jasper is saying
there are more millionaires made in a
recession than any other time but my
question is how and what can the average
person do to take advantage of that
moment or since i know the punch line
really any moment and guys make sure
that you stay till the end because i'm
going to give you the eight things that
i have learned from amazing answers from
just breathe like you're about to hear
all right so let me start with the
simple answer and then we'll kind of
break it down into more complex answer
recessions create more millionaires than
any other time like you said because
when you have a recession a market crash
people get scared and then they sell
their assets
what's an asset stocks real estate
crypto gold it can be any type of
investment depending on what the crash
is what the recession is about
and that then creates a buying
opportunity for somebody who has access
to cash or capital and somebody who is
financially educated so if you have the
cash you're prepared and you have the
education of knowing what to buy but now
a crash creates a discount for you to
come in and buy an investment on sale
you can think of it like
black friday for investors you get to go
shopping at a discounted price because
now people are selling because they're
scared and what you want to look for now
is good investments that are being hurt
not because their investment is on the
verge of bankruptcy but because the
economy is pushing the price of good
investments down so that's kind of on a
in a nutshell to answer your question
what that means but now if we dive a
little bit deeper we go a little bit
higher level how do you do this what
does it mean
well
if you ask the majority of people or if
you just ask anybody is a recession a
good thing or a bad thing
most people are going to say it's a bad
thing but it's really relative depending
on which side of the equation that
you're on see it's bad for so many
people because recession means
i might lose my job
i might lose my home
i might lose my savings so it's bad in
that sense where if you're not prepared
you might not be able to
weather the storm and you might get
financially hurt we've seen this happen
for i mean forever now that anytime you
see a bubble burst the people who are
not financially educated the people who
are not prepared the people who don't
understand what's going on in the
economy get burned i remember the first
time it occurred to me i was like wait a
second if i don't lose my job
then a recession doesn't impact me now
that was before i had any money invested
so now i have a better understanding of
if you're counting on income or whatever
from your investments then it can still
be a dicey period but that was one of
those things like the a recession was a
boogeyman it was like something to be
afraid of i didn't really understand why
i was supposed to be afraid and so my
question is
why do people get scared in a recession
what is it that makes them sell i'll
give you a very specific thing so in
crypto
i haven't even though the price is
plummeted i haven't sold a single eath
not a single satoshi i've just been
holding
not tense about it
so why
do so many people get scared in a
recession so there's two reasons why
someone sells either it's a forceful
sale or it's a voluntary sale
the voluntary sale is a little bit
easier to understand so i'll explain
that first
so when the 2020 pandemic hit
we saw the stock market crash
now i think most of us understand crash
has a definition by the way
well yeah crash bear market is when you
see the market fall by 20 or more
now
the stock market when the economy shut
down in march of 2020 we saw the fastest
stock market crash in the history of
time now naturally people got scared
faster than
great depression whoa
people got scared
and i think most of us understand that
your 401k for example is a retirement
plan that you don't want to touch until
you are near retirement
what happened well we saw a massive
amount of people
sell out of their 401ks near the bottom
of the 2020 stock market crash because
they're convinced this is going to keep
going lower and it's like i got to get
out now you just see your portfolio in
the red you lose 10 20 30 40 50 you get
scared and you're like i want to save
whatever money that i can because you
don't understand what's going to happen
i mean if you look at it from the last
100 years chart you'll see that crashes
happen but then each time they happen
our economy is stronger rebounds the
market moves higher but we get this like
narrow vision we're looking at today
tomorrow the day after next week and now
we want to pull out as fast as we can to
save quote unquote save our money
and so you sell so this is a voluntary
sell where now you get scared you panic
people talk about how the world is
ending i mean the media is in the
business of some hype okay it's as
unfortunate as it is you have to
understand this things are typically
never as bad as they seem and things are
typically never as good as they make it
seem so it's typically somewhere in the
middle
and
so now when you know that you'll
understand that okay the stock market is
a liquid investment meaning you can buy
and sell a stock with the click of a
button i can buy and sell a share of a
company literally within two seconds
and so what does that mean well if i
start reading headlines i see the market
going down and start getting this
anxiety i started getting this fear i
might just want to sell i mean i can do
it in two buttons and if all my friends
talk about how they're selling how
they're losing money and the media keeps
talking about how the market's
collapsing the world is going to end
because the media is either going to say
the world is ending or nothing bad will
ever happen right it's typically one of
these two extremes because that's what
drives and i want to get to that that's
one of the things i'm going to push you
on later is like i've heard you talk
about this people lie a lot they do and
then they come out and admit yeah we
were lying but we had a reason but i
won't derail this now but like that kind
of stuff freaks me out and that's and
it's the reality of life and we'll talk
about that so now if you understand that
what does that do it manipulates
people's emotions emotions then drive
our actions and what are these actions
we sell at the bottom
and then we buy at the top because at
the top is the same thing people say oh
everyone's making money on the stock you
can't believe how much money these 17
year old kids from high school are
making you can't believe how much this
hedge fund made you can't believe how
much money whatever your neighbor made
and now you get jealous you get this
fomo you don't want to miss out you come
in and buy then at the bottom is the
opposite of motion so that's the
voluntary stealth because most of us
don't have the psychology which is a
part of the financial education of how
to manage our investments
the second is the forceful sale now the
simplest example that i can give you of
this will be if we backtrack look back
to the 2008 real estate crash
now if you bought a home
for four hundred thousand dollars
and you had a
adjustable rate mortgage which was very
common back then and it's getting common
again it is getting very common again
which is very bad news but they were
very common and
another thing that was very common back
then was a zero percent down payment but
let's assume we put a little bit of
money down because you were
you wanted to put some skin in the game
so you put a little bit of money down
you put three to five percent maybe ten
percent down
well what happened was a few years after
you bought the home interest rates went
up and now you realize really fast i
want to walk people through what an arm
is an adjustable rate mortgage i had one
if i had known how dicey talked about
would not have done it so an adjustable
rate mortgage you're basically betting
that the future is going to be better
than the current moment so you take
something with uh
a
a certain
interest rate and you're like okay i'm
going to be able to refinance either the
value of my home is going to go up or
interest rates are going to come down
whatever but i'm going to be able to
refinance my home so the story goes or
i'm going to be able to pay it off
whatever before that huge increase and
you are betting literally your house
that you're going to be able to either
make enough money to cover the increase
or that you'll be able to sell your
house at a price that you like or be
able to refinance it before that happens
exactly it's so dicey so people end up
getting in these insane situations that
tends to go along with when people are
getting pretty loose and fast about not
expecting as much money up front so now
you don't have any equity in the
property you get upside down meaning
that the house is worth less than you
owe so even if you sold it you're going
to be selling it for a loss and so now
you're in this really dark spot where
you can't sell it the interest rate just
jumped sometimes dramatically right and
so now you owe significantly more i mean
it could be 50 more a hundred percent
more
and you're just in a really big you
can't get out from under it unless you
just let them foreclose on you right or
you have to find a way to pay that money
and it is
speaking from experience i was so
convinced
that my life would be in a fundamentally
different place right than it was when i
took it so i put a five-year bet on
myself
and
dude it ended up working but oh my god
in the intervening five years i became
so much more financially literate that i
was like what was i doing like that was
the most dangerous thing i could have
possibly done it's a very dangerous
vehicle when it's given with no
financial education and the problem is
it's not given with any financial
education because see a banker so i'm
gonna just explain this for a second a
banker is in the business of making
money how do they make money by selling
you money so they're trying to sell you
as many loans as possible and now if
you're looking at this 400 000 home well
let's just assume for rough numbers that
the mortgage on this 400 000 home is 2
000 a month and you might see i'm kind
of stretching myself a little thin but i
want to own this home the banker doesn't
want you to not buy the home because if
you don't buy the home they don't get
paid so now what they can do is say well
how about you buy this four hundred
thousand dollar home you don't pay two
grand a month but instead you just pay
nine hundred dollars a month
off are you telling me i can buy this
four hundred thousand dollar home for
nine hundred dollars a month with
nothing down
yeah how about you have this free tv as
well because there was promotions back
then where they would give you a free tv
you literally put no money down now you
can buy this home
and so what was happening is people were
buying these types of homes with these
types of deals thinking they have this
amazing price 900 a month and it was
given with
zero
to extremely little financial education
because then what would happen is after
a number of years your interest rate
would readjust because you were given
this low teaser rate for the first few
years
and the pitch was
well don't worry about it home prices
always go up
so if home prices continue to go up or
not if when home prices go up in a few
years if you can't make the payments
don't worry about it just refinance out
or sell the home and then you have cash
in your pocket so what could go wrong
and this was the pitch now
again many people are not financially
educated we're not taught about money in
school so that was the first aspect the
second aspect was these loan officers
banks are incentivized very heavily to
sell as many mortgages as possible
because the more mortgages you can sell
in a month the bigger your bonuses
and so you had these two aspects
happening so now you bought this 400 000
home you pay 900 a month
and things are great then a few years go
by you get this letter in the mail
saying your payment's going to go from
900 a month to let's just say 2 000 a
month
now if you don't have the ability to pay
this extra 1100 a month you're going to
say
oh that's quite a bit oh well no big
deal let me call up my banker and tell
him the situation and he'll tell me what
my best options are because my banker is
a good financial advisor right
call up the banker say hey banker
i can't afford this 2000 a month what
are my options he says well you can
refinance or you can sell this is what
was happening now getting closer to 2008
and so you said okay well let's
get an appraisal or let's look at the
value of the home you you bought it at
400 000. now you maybe owe
380 000 over the first few years because
the first few years of your mortgage are
interest heavy meaning the majority of
your monthly payment is going towards
interest not paying down your balance
and so now they look at it and they say
so the value of your home is now 350 000
you owe 370 380 meaning you're under
water
so now if you owe 380 000 under 350 000
