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How To Take Control Of Your Financial Health To Create Lasting Abundance

By Lewis Howes

In this episode of The School of Greatness, financial expert Vivian Tu and other guests discuss strategies for building financial stability and career success. The conversation covers practical approaches to emergency funds, debt management, and retirement planning through tax-advantaged accounts, while also examining how workplace relationships and social skills contribute to career advancement.

The guests share perspectives on the connection between mindset and financial success, addressing common challenges like imposter syndrome and the temptation of get-rich-quick schemes. They explore the value of investing in personal development and building wealth through sustained effort, drawing from their own experiences to illustrate the importance of making strategic career and financial decisions for long-term prosperity.

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How To Take Control Of Your Financial Health To Create Lasting Abundance

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How To Take Control Of Your Financial Health To Create Lasting Abundance

1-Page Summary

Practical Financial Strategies For Improving Financial Health

Vivian Tu outlines key strategies for building financial health, starting with emergency funds. She recommends 3-6 months of expenses for renters without dependents, and 9-12 months for those with families and mortgages. When tackling debt, Tu advises prioritizing high-interest debt first, making minimum payments on all accounts while directing extra funds to the highest-interest obligations.

For long-term financial success, Tu emphasizes the importance of utilizing tax-advantaged accounts like 401(k)s and IRAs, which offer benefits either at contribution or withdrawal. She also stresses the need for detailed financial planning, encouraging listeners to envision their desired retirement lifestyle and set specific milestones to achieve these goals.

Soft Skills and Networking For Career Growth

Tu highlights the crucial role of workplace relationships and likeability in career advancement. She suggests participating in events, sharing personal interests, and contributing positively to the work environment. To track professional growth, Tu recommends maintaining a "Brag Book" of accomplishments and positive feedback.

Citing research, Tu notes that top earners often succeed more through social aptitude than technical expertise, suggesting it's better to be a "B plus student with an A plus personality." Lewis Howes adds that consistent positive attitude and effort can be as valuable as excellent job performance.

Mindset, Self-Worth, and Their Impact on Financial Success

Noah Kagan, Alex Hormozi, and Lewis Howes discuss the prevalence of imposter syndrome among successful professionals. Kagan shares his personal struggles with self-worth, even after building a successful business, while Hormozi emphasizes the importance of building confidence through repetition and experience.

When it comes to building wealth, Hormozi warns against "get-rich-quick" thinking, advocating instead for sustained effort and skill development. He shares his experience of living frugally to save $50,000, demonstrating the value of short-term sacrifices for long-term gains. The speakers collectively emphasize that investing in personal skills often yields better returns than modest financial investments, with Tu specifically noting that asking for a raise can be more practical than extensive cost-cutting.

1-Page Summary

Additional Materials

Counterarguments

  • Emergency funds may need to be larger or smaller depending on individual circumstances, such as job stability, health, or the presence of other safety nets.
  • Some financial experts suggest using the debt snowball method, which prioritizes paying off smaller debts first for psychological wins, rather than focusing solely on high-interest debt.
  • While tax-advantaged accounts are beneficial, they may not be the best option for everyone, especially those who expect to be in a higher tax bracket in retirement or those who need more liquidity.
  • Detailed financial planning is important, but too rigid planning can be counterproductive if it doesn't allow for life's unpredictability and changing personal goals.
  • Networking and soft skills are important, but they should not overshadow the need for technical expertise and competence in one's field.
  • A "Brag Book" can be useful, but it should be balanced with humility and an awareness of one's areas for improvement.
  • The idea that personality trumps technical skill can be misleading, as both are often necessary for success in most careers.
  • A positive attitude is important, but without strong performance and results, it may not be sufficient for career advancement.
  • Imposter syndrome is a complex issue and may require more than just repetition and experience to overcome; sometimes professional help is needed.
  • The advice against "get-rich-quick" schemes is sound, but it's also important to recognize and seize legitimate opportunities for rapid financial growth when they arise.
  • Living frugally to save money is commendable, but it's also important to balance saving with investing in one's quality of life.
  • While investing in personal skills is crucial, financial investments should not be undervalued as they can provide passive income and financial security.
  • Asking for a raise is a good strategy, but it's not always feasible in every job market or position, and sometimes cost-cutting can be a necessary part of financial management.

