Kind: captions
Language: en
when it comes to making decisions about
your money do not let yourself get
sidetracked from your goals today I'm
going to be breaking down how to form
habits maintain focus and how to build
the expertise that will allow you to
trust your own decision making and how
all of that relates to finding success
in the financial world let's get into it
growing up most of us are told some very
detrimental lies about money and I get
it it's what people have been taught
before them so of course that's what
they're going to pass down but what
people don't understand is money is a
great facilitator money doesn't say
anything about who you are as a person
it doesn't mean that you're good it
doesn't mean that you're bad and that's
one of the biggest lies that people are
told people are told that money is the
root of all evil that definitely is not
true money is the great facilitator this
is why the greatest charities in the
world what is the thing that keeps them
alive money so money can do incredibly
good things it can also do incredibly
bad things that's why I just say it's
the great facilitator I'm not saying
whether it facilitate something good or
bad but what you do with it is going to
determine its power money is potential
once you understand that money is
potential now it just becomes a question
of what exactly is it that you're trying
to do with the money and so getting
people to get out of their own way
around what money is is critically
important and so I want people to really
understand that it is the currency that
facilitates things when you think about
your own life would you go into work for
free
and the answer is no matter how much
good people want to do in the world to
eat to have a roof over your head you're
going to need money to get other people
to do the things that you want them to
do whether that's make food for you
whether that's fixed roads whether
that's to create an after-school program
all of that requires money it's just
what we as a civilization have decided
we're going to use as a way to manifest
value to store value to transfer value
across time and space and so money is
the way in which we sock away our energy
and efforts so you go to work you work
really hard that's where you're putting
your energy and effort they then give
you money that allows you to carry that
energy and effort across time so that as
time passes you have a way of planning
for the future so that that could buy
you a loaf of bread tomorrow it could
buy you a house in five years whatever
the case may be but understanding that
money isn't something that was made up
recently by the government in order to
hold people back or to allow quote
unquote rich people to take advantage of
other people what money is fundamentally
is it is an entry in a database
that allows you to store your efforts
across time and space once you
understand that then you understand why
say that it's the great facilitator now
the other lie that people are told about
money is that
if you have a lot of it you have either
done something bad to acquire it or
you're a bad person for acquiring a lot
of it but if money really is the way
that we allow value to be carried across
time and space than somebody who's able
to leverage their time well in a way
that can be put into money and carried
across time and space they have shown
that they have a level of efficiency
with how they spend their time and
energy because the way that you get
money for doing something is by making
things more convenient by solving a
problem for somebody by making something
easy that was previously difficult you
in essence if you're getting money you
have created something in the world that
somebody would rather have that thing
than that money so for instance in my
own life
when we were building Quest what we were
trying to do is say okay there are
people that want to eat cake cookie pies
ice cream but they want to stay in shape
and so they want somebody to make food
that they can choose based on taste and
it happens to be good for them now the
problem is that's very difficult to do
and it's very difficult to do at scale
and it's tremendously difficult to do at
scale in a way that's shelf stable and
so we put 18 months just into
formulation we put an ungodly amount of
time energy and money into actually
building equipment and then we had to
hire people train them how to actually
produce the product how to package it
how to distribute it all of that and how
to do all of that at a price that it was
cheaper for people to pay us the two and
a half dollars or whatever to get that
meal effectively that they would rather
have that product that we had created
than that money that money was actually
worth less to them or equal amount to
that product and so now for us to do all
of that work to do all of that research
to pay all of those employees to
negotiate all of those contracts to be
consistent to learn about health
standards and practices in manufacturing
food we did all of that and turned it
into something where people are like
word I would gladly give you this money
in exchange for that product and
understanding that ultimately what
you're doing is you're entering into a
voluntary transaction where you've
created something that people would
rather have than their money and so
understanding then that somebody that
has accumulated a lot of money has added
a lot of value to the world now of
course that's not always the case and
there are things where we're right to
question whether that is something that
we think is that valuable or not but if
it's happening on the open market the
open market is saying yes it is that
valuable that's why we're willing to do
that
and so the area where people get most
upset is in the area of finance and so
people look at Bankers they look at
people that make money on Wall Street
and they say that isn't fair now what I
would say about that the reason that
people equate that or that they've been
told to lie that those people are evil
that they're doing something that's bad
is because they don't feel like they
have access to that same system and that
brings me to another part you're not
just told lies the other part about
money that becomes problematic is people
