00:00:00
[Music] 53% of you are planning to make a New Year's resolution about money finance and investing this year because you want
00:00:07
Financial Freedom and Financial Security so we went through every conversation we've had about money personal finance
00:00:13
and investing and we found the most replayed and most shared moments from those conversations for you everything
00:00:20
from life-changing advice on saving spending investing tax crypto buying a
00:00:25
house and having a money mindset the most expensive thing that all of us are paying for is the information that we don't know so how do you make the most
00:00:31
money humanly possible it's two things let me tell you a few key basic things
00:00:37
about investing in money it's going to lead to amount of success that will literally put you in the top 5% of
00:00:42
investors but never have to worry about money again if you listen to this conversation we believe your money goals
00:00:48
will come true in 2025 so take
00:00:53
notes quick one before we get back to this episode just give me 30 seconds of your time two things I wanted to say the
00:00:59
first thing is a huge thank you for listening and tuning into the show week after week it means the well to all of
00:01:04
us and this really is a dream that we absolutely never had and couldn't have imagined getting to this place but
00:01:10
secondly it's a dream where we feel like we're only just getting started and if you enjoy what we do here please join
00:01:16
the 24% of people who watch this channel regularly and have hit the Subscribe button means more than I can say and if
00:01:23
you hit that subscribe button here's a promise I'm going to make to you I'm going to do everything in my power to
00:01:28
make this show as good as as I can now and into the future we're going to deliver the guests that you want me to speak to and we're going to continue to
00:01:35
keep doing all of the things you love about the show thank you thank you so much back to the
00:01:41
episode so what is the S&P 500 for anybody that doesn't know yeah and what
00:01:47
are the returns that I'm likely to get from investing in the S&P 500 I really want to simplify this for people that
00:01:52
are at the very start of their investing Journey you know because I mean this is what you spend so much of your time
00:01:58
doing that I just think about my my team here say the dire of a CEO there's about 30 people and we started talking about
00:02:04
money one day and it was mindblowing how nobody in my team's lives had ever had
00:02:10
the conversation with them about investing we all think of investing as something that rich people after the age
00:02:15
of 40 do once you have a million dollars um Al if you don't have a million
00:02:21
dollars then the only other way to invest we're taught is to buy a house ah
00:02:26
this is driving me insane it's true though isn't it yes and that's that's the central part of my work is that you
00:02:33
can live a rich life and that rich life can be richer and more vibrant and more
00:02:38
personal than you ever imagined if you want to travel you can travel for longer than you ever thought you can travel for
00:02:45
me at nicer hotels you can uh spend more time with your children with your loved
00:02:51
ones whatever your rich life is you can do that but you've got to learn a few key basic things about investing and
00:02:59
money so let me tell you what I would tell my family when they come to me they go how should I start investing the
00:03:06
simplest simplest way that I advise my family is I say get a Target date fund
00:03:11
so let me explain what that is a target date fund is One Fund just one and you
00:03:18
pick it based on the year that you're going to retire so if you're going to retire in
00:03:24
20150 if you're going to be 65 in 2050 you go and you find that one fund it's
00:03:29
called a Vanguard 2065 fund or Fidelity 2065 or Schwab 2065 there's lots of
00:03:36
Brokers These funds it's One Fund all you do is put money into it that's it
00:03:42
the fund like a pie chart is automatically Diversified so as you get older it gets more conservative because
00:03:50
somebody who's 75 years old should be investing differently than somebody who's 25 One Fund all you have to do is set
00:03:58
your money up to go into it every single month what is a fund a fund is uh a a
00:04:05
set or a basket of stocks and maybe bonds so we've all heard of you know
00:04:10
companies like Microsoft Google whatever a fund owns lots of these right and
00:04:17
that's important because we've heard diversification like you should have Diversified your Investments okay well
00:04:23
how do I do that you don't need to go and buy 20 stocks and then figure out
00:04:28
how much of each to do that's too much work and honestly most people are not good at that even professionals you buy
00:04:35
a fund which automatically owns lots of stocks like hundreds of them and over
00:04:41
time all you the individual investor like me have to focus on is putting
00:04:47
money into it automatically so a fund essentially I've got1 pounds that I want to invest um I find a fund where do I
00:04:54
find these funds you can go to Vanguard Schwab or Fidelity all those are great companies uh what looking for regardless
00:05:01
of what country you're in is you're looking for a lowcost brokerage firm so but there's also apps and stuff that I
00:05:07
can you can use apps I don't like a lot of the apps because they gamify you to try to invest they want you clicking and
00:05:15
trading I hate Traders Trad you do not want to be a Trader Traders lose money
00:05:21
investors treat investing like watching paint dry that's how sexy it is trust me
00:05:27
I'm not getting my entertainment from investing I'm going out go watch a movie go watch Netflix but investing is boring and
00:05:36
automatic that's how it should be I used a a a company called HRI lands down in
00:05:41
the UK who have an app when I first started investing um when I first started investing in funds they they had
00:05:47
a very ugly app so I wasn't very compelled to use I think it's better now but I would use just do it on desktop which I do get your point because you
00:05:53
don't want to you don't want to be game you don't want to screen all of that notific like ug it should be ugly I you
00:05:59
want it to be too accessible as in I don't want to be able to check it every day no look on my phone you will see no
00:06:05
investing apps yes there should not be why do you need to log in and check it every day what's the point yeah in fact
00:06:11
I log you know what most people should check it every three to six months and
00:06:17
here's how you check it you log in on your desktop wow it's up wow it's down okay
00:06:24
bye you're not tweaking anything it's like making Thanksgiving dinner once you've put the T in the oven just let it
00:06:32
sit do not fiddle with it cuz you're only going to mess it up and in this case you're letting the turkey cook for
00:06:38
decades and that fun so I've got 100 pounds I go on a website Vanguard
00:06:43
Fidelity Schwab whatever they are I have no Alliance to any of them neither do I um there's various ones in the UK I actually do recommend hgri land down
00:06:49
just because it's simple and I think investing in funds there's no fees there's no fee associated with the investment itself obviously they take a
00:06:56
you know they might take a percentage depending on which fund you're investing in I take my00 and investing in heve lands down
00:07:02
you don't need there's no um minimum great from what I understand and there's no if you invest in a stock they charge
00:07:09
122 pounds per investment but if you invest in a fund it's free um I put my100 pounds into a fund the fund is
00:07:15
essentially taking one pounds one of those pounds and investing one pound into Facebook it's investing one pound into Google one pound into Shopify one
00:07:21
pound into Spotify one pound into Nvidia or whatever it's doing that for me it's managing it for me it's making the
00:07:27
decisions for me I just put the money in every month whatever I can and I leave
00:07:33
it yeah and let's go even deeper I love that we're getting into the nuts and bolts here because you know honestly
00:07:39
most people they do not know how to invest literally what website do I go to and then what do I
00:07:46
do the fund owns these different stocks and some will go up and some will go
00:07:52
down and it's inconsequential to you all you need to know is you own this
00:07:57
fund now that you've opened up an account and you've sent a hundred bucks or 1,000 bucks great you've made one of
00:08:04
the most important decisions of your life now there's just one more thing you have to do set up an automatic transfer
00:08:10
so that every single month you have a certain amount of money going in now if you don't know how much money use my
00:08:17
conscious spending plan guideline what did I say 5 to 10% of takehome is a good
00:08:23
guideline all right you should be able to do 5% trust me anyone who comes to me
00:08:28
they go there's no way must be nice I can't afford I go show me where you're spending your money I guarantee you I
00:08:34
can find 5% to send in every month now you're not trying to send it in I don't
00:08:40
try to brush my teeth in the morning it's a habit investing is even easier than brushing your teeth because you set
00:08:46
it up automatically the investment fund will automatically draw from your
00:08:52
checking account and it will pull in a 100 bucks 500 bucks 1,000 bucks whatever
00:08:57
your number is and so so you're not going to log in for 3 four 5 months you're going to log in a few months
00:09:03
later you're going to be like oh my god I didn't even realize that all this
00:09:08
money is in here when you add that plus compounding over many years that is how
00:09:14
real wealth is created so I don't want anyone to think that you have to be rich
00:09:20
in order to start investing one of the ways you get rich is by investing I've
00:09:27
got a friend that's currently actually in this building at the moment and I had this conversation with them about a year
00:09:32
ago gave the advice that you've just given there and about 2 months later
00:09:38
this individual who I Shan name came to me and I said How's your uh you know your your your Investments going in that
00:09:44
in that fund and they said oh yeah I had bills I had a credit card bill so I I took took it out oh yeah she she treated
00:09:50
like a checking account Investments for me are places to accumulate wealth I don't
00:09:57
draw from it that's what a checking account is for so if what that is is
00:10:02
there's two parts to what your friend is saying one is um mentally she's thinking
00:10:07
that this investment account is just money I can draw from if I need it so I would sort of gently change the way she
00:10:14