Actionables

  • You can automate your savings by setting up a direct deposit from your paycheck to a dedicated emergency fund account. Choose a percentage of your income that aligns with your savings goal and adjust as necessary to meet the 3-6 or 9-12 months' expenses target. For example, if you're paid bi-weekly, you might set up a 5% automatic transfer to your emergency fund every payday, ensuring consistent growth without manual intervention.
  • Create a "Skill Investment Plan" by listing skills relevant to your career and committing to a regular, small investment of time or money into learning them. For instance, if you're in digital marketing, you could allocate one hour each week to learn about data analytics through online courses or webinars, gradually building expertise that could lead to higher earnings or a promotion.
  • Develop a "Raise Request Proposal" by documenting your achievements, the value you've added to your company, and market salary data for your role. Schedule a meeting with your supervisor to present this proposal, focusing on your contributions and the alignment with industry standards. This approach turns the abstract advice of asking for a raise into a structured, evidence-based discussion.

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How To Take Control Of Your Financial Health To Create Lasting Abundance

Practical Financial Strategies For Improving Financial Health

Vivian Tu shares effective strategies aimed toward better financial health, emphasizing the need to build emergency funds, tackle high-interest debt, utilize tax-advantaged accounts, and create a comprehensive financial plan.

Prioritize Creating an Emergency Fund and Tackling High-Interest Debt

Tu stresses the importance of having an emergency fund, advising individuals who rent and have no dependents to save 3-6 months of expenses. For individuals with a family and mortgage, she suggests aiming for 9-12 months' worth of expenses. Further, Tu recommends tackling high-interest debt by ranking and paying it off first. This method is more cost-efficient over time compared to the debt snowball method, despite the latter's psychological benefits of quick wins.

Pay High-Interest Debt Before Lower-Interest Debt

Tu elaborates on debt payment strategies, advocating for paying the minimum balance on all accounts, but focusing any extra repayment money on the debt with the highest interest rate. This targeted approach minimizes the total interest paid over time.

Utilize Tax-advantaged Accounts: 401(k)s and IRAs

Tax Benefits For Account Contributions

Tu highlights the tax benefits of contributing to retirement accounts, such as 401(k)s, Roth 401(k)s, IRAs, and Roth IRAs. These accounts offer tax benefits either at the time of contribution or upon withdrawal, serving as an incentive provided by the tax code to encourage retirement savings.

Create a Detailed Financial Plan for Your Future

Envision Your Desired ...

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Practical Financial Strategies For Improving Financial Health

Additional Materials

Counterarguments

  • While building an emergency fund is crucial, the suggested amounts may not be feasible for everyone, especially those with lower incomes or high living costs. Alternative strategies might include starting with a smaller emergency fund and gradually increasing it.
  • Prioritizing high-interest debt is financially logical, but some individuals may benefit from the psychological wins of the debt snowball method, which can provide motivation to continue paying down debt.
  • Focusing on high-interest debt doesn't account for other factors, such as the potential for debt forgiveness programs or the strategic benefits of maintaining certain types of low-interest debt for credit-building purposes.
  • Utilizing tax-advantaged accounts is beneficial, but it may not be the best strategy for everyone. For example, individuals with liquidity needs or those who expect to be in a higher tax bracket in retirement might consider different investment vehicles.
  • Creating a detailed financial plan is important, but it should also be flexible to adapt to life changes and unexpected events that could alter one's fin ...

Actionables

  • Automate your savings by setting up a direct deposit from your paycheck to a dedicated emergency fund account. This ensures you consistently contribute to your emergency fund without having to remember to transfer money each month. For example, if you're paid bi-weekly, you can arrange for a portion of your paycheck to go directly into a high-yield savings account specifically earmarked for emergencies.
  • Use a debt repayment app that employs the avalanche method to organize and track your progress. By entering all your debts and their interest rates, the app can calculate the most efficient payment plan, focusing on the highest interest debt first. This digital tool can provide you with a clear visual of your debts and a timeline for when you can expect to be debt-free.
  • Create a retirement vision board that includes images and estimated co ...