aren't taught basic financial literacy
and there was a quote I forget who said
it but they said this is somebody very
very wealthy one of the famous names
unfortunately I don't remember who it
was but one of the famous names in money
and they said that if people understood
how money actually worked they'd be
rioting in the streets
and that's because the way that the
system of money works is people are kept
in the dark about how money enters the
system how money exits the system how
assets work how liabilities work and
because people are kept in the dark
about that then other people are able to
use their Superior knowledge in an Open
Marketplace to Garner more of the money
or even worse if the government is using
money to either inflate the currency
or to
redistribute money which basically is
stealing from one person and yes I'm
using that word very intentionally to
give to other people that have not
earned that money that creates all this
contention about how the money should be
used where it should be going right
there were people that were up in arms
when the airline industry was bailed out
or the banks were bailed out in the 2008
collapse
but how many of us knew that the banks
have actually paid that money back and
the government's actually made money off
of the loans that they gave to the banks
so most of us aren't taught the ABCs of
money we don't understand how investing
works we don't understand the the fact
that money is your own ability to store
your energy and effort and your
efficiency your intelligence all of that
across time and that you're getting paid
in direct proportion this is an Elon
Musk quote you get paid in direct
proportion to the difficulty of the
problems you solve so we have all this
going on money's amazing it's the great
facilitator it allows you the ability to
carry your your problem-solving
abilities across time and space but yet
it's all wrapped up in this system where
if you're not educated in the system
then there are other people that are
getting ahead way faster that are making
decisions about money that you don't
understand that you're not consulted on
and so you feel Bamboozled you don't
feel educated and you've been told lies
and so you're missing out on your own
own opportunities and so one of the
things that makes me the saddest is that
people don't even understand that
essentially what you're doing is trading
time for money and so the ability to
trade time for money is great I'm glad
that we're able to do it but if you
understand that that's what you're doing
then you begin to understand that
there's actually larger opportunities
for you that go beyond just trading time
for money so at quest for instance we
weren't trading time for money anymore
what we had done was create a system
that was making us money in our sleep
so the bars would get produced they
would get into a distribution Channel
they would go out into grocery stores
literally all over the world and people
would be buying those whether I was
awake asleep sick whatever it didn't
matter if I didn't go into work that day
we were still making sales now most
people are in situations where if
they're not going into work then they're
not making money especially if you're a
part-time employee or now is the gig
economy it just becomes massive
you don't even have a salary that you
can count on or sick days you can count
on when you're not able to come into the
office or you choose not to go into the
office that you're not generating money
and so you're in this very precarious
situation where it really really is this
one for one of trading time for money
now once you know that you're trading
time for money and you recognize that's
only one way to do things and that there
are other ways which I'll get into in a
second now your horizon begins to expand
and if for reasons of low risk you just
want to trade time for money fair enough
but what I'm hoping people understand
money is just a great facilitator it's
not evil and that people that Garner a
lot of it are the people that have
created the best system they have traded
the most value so now instead of just
trading time for money which is one way
of exchanging value for money your time
is valuable so you exchange that time
for money there are other ways to create
value for people people that isn't just
trading time for money or maybe it's you
trade time for money once but then over
time it's not just that so I'll walk you
again through how I generated my own
wealth so it starts at Quest recognizing
that there's a hole in the market so
there's a problem people want food that
they can choose based on taste and it
happens to be good for them but those
products are difficult to figure out
they're difficult to manufacture they're
certainly difficult to manufacture at
scale they're difficult tremendously
difficult to manufacture at scale in a
way that's shelf stable Okay so we've
got all of that going on we recognize
that then we did all the difficult
things to make sure that we could
deliver on that which was incredible it
took a lot of time took a lot of money
resources learnings decades worth of
learnings coming into building all that
stuff finding experts convincing them to
work with us all that stuff
and so now not only is that making money
while I sleep but it's also creating
what's known as Enterprise Value so the
company itself is becoming valuable to
other people that would want to buy that
company for whatever reason that might
be and now we get into how
interconnected money is and this is very
much a quick nutshell but just to give
you an idea of why it's so important to
be educated about money to not be just
rejecting people that make money you
know oh these evil overlords of taking
advantage of me
learn about money Master the game so
that you can play it very well so the
way the Enterprise Value works is this
if you have a company and they're trying
to grow their revenues a big reason one
of the biggest reasons why somebody
might want to grow their revenues is
that they want their stock value to go
up now the reason they want their stock
value to go up is that the value of a
company is predicated on the value of
their stock so how many individual
shares of the company exist this is
