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we have to get over these money myths that you can't build wealth if you rent where you live you can't build wealth if
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you don't have access to millions of dollars that's not true and there's one he think has given much better returns
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than any real estate and any stock and even any cryptocurrency so let's talk about the real way to build true wealth
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Jas bre Singh is the non-nonsense financial Guru realtor and entrepreneur whose methods have help millions of
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people solve their crippling money problems and unlock Financial Freedom people don't like when I say this but I
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don't say what I say to make friends I say what I say to help people be better with money there's a lot of people that are lacking Financial education and
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we're Tau study hard get a good job and if you continue working down that path you're going to become successful that
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most people buy a house they can't afford and statistically are living paycheck to paycheck in fact that's 78%
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of Americans because ironically the key thing that keeps so many people poor for the rest of their life is they're scared
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to look broke so what do they do they're driving around in nicer cars going on better vacations went to the or
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restaurants but they no longer have money to save they no longer have money to invest and the problem is we need
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about $1.8 million to comfortably wow so if you are in the financial danger zone which is you don't have $2,000 saved up
00:01:12
for an emergency and you have credit card debt you have to make drastic changes today so what do I do well the
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first thing you got to understand is a 75151 plan which is but now let's dig
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this a little bit deeper and let's talk about making money I put my money in five places that has been proven to win
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number one this has always blown my mind a little bit 53% of you that listen to the show
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regularly haven't yet subscribed to the show so could I ask you for a favor before we start if you like the show and
00:01:41
you like what we do here and you want to support us the free simple way that you can do just that is by hitting the Subscribe button and my commitment to
00:01:47
you is if you do that then I'll do everything in my power me and my team to make sure that this show is better for you every single week we'll listen your
00:01:54
feedback we'll find the guest that you want me to speak to and we'll continue to do what we do thank you so much
00:02:00
[Music] just PR who should care about your
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message and why should they care anybody who uses money which is
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everybody the interesting thing about money is we use money every single day
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it costs money to eat and it costs money to feed other people yeah most of us are never taught about money so most people
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say money doesn't matter I shouldn't think about money I shouldn't have to worry about money money's bad money's
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evil when in reality it cost money to eat and it cost money to feed other people and when you don't understand
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that now you're the one that's going to be paying the highest taxes you're the
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one that's going to be struggling to pay your bills you're the one that's not going to be able to go to Disney World
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you're the one that can't pay for that amazing gift for your wife for your husband and you're the one that can't
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pay for the health care for your parents and you wonder why and in this economic
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system that we all live in Money talks and unless you understand that you're
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never going to be able to win in the system what is the difference between people who figure out how to make
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themselves wealthy and those that don't if we put all objective advantages aside
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Rich parents inherited lots of money all these kinds of things what is like the fundamental difference that you've seen
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from the many many hundreds of thousands of people that you've worked with and taught and that have consumed your content
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what is the fundamental there's one difference one key difference people that become
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wealthy understand how money works and everybody else does not and I'll tell
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you where I came to this conclusion I checked all the boxes I studied hard in school I went through
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high school I went to college I spent one year in graduate school and then I
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went through law school but I never once learned a thing about money I never once
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learned to think about Building Wealth I never once learned to think about investing I never once learned to think
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about passive income but if you look at the wealthiest people in the world they don't get there
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by working a job and getting a raise they don't get there by working to climb the corporate ladder they get there
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because they understand how money works and they understand how to win in the
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economic system and the crazy thing about that is we're all taught to trust
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the system my parents are immigrants from a state in India called Punjab and like many other traditional
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Indian immigrants they wanted me to become successful now in my house that
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definition of success was very simple they gave me two options I can guess
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well option number one was just you can be a doctor yeah option two was just prit you can be a failure okay and they
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said they get to pick which one and this is me when I'm like one-year-old that since the day I could start talking my
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parents told everybody not just people around us they called my family in India my family all around the country that J
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is going to grow up and become a doctor because he's going to become successful now I had nothing against
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that because I wanted to become successful too I saw how hard my parents worked my dad if he got a Saturday on a
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Sunday off was considered a long weekend I mean my parents bust their butt and I wanted to become successful so I could
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give back to them and they told me that if I wanted to become successful the way I do that is by becoming a doctor which
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makes sense because when you're in school you get those like pamphlets those career pamphlets and they show you
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the different career options you have and anytime you look at that the top of the list is always doctor and so they
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said just if you want to become successful you have to become a doctor and because we came to this country you have to become successful so you have to
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become a doctor now I didn't think anything wrong with it because I liked the idea of becoming successful so when
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went down that path now along the way I realized I didn't want to be a doctor I told my parents that I'm not
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going to be a doctor my mom almost had a heart attack my dad couldn't believe it
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and so my dad essentially told me that just if you want to keep any pride in the family you have to at least become
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an attorney so I said okay I went to law school parttime worked on my business
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full-time now today I am a licensed attorney but I've never worked a day as an attorney
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and the reason why I've never worked as an attorney is because it's just not worth my time and it's not where my
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passion is and along that way that's when I learned that we're taught this is
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how you win go to school study hard get good grades get a good job and if you
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continue working down that path you're going to become successful but if you look at the successful people that's not
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the path that they followed and if we take a look at the three things that have built more wealth
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than anything else over the last century it's starting a business investing in
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real estate and investing in stocks yet along my entire educational
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path I was never taught that we're focus on how do you get a good job but our wealthy people are focused on is how do
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I grow my assets and that's the key difference here as wealthy people are working to
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own the corporate letter everybody else is working to climb the corporate letter and then the next thing I'm going to go
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back to what you said assuming that you don't have Rich parents because most people assume that you have to be rich
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in order to do this you need millions of dollars you need access to all this money but that's not true you can start
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now with $100 $10 but you have to get started the problem is most of us are
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never taught how to do this but unless you start doing this you're never going to build wealth and that's the way that
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you win in this economic system so I want to go through all of those three things you've just said I want to talk about starting businesses I want to talk
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about investing in stocks and also want to talk about real estate but I'm curious in your own personal story there
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when did the penny drop because it's so interesting in my life there's key moments where I got to see behind the
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curtain and when I say see behind the curtain I I'll refer to my friends when we we're speaking uh privately I'll say
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I'll refer to it as money games like the day where I saw these billionaires playing money games that I was I didn't
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know existed and I was there working my butt off working in call centers or building whatever and then I got to meet
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a billionaire got to spend time with them got to see behind the curtain and was like oh they just play these money games which nobody else has been told
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about right um when was the penny drop moment for you you qualified as a lawyer
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why didn't you end up pursuing that some some something happened yeah so when I was in grade school I began working at
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Indian weddings I played a drum called the toll it's a Punjabi drum that's
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where my family is from in India and I used to play this drum at weddings now my parents didn't like that I did this because anything that was not math or
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science was like you don't do this so I had to play this drum uh in secret but I
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played at weddings and I started to make a little bit of money and by a little bit of money I mean $50 per wedding when
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I was in Middle School then maybe $100 $200 in high school and one of the DJs
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that I was working with said J you know a lot of kids in high school uh how about we host a teen party
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for some of these kids in your school I was like okay why not so we hosted this
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teen party and it was a big success and at the end of the night uh the DJ then starts paying out all the costs because
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we were going to go in 50/50 on this business venture and then we pay out the money for the security for the venue for
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the marketing and then he says all right let's count our profits and he has four bills in his hand one two three four
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there's four singles left $2 for him $2 for me and I saw that we put in so much
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work into this business venture into this idea into this this first party and we made $4 of profit which we split
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50/50 and at that moment he was really upset but I was really not upset at all because I was like this was fun you know
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it was it was it was a lot of fun putting this together but in my mind it was just one of those hobbies that I was
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doing because I needed to become a doctor well I did a few of those teen parties when I was in high school and
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now it was time for me to go to college I was 17 years old and I get there and I
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see everybody partying drinking blowing money they don't have and I was shocked
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I had no idea that people went to college to party and I had no idea people got the money to spend money on
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all this alcohol I don't drink I'm not into partying but now I needed something to
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do on Friday nights and so now I'm thinking what do I do
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how about I take this teen party business concept that I had in high school and now do it in college so I was
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17 and I started knocking on the doors of all the bars venues restaurants
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trying to see if anybody would let me host a party there and in the beginning
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some said sure you can host a party here we just need a $10,000 deposit I don't have $10,000 I was 17
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years old so I kept going some said I need a $20,000 deposit but eventually I found this one club that said yeah you
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can host a party here you don't got to pay us anything just pay us half of the cover charge that you generate pay has
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50% of whatever Revenue you generate now I'm in business I made the same arrangement with my DJ I said look how
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about you DJ for me for free and I'll split whatever profits I make with you and that was the beginning of my first
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real business it was this party promotion company which then became an event planning
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company and it grew pretty big in college I mean I started off by hosting
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these one-off parties then I was contracted by one of the largest clubs on campus to host their weekly college
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night so I was hosting their parties every week we were hosting official shows and After parties and it grew
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pretty large and now as this business starts to make
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money the first thing that I realized is I don't need a license or degree to make
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money I thought that was something that I needed because I thought I needed these good grades to qualify for this
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thing to make money so that was the first kind of shock and realization the second realization that
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I had was I knew nothing about money I was making a little bit of money and I
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was very fortunate that I started reading books about money and
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business and I started reading these books and the first thing I learned was
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the difference between an asset and a liability which were things I had never heard of before
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an asset is something that puts money in your pocket a liability is something that takes money out of your pocket
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wealthy people want to own assets I was buying a whole lot of liabilities because I was working in this party
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promotion business and I wanted to look the part so I would make a little bit of money buy a nice watch make a little bit
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more money put some new rims on my car put a new sound system in my car put a new uh subwoofer in my car I mean I was