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How To Take Control Of Your Financial Health To Create Lasting Abundance

Soft Skills and Networking For Career Growth

Soft skills and networking play critical roles in career growth. Vivian Tu, Lewis Howes, and other speakers highlight aspects of establishing and maintaining relationships, increasing likeability, and communicating value.

Be Likeable and Build Relationships With Colleagues

Participate In Events, Share Interests, Demonstrate Positivity

To be more likeable and build relationships with colleagues, Vivian Tu suggests participating in events and sharing personal interests. By starting conversations about past experiences as a cheerleader or an interest in mob movies, Tu creates common ground during interviews, potentially increasing her likeability. She discusses the likability of individuals who are great partners, exhibiting qualities like bringing snacks for others, which underlines their thoughtfulness and likability.

Be Known As Easy to Work With and Contribute To a Pleasant Environment

Tu implies these individuals contribute to a pleasant work environment by always having something exciting to talk about and being cool and inspirational. Portraying the ideal partners as such results in being seen as easy to work with, fostering positivity around them.

Quantify and Communicate Your Value and Achievements

Keep a "Brag Book" for Feedback and Accomplishments

Vivian Tu advises creating a "Brag Book," a collection of positive feedback, accolades, or any recognition from team members or clients. This serves as evidence of achievements when discussing raises or career advancement.

Ways You've Generated Value for the Company

Tu also emphasizes the importance of reminding employers throughout the year of one's contributions, ensuring the employee is in consideration for raises or opportunities.

Prioritize Relationship-Building Over Just Technical Skills

Research: Top Earners Often More Socially ...

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Soft Skills and Networking For Career Growth

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Counterarguments

  • While soft skills and networking are important, they should not overshadow the necessity of technical skills and expertise in one's field.
  • Relationships in the workplace are important, but there should be a balance to avoid potential conflicts of interest or perceptions of favoritism.
  • Likeability can be subjective, and efforts to increase it should not compromise an individual's authenticity or professional boundaries.
  • Communicating value is essential, but it should be done in a way that is not perceived as boastful or self-promoting to the point of alienating colleagues.
  • Participating in events and sharing interests can help build relationships, but it should not be at the expense of personal time or work-life balance.
  • Positivity is beneficial, but it is also important to address and not gloss over issues that require critical attention and constructive feedback.
  • Being easy to work with is valuable, but it should not lead to being overly accommodating or not asserting oneself when necessary.
  • A "Brag Book" can be useful, but relying solely on self-reported achievements may not provide a comprehensive view of one's performance and impact.
  • Reminding employers of contributions is important, but it should be done in a way that aligns with company culture and does not come across as entitlement.
  • Relationship-building is important, but it should not take precedence over delivering quality work and meeting professional responsibilities.
  • The correlation between social adeptness and earnings does not necessarily imply causation, and other factors such as industry, role, and economic ...

Actionables

  • Create a personal 'connection calendar' to schedule regular check-ins with colleagues and industry peers. By setting aside time each week to send a friendly message or email to someone in your network, you ensure that you're maintaining those relationships. For example, every Monday, you might reach out to a different contact with a brief update or a piece of interesting news related to their interests.
  • Start a 'compliment chain' at work to foster positivity and likeability. Encourage your team to recognize one another's strengths and achievements by giving out a compliment to a different person each day. This can be done through a dedicated Slack channel or a physical compliment box in the office. As compliments circulate, they create a culture of appreciation and positivity.
  • Volunteer for cross-departmental pr ...

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How To Take Control Of Your Financial Health To Create Lasting Abundance

Mindset, Self-Worth, and Their Impact on Financial Success

Understanding the relationship between one's mindset and self-worth and their effects on financial success is paramount, as individuals navigate the complexities of personal and professional growth.

Overcome Limiting Beliefs and Self-Criticism

Noah Kagan, Alex Hormozi, and Lewis Howes delve into the struggles individuals face with self-worth and the imposter syndrome, even after achieving professional milestones.