assuming it's a public company how many
individual shares of the company exist
and what are people willing to pay for
those shares what's the going rate that
at literally that moment because these
fluctuate by the second but in that
moment all of what what are known as
outstanding shares so all of the shares
that exist are and out in the world if
they were to sell all of them how much
would that be worth now a company can
not only sell if they hold some of those
shares they can sell them on the open
market and earn money that way but they
can also buy borrow against that money
and so they're able to bring on debt in
order to finance growth in the company
which could be adding new product lines
it could be expanding into different
regions whatever you could use that
money for a lot of different things but
people that really understand the
financial game at a high level are able
able to use debt as leverage okay and so
debt is often actually referred to as
leverage what they mean is maybe for in
the case of stocks equity
same thing in exchange for the
outstanding the value of the outstanding
shares they can borrow against that and
so now just by building a company that
other people want to own a piece of
they're able to borrow money right so
they didn't do
um more things the collateral is the
value of those outstanding shares and so
now they're able to grow their company
even more and so they build around their
company what is often referred to as a
moat because it's very hard to compete
with a company that has a massive value
because of the amount of money that
they're able to generate off of the
value of the stocks okay and so that's
just one way and I don't even consider
myself super educated on the way that
money Works to be completely honest this
has been a journey I've been I've always
known how to not always in my
professional career I have learned how
to make money but investing money is
actually a totally separate thing and
the more I learn about investing money
the more I'm like how are they not
teaching them us this stuff and it is
complicated but it's very learnable and
so the more that you believe this idea
that people that have a lot of money are
evil that money itself is the root of
all evil then you willfully remain
ignorant and now as you willfully remain
ignorant the people that are like yo I
know how this works they're going out
and they're garnering all the extra
resources and now the Divide between the
rich and the poor just gets wider and
wider and wider and wider and that's how
we end up here but if you like me go hey
I because remember I started out broke
I did not want to remain broke forever
and so I was like I'm gonna have to
learn how this game is played so first I
learned how to make money and now I'm on
the Journey of learning how to invest
money and the more that I learn about
this stuff the more I'm like oh my God
anybody can do this literally if you
meet a minimum line of intelligence
which if you're watching this I promise
you do if you meet a minimum line of
intelligence you're going to be able to
figure this stuff out and honestly it's
the most basic stuff that you want to do
ETFs index funds don't try to time the
market don't try to become a genius
just do really basic stuff and now
you're able to take advantage not just
of time but intelligence efficiency all
that stuff that you can remember sock
away into money and now that money
whether it's cash gold
stocks bonds whatever you decide to
invest in that's going to carry that
value across time that's so important to
understand and that's really just like
that level one of getting ahead of the
average person who's just training time
for money and then as you go you're
going to find that there's levels to
this stuff but the more you understand
the more control you have in your life
the more you're able to generate money
the less you have to worry about money
problems now money is not going to solve
anything but money problems and that's
something that's very important to
understand but as you learn to master
the game of money you really can get
ahead so please don't buy into this
narrative that money is evil that rich
people have done something wrong to get
that money they just understand
something that you may not yet
understand
there are almost certainly a lot of
things that you're doing that are going
to keep you broke the first is what we
were talking about in the last question
it's all about financial literacy do you
know how money actually works as
somebody who came to this game really
late I understand how easy it is to be
educated to be dare I say intelligent
and still not actually understand how
money actually functions and so you want
to make sure that you're taking time to
get financially literate the next thing
is and some of these are going to be so
basic and people don't do them
you need to stop spending so much money
most people live paycheck to paycheck
even people that are making six figures
live paycheck to paycheck it's something
like two-thirds of people that make 250
000 a year still live paycheck to
paycheck so the goal is instead of
flexing on how much money you make you
want to make sure that you're living
below your means if you want to
dramatically reduce the amount of stress
in your life and set yourself up for
Success you want to make sure that
you're living below your means now as
you begin to live below your means first
the first habit you're going to want to
introduce is that you're going to start
saving some of your money so of course
there's going to be amount that you're
going to allocate towards your living
expenses your house payment or your rent
your car payments Insurance all of that
stuff food but then you want to make
sure that automatically you're saving
money if you're not automatically saving
money then you're walking down the path
of remaining broke so you want to make
sure that you're living below your means
and you want to make sure that you're
automatically saving money now once you
have saved up enough money that you have
somewhere between 6 and 12 months
of emergency cash on hand
if you get sick if you hate your job any
of that stuff is exacerbated a thousand
fold if you're living paycheck to