home no bank is going to want to
refinance because now you're underwater
they're not going to want to re-lend you
any more money otherwise you're going to
have to bring cash to the table
you can't sell the home because if you
sell your home for 350 000
you need to still pay the bank the other
380. so you need the 30 000 coming out
of your pocket and if you don't have 30
000
you can't sell so what's the next option
pull if you can't make the monthly
payment either you're going to walk away
or the bank is going to force you to
walk away through a foreclosure this is
now a forced sale
so now the bank comes in they take the
home from you and now the bank wants to
liquidate because they want to
not own properties they want to just
lend money that's their business they
don't want to own homes
and so that was what happened and so
many more homes hit the market you see
the same thing happened in the stock
market when you buy stocks on margin
and now what does that mean it means
you're using debt to buy stocks
and when you use debt to buy stocks
your lender your brokerage doesn't want
to see your portfolio fall by a certain
amount if it falls by a certain amount
they're going to ask you now to cover
meaning put some money in
and if you don't have this extra cash
the reserves to put more money in
because you thought your investment was
going to go up so you went all in
well now they're going to force you to
sell and that is now again a forced sale
so now markets are going down what
causes people to sell either voluntary
because you get panicky you get scared
you get worried or you think you have a
bad investment so you want to exit as
fast as possible or on the flip side
it's a forced sale where now
you used debt
and you were over leveraged and now
you're under water and now you're being
forced to sell so what does this do this
increases the supply of this asset now
again what is an asset stocks real
estate crypto it can be any asset
out there an investment
so now when you increase the supply of
this asset
well that can now bring the price of
things down because the price of
anything really whether it's an asset or
something else depends on supply and
demand when you have a lot of supply of
something with no demand or very little
demand the price of this thing is going
to fall because now all the sellers are
fighting against each other to get
somebody to buy it
on the flip side when you have a lot of
demand but no supply the price of this
is going to go up this has been the real
estate market for the last two years or
so we have had this massive demand of
people
wanting to buy homes
why well for one the pandemic changed
our workforce where now you can work
from home so people want a home with an
office in the home
second people want to move out of the
big cities because they're realizing if
i can work from home i don't got to pay
this 5 000 a month in manhattan i can go
live in a suburb and pay a fourth of
that and have a bigger home
and then third mortgage rates were the
lowest that we have ever seen
ever in the history of american modern
history we've never seen mortgage rates
this low so this created a massive
demand meaning people wanting to buy
homes so you had this flood of people
wanting to buy homes
while the supply of homes was extremely
low
so some people didn't want to sell
because they were worried about the
pandemic they didn't want people to come
in their homes who could have
potentially been sick
second builders couldn't build homes
because we had a labor shortage we had
and still are facing supply chain issues
so what does that mean you want to build
a home well do you remember there was a
period where there was a huge spike in
lumber costs builders could not get
access to certain materials certain
materials were backed up it was harder
to find labor to find workers to help
build the home and then on top of that
the cost kept going up because now
workers wanted more money the cost of
materials kept going up so it was this
big
dilemma in the building side so the
inventory of homes
was artificially low you could not build
more homes
so for the last you know 18 months or so
two years we saw the situation where
demand was through the roof literally
and supply was
very low
some of the lowest supply levels that
we've ever seen that pushed home prices
up at the fastest rates essentially ever
and now we're starting to see that slow
down where now demand is starting to go
down because mortgage rates have gone up
so significantly
people are looking at the higher prices
of homes saying i don't want to pay this
higher price so that is starting to flip
but this is where you know understanding
how supply and demand works and you now
as a financially educated person as an
investor what you want to be looking for
now
when you see market slowdowns a
recession a crash what you want to be
looking for is not the emotion but now
cutting through the noise cutting
through the media
but now looking for the actual financial
fundamental investments where you have a
good asset a good investment that's
being hurt by the economy that would now
you can come and buy it at a discounted
price
and that's what you want to be doing and
that's um i don't want to keep going on
this same topic but after the 2008 crash
happened
that's when i first started buying real
estate and i think we talked about this
before
i didn't understand what was going on um
i was 19 i had some cash saved up
because i was running some
entrepreneurial ventures
detroit which is kind of my home base
metro detroit ford gma chrysler were the
main drivers of our economy
gm and bankrupt chrysler went bankrupt
ford was on the verge of bankruptcy so
the michigan real estate market was hit
exceptionally hard
and real estate prices had fallen by 90
to 92 percent in some instances oh my
god and so that was where i was able to
come in i didn't know all this like i
look back and i understand this now but
i was 19 i had a little bit of cash
saved up and that was when i bought my
first
rental property
because i didn't have any real estate
mentors or guidance or people i didn't i
didn't know any real estate investors
my first real estate property was an
eight thousand dollar condo
i bought it out of foreclosure from the
bank
and
uh it
previous to me buying it it had sold for
a hundred and fifty thousand dollars
just a few years prior
and that was just the market where there
was nobody there to buy it people
thought that i was the crazy one the
dumb one for wanting to go and buy real
estate when the world was ending when
real estate was collapsing when nobody
wanted to own real estate everybody told
me that i had lost my mind
but that was the situation and you have
to understand the psychology i've said
this before i'm gonna say it again
history while it doesn't repeat itself
it does rhyme yeah i wanna talk about
that psychology and i want everybody
make sure you guys stay tuned to the end
i'm actually going to go through the
eight things that i've learned from jess
breit from
this is now our second time together so
i have i think a pretty good lock on
some of the core things you talk about
i'm gonna give you guys those eight
things at the end so hang tight but i
want to talk about the psychology this
is where i think people really get
themselves in trouble i've talked about
this in entrepreneurship a lot
the entrepreneurs that do well are the
ones that can self-soothe and what i
mean by that is so in the context of the
economy the price starts dropping if you
didn't anticipate that going into it
like when i bought into cryptocurrency i
was like this is a highly volatile asset
so
i cannot be panicking when the price
starts dropping i have to know that
that's a part of this right and michael
saylor had said look when you're dealing
with bitcoin he was talking specifically
any time frame less than four years is
just noise
so i was like word anything less than
four years is just noise so when it
started dropping like a rock i was like
has it been four years no it has not so
then i shouldn't be freaking out yeah
and
the reason that i've had success in
business is i can self-soothe very well
so if i fail up i can self soothe i
don't lose a lot of time worrying about
the fact that i made a mistake or
whatever
and the same is true now for me in the
financial world now had i been taking
the kinds of
risks i guess i'm i'm
relatively risk averse meaning i don't
do anything on debt and i don't um
invest more than i can afford to lose
so
that's always been my operating
principle but
you you hear the advice
buy low sell high and it sounds like a
joke it sounds like somebody's toying
with you they're trying to troll you but
that really is the best advice that you
can offer somebody but what people don't
understand is it's hard as hell to do
because
in moments of euphoria which i had never
paid attention i've lived through them
but i wasn't paying attention to the
market i never lived through a moment of
euphoria we've just come out of that so
i'd say we're about nine months out of
euphoria right now and i'd never gone
through that so i didn't know what it
felt like i didn't know what it looked
like and i remember and i won't rat the
person out that said this but this is a
big influencer and they were like maybe
the economy now has gotten to the point
where it's so global it's so
interconnected that there could never be
a recession again and i remember when he
said i was like oh
ah
that doesn't sound right i'm not sure
that that's how this time is different
yeah exactly and so there was everybody
just was like man this time is different
and so i was like i don't know about
that so
i was like okay i need to make sure that
i am
detaching my emotion
i'm realizing this why i was obsessed
with ray dalio i'm realizing that
history is going to rhyme
that this time isn't going to be
different this is going to be another
one of those as ray says
and so what does that look like what's
going to happen when this goes down
do i buy more am i trying to sell
and
watching everybody
one that people buy and leverage
terrifies me and man like you've really
got to know what you're doing like if it
isn't your full-time job my ignorant
uninformed advice is to not use debt
because you can get into a forced
liquidation that's just terrifying in
fact remind me i want to talk about
covenants i'm going to write that down
uh
because that is i don't know if if they
use the same language in
investing but that's what you talk about
in business or covenants anyway we'll
get to that in a minute what is up my
friend tom bilyeu 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
all 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 if people can go all
right
this is volatile stock market is
volatile crypto's volatile housing
markets can even be volatile i'm not
gonna panic in a down moment i'm gonna
set myself up or i'm not investing more
than i can afford to lose
i'm not doing this on debt
you have to
keep your income going so whatever it is
whether it's a job or whatever you have
to be very thoughtful about that
but
setting yourself up well
knowing that there's going to be a
downturn that it's about time in the
market instead of time in the market
right
and then you can just
ride this out exactly
and i think for the majority people
the vast vast majority of people that is
the best advice that you can give them
don't invest with debt
don't invest more that you can lose
and i'm gonna take it one step further
because i think for
90 percent of people out there regular
retail traders investors you don't need
to be buying individual companies just
put your money into a low-cost etf into
a low-cost index fund and that's it
fox what are those though and so just
breathe most people don't know what that
means
so let's let's break that down so an etf
is an exchange traded fund
and it is literally
a group of companies a basket of stocks
so instead of you going out and
investing in let's just say mcdonald's
the corporation
and now all your eggs are in mcdonald's
meaning all of your money is in the
investment in mcdonald's so if
mcdonald's goes up you can make a lot of
money if we dumps goes down now you're
gonna be panicking because your whole
portfolio is down
well the issue is you have the most
upside but also the most risk because if
the executives at mcdonald's run their
company into the ground and they go
bankrupt their whole investment's gone
now if you invest into something like an
etf or an index fund which are very
similar to each other now you have a
group of companies where now it might be
mcdonald's and 499 other companies so
now what happens you lower your risk
your lower summary upside but you also
lower some of your downside because now
if you run through that same scenario
where the mcdonald's executives run the
corporation into the ground and they go
bankrupt well you have 499 other
companies in the portfolio so you're
okay
and so then what can happen in a
low-cost etf or an index fund is they
have computers and this is automated