Successful People Struggle With Imposter Syndrome and Self-Worth

Kagan shares his experiences of feeling unworthy, a sentiment that persisted even after building his successful business. Similarly, Lewis Howes talks about feeling judged and struggling with self-worth. Vivian Tu addresses misconceptions about her financial success, hinting at her own internal battles with imposter syndrome. Hormozi notes that comparing oneself to others is natural and can sometimes lead to negative feelings about one's accomplishments.

Actively Practice Self-Compassion and Reinforce Your Own Capabilities

Kagan mentions his fear of inadequacy when faced with the challenge of writing a book. He describes going into "hermit mode" and confronting this project head-on, ultimately overcoming his fears. This example underscores the importance of actively working on one's self-compassion to reinforce capabilities and thereby improve self-worth.

Kagan also mentions the importance of counteracting self-criticism with positive self-talk. He discusses an exercise where he would say one nice thing about himself to change his relationship with himself over time. Hormozi discusses how confidence is built through repetition and experience, referencing how presenting numerous times can build confidence in one's abilities.

Adjust Mindset From Short-Term to Long-Term Growth

Hormozi, Kagan, and Vivian Tu explore the importance of adopting a long-term mindset for sustained wealth and personal growth.

Avoid "Get Rich Quick" - Sustained Effort Builds True Wealth

Kagan reflects on his tendency toward frugality, indicating a focus on long-term financial health. He lamented an impulse purchase of a Jaguar, learning the value of avoiding quick decisions in favor of sustained financial effort. Hormozi warns against the get-rich-quick mentality, emphasizing that true wealth comes from skill development and sustained effort.

Tu advises appreciating the current journey and the milestones achieved, instead of incessantly seeking the next big thing.

Make Short-Term Sacrifices for Long-Term Payoff

Hormozi stresses the significance of accepting the cost of achieving goals, including the necessity of enduring failures and risks to reach long-term success. He shares his experience of living frugally to save $50,000—a crucial step that enabled him to seek further growth in his career.

Leverage Skills and Earning Power Over Investing

Hormozi, Tu, and Kagan argue that investing in one’s skills is a more reliable way to ensure long-term financial succe ...

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Mindset, Self-Worth, and Their Impact on Financial Success

Additional Materials

Counterarguments

  • While self-compassion and positive self-talk can be beneficial, they may not be sufficient for everyone, especially those with deep-seated psychological issues that require professional therapy or counseling.
  • Confidence built through repetition and experience can sometimes lead to overconfidence, which may result in taking unnecessary risks or failing to prepare adequately for challenges.
  • A long-term mindset is important, but it should be balanced with the ability to adapt and pivot when immediate opportunities or threats arise.
  • The "get rich quick" mentality is often criticized, but it's important to acknowledge that some individuals have achieved financial success through timely investments or entrepreneurial ventures that yielded rapid returns.
  • While appreciating the current journey is valuable, it can sometimes lead to complacency and a lack of urgency in pursuing goals.
  • Making short-term sacrifices for long-term payoff is generally sound advice, but it's also important to ensure that quality of life and personal well-being are not excessively compromised in the process.
  • Investing in skills is crucial, but diversification, including financial investments, is a key principle of wealth management to mitigate risk.
  • Personal skill development is important, but not everyone has the same opportunities or abilities to increase their earning potential through skills alone.
  • Focusing solely on activities that boost income might lead to burnout or neglect of other important life aspects, such as relationships, health, and personal fulfillment.
  • Asking for a raise is practical, but ...

Actionables

  • You can create a "skill investment plan" by identifying key skills relevant to your industry and setting monthly goals to improve them, such as taking online courses, attending workshops, or practicing specific tasks. For example, if you're in digital marketing, you might set a goal to master a new social media analytics tool within a month, thereby increasing your value to your employer or clients.
  • Start a "confidence journal" where you document daily actions that contribute to your experience and expertise, no matter how small, to build a tangible record of your growth and boost your confidence. This could be as simple as successfully navigating a difficult conversation, learning a new software feature, or completing a project under budget.
  • Implement a "milestone celebration ritual" where you set personal milestones related ...

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