paycheck because now you've got nowhere
to go there's no way for you to be able
to weather that storm and so it's what's
known as a threshold event everything in
your life may seem like it's going well
until you hurt your back and you're
unable to go to work for uh two months
and you were living paycheck to paycheck
and now you're in financial ruin or God
forbid you get a diagnosis and you end
up with medical bills and you go
bankrupt from that that happens so
frequently so you want to make sure that
you have six to 12 months saved up now
once you have six to 12 months saved up
now we want to start thinking about
investing now if you're not investing
you're going to be getting eaten alive
by inflation now a lot of people are not
thinking about inflation
and the reality is even in a good
economy
you're looking at inflation being around
two percent now right now as we're
recording this inflation is about eight
and a half percent so you don't want to
count on it being as low as two percent
because that's not always going to be
the case now the crazy thing is most
people don't understand what inflation
actually is so inflation is your ability
to buy something goes down every year
that's the same as losing money every
year so imagine if you have a hundred
dollars inflation if inflation is eight
point five percent like it is now the
next year by the next year because it's
happening every day by the next year you
don't have a hundred dollars even even
if you saved it didn't touch it it's
locked away in your bank account you now
have the equivalent it'll still say a
hundred dollars but that hundred dollars
now only buys you the equivalent of
ninety one dollars and fifty cents okay
that's inflation so you're buying power
even even though the number stays the
same the buying power is going down so
as of right now as we're recording this
you would need to make
eight and a half dollars every year in
order to stay at the buying power of
your 100 okay so saving money even
though I just told you to save six to 12
months
you want to make sure that you
understand that you can't just sock all
of your money away and think that it's
going to stay and this doesn't haunt
anyone more than me I get it because
investing is nerve-wracking but if you
don't invest you're not going to be able
to keep up with inflation if you don't
keep up with inflation you're going to
be losing money over time and if you're
losing money over time that nest egg
that you're going to Hope takes care of
you at the end of the day isn't going to
be there for you and so you really have
to be thoughtful about how you invest
what is up my friend Tom bilyu here and
I have a big question to ask you how
would you rate your level of personal
discipline on a scale of one to ten if
your answer is anything less than a 10
I've got something cool for you and let
me tell you right now discipline by its
very nature means compelling yourself to
do difficult things that are stressful
boring which is what kills most people
or possibly scary or even painful now
here is the thing achieving huge goals
and stretching to reach your potential
requires you to do those challenging
stressful things and to stick with them
even when it gets boring and it will get
boring building your levels of personal
discipline is not easy but let me tell
you it pays off in fact I will tell you
you're never going to achieve anything
meaningful unless you develop discipline
right I've just released a class from
Impact Theory university called how to
build Ironclad discipline that teaches
you the process of building yourself up
in this area so that you can push
yourself to do the hard things that
greatness is going to require of you
right click the link on the screen
register for this class right now and
let's get to work I will see you inside
this Workshop from Impact Theory
University until then my friends be
legendary peace out
now I'm going to give you the most basic
advice on investing now why am I giving
you basic advice because all the
smartest investors in the world are
saying if you don't know anything about
investing this is what you want to do
and because I do not consider myself a
good investor this is the only advice
that I feel like I can give you that's
actually sound advice and that is to
invest in passive things so you're going
to be investing in ETFs uh in index
funds now index funds are the easiest to
explain an index fund is a group of
companies so rather than you saying I'm
so smart I know what companies are going
to do well I would say don't do that
because even the smartest people that do
this for a living have a hard time being
right over a long period of time here is
a fact that most investors don't want
you to know most investors over a
10-year period are going to lose to an
index fund so the really smart people
with all the algorithms they're all
going to lose to just picking a big
basket of companies and investing in
those and not touching the money
and then doing something called dollar
cost averaging so rather than thinking
that you're so smart that you're gonna
beat the market right I'm going to time
it I know when the bottom is right
because the best advice on investing
you're ever going to get is the
following
Buy Low
sell High
now I I don't mean that as a joke that
really is the best advice you're ever
going to get the problem is most people
can't do it and the reason they can't do
it is they get emotional or they don't
have enough knowledge and so I see so
many people making these big bets
because it's sexy it's cool and when it
hits you feel like a king the problem is
The House Always Wins and the odds of
you on a long timeline winning like that
are virtually zero and Ray dalio made
this really clear to me so Ray dalio
runs the largest hedge fund in the world
it's called Bridgewater and Associates
and he says Tom look I'm spending
hundreds of millions of dollars on
Research I've spent probably even more
than that building the best algorithms
in the world
I have a talent pipeline where I'm
recruiting the best and the brightest
people from across the entire world I
have fiber optic cables that allow me to
make transactions that are measured in
milliseconds
and you're competing against me if