where they will kick out mcdonald's
because now they're no longer fits
within this 500 companies and then
they'll put in another company to take
the place at mcdonald's so now it's
passive on your end because if you're
not willing to put in the work to do
that active investing to do that sort of
fundamental analysis meaning listen to
the earnings calls study the revenue
study the profits study what the
corporation is doing if you don't care
about doing that if you don't want to do
that and if you're not willing to do
that
don't invest in individual companies
because now
you're taking on all the risk hoping for
some upside versus you can mitigate a
lot of that risk by just investing in
etfs or index funds and you can do this
right off of really any stock brokerage
app out there
and now you can buy them now how do you
buy them well two strategies passively
or actively
passively which is a great strategy is
now ideally every week or any time you
get paid you put a little bit of money
automatically into this etf system do
you use for that so i use a platform
called m1 finance there's m1 finance m1
finance there's tons of brokerages out
there you can find whatever one you want
where now it is completely passive money
is automatically pulled out of my
checking account on wednesdays you pick
the day it doesn't matter and it's
automatically invested in two dollar
cost average dollar cost averaging into
my portfolio etf so i have a number of
different etfs in there it happens every
week whether the market's up or the
market's down and i don't touch it it
just does its thing
the active side would be now
you're looking for a good price point
and this is where it gets a little bit
more advanced where if you're willing to
do the research you know you could you
can pick etfs or index funds where if
you see a big crash you see prices go
down you can put more money in
or now you can start looking for good
companies that you believe are
undervalued but again this now gets a
little bit more advanced where you have
to
yeah the average person they're not
financially literate would you rather if
they had a thousand dollars would you
rather they play blackjack or try to
actively trade that money play blackjack
or actively trade that money don't trade
i think trading unless you want to do it
to learn i trade it i'll give you my
personal experience i know you would
trade because you know what you're doing
well i wouldn't trade i wouldn't even
you wouldn't trade would you treat your
only options blackjack active trading so
explain that for you i'm not a casino
person so blackjack is the one where you
go to 21. oh you're going to lose either
way or you're going to lose either way
the reason i bring this up is i really
think that the average person would be
better off taking their thousand dollars
to vegas and playing blackjack because
it will be fun
if you try to actively trade you're
going to lose your money now
is that a hundred percent of the time no
of course not but ray dalio for people
that don't know runs the largest hedge
fund in the world when he explains this
i'm like oh my god i'm never going to
try to active trade he said you're going
up against people like me i spend
whatever 200 million dollars a year on
research yeah and i have ai
which is making trades in milliseconds
right we know how fast the fiber optic
cable is to make sure that our trades go
through slightly faster than the other
person which can be the difference
between you know a percentage point
which could be millions of dollars he
was like you're going to lose
and he was like it's hard for us and
we've got whatever 1500 employees like i
said ai that they've been building for
the last 25 years fiber optic cable
measuring things in milliseconds he's
like
the odds of you finding something that
we haven't already traded on is
basically zero yeah every person that i
know this is a very small sample size
i'm well aware of that every person that
i know has lost money on a long enough
timeline actively trading yeah the only
people that make money are people that
are that and i will use my language this
is how i think about myself i am too
stupid to beat the market i'm too stupid
to be ray dalio that's for sure and
radialis entire team and ai and all that
so
actively trading is off the table just
because i know it would be like
me trying to play uh professional soccer
right i'm going to get my ass handed to
me my by messi the the difference
between me as a footballer yeah and
messi is the same as me as an active
trader and radalia right the gap is so
catastrophically large that at least
playing blackjack i would have a good
time and i think the difference is now
differentiating active trading versus
active investing because trading i tried
trading one summer in college and i
spent
every day staring at charts
candles which are these little ways that
you can make a stock chart and
you get glued to the screen you glue to
the emotion
and it is very difficult yeah watching
candles is emotionally yeah
and so i stopped it because i realized i
was never going to make any real money
doing this
active investing what i mean by that now
is you're looking at companies
and when you see this company fall
because the whole world is getting
scared the whole market is tanking
well this is an opportunity for you to
come in buy a great company at a
discounted price and then you just hold
on to it now would you do that at the
company level or at the etf index now
again who is the person for me
i would do it at the company level for
the average person do it at the etf
level
because again you have to be willing to
put in the work to research companies
keep up with the earnings statements if
you want to buy and hold for the long
term i am doing active trading right now
not right now
but extra investing active investing i
am not actively investing my money into
the market i am passively investing the
reason why for one active investing
means i'm putting my money into the
market when i see a great buying point
second thing is
it's now
going to interest my personal life what
is the best use for my money right
investment money in five places my own
business i put my money into real estate
into stocks into crypto into physical
gold in this order
right now i see the most opportunity in
my own business market briefs and so
instead of actively putting my money
into the finance now
my favorite thing you read every morning
it's a great newsletter right so it's
where we uh break down what's happening
in the financial markets into a fun
ready easy to read email but for me i
see the opportunity there it is the
biggest purpose for me bet on yourself
and the most excitement for me so
instead of me putting my money into the
market instead of me putting my money
into real estate which i love doing i've
been stopping these active investments
and putting more money back into market
briefs that we can build the company
build the infrastructure build it into
something bigger and so now obviously i
knew the punch line which is why i asked
the question but i want people to
understand that you make a living
researching this stuff knowing about it
and even you
aren't doing the active investing you're
doing passive for sure very wise set
that up
but
for the average person
the average person the odds that they
will
do better by trying to go in and saying
oh i know where this is going well
enough to know that now is a good time
to buy yeah mcdonald's whatever they're
they're going to have heard headlines
about tesla and things like that and and
i'm not saying that there aren't moments
that present themselves but like if you
watch wall street bets do you watch wall
street bats i don't read it at all it's
scary you get these kids committing
suicide because they don't understand
like um
[Music]
they'll do something where i forget if
it's calls or puts or whatever i i am so
not good at this i want people to be i
know my limits but whatever it is where
there's an unlimited downside yeah and
so they end up owing like 75 000
all of a sudden and they're like uh what
do i do and so now they're just
absolutely devastated yeah
so anyway so let's put trading out the
window people
careful don't be trading don't trade
your money and now when you're investing
in money don't invest with debt don't
invest more than you i want to go back
to recession yeah
i think this is a huge moment of
opportunity even though i'm warning
people as vociferously as i can about
trying to beat ray dalio
i do think that
understanding that if you're playing
your cards right and you're not
overextended and you've done what you're
talking about you've got your five
buckets of investment we're going to get
into remember to hang till the end
because i'm going to give you the eight
things that josh bree teaches a lot
but if they're doing it well
this is black friday for assets
and if people think of it that way like
don't get yourself in trouble don't be
overextended don't have debt uh but
if you think of this as black friday
there's huge opportunities and this
really is a moment where i want people
to pay attention and take advantage of
this moment i am so hungry for the
average person to get
educated on this stuff yeah because
i am
i have lived the american dream
and i mean not the like it's your house
and all that but but that you can change
classes i grew up lower middle class and
now i'm wealthy and so i'm like no no
this is a set of ideas if you get your
head around the right ideas like you can
really win yeah but you have to simplify
simplify simplify
and
because of the internet because of meme
culture people get so caught up in the
emotion it's the one thing you can't do
right and you have to be like stone cold
logical you have to get that emotion out
and it's hard because everywhere you
look on the internet youtube included
there's a lot of emotion now i'm gonna
i'm gonna be completely blunt completely
honest here because i'm gonna talk about
how the youtube algorithm works because
i think we've talked about this before
i see this on my own platform where
sometimes
youtube is going to promote certain
video titles over the other so let's
talk about the market going down if i
say you one youtube pedal is the market
goes down three percent here's what you
need to know
be prepared for market crash what's
going to get more clicks be prepared for
be prepared for market crash now i hate
that because i hate these titles now
you're going to say just breathe
but you and every major youtuber has
titles that sound like this oh someone
got to this video through a clickbait
title someone got through this right and
and that's and so now let's let's
dissect this because i
have a team
and for a very long time they kept
saying just please make these types of
titles and i refused
what happened
views went down like this now
i had a heart to heart with a couple
people on my team where they're like
just pretty listen
your videos
are i'm saying what they said i don't
want to sound like a super narcissist
but they're like your videos have real
financial education that people need to
hear and it's better than what a lot of
people are putting out i was like okay
they're like if this title is what it
takes to get people to learn what you're
saying within the video why not make it
and so it was one of those things where
i was like oh my god i hate this but
it's the only way to provide that
financial education to get people to
click it because if i need to click that
video and now i can provide you real
education without saying oh my god i
need to panic and sell no understand the
opportunities be calm look for the
options
that's my goal so it's one of those
things where i see it because i'm in it
and you know i'm going to talk about
marketplace for another second because
that's another driving reason for me
wanting to create market briefs because
the internet is full of sensationalism
especially in the titles because they
need to get you to click
that's how
just the internet works it's the reality
okay i mean it is what it is i have
fought it for a long time
i hate it but it's the reality now the
reason why i like market briefs and the
reason why i'm so passionate about it is
because we can completely separate
ourselves from that because now we are
one email
we are
you know you no one is coming into inbox
every day
it doesn't matter what the title is
because it's in the email once you open
the email everything is right there and
so now we can give you the actual news
without any of that you know that
hypiness
and so that's the way you know you and i
operate but there's a lot of people now
that take it one step further that even
the news then the actual content of the
news becomes just super crazy
sensationless it doesn't make any sense
that's sometimes
an outright lie
which then takes it one step further
where now you have to be able to dissect
the crap
dislike the good because the reality is
if it doesn't have a quote-unquote
clickbaity title you're never going to