thinks about it the second is I guarantee her account structure is a little um subpar so here's how I would
00:10:22
set it up this is in chapter 5 uh it's all automation cuz trust me I don't want
00:10:27
to spend time transferring money back and forth that's I don't spend any time on that you get paid your money goes
00:10:34
into your checking account from your checking account it is automatically transferred to a savings account in fact
00:10:42
I have sub savings accounts for vacation car down payment all that stuff so you
00:10:48
have money set up for specific goals money is transferred to your investment account it's transfer there I'm not
00:10:55
going to touch that money I'm going to let it cook and then I have my guilt-free spending which is going out
00:11:01
with friends whatever I love and my credit card bill is automatically paid off every single month that's how you
00:11:08
want to set it up it takes a couple of weeks to set everything up and then you never have to think about it again C how
00:11:15
can you prove to me that this is the way to make wealth what case studies have you got that investing in funds over a
00:11:21
long period of time is the path to financial wealth because you know it's
00:11:27
you said earlier about the paint drying thing The Narrative that we see about how why people and how people get rich
00:11:32
is you know they sell a company or they have a lottery win or maybe they buy some cryptocurrency and it goes up yeah
00:11:39
that's what we hear so that's what we're try and emulate totally we prove to me that that's that this fund strategy is
00:11:46
better well there's there's a couple things first off the research over more than a hundred about a hundred years
00:11:51
shows the returns of the stock market and the returns tend to be at least in
00:11:57
America they tend to be around 11% 10 to 11% and if you take out
00:12:04
inflation you get about 7 to 8% per year now for anyone listening they go okay
00:12:11
well what does that mean that number means nothing to me 7% whatever if you
00:12:16
go right now and you Google investment calculator and you just plug in your age
00:12:23
you plug in let's say 200 300 bucks a month and you plug in 7% return turn and
00:12:30
you just watch how that money grows you will be shocked Jack get me my phone I'm
00:12:35
going to do it now okay so let's search for compound interest calculator and there's a really
00:12:41
simple one this it's called money chimp okay okay I've got it all right all
00:12:48
right so there's four numbers we need to fill out here let's take a look the first is current principle that means how much you've got in the bank I'm
00:12:54
going to say $5,000 and I'm going to start when I was 16 because if IID saved my money when I
00:13:02
was 16 and not spent irr recklessly I think I could have had that $5,000 when
00:13:08
I 16 um annual Edition what does that mean how much can you invest per year so
00:13:13
for most people they think about on a monthly basis they might say 200 bucks a month which would be $2,400 annual
00:13:21
Edition okay so what do you want to say I'm going to say can I say $5,000 yeah that's you know about 400 bucks a month
00:13:28
I think that that's reasonable I often find that with people making uh median
00:13:33
or slightly above median salary that there are hundreds of dollars of month of money that is unaccounted for that if
00:13:40
properly made intentional could be invested so great 5,000 a year all right
00:13:45
obviously I could have once I got past a certain age I could have increased that though so we're going to talk about that hold on to that idea okay how many years
00:13:52
this was you at 20 this was me at 16 oh okay and how old are you today 30 okay
00:13:59
so 14 years let's just do it until today and we'll see what happens okay all right 14 years and then it says interest
00:14:05
rate so what should we assume for that is that 8% yeah s to eight I I do seven
00:14:11
just to be super conservative because I never want to be surprised on the downside right if anything I'm going to
00:14:17
make more so 7% all right let's calculate it okay what do you see damn
00:14:24
what do you see $133,000 537 yeah that's what you would
00:14:30
have had right now now let's add some context so this is really important you see a number that says
00:14:36
$133,000 at age 30 yeah okay is that a
00:14:42
lot is that not hm I don't know let's break it down at that point you started
00:14:47
with $5,000 and you invested $5,000 per year
00:14:52
we assumed no raises even though you obviously made more than you made at age 16 mhm weum assumed you stopped
00:15:00
investing at age 30 which is obviously ridiculous and you end up with six
00:15:06
figures let's play it out let's take it until
00:15:12
40 so instead of 14 years you invested for 24 years what do you
00:15:19
see I would have $336,000 it's getting better from just
00:15:25
$5,000 a year it's not much it's fantastic again 400 bucks or so a month
00:15:30
is very modest remember people's income goes up typically in their 30s and 40s
00:15:36
and if you already are investing a little bit automatically all you have to do is just tweak a number and it will take an extra couple hundred three four
00:15:43
500 bucks let's do one more let's go to 34 years just because I want to see what happens and then we're going to play
00:15:48
with the other numbers okay so investing from the age of 16 until I'm 50 mhm I
00:15:56
would have $736,000 in my account yeah now I want to do the
00:16:01
full the full thing I want to do a more realistic number here so instead of 50
00:16:07
we're going to go 49 years that takes you to age 65 yeah okay
00:16:15
and instead of $5,000 per year your income obviously went up from being 16
00:16:21
years old so I'm going to pick a number out of thin air and and I'm going to
00:16:26
tell you how I picked it I'm gonna say instead of $5,000 a year it's actually going to
00:16:31
be $30,000 per year let me tell you why I picked that in your early years you don't have
00:16:38
as much money but you were still investing a little bit which shows that you're dedicated as your income goes up
00:16:44
you're going to start proportionately continuing to invest so at a certain point your income will be really high
00:16:51
and that will bring that average up that's why I switched it to 30,000 per year I actually think this is quite
00:16:56
modest but I'm going to go ahead and do it so here we have someone starting
00:17:02
investing at $5,000 they invest $30,000 per
00:17:07
year okay they grow it for 49 years at 7% do you know the
00:17:14
math no tell me
00:17:20
12,330 so that's me starting with 5K gradually ratcheting it up until I'm
00:17:26
investing well investing 30k on year a year per average across those 49 years
00:17:31
yes which is a flaw in this because it's so simple that money invested you're not actually going to invest that much early
00:17:37
on you'll invest more later so you won't actually you'll maybe have a marginal amount less but we're talking 10 versus
00:17:44
12 million that's a lot of money and then if I got 8% instead of the 7% I'd
00:17:51
have 17.4 million yeah but don't mess with that cuz this is what this is what people do they go well if I got 13% I'm
00:17:58
going to invest in I don't do that you're going to lose all your money just stop 7% is safe it's
00:18:03
conservative that's why I am here that's why I want to encourage people you don't need to juice your returns I hope you do
00:18:11
get 8% but I don't want you to count on that I want you to count on safe stable
00:18:16
returns and what matters for you is the time you started early and the amount
00:18:22
you have a considerable amount to invest you know the the biggest debt one of the things I um I love saying this
00:18:29
but like the biggest debt all of us pay is ignorance and so I I heard this close at this pitch years ago and this guy got
00:18:36
on stage and he and he was like Hey ma'am he was like how much do you make she was like $50,000 so he wrote $50,000
00:18:42
on the Whiteboard and then he wrote A Million Dollar on top of the 50,000 and he subtracted it and said $950,000 he
00:18:49
said you pay life $950,000 every single year for not knowing how to make a
00:18:54
million dollars a year and it was a crazy concept he was using it to close the audience but I like the most
00:19:01
expensive thing that all of us are paying for is the information that we don't know and that's like both frightening and also incredibly exciting
00:19:07
because like fish in the best ponds right like a good fisherman knows where to fish and a
00:19:13
different way of saying it is find the people who value what you have the most and I'm sure you've heard this have
00:19:19
you heard the story of the the father and the son with the car no okay so maybe I have I enough detail it's good
00:19:26
it's good so there's there's a father who gifts his son an old beat up car and
00:19:32
he says you know hey I don't know if it drives or not but you can take it down to the um the dealership down the street
00:19:38
see if you can trade and get some money he was like okay so he goes down the street goes to the dealership they say
00:19:43
we'll give you a th000 bucks for it and he come you know hears him out comes back home he's like Dad they said give me a th bucks he's like okay he's like
00:19:50
go to the impound yard where they you know break the cars up just for Metal He's like see what they'll give you goes there and uh the guy's like ah I don't
00:19:57
know this might be500 Buck of metal kid like you know comes back home he's like Dad you know he said it was going to be
00:20:03
$500 he's like okay he's like hey go down the street to that uh that antique
00:20:09
uh dealership see if they've got anything that use carlot he's like okay so he goes down there talks to the guy
00:20:15
comes back home super excited he's like Dad you won't believe it he's like this is a historic car there's only like 10
00:20:20
of them left he's like it's worth $100,000 and so the father smiles and
00:20:26
he's like and the lesson I want you to know is that it's not necessarily who you are but the people that value you
00:20:31
the most and so you can talk to different people and go to the people who value you and I just I I love that
00:20:39
story because from a it's a Hu it's a huge business story in terms of like sell sell the where the fish are where
00:20:45
the big fish are like if you if you're going to go Hook Fish go to go where the whales are um it takes the same work but a lot of it's just belief people don't
00:20:50
think it's possible and so a lot of times you have to just keep leveling up and you sell your first $110,000 thing you sell your first $100,000 thing sell
00:20:56
your first multi-million dollar package you realize it's the exact same thing it's just so maybe if I'm list if
00:21:03