you're trying to actively trade in the
market
and so that's why people like him who
understand how this system works are
saying for the average person that's not
the game that you want to play the odds
of you losing border on 100
but if you go with something like an
index fund which is there's one called
the S P 500 the S P 500 is effectively
the 500 biggest companies on the stock
market now the odds that you become one
of the biggest companies on the stock
market and stay there you're going to
stay there for something the average
company stays on the S P 500 for like 16
years right now now it's been declining
but still that's a long time and the way
that the S P 500 works is when one
finally gets down to the bottom and it
gets booted off then they replace that
with another one and so you always have
the top 500 companies in the stock
market at that time and there's a whole
bunch of different index funds it could
be growth stocks it could be stocks in
foreign markets and whatever one you're
comfortable with but at least it's a
basket of stocks and your dollar cost
averaging in which just means that every
day or every Wednesday or whatever
you're putting in a certain amount of
money that you want to invest and you're
just going to leave it you're not going
to panic when the market goes down and
you're not going to when prices are up
you're not going to buy into the
Euphoria now why would you not want to
do that
the reason that you don't want to buy
into the Euphoria is because when price
when people are euphoric prices are
going Sky High now in those moments and
I have now lived through my first cycle
where I was really paying attention to
the market and it got euphoric so now I
know what it feels like and what it
feels like is it's always going to go up
that you're a genius you're making all
this money hand over fist now the good
news is when it all crashed I didn't
sell I didn't buy like a fiend it was
going up and I didn't sell when it went
down which means that I don't have any
realized gains or losses now of course
when things are going up if you want to
take money off the table by all means do
that you then bought low and you sold
High makes all the sense in the world
but the last thing you want to do is buy
like crazy as the price is going up and
then Panic as the price drops because
now you've bought high and sold low but
that's what most people do because the
Euphoria is so exciting and people feel
like oh there's no way that I can lose
and then when the bottom falls out they
feel like oh my God it's only going down
this is all going to go to zero and the
reality is it might
but if you follow the principle of never
investing more than you can afford to
lose then you can ride out the market
and if you're in a passive fund like in
the S P 500
then it's just your dollar cost
averaging you're just buying at that
steady interval now when the price drops
you might buy more right if you know
what a good deal looks like like hey if
the S P 500 is down 20 then maybe what
I'm going to do is buy instead of my
hundred dollars a week I'm going to put
in 150 or 200 if you have the capital of
the spare now you're getting things at a
discount right I've heard it said I
think it was by just Bree Singh that a
recession is basically just a Black
Friday deal for assets because now
everybody's panicking
prices are falling but if you've been
passively investing into something as
stable as the S P 500 now you're just
able to get more of that at a discount
it can be very advantageous and this is
why they say more millionaires will be
made in a recession than in any other
time because all of these assets are on
discount now the question is
what's an asset and so this is another
habit that keeps people broke is they're
not learning about money they're not
taking this time to figure out the
difference between an asset and a
liability people are spending all of
their money death habit number one
you're spending all of your money on
liabilities and not assets so the key is
to understand what an asset is to
understand what a liability is and to
buy appropriately an asset is something
that when you buy it's going to go up in
value and not cost you money or even
pays you money more money obviously than
it costs you
if you have a liability it's the exact
opposite so the classic example of a
liability is a car payment the second
you drive a car off the lot it's going
down in value and with very rare
exception it is never going to go back
up so it's going down in value and
you've got to keep making those payments
so you've got money going out while
value is declining another one that
people often think of as an asset but is
usually a liability is your own home now
the reason that your own home is so
frequently a liability is odds are you
have a mortgage odds are it's the most
expensive thing in your life and it's
not like you can just get out from under
that liability especially if the bottom
falls out you're gonna have property tax
depending on where you live and you're
going to have upkeep no matter where you
live so now you're pouring money into
this thing and maybe the value is going
up but maybe not always and between the
property tax and the upkeep you may be
paying more than the value is going up
over time
especially if you account for
opportunity cost so the odds of your
house after taxes fees uh upkeep all of
that being a better use of capital if
you're living in it being a better use
of capital than taking that same money
and putting it into an index fund or
something like that
a diversified portfolio let's say the
odds of the house returning more on that
are very low unless obviously if you get
into rental properties and things like
that and you're not living in it so now
it can actually generate cash flow well
then it's just a math equation this is
how much I spend on average per month
for
um Insurance uh property tax upkeep all
of that and if on average the rent that
you're getting is more than the money
that you have going out then it's very
simple every month I'm making more off
of this property then I'm losing cool
now you've got an asset so that is the
difference if you're paying for
something it's a liability if you're
making money off of something it's an