see it it's never even going to cross
your
phone your screen it it will be hidden
into the depths of the internet
so now if you see it and has a
clickbaity title the question is what's
inside that content and that's where you
have to be able to dissect and dig a
little bit deeper
understand if this is good and this is
not and the general rule of thumb is
that
generally when times are good they're
typically not as good as the media makes
it seem and when times are bad it's
typically not as bad as the media makes
it seem it's usually somewhere in the
middle and this is where now you have to
really be able to understand and do that
financial education for yourself now as
an investor but the best thing is you
know just
just keep investing your money looking
for those opportunities but then also be
able to understand what's happening
which is
taking some of your
emotions out of the equation and so this
is now kind of you know building that
financial education where it's difficult
to do but it's so important especially
in this day this age where the internet
is our means of education
where
accessibility is so much more where
anybody can invest and put their money
into the markets anybody has access to
these tools like
one thing that i want to mention is when
we talk about building wealth
rather in a recession not a recession
the majority of people i think assume
that
it's a lack of tool set that's stopping
them from getting to where they want to
go when in reality for the majority
people it's a lack of mindset
most of us have access to the tool set
it's just our mindset that's lacking you
don't need a ton of money what's the
mindset problem the mindset is one
believing i don't have enough money i
don't have access enough tools i don't
have access to enough things to go and
do it that if i want to go and build a
business i need this this this and this
i need ten thousand dollars i need a
hundred thousand dollars to go out and
do that i need to have this type of
degree i need to have this type of
parent i need to have access to these
types of people in order to go and build
a successful business if i want to go
invest my money i need ten thousand
dollars before i can invest for it to be
worthwhile why would i want to start
investing with ten dollars what is that
going to do when in reality these small
investments
do build up if you are 21 years old
today and you start by investing just a
hundred dollars a month
which is just over three dollars a day
and you do this consistently until you
retire until you're 65 years old 66
years old and you can get an average 10
return on your money that doesn't mean
it's a 10 return every single year it's
an average 10 return
over the course of investment which is
the average stock market return
you will retire a millionaire on the 100
investment assuming you never increase
the amount of money investing and we're
talking about less than four dollars a
day
that's a hundred dollars a month not a
one-time hundred dollars hundred dollars
a month yeah yeah less than four dollars
a day you put a hundred dollars a month
for the rest of years and so even if you
get a raise and you never put another
penny into your investments
you will be able to retire a millionaire
on the four dollars a day that you're
putting aside
yeah see that's why i want people to get
stoked on that like look there is an
entrepreneurial side and we can talk
about that later that's exciting and
high risk and pour yourself into it
you'll pr you will get kicked in the
face over and over and over
but
if you
care about the thing that you're doing
and you have a strong enough why even
losing can be incredibly fulfilling
but that's a separate bucket when it
comes to
investing and thinking about retirement
it is a totally different ball game
right that comes it really does boil
down to buy low and sell high
now how do you get to that point you can
do what you just talked about which is
you put a little bit of money in doing
dollar cost averaging and you may be
dollar cost averaging simply because you
don't have the capital saved up to do it
any other way right uh by the way
capital's just a fancy word for money so
you don't have the money saved up to do
it any other way so you're just every
paycheck it's pulling out you say you do
it on wednesdays whatever just at some
increment it's pulling some amount of
money which can be very small to your
point 100 a month
but doing it consistently and not
selling in moments where everybody else
is freaking out and then like as
advanced as you need to get is
if we're in a downturn and you're doing
your etf or your index
and you know that we're in the middle of
a difficult time maybe instead of a
hundred dollars that month it's 150 or
200 right it's you're not going crazy
you're still just dollar cost averaging
but now you know that when it's black
friday for assets that you're going to
spend a little bit more just because you
know it's going to go
farther exactly but it isn't sexy man
and this is why like
having now witnessed euphoria i'm like
people act a fool
and i had the impulse to act a fool i
was like no no go more you're so smart
like you get this this and i was like
i know better than that yeah i am a fool
the only thing i can hope for is that by
staying
rational and calm and not overextending
that i can stay in this long enough to
sort of wash out my ignorance just just
through time exactly the walls i think
is wall street journal that used to do
this thing back in the day where they
used to bet against a monkey where a
monkey would throw darts at a stock i
love this
and they would uh compare what the
monkey picked against traders it really
happened this really happened look it up
on google
and so the monkey obviously had no uh
financial education it just literally
threw dots at these companies that would
hold on to it but i think it was a ten
year span or it was a long-term thing
compared against these massive traders
guess who won not the traders the monkey
oh my god and it just shows we turn that
into a t-shirt that feels like a t-shirt
this is so
hilarious it's really
really important for people to
understand a monkey
outperformed professional traders
professional traders i'm gonna have to
look this up look at that it's way too
important this is the reality where it's
it's just the value of owning an
investment for the long term
and it
like you said that short richness is
loud it's flashy everyone talks about oh
my god i doubled my money in this meme
stock oh my god i made so much money
here it's loud and splashy but that's
also fleeting it's the first time you
lose money
where it's like yeah you gained all that
money but then you lost it exactly but
that other the real wealth
real true sustainable wealth is built in
silence it's quite because it just keeps
happening in slow increments over time
and now you start to build this you know
there's the snowball analogy where from
michigan right we have snow there you
start by building a small snowball like
this you put on the ground and you start
rolling it in the beginning you got to
roll it a lot because you have this much
surface area to pick up as much snow as
you can as it gets bigger it grows
faster because now you have all the
surface area that could pick up more
snow so you roll it and it picks up more
snow and gets faster and bigger and
faster and bigger and faster and bigger
and before you know it now you can have
a massive pile of snow but the initial
one is the hardest because you're
starting with a hundred dollars you're
like what's a hundred dollars going to
do but you can stay consistent with a
hundred dollars and if you make more
money you keep putting more money in and
you just stay consistent letting the
hundred dollars grow then you put in
another hundred dollars now the first
hundred dollars is growing and then you
add another hundred dollars and then you
add in another hundred dollars now the
first hundred dollar has grown hopefully
the second dollar dollar has grown
hopefully now you add another hundred
dollars to grow and you just keep doing
that month after month after month after
month
now you're really starting to build the
snowball that's growing and growing and
if you look at this not month after
month but year over year
that's when you really start to see the
returns but the problem is who wants to
wait that long nobody wants to wait 10
years 20 years 30 years because we're
thinking about when can i bomb a
lamborghini tomorrow how can i bomb a
lamborghini next year how can i have the
nice stuff now
and this then becomes a different
question we're turning to these
investment long-term investment vehicles
to make us rich next month as opposed to
actually doing what it's supposed to do
which is make us rich over the long term
we're trying to do it the wrong way so
now we got to flip the question if these
types of investments are there to make
us rich for the long term how can we
make more money today and so this is
where people turn to things like trading
oh i can flip these stocks i can flip
these houses i can do whatever to try to
make a lot of money right now and for
some it might work in the short term
but it is very difficult over the long
term and this goes back to what you're
saying regarding something like
entrepreneurship this is more of an
income issue because now we're trying to
create an income through trading now if
you are a full-time trader you have the
systems you have the tools this is all
you do
maybe it works for you but for the vast
majority of regular people it is not
going to work
and this is where now something like you
know just like entrepreneurship it's not
going to work for the majority people
majority people are not meant to be
entrepreneurs but you have to start
asking the question of how can you
increase your income if you want to have
that better lifestyle
but now
i want to caution that a little bit more
too because you know we talked in our
previous interview about building
systems how to become financially smart
this is where now
one of the
simplest not easiest but simplest ways
to become wealthier faster is when you
increase your income to not increase
your expenses
and so
the best way for me to give an example
of this is if you ask the majority of
people
what's caused your financial issues the
majority of people are going to say it's
an income problem if i just made an
extra ten thousand dollars i'd be able
to put money aside for my investments
i'll be able to do this i'll be able to
do that i'll be able to do so many other
things but what data has showed us
is for the vast majority of these people
is when you make that extra money what
happens your expenses
go up right with your income now you got
to buy a new car that matches your new
income you got to go on a vacation you
got to celebrate you got to go out you
got to you got to live this lifestyle
that matches your income so instead of
doing that
create a system
that
flows no matter how much money you're
making and
one of the simplest things that you can
do is follow something like a 75 15 10
plan which means that for every dollar
that you earn from now on
75 cents is the maximum you can spend
15 cents is the minimum that you're
investing putting aside for investments
10 cents is the minimum that you're
putting aside for your savings so now
whether you're making 40 grand a year or
4 million dollars a year it doesn't
matter you're still following the same
system where it's just a percentage
based on how much money you're earning
and the only thing that you're going to
change
is your savings because you don't want
to save your money forever you want to
save your money for three reasons save
your money for an emergency save your
money for a big purchase like you want
to buy a home or a car or save your
money for an investment if you're not
saving your money for under these three
reasons don't be saving your money now
when we talk about saving your money for
them bold statement
yeah that's a bold statement there's no
other reason to save your money because
now you're just saving money we're going
to have to get into inflation otherwise
people are going to derail but i also
let's start there so why why not save
that's all i was taught as a kid safe
safe safe me too
so i grew up in a traditional indian
house where
the whole idea of plan and becoming
wealth this is for me was become a
doctor why because doctors have a big
status and doctors have a big salary now
when you make this big salary what is
the plan to become wealthy not by
investing
not by doing some fancy stuff it's by
saving your money have a big bank
account so live small live off of
ideally 20 to 30 percent of your income
save the other 70
and that might sound extreme
but this is the reality of what a
healthy financial household looks like
for a indian doctor was it for
emergencies like what what is the
purpose of saving
in that particular mind so it's not for
emergencies it's literally just to build
up a big savings account too that's on
your kids to pass on to build wealth so