anybody's listing right now it is the same thing it's the exact same thing and sometimes it's easier it's normally easier like you
00:21:10
know you've seen that Meme that says like uh so what exactly am I going to be getting for this $50 thing right and
00:21:16
then it's like uh $50,000 clients like wire scent yesterday like what do you else do you need like it's and that's
00:21:22
totally true um but I think there's a skill in understanding where to
00:21:27
fish so a skill um information it's information it's even knowing that there
00:21:33
was another Lake over there in part and and that's why like listening to conversations like this is so valuable for people because it lifts a curtain
00:21:40
and you go what the [Â __Â ] you guys were behind here the whole time partying that's what my business life has been like it's like gradually like I think I
00:21:46
heard Kevin Hart describe on Joe Rogan one time where he said there's this other room yeah where these people
00:21:52
playing this other set of money games yeah and then when you get in that room you get you're almost pissed off that nobody told you this room existed did
00:21:59
but then there's another door yeah and then you get through there maybe a couple of years later and you
00:22:04
find these other people these [Â __Â ] billionaires that playing another set of games and you're going what and they're chilling yeah they're just smoking
00:22:12
cigars they're not even doing any hard work and you go tell me the games that you guys have been playing in here yeah and then again the frustration is and
00:22:18
that's kind of what I feel like in my business life it's been like where at the jump I'm charging I don't know I remember my first we found our first
00:22:25
deck from 2014 charging I remember the package we did gold silver and bronze it was like you know like $200 package for
00:22:32
like support and then $500 and then the gold package where we threw everything in for $1,000 and I remember my one of
00:22:38
my first clients um accepting that and then I think today like the only difference okay there's skills that have
00:22:44
increased but information is the big thing knowing how to do it you know
00:22:50
um when you think about curtains that have lifted that have really shifted the games you play from a value money
00:22:57
perspective mhm like where someone's Ed the Lights On You [Â __Â ] of course yeah is there anything else that comes to
00:23:04
mind I will answer it with the stair steps of how each order of magnitude
00:23:09
change in my income so when I went from being an employee to self-employed I went from making four figures a month to
00:23:15
five figures a month and that was for me just like I'm now in control the level above that was I started having other
00:23:22
people who worked for me and then went to six figures a month right and then from there stayed there did the
00:23:28
turnaround business still had the same organizational structure had another degree of Leverage and so the next
00:23:33
degree of Leverage was that I started licensing so it was digital right so the cost for you cost of goods is basically nothing but all of these things are
00:23:40
about leverage and so this is like one of my favorite topics in the whole world but if we Define leverage as the
00:23:45
difference between what you put in and what you get out so if you have a lot of Leverage you put a little bit in you get a lot out if you have no leverage or low
00:23:51
leverage you put a lot in you get a little bit out and a lot of times people who are listening to this and are not making as much money as they want they're putting lots of input in and not
00:23:56
getting a lot out they have low Leverage opportunities and so understanding how
00:24:02
to get more for what you put in is the game overall and so the first level that
00:24:08
I described was Labor it's just work first I was working for someone else then I worked for myself then I got other people to work for me first level
00:24:14
each of those levels was more leverage above that I had media which is the thing that I was licensing out so
00:24:21
another degree of Leverage I made it once and I could license it out Infinity on top of that I have capital I can take capital I don't have to sacrifice time
00:24:27
in order to get something for it so it's high input output um above that would be some sort of Technology you build the
00:24:34
code once in theory obviously you continue to improve the code but theoretically you build the thing once and then a million people can use it and
00:24:40
so you want to Stack as many types of Leverage as you can and as much of them as you can because like Joe Rogan also
00:24:46
has a show and somebody else has a podcast they both technically are using media as their as their as their vehicle
00:24:52
for leverage but he has significantly more of it so it's not just like I'm going to use all these right yeah but
00:24:58
it's also how much and to what degree but like Facebook had other people's money he used media had other people's
00:25:04
work Max leverage Amazon same thing right they used every element of Leverage and they maxed all of them out
00:25:10
and um that's that's at least the the curtain that and nval talks about this if you're familiar with Nal rant um he
00:25:17
talks about these things as the as the the P the elements of Leverage or four types of Leverage um and understanding
00:25:23
that for me has kind of been a blueprint for wealth overall and then you know Capital there's degrees of capital right
00:25:30
like you first you can get friends and family to give you money then you can get you know institutional money and
00:25:35
then you can get public money right which you know you saw like the IPO money like the fact that the NASDAQ was
00:25:40
Forex uh the dorf exchange is that where it was right um there's just significantly more capital in that
00:25:46
market and so it same work more zeros um and so I love this topic because I think
00:25:53
that that's fundamentally like the people who move faster in life don't actually move faster than get more for
00:25:59
every step if right now you want to find where is your unfair bet that can make you
00:26:06
your Millions with your skill set that nobody else in the world can
00:26:11
replicate except you here's what I need I would need a whiteboard I would need a pen which I would do if I was you and I
00:26:17
would need a smart friend perfect like so I've got Stephen here and at the top of the right whiteboard I would write on
00:26:23
this side skills oh my God you're going to see my handwriting like a doctor and on this side I would write money M and I
00:26:30
would start writing down all the things that we're brilliant at so let's pretend it's it's stepen here and we'll pretend like you don't have all the things that
00:26:36
you have but your core skill set you could put your hand on the screen by the way oh it makes me nervous am I am I doing this like a boomer I am the
00:26:43
handwriting is a little bit it's giving doctor so I'm yeah look at that okay so
00:26:48
embarrassing okay so social media right you're incredible at social media what else are you probably good at well you
00:26:54
know a lot of people you've got a network what else well it's not just just social media though it's actually a
00:27:00
few particular things it's like YouTube and I think you're one of the best in the world at short form video right
00:27:07
you're also one of the best in the world at like a datadriven social media strategy so you
00:27:14
can kind of say upfront hey we think this is going to go viral because the data says this thing over here what else is Stephen good at he's charismatic he
00:27:21
can probably get people to agree to things just by talking to them you know what what else uh British ACC you know
00:27:28
so probably you want more in-person interaction because uh we've got you
00:27:34
know uh a very charismatic person what else is Stephen really good at well he asks a lot of questions this is my hinge
00:27:41
profile by the way I'm totally just gonna copy and paste St yeah good-look funny you know yeah exactly so so we'll
00:27:47
just say these there's a lot more deal flow but let's just pretend that all you're good at is social media you're good at getting to people which is a
00:27:54
network you don't even have to know rich people just can you get to them you're charismatic you're data driven okay great we've got all these skills now how
00:28:00
could we apply these skills to get the most money humanly possible and I would do exactly what you said so how do you
00:28:06
figure out most money humanly possible it's two things it's the how would I do
00:28:11
this it's the size of the problem it is the value of the
00:28:20
solution interesting okay and so if I'm thinking about this for you if I go and
00:28:27
I give your social media media skills to a trade or service business M I'm not
00:28:34
going to make that much money how do I know I'm not going to make that much money because I'm going to go look up online what is the average revenue of
00:28:42
this business and the average profit margin yeah now you probably didn't even think this way when you were thinking
00:28:47
about it but you guys look online right now what's the average profit margin of a biotech company in average revenue let
00:28:54
me tell you what it is it's going to be like 50 to 80% and it's going to be hundreds of
00:29:01
millions that you could potentially get Trade Services business a lot less yeah
00:29:06
and so that's where I would start skills plus money really equals to three things
00:29:12
which is like sector size of the
00:29:17
business and profitability of the business and I would play this game and
00:29:22
what that might look like is you go okay I know that I have some friends in
00:29:28
let's go to the places that we know have the most cash in Silicon Valley in on Wall Street if they could make a lot
00:29:34
more money if they had a lot more attention because what I'm selling is attention I want to get to the people who can make the most money with the
00:29:40
most attention and that means that I'm not going to go to Walmart only has 6% margins I'm going to go to the highest
00:29:46
person that I could get to and it'd be fun if anybody's listening to this right now try it like tag Stephen and I in
00:29:51
your stories on Instagram of your little charts and let's see and I'll give feedback anybody that tags me in it if
00:29:57
you're like here's the here's what I think my skill is here's what I think the industry is I'll tell you one way or another and it can be fun you can see
00:30:03
other people's examples live so people people that are only listening on audio and and that can't see what the um this
00:30:10
uh chicken scratch chicken scratch you've just drawn on this iPad um on one hand you have you list your skills and
00:30:17
then on the second side you're listing the ways you believe you could make the most money from those skills based on