asset now most people don't have the
discipline to buy assets because
liabilities are usually the fun things
it's the cool clothes it's the car it's
the fancy house all of that stuff and so
people get themselves into a difficult
situation because now the vast majority
of their capital is going out and this
is how people end up
in a position where they're living
paycheck to paycheck okay another thing
I want to talk about that's a bad habit
is that people are on a career path
now why is that bad you ask I have so
many people around me at my company that
are on a career path and they're amazing
people but the people that really
make money are the people that get so
good at something that they can solve
the most difficult problems that the
company faces so rather than thinking oh
I am an editor and so I'm going to get
good at editing and I'm going to work my
way up that way you can basically
predict what your salary is going to be
you're more or less going to get a two
to five percent raise year over year
there'll be a couple times where maybe
you're promoted into a role within that
lane that has more UH responsibilities
and therefore you get paid more money
but you can just look at that career
path and say what is the person that's
the highest in in this chain that I'm
working my way up what do they make
that's what you're going to make plus
the sort of annual increases
on the other hand if you look at who's
the person in the company making the
most money full stop now you begin to
understand that just following that one
career trajectory is not necessarily
going to be as lucrative as solving
those very difficult problems that the
highest paid people in the company are
solving so I'll give you one example if
you want to get wealthy in a company go
into sales
I mean that's just like the classic path
to making money because now if you're
getting a commission off of what you
sell you're only hemmed in by how much
you can sell and the price of the thing
that you sell so now you've got a lot
more flexibility so be very thoughtful
as you're exchanging time for money
don't forget that you also want to be in
a position where you can exchange skill
set for money efficiency for money all
of those things allow you to break the
basic time for money equation and that
is going to be far more lucrative and
now as you're making that extra Capital
if you keep your costs of living low now
you're able to invest into those assets
and as you invest into Assets Now you're
kicking off either cash flow or you're
building up wealth over time and
something that can be sold for way more
than you bought it for okay if you do
all of that you can finally break these
habits that are keeping you broke there
are certain habits of basically all
wealthy people have in common that you
guys can put to use in your life
and the first one is going to be the
most controversial but I could not feel
more strongly about this they make no
excuses they take total responsibility
for their lives in fact many people
that fall into that category will take
responsibility for things that clearly
don't even have anything to do with
themselves
I have said many times arguably the most
controversial thing I've ever said but
I'm telling you if you adopt this in
your soul and act accordingly it will
change your life forever you will become
an Unstoppable machine
if I Tom bill you were hit by a drunk
driver I would blame myself
not because I don't think that the drunk
driver caused the accident because
blaming the drunk driver gives all my
power away and I can't do anything about
them I can't stop people from drinking I
can't control the way other people drive
but I can control whether or not I'm on
the road I can control how good I get at
defensive driving how much I pay
attention and looking out all of that
all of those things I control so if you
take control of your life and make no
excuses
now you're in a solution-oriented
mindset and people that get wealthy let
me tell you right now all they think
about are solutions how do I solve this
problem because you are if you're
wealthy you must remember your parent
you're paid in direct proportion to the
difficulty of the problems you solve and
if that's true you better get very good
at solving very difficult problems and
if you have something that's holding you
back like I'm not as smart as a lot of
people and that really pisses me off but
the reality is pissing and moaning about
it is not going to make me any smarter
all I can do is go make the most of what
I have I can go learn now I can get
pissed off at my mom I can be angry at
my dad but the reality is that I am
where I'm at from either uh how I was
impacted as a kid in the developmental
years how it's impacted in the womb my
genetics all of that stuff but it's all
done the Dias cast there's nothing I can
do about it but there's 50 of my life
that's completely malleable and so I'm
going to focus on that and I'm going to
like other wealthy people be obsessed
with learning you've got to be obsessed
with learning so you're not making any
excuses you take total responsibility
for your life and one of the ways you
take responsibility for your life is
even if circumstances are against you
even if you really haven't dealt a bad
hand you know that you can get better at
things you have the only belief that
matters the only belief that matters is
if I put energy and effort into getting
better I will actually get better now
why does that matter
because skills have utility now why does
that matter because skills that you do
something other people can't do and that
thing that it lets you do is solve
problems that people want solved what if
I said like eight times in this episode
that people will pay you in direct
proportion to the difficulty of the
problems you solve so going out learning
getting skills that have utility allows
you to do things other people can't do
you're going to be able to get money
other people can't get that is something
that wealthy people understand maybe
it's not fair but who gives a [ __ ]
nobody's coming to save you nobody's
going to solve these problems for you
and if you're turning to people for a
handout all you will ever get is what
they're willing to put in your hand