be wealthy and live in a shoebox like
what is the
is there like are are they ever
articulating why you're doing it like
for my if my mom if i'd pressed her what
would she have said you never know when
you're gonna need it
uh that's the only way to get rich she
would have said something like that but
if i had then pushed farther and said
okay what what's the point of being rich
well then you can do this that and the
other well not if i'm saving forever i
can't so if we i think it has to do with
the times that somebody grew up in so
this safe heavy culture is a big
byproduct of my parents culture people
who grew up
were born in the 60s
especially in india so now if you look
at that time frame where you look at
before 1970 in india
it was a very tough time where
poverty was very common
most people were poor
see that i get that's a protection
against i don't ever want to be hungry i
don't want my kids to be hungry but that
mindset hasn't gone away and so it just
kind of trickles down right you you see
what you know because i personally
many my friends are doctors
many of my friends make a lot of money
many of these people also have zero
investments and have huge bank accounts
because then you're beaten away from
this idea of doing something risky like
investing your money investing in money
is dangerous it's bad like when i i mean
i
when i wanted to invest in real estate
nobody in my family had ever heard of
this concept of real estate investing
either had i
nobody i knew was an investor so i told
my dad dad i want to invest in real
estate i found this condo for eight
thousand dollars i want to rent it out
blah blah blah blah my dad's response
was you are stupid
go become a doctor go do something
worthwhile
and you know he said it out of love i
love my dad
but did he really say worthwhile yeah
yeah
now
i get the reason why my dad said was
that extreme about it because you know
indian parents have this thing where
they like to create stories to scare
someone away from doing something
and so you know his whole thing was oh
uh what happens if your tenant doesn't
pay you what happens if you go to your
tenant's door and then they shoot you
because they don't want to pay you that
escalated quickly i mean this this was
the example that he gave me and so it's
just it
it's just you start creating all these
fears where it's like if you invest in
real estate you might die
and that's supposed to scare you from
not doing it it's one of those things
where it's this lack of financial
education lack of ever experiencing it
because you don't
know that it's possible you don't know
anybody doing it you don't know anybody
that looks like you doing it you're
you're still new in this country
how are you supposed to go and do it
it's just very scary but this is the
safe thing is just saving money
if you save a hundred grand
today and look at your bank account a
year from now it's still going to be 100
grand maybe a couple extra pennies if
your bank is giving you some interest
but you know that's it if you invest why
isn't that the best idea ever
well going back to what you said
inflation
inflation
by definition
is diluting
the buying power
of your dollar
so
what i thought this was a fundamental
law of nature
it's really human intervention
yeah it really is inflation comes from
the word inflate what are you inflating
when you have inflation and it's funny
if you've been watching some of your
content or my content you know that it's
you're inflaming the monetary supply
when you increase the amount of dollars
out there without increasing the amount
of wealth the value of each individual
dollar goes through broke brains how do
you increase money without increasing
wealth so if i just print money the
federal reserve bank who which is the
central banking system of the united
states
they have the ability to print money
they can increase the amount of physical
dollars out there or increase the amount
of currency through digital things so
the amount of money in circulation they
can increase this
and so if we go to a very basic example
if we live on a hypothetical world where
there's me you and three other people
and each one of us
us five have twenty dollars each and
that's it
we are each equally
owners of twenty percent of this world's
wealth but what happens now if this new
alien government comes in and then they
magically
gave us 20 more each
are you going to be 20 you know double
as wealthy as you were before you might
feel like you are for a minute because
you see oh my god i have 40 dollars
there's only 100 in this world i have 40
now and then you go and talk to your
friends and you go shopping and you
realize oh everybody has 40
so now all of a sudden the price of
anything you want to buy is going to be
double because you've increased the
amount of
currency in this case without increasing
the actual wealth and so this is where
you kind of have to differentiate
currency from money because
you have to kind of define what money is
because money can can have a couple
different definitions it can be a store
of value or it can be a means of
exchange
and what i mean by that is
money as a store of value if you look at
physical gold for example gold is your
traditional store of value because it
takes time effort and labor to mine
physical gold so that time effort and
labor is represented through a physical
gold bar and that is the value the
physical gold
now if we compare that to something like
our paper dollars
it's very easy to transact with it's a
very good means of exchange gold is
difficult to transact with if i wanted
to go to mcdonald's and buy something
with some gold it's going to be very
hard to do that versus with dollars it's
very easy to exchange
however
it can be easily manipulated because the
federal reserve bank can print money
essentially on command so they can
increase the amount of dollars out there
which decreases the value of each
individual dollar
so while our dollars serve as a very
good means of exchange it's not a very
good store of value this is where now
what wealthy people do is they want real
money they want something that's not
only going to store their value but also
hopefully
increase in value this is what assets do
if you look at hope we hope right there
you invest in assets for the purpose of
making money how does it make money by
increasing the amount of value that it
provides when you invest in a company or
etf or anything you want to invest in
something that you believe will be more
valuable in the future if you didn't
believe that you wouldn't put your money
in there how is it going to become more
valuable how is mcdonald's or amazon
going to become more valuable their goal
is to produce more value to create
something new that will provide more
value to more customers and then the
value is represented through revenue
through profits through money so you're
investing in something that you believe
will produce more value same with real
estate you want to invest in an area
that you believe will be a more
desirable area because if you invest in
an area where
businesses are moving to
where people are moving to where jobs
are moving to now you own that land you
own that property you own that building
that is now more valuable because more
people want to be here
and now that is represented through
money through this currency where now
more people want to be there so now
rents are higher property values are
higher
this is why this stuff gets complicated
and why people turn their brains off
because for instance if you pick the
wrong neighborhood you can lose your ass
right this is where etf's index funds
become very interesting to use real
estate as an example
i personally because i recognize how
ignorant i am i would much rather be
investing in a whole bunch of
neighborhoods across not only this
country other countries
because i don't know which one's going
to pop off yeah right so
because there is so much uncertainty
it's like as you spread that out now but
to your point you're limiting your
upside but you're limiting your downside
right that to me is
far wiser you're never gonna you don't
become the next ray dalio by doing that
so you're not going to turn into a
billionaire
but
when you think like when ray dalio was
pressed like what would you do like if
you could only leave a set of
instructions to your kids
about what to do with their money you
couldn't actively manage it for them you
couldn't have your company do it you
just had to give them instructions and
he came up with what he called the
all-weather fund yes and so it's just
like ah i don't know what's gonna happen
so here is like the diversification that
you should put it across and you're not
gonna make as much money but you're not
going to lose a bunch of money either
exactly and so
all of this stuff is so freakishly
complicated that
even better it is so easy to be wrong
and so hard to be right that your odds
of getting it right consistently enough
because it's to your point about the
monkey if you looked at it in six months
monkey probably loses you look at in 12
months monkey probably loses 18 months
probably loses two years maybe loses
three years though it starts to be like
all bets are off and by the time you get
to 10 years like the monkey's winning
just because you just left it alone yeah
instead of thinking that you could
outsmart the scenario and warren buffett
did a very similar bet against
some
major hedge funds on wall street where
he bet it was a 1 million bet that the
winner would give a million dollars and
then they would go to charity and his
bet was that the average person would be
better off by investing their money into
a low-cost index fund as opposed to
actively managing their money actively
trading their money like the hedge funds
were doing over the long term over a
10-year period
and
what happened was
exactly what you said in the beginning
the hedge funds were crushing the index
fund uh the the the index fund was down
hedge funds were going up because they
were able to find these trades and make
all this money in the short term
and the media was asking warren buffett
how do you feel about it he said the 10
years are not up yet yeah and then come
year 10
well then we had some swings on the
market some hedge funds had some losses
you took out their fees which is also a
big chunk of it
after factoring in the fees and all that
other stuff
the index fund won
and
what did he do he just put his money
into it set back and didn't do anything
versus the hedge funds are spending all
their time managing the money trying to
beat the markets
and they did for a little bit but then
over the long term they didn't and then
when you factor in their fees for
spending all that time trying to beat
the market now your returns are less
than if you just put your money into the
market and didn't have to do a thing
and so this is that basic financial
education where it's not as attractive
people want to be able to show off like
it's just like
people would rather look rich than
actually be rich and you would say oh no
i would rather be rich well people's
actions speak louder than the words
because if that's true
you should not have a gucci belt if you
don't have that same amount of money in
the market you should not own a bmw if
you do not own any investment portfolio
right i mean it's just it's just a
matter of looking at what you do
it doesn't matter what match with what
you actually want if you want to become
wealthy
question answers yes okay what are you
willing to sacrifice yeah bmw in the
driveway you got the gucci belt of the
louis vuitton if you have this nice
stuff but you don't have the nice assets
your priorities are in the wrong place
and this is just a matter of you looking
at yourself in the mirror and being
honest with yourself and understanding
what you want
and for a lot of people
more you know maybe this is a matter of
financial education maybe this is a
matter of preference but
many people would rather look rich than
be rich if you just look at you know
what it is now if you dive a little bit
deeper are the people that want to
actually be rich
we want to be rich today we want to be
rich tomorrow not be rich in 5 10 years
and so what then what does that do it
then drives our actions so it's very
difficult now to to understand that hey
i'm willing to sacrifice not only the
nice stuff today but then also not doing
the attractive the sexy the things that
that are hot that are making people so
much money today because i believe in
this long-term investment that has been
time tested because it's so boring
but the reality is that boring is where
the real wealth is built
i always tell people
boredom kills more entrepreneurs kills
more dreams than fear or failure
it's it's the daily grind like when
to your point about watching candles
when crypto was really popping off
i had to stop myself from watching it
because it was so fun and so exciting
and i was like you can't spend time
there because i'm i'm not going to want
to watch it when it's down so it's like