00:30:22
the size of the problem you'd be solving with them and the value of the solution so for example let me let me try and
00:30:29
play this game with you then so okay so I am a writer so I'm going to do my skills on the left hand I'm a writer and
00:30:36
on right I'm going to write money yep I'm a writer I'm really good at writing stuff um that's it and I kind of get I
00:30:45
kind of get the internet so I kind of understand LinkedIn blogs and stuff like that but that's it I'm a writer let's go with what would be the worst what would
00:30:51
be the worst thing you could do if you're a writer to make no money to make no money cuz sometimes it's easier to do the negative okay working for a local
00:30:57
news yeah local I was thinking like fantasy books like you could write like fiction you know really hard to make
00:31:04
money in you could write for a local newspaper that's an even worse idea so I like that so now you've got your your
00:31:10
bottom tier right which is like 14 bucks an hour or something like that now if you look about I mean you could Google
00:31:16
this what is the highest paying jobs for writers I bet the thing you'd find on top copywriter why I got a better one oh
00:31:22
what's the better one do you know why I know this because when I was in working in biotch we couldn't hire one which is a medical writer oh oh so smart hypers
00:31:29
specialized honestly we so a typical copywriter when I was working in my social media company we might pay entry
00:31:35
level ÂŁ25,000 which is probably about $35,000 okay a medical writer someone
00:31:41
that can write about the psilocybin compound in my psychedelics business would get paid
00:31:49
$150,000 or more we just couldn't find some we found loads of people that could write yeah but nobody that had within
00:31:55
their skill stack even though it's quite easy to teach the ability to write using medical words slightly medical words it
00:32:01
doesn't mean you need a medical degree you could probably learn how to write become a medical writer in a month if you really committed yourself to it so
00:32:08
that's the top true and same with Finance we go to the things we know so you know biotechs you know there's a niche there I know finance and I know
00:32:14
that again it's one of the highest paying Industries so a financial writer what would that look like it would look
00:32:20
like somebody who knows how to write probably an investor update yes right yeah yeah yeah so hugely lucrative and
00:32:27
then the other thing you could do is I guess I didn't even think about this before it would be like size of the
00:32:33
problem it would be value of the solution and then it would also be structure of your job so like if you're
00:32:40
a copywriter I wouldn't take a job for 35k what would I do I would say hey pay
00:32:46
me what is the salary you want to offer 35,000 I'll take 10,000 so I can eat because I'm hungry but can I have a
00:32:53
percentage of The Upside that I drive above and beyond goal so if I'm going to
00:32:59
write copy that converts into Revenue like I'm going to write a funnel for your biotech company or I'm going to
00:33:05
write a funnel to get investors for you if right now per month you get $100,000 through that funnel how about you just
00:33:11
pay me an extra 10% of everything I drive above your 100K so I think that's another way you can make more money is
00:33:18
getting smarter on deal structuring well that's actually when I moved into biotch how I got paid and when I talked about a thou being paid a
00:33:25
thousand times more than I would have previously it's because was the way I got paid was in options in the IPO
00:33:31
brilliant yeah so I got given in that particular company I got given 400,000
00:33:36
shares effectively in the company at a certain price um and so when the company
00:33:41
ipoed at $3.2 billion on the NASDAQ in July 20 I don't know 21 or something
00:33:48
even though I'd only worked in the company for about six months just helping them build out the marketing team I think my like net return was on
00:33:55
the equity value at the time was quite close to 10 million so 6 months work 10 million return because I you know and
00:34:01
the re really really the reason I did it was CU so interested in psychedelics but it just opened my eyes to the fact that any kid with social media skills and
00:34:07
that knew how to structure a deal with these people could have walked in there and said give me some stock in this IPO and I'll run your social media for six
00:34:13
months you're so right could have change your life yeah and it's it's something I'm struggling with trying to get people to understand right now is that even if
00:34:20
you never buy a business which is what people fixate on well I haven't bought a business yet I haven't bought a business yet it's like God you're never going to
00:34:27
regret learning how to do deals you're never going to it's I think that is the most valuable skill set in
00:34:33
the world I completely agree and it's so unfair that people don't know about it it's so unfair but it's also your fault
00:34:39
if you don't know about it because nobody's gatekeeping this information anymore it used to be gatekeep like when I first started off in private Equity I
00:34:45
wasn't allowed in the rooms where they were actually doing the deals and the terms and if I wanted to see what the final terms were like I had to kind of
00:34:52
you know sweet talk my way into figuring out how they structured it but it's an unknown unkknown
00:34:57
so before I knew I didn't know that I didn't know yeah that's true yeah that's very true but now I think there's enough
00:35:02
people out there talking about it where you're like I mean if you think about whether you like Donald Trump or not what is he really good at deals the art
00:35:09
of the deal like it it that's it and that is what Mo I mean Elon Musk how does Tesla actually make money they make
00:35:16
money through credits through credits for solar so he was able to survive for
00:35:21
those 10 years of building that company because he has some of the best solar tax credits in the world that he
00:35:27
negotiated with the government so where does one go then where does a 25-year-old kid listening to this go to
00:35:33
learn how to make deals well I have a book coming out yeah called Main Street millionaire yes exciting I know and we
00:35:41
have we have stuff we can tell them about that later too okay well I'm going to link Main Street millionaire below so everyone can pre-order it I've
00:35:47
pre-ordered I think 10 or 20 copies of it maybe a couple more um but that's like 30 bucks and you learn almost
00:35:53
everything you need to know about doing a deal to start and that book is only what you need to know I made it on
00:35:59
purpose not really long not overly intense it is exactly what you need to know and then if you like learning deal
00:36:06
making and you like that book then you go to contrarian thinking.com and we have courses and free newsletters and a
00:36:12
community all about buying businesses um but that's where you should start the other thing I I came to learn
00:36:19
is I got money and I it was almost like someone pulled the curtain back for me is how wealthy
00:36:26
individuals play the TX game oh my gosh and it's a tax game that the average person has no idea what's going on got
00:36:32
to talk about money tax avoidance is a key skill to Building Wealth and by the
00:36:37
way we don't talk about I I speak openly about my I won't call it tax avoidance
00:36:42
but my Tax Strategies if you're you know it's like they said if you're a prison of War you have an obligation to escape
00:36:49
if you're trying to build wealth you have an obligation to pay as little tax as possible do it legally but Apple will
00:36:55
issue their IP to Apple International in Ireland and then they will use apple
00:37:01
Ireland they will license their IP to America charge them tens of billions of dollars thereby increasing the income of
00:37:07
Apple Ireland at a lower tax rate and decreasing the income in the US thereby
00:37:13
lowering their overall tax rate that is pure tax avoidance every organization every
00:37:21
corporation does this to the hilt and so should you by the way I will vote for
00:37:27
people who have an alternative minimum tax we have to raise taxes on corporations the 25 wealthiest Americans
00:37:33
pay between 6 and 8% tax rate what are the tax games they're playing oh just
00:37:38
the rich people there's a bunch of them first and foremost it's you buy stocks you never sell them you borrow against
00:37:45
them okay explain that to me like I'm a 10-year-old so sure you own $100 an Amazon stock yeah you need money to buy
00:37:51
something instead of selling the stock and it say it's gone up 50% I say it's doubled you would have to realize a
00:37:57
capital gain and pay long-term capital gains on that $50 gain no just borrow against it and let the stock continue to
00:38:05
grow and you pay a little bit of Interest hopefully from your current income but basically it's invest borrow
00:38:11
against it and die put it into a a trust and then pass it on to your kids there's
00:38:17
a lot of um State Arbitrage Jeff Bezos just moved to Florida to spend more time
00:38:23
with Dad isn't that sweet Stephen isn't that nice no it has nothing to do with his father give me a [Â __Â ] break he
00:38:29
aggregated $160 billion in wealth he would pay about another eight or 10% in state taxes in Washington because he's
00:38:36
got to leverage the public school system the University of Washington the Seattle Tacoma Airport the hospital system but
00:38:41
in the US you're allowed to piece out to Texas or Florida and pay no income tax
00:38:47
so all the people [Â __Â ] Post in California or New York show me someone who's CR all of a sudden can't handle San Francisco politics I'm going to show
00:38:53
you someone who needs to recognize a capital gain and has all of a sudden decided they like like Texas politics it's really not very it's very
00:39:00
disingenuous there's uh the tax loophole I've leveraged in the US there's
00:39:06
something called 122 or qualified small business so when I started L2 what's L2
00:39:12
L2 is my analytics company I started it I invested a small amount of money um uh
00:39:19
because it was a business worth F less than 50 million your business would qualify in the US as qsb small business
00:39:26
if you hold on to that stock in that company for longer than 5 years when you sell it the first 10 million or 10 times
00:39:32
the basis are taxfree so the first 10 million out of L2 was tax-free
00:39:38
zero that makes no sense if that sounds like we're screwing the middle class trust your instincts I invested in a
00:39:46
company brought a company out of bankruptcy I invested two and a half million the first 25 million got very
00:39:53