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blowing money and all these dumb things to look like I was rich when in reality I was just making a lot of other people
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rich and then I learned about this thing called investing which really started to upset
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me because I thought I was doing everything right and I'm reading these books that are talking about how every
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wealthy person invests in real estate I have no idea what that means
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nobody in my family is a real estate investor I had never heard of this concept of real estate investing
00:13:57
before I don't know what it is is but if wealthy people are Real Estate Investors and I want to become wealthy maybe I
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should invest in real estate so when I was 19 I'm now studying to get into medical school because I
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still think that I'm going to become a doctor and I was bored out of my mind
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because I would spend all day 10 to 12 hours a day in the library studying and this was around
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2011 and the reason why I say the year is because if you remember 2008 was was
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the great financial crisis that was when we had the real estate collapse in America so real estate prices were
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decimated and they didn't hit rock bottom until 2012 that's why I'm saying this so in 2011 I'm studying to take the
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Medical College ad Mission test the MCAT and I'm reading these books talking about how wealthy people invest in real
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estate and now I'm making a little bit of money from this party business and have a little bit of cash in the bank so
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during my breaks when I'm studying for the test I start looking on the internet
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websites of finance and they all talk about how real estate prices have hit rock bottom how real estate is being
00:15:08
decimated in America and so I was like well maybe I start looking to buy real
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estate and so on August 22nd I took the Medical College admission test and then
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on August 23rd I purchased my first real estate investment property it was a
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small condo that I purchased out of foreclosure a few years prior it had
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sold for a little bit over $150,000 and then like many properties
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it went through foreclosure the banks couldn't sell it and it was listed on sale for
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$8,400 that was a total price of the condo so I came in with an offer of
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$4,000 because I don't know what how this real estate investing stuff works
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and we were back and forth with the bank the bank said will sell it to you for $7,000 I tried to negotiate them even
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lower and then the bank said that they had another offer on the table so now it's a bidding war and I had to pay
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offer my highest and best price so I said I'm willing to offer $8,000 to buy the condo no more and they
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accepted my bid so I purchased this condo for $88,000 I put in a few thousand worth
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the work and then I rented it out for $600 a month and now I start start to
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question things why did nobody tell me about this this condo is putting money
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into my pocket without me having to do something because I own this asset we're all taught to trade our time for dollars
00:16:44
we're all taught to work to get paid because that's what we're taught to do but wealthy people are not working for a
00:16:50
bigger salary they're working for more assets because that can continue to pay you even when you're not working and
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that's that shift when I saw that that really sparked a fire under me and
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really made me angry and I don't know why I got so angry but I got angry because I felt like I was checking all
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the boxes I was doing good in school I bust my butt in school I was going to do all the right things become a doctor and
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do everything that I was told but what I didn't realize is those boxes weren't my boxes who
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created these boxes and why is there this whole world of financial education that were never taught because if this
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is how wealthy people build and grow their wealth why is everybody else not taught this so I want to make a
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distinction here are you saying that in order to build wealth people should buy a house no if you want to build wealth you
00:17:46
have to buy assets when people say buy a house what does that mean to most people's eyes it means buy my home yeah
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I want to buy this nice place for me to live which is what most people do when they get a bit of money they take their salary from work and then they go and
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buy a house to live in and then they pay into the mortgage which means that they are now building an asset right they're
00:18:08
building what many people call generational wealth which is one of the biggest lies when it comes to money the
00:18:14
reason why is because your house is
00:18:19
actually a money pit and that's why I want you to think of your house as a liability but I want
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you to hear me clearly I'm not saying you shouldn't buy a house I'm not saying it's bad to buy a house you have to
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treat your house like a liability this suit that I'm wearing is a liability this watch is a liability my shoes are
00:18:39
liabilities should I not buy them no I got to make sure I can afford them so
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when people think about buying a house what do they think of they think I'm going to build generational wealth I'm
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going to build wealth I'm going to pay it off and I'm going to be able to have more freedom in my life because I can
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own this house let's go with the best case scenario you buy a home for let's
00:19:00
call it $300,000 you pay it off and throughout your lifetime this
00:19:07
$300,000 home grows in value to a million dollar and now you're going to say just PR I showed you this is an
00:19:13
asset my house tripled in value more than tripled in value and now I'm going to pass it down to my kids so now yeah
00:19:20
your kids got a million dollar house but unless they have the income to support paying for a million dollar house they
00:19:26
might have to find some more cash now would what do they do because you can't just pull cash out of this house right I
00:19:32
mean it's not an ATM unless you go to the bank the bank will give you the cash
00:19:37
because the bank says oh you have a million dollar house how about we loan you $800,000 but that's not an ATM because
00:19:44
you have to pay that money back plus interest and unless your kids have the income to pay for the property tax to
00:19:51
pay for the insurance to pay for the upgrades to pay for the maintenance and the mortgage they can't afford that
00:19:56
house so maybe now they have to sell okay now you sell it you got a
00:20:01
million dollars great we're not even going to talk about taxes right now but you got a million dollar you're
00:20:08
rich but if they don't have any Financial education and you have a million dollars what's going to happen
00:20:15
well let's think about this if you had a million dollars what would you do with it if I went down the street and I asked
00:20:20
the average person if I wrote you a check for a million dollars today what would you do what are people going to say I'm going to go to the Bahamas I'm
00:20:27
going to buy myself a nice house I'm going buy myself a nice car buy myself some nice clothes go to the Gucci store go to the Louis Vuitton store and buy
00:20:33
myself the extra guaca Chipotle that's what the average person will do now
00:20:38
maybe you're a little bit more financially smart you say I'm just going to live off of $50,000 a year but after
00:20:44
20 years you have nothing left not to mention the fact that 10 years from now
00:20:51
that $50,000 a year lifestyle is going to buy you half of what it can today so now let's go back to that
00:20:57
situation you thought you built generation of wealth you did a good thing about paying off the mortgage
00:21:02
because you don't have to pay the mortgage payment but is that really the type of generational wealth that you
00:21:09
want and now to fully Hammer this home I'm not saying it's bad to own a house
00:21:15
it's actually very great it's an amazing thing to own your house free and clear because now you can rest assured you
00:21:21
don't have to worry about the mortgage payments if you have the financial education that's great but let's talk
00:21:26
about now the real way to do this and build true wealth when I buy my real estate investment properties and my
00:21:33
property values go up the rental values also go up the rent is what pays for the
00:21:39
maintenance the rent is what pays for the upgrades the rent is what's paying for the property taxes and the insurance
00:21:45
the rent is putting money in my pocket and this is cash flow that I can use I can use this cash flow to buy a
00:21:53
vacation I can use this cash flow to buy food I can use this cash flow to pay for my lifestyle
00:21:59
but your house doesn't do that you have to pay to live in your house but people
00:22:05
think you know they're getting their mortgage payments they're spending whatever they are you know spending on their mortgage payments they they think
00:22:11
they're well we're kind of told that that mortgage payment is an investment into an
00:22:17
asset your mortgage payment is a payment to your bank banks are not stupid in
00:22:25
fact they're very smart Banks do something called front front loading your mortgage what that means is if you
00:22:31
go out and get a 30-year mortgage which is what many people do in America and you pay $3,000 a month on
00:22:38
your mortgage you're not paying $1,500 to your interest your bank and $1,500 to
00:22:45
your principal your Equity the way it works is Banks frontload your mortgage
00:22:51
which means for the first almost 15 years it's about 14 years and 8 months
00:22:56
or so but for almost 15 years of your mortgage the first 15 years the majority
00:23:02
of your mortgage payment is going directly into your Banker's pocket in the form of Interest which means if
00:23:09
you're paying $33,000 a month on your mortgage for the first part of your
00:23:14
mortgage maybe $100 is going out of the $3,000 into your Equity the other
00:23:20
$2,900 is going right into your Banker's pocket with interest and now yeah after
00:23:26
15 years now half of your mortgage payment is going to your equity and half
00:23:32
is going to interest but if you refinance before that 15year Mark that starts over and so
00:23:40
this is where Banks understand the gain again I'm not against buying a house but you got to understand the game of money
00:23:48
and most people don't understand that and so the mistake that people make is they buy a house they can't afford and
00:23:53
now they're paying all this money into their mortgage thinking that I'm Building Wealth they no longer have money to save they no longer have money
00:23:59
to invest into other real assets and their money is just going to
00:24:05
pay down their mortgage thinking that this is going to build my wealth but you've been sold a lie this term
00:24:10
opportunity cost most people don't know what this term opportunity cost means but it appears to be very pertinent to
00:24:16
what you're saying especially when you just said this is money that you can't then invest in assets can you explain
00:24:22
what opportunity cost is and how it's impacted if you if you buy a house sure
00:24:27
if you have let's let's make the numbers very simple you want to buy a $100,000 home and let's say the banks require a
00:24:34
20% down payment $20,000 you could do a few things number
00:24:41
one you can take that $20,000 and go out and buy this house and now that's how that money has been used but if you use
00:24:47
that money to buy the house you lose the opportunity to take that $20,000 and say use it to buy a rental property you lose
00:24:55
the opportunity to use that $20,000 to inv in the stock market you lose the opportunity to take that $20,000 and
00:25:02
maybe build a business now the question is what is going to give you the best and most
00:25:09
growth now hopefully this house that you buy will go up in value it's not guaranteed we know the houses don't
00:25:14
always go up in value no matter what your Banker says no matter what your real estate agent says because we saw
00:25:20
what happened after the 2008 crash where real estate prices were slashed in
00:25:25
half it was as much as is 93% real estate values dropping in the
00:25:32
state of Michigan where I am so we know real estate prices don't always go up stock prices don't always go up
00:25:38
businesses don't always work everything has a risk but now the question is which risk do you want to
00:25:44
take and which risk do you want to take first are you in a situation now where
00:25:49
you're ready to go out and buy a house or do you want to build your wealth first a little bit more and that's the
00:25:56
question that I want people to start thinking is am I ready to buy a house and then people say well if I go out and
00:26:01
invest my money the problem is housing prices keep going up I'm chasing this
00:26:07
housing market it keeps getting more and more and more expensive and you're 100% right it's a
00:26:13
risk but there's also a risk the housing prices could fall I think one of the biases that makes people want to buy
00:26:19
house is that they're currently renting and they see that as just giving money away so they think listen I could spend
00:26:26
this money on a mortgage and I'll own this thing one day or I could spend this same $2,000 whatever it is on rent and
00:26:33
I'm never going to own this thing well I'm here in Los Angeles right now I had
00:26:38
to stay in a hotel that hotel payment is paying somebody's mortgage it's paying
00:26:43
somebody's College tuition it's paying for somebody's stuff when I go to a restaurant and I eat out I'm paying for
00:26:50
somebody's mortgage I'm paying for somebody's College tuition I'm paying for somebody's bills because when you go
00:26:56
out and your rent that's what everybody says I making my landlord Rich well when you eat at a restaurant you're making
00:27:01
that restaurant owner Rich when you go to a hotel you're making the the hotel owner Rich when I go and buy a mug I'm
00:27:06
making the mug owner rich and the reality
00:27:12
is yeah it's good for to own a house but are you ready to own a house can you
00:27:17
afford to own a house and what do you want to own first I rent where I live right now I am making my landlord Rich
00:27:24
today I also rent for my offices I am making my off office landlord very wrch
00:27:30
because my office rent is very expensive do you feel bad for me I hope not and
00:27:36
this is where we have to get over these these money myths that many people keep
00:27:42
selling you that you can't build wealth if you rent where you live you can't build wealth if you don't get a good
00:27:47
degree that's not the way that the system works see there's the traditional
00:27:53
rules and then there's the real Financial education Money Rules and again I'm not saying it's bad to own a
00:27:58
house but it's bad to own a house you can't afford how do you know if you can afford one well there's three parts to
00:28:04
afford in a house you have to afford the down payment you have to afford the monthly payment and you have to afford
00:28:10
the moving costs I'm going to go start from the simplest one which is the moving costs because many people don't
00:28:15
Factor this in when you buy a house you got to move in and I'm not talking about the the closing costs you might have to
00:28:23
hire movers which are expensive you might have to upgrade your furniture which which is expensive you might have
00:28:29
to upgrade the house which is expensive factor that in then I want to talk about
00:28:34
your down payment people don't like when I say this but I don't say what I say to make friends I say what I say to help
00:28:40
people be better with money if you want to afford the house you have to have at least a 20% down payment that way you
00:28:47
actually have some Equity some skin in the game that way you can actually afford the
00:28:53
house the third part is you have to afford the monthly payments now every
00:28:58
bank is going to have a different rule for you banks have like the 28% Rule and these other rules I have sorry just on
00:29:04
that last Point why do people not like it when you say that because it's very hard to pay a 20% down payment housing
00:29:10
is expensive you want to buy a $500,000 house you have to have $100,000 as a
00:29:15
minimum for your down payment and that's extra cash okay now if we talk about the
00:29:20
monthly costs the simple way that I like to follow it is you have to have a system
00:29:27
for yourself you have to know how much money you are allowed to spend how much money you need to be investing and how
00:29:33
much money you have to be saving every single month then just Factor it in so the way
00:29:40
I like to look at it a simple rule of thumb is something like a 75151 plan which says for every dollar
00:29:48
that you earn from here on out 75 cents is the maximum that you can spend 15
00:29:55
cents is the minimum that you invest 10 cents is the minimum that you save now
00:30:02
let's do the math if you know that you make let's call it $100,000 a year that
00:30:07
means the max you can spend out of the $100,000 is $75,000 so if out of that
00:30:14
$75,000 you can afford your mortgage costs you can afford your food you can
00:30:20
afford your vacations and Life Style then sure you can afford it but if you can't afford that then you can't afford
00:30:27
that mortgage and the reason why I like to go by this rule is because some people are going to say I can live in a
00:30:33
small house I just want an expensive car and some nice vacations other people are going to say I want a beautiful home I
00:30:39
don't care about the car and Vacations so now you can Factor it all in there how much can you afford out of that 75%
00:30:46
of what you make do you think people even know how much money they spend no I
00:30:53
was thinking I wonder how many people listening right now know over the last 6 months the exact figure that they spend