you want a system you want to set it you
want to forget it yeah
and the if i could get people to
understand the psychology of how money
impacts you like oh my god to your point
about people would rather look rich than
actually be rich
when you think about what money really
does for you you have to understand
peak emotion
there's only so much emotional amplitude
that you can have in fact do you do you
have an image in your mind of the
highest emotional
amplitude moment of your life as where i
felt the most emotion yeah the the
highest positive emotion you've ever
felt positive emotion yeah positive for
sure you know
it's funny um my wife
used to get really upset at me because i
never showed emotion
and she was like what's wrong with you
like you never like you never get
excited you never said i'm like look the
only real emotion that i feel is hunger
i get hungry
uh i i've changed this that's what a
woman wants to hear by the way if you
said hungry for you baby that's the only
thing i ever feel you might have a shot
yeah so
i've evolved since then where i've you
know i'm working on that you know uh but
i think you know the happiest is really
for me
being around my family and the people
closest to me and just laughing yes that
is my favorite thing in the world like
what do i want i literally want my
friends and my family in one room and us
just joking around because i you know we
we make fun of each other and it's not
enough mean way it's just the you know
our personalities when we laugh and have
fun
that is if i could think of my favorite
thing to do would be that maybe if you
want to take it one step further maybe
do it on a beach but you know it's it's
honestly it doesn't matter where we are
if we're in my basement eating some
whatever pizza some indian food and just
laughing yes so now
i believe that to be true of what you're
saying it's certainly true of what i
know in my life so i have had the
fascinating experience of uh i spend
christmas with my family and my wife's
family together and it's amazing
and i've done christmases in
a
middle class home and had an absolute
ball and i've done christmases in a big
fancy mansion and had an absolute ball
and
while doing it in the big fancy mansion
is fun especially because other people
they don't get to do very often like oh
my god this is so cool uh
the the peak emotion is not higher yeah
in fact the highest amplitude emotion
i've ever had
is
when i was in high school i got cast in
a professional play oh wow and
that meant that i got to skip calculus
and dude i was over them i got paid to
be in a play it was like the craziest
thing ever i was like i can't believe
this is really happening now
i have had
millions of dollars show up in my
account like that and i'm telling it was
cool it was neat but it wasn't as neat
as getting cast in a professional play
where i made 75 a week
in high school
there's only so much amplitude of
emotion you're ever going to experience
and i know no matter what i say to
people they're not going to believe me
they're going to have to go through the
same rigor my role i'm not
saying money isn't powerful money's
incredible i want to make more money
because you can do incredible incredible
things with it i'm just saying that it
doesn't touch fulfillment it doesn't
do the things for people that they want
it to do yeah and so the reason i say
that is
okay you're going to be bored doing it
the right way
it isn't going to be sexy you're not
necessarily going to be able to flex
it's going to take decades but it will
work right and it actually addresses the
thing that money is good for which is
money problems right and so
you they're really two paths before you
if you want to be an entrepreneur like
that is high risk high potential reward
high potential failure if you optimize
your entrepreneurial journey for failure
mode and you're like even in failure i'm
having a good time you're gonna hate
failing don't get me wrong but like that
i'm pursuing something that really
matters to me i'm getting better every
day i'm serving other people and myself
i'm uh increasing my skill set even if
you're losing that's going to be amazing
if you're thoughtful about your mindset
100 but if you're making all the money
in the world and you're not able to
laugh and play and have a good time and
feel like you're doing something that
matters it won't matter like i
this is where i want to like grab the
camera and start biting it to get people
to understand like
dude
set it and forget it let the
make an income
work at something that matters
if you want to be an entrepreneur i love
that i can even help you do that well
but the money isn't going to change how
you feel about yourself 100 it is not
going to make laughter more joyful right
it isn't going to make human connection
better yeah it will get you on the
occasional beach
but
if people could internalize that i think
that they would make very different
choices they wouldn't be so worried
about making all the money right now in
fact let me ask you another question
what do you spend the most money on
my business
a hundred percent what do i spend the
most money on my business so it's like
it's not like i'm out
balling on you know the beach ever i
could i know but that doesn't give you
fulfillment you know i did a show i was
in new york last week i did a show there
and they were asking about the first
time i made a million dollars and i went
through that i was like you're not gonna
like my answer because the first time i
made a million dollars in a year i think
i took home twenty thousand yeah which
is what i should offer right back
everything back into the business
because
you know i was like i'm
fine driving a 500 car like i'm getting
from point a to point b
i
i'm getting by just fine like this is my
this is my fun passion and on your point
of you know the fulfillment this is what
i call my quadrafit theory where there's
four aspects
quadrafit so uh what i say my theory is
if you want to live a happy fulfilled
life you have to be fit
in four aspects of life and just think
of it like a triangle around the bottom
of the triangle you have to be
physically fit then mentally fit and
spiritually fit and on the top
financially fit if you want to live a
fully fit life
physically fit because if you're on your
deathbed it doesn't matter if you have
10 million in the bank the only thing
you care about is being healthy again to
be able to breathe again you want to be
physically healthy because if you
are morbidly obese you can't move you're
you just the only thing on your mind is
to be healthy again you know we all know
that feeling where you're sick you don't
feel good where you can't do anything
the only thing you want to do is feel
better then it's mental fitness being
around people that you love
not being miserable if you're struggling
with anxiety depression if you're not
happy more money is going to make you
more miserable
and
we all i mean i i'm so passionate about
this because i've seen this firsthand i
used to not believe in this but i've
seen this so many times where i try to
bang this into people's heads if you
think that making a million dollars is
going to suddenly make you happy it's
going to make people like you it's going
to make people want to be your friends
it's going to make you find the love of
your life you are so wrong and you are
so far from the truth that it's going to
be extremely painful for you to learn it
because you have to work on this mental
health as its own aspect of life learn
how to build self-esteem how to be happy
how to manage anxiety how to manage and
fight depression learn about these
things it's its own
part of this you have to be mentally fit
then spiritually fit now this doesn't
have to mean religion spiritually fit i
mean finding your self-purpose what are
you waking up for every single day like
you said you've had millions of dollars
in your bank account you don't got to go
to work every single day you don't got
to go and hustle yet you do why because
you see a bigger purpose for yourself
you have a reason for you to get out of
bed
because if you don't have a reason to
get out of bed more money is not going
to
do anything you need to have a reason to
get up want to thrive whether you have
10 or 10 million dollars to want to
hustle and then at the top this is where
financial fitness has the most impact
the most power and the most ability to
allow you to live a more fulfilling life
because more money is just putting fuel
on the fire it gives you the ability to
do more of the things that you love to
do more things that make you feel more
fulfilled to do more things that you
want to do to give back more to do more
of that
but
having more money is not going to solve
your physical fitness maybe he'll buy
you better food or a better gym but it's
not going to give you the mindset to go
to the gym it's not going to make you
feel okay when you're drinking something
healthy you're going to say man screw
the smoothie give me something nasty
give me some unhealthy food right i mean
it's mental fitness more money is not
going to fix that more money is not
going to give you a purpose in life it
is its own aspect of life
and this is where you have to understand
that yeah work on all four of these
each one of these requires its own
attention its own nurturing its own
thing like i focus on the financial side
because i feel like i understood that
but that's not the only aspect of life
and this is what i really try to hammer
into you know on my channel to the
people that watch my videos is yeah look
money's great understand it conquer it
understand how to master your money but
also understand that it's not the only
aspect of your life you got three other
huge aspects
where if you don't have money yeah it's
going to ruin everything else because if
you don't have money you're struggling
about your bills you're struggling how
are you going to pay for anything you
don't know how you're going to take your
spouse on the vacation that he or she
wants you're not going to be able to pay
for your kids education you're not going
to be able to do the things that you
want
but if you have money and you don't have
these other three things you're going to
feel miserable
and then what's the point of having
money if you're not happy yeah just go
back to the middle class home and laugh
yep yeah and
it's really interesting because of
course when you're
in that so all of this everything we've
been talking about today you're up
against the nature of the human mind
from
clickbait titles are necessary because
that's how the human mind works
euphoria in the market human mind fear
in the market the human mind
the fact that you're not trolling
somebody to say buy low sell high
because it's one of the hardest things
you're going to do yeah it's the human
mind at work right like really getting
to understand what the psychological
aspect of all this is so i know somebody
and even myself
when i was
in a
lower middle class existence i was
obsessed with getting rich
and that was just like all that i wanted
to do now
getting rich
the thing that surprised me is that it
didn't
dull my ambition
it it can't quench your need for
fulfillment and feeling like you're
doing something that matters and so i
just found myself right back in the game
wanting to build something and create
and have a great time and thankfully i
had learned that you really have to
optimize for the failure scenario
because
um despite being successful i fail a lot
so it's like really understanding the
nature of that what i call the physics
of progress that failing is just a part
of the the thing
um but
so i get it i get that people that are
on the come up are not going to believe
the following statement but i promise
that it's true
the most fun you're ever going to have
the the pinnacle of existence is that
moment where you're working really hard
at something that could pay off
tremendously and you believe it's going
to work yeah there's nothing better than
that moment oh my god i'm working really
hard at this i think it's gonna work and
if it works oh my god like the world is
gonna be mine yeah that's way more fun
than actually winning and getting the
thing yeah and so enjoying
that ride
yeah like that's that's the juice and so
i found myself
wanting to re-get back into that
position of like oh my god i'm building
something and if we pull this up it's
like so i know
that it's not about the money
it's it's really about fulfillment that
i don't want to harp on that too much
but like just getting people understand
you're in a battle against your mind
if you can
get to the point where you realize
that being around the people that i love
is going to be huge emotional amplitude
doesn't matter if we're on the beach or
if we're you know in a hut as long as we
have our basic needs met because for
sure that matters
but we have that
emotional amplitude isn't going to go
any higher by having a ton of money but
that moment of like i'm building
something that matters
i think this really might work and if it