but if on the other hand
you're willing to go hey what's the
hardest problem you have to solve I'm
going to make that problem go away for
you and all I ask in return
is money
and I'm going to ask the amount of money
that's either equal to the exchange for
you or less so that you're tripping over
yourself to buy this thing and that is
precisely how you end up breaking the
time for money equation because wealthy
people understand
you just can't charge enough for your
time in order to make it worth it so as
you can imagine there are people that
offer to pay me a lot of money for
one-on-one coaching but I don't do it
and why don't I do it because unless
you're willing to give me equity in your
company to do it I just can't charge
enough to make it worth the time
so you have to break that time for money
equation you have to be getting
ownership in something and that's
another thing that people understand
wealthy people
that real wealth is going to come from
owning something
you own something that other people
consider extraordinarily valuable that
is going up over time now the reason
that ownership matters is because you
want to buy low and sell High the reason
that entrepreneurs end up making a lot
of money in success obviously is because
they start with something that's worth
nothing and they get very clever and
they build something that over time goes
from worth nothing to worth whatever the
market values it at so to give you an
example in my own life talked about this
earlier we took quests from a product I
couldn't give away literally I know that
seems ridiculous now but when we first
launched
I would stand at trade shows and tell
bodybuilders who ended up becoming like
the most Ardent purchasers of quest and
I would say
free protein bar
it's a free Quest Bar I will give it to
you right now we didn't even in the
beginning we didn't even ask for an
email all you had to do was extend your
hand grasp bar that was the sum total of
the payment that we were asking for and
people wouldn't do it
so we had to take it from figuring out
the formulation building out the
manufacturing all the things that we've
talked about
convincing people to try it and we went
from that to something that people were
willing to pay a billion dollars for
but in the beginning it was worth
nothing and so the amount of money that
we had to put in to get profitable and
then we reinvested all that money and
then ultimately we were able to sell it
for that extraordinary sum of money and
it was a huge win life changing for all
of us involved
because we started with nothing and we
owned it and we built value in it that's
the key you have to own something that
goes up in value over time so whether
you bought low and you're going to sell
high or whether you were the one that
created all the value and so you didn't
even have to buy anything you just
created value in this thing that later
people wanted to own so ownership is a
huge key for people that end up
generating wealth you want to own you
want to hold and so
um Warren Buffett talks about this a lot
selling makes you rich holding makes you
wealthy now what does he mean by that
if you want to sell something you can
get that influx of cash and you will
have whatever that cash is now but now
you're fighting against inflation right
so you've got the money but what the
hell do you do with it what are you
going to do with it that doesn't allow
it to get shipped Away by inflation
you're going to have to find somewhere
to put that money that's earning you
more money than inflation is taking and
so that's why holding really becomes the
ultimate play if you're holding the
right thing because it's going up up up
up up up over time and then you can
either borrow against that and this is
something that wealthy people understand
you can borrow against your assets you
don't even have to sell them you use the
asset as collateral you go to a bank and
let's say that you're collateral sorry
it is your collateral but your asset is
what I meant to say your asset is going
up let's say
five percent seven percent year over
year and inflation is two percent or
like right now eight eight point five
percent is the current inflation
hopefully by the time you watch this
that won't be true uh and your assets
going up by 10 percent so now you're in
a situation where even though inflation
is chipping away at most people's
ability to buy and whatever you have in
savings is going down by that amount
amount of inflation
you've got this asset that's going up
more than that cost now if you've got a
bank that's willing to give you a loan
with that asset as collateral and the
loan is let's say three or four percent
but you're making five seven percent off
of that money that you're either using
to reinvest in your company or buying
stocks or whatever you're doing you have
to be very careful buying stocks on debt
which I'm actually I advise people not
to do but just so you understand how
money works
wealthy people that know how to use debt
effectively that's what they're doing
they don't sell the asset they borrow
against the asset and as long as there's
a Delta between the cost of the loan and
the amount that the asset goes up you
now never have to sell the asset you can
just keep borrowing against it this is
how real wealth is made real
generational wealth so yes you can sell
the asset you can make that money and
you will have to do that uh over time in
order to pay back the loan and all that
stuff but again there's a Delta so even
as you're selling pieces you're making
more than you have to pay back it's
really crazy and it's freakish how long
it took me to understand even basic
things like that so trust me when I say
I deeply empathize with people who are
hearing that for the first time
so understand that they understand they
have to own something they have to own
something that goes up in value over
time that they want to own something
ideally that they can borrow against and
so that's how selling makes you rich but
owning and holding can make you truly
wealthy
all right those are the habits if you
follow those habits you really can turn
things around in your life be hyper
careful about using debt that's like the
the advanced level stuff but just by way