00:31:00
every single month most people statistically are living paycheck to
00:31:07
paycheck so they're basically spending everything or more okay 78% of Americans
00:31:12
are living paycheck to paycheck which means I make some money and I spend all
00:31:18
of it or more there's a there's a joke that I like to make which is in the traditional Indian culture
00:31:25
people make a dollar to spend 20 in the traditional American culture
00:31:31
people make a dollar to spend $2 through the help of lines of credit credit cards
00:31:36
and other forms of debt and the reason why I'm going to take it a step back I don't think you wanted me to go this way I'm I'm going
00:31:42
to go anywhere anyway we live in what's called a credit based
00:31:48
economy which means if you make $50,000 a year you don't live off of $50,000 a
00:31:55
year at least most Americans don't we live in what's called a credit-based economy which means you have the ability
00:32:01
to spend the $50,000 you earned plus debt because as you make more money as
00:32:06
you have a good job you become more credit worthy and so as you show the bank hey I made $50,000 they'll give you
00:32:13
credit cards they'll give you lines of credit they'll give you whatever types of debt that they can that way now you
00:32:18
can go out and spend 60,000 70,000 $80,000 because that's what grows the
00:32:25
economy the more money you spend the Richer somebody else gets and so now when you live in this credit based
00:32:31
economy with no Financial education people spend spend spend the economy grows grows grows and most people have
00:32:38
no idea what hit them do you know what's really interesting is two days ago I was
00:32:44
having a conversation with one of my friends it was actually I did a podcast about Finance um recently and in there I
00:32:51
mentioned some of my friends and then they messaged me on Whatsapp and we were having a chat in our group chat and I
00:32:57
for the first time ever one of them asked me to guess we're very close friends we talk about money we talk about how much money we have Etc they
00:33:03
said guess who has the most money in the group so I went through and I did I think this is this person's net worth of
00:33:08
my five best friends and I think this is how much cash they have now one of my friends
00:33:15
who is very what's the word I guess Frugal
00:33:20
lives a very very simple life as I was going through I go you know what this friend is this like highflying guy lives
00:33:26
in this aming apartment this person has all these wonderful things this person's been successful in business this
00:33:32
person's successful in crypto but you know what I bet my M and I won't say his name I bet he's richer than everyone
00:33:39
else in that chat um all of my other friends in the chat and so I did my little prediction and I said I bet
00:33:44
you've got X figure and he replied and go and said this is my current cash
00:33:49
position he was richer than everyone in the chat in terms of cash combined this
00:33:55
guy lives so he lives in like a studio apartment he never balls he doesn't have
00:34:00
like a fancy car doesn't have fancy clothes and he's richer than the entire lot of my friendship group and I thought
00:34:07
God there's something really important here in terms of and it's it's so crazy if you if you
00:34:13
know the context of what I'm saying because I've got a friend in that chat who's built like a big business I've got a friend like everyone in that chat runs
00:34:19
businesses is successful but they're living in different ways and the one friend who runs the smallest business
00:34:25
who like probably has the least income is the
00:34:31
richest and over the last couple of days it's it's so funny I was thinking about all the dinners I bought this [ __ ] guy and I'm like I didn't know you were
00:34:37
a millionaire like I [ __ ] I would have been paying for everything but this is really I mean if we ignore your
00:34:44
friends it's very easy to look fake Rich yeah because everybody will give you a line of credit if I want a Gucci person
00:34:51
I can't afford the Gucci guess what I can buy now pay later I can open up a credit card and buy the Gucci and look
00:34:56
like I'm rich when in reality I'm just making Gucci rich in fact one of the richest people in the world in 2023 he
00:35:03
was the richest person in the world is Bernard arnal he's the founder and CEO of lvm or he's the founder and CEO of
00:35:12
the company that owns Louis Vuitton and why because millions of
00:35:17
people pay him to look rich when in reality he's the one that's getting rich
00:35:22
and we assume that when you make some more money you got to start looking the part and this is that mindset shift that
00:35:29
we have to make and you know a lot of people resonate who come from the Indian
00:35:37
traditional families they messaged me saying jit I became a doctor or my wife
00:35:42
and I are doctors we make hundreds of thousands of dollars a year we make a great income but we have no savings and
00:35:50
no Investments and I don't know what to do and the reason why is we have a Range Rover and a b we have a nice house we go
00:35:57
on the doctor vacations we have to look the part but we don't have any money left
00:36:02
over at the end of our paychecks and it's a very easy thing to get caught up
00:36:08
in because when you make more money you become more credit worthy banks will give you bigger loans when you make more
00:36:13
money you want to spend more money and it's very easy and you have to understand how do you control that
00:36:20
spending and that's why if you follow something like 75 15 10 one of the simplest things you can do to start is
00:36:26
just always no matter what whether you're making $110,000 a year or $10 million a year you always put money
00:36:32
aside to invest you always put money aside to save and you spend whatever's left my friend doesn't invest the friend
00:36:38
I'm talking about doesn't actually invest he just doesn't spend he like just doesn't spend money and he's just
00:36:44
stacked up like a million dollars in cash whilst earning less than everyone
00:36:49
else of my five friends in that chat and it's it didn't take a long time like it
00:36:54
took him four years or something four 5 years of just running this small business with a couple of people when I
00:37:01
say a small business I mean a really like a small business like a business of maybe four or five employees and he's
00:37:07
built up a million million dollars in cash for himself because he just doesn't spend money and he lives at he doesn't have
00:37:13
like a an ego doesn't care if people what people think of him yet my other friends who are rning maybe five times
00:37:19
more a month have five times less cash than him it's like it's it was so
00:37:26
inspiring it was honestly so spiring because it it says something about the importance of saving but who the hell
00:37:31
wants to save if I titled this podcast today this something about saving no one's going to click it's not fun saving
00:37:39
isn't exciting who wants to go out and save $2,000 who wants to spend less money we want to buy more nice things
00:37:46
but unless he can control the spending unless you know how to save you will never build wealth do you know for
00:37:53
people that are in that paycheck to paycheck cycle which I was in for many many years of my life where I'd get paid
00:37:59
for my call center I'd go and spend the money I'd pretty much spend all the money within the first couple of days of getting the paycheck and I was just
00:38:05
waiting the next three weeks for the next paycheck what advice would you give them about getting out of that cycle because
00:38:11
it because you almost feel imprisoned by that cycle if you're absolutely well before I give the advice I want to
00:38:16
explain to that person what's happening because you are the Prime customer for
00:38:24
our economic system Banks love you because they can sell you payday loans
00:38:29
they can sell you credit cards they can sell you lines of credit and they can keep you in debt for the rest of your life which means you keep making the
00:38:36
bank Rich corporations love you because you're not going to think twice when we show you this nice bag when we show you
00:38:43
this nice vacation you're going to want the stuff and so we love selling you the stuff the government loves you because
00:38:50
you're going to pay the highest taxes employees pay the highest
00:38:55
taxes and so when you're in that situation you are making everybody else
00:39:00
Rich at your expense and so if you want to break out of this the first thing you got to
00:39:07
understand you need to make yourself rich before you make everybody else Rich
00:39:12
because when you're spending all your money you are putting your money into their pockets and you have to stop that
00:39:17
you got to keep that money for yourself you're in a boat think of it this way you're in a boat and this boat has water
00:39:23
just flowing in and you are sinking and you got to start by sealing the holes you got to stop the water leaving this
00:39:31
you got to stop the water coming in you got to stop the bleeding and that means you got to stop the
00:39:36
spending so if you are in what I call the financial danger zone which is you don't have $2,000 saved up for an
00:39:43
emergency and you have credit card debt if you are in that situation you are in
00:39:49
the financial danger zone and you have to make drastic changes that means right now no more eating at restaurants no
00:39:56
more vacations no more doing anything that doesn't put money in your pocket and no more Netflix
00:40:03
no and the reason why I say this isn't because you're going to save $15 a month it's so you can save two hours of your
00:40:09
time a day the average American is watching more than two hours of Television a day and if you don't have
00:40:16
$2,000 saved up if you have credit card debt you cannot afford those 2 hours a
00:40:22
day being wasted on TV and that means right now you have to go out and start
00:40:28
using the time to learn start using the time to work and start using the time to make some extra dollars so what do you
00:40:35
do start selling stuff stop spending money selling stuff you own selling stuff you own so if you have a TV that
00:40:42
you're not using sell it you have a car that you can't afford sell it if you're living in a house that you can't afford
00:40:48
sell it downgrade move smaller and then work to earn more money
00:40:54
I've got to say the couple of things that I came to mind is you were saying that and funnily enough I put myself in
00:40:59
the shoes of 18-year-old Steven Bartlett when I was in that small apartment with
00:41:05
three or four immigrants in Mosside rush home and I was you know my rent was
00:41:11
nothing my rent was a 1 15 a month which I could not afford and I could not pay
00:41:17
and I was intermittently working between call center jobs and whatever money I got I spent and part of the reason I
00:41:24
spent it just pre is because like many people watching especially men who
00:41:30
sometimes feel the need because of the way Society is I was trying to get laid at the same time and it's hard yeah when
00:41:38
you're a young man and I say young men in particular because the stats do support the fact that there is an expectation that men pay um when you're
00:41:45
a young man it's particularly difficult to do all of these things to cut back and also get laid and what am I going to do defer getting laid for 10 years when
00:41:52
I say laid I'm really saying meeting someone and falling in love and having a having a life so what do I if I if I'm
00:41:58
living in a shoe box which I was I can't bring anyone back there I can't take anyone for dinner I can't take anyone to
00:42:03
the movies so what do I do and this is why every Indian parents tell their kids to become a doctor so their son can get
00:42:09
married it's the same concept but here's the thing you have to pick your hard
00:42:14
either life's going to be hard now or it's going to be hard for the rest of your life and you have to pick what's
00:42:19
more important to you right now and you know if we talk about balance if you
00:42:24
want to have a balance of everything where you wna find a girl and you want to make money and you want to stay
00:42:31
healthy you are dividing your attention everywhere not saying it's impossible but very few people can actually do
00:42:37
everything all at once and if your number one goal is to become wealthy if your number one goal
00:42:43
is to turn your finances around you have to get serious about it because where you put your attention is
00:42:49
where you get the results and so if you want to be in a better financial situation you are going to have to make
00:42:55
sacrifices and difficult I can't come here and tell you it's going to be easy yeah because that's going to be me lying
00:43:01
to you I got to be honest I did make a sacrifice and for me the sacrifice was I started a business and frankly that
00:43:08
meant that I didn't have time to be going out getting laid or meeting people or socializing but it's it my story arc
00:43:16
ends with it going well and then the Romantic situation taking care of itself
00:43:22
many years later once it had gone well because I was so focused on myself and it's funny there is a bit of a paradox
00:43:28
to life that the more you actually Focus inward the more you become a magnet yeah um and the more I focused outward the
00:43:35
more I pursued and chased and sort of neglected myself the the more harder it was to get people interested in me yeah
00:43:41
and you know I I also want to say that when I talk about Building Wealth I'm not talking about becoming a money
00:43:47
hungry just money greedy this is evil person that just cares about money that's not what I'm talking about because I want you to live a holistic
00:43:53
life because money is just one part of your life but the second part to that yes I'm not telling you to never enjoy
00:44:00
life I'm telling you to make a sacrifice for a period of your life that way you can enjoy the rest of your life and
00:44:06
never have to worry about money again it's hard for us to naturally see life for Seasons especially when we're
00:44:11
looking forward when we're looking back it's very easy to say oh that was that season like I can sit here now and say
00:44:16
oh that 20 to 25 was that sacrifice everything in my life to make myself something season and then 25 to 30 was
00:44:24
like building and learning and then I I now you know can can think of it's
00:44:29
easier actually now to think forward in Seasons now that I've been through some Seasons but for someone that's hasn't
00:44:34
been through seasons in life it's hard to think about life in those terms I now
00:44:39
think of my life in these fiveyear Seasons MH and that helps me to say to you even have conversation with my
00:44:45
partner where I go this is the season I'm in um and it'll last probably roughly this this long and I'm going to
00:44:51
sacrifice these things and prioritize these things in this season mhm but um
00:44:57
it's hard for people to understand this idea it's difficult and that sacrifice is difficult especially during a time
00:45:05
where everybody's showing off everything on Instagram you look at your friends who have a crappy job but they're
00:45:12
driving around in nicer cars going on better vacations going to the nicer restaurants and you're thinking what did
00:45:17
I do wrong and then especially if you're a guy you have a girlfriend you have a wife she's going to say how come they
00:45:25
keep get to go can they keep getting go to Cancun they keep going to these nice restaurants how come you can't take me
00:45:30
to these nice places and now you feel like you're doing something wrong because where is this discrepancy the
00:45:35
reason why I call my show the minority mindset is because I'm a big advocate of
00:45:41
not doing what the majority of people do the first time I made a million dollars in a year I was in my 20s I was driving
00:45:47
a car worth $500 it didn't have a bumper on it it
00:45:53
was not pretty my wife sat in the car with me and my employees drove better cars than
00:45:59
I did so you know you got to be
00:46:06
confident and you got to work for something bigger and you want a partner
00:46:11
that's going to understand that that's my belief which is not the easy
00:46:18
thing it's interesting because confidence is such a internal thing and I just feel like I just probably just
00:46:24
didn't have it then cuz I I I think I was scared for someone to know that I
00:46:30
was broke I was so scared to know for someone to know that I was broke that I just didn't entertain romantic
00:46:36
relationships and that is the reason why so many people will go into debt to buy
00:46:43
vacations to buy things to buy stuff to look rich and ironically that's the
00:46:49
thing that keeps so many people poor for the rest of their life is because they're scared to look broke and now
00:46:56
when you try to look rich that's the thing that's actually keeping you broke there's another element to this which is
00:47:02
my life was pretty miserable so when you have a relatively miserable life when you
00:47:08
don't have many nice things CU you're working in a call center as I was until 11:00 at night time doing overtime every
00:47:13
overtime hour I could get then because you're all so lonely you're going home alone walking home because you can't afford the
00:47:20
bus anything that gives you a little dopamine hit gambling this is why all
00:47:26
the gambling shop are in the areas that struggle the worst financially because those I mean a lot of people say because
00:47:31
those people are looking for that you know that big payday that dopamine hit from a Payday um my TV in my tiny tiny
00:47:41
little bedsit room was like half the size of the wall I was making Reckless
00:47:47
spending decisions because I think it gave me some kind of hit that I I was missing in my life it gave me like a dopamine Rush that was and there wasn't
00:47:53
many things giving me a dopamine hit at that point in my life and see here's the thing during that time you are making
00:47:59
emotional decisions yes as many people are and it's very difficult to speak logic to
00:48:06
emotion but this is where now you have to be able to understand the difference because if you're listening to this and
00:48:11
you're in that situation you have to understand that if you want to continue being able to live
00:48:17
that lifestyle you're going to have to make some changes today otherwise you're going to be stuck in this lifestyle for
00:48:23
the rest of your life and it's only going to get more difficult and that's the thing is if you want to
00:48:29
become wealthy the first part is just your own mindset it's your own discipline and until tell you can
00:48:34
conquer that I can tell you everything about investing I can tell you different ETFs and index funds to invest in I can
00:48:41
tell you different investment institutions out there I can tell you which stock brokerages to use I can tell
00:48:46
you just invest 15% of your income into this for the next 10 20 30 years and you're going to become wealthy but until
00:48:52
you can get over that mindset you're never going to become wealthy because then what happens in that sit a is when
00:48:58
you're in that state of I just want to look rich I just want to have that dopamine I just want to
00:49:03
have some nice things because I deserve it I work hard you know what happens next you the one that gets caught up in
00:49:09
all the get-rich quick schemes because someone's going to say look put $1,000 into this you'll have
00:49:16
$10,000 in the next three months or I'm going to show you you can live the laptop lifestyle you can work 5 hours a
00:49:23
week make $10,000 a month $10,000 a week you're never going to have to worry about money again just buy this