works like
you know like we've got some big victory
that's the juice and you're going to
constantly want to be in that now given
that all of that is true make sure that
you're taking some percentage of what
you're doing and just put it in the set
and forget it that way you should get
older yeah and it gets harder to be sort
of peak energy all that stuff that
you've got money it's going to be doing
its thing and then and maybe it's just
taking that like you said you can spend
75 okay cool so if we know that we have
to save some we know that we're going to
buy assets with some then why don't we
take some of what we're going to spend
and spend it on building something
starting a side hustle whatever seeing
if that works for you i mean we're going
through a period now where it's like
everybody wants to start their own thing
try it like see if it's your bag i think
people will i heard you quote you have
to be willing to get punched in the
throat i always say kicked in the face
but like it's the same thing maybe both
very very yes yeah uh if you like it and
that's something that you enjoy then
that's a tremendous outlet and that can
be the thing where you're really
gambling on big upside yeah but man if i
could just get people to internalize
this idea of emotional amplitude
like life's
peak joys are available to everybody
yeah regardless of money like i think
warren buffett underplays wealth a
little bit like he said look i'm meeting
at the same restaurants that you're
eating at uh i'm staying at the same
hotels you're staying at i'm living in
the same place look
money can do some pretty interesting
things yeah but it can't change the
amount of emotion that you feel 100
and if i can tie this back into what we
talked about in the beginning of this
video where we talked about we talked
about the real estate market we talked
about everything going on with that and
i think
the best way to explain that now because
you're putting some money aside
what are we looking to buy because i've
talked about this recently a lot on my
channel
where the american dream because you
mentioned this the traditional american
dream was being able to buy a home
paid off and now you own a home the
reason why this was the american dream
for anywhere in the world is because
when you pay down your home what are you
building in your home
equity
it's this concept of equity
and we assume or
we for lack of better we don't have the
financial education to know that
that equity which we think is going to
make generational wealth because equity
is where real wealth is built can only
be found in the home that we live in but
that's not true and this is where so
many people get things wrong because
they now stretch themselves too thin
they do risky things take out adjustable
rate mortgages use too much debt to buy
a home because they think that it's an
investment that's going to make them
wealthy because now you can pay it down
build equity and have something to pass
down however there are many other ways
to build
equity
to build real wealth
that you can then pass down this goes
back into the assets that we talked
about right when you invest your money
into stocks you are building equity in
these companies when you go and invest
in real estate as an investment now
where you live in yourself as a rental
property you're building equity in your
real estate portfolio and this is
different than your home because when
you buy a rental property you're buying
it for one purpose you're buying it for
the purpose of making money you buy a
home for the purpose of making memories
so if you're buying something for the
purpose of making money you're probably
going to make more money because you're
going to do a different type of analysis
than in the home that you live in
and
you know one way is you can go and
actually buy it and the second way like
you've been talking about
entrepreneurship is you can build the
equity
so when you build a company you're
building equity in the company like if
you go and start a company you are the
100 owner of the company well if your
company can make a hundred thousand
dollars of profit a year
your equity might be worth
two hundred thousand half a million a
million dollars depending on you know
whatever type of company it is but
you're building equity in a company so
you can build this equity you can buy
this equity
and the whole idea of a recession is now
this type of equity these investments
these assets can go on sale and this is
where now you could come in and buy more
equity at a discounted price
and this is one of those things i'm
gonna go back to we keep mentioning what
we talked about before in a previous
interview
we are never taught this because school
teaches us to become an employee what do
you do when you're an employee you get a
salary do you get any equity with a
salary no maybe your company gives you
separate equity as a compensation
package or something but your salary is
payment for hours that you work
and
that is nice today but once you spend
your salary you have nothing left
real wealth in this country in this
system is built through owning equity
we're never taught this this is what
gets me really heated up because we're
never taught about this
and so if you're if our whole system is
taught around building and earning a
salary how come we're never taught about
building equity because now what we
should be teaching is hey
go to school get educated but understand
that wealth is built through equity so
earn a salary doing whatever you want
whether you're a doctor or you're
working at a factory doesn't matter
take some of your salary go out and
build some equity
we're always taught and think and told
that the way you do that
is to follow the american dream just
buying a home because now you can pay
down your home build some equity but
that is honestly one of the worst ways
to build equity
you never talk about wealthy people
becoming the richest people or wealthy
people because i paid off my home no
you become wealthy because you own a
company you built a company you invested
in stocks you invested in real estate
you invested in equity somewhere else
and your home is honestly like one of
the last things that wealthy people
think about
yet for the majority people when think
about becoming wealthy and building this
type of generational wealth what are
they thinking about
buying and paying off my home
and there's so much more to that but it
requires that financial education yeah
i want to go back to something we were
talking about earlier debt covenants
so you were talking about at the time
that there's two kinds of selling
there's selling because you choose to
but oftentimes people are doing it out
of panic and then they're selling
because you're forced to um
in business when you're taking out a
loan
they put covenants on it meaning the
following things must be true for you to
have a loan in good standing so even if
you're making your payments if the ratio
of like your accounts receivable so the
amount of money that you know that you
have coming in if it drops below a
certain level if that's one of the
covenants or you have to have a certain
amount of savings in the bank or
your profit margin has to be 13 or
higher whatever they put these covenants
right on that is that's what's happening
when somebody is getting overextended
with uh either sort of
so um if we talk about real estate first
when you go now there's a couple
different levels of real estate
investing and loans assuming you're
buying with debt now
in the beginner level
they're going to look at your income
very heavily your income to debt ratio
just like when you go and buy a home
they're going to look at all the things
same things to go and buy a rental
property then as you get a little bit
bigger
they're not even going to really care
about your personal financial situation
what they're going to be looking at is
primarily just like you were saying
the actual investment itself because now
you're buying essentially a business if
you're buying an apartment complex
well now you're buying essentially
business and then what they want to see
is okay what's the price of this
how much rent are you generating every
month every year what are your expenses
what is the margin because they know
that this property is going to continue
to generate rental income and the rental
income is going to then pay for
the mortgage the loan on the building
and so that's what they're looking at
and of course they're going to want to
see your
personal financial situation because
they want to see okay if things go bad
what can you do do you have any access
to access
cash do you have any other access to
capital do you have any other wealth do
you have any other experience but the
primary thing as you get bigger and
bigger is just going to be the property
itself in the stock market
oh man well let's stay on property for a
second so are they going to call the
loan like there will be a predefined set
of things i imagine that
if they stop being true they'll call the
loan so for instance as long as you have
20 equity in the
building we're fine but the second
the value of the property drops like if
you put out let's say 5 million dollars
to buy it if the property ceases to be
worth five million dollars then we're
going to
basically call it because i know that's
what ends up happening to somebody in
the crypto market yeah if your crypto is
worth a million dollars and you've got a
million dollars uh
borrowed the second that that's worth a
million they're gonna uh do a margin
call sure because now it's like if it
goes down anymore then they're out money
so they literally the second it drops to
the amount that you owe boom it's gone
it works similar to that in the stock
market but in the real estate market no
they're not paying attention to the
valuation of the property day-to-day
because that's also kind of ambiguous
a property is worth really what
someone's willing to pay for it you can
run an appraisal you can do comps but at
the end of the day is what someone else
is willing to pay for it so instead of
them looking at the valuation of the
property or what they think it's worth
what they're looking at is are you
making the payments
um because if you're making the payments
they're not going to ask you questions
if you stop making payments that's when
they start asking questions and that's
when they start uh trying to figure out
what to do and then they might force you
to sell now forcing you to sell in
crypto is very different than forcing
you to sell in real estate because
forcing you to sell in real estate is
not going to depend state to state what
the foreclosure process looks like how
intense that process is and how long
that process is versus crypto from my
understanding because it can be pretty
instant you get that margin called they
can take your crypto back pretty quickly
real estate we can be a year and then
there's a lot of
different tools that can be done
like in the 2008 real estate crash one
thing that was very popular was a short
sale this is separate from a foreclosure
a short sale is now where there's three
parties working together the seller
the bank
and the buyer are working to now come to
an agreement on a price where the bank
agrees hey we're going to lose money in
this deal
we're willing to lose x amount of money
on this deal the seller says yeah i'm
going to walk away from this deal and
not make any money but at least i don't
get foreclosed on and the buyer says
fine i'll pay this money i was involved
in multiple short sales and one of the
short sales that i was involved in
they also had an additional provision
where okay the bank's going to agree to
lose however much money i don't remember
the exact numbers the seller agreed to
walk away and not get a penny from the
home
and then they also wanted me to write a
separate check at closing
to the seller's contractor because he
had done some work on the property
never got paid and had put a lien on the
property meaning he essentially
made a claim
against the seller backed by the value
of the home that hey
i need to get paid so i then had to also
work out a deal with the contractor
where
all these parties where the contractor
had to agree to a certain amount of
money this was a long time ago so i
don't remember the exact numbers but
so it was two separate checks that had
to go one was to the contractor to make
him happy and whole and then one was to
the bank where the bank now was okay
with losing a certain amount of money
and they're willing to do this the bank
in that situation because if they had
gone gone through foreclosure they would
have to spend way more money on legal
fees they'd have to spend way more money
on administrative fees and then they'd
probably even sell the home for less
money when it came to the actual
foreclosure process
and the seller would prefer a short
close a short sale in this situation
because if you don't do a short sale and
you go into foreclosure then your credit
score gets hit you have to go through
the entire foreclosure proceeds so you