lucky the company got sold for a lot of money the first 25 million were taxfree these are the tax code has gone from 400
00:39:59
pages to 4,000 and that extra 3600 pages are to turn rich people into super rich
00:40:05
people now the myth around taxes is the following that rich people don't pay their taxes
00:40:11
actually the sort of Rich pay a disproportionate amount of taxes so if you make all of your money from current
00:40:17
income that is salary and you make a lot you're actually paying more taxes than anyone so mom's a baller she's a partner
00:40:24
in a prestigious Law Firm making a million bucks a year dad's a chiropractor has three people working
00:40:30
for him he makes 600 $1.6 million a year total ballers in order to make that kind
00:40:36
of money they probably have to live in a urban center in a blue state where at that level they're paying 45 48
00:40:43
sometimes 52% tax rates but if dad decides to raise capital and buy a bunch
00:40:50
of chiropractic clinics and they become Investments and he sells them for $50 million his tax rate plum
00:40:57
so you don't want to be a super earner you want to earn enough money to invest so you can become a super owner the top
00:41:04
25 wealthiest Americans pay about 8% in tax right so actually the bottom half
00:41:11
pay almost no tax they pay a lot of consumption taxes but it's the super earners that get screwed what I call the
00:41:17
workhorses but once you makes the jump to light speed and you own things and you make your money from buying and
00:41:23
selling assets your tax rate plummets the really sort of actionable thing
00:41:29
there for the average person as well is probably the the first point where you said a lot of what rich people do is
00:41:34
they'll buy a stock so I'll I'll spend 10K on Amazon stock and then I go to a
00:41:39
bank and the bank give me a $5,000 loan against my Amazon stock taxfree and I
00:41:46
just hold the Amazon stock now I've got 5,000 taxfree if the Amazon stock goes to TW $20,000 in value then I can I can
00:41:53
go to the bank and say it's gone up now give me another $5,000 and I just spend and live off that money now if the Amazon stock
00:41:59
collapses I'm fine because the loan was against the stock so they'll sell the stock at a certain point as it's
00:42:05
collapsing to get their money back yeah I mean you don't want to get into too much trouble but it leverages how smart
00:42:11
people go broke but the idea is that one of the great tax schemes in history is
00:42:16
that stocks grow think of yourself as a stock you you go up in value a million
00:42:23
bucks a year you're making a million dollars a year doing a very successful podcast every year the government in the
00:42:29
UK is going to take 40 cents of that 40% of it if you own a million dollars in stock and it goes to two million you
00:42:37
don't get taxed on it till you sell it yeah so just never sell it never sell it and that's what elon's doing with his
00:42:42
companies people say he's got you know $200 billion whatever in fact he's borrowing taxfree against those
00:42:48
companies and then when he finally needs to sell it to pay off some of those loans he moves to Taxas despite the fact he built all his wealth in
00:42:54
California smart I think one of the Great advant ages of life is um as it relates to wealth creation is really
00:43:01
getting good tax advice because I've sat here over and over again with people that have great tax advice and some people who didn't have any at all and
00:43:07
the outcomes are quite frankly um shocking the variance and outcomes are quite frankly shocking from one person
00:43:13
going bankrupt to the other person becoming a multi-billionaire and it comes down to some of it comes down to
00:43:18
their tax strategy and how they thought about tax and have you know being around a lot of people now that are Masters in
00:43:24
tax it was like yeah describe it as someone pulled back a curtain that I never knew was there and all these
00:43:30
people were doing magic behind this curtain and no one ever told me that curtain existed and it's called tax we
00:43:35
don't all pay the same tax because we're not supposed to talk about it again not talking about it is rich people trying to keep poor people down yeah because
00:43:42
rich people talk about their taxes all the time brightest woman in my entire professional universe is a woman named Lucy Lee who is my tax Yoda who works at
00:43:49
a big Law Firm that I pay 1,800 bucks an hour or two to figure out the smartest when I set up a company I talk to my tax
00:43:56
person when I'm about to get a big payment from my podcast Distribution Company I talk to my tax person first this is it is
00:44:05
everything but the key when you're young is to become an owner not an earner you're an earner you want to bust a move
00:44:12
out of earning and develop an army of capital that goes out and kills for you at Night 500 bucks is a lot of money
00:44:19
when you're 21 500 bucks when you're 21 is 10,000 when you're my age right and
00:44:25
it's going to go really fast so just start and then once you become a super owner you have 10,000 50,000 100,000 a
00:44:32
million dollars in assets then then you can become a super tax
00:44:47
avoider that sounded awful that sounded awful that sounded
00:44:54
awful sitting here with your bucket of sand oh my God a bunch of mil that's right
00:45:01
talking about this is how we [Â __Â ] the middle class St this is how we really
00:45:07
screw over the little guy what is your Capital allocation strategy how do you invest your money um
00:45:14
this is you know this is the thing people want to know most about you I keep it as painfully simple as I
00:45:19
possibly can so literally my entire net worth is cash a house and index funds
00:45:25
and some shares of Marquel while I'm on the bo directors and that's it there's nothing else my entire I can summarize
00:45:30
everything so easily and so cleanly and truly that's it and it's not even like I have 20 bank accounts I I have one bank
00:45:37
account one brokerage account like in a house and that's it so simple why why index funds you're the reason I your Capital
00:45:45
allocation strategy is almost identical to mine I want to talk about the house thing as well but um after reading your
00:45:50
book I stopped trying to pick stocks and I invested all of my available Capital
00:45:56
into index funds outside of investing it in starting companies so I'm a
00:46:01
shareholder in I don't know 50 60 70 companies I all my other available capital is invested in index funds and
00:46:08
then I have a very long-standing large position in ethereum which I've held for
00:46:13
like six years or something yeah which has done me very well yeah that is it and the ethereum investment is also
00:46:19
based on the fact that I run a software business that is in blockchain and I could see that developers are building
00:46:25
on top of ethereum more than any other blockchain so that Insight was really beneficial to me and six years so even
00:46:31
with the big fall of the last two years you're still up a lot yeah I I think
00:46:37
your book taught me that successful investing is when you lose the password to your investment account yes that's
00:46:43
exactly it I don't actually think you said that in there but that's like when I lose the password to my investment account I'm so proud of myself because
00:46:50
it means I haven't checked it in forever and so it was funny cuz you were coming today I thought oh yeah well I
00:46:56
have all this money in these index funds I'll check it and I thought [Â __Â ] I don't know the password I good that's why you're going to do okay the reason I do
00:47:02
this what's important is that I am not one of the people who says nobody can beat the market so therefore use index funds that's not what I believe I think
00:47:09
there I think it's extremely hard to beat the market and very few people will do it but I think there are really smart
00:47:14
people who can do it and people who I know who I could invest with the reason I don't is not because I don't believe
00:47:20
it can be done it's because the variable that I want to maximize for in my investments is endurance if I can just
00:47:26
earn average returns for an above average period of time it's going to lead to amount of success that will
00:47:32
literally put you in the top 5% of investors my parents are a great example
00:47:37
of this my parents are smart people but they really they have no Financial background and they have like minimal
00:47:42
financial interest I would say and but they have dollar cost average into index funds for going on 40 years now and
00:47:48
literally if you look at their returns they've never sold anything ever and literally if you look at the returns they'd probably be in the top 3% of
00:47:55
professional investors what is for anyone that doesn't know what is dollar cost averaging and what is an index fund
00:48:00
dollar cost averaging means you buy the same dollar amount of Investments every single month come hell high water
00:48:06
doesn't matter what the stock market's doing recession boom bust you say I'm going to put $100 or whatever it is in
00:48:12
the stock market on the first of every month now most people who like have a 401k at work are doing this whether they
00:48:17
know it or not they have $100 or whatever removed from every paycheck and it goes into the funds that they own and
00:48:24
they don't have to do anything whether you know it or not you're actually doing it the contrast to that would say I'm going to buy and sell based off of how I
00:48:30
feel in the stock market I wake up I watch CNBC I decided to sell and I'm going to put it back in when I feel better about the market it's the
00:48:36
contrast to that an index fund is just a single fund that owns hundreds or thousands of stocks within it and if
00:48:43
it's diverse enough if it's big enough really what you're doing is you're owning a slice of the global economy
00:48:49
which is how I think about it it's thousands of individual stocks in there Tesla Apple whatever it would be but really what you're doing is you're
00:48:54
owning a slice of capitalism if I was your son and I said Dad prove to me that that's a better long-term wealth
00:49:00
creation strategy than buying crypto or buying companies that I use or like how
00:49:06
would you explain that to your to your kid your ability to do well over the next one year or five years is going to
00:49:13
have no role whatsoever on your lifetime ability to generate wealth all that's going to matter is not what are the best
00:49:20
returns you can earn all that matters are is what are the returns that you can sustain for the longest period of time
00:49:25
all that matters is your endurance it doesn't matter if you can double your money this year or even double your money again the next year all that
00:49:31