00:49:30
program and now you're a prime candidate because now you were driven by this
00:49:35
emotion of I want that I can't imagine if I had an extra $10,000 a month and I don't even have to work for it because
00:49:42
you can't see past it you're all you're doing is being sold by emotion and So you you're the one that's going to get
00:49:48
caught up in the get-rich quick schemes you're the one that's going to make the bank Rich because you're going to get stay stuck in debt corporations are
00:49:55
going to love you because they can keep selling you the nicest the newest stuff because you want to look rich you want to show it off to your friends you want
00:50:00
to show it off to the girls and you get stuck in that cycle so I want to talk about what the money
00:50:06
mindset is but just on that thing you just said there you said get rich quick schemes
00:50:12
crypto what's your point of view on cryptocurrencies and investing in crypto so I'll tell you where I invest
00:50:19
my money so you can understand I put my money in five places I put my money into my own business I invest my money into
00:50:25
real estate and inv my money into stocks I invest my money into speculative assets which includes cryptocurrency and
00:50:32
then I own some physical gold so starting with my own business I run a company called briefs media we're
00:50:38
probably most known for our Market briefs newsletter where we break down what's happening in the financial markets so that's briefs media number
00:50:46
two is I invest in physical real estate so I'm going out to buy rental properties that I can use to generate
00:50:52
cash flow number three I invest in stocks this is in the form of investing in in individual companies and investing
00:50:59
in funds funds are ETFs index funds mutual funds where you can get investment into a broad basket of
00:51:06
companies number four is my speculative Investments notice how I said number four this is one of the smallest pieces
00:51:13
now which are things that I believe can go up very quickly but can also fall
00:51:18
just as fast so the speculative assets which make up a small piece of my portfolio include things like startups
00:51:25
that I invest in it also includes things like cryptocurrency and then I own a little
00:51:30
bit of physical gold physical gold makes up about 2% of my portfolio but going back to
00:51:35
cryptocurrency because that's what you asked I think it is a speculative investment I have made a ton of money in
00:51:42
cryptocurrency uh and I started buying cryptocurrency before it was as popular
00:51:47
as it is today I began buying it in uh 2016 or so when Bitcoin was around 3,000
00:51:54
maybe 2016 2017 when Bitcoin was around $3,000 a coin and I have sold some and
00:52:01
for me I understand it can go up very fast but it can fall just as fast and
00:52:07
the issue that I have is when people now want to get into this idea of investing
00:52:13
because now they're in this tough situation I'm living paycheck to paycheck and I hear about this financial education and investing if I just dump
00:52:20
my money into Bitcoin or crypto maybe it'll 10x and it'll have Financial Freedom and that that's where I have
00:52:27
issue because you're taking your money and you're going for your long-term investments into a speculative asset
00:52:35
that hasn't been proven maybe it will work and you'll become a multi-millionaire maybe you'll lose
00:52:41
everything but I don't want to gamble with my wealth I want to build my wealth with something established and then use
00:52:48
the speculative assets as something that is speculative and treated as such in terms of your net worth then how is it
00:52:55
broken down in terms of percentage between these five things so if we look at real estate real estate is probably
00:53:00
close to almost 50% of my investments okay stocks make
00:53:07
up probably right around 30% speculative is about 18% of my
00:53:13
portfolio soorry just the 30% how much of that is into individual company stocks versus ETFs it's about half and
00:53:19
half okay so 15% each okay cool and then
00:53:26
versus startups it was a lot more crypto now it's a lot more startups I sold a
00:53:31
chunk of Bitcoin when it was breaking record highs and I'm going to be using that money to buy some more rental properties okay and gold about 2% of my
00:53:39
portfolio Okay and the reason why I buy gold I don't myself don't consider gold an
00:53:47
investment I look at gold as a way of saving hard money because my theory is if I take $10,000 of cash and
00:53:55
I take 10 ,000 worth of physical gold and I bury both of these things in my backyard today in 10 years what's going
00:54:03
to have more buying power my theory is that the gold is going to have more buying power and so that's why I own
00:54:09
some physical gold for me it's this way of saving Hard Cash I look at it as a
00:54:14
insurance against doomsday against something really bad happening against something bad happening to our currency
00:54:20
something bad happening to the economy that's why I own a little bit of physical gold but the problem with gold
00:54:26
is when I own my physical gold it just sits there in a vault it doesn't produce
00:54:32
cash flow it doesn't create new value it just sits there when I invest in real estate it produces cash flow when I
00:54:39
invest in stocks the companies are working to produce a better product to grow the profits the gold doesn't do
00:54:46
anything what about cash do you keep a lot of cash on hand uh cash is definitely position I I don't know about
00:54:52
percentage but I always keep cash and I'm going to break this down a few
00:54:58
ways because I have one let's call it bucket of cash which
00:55:03
is my emergency savings this is cash that is there to protect me against an emergency my personal life I also have a
00:55:11
separate bucket of cash which is my business emergency savings then I have a bucket of cash which is their to be
00:55:18
invested money this is money that's waiting to be invested in real estate and then I have and stocks and then I
00:55:25
also have another little piece of cash that's waiting to be invested more into speculative assets so I have cash waiting to be invested in speculative
00:55:31
assets cash waiting to be invested in real estate cash waiting to be invested in stocks and then I have my emergency
00:55:37
cash so I like to separate it all out a second ago you said that unless you have a money mindset you're never going to be
00:55:43
wealthy what is the money mindset the mindset is number one you have to
00:55:49
believe that you're going to become wealthy what I like to say is you have to say I will become wealthy why because
00:55:54
if you don't believe you're going to become wealthy it is going to be impossible for you why I used to guest to teach in Detroit public schools so
00:56:01
Detroit is a um it was a very rough and it still is rough area certain parts of
00:56:07
it our office is in downtown Detroit but there are parts of Detroit which are still very rough and I suggest teach in
00:56:13
some of the public schools there and these are kids good kids who were not
00:56:20
exposed to some of the best things and what I mean by that is when I would go into these classrooms you'd first have to go
00:56:26
through multiple metal detectors there'd be police there you might have to be pat down and when I get into the classroom
00:56:32
I'd ask the kids how many of you have two parents in a home almost nobody
00:56:38
would raise their hand I would then ask how many of you work a job almost everybody would raise their hand and as
00:56:44
I got to know the students better I also started to realize that these kids high school kids some of them are already in
00:56:50
gangs some of them already have been arrested by the police some have already been involved in these what we consider
00:56:56
bad things and they are bad things but to the kids that's just
00:57:03
normal because when I talk to them about these gangs what they'll tell me is I don't have parents at home I don't have
00:57:10
a dad I don't know my Dad my mom is working how am I going to eat my brothers this gang provide me some
00:57:18
comfort because there's people that are around me they give me food they help give me money it's not a bad thing in their eyes
00:57:26
and so when you grow up in that mindset it's very hard for you to think bigger and so when I would come into these classrooms I would talk about life
00:57:32
motivation money all things and and so one of the things I'd like to do an exercise that I would do is try to get
00:57:38
you to think about successful things what are things that kids want a nice
00:57:44
car so I would ask these kids what is your dream car and the responses that I
00:57:50
would get were things like a Ford Mustang or a Dodge Challenger and you know these these nice cars but I would
00:57:56
follow up with why not a Bugatti why not a Lamborghini why not a
00:58:02
Rolls-Royce and they would say somebody like me can never have something like that so I can't even dream about having
00:58:10
these nice things and that was really shocking to me I mean that you are kind of suppressed to
00:58:18
the point but not only do you not think that you can achieve it but you can't even dream that you can achieve it you
00:58:23
can't even achieve it in your own dreams and so when you don't believe that you are worthy of anything more than a Ford
00:58:30
Mustang how in the world are you going to work for something nicer and I'm not saying you have to work just for
00:58:35
materialistic things but this is that mindset shift
00:58:41
that if you don't believe that you can do it you are never going to be able to do it and so this is where the first thing
00:58:48
is you have to say I will become wealthy and sometimes you have to be able to find a taste of success and see what
00:58:53
that looks like and there are many ways to go by doing it I mean you can just go
00:58:59
on to Instagram and see what success looks like to some people but you start to Define what is that success and tell
00:59:05
yourself I will become wealthy not that I might not that I can but I will become
00:59:11
wealthy the second thing is money is a tool and the reason why I say that is
00:59:18
because we've been kind of hinting at this throughout this entire discussion but the reason why many
00:59:24
people are so scared to talk about money the reason why money is such a taboo
00:59:30
topic is because we are insecure about our own money I just want to pause there
00:59:35
before we carry on on the money as a tour Point um it's so interesting what you're saying about those kids so
00:59:41
interesting because I was thinking as you were speaking about stereotype threats and in my previous book I I
00:59:48
spent some time talking about self-belief and confidence and this idea of stereotype threats and some of the
00:59:54
studies I came across showed that if there's a stereotype that people like you let's say black people like me are
01:00:00
bad at a certain thing let's say maths before they do a math test if they
01:00:06
reminded a black person that they were black just got them to tick a box saying that they were black their performance
01:00:11
on that test would drop and they did the same with women so if there's a stereotype surrounding your ability and something if they remind you of that
01:00:19
part of you before you do a test your performance drops and really importantly in the studies when they don't remind
01:00:26
the black person or the woman about that particular feature of themselves their performance is the same as everybody
01:00:32
else and it's it's interesting that you say that when you're talking about money that we have a stereotype threat there
01:00:39
we we exist in a world where we think people like us make a certain amount of money and if the stereotype threat
01:00:45
studies are true that means that I'm going to show up in the world in such a way yes that's going to bring that amount of money about but it's not easy
01:00:54
to genuinely believe outside of your stereotype 100%
01:01:00
outside of the context in which you were raised I went undercover in a school in a rough area in Liverpool that was doing
01:01:05
very poorly and I was undercover as a school teacher so I was getting to know the kids and I met this one kid and I I
01:01:10
remember him saying to me um about his plans for the future and I sat there and I said do you know any millionaires he
01:01:16
was like no there's no no millionaires around here I was like have you ever met one he goes I've never ever met one and
01:01:21
in that moment I his mom which it's on video it was a channel four documentary I did
01:01:26
um he then goes but I think I want to be a millionaire and his mom burst out laughing she was on the sofa next to him
01:01:32
and she burst out laughing and I remember asking her on I remember asking her on camera saying why are you laughing and she goes no there's no CH
01:01:39
there's no chance so it's like indoctrinated into your context your family your roots your friendship
01:01:45
networks that you can't make it so it's hard it is 100% difficult and it it
01:01:52
doesn't stop in any level if for example when I told my parents
01:01:59
that I didn't want to be a doctor I was told by everybody I'm throwing my parent sacrifice away and
01:02:06
that somebody like me can never make it in business because I don't know anything about business no one in my family is a business person no my family
01:02:12
is an investor no one in my family does this you've never learned this stuff before you didn't get into business school you how are you going to do this
01:02:18
and I'm not saying this to compare I'm saying this to explain that there are so many levels to this mindset BL
01:02:27
block that if you cannot break out of this invisible
01:02:33
barrier you will never become successful when when any employee joins my team the
01:02:39
first day we make every employee every single one regardless of a role do this
01:02:45
exercise it's called the nine dots exercise and you have these nine dots on the screen and if you go to Google you
01:02:51
can see the nine dots exercise or nine dots trivia where it's nine dots we'll put it on the screen yes
01:02:56
and I'm not going to spoil it but I will actually that's the only way I can get it across but the way that this Exercise
01:03:03
Works is you have to in four lines touch every dot on the screen without picking
01:03:10
up your pen you have to touch every dot all of these nine dots without picking up your pen and so when you do that you
01:03:16
might say well uh there it's impossible how do you do that and so this is where
01:03:22
now oh okay not going over a previous line right not well you can go over a previous line but you cannot pick up
01:03:28
your pen so if there's nine dots one 1 2 3 4 5 6 7 8 nine yeah you have to
01:03:34
connect all four dots sorry all nine dots with four lines you can't curve the pen and you can't pick up your pen and
01:03:42
people will say this is impossible and the reason why you say it's impossible is because you have just created an
01:03:47
invisible barrier because now if you go outside of the box if you extend the pen a little bit further then you can start
01:03:54
to connect all of these dots and now you realize oh it is possible if I don't
01:03:59
create these invisible walls around myself if I don't put myself in this invisible box and that's what we do
01:04:05
we're all conditioned to do this to some extent if you grow up in poverty it might be that you can never become any
01:04:12
level of successful if you grow up thinking that you're going to beig be this thing it
01:04:17
might be that you can never start a business you can never become an investor if you have become an engineer
01:04:23
and now in your 30s you want to go out and do something different it might be that somebody like you can never do something different but these are all
01:04:29
invisible boxes you see it right there and that is that's why we make every team member every employee do that on
01:04:36
the first day because what we say is look we got to come here and innovate and if you want to be able to innovate and do something big you have to get out
01:04:42
of your own mind and you have to be able to break out of these invisible barriers and so now when you go back to your question it's very difficult it is
01:04:49
difficult and so how do you do it and so this goes into now your personal development what I would recommend is
01:04:55
read five books on self-development personal development and really now try
01:05:01
to implement these things into your life because until you can start to think a little bit different and you can start
01:05:07
to see the world a little bit bigger you're never going to be able to achieve the maximum level of wealth that you
01:05:13
deserve I've just uh Gone on Google and found this nine dots thing which I've got here this is the nine dots you got
01:05:19
it so you're telling me I've got to connect all of the dots without lifting up my pen exactly okay let me try you
01:05:25
have only four L and you can't curve I can I can only do four lines only four
01:05:30
lines four straight lines it's not as easy as it looks come
01:05:37
on Stephen show me how to do it so what most people do is they start
01:05:42
going like this this and then now we freeze up because I don't know where I can go next but the way that you do it
01:05:49
is we're going to break the invisible barrier so what I'm going to do now is I'm going to start the same way I did before but in instead of creating the
01:05:56
same cut that I did last time I'm going to break the invisible barrier go a little bit further down and now I'm
01:06:03
going to come up like this then I'm going to go this way and then I'm going
01:06:09
to finish it up like that you break the invisible barrier you go beyond what you
01:06:15
think you can do because you blew past your own expectations we have this invisible box
01:06:21
around ourselves and this is what you want to be able to break out of this is that mindset shift that you have to be able to make and that's the first part
01:06:28
of becoming wealthy when you talked about invisible
01:06:34
barriers it reminded me of a video that actually changed my life and it was a video of an ant some people have heard
01:06:40
me talk about this video before this is the video shows an ant and they get a
01:06:46
Sharpie pen and draw a circle around it and the Ant now believes that it's trapped in the circle no matter what it
01:06:54
does it goes around and it checks all the to the circle it thinks that it's it's trapped we can see that that circle
01:06:59
is a figment of its imagination and when I see this I think oh my God we've all got this sort of imaginary Circle drawn
01:07:04
around us and then I watched this video of a spider so they can do the same thing with a spider but the key moment
01:07:10
in this video that really inspired me is the spider's currently trapped by this pen right but in this video there's a
01:07:15
moment where the spider accidentally steps over the pen and when it steps over the pen it can never ever be
01:07:22
trapped by the pen again you'll see it in a second it's running towards WS it so this is like an imagin imaginary
01:07:28
barrier in its mind um and then if I just bring it forward a little bit this is the moment here where it
01:07:39
gets wow it's like a real wall it thinks it's a real wall and then it gets too
01:07:44
tight here it runs over it and it can never be trapped again I love that because once you break
01:07:50
it you can't be stabed after that you realize that it's an illusion that was trapping you the whole time and this kind of feeds into what we've been
01:07:56
saying about these stereotypes for me when I at a very young age when I was able to make my first money or start
01:08:02
start a business or turn an idea into a thing that put money in my pocket that illusion was broken forever the illusion