of making sure you understand how the
system works it can be a very powerful
tool in the right hands
I know a lot of people are asking the
question do I have a spending problem or
do I have an earning problem now the
great news is you've identified the only
two levers that there are you can either
spend less money or you can make more
money those are your two options but I
would say that most people have a
problem with both the odds that you're
spending too much money are virtually a
hundred percent unless you're really
able to Sock away money week after week
month after month year after year and so
the easy way to figure out is how much
money more money do you have at the end
of the year than you have at the
beginning and if that number is going up
and it's going well amazing now remember
the goal isn't just to save a ton of
money you want to save six to 12 months
beyond that you want to be finding a way
to invest now look there are certain
economies because I feel bad saying this
right now knowing that I have a huge
portion of my wealth right now in cash
so some of this has to do with Seasons
the reason is I think that we're in a
very bizarre period of volatility right
now that I don't expect to last I am now
beginning to look more seriously at
different assets because I do think that
things are relatively depressed right
now be aware though I am not a financial
advisor this is not Financial advice you
should be very careful you take
Financial advice from so when it comes
into the specifics I would say go find
somebody that knows way more about what
I'm talking about but just getting you
to understand I was feeling weird not
admitting that right now I have a ton
more uh in cash than I would normally so
anyway there are different seasons but
for the most part you don't want to have
a bunch of money in cash you want to
have your six to 12 months and then you
want to have the rest invested in
something that is very passive you're
not in there actively trading going up
against people like Ray dalio
um you're taking a basket of things
you're not trying to time the market
you're not trying to outsmart the market
you're saying this is how I say to
myself I'm not smart enough to pull this
off so I'm going to take a diversified
approach to buying low selling High AI I
can't time the market so I'm in a dollar
cost average in and then I'm just going
to make sure that my assets are going up
over a long period of time I'm not going
to panic about little blips so and I'm
talking like three to four year
movements so I'm not worried about
something going down over a three year
period I'm just thinking okay I want to
make sure that I have a very robust
Diversified portfolio and that it's
going up over longer periods of time and
just look at historicals how is it
performed historically there are no
guarantees of course but if something is
done well over the last hundred 120
years odds are that you can roughly
count on something like that moving
forward and so that is
um the very basic approach that I would
take you want to make sure that at the
end of the month that you've got more
coming in than you have going out and it
really is that basic and then just
remember there are two levers to pull
you can either spend less which is
always an option don't think yourself
cool because you have a fancy car our
fancy house fancy watch fancy clothes
none of that I buy most of my clothes on
Amazon
obviously I could afford a lot more but
I just don't tie I actually do tie
myself to my sense of style which I
actually do like but I don't tie that to
whether the clothes are expensive or not
and I remind myself constantly I could
wake up broke tomorrow so don't tie your
identity to that don't be afraid to pull
back your expenses as just free seeing
has said many times if you can't buy
something five times don't buy it once I
think that is very good advice so be
super thoughtful about your spending and
then go crazy on figuring out ways to
make more money because personally I
couldn't live in a world where all I was
doing was saving I want to be excited
about my potential upside opportunities
and so for a lot of you figuring out a
way to invest in yourself to take a
chance on yourself as either having a
side hustle or being a full-blown
entrepreneur will be the greatest
journey of your life even if it doesn't
end up paying off financially it will be
an incredible journey and if you love it
you love that Hustle as long as you're
not investing so much money into the
bank that into the into the business
that it becomes stressful if you lose it
then hey that first one fails try try
again until you find one that succeeds
successful entrepreneurs almost always
have a Litany of failures behind them so
don't stress yourself over that just
make sure that you're in a position
where you don't need a lot of money to
survive then you can do a lot of cool
and exciting things the most important
question you can ever ask about money is
can money buy happiness and I'm begging
you and pleading with you over the next
however many minutes please pay
attention so that you may learn easily
what I learned with great difficulty
money can't buy happiness I'm sure
you've heard that a thousand times but I
want to tell you why it can't buy you
happiness but why people keep chasing
money because people are always going to
chase money and the reason people are
going to chase money is because it is
extraordinarily powerful but it can't
touch how you feel about yourself
so I think that people have been told
lies about money like we were talking
about earlier but one of the lies that
you've been told is that money isn't
powerful it's not going to make you feel
the way that you want to feel and the
truth is it isn't going to make you feel
better about yourself but it is a great
facilitator and so if there's something
that you want to build money is going to
unlock that money can make you feel
amazing that you can do something
incredible with your uh your time your
opportunity your knowledge you can build
something extraordinary that is this
economic engine that serves people I
think entrepreneurship is turning your
potential into skill set in a way that
allows you to build this ongoing
economic engine