matters is can you stick and keep it going for 50 years that's where compounding comes from prove it all
00:49:37
because the formula for compounding is returns to the power of time that's not quite it but like more or less that's it
00:49:44
so in that equation if you understand the math all of the heavy lifting comes from the exponent give me a case study
00:49:49
where someone has followed that strategy and done well okay here's one way to explain it that I use in the book 99% of
00:49:55
Warren buffets net worth was accumulated after his 60th birthday after he turned 60 years old
00:50:02
99% of his wealth Jesus has been accumulated after that period because the longer you hold that four the
00:50:08
crazier the numbers get when he was 60 I think he was worth about $3 billion lot of money he's a multi-billionaire but
00:50:14
now that he's 90 he's worth over hundred billion and he's given like a 100 billion away to charity so if he didn't do that he'd be worth he'd go from 3
00:50:20
billion to 200 billion since he's been 60 cuz the numbers just get crazier at that point he's worth 100 billion so if
00:50:27
his if his Market if his net worth goes up 10% in one year he makes1 billion which is three times that he was worth
00:50:33
when he was 60 so that's when you look at somebody like Buffett is he a great investor is he a great stock picker of
00:50:39
course but the real secret to his success is that he's been a good investor for 80 years and if he had
00:50:46
retired at age 60 or at age 50 nobody would have ever heard of him he would have been like one of the other
00:50:52
multi-billionaires who lives in Florida and plays golf and like you've never heard of him the reason he use a
00:50:57
household name is because he's been doing this non-stop since he's since he's been 11 years old and he's never
00:51:02
stopped it's just the endurance that's made him so wealthy not necessarily the annual returns patience it's a difficult
00:51:09
thing it also reminds me of the story that you talk about in the introduction of your book about the janitor Ronald James Reed yeah who when he died in 2014
00:51:18
age 92 had a net worth of over 8 million and he was a janitor how did he
00:51:24
do that he took what very little money he could save from his job as a janitor mopping floors at the gas station he put
00:51:31
it in stocks and he left it alone for 70 years and that's it that's all you need that's all you need to do if you have
00:51:37
endurance in your investing and you can keep it going for years or decades you don't need to be a genius stock picker
00:51:44
and not only do you not need to do it if you have endurance you're going to beat literally 97 or 99% of the genius stock
00:51:51
Pickers and what's so interesting about it is like picking the right stocks is hard it's supposed to be hard like
00:51:57
there's no world in which everybody who tries to beat the market is going to do it of course it's hard just like being an NBA player is hard and but having
00:52:04
endurance is like largely in your control it's so much easier to just be patient than it is to pick the right
00:52:10
stocks every single day now I think some people nature nurture some people like probably Ronald Reed and my parents just
00:52:17
understand it naturally it's not hard for them to be patient but do like there are professional investors who work 80
00:52:23
hours a week for 30 years to try to beat the market and they can't do it not only
00:52:28
some that that explains like most of them and even the ones who can do it are maybe going to beat the market by half a percent per year one% per year but if
00:52:35
you can have endurance that is that's a bigger benefit than you can have by even being like a very successful stock
00:52:41
picker like somebody who outperforms the market by one percentage Point per year and they can do that for 10 years that's
00:52:48
amazing that's like Mount Rushmore investor but somebody who earns average returns and doesn't for 20 years is
00:52:55
going to have way more money you do it for 30 years you're going to be Filthy Rich You' be like Ronald Reed you can be a janitor who leaves eight million to
00:53:02
charity when you die is buying a house a good or bad financial decision my brother who works in my company and he's
00:53:08
the one that introduced me to your book many many years ago said to me something along the lines of Steve don't buy
00:53:15
houses to make money because you have the ability to play a different set of games that very few people can play yeah
00:53:22
and what I mean by that is he kind of explained it to me go listen everyone can buy a house so returns there aren't
00:53:27
going to be huge go find a game that like only you can play you'll get bigger returns if you're buying a house because
00:53:33
you think it's going to be a good Financial investment stop like even if it turns out in hindsight that it was it
00:53:38
doesn't matter I think these are just purely lifestyle decisions and I think so many people get screwed up when
00:53:44
they're in a spot in their life where they should be renting because they need to be mobile they need to move around to a new job new career new school whatever
00:53:50
it is but they end up buying because they think they're going to make money doing it and that's like that's the problem so I own a house
00:53:57
and if I ended up losing money on it I I I don't think I'd care that that's not why I'm owning it I'm owning it just
00:54:02
because I want the stability for my family people people buy houses because they think that they're making loads of money from because there have been periods in time in which people have
00:54:08
made loads of money historically like that's the anomaly historically in the US and the UK housing prices adjusted
00:54:14
for inflation go nowhere it's just been the last 20 or 30 years that there's this very brief window of time that
00:54:20
owning a house was a great investment Robert Schiller won the Nobel Prize about a decade ago for is work in
00:54:26
showing that over the last 150 years in the United States adjusted for inflation
00:54:31
most home prices have been flat as a pancake it's just the last 20 years that have inflated people's expectations of
00:54:37
what a house can do statistically there's going to be at least one person listening to this that
00:54:43
has made an offer as we speak for a house under the assumption that it's going to help them stack
00:54:52
wealth if they were purely doing it for those reasons what would you tell them do instead if that's purely the reason
00:54:58
run for run for your life don't do it particularly I mean it it used to be and maybe it still is like this in many
00:55:05
cities in America in the UK but it used to be that rentals were almost without exception shitty houses there were no
00:55:12
good rentals a big change at least in America in the last 20 years is that most big cities have tons and tons of
00:55:18
luxury apartments to live in and that are great places to live and they're in the city centers and they got beautiful
00:55:23
granite countertops and they're great places to live don't fall for the idea that you can't live well if you're
00:55:29
renting I think that's that's that's the problem and realize that if you're doing it for financial reasons you're probably
00:55:34
about to borrow a shitload of money for an investment that historically has been a very bad investment like if you put it
00:55:43
in those terms like what are we doing here man you're going to borrow hundreds of thousands of dollars for an
00:55:49
investment that historically has been a loss that's what you're doing here does you feel good about that that's what I'd
00:55:55
say to that person got speed I I would love to be in the room somewhere where that person has just
00:56:02
looked at their partner after persuading them to make that offer because it was going to make them Rich sorry
00:56:09
guys so to make sure I I and everyone listening understands what what the blockchain is it's this public can think
00:56:17
of it as this database in the sky and the database in the sky is checked by
00:56:22
everybody who has their computer on and is interacting with the dat datase in the sky so you no longer need a
00:56:28
government or a bank checking the transactions and the and the contracts in the database in the sky because now
00:56:33
all of our computers that are on interacting with it are in the background checking that if I send you
00:56:39
one Bitcoin if I do something on this database in the sky it is um in accordance with the history of
00:56:48
the database and um it is in line with
00:56:54
that database yeah what and to to make it less complicated it just makes it a
00:56:59
source of Truth okay in a world where we don't even know who is who online who
00:57:05
owes each other what any of these things we now have source of truth that
00:57:10
everybody can agree on and everyone can see and everybody can see and you don't need to trust anybody and so that as a
00:57:20
technology solves many things problems that we don't even know we've got because they're so part of
00:57:26
how we exist so the technology is not about money the technology is
00:57:34
about truth and exchanging value and creating value
00:57:41
in a digital age now what is interesting and Powerful about this technology is we've seen Technologies
00:57:49
similar before the internet we've seen Broadband we've seen
00:57:54
these big global infrastructure
00:57:59
things most of those the internet was a public service good Broadband was all built private
00:58:08
sector we didn't get to make money out of these things really Amazon made the
00:58:14
money or or whoever it was building the Broadband they all went bust as well
00:58:20
what we've got here is this very clever thing that everybody in this Block Chain
00:58:27
gets rewarded for the role that they play in maintaining the blockchain in
00:58:34
maintaining the blockchain and because these things are scarce and let's say Bitcoin being the most classic example
00:58:40
there's only 21 million that will ever exist you've created this scarce asset that is a reward system so the people
00:58:47
who mine the Bitcoin they use the electricity to solve the algorithm to get the Bitcoins to make sure there's
00:58:53
only 21 million well they get rewarded the people who verify the chain get remed and then we can buy the asset
00:59:01
which is actually us investing in the future use cases of
00:59:07
this thing are people going to use it for storing wealth or building stuff so
00:59:12
now you get this Global infrastructure layer of which people can invest now
00:59:19
let's go back to the example of ai ai 99 % of people listening to this will
00:59:28
not be able to invest in it apart from buying some of those big public companies because they're not accredited
00:59:33
investors they're not allowed they don't get to see it an Insider all of this stuff this is the