01:08:08
that the only way to become successful you said the same thing was to go to school get a degree get a job um and you
01:08:15
can't you can't unsee it you can't unlearn it yeah you can't ever go and
01:08:20
follow that same traditional path and do that again because you saw the other side
01:08:26
and until you get a taste of it you're going to be stuck and that's where again
01:08:33
all success starts with their mindset and that's why I say I will become
01:08:38
wealthy that first point though of awareness just knowing the fact that you're trapped by something and it's
01:08:43
it's not to say that I've broken out of all of my psychological barriers now I'm just in a new one I'm just in a new set
01:08:50
of barriers I think that I can be I can have nine figures I don't I probably don't think I could be a billionaire or
01:08:57
or whatever at this moment and all of us no matter how successful we think we are are in some kind of circles in every
01:09:04
stage of your life you're in some sort of barrier and you [Music]
01:09:10
know everything that you do now has to be constantly working to shock yourself
01:09:15
when I started my YouTube channel it's kind of funny uh I I didn't start my YouTube channel thinking that it was
01:09:21
going to be big and the funny thing was I always thought that I thought big I think big I'm going to start a business
01:09:27
I'm going to prove everybody wrong I didn't start my YouTube channel to make money this was kind of a hobby for me
01:09:33
but I remember and I laugh at this now I told my brother when I started my
01:09:38
YouTube channel if I hit 100,000 subscribers I don't know what I'm going
01:09:44
to do but if I had a million subscribers I'm going to shut my channel down because there's no way it's impossible
01:09:51
that my channel is going to hit 1 million subscribers like there's not 1 million weirdos in the world I going to want to watch this random guy on YouTube
01:09:57
talk about guacamole and money right and the funny thing is I started making
01:10:03
these videos I started enjoying making these videos because I started talking about the things that I wish somebody
01:10:09
would have told me before and people started to watch and
01:10:15
people started to actually enjoy it and share it with their friends and then we hit 100,000 subscribers and I couldn't
01:10:21
believe it we hit 500,000 subscribers and I couldn't believe
01:10:27
it and then one day we hit a million subscribers and I was like oh crap I
01:10:32
hope my brother doesn't remember this promise because I don't want to shut this down but then we continued growing and here I was this guy who had
01:10:42
been successful I'm already investing in real estate I've had some business success I broke out of this idea of
01:10:48
becoming a doctor and started a business and I'm still putting these limitations on myself that I can't start a YouTube
01:10:54
channel mhm why did I do that because I had never done that before I had never
01:11:00
seen this happen for somebody like me before so is there anything practical that someone who's currently trapped in
01:11:07
some kind of psychological barriers can do practically to help them be more
01:11:13
expansive with how they think about their life what I do and I don't know if I recommend this to anybody else is I'm
01:11:20
a little stubborn I'm going to kind of preface it with that is I do things
01:11:26
to stick out and be different so what I mean by this I'm going to go back to what I said before the first time I made
01:11:32
a million dollars in a year I thought originally that I would be flying in private jets and balling out and doing
01:11:39
all this stuff but I knew that I wanted something different I I wanted to build this wealth but I didn't want to now
01:11:45
start living like everybody else I wanted to do something different so I continued living small that's why I
01:11:51
continued driving around in this car because everybody questioned what the
01:11:56
heck I was doing people were wondering is just PR actually successful or is this guy a hoax is Just
01:12:04
Breath broke can you not afford a nicer car and so I kind of put myself in this position of like hearing the stuff and
01:12:12
wanted to really you talked about confidence I wanted to really build my confidence to be that person that did
01:12:18
something different and I I don't know I get joy
01:12:23
I'm a weirdo I get joy out of that when I graduated law school I told my dad before I graduated
01:12:30
law school even before that I'm only doing this for you and so when when it was my
01:12:36
graduation day everybody you know you wear a nice suit and tie and you kind of get all dressed up to go I told my dad
01:12:42
look I told you I'm going to get you the diploma but I'm going to do it on my terms so I decided not to wear a suit I
01:12:49
decided to wear a very traditional Punjabi outfit called a c pajama which is a a long shirt and pants and I wore
01:12:57
traditional it's called a Punjabi jti meaning Indian shoes
01:13:02
and for me I just wanted to do that because it gave me this confidence and
01:13:08
yeah I mean people will say what the heck are you wearing but for me I needed
01:13:13
that burst of confidence that I'm doing this for me and I I get fueled by people questioning me
01:13:22
and you have to find what fuels you I'm not first point of it's my duty to become wealthy is that just something you say
01:13:30
out loud is there a way you can remind yourself of this so I I'm not a big fan
01:13:35
of you know meditating on this idea of you become wealthy I'm not a big fan of this woo woo idea of I'm G become
01:13:40
wealthy I'm going come wealthy and that's not how it works but what I do believe is you have to keep reminding yourself and giving yourself the
01:13:46
motivation and discipline in the beginning as to why you started some fuel as to why you started so one of the
01:13:53
things I like to talk about is what is your why who are you doing this for and so in our
01:13:58
office everybody has next to their desk this this tackboard where you can put pictures or whatever it might be to
01:14:04
remind you of why you're working hard and in the beginning for me it was
01:14:10
I was pissed off I wanted to prove people wrong and I was angry and I don't
01:14:15
try to cuss on camera that often but here we go uh I was angry and the reason I was angry is because when I
01:14:26
made that decision to not become a doctor the thing that I was told was I'm throwing away the sacrifice
01:14:34
that my parents made and I started a business at the time I was working in the e-commerce world and I started a
01:14:40
sock company and so then the comments that we get was so just PR you were
01:14:46
going to become a doctor now you're selling socks and it was just very just
01:14:51
reoccurring just like ah you gave up your dream dreams you gave up all the
01:14:56
sacrifices that your family did you don't even appreciate the things the sacrifices and now you're just going to
01:15:03
sell socks on the internet and that was my
01:15:09
fuel because I knew I don't know how but I
01:15:15
knew I was going to prove you wrong toxic fuel it 100% you know it was just
01:15:21
anger just pure just anger I'm going to prove you wrong and uh slowly the
01:15:27
business started to grow I started to be seen on TV and all these things started to happen and and so I was fortunate that my business also flipped that now
01:15:34
I'm not selling socks I'm you know building this financial Media Company briefs media and now for me it's there is a
01:15:42
purpose for what I do there's a lot of people that are lacking Financial education there's a
01:15:49
lot of people that are working really hard that have no idea why they can't build any wealth they keep hearing about
01:15:57
how people are becoming so wealthy investment levels are skyrocketing
01:16:02
billionares are becoming even richer and they don't understand and people just get angry when in reality you can
01:16:10
participate in that same game and win in this game because our economic system is
01:16:15
designed to benefit investors and if you don't understand that you will never be able to win in
01:16:21
the system Point number two in your money mindset is that money is a tool what do
01:16:29
you mean by money is a tool and how is that different from how everyone else thinks about money you have to understand how money
01:16:36
plays a part in your life when I say money is a tool what I mean by that is money doesn't make you a
01:16:43
good person money doesn't make you a bad person it amplifies who you are and what
01:16:48
I'd like to say is that there are four fitnesses in your life if you want to live a happy and fulfilled life you have
01:16:55
to be physically fit mentally fit spiritually fit and financially fit if
01:17:02
you're physically fit you're on your deathbed you're morbidly obese having $10 million is not going to make you happy all you want to do is be healthy
01:17:08
again mentally fit is about being happy if you're surrounded by toxic people if
01:17:14
you're unhappy if you're depressed if you're anxious if you're just miserable you're never going to be able to really
01:17:20
enjoy life having more money is not going to fulfill that hole spiritually fit does not mean religious it means
01:17:26
having a purpose what is the reason for getting out of bed every day what is the reason for wanting to go out and Achieve
01:17:31
and do something because if you have $10 million what's the reason for wanting to
01:17:36
get up and Conquer at the very top this financial
01:17:42
Fitness and once you have the bottom three having Financial Fitness gives you
01:17:48
the most power and ability to live the best life possible because this is all
01:17:53
about now being able to solve solve your financial problems being able to not worry about paying your bills being able
01:17:59
to have the nicer stuff when you want and not have to worry about the price and the thing about this that I want to
01:18:05
really Hammer home is if you don't have this financial Fitness now your physical
01:18:11
fitness can get hurt because you can't afford the nice gym membership you can't afford the healthy food you can't afford
01:18:17
to take care of your body if you don't have the financial Fitness your mental Fitness can get
01:18:23
hurt financial problems are one of the leading causes of suicide and divorce
01:18:29
financial problems can really stress you out and they can cause a whole lot of
01:18:34
anxiety and depression financial problems can also ruin your spiritual Fitness because if you can't pay your
01:18:40
bills you can easily lose your sense of purpose so yes being financially fit is
01:18:46
its own part but it all comes together in your life number three to this money mindset
01:18:54
money is abundant and what I mean by that
01:18:59
is you have to be willing to think bigger because often times what happens
01:19:06
is we start to think about the dollars that I'm giving as opposed to the
01:19:12
dollars that I'm getting if I pay you a dollar you are getting rich off of me
01:19:18
but I'm not looking at what I'm getting if I'm getting $2 from you well is it
01:19:23
bad that I pay you $1 no and this is right now we not just we need to start to understand there's a
01:19:29
lot of money in the world just because somebody gets Rich that doesn't mean somebody else can't get rich and the
01:19:35
reason why we get this confused is because we assume that money is scarce and this comes from our childhood
01:19:43
because when you grow up you're fighting for your parents attention and there's a limited attention span that your parents
01:19:49
have if you have siblings now it's divided and so you can't have all
01:19:54
attention so if they're giving your parents are giving their attention to somebody else that means you're not getting attention it's is it's a yes or
01:20:01
no it's a black and white but with money that's not the case
01:20:07
you can be rich and I can be rich but we have to understand that there's a lot of money in the world I
01:20:13
mean the United States government has 35 some trillion dollars of debt it's a lot of money and so if you just take a small
01:20:21
piece of that a small piece of the dollars out there you can build wealth and somebody else can build wealth and
01:20:26
why is that that particular point in this m money mindset so critical why is it important to know that there's so
01:20:31
much money out there how does that change you so if you make $50,000 a year right
01:20:37
now what you might start doing if you become financially smart is you might say all right I'm going to start living
01:20:44
off of 75% of what I make and I'm going to invest the other
01:20:51
15% that means I'm going to live off of uh 30 ,000 and save and invest we'll
01:20:57
call it $20,000 you might now say ah I like this
01:21:04
idea of investing I'm seeing the potential what do I do I make $50,000 a
01:21:09
year how about I keep cutting back now I'm going to live off of
01:21:15
25,000 23,000 there's a limited number of dollars that you can squeeze out of this
01:21:21
pie but there's no limit to how much you can earn so what if I say let's flip it up a little bit how about instead of
01:21:27
trying to squeeze more pennies out of this $50,000 you have let's try to earn $500,000 a year
01:21:34
now and the first thing that's going to happen is you're going to say whoa whoa whoa $500,000 a year my boss is not
01:21:41
going to give me a $500,000 a year salary what are you talking about J well
01:21:46
okay let's break this down if you want to make more money how do you do it I don't know well let's start
01:21:53
learning where you going to to learn I don't know Google YouTube okay let's go to Google and YouTube how can I make
01:21:59
more money maybe you start by learning how to ask for raise maybe you learn to get a career change maybe you learn to
01:22:06
change jobs or maybe now you start to think a little bit different and you say maybe you start to build a side business
01:22:15
or a side hustle that way you can start earning more money but until you realize that it's possible to instead of trying
01:22:22
to go from 50,000 to 55,000 58,000 to 65,000 let's try to go a little bit bigger how about 50,000 to
01:22:29
500,000 and that's going to require number one you break out of that mindset shift that that that invisible barrier
01:22:35
but also understanding there's a lot of money out there and the last Point here is I will become wealthy which is
01:22:42
different to the first point which is it's my duty to become wealthy so we discussed the first one which is I will
01:22:47
become wealthy the last one is it is my duty to become wealthy oh okay why is it your duty to become wealthy because I
01:22:54
believe that it's up to you to take care of your family to be the one that take cares that takes care of yourself that
01:23:01
we can also help take care of your community that is my belief that it is your duty to do so and if you rely on
01:23:07
the government or somebody else to do it well you are asking for
01:23:12
problems and you know we've seen this in many instances where you might have heard in
01:23:18
the United States Social Security is drying up it's never going to dry up because the government can just print
01:23:24
more money and pay it out but it's never going to be enough to live a great life people that relied on pensions well
01:23:30
pensions are becoming a thing of the past some pensions have gone bankrupt and people have lost that so it is more
01:23:36
important than ever for you to become financially sufficient and financially stable through your own Financial
01:23:43
education Trump has just been elected the new president of the United States of America and when you saw that news
01:23:50
did it change your thesis as it relates to wealth creation is there anything you're now going to be doing differently
01:23:56
is there any new opportunities that you now see are you shifting your Capital allocation towards more risky assets or
01:24:02
less risky assets or real estate if we take a look at the last 15 presidents in
01:24:08
the United States some have been Democrat some have been Republican the stock market has gone up under
01:24:14
democratic presidents it's also Fallen under democratic presidents the stock market has gone up under Republican
01:24:20
presidents it's also Fallen under Republican presidents so what does that
01:24:27
mean well if you just investing for the long term who
01:24:32
cares but for some investors that we'll call it a little bit more
01:24:37
sophisticated you might want to understand what the president is going
01:24:42
to do in terms of Shifting government spending now I'm going to make this a little bit technical but let me kind of
01:24:48
break this down our economy is measured through a number called GDP and GDP is a measure of all spending
01:24:55
that happens in our economy in the United States the largest spender is the
01:25:01
government 30% of our GDP our economy is government
01:25:07
spending which means that there are certain entities certain businesses that will benefit depending on where the
01:25:13
government spends money and that can then impact those stocks it can impact those Industries and it can impact those
01:25:20
businesses so now let's break this down if you're a long-term investor you're investing in the S&P 500 you're
01:25:26
investing in just general ETFs and index funds and mutual funds it does not matter but if you are let's say a little
01:25:33
bit more sophisticated you want to understand the government shifts that are happening now we can dig a little
01:25:38
bit deeper so prior to the election we published a whole report in Market briefs Pro on this where what we talked
01:25:44
about is if Trump is elected president here are the things that he has said
01:25:50
that he's going to do number one he wants to deregulate Oil and Gas number
01:25:55
two he wants to deregulate the financial service industry and number three he wants to invest in the military so if
01:26:02
you're break this down oil and gas these are companies that are investing and
01:26:08
drilling oil and so if these companies have less regulations and more ability
01:26:13
to produce product and sell more product they could see bigger revenues and bigger profits number two with Financial
01:26:20
Service Industries things like the companies on wall Street if you deregulate them and give them the
01:26:27
ability to do more things they can make bigger revenues and bigger profits and crypto as well and crypto crypto since
01:26:33
the news that he's been he's going to be inaugurated the prices have just skyrocketed
01:26:40
exactly and number three is investing in the military now what does it mean to
01:26:46
invest in the military well if we're investing in the military that means that we're going to be practicing
01:26:52
shooting more guns shooting more bullets having artillery having planes and other
01:26:58
machinery and these are then done by private companies and so if the
01:27:04
government can spend and choose where to spend money and the government then
01:27:09
decides that they want to spend more money or allow companies to be more free to do whatever they want in these
01:27:15
industries those Industries then have the ability to potentially grow the revenues grow their profits grow the
01:27:21
stock prices these can then create what we call a government shift because the government spending shifts and that can
01:27:27
create an investment opportunity for investors that want to be a little bit more sophisticated but I'm going to say this again as a long-term
01:27:34
investor forget the collection Cycles you're investing for the long term for those less sophisticated investors as
01:27:41
you were when you were 19 years old you chose to invest in real estate as a cash
01:27:46
generating asset now if I want to invest in real estate it's my first investment as you did what are the things that I
