeed.

I started saving my change. I would put it into a jar or bag.

I would save up anywhere from $25 to $100 dollars in change and then deposit this into the bank.

When you see the money add up and feel how heavy that coin jar or bag is, it gives you incentive to keep going. After, mastering the coin game, I moved on to bigger gains.

TURN SAVING COINS INTO SAVING DOLLARS

Then I started turning my attention onto dollars.

I started with manually transferring $50 per month into my savings account.

From there, I set up an automatic deposit of $25 every two weeks.

However, I was also getting tired of having to pay ATM fees. So, I found a way around this.

I would have to either go to the bank and take out a large enough amount of money to get me through the week, go to free ATM’s, spend less, or go to stores and do cash back.

For instance, grocery stores will allow you to do a debit card cash back of anywhere from $100-$300 depending on what store you go to.

Other places, like the convenience store, may allow you to get between $20-$80 cash back with a purchase.

I slowly worked my way up to saving more.

Every year, I would re-evaluate what my saving goals were, I would write it down, and figure out a way to make it happen.

If you zero sum budget, then you know when something gets paid off or you eliminate any type of expense that money gets freed up and must go somewhere or it disappears. Like all good dogs, it goes into heaven, I call it dollars heaven.

I started saving my money first from income I earned, and then spending what was left over.

I would decide to save $300 per month and figure out how much more to bring in to increase my cash flow or what I could cut in my budget to lower my expenses and then save that money.

It went down like this:

Year 1: Save $600.

Year 2: Save $1,800.

Year 3: Save $2,500.

Year 4: Save $3,600.

Year 5: Save $10,000.

Year 6: Save $13,333.

WHERE TO PLACE YOUR MONEY

Since, I knew I did not want to depend on having to go to the bank or grocery store every week, I decided to place money into a cash box.

I would put no more than a few hundred bucks in it.

I was placing my savings into several savings accounts such as regular savings and money market savings.

In addition, I would label my savings accounts to ear mark that money for things I wanted to pay for such as a vacation, car, home down payment, or college.

I then started looking into Certificates of Deposit (CDs) and High Yield Savings Accounts (HYSA).

Earn Money with High Yield Savings Accounts

With the high yield accounts, you can start to earn money on your money, that you can spend any way you want.

HOW TO BE YOUR OWN BANKER

Now that you have a cash cushion and cash box, you need banks less and less.

You should get to the point of not needing to borrow for much of anything.

You can keep 1s, 5s, 10s, 20s, 50s, and 100s in your cash box. Enough money to make your own change.

The savings account allows you to earn interest on your money and use this to save up enough to pay for hotel stays, rental cars, and vacations.

You can also earn through peer-to-peer lending because you now have enough dough to start lending to others like a bank does. And earn interest too!

ROLLING IN THE DOUGH

At this point, you should be able to start saving at least 10% to 25% of your income, after you eliminate debt and put your money to work for you.

So, now you know how I did it and what you can do too.

I went from saving $50 to over $13,000 per year! See how here 

How Millennial Money inspired me to start saving $13,333.06 a year

I started doing 5% of my income to now saving over 41% of my gross income!

It took years to get to this point.

Once I made the decision to save, I wrote it down, and created a plan.

It took over 5 years to get here!

So, take my advice, do not rush to try and do so much and then do nothing.

Take small steps toward bigger ones. That is the key to building wealth. The kind of wealth that lasts takes time to build. There are no shortcuts. Only patience, discipline, consistency, and time.