00:59:40
inverse it is fractional so a Bitcoin you don't have to buy one at 60 whatever thousand it is
00:59:47
today you can buy fraction so remember we talked about
00:59:53
property and the guys who own the big highend property make all the money none of us can buy the $50 million
01:00:01
apartment in Manhattan and then do it up and flip it for 250 million now
01:00:08
blockchain we can all put 10% of our paycheck in it do you think people
01:00:13
should yeah and more but the point being is this is the only globally homogeneous
01:00:23
asset on Earth it's the same in Nigeria as it is in Brazil as it is in London as
01:00:30
it is in Silicon Valley as it is in India as it is in Pap Guinea and everybody is on an equal
01:00:38
footing you can put the same percentage of your worth in it okay that is
01:00:46
mind-blowing and it bypasses the banking system The Brokerage system and all the
01:00:52
other incumbent things that get in the way of a Nigerian buying an International
01:00:58
Investment so we've got a playing field that's leveled in the fastest growing technology of all time in the fastest of
01:01:05
pretesting asset in price terms of all time in the shortest period of time that
01:01:10
is globally available to anybody and then you realize holy [Â __Â ]
01:01:18
okay this is important now why that's important is because having more investors in it
01:01:25
means the it becomes more valuable which means you're more likely to secure it people want to join the network to earn
01:01:31
some of these tokens to secure it the more use cases get built upon it because people are making money and it
01:01:38
bootstraps it's behavioral economics it's an incentive based system to bootstrap the most ridiculous startup
01:01:45
idea of all time which is I'm going to entirely disrupt money and create a new internet I mean that's laughably stupid
01:01:52
and that's what's happening one of the I run a company called um third which is a web three infrastructure business we
01:01:59
we've raised quite a lot of money for the company about $30 million now and we have a big team and it's interesting for
01:02:05
me to observe the use cases because people come to third web to build on the blockchain and one of the really
01:02:12
interesting use cases we've seen over the last I'd say 12 months that's really exploded is is gaming people
01:02:19
building uh web 3 blockchainbased games because if you think about games like FIFA which is a huge game obviously the
01:02:26
UK where we're big soccer fans or other games like you know um RuneScape back in
01:02:31
the day where you have Assets in the game in FIFA you have a messy card in
01:02:37
RuneScape you might have a sword the thing that the blockchain now enables us to do is to take those assets from the
01:02:43
game and actually trade them outside the game so I can if the if the sword was on the ethereum blockchain even though I'm
01:02:49
not inside the game I can trade that sword on the ethereum blockchain and so one of the most exceptional use cases
01:02:54
we've seen at third web is people building AI games sorry people building web 3 games because these assets are now
01:03:01
valuable it's great for the game developer they've now got this brand new economy for their for their company and
01:03:06
it's great for the people that own those assets in the game because they've now those assets are now more valuable because more people can access them and
01:03:13
if if I own ethereum yeah if I own an ethereum token yeah which I Do by the way I've been stacking it and refusing
01:03:20
to sell um but how do I benefit from the fact that games are now being built in ethereum and it's really simple if we'd
01:03:29
have all been given shares in Facebook when it started we'd have all been hilariously rich but we didn't the VC's
01:03:36
got it and then it went to the public market and then you have to have a brokerage account you have to be approved right what this is happening
01:03:44
you buy an ethereum token today if ethereum ends up becoming
01:03:49
bigger and more uses your token value goes up it's as simple as that so you
01:03:56
get to participate in an entire technological Revolution really simply from your mobile phone and you don't
01:04:03
need anybody to approve it or do anything yes there's regulation stuff but simple stuff like that it's pretty
01:04:10
straightforward for almost everybody in the world so therefore we talked about how do you invest in your disruption and
01:04:16
the future of technology okay here's one where you can really do it
01:04:22
and it's easy to do a couple of questions here then so you said it's
01:04:27
easy to do yeah let's talk practicalities how do does one do it I
01:04:33
can do it on my phone I have to call someone how do I invest in crypto you just open a crypto account yeah um with
01:04:40
one of the big crypto provid coinbase Kraken crypto.com who are in a Gemini
01:04:46
what about this though my bank my digital bank is offering me to buy crypto on there should I do that yes you
01:04:53
can and you could do it bya PayPal starts somewhere I'm not going to say no
01:04:59
but you will go down the journey that everybody goes down which is the easiest on ramp is the best revolute whatever I
01:05:05
don't care just do it get a feel for what it's like to own an asset that goes up and down a
01:05:12
lot particularly down when it goes down it makes you feel terrible and you got to learn about how to deal with it and
01:05:19
then because it goes up over time if you don't do anything and you've chosen a good quality asset that's provable as a
01:05:27
as an asset in itself it'll probably go up over time in fact highly likely to go up a lot and then you'll start thinking
01:05:35
do you remember Ral saying that the bank owns the stuff and I don't own it and
01:05:40
then you might say oh but the magic here is unlike the bank where I can't take more than 10 grand
01:05:46
out I can put it all on my little Ledger device because what's a ledger device a
01:05:52
ledger device is it's actually it's a company provides it but what it
01:05:57
is because this is just an address on a
01:06:02
blockchain and think of it is like your mailbox you can send stuff to it but you
01:06:09
can't actually take it out like your email somebody can't read all your emails but they can send you
01:06:15
emails well that that part that's private that
01:06:22
secure Pass Key essentially well you keep that to yourself and it's
01:06:28
stored on a device and there's a complicated way of doing it and you'll have to go through that which is you
01:06:33
have to have this seed phrase that does it this technology will change quite soon you know fingerprints face prints
01:06:39
and a bunch of other stuff but basically a little USB stick will secure that you
01:06:44
can go and put in the safe or go and take it to your Nan's house or whatever it is can
01:06:50
secure your money that it's only yours and nobody can take it out I have mine
01:06:56
on a ledger so I have my ethereum on a small it's kind of like a small USB stick and then that USB stick is
01:07:03
protected by like 24 words or whatever it is that's right and those words are on pieces of paper in different
01:07:08
countries at the moment that's right um and it means that no matter what happens no matter where I am in the world no
01:07:14
matter who comes for me I can always retrieve the x th000 ethereum that I have on this Ledger device yeah um
01:07:21
unlike a bank where my my account could get Frozen by the government or they could empty my bank they could freeze my
01:07:27
bank I can I will always have that value and also you know there's a famous
01:07:33
example of the conversation of gold in the United States and it's been done in many countries in the past the good
01:07:38
thing about this magic internet money is you have to physically cross borders
01:07:45
with it yeah yeah think of all the Jewish people who had to take money and
01:07:50
diamonds and gold out of Nazi Germany and out of Europe
01:07:56
it was hard to do here you don't have to do anything you just need to remember a seed phrase a seed phrase being
01:08:03
basically a string of words yeah yeah do you know for people that are in that
01:08:08
paycheck to paycheck cycle which I was in for many many years of my life where I'd get paid for my call center I'd go
01:08:15
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 waiting the next three weeks for the next
01:08:21
paycheck what advice would you give them about getting out of that cycle cuz it because you almost feel imprisoned by
01:08:27
that cycle if you're in absolutely well before I give the advice I want to explain to that person what's happening
01:08:34
because you are the Prime customer for our economic system Banks love you
01:08:42
because they can sell you payday loans they can sell you credit cards they can sell you lines of credit and they can
01:08:47
keep you in debt for the rest of your life which means you keep making the bank Rich corporations love you because
01:08:54
you're not going to think twice with when we show you this nice bag when we show you this nice vacation you're going to want this stuff and so we love
01:09:00
selling you this stuff the government loves you because you're going to pay the highest
01:09:06
taxes employees pay the highest taxes and so when you're in that
01:09:11
situation you are making everybody else Rich at your
01:09:17
expense and so if you want to break out of this the first thing is you got to understand you need to make yourself
01:09:23
rich before you make everybody else Rich because when you're spending all your money you are putting your money into
01:09:29
their pockets and you have to stop that you got to keep that money for yourself you're in a boat think of it this way
01:09:34
you're in a boat and this boat has water just flowing in and you are sinking and
01:09:40
you got to start by sealing the holes and that means you got to stop the spending so if you are in what I call
01:09:47
the financial danger zone which is you don't have $2,000 saved up for an emergency and you have credit card debt
01:09:54
if you are in that situation you are in the financial danger zone and you have to make drastic changes that means right
01:10:01
now no more eating at restaurants no more vacations no more doing anything
01:10:06
that doesn't put money in your pocket and no more Netflix right and the reason
01:10:11
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 time a day
01:10:18
the average American is watching more than 2 hours of Television a day and if you don't have $2,000 saved up if you
01:10:26
have credit card debt you cannot afford those 2 hours a day being wasted on TV
01:10:33
and that means right now you have to go out and start using the time to learn start using the time to work and start
01:10:39
using the time to make some extra dollar so what do you do start selling stuff
01:10:45