01:27:54
should be looking out for if I'm someone that knows nothing about real estate what kind of properties should I be looking for how big doesn't matter how
01:28:00
how much those properties cost am I looking for family rentals studio apartments what kind of things matter
01:28:08
what you invest in is going to depend on what's best for you but the way I like to look at it for me cuz I can't tell
01:28:14
you what to do is for me when I invest in real estate is I look for a 7% cash
01:28:21
on cash return minimum what does that mean so if I invested a dollar today I
01:28:26
want 7 cents of cash flow after expenses every year for my dollar that I invest
01:28:33
so if I buy let's just call it a $100,000 house and I'm going to keep it very simple we're going to have no debt
01:28:38
I take a $100,000 out of my bank account and I buy this $100,000 house that I
01:28:44
then rent out that rent after all the expenses should then put at least $7,000
01:28:52
into my pocket and every year that's what a 7% cash on cash return means now
01:28:59
for me I prefer single family houses or multif Family Apartments because that's
01:29:06
kind of where I got started and I've found more success there and it's a little bit more Innovation proof because
01:29:12
we know that offices can go up and down if companies are working from home offices can be affected the retail
01:29:19
sector can be impacted if companies are moving online and we see that there's a lot of shifts happening in the retail
01:29:25
spaces but uh at the end of the day you got to find what's right for you and how
01:29:30
involved you want to be when I invest in real estate I want it to be passive for me that after I find a property after we
01:29:37
do the renovations I want to give the keys over to a property manager I don't want to have to worry about it okay so
01:29:43
you don't you don't become the landlord yourself and deal with the tenants directly I do not and the reason why is
01:29:50
I have all the things that I need to do and I don't want to spend my time managing the prop property I want to
01:29:55
spend my time acquiring I want to spend my time investing but I don't want to spend my time managing what's the best
01:30:01
investment you ever made the best investment I ever made is the investment of myself that has given me a much better
01:30:09
return than any real estate than any stock and even than any cryptocurrency
01:30:14
and when I say best investment in myself is two things number one is the
01:30:21
investment that I have made in my own education outside of school so books
01:30:26
podcasts classes coaching number two the
01:30:33
failures I have made a lot of mistakes they have caused me a lot of stress a
01:30:40
lot of headache a lot of money but they have taught me a ton so we'll talk about
01:30:48
real estate for a second if we go back to the first condo the sunshine and rainbows is I
01:30:54
rent this property up for $600 a month but the downfall or the risky part and the bad part is that I made every
01:31:01
mistake possible number one I hired a bad contractor number two I hired a property
01:31:07
manager which I didn't realize was a fake property manager we didn't even sign a lease with the tenant I didn't
01:31:13
even sign a contract with the property manager they weren't working with the tenants and they gave the tenant my
01:31:19
phone number so here I am sitting in my organic chemistry class getting calls from my tenant ten saying the property
01:31:25
is going to implode because the light bulb fused then we hired brought in a bad tenant can I ask you a question then
01:31:32
how could you have avoided all of this well I could have either number one
01:31:38
had a real estate investor that I could have talked to which I didn't have access to I read a lot of real estate
01:31:44
books so if you say what could I have done differently to avoid it because there's
01:31:49
people listening right now that are going Jesus I I want to get into this real estate game but I don't want to go through you can learn as much as you
01:31:55
want you're going to make mistakes it is a part of the process you can learn as everything you want but every real
01:32:00
estate deal is unique you are going to screw up and I have made a lot of screw-ups but once you get through the
01:32:05
screw-ups it becomes a lot easier I call it the hurdle but then things get even more exciting because now I bring on a new
01:32:12
property manager and the tennants move out and then we
01:32:18
think everything is good and now I get a letter Del to me hand delivered well
01:32:25
this is a nice gift it says Just Breath sing you are being sued and I said
01:32:32
what those tenants then sued me because they claimed that the bathtub
01:32:40
was too slippery when the water was on true story and now here I have this
01:32:47
lawsuit I'm 2122 I have no idea what's going on just
01:32:52
bre was the bathtubs do slippery well I'll tell you exactly what happened there was a chip about the size
01:32:58
of a quarter in the bathtub the paint had chipped they filed a complaint with my new property manager thank God I
01:33:05
switched property managers because what a good property manager does is they're going to document everything that happens so my property manager documents
01:33:13
that okay tenant complains of a chip in their bathtub we send out the contractor
01:33:18
so the property manager sends out the contractor they go there to fix the chip in the bathtub and you know what the and
01:33:24
says can you come back a different time my husband slipped and fell at a friend's barbecue and so we don't want
01:33:30
you to fix that chip today the contractor says okay we note this down he tries to then fix the chip three more
01:33:38
times but the tenant denies it every single time and so we thought okay just let us know when you want the chip fixed
01:33:44
the contractor is waiting they never brought it up again then we get this lawsuit saying that we were negligent
01:33:51
that I'm this evil greedy human being because I refused to fix this chip in
01:33:56
the bathtub which made the bathtub slippery when the water was on which caused this person to slip and fall and
01:34:02
break their hip and so now we go through the lawsuit process thankfully I had insurance but
01:34:10
the insurance company still has to pay for the attorney I still have to be involved through all the
01:34:15
proceedings and now they're claiming that because I didn't fix this chip it made the bathtub slippery and that's
01:34:21
what caused this tenant to get hurt but we had the documentation saying that they slipped and fell at a friend's
01:34:26
barbecue and then we go through the hospital records and we found out that this person slipped and fell at a
01:34:33
barbecue but they wanted to get some money out of this Rich
01:34:38
landlord I'm a 22y old kid a 21- year old kid I have no idea what's going on
01:34:44
and so the insurance company had to settle they paid $144,000 to make the case go away it's
01:34:51
interesting because even when people hear all of that they think gosh I really don't want to go through that so J PR please tell me something to avoid
01:34:57
some of those things and and you know as you were talking I was I was writing down some principles yeah and what the
01:35:03
first principle that I wrote down which could have avoided you a lot of that heartache is to really really really
01:35:09
really take time when picking people
01:35:15
100% And we no one does it no one does it and I have an Investment Portfolio where I have 40 50 companies now and
01:35:22
that if there was one piece of advice that I'd give to all of those portfolio companies which I know they are not
01:35:27
going to listen to No matter how passionately I say it no matter if I bang on the desk no matter if I scream or show them my scars the one piece of
01:35:34
advice I'd say to them is that recruitment is the single most important thing and and you can say that to people
01:35:41
but they still rush the process they still will just go with their Vibes and bias they'll still just go with the
01:35:47
person who sounds the smartest they won't acknowledge the fact that they don't know what good looks like you
01:35:53
don't don't know what good looks like if you start with this base premise which most people don't start with which is I
01:35:59
am really really bad at recruitment if you start with that then you'll put systems in place to alleviate the
01:36:06
downsides of you being really bad at Recruitment and if you had started with that when you were I don't know 20 years old or whatever it might have
01:36:12
been you would have gone to seek out someone else's opinion on which contractor to hire which tenants to
01:36:17
bring in and that could have alleviated a lot of this pain it seems like I was
01:36:23
in a rush in a rush yes I wanted to get it done and so I find the cheapest and
01:36:28
fastest contractor the cheapest and fastest property manager the cheapest and fastest or not the cheapest but you
01:36:34
know the fastest tenant that I could bring in because I wanted to do it quickly I wanted to get there fast it
01:36:39
reminds me of people picking romantic Partners I was in a rush so I ignored the red flags and it's funny because you
01:36:46
said the cheapest this is actually what plays out in business all of the time is I speak to these young Founders that are starting businesses and they go Steve
01:36:53
yeah I know you say like take time and hire great people but look at the salary this person costs $100,000 and this
01:37:00
one's $50,000 so I'm going to go for the one that saves me
01:37:05
money and that is the Trap one of the most expensive things that you can do is be cheap and I learned that the hard way
01:37:12
because I was born to be cheap you know I talked about how Indian people make a
01:37:17
dollar to spend 20 cents that was my family growing up and that was the way that I was raised
01:37:24
that if you become a doctor you'll make a nice sixf figure salary you can live off of $30,000 a year and save a whole
01:37:31
lot of money and I never questioned it but this is a very kind of just don't
01:37:36
spend money that's how you build wealth because if I give you money that means I'm taking my wealth and giving it to
01:37:42
you and I'm getting nothing in return and that's it goes back to the in that mindset money is abundant and that
01:37:48
scarcity thinking is one of the most expensive things that you can do so true and I'll
01:37:55
give you a story of this I told you I have if you want to talk about mistakes we can go for hours and days about my
01:38:00
mistakes because I screwed up a lot I had an
01:38:05
accountant and I figured that if I'm paying less money in accounting fees I
01:38:13
am saving money so my business can keep more money act and build more wealth right but one of the most expensive
01:38:20
things that you can do is be cheap so I had this accountant that was cheap and all he did was file my taxes
01:38:27
kind of I mean he was late and whatever but he was cheap the monthly payment was cheap so I didn't really care too much
01:38:34
because I got the taxes done and then I always wondered why we
01:38:39
don't like talk about tax planning what should I do it's just like at the end of the year I get this like big email send
01:38:45
me all of your stuff and then I don't hear from him for a long time and then he says sign this paperwork and I didn't
01:38:52
really think much of it but then one year it was January I'm in my office and
01:38:59
I get a call Early in the Morning from my accountant and if you get a call from your accountant early morning in January
01:39:05
it's never a good sign I didn't know that he calls me says justbu how are you doing I said I'm good how are you
01:39:10
thinking I'm going to get some good news he said hey uh I made a little mistake on the taxes could you do me a favor and
01:39:18
uh wire $18,000 to the state of Michigan by the end of the day said excuse me he
01:39:24
said oh uh also could you also by the end of the day please wire $100,000 to the federal IRS by the end of the
01:39:32
day excuse me oh and the last part you're going to have pay penalties and
01:39:38
interest on this to and it took me a minute to really absorb all this information so you want me to send a
01:39:45
hundred some thousand dos by the end of the day whose fault is this and I remember this response he said it's
01:39:53
nobody's fault and you know I I didn't really
01:39:58
process what he said but I had to think through this I said whose fault was it it's my fault that's whose fault it was
01:40:06
I wanted to blame him but it was my fault because I was being
01:40:12
cheap and I learned I hired a new accountant who cost me many many many
01:40:19
multiples more than what I was paying before but you know the crazy thing is it's actually saving me more money now
01:40:26
because we do these tax strategizing which then allows me to pay
01:40:31
less money in taxes legally even though I'm pay more money to my accountant this is one of the most pivotal things that I
01:40:37
learned in the last sort of three to four years my care I've been in business for maybe well my first business maybe 15 years ago but in the last three years
01:40:44
in particular I just got overly obsessed about hiring in Recruitment and
01:40:50
really how much the the exceptional person costs is inconsequential to the
01:40:56
long-term net impact I'll have on my business I remember I spoke to Jay Jason who's my older brother who works in my company now he's like super smart lsse
01:41:04
actal scientist he's like a calculator um and I I'd said to him can you tell me
01:41:09
where my net worth has originated from he said your net worth is X hundreds of millions or whatever I said can you like go upstream and tell me where it came
01:41:16
from and he he didn't come back and say oh you made this great bet or this investment he said effectively what
01:41:22
happened is you hired six or seven good people and those
01:41:28
six or seven good people ended up hiring a couple more good people and making a couple of good decisions and those
01:41:34
people made a couple more hires and made a couple more good decisions and it propagated and it reminded me of
01:41:39
something Steve Jobs said Steve Jobs said people think I've built this you know multi-billion Dollar business because I'm so smart and he says in that
01:41:46
interview I've built my career by doing the really really hard work of finding truly exceptional people and it
01:41:52
propagates I a players High a players b players High b b players C players high C players so
01:41:58
the game of business I mean the definition of the word company is group of people but the game of business is to assemble the best group of people and if
01:42:05
you're cheap that mission is not possible yeah and and you you'll get a shortterm win
01:42:11
but the long-term pain which is that January phone call from your accountant when they say I [ __ ] up you get what
01:42:16
you paid for just and and you know it goes back to we talked about touching the fire right becoming successful means
01:42:24
you're going to make mistakes you have to make mistakes you cannot bypass the mistakes you ask me how does somebody do
01:42:29
this without the mistakes you're going to make your own but the difference between somebody who becomes successful and somebody who does not become
01:42:36
successful is they are willing to make those mistakes see most people say I don't want to try to touch the fire I
01:42:41
don't want to risk it but until you touch it until you screw up you're not going to know it's hot and You' got to
01:42:47
be willing to screw up I want to add something to that as well which I noticed in you you just said that
01:42:53
unless you're willing to make mistakes you're not going to become successful but there was a question I asked you I said whose mistake was it when I was
01:43:01
talking about your accountant and I was testing you because I was I was trying to see where you put responsibility
01:43:06
today and I think that point of taking responsibility is actually the biggest indicator that that mistake turns into a
01:43:13
lesson so your your accountant [ __ ] up clearly incompetent but when I asked you whose fault was it you said it was my
01:43:19
fault and that immediately tells me that you don't have an internal locus of control are you the control of that
01:43:25
decision and your belief of where the control lies is within you so in the future you can do something about it but
01:43:31
when I speak to people about bad relationships about bad hires or about
01:43:36
any sort of bad personal decision they've made maybe a bad friend 99% of the time they will blame the person that
01:43:44
was a bad person and what you did is what I think is the most important thing and actually the science cooperates that
01:43:49
if you have this internal locus of control internal responsibility for what happens you're much more likely to be successful much more likely to learn
01:43:55
from it much more likely to be happy much more likely to be rich which as you went it was my fault can I tie that
01:44:02
together now with wealth when people ask me why is it that so many people are
01:44:08
poor and struggling with money I say there's two things at fault and there's two ways you can look at it there's the
01:44:15
it's your fault and the my fault and I always like to talk about both of these because you have to understand this
01:44:20
because it ties in very well and I appreciate all the kind words because I I really do appreciate that but when I
01:44:26
say it's your fault look our economic system is designed to profit off of
01:44:32
people being financially stupid period Banks profit when you're
01:44:38
financially stupid because that means you stay in debt and they keep making interest for the rest of your life
01:44:44
corporations profit when you're financially illiterate because that means you're going to keep buying their
01:44:49
stuff and not think twice and they're going to hire the best and smartest mbas to get you to open up their wallets to
01:44:56
open up your wallets number three the government is going to profit when you're financially illiterate because
01:45:01
that means you don't do anything outside of your W2 job and you're going to pay the highest tax rates you profit when
01:45:07
you're financially educated so now what can you do you can say they're the reason I'm broke this company is the
01:45:13
reason why I'm broke my company is the reason why I'm broke the government's the reason why I'm broke the banks are the reason why I'm broke well that's not
01:45:19
what I'm saying that's just part one the second part to part one before I get to part two is once you understand this you
01:45:27
can learn how to win you can learn how to use the bank you can learn how to use corporations because you want to have
01:45:32
nice stuff you can learn how to use the resources that the government has but now let's flip the script the second
01:45:39
part to this that you need to understand it's your own responsibility because if you spend
01:45:45
every dollar that you earn you're never going to become wealthy if every time you make money you go on a nice vacation
01:45:50
you're never going to build wealth if you can't afford it if you just make money and you make everybody else around
01:45:56
you rich before you make yourself rich that's your choice people don't want to
01:46:02
take personal responsibility though you know it's a topic I always talk about um because that's like holding a mirror up
01:46:08
to yourself it doesn't feel good does it to say that it was my mistake I'm the reason why I don't have money I'm the
01:46:14
reason why I'm living in this you know this little bedsit with these four
01:46:20
strange guys when I was 18 years old and I didn't have car Carpets on the floor and I was shoplifting food to feed
01:46:25
myself I'm you know that hurts to say that it was me it's my deficiencies the