stop spending money selling stuff you own selling stuff you own so if you have a TV that you're not using sell it you
01:10:52
have a car that you can't afford sell it if you're living in a house that you can't afford sell it downgrade move
01:10:59
smaller and then work to earn more money I've got to say the couple of things that I came to mind is you were saying
01:11:04
that and funnily enough I put myself in the shoes of 18-year-old Steven Bartlett when I was in that small apartment with
01:11:12
three or four immigrants in Mosside rush home and I was you know my rent was
01:11:18
nothing my rent was a 1,000 150 a month which I could not afford and I could not
01:11:24
pay and I was intermittently working between call center jobs and whatever
01:11:29
money I got I spent and part of the reason I spent it just pre is because
01:11:34
like many people watching especially men who sometimes feel the need because of the way Society is I was trying to get
01:11:42
laid at the same time and it's hard yeah when you're a young man and I say young
01:11:47
men in particular because the stats do support the fact that there is an expectation that men pay um when you're
01:11:53
a young man it's particularly difficult to 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
01:11:59
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
01:12:05
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
01:12:11
the movies what do I do and this is why every Indian parents tell their kids to become a doctor so their son can get
01:12:17
married it's the same concept but here's the thing you have to pick your hard
01:12:22
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
01:12:27
more important to you right now and you know if we talk about balance if you
01:12:32
want to have a balance of everything where you want to find a girl and you want to make money and you want to stay
01:12:39
healthy you are dividing your attention everywhere not saying it's impossible but very few people can actually do
01:12:45
everything all at once and if your number one goal is to become wealthy if your number one goal
01:12:50
is to turn your finances around you have to get serious about it because
01:12:55
where you put your attention is where you get the results and so if you want to be in a better financial situation
01:13:02
you were going to have to make sacrifices and it's difficult I can't come here and tell you it's going to be
01:13:07
easy yeah because that's going to be me lying to you I got to be honest I did make a sacrifice and for me the sacrifice was I started a business and
01:13:15
frankly that meant that I didn't have time to be going out getting laid or meeting people or socializing but it's
01:13:23
it my story arc ends with it going well and then the Romantic situation taking
01:13:29
care of itself many years later once it had gone well because I was so focused on myself and it's funny there is a bit
01:13:36
of a paradox to life that the more you actually Focus inward the more you become a magnet yeah um and the more I
01:13:41
focused outward the more I pursued and chased and sort of neglected myself the the more harder it was to get people
01:13:47
interested in me yeah and you know I I also want to say that when I talk about
01:13:53
Building Wealth I'm not talking about coming money hungry just money greedy this is evil person that just cares about money that's not what I'm talking
01:13:59
about because I want you to live a holistic life because money is just one part of your life but the second part to
01:14:04
that is I'm not telling you to never enjoy life I'm telling you to make a
01:14:09
sacrifice for a period of your life that way you can enjoy the rest of your life and never have to worry about money
01:14:15
again it's hard for us to naturally see life for Seasons especially when we're looking forward when we're looking back
01:14:21
it's very easy to say oh that was that season like I can sit here now and say all that 20 to 25 was that sacrifice
01:14:27
everything in my life to make myself something season and then 25 to 30 was like building and learning and then I I
01:14:33
now you know can can think of it's easier actually now to think forward in Seasons now that I've been through some
01:14:40
Seasons but for someone that's hasn't been through seasons in life it's hard to think about life in those terms I now
01:14:47
think of my life in these fiveyear Seasons mhm and that helps me to say to you even have conversation with my
01:14:52
partner where I go this is the season I'm in um and it will last probably roughly
01:14:57
this this long and I'm going to sacrifice these things and prioritize these things in this season mhm but um
01:15:05
it's hard for people to understand this idea it's difficult and that sacrifice is difficult especially during a time
01:15:13
where everybody's showing off everything on Instagram you look at your friends who have a crappy job but they're
01:15:20
driving around in nicer cars going on better vacations going to the nicer restaurants and you're thinking what did
01:15:25
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
01:15:32
keep get to go can they keep getting to go to Cancun they keep going to these nice restaurants how come you can't take me to these nice places and now you feel
01:15:39
like you're doing something wrong because where is this discrepancy the reason why I call my show the minority
01:15:45
mindset is because I'm a big advocate of not doing what the majority of people do
01:15:51
the first time I made a million dollars in a year I was in my 20s I was was driving a car worth
01:15:57
$500 it didn't have a bumper on it it was not pretty my wife sat in that car with me
01:16:05
and my employees drove better cars than I did so you know uh you got to be
01:16:14
confident and you got to work for something bigger and you want a partner that's going to understand that that's
01:16:21
my belief which is not the easy thing
01:16:27
it's interesting because confidence is such a internal thing and I just feel like I just probably just didn't have it
01:16:32
then cuz I I think I was scared for someone to know that I was broke I was
01:16:39
so scared to know for someone to know that I was broke that I just didn't entertain romantic relationships and
01:16:44
that is the reason why so many people will go into debt to buy vacations to
01:16:51
buy things to buy stuff to look rich and ironically that's the thing that keeps
01:16:58
so many people poor for the rest of their life is because they're scared to look broke and now when you try to look
01:17:05
rich that's the thing that's actually keeping you broke there's another element to this which is my life was
01:17:10
pretty miserable so when you have a relatively miserable life when you
01:17:16
don't have many nice things because you're working in a call center as I was until 11:00 at night time doing overtime every overtime hour I could get then
01:17:23
because you're all so lonely you're going home alone walking home cuz you can't afford the
01:17:28
bus anything that gives you a little dopamine hit gambling this is why all
01:17:33
the gambling shops are in the areas that struggle the worst financially because those I mean a lot of people say because
01:17:39
those people are looking for that you know that big payday that dopamine hit from a Payday um my TV in my tiny tiny
01:17:48
little bedsit room was like half the size of the wall I was making Reckless
01:17:54
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
01:18:01
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
01:18:07
emotional decisions yes as many people are and it's very difficult to speak logic to
01:18:13
emotion but this is where now you have to be able to understand the difference because if you're listening to this and
01:18:19
you're in that situation you have to understand that if you want to continue being able to that
01:18:25
lifestyle you're going to have to make some changes today otherwise you're going to be stuck in this lifestyle for
01:18:30
the rest of your life and it's only going to get more difficult and that's the thing is if you want to become
01:18:37
wealthy the first part is just your own mindset it's your own discipline and until tell you can conquer that I can
01:18:43
tell you everything about investing I can tell you different ETFs and index funds to invest in I can tell you
01:18:49
different investment institutions out there I can tell you which stock brokerages to use I can tell you just invest $ 15 % of your income into this
01:18:56
for the next 10 20 30 years and you're going to become wealthy but until you can get over that mindset you're never
01:19:01
going to become wealthy because then what happens in that situation is when you're in that state
01:19:07
of I just want to look rich I just want to have that dopamine in I just want to have some nice things because I deserve it I work hard you know what happens
01:19:15
next you the one that gets caught up in all the get-rich quick schemes because someone's going to say
01:19:21
look put $1,000 into this you'll have 1010 $1,000 in the next 3 months or I'm
01:19:27
going to show you you can live the laptop lifestyle you can work 5 hours a week make $10,000 a month $10,000 a week
01:19:34
you're never going to have to worry about money again just buy this program and now you're a prime candidate
01:19:41
because now you were driven by this emotion of I want that I can't imagine if I had an extra $10,000 a month and I
01:19:48
don't even have to work for it because you can't see past it you're all you're doing is being sold by emotion
01:19:55
it's you you're the one that's going to get caught up in the get-rich quick schemes you're the one that's going to make the bank Rich because you're going
01:20:00
to get stay stuck in debt corporations are going to love you because they can keep selling you the nicest the newest
01:20:05
stuff because you want to look rich you want to show it off to your friends you want to show it off to the girls and you get stuck in that cycle
01:20:13
isn't this cool every single conversation I have here on the D of CEO at the very end of it you'll know I
01:20:18
asked the guest to leave a question in the Diary of a CEO and what we've done
01:20:25
is we've turned every single question written in the Diary of a CEO into these conversation cards that you can play at
01:20:32
home so you've got every guest we've ever had their question and on the back
01:20:37
of it if you scan that QR code you get to watch the person who answered that
01:20:43
question we're finally revealing all of the questions and the people that
01:20:49
answered the question the brand new version 2 updated conversation cards are
01:20:54
out out right now at Theon conversation cards.com they've sold out twice instantaneously so if you are interested
01:21:00
in getting hold of some limited edition conversation cards I really really recommend acting quickly