01:46:30
self-esteem doesn't want to to take such an attack and you know what here's the
01:46:36
thing it might not be all your fault there might be a lot of reasons why you're in that crappy situation there
01:46:42
might be a lot of reasons why you're struggling with money today you might have grown up in a very crappy situation
01:46:47
you might have had horrible parents you might have had a horrible upbringing you might have had horrible surroundings you
01:46:52
might have been dealt a horrible set of cards okay now what now what you were
01:47:00
now the question is are you going to take that responsibility today going forward or not and you have to take that
01:47:05
drastic responsibility you have to take that drastic mindset shift and that's what you have to do and it's difficult
01:47:12
who wants to blame themselves but if you want to change
01:47:18
where you are they're not going to do it your Banker is not gonna say
01:47:23
Hey Stephen you know you can't afford this car don't take this debt don't take
01:47:28
this house because if they can sign you up they're going to want to get paid they're in the business of making money
01:47:34
not for you but for them Gucci is not going to say maybe you should buy some
01:47:39
stocks instead of this purse because they're going to want you to buy their stuff the government's not going to say
01:47:46
hey why don't you take a look at our balance sheet I'm gonna get I'm gonna
01:47:51
take this little tangent the government says student loans are a problem we've all heard that Millennials
01:47:59
can't buy houses they can't buy their home they can't invest because they have student loans the government says
01:48:04
student loans are a problem really let's take a look at the United States balance
01:48:09
sheet your balance sheet is your asset and liability statement the number one
01:48:15
largest asset on the United States government balance sheet are student
01:48:21
loans so here we keep saying oh student loans are bad we keep hearing this from the government but on the other hand the
01:48:28
government is so rich because of the student loans because so many people are
01:48:33
stuck in these student loans and guess what you pay the highest tax rates when
01:48:39
you were just an employee I'm an attorney I'm not your attorney but I am a licensed attorney and I spent a lot of
01:48:45
time studying the tax law and what I can tell you is that the
01:48:50
tax law rewards you when you are an
01:48:55
investor in 2024 the CEO of Coca-Cola James Quincy
01:49:01
is going to make about $8 million in cash compensation he'll also get Equity but about $8 million in cash
01:49:07
compensation his top tax rate on that $8 million is going to be 37% on the
01:49:12
federal taxes in the US Warren Buffett is going to make over $700 million from
01:49:19
Coca-Cola dividends in 2024 his his top tax rate is going to be
01:49:26
20% he's making way more than the CEO but he's going to pay less in taxes on a
01:49:32
percentage level because he made that money as an investor we're never taught that this
01:49:39
goes one step further though doesn't it because if you look at someone like an Elon
01:49:44
Musk they never even take a salary these people and people don't know about this
01:49:50
thing called loaning against your assets I didn't know about it and I think it's a big secret that people need to know
01:49:56
about Elon Musk is interesting because he's a risk taker and he chose to get paid not in
01:50:07
salary and if we look at the tax benefit from this is because you are taxed not
01:50:13
on your income that's not what the tax code says you are taxed based on your taxable income so now what every
01:50:21
accountant every smart accountant every every smart accountant is going to focus on reducing your taxable income and so
01:50:27
what Elon Musk did is when he was building TX Tesla he negotiated with the
01:50:33
investors and the board that I want to get paid not with a salary I want to get paid with stock
01:50:40
options a stock option gives you the right to buy that stock and he was
01:50:45
awarded these Tesla stock options at about $6 a share which means if the Tesla stock
01:50:52
goes up to to $7 a share he could sell the stock option for $6 and profit $1
01:50:57
for each stock option now he was given millions and millions and millions of these stock
01:51:03
options and so now when the Tesla stock goes up to $100 a share now he is Rich on paper he doesn't
01:51:12
have any money in his bank he hasn't gotten a salary so he has no taxable income because he hasn't actually
01:51:18
received any money he has the option to sell this stock for six
01:51:23
and in return get $100 so net 94 but if he sold that stock he would
01:51:30
have $94 of income now you have a tax because you have taxable income so instead what he does is he goes to the
01:51:37
bank and he says Hey bank I have these millions and millions of stock options
01:51:43
that are worth billions of dollars would you like to loan me a million $10
01:51:49
million $100 million at three four or 5% interest no bank is going to say no
01:51:57
because the collateral is so valuable what's the collateral the collateral is the company it's his assets the stock
01:52:03
options which is Tesla in this which is Tesla in this instance so then he gets let's call it a
01:52:09
$10 million loan from the bank now he has $10 million in his bank account but
01:52:14
it's not an income it's debt debt is not taxed if you go out and get a mortgage
01:52:21
for a half a million dollars you're not taxed if you do a Cash out refinance you're not taxed because that's debt so
01:52:28
now he gets this $10 million of loans that he can spend to buy a house to buy a car to buy food to buy vacations to
01:52:34
buy whatever you want buy Twitter to buy Twitter and pay no money in taxes and it's 100% legal now you're going to say
01:52:41
well just prit how does he pay it back well let's just assume that you're
01:52:47
going to get a 5% interest on this if the value of Tesla goes up by say
01:52:53
7% he made a profit so now he can go back to the bank and say how about you
01:52:58
give me an additional $10 million and he can pay back the old loan because the value keeps going up and as
01:53:05
long as the value keeps going up no problem but you can start to see where this gets risky because if Tesla goes
01:53:11
bankrupt now we're talking about a house of cards that can collapse and now you have all this debt that you've already
01:53:17
spent and no more collateral but in his case he could
01:53:23
if Tesla starts to fall in value then the bank will call payment so if it say
01:53:31
it might be I don't know Tesla Falls from let's say 100 to $10 a share
01:53:36
they're going to call payment he's going to get what what's that called he's going to get a um Margin Call a margin call which means that they're going to
01:53:42
say give me the money back quick yes and or they're going to sell off the asset and to get their money back quick
01:53:49
and it's a losing transaction the bank will lose because if they Banks do not profit from margin calls because once
01:53:55
you start making margin calls that's in panic hits yeah and now you have to scramble to sell and now the bank is
01:54:03
just trying to get pennies back out of every dollar that they lent out I'm going to get old
01:54:09
someday and um I think a lot about making sure I'm wealthy enough so
01:54:15
that I can take care of myself when I probably can't work a lot of people talk about this retirement crisis MH that the
01:54:22
UK and the US are in what is the retirement crisis and why why does it
01:54:27
matter to any of us and what do we do about it this is a multifaceted
01:54:32
issue the first issue is we have this huge population of old people Baby
01:54:39
Boomers that are retired or entering retirement that have not enough money
01:54:47
this is not just the US this is also the UK like you said which creates a few issues
01:54:53
number one who's going to take care of them number two who's going to fund that
01:54:58
taking care of them the government doesn't have that money and the people that are going into
01:55:05
retirement don't have that money and their kids many times don't have that money that's the first
01:55:12
issue and now as we start to dig into that we have people that are working
01:55:18
longer and it creates now now this problem in
01:55:24
the future that we can see today if you're in your 50s 40s 30s 20s teens you
01:55:32
can see that there's this problem that's happening how do we prevent that
01:55:37
today because I don't know what the solution is for this retirement crisis I don't have a solution for that the
01:55:43
average retirement savings for Americans age 60 is roughly $500,000 and the average age of death in
01:55:49
the US is 77 years old so if you retire at 67 years old which is the average age
01:55:56
of retirement in the United States then for the next 10 years you're going to have to live off about
01:56:02
$50,000 um and the stats say that well I actually got this from your YouTube
01:56:08
channel the minority mindset YouTube channel said that the average American needs between1 to2 million to retire
01:56:16
comfortably according to USA Today We need about $1.8 million to comfortably
01:56:21
wow and the reason why is every year we have
01:56:28
inflation so if you live off of $50,000 this year you're going to need
01:56:35
maybe 52 53 $54,000 next year more the
01:56:40
year after that more the year after that and $50,000 doesn't buy you what it did
01:56:46
30 years ago and so now when we take a look at all these issues happening the question
01:56:52
question is what do you do today to prevent these issues in the
01:56:57
future and starting with in the United States we have what's called Social Security which is a government check
01:57:04
that you get when you retire the first problem with Social Security because Social Security is
01:57:11
drying up this is a fact that if you read the headlines they'll say social security is going to be dry by
01:57:16
20134 if nothing changes the problem is people are paying money in but the
01:57:23
government is paying out more than what's going in so from any business perspective if you have more cash
01:57:29
outflows and cash inflows you have a problem and the reason for that is well number one the math was wrong and number
01:57:35
two people are living longer so when the government keeps paying your social security check longer and longer and
01:57:42
longer because people are living longer life expectancy is getting higher that means they have to keep paying that's
01:57:48
not good for the government now on the plan right here to La I sat next to somebody who was
01:57:54
telling me I didn't verify this but he told me that the government knew that this was going to be a problem from the
01:58:00
get-go because he told me that the first recipient of the Social Security program
01:58:05
lived to a 100 I don't know if that's true or not but you can Google that to see but that's the problem right now
01:58:12
Social Security is is running out of money and this is where everyone says Social Security is going to run dry you're never going to get a social
01:58:18
security check that's not true either the reason why I say that is because because the government won't let it fail
01:58:25
they'll either raise your taxes or they'll just print that money but the problem with it is you will never be
01:58:33
able to live comfortably off of Social Security that was never the intention
01:58:38
but many people are looking at it as I'm going to be able to live comfortably from this government check but here's the problem let's take
01:58:45
a look at what's happening today between 2024 to 2025 social security recipients are
01:58:53
going to receive a 2.5% raise for inflation what they're
01:59:00
saying is we have this inflation in 2024 and because of this inflation in 2024 you're going to get a 2 and a half%
01:59:07
raise there two problems with that number one that raise is not enough things are getting a lot more expensive
01:59:13
even though the rate of inflation is falling I mean 2 and a half% raise is not going to keep up over the real cost
01:59:19
of living growth that most people feel the second problem is it's a delayed
01:59:25
raise the government gives you a raise in 2025 based off of the inflation you
01:59:30
had in 2024 so we already had this price growth and then you get the raise next
01:59:36
year and guess what we're going to have more inflation in 2025 so relying on social security is a
01:59:43
losing proposition which brings the next part of this three-legged stool see have
01:59:48
social security then you have pensions pensions have become a thing of the P I mean if you're under the age of
01:59:53
45 chances are you're not getting a pension and even if you're over the age of 45 and you're promised a pension you
02:00:00
better cross your fingers to hope that that pension fund does not go bankrupt because there have been many Pension funds that have gone bankrupt and people
02:00:07
are left with nothing which leaves number three your own savings and
02:00:14
Investments and this is where we have so much a lack of understanding because
02:00:23
people are not doing enough this goes back to the whole financial education we make money to spend money
02:00:31
that's what the American culture is I make $1,000 I'm going spend $1,000 maybe
02:00:37
$1,200 but you're never going to be able to retire with that sort of mindset and here's the second problem with that I'm
02:00:44
just going to lay the problem so we'll come up with a solution you might say well I need a financial adviser no good financial adviser
02:00:52
nowadays wants to work with anybody under $500,000 in assets maybe $250,000
02:01:00
in assets maybe if you get lucky $100,000 in assets but if you have under
02:01:06
that they don't want to work with you because they want people to have some
02:01:11
money to actually make money off of right the financial advisers got to eat too so if you don't have the Investments
02:01:17
you don't have the education now you're stuck and this is where now your Financial education comes in because if
02:01:24
you want to build wealth you want to have quote unquote retirement you got to do something different you can't keep
02:01:30
doing what the majority of people do because if you keep doing what the majority of people do you're going to end up like the majority people and
02:01:35
right now that's broke in debt living paycheck to paycheck fat and unhappy and
02:01:42
I'm not saying this as a general term I mean statistically that's what the majority of people are especially in America so
02:01:49
now let's come up with the solution cuz we have laid out the problem the first solution is Define what is
02:01:56
retirement because I'm going to get a little philosophical here but I have my issues with traditional retirement
02:02:04
there's a saying that says Those Who retire early die early the reason why is
02:02:09
because if you work from the age of 21 to 65 maybe 67 at a job you hate but you
02:02:17
work every single day and all you're looking forward to is retire at 67 you retired 67 you have this great big
02:02:24
retirement party now you come home and you sit on the sofa and you start watching
02:02:29
TV you start to lose your sense of purpose and I've seen this very closely
02:02:35
with people in my not my family but close to my family where I've seen people who were
02:02:41
healthy energetic maybe didn't love their work but they had a reason to get up every day go to work retire and
02:02:50
literally go insane I mean you you have nothing to do and now you start to see health issues that you didn't have
02:02:56
before you start to have mental health issues which you didn't have before and all these things just start to happen when you were going to enter your golden
02:03:02
years even if you have the money to do things so when we talk about what is
02:03:08
retirement I want to caution everybody or if you have parents to
02:03:13
start thinking about what do you want to do during retirement because if your goal is to do
02:03:19
nothing you might enjoy it for the first few weeks maybe 6 months but eventually you're going to get bored so you got to
02:03:25
have something to do then is the financial side of retirement what is retirement and I have a different
02:03:32
definition than most people most financial advisers don't like me for the things that I say but my definition of
02:03:40
retirement is the same as my definition of wealth wealth is for me when my cash
02:03:47
flow from my investments exceeds my expenses it's very simple if my expenses are
02:03:55
$4,000 a month and my cash flow from my stocks and my real estate and everything
02:04:00
else is paying me $4,000 And1 a month I am
02:04:06
wealthy so now the question is how do you actually achieve this type of wealth
02:04:14
retirement the reason why I don't like the word retirement as well besides the connotation of I'm going to do nothing
02:04:20
is they assume there's I got to be 67 years old to hit this retirement when
02:04:25
you can achieve this wealth way sooner and now you have more options so
02:04:31
retirement Is wealth wealth is when your cash flow from your assets exceeds your expenses how do you actually do this
02:04:39
now well you got to buy the assets and in order to do that you have
02:04:45
to have the money and many people assume that the
02:04:50
way you get rich is by Investing For passive income you get rich by investing in real estate you get rich by buying
02:04:57
this cash flow that's a lie you have to have the money
02:05:03
first you have to have the money to invest in real estate you have to have the money to buy the cash flow so if we
02:05:09
just make the numbers very round and simple if I need $70,000 a year to live my life and I can
02:05:19
get a 7% cash cash flow on my investments I need to invest a million
02:05:25
dollar to have that $70,000 a year to fund my
02:05:31
lifestyle now you're going to say where in the world are you going to get a million dollars you don't need it today
02:05:38
it can happen over time right when people talk about retirement planning they're thinking about 45 years so when
02:05:44
we talk about wealth why can't we talk about the long term it's not going to happen in two days but it can happen if
02:05:50
you put in that work so now you have to put aside this amount of cash to buy certain Investments that
02:05:57
can pay you this type of cash flow the second thing is well what about
02:06:04
inflation jit you talk about this all the time the buying power of my dollar
02:06:10
is going down $70,000 when I'm 65 years old in a few decades is not going to
02:06:17
have the same buying power as today you're right but here's the thing when you invest your money into dividend
02:06:24
paying stocks which are stocks that pay you or into strong real estate these are inflation adjusted Investments which
02:06:32
means generally as inflation happens rental
02:06:38
prices go up as inflation happens stock values and dividends also go
02:06:44
up and this is where now if we start to understand this you'll understand the
02:06:50
power of this because it's actually a little bit more extreme we've probably heard about you
02:06:57
know the wealth Gap in America and how the rich are getting richer and the poor are getting
02:07:03
poorer well the reason why that happens is because investment values
02:07:09
grow faster than incomes and inflation benefits
02:07:15
investors so you see how we start to tie this all together because wealth is about owning Investments the way you become wealthy
02:07:21
by owning Investments our economic system is designed to benefit investors if we take a look at 2019 to
02:07:29
2024 over those 5 years household incomes the median
02:07:35
household income grew by around 18% during those 5 years the S&P 500 the
02:07:43
stock market has grown by almost
02:07:48
100% which means that the wealth for investors has grown almost five times or
02:07:55
about five times faster than incomes this is why you can't earn your
02:08:01
way to wealth you can't save your way to wealth you have to invest your way to wealth and remember wealth is retirement
02:08:07
and you might say well despy that's just because of the pandemic and everything that after happened after the pandemic well let's go back in time let's look at
02:08:14
it a little bit broader let's look at the five decades between
02:08:19
1971 and 20 21 over those five decades household
02:08:26
income increased by around 600% now mind you that between 1971 and
02:08:34
2021 we also saw the number of workers in a household increase between in
02:08:40
1971 the average household had one person that went to work the man went to work and the woman didn't that's how
02:08:46
life was in early 1970s in 2021 many households are two household incomes so
02:08:51
1971 to 2021 the median household income grew by around 600% the S&P 500 the largest 500
02:08:59
companies in the stock market grew by around 4,000% so again inflation happens
02:09:06
inflation benefits the investor how do you become wealthy it's by investing your money so if you want to retire if you
02:09:14
want to build wealth you have to be an investor and you have to calculate what is that wealth number for you for me the
02:09:21
way that I do it is I do it through cash flow most of my investments my real estate Investments pay me cash flow when
02:09:27
I buy a property I buy it for the cash flow most of my stock market Investments are dividend paying assets meaning they
02:09:33
pay me cash flow dividends just for owning the stock some of my investments grow in
02:09:40
value they're more appreciative they're more appreciation but when I think about
02:09:46
retirement for me it's cash flow exceeding my expenses
02:09:51
what about starting a company should people become entrepreneurs well I think everybody in
02:09:58
America needs to be business owner but the majority people should not operate a business when you invest in a stock you
02:10:06
become a business owner you don't operate the business if I go out and buy a share of Amazon I'm not working in the
02:10:12
company I'm not operating the company but I own some of it some people should start a business I'm a huge advocate for
02:10:20
entrepreneurship for the right person who's the right
02:10:25
person I used to think everybody needs to become an
02:10:32
entrepreneur because when I started to see success as an entrepreneur I crossed
02:10:38
that invisible barrier I said oh my God people need to see this you have to
02:10:44
become an entrepreneur you can do things on your own and I was preaching this to
02:10:50
my friend friends I got one friend of mine who was an engineer to quit his job
02:10:58
and to then join me he would come to my office and I would talk to him about things and I said you know different
02:11:03
ways you can do this and I realized pretty
02:11:09
quickly he is not meant to be an entrepreneur the work ethic was
02:11:14
different when he would go home he didn't want to work and that did not click to me what do you mean you don't
02:11:20
want to work after 5:00 like that there's no stop point when you're starting a business
02:11:26
you got to start the second thing was the way you think about risk it's oh
02:11:33
well if I invest $100 how fast I'm going to make the money back am I going to make this money back it became all these like little
02:11:39
analysises before you've even done anything you got to start and then it's
02:11:44
the innovation of what are you going to do it's asking for a blueprint tell me exactly what to do tell me exactly what
02:11:50
to sell tell me exactly how how to sell it I don't know what you are good at I
02:11:55
don't know what problem you can solve I don't know what Innovation you can create and this is where I go back
02:12:03
to I am a big advocate for entrepreneurship for the right person who is that right person somebody who
02:12:09
has this entrepreneurial itch that you have this this I need to create
02:12:16
something this I can't work for somebody else's feeling this I want to build
02:12:22
something it's a very much like I don't care what it takes I don't care what I have to do this is what is my calling
02:12:29
and as you say there you're going to have to tolerate uncertainty and when I say uncertainty I
02:12:35
mean comfort as well the lack of a blueprint the lack of certainty about how much you're going to make this month or how quickly you're going to make
02:12:41
money or if you're going to make money risk which is you might have to put a lot of things on the line including your
02:12:46
reputation and you said hard work as well so are you willing to work seven days a week and you're right you know
02:12:53
when people say that they think it's super toxic but like in my own experiences of starting businesses but
02:12:58
then on every friend that I have that started a business they'll all tell you that there's absolutely no such thing as
02:13:03
9 to-5 you work you work whenever you have to work and if you're at a bar mitzvah or a wedding or a anniversary
02:13:09
meal with your partner at any moment you might get a horrible email and you have
02:13:14
to act upon it you can't say I'm going to save that till Monday or not my problem oh yeah and I'm going to add one
02:13:21
more to that list the willingness to be criticized oh yeah any business you start you are
02:13:29
going to upset a lot of people at every stage of the business I
02:13:34
mean this is really important because much of the reason why people want to be entrepreneurs is because they want to be
02:13:40
their own boss but what's so interesting about the story you told about that tenant is you became her
02:13:47
boss whenever I speak to entrepreneurs there's one problem that always comes up but today's sponsor LinkedIn has a
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diary won't change your life but the Habit it teaches you definitely will the
02:14:51
most unhelpful advice that I ever received was don't sweat the small stuff you have to sweat the small stuff I
02:14:57
sweat the small stuff I always have and I always proudly will because small
02:15:02
things that are easy to do are also easy not to do it is easy to save a dollar so
02:15:08
it's also easy not to it is easy to brush your teeth so it's also easy not to it is easy to make a 1% Improvement
02:15:15
so it's also easy not to understanding the power of compounding 1% you can
02:15:21
absolutely change your outcomes in your life it isn't about drastic Transformations or quick wins it's about
02:15:27
the small consistent actions that have a lasting change in your outcomes so two
02:15:32
years ago we started the process of creating this beautiful diary and it's truly beautiful inside there's lots of
02:15:37
pictures lots of inspiration and motivation as well some Interac Dev elements and the purpose of this diary
02:15:43
is to help you identify stay focused on develop consistency with the one perents
02:15:49
that will ultimately change life we're only going to do a limited run of these Diaries so if you want one for yourself or for a friend or for a colleague or
02:15:56
for your team then head to the diary.com right now I'll link it below one one of
02:16:01
the things I really wanted to to talk to you about as well is just a word that I think is so pertinent to everything
02:16:08
we've talked about today which which I think is important which is the word patience because there's some areas of
02:16:16
my it goes to what I said about my friend my friend who's been in our group chat who's made more C than all of my
02:16:21
other friends in that group chat and he's done it by being boring impatient like he's he's just flown
02:16:27
under the radar and when I think about my life and many of the Investments I'm making now I'm like oh God what is it
02:16:35
I'm looking over there my friends buying some like crypto meme coin and he's told me it's gone up 150x this month I'm
02:16:40
looking over there and people are investing in I don't know the the they're picking stocks and stock trading whatever and they're telling me it's
02:16:46
gone up 50% but in my wisdom as I've gotten older I've realized like the tortois in
02:16:53
the hair that boring and patient is such a wonderful investment strategy it's
02:16:58
such like a paradoxical way to think I have so many seeds that I've planted
02:17:03
that are taking forever to grow but I just now know because I've got enough case studies in my brain that that
02:17:08
boring impatient approach to wealth will put me in a better position at the end of the game
02:17:15
yes and you have to be sometimes impatiently patient
02:17:22
so if we talk about Building Wealth through investing your money the numbers
02:17:27
have shown that over the last century the stock market has gone up by an average of 10% a year
02:17:34
historically but many people lose money when investing in stocks I mean if you go around talking people have you
02:17:39
invested in stocks yes yes yes how many of you have made money the hands start dropping well if the stock market has
02:17:45
gone up by around 10% a year on average every year for the last 100 years why
02:17:50
why are so many people losing money because we start playing the wrong game and so now what happens if you invest
02:17:59
your money into the stock market and by the stock market I mean let's just say you buy the S&P 500 which is a basket of
02:18:05
the 500 largest companies in the stock market for example not Financial advice if you invest in spy that is an ETF that
02:18:12
gives you exposure to the 500 largest companies we know that historically that's gone up by 10% a year but that's
02:18:19
not enough for a lot of people so now I'm going to play this game of I'm going to try to beat the
02:18:24
market and some people will most won't so now some people are going to try to get into the game of investing in
02:18:30
individual companies or maybe trading companies because even investing in individual companies if you invest for
02:18:36
the long enough period of time you're probably going to win but many people now want a quicker
02:18:43
solution so now we start trading we start finding hot companies the next Tesla the next Amazon we see what Reddit
02:18:50
says see what Google says and we start buying these things because we're excited but that excitement is what's
02:18:58
killing your wealth because you're investing On Emotion instead of investing on
02:19:04
financials and so this is where you talk about what's boring just keep doing the market keep
02:19:12
investing in the market when the Market's up when the Market's down when the market sideways just keep investing because that has been proven to win we
02:19:18
know that if you invest a $100 a mon month from the age of 21 until your
02:19:23
retirement 6566 and you can get that same 10% return you're going to retire a
02:19:30
millionaire assuming you only invest $100 a month from the age of 21 to 65 or
02:19:37
66 it's so interesting because when I asked you earlier what the best investment you ever made was you said
02:19:42
the investment you made in yourself and maybe we've not spent enough time really
02:19:48
talking about how critical Knowledge and Skills are to wealth generation maybe that is the first
02:19:55
principle of wealth creation maybe that is the furthest thing Upstream is Knowledge and Skills um and you can you
02:20:02
know dabble in stocks and whatever else but really over a 50-year Time Horizon
02:20:09
your Knowledge and Skills and you know your knowledge might be of patience your knowledge might be of real estate
02:20:14
investing your knowledge might be of whatever your knowledge might be of a philosophy towards investing really it's your Knowledge and Skills they're going
02:20:20
to determine where you end up so as it relates to getting those Knowledge and
02:20:26
Skills where's the best place to people to go other than obviously the Dio you
02:20:31
know but outside of this podcast where is the best place for people to go to get Knowledge and Skills that they can trust without getting scammed without
02:20:37
having to pay for some call from some YouTuber who's charging $3,000 a month for like a you know to tell them
02:20:45
something that reading off chat GPT what is like the best place well the best best place is to go out and do it screw
02:20:52
up make mistakes but along with that start with what's free YouTube podcasts best book
02:20:59
you've ever read the first book I'll start with that because the best is it changes yeah the first book I ever read
02:21:05
cover to cover was Rich Dad pad the second book was Total Money Makeover Rich Dad pad is by Robert kosaki Total
02:21:12
Money Makeover is by Dave Ramsey the third book is a book called uh the creature from Jackal Island which talks
02:21:18
about the Federal Reserve Bank those three books are going to give you a foundation of money and different
02:21:25
perspectives of it so start by learning for free even
02:21:31
before books start by watch a YouTube video start by listening to podcasts then you take the next step and you start reading books and what I talk
02:21:37
about is if you go out and over the next 12 months you read five books on money management and investing I just gave
02:21:43
three read five books on personal development and self-development read five books on how to start a business
02:21:49
read five books on leadership and then read five books on how to scale market
02:21:54
and build grow your business you're going to have an MBA level education for a fraction of the cost start with that
02:22:03
and then go out and make mistakes and as you grow that's when you can start
02:22:08
buying classes and other things because you'll find people that you might want to get Consulting from but start with
02:22:14
that what is the most important thing we didn't talk about today as it relates to wealth creation
02:22:21
the most important thing that I think we did not talk about is we we talked about
02:22:26
the economic system we talked about the principles but I think we didn't get into the actual steps now of how do you
02:22:33
preserve and protect your wealth and how do you now continue to use wealth protection tools because there's a lot
02:22:40
of that that every single wealthy person is investing a huge amount of time
02:22:46
effort and money into that most people have no idea even exists we started to touch on taxes but there's so much more
02:22:54
so on those wealth preservation tools what exactly are you referring to starting with first your accounting and
02:23:00
taxes then we get into the legal your estate planning what types of attorneys what types of legal protection and
02:23:06
Shields and tools can you use to structure your business your Investments to protect you but also amplify your
02:23:13
wealth and then things like insurance but then also you're estate
02:23:18
planning because you talk about generational wealth well generational wealth isn't just the money it's what your money does after
02:23:24
you die and you can control that when you're alive we have a closing tradition on this podcast where the last guest
02:23:30
leaves a question for the next guest not knowing who they're leaving it for and the question that's been left for you
02:23:38
is what wakes you up every morning oh I'm excited I don't use an
02:23:43
alarm I'm I'm I'm get up by the purpose I'm excited by the mission I mean I I love what I do uh the purpose the
02:23:51
mission that's what gets me up every morning what about yourself and your own
02:23:56
happiness and mental health and you know you know I I am happy I I've been so
02:24:04
fortunate I've always been one of those people you could put me in a box and I'd
02:24:09
have a great time I would turn that box into an airplane and I'd be flying it around before I came here my wife recorded a video I found this so we were
02:24:16
in a hotel um and they gave these cans of water okay these two cans of water I took them I
02:24:22
said record this video I went on the balcony and I did a Stone Cold Steve Austin mock video where I opened up the
02:24:28
cans of water and just dumped it on myself just I don't know why and I sent it to my cousins I've been very blessed to uh I
02:24:38
can have a good time with anything I'm a pretty light-hearted guy I know I talk about serious stuff but I I've been very
02:24:44
fortunate on that and uh I can have fun in a lot of situations
02:24:51
I'm not driven by materialistic things um there are some certain things that are like I will spend money on luxuries
02:24:57
uh my wife got me into that into like like nicer hotels and nicer travel and those conveniences I
02:25:04
like uh and I want to keep my wife happy so whatever you know she likes but I I'm
02:25:09
not driven by fancy cars fancy clothes uh that to me is not as
02:25:14
important I I I like to see change and I want to help Empower
02:25:20
people people and that gets me excited uh if you had to bring it down to five things that are driving you then what
02:25:25
are those five things number one taking care of my family yep number two is my own purpose
02:25:33
and Mission and feeling excited like my personal excitement yeah number three is the mission yeah is to continue help
02:25:40
people number four is to bring light to the
02:25:45
community number five is to continue giv him back and to help
02:25:51
just PR thank you thank you so much for being so generous with your time and I've learned so much um about so many
02:25:57
things and I've had so many sort of ideas reinforced and sometimes that's it you
02:26:04
know I do these conversations because I've been out there in the world and I've met people who have listened to
02:26:09
these conversations about wealth and finance and money and sometimes in life all it is is just a little seed of
02:26:17
information that can absolutely change the trajectory of not just you but the generations that come after you and
02:26:23
that's exactly what you're doing that's exactly what you've done on your YouTube channel for so many people that probably will never get to say thank you to you
02:26:28
but it's to give these little seeds of inspiration and information and you never really know which seed is going to
02:26:33
change someone's life but what you do is you just continue to plant them and hopefully those people will water them
02:26:39
for themselves so thank you so much for what you do thank you for being so generous with your time today and please do keep doing it because our education
02:26:45
system is a bit of a cookie cutter and optimizes for creating people that are part of of a system which doesn't seem
02:26:53
to be designed with their best long-term interests in mind and that's why we have these problems that's why we live in this credit Society that's why we have
02:26:59
these retirement issues and that's probably why we have so much mental health issues and depression but it's
02:27:05
people like you out there that are giving us the information that gives
02:27:10
us a chance a chance to live a different life so thank you for that JRE I really appreciate you thank you for having me on it was really a
02:27:18
pleasure Chuck me that perfect Ted one of the things that I think about all the
02:27:23
time because my life is quite hectic and busy is how to manage my energy load and as a podcast you kind of have to manage
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02:27:35
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02:27:48
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02:27:54
artificial ingredients which my body didn't like and that's why I invested in perfect Ted and why they're one of the
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sponsors of this podcast it has changed not just my life but my entire team's life and for me it's drastically improved my cognitive performance but
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head to perfect ted.com [Music]