don't take a hit if you do a short sale
if you do it right you typically don't
have to get the same sort of credit
score hit because you're just selling
the home versus a foreclosure i mean so
there are
again the reason why i said you have to
do it right because there's provisions
there's certain contracts that you want
to make with the lender saying that
they're not going to come after you for
the previous money and they're not going
to file some other things so there's
specific contracts so it gets very
complex where you want to make sure you
have a good attorney because it could
affect your credit score and it could
also not affect your credit score as
much depending on how good your
representation is and how well you draft
these agreements so it becomes very
complex versus you know we talk about
with crypto or with the stock market if
the value of your investments
fall to a certain amount and you don't
put in a certain amount of money
it just sells
there's nothing else like they're gonna
say give us ten thousand dollars right
now or we're gonna sell the investments
for you and there's really no other if
ands or buts it's like almost automated
in that sense
so it's a very different situation how
do people get
into the stock market with debt
it's actually
very simple
most brokerages
make their money through margin meaning
debt
because
if we what
backtrack so you're saying if i go
somewhere like vanguard
i can buy on debt so let's let's talk
more about the mainstream robin hoods
and uh the the more the mainstream
brokerage is in that sense where robin
hood now is mainstream huh
they're they're pretty made as long as
they've been around for it i don't know
the executive reviews it's not that long
right they're they're i mean they're you
know one of those startup brokerages i
don't know what year they started wow
well let's start
about 100 years ago and then we'll kind
of take this little time lapse a hundred
years ago if we wanted to buy just just
a couple days back
if you wanted to buy stocks a long time
ago you would have to have access to
a actual stock broker you would probably
have a financial advisor it'd be a very
difficult process and a very long
process where if you want to buy a stock
you would call somebody who would call
somebody who would then make a
transaction maybe multiple people to
make that transaction so it was a very
long process
then in
the 2000s early 2000s started coming
these digital brokerages this is where
charles schwab e-trade td ameritrade
they really became bigger but the way
that they would make money was they
would charge you a fee a commission to
make a trade so it was somewhere between
five dollars seven dollars to fifteen
dollars even twenty dollars to make one
transaction to buy a stock or sell a
stock
then after the 2010s came things like
robin hood and robin hood then shook
things up even more where they said
we're a commission free brokerage you
can come
trade stocks on our platform we're not
going to charge you a single trading fee
now if you're not charging a fee how are
you going to make money well the first
way that they made money
was
uh this whole concept of you would buy a
stock on robin hood and then robin would
then make that transaction a little bit
later and they would sell these trades
it was a very complex process where they
would sell it to
another entity so
you were kind of doing an indirect trade
for you as the trader it made no
difference or a negligible difference
you wouldn't even know the difference
versus robin hood is then selling these
trades on the back end but then the
second way that they would make money is
through margin
meaning that robinhood and these
platforms would then lend you money
based off of how much money you have on
the platform and then you can trade not
just with the hundred dollars that you
have in your in your robinhood account
but now with the extra 20 50 maybe 100
of robin hood is giving you that you can
now trade on margin and the amount of
money they're going to give you is going
to depend on the number of different
factors um
but then they literally will just extend
you this line of credit and now you can
trade and i know this from first-hand
experience not with robin hood but with
a different brokerage because when i
first got started and we talked about
trading this was when i was
forget it was my first year in college
i spent the summer doing trading and i
was using a platform and
they told me that hey i can i started
trading and then they said let's upgrade
your account to a trader's account i
said okay cool and then they said hey we
will also give you more money to trade
with margin i didn't now this shows you
how naive it was with the lack of
financial education that i had i thought
it was free money
i didn't know that this money had
strings attached to it i didn't know how
to pay the money back i didn't know that
i was being charged interest so what
happened was i traded money i i don't
know if you've heard there's a guy named
jaspreet singh and he says the most
expensive money
is free it's free money i learned that
lesson a very painful way so i was
trading money with uh the brokerages
account where i just thought that
because now i'm making uh making more
trades that they're going to make more
commissions that there's going to you
know that's how they made their money
well
long story short
i had lost money on some of these trades
that were on margin
and they said hey you need to put more
money in the account i was like what do
you mean okay i got to make up this
whatever margin so then i you know i had
fortunately some money i covered it and
then i decided i'm no longer going to be
a trader i'm done with this so we loaned
you money to make the trade you lost pay
us back i paid that money back so now
how long do they give you to pay back
i don't remember i paid it i had the
money so i just paid it because i was i
understood that i had lost their money
so that part made sense to me
and then i was done trading i realized
that this is not for me i don't want to
spend this time you can't pay it back
well i don't know exactly what they do
but they're going to come after you i'm
sure they will file a loss because i'm
thinking about this i'm an attorney
right from legal perspective
it depends on how much how much money
you owe
and uh what you're going to be doing
because now they can very easily file a
claim against you they can you know run
a lawsuit against you if you're not
paying there's a lot of different things
they can do and the more dollars that
you owe there's more things that they
can do just like with anything else
but then
you know i'm done trading
and then
a number of months go by and i start
seeing this like deductions from my
account i'm like what am i being charged
for so i call them up and they're like
it's your margin like what are you
talking about i'm not doing anything
well we gave you money it's in your
account you have to pay interest on the
money that we gave you and that's when i
realized
there's a cost of money right and so
that's when i said turn this off
take your money back i don't want this i
paid interest on it and that was the
last time that i did that but this is
you know wow there's
i was i don't know 18 years old 17 18. i
annoyed probably 18. i had no idea what
i was doing
and
this is where a lot of people get in
trouble because you think
oh
i can double my money pretty quickly
but if i use
their money in addition to my money now
i can quadruple my money because i only
got to pay you a little bit of
percentage if you know that you got to
pay them back
i so i don't know a lot about robin hood
i am super stoked that the average
person can now get into the equities
market
but
that's how people get into trouble
they're using the financial education
along with everything else
accessibility is great
but
the accessibility without financial
education can be dangerous now if you
start using these tools because if you
don't know the cost of some of these
tools it can be very bad for example
think of a credit card is a credit card
a bad thing or a good thing it depends
who you ask right
you know there are so many people have
thousands of dollars with the credit
card debt that is skinning them alive
i only transact with the credit card
why because well i get my points i get
my cash back i get my fraud protection i
get free insurance on my car rentals i
get all these things
that i wouldn't get if i paid with cash
even if i debit card i don't get all
these things so now when i'm spending i
spend a lot of money especially my
business if i spend a hundred thousand
dollars a year half a million dollars a
year i'm going to get a big cash back
check that i can put right back into the
business i can spend it i can use it on
vacation i can get free perks i mean i
get so many different things but that's
only because i know i'm not going to
change my spending because of my medium
i'm not changing my spending because i
have a credit card i'm just using a
credit card to facilitate my
transactions as opposed to using it as a
free
money printer
and again what is it it's that financial
education along with the tool
it's not the tool that's inherently evil
it's when you use a tool without that
financial education that now you can get
screwed over that you get in trouble
that you start hating the system oh
they're out to get you
they're not giving you the financial
education because it's not in their best
interest to give you that financial
education
but this is where if you have the
financial education you can use the
system to advantage but the problem is
we are never taught this right and it's
so it's just like it for me it pulls on
these
strings in my brain because it's like
oh my god it's just screw so many people
over because it's profitable to keep
people poor if you don't understand this
you're going to spend more money on your
credit card you're going to spend all
your money making everybody else a
terrifying statement you just rush past
it's profitable to keep people poor it
is profitable to keep people poor
is it profitable to keep them poor or to
keep them ignorant it's a mix of both
when you're ignorant you stay poor
they go hand in hand because if you
don't have the financial education what
are you going to do you're going to go
spend your money on gucci louis vuitton
you'll be buying the extra guac because
hey you got that money
then how are you going to buy it you're
going to buy it buy that extra get a
body extra walk lifestyle you're going
to buy it with your credit card
and you're not going to wait until you
can afford it you're going to buy it now
because you can and nowadays it's not
just a credit card just buy now pay
later and everybody talks about how buy
now pay later
is zero percent apr
there's no cost to this money you can
buy it now pay later but again like you
said what i said the most expensive kind
of money is free money they got to make
money somehow there's a reason why
there's billions of dollars pouring into
the buy now pay later industry one of
the fastest growing fintech industries
ever because when you spend on buy now
pay data what happens one you're
spending way more money than you would
have if you didn't buy now pay later
because if you wanted to buy a thousand
dollar sofa you have to have a thousand
dollars in your pocket well now you can
buy it down pay it later so now you can
spend a thousand dollars on something
else
second what happens to so many people is
you don't pay it off in time
now when you don't pay it off in time
it's no longer zero percent apr now you
get slapped with a very hefty very
expensive fine
so now it's
okay the tool plus the education the
tool plus the education going back to
inflation
inflation
you know is it a good thing or a bad
thing i think you asked me that last
time or are you talking about you know
the way the system works again
just depends depends on if you
understand it or not
if
for wealthy people they they love the
inflation hey
keep paying more for my assets
keep driving up the value of my assets
keep making me wealthier
versus for the average person you keep
getting screwed over because now your
groceries are more expensive your gas is
more expensive your rent is more
expensive everything is more expensive
everything it you know it's
understanding the tool and the education
the tool i'm going to give one more
example because this is the stuff you
can see it gets me so
keeps me up at night it gets me really
upset because i understand both sides
because i never had that financial
education and now i see the benefit of
it and i'm like please learn this even
if there's a clickbaity title because i
need you to watch it please learn this
we talk about
you know how the government many times
like they might have good intentions
but the people in government aren't
economists
they're not always the best decisions
with their money because sometimes their
goal might just be to create jobs and
creating jobs is different than being
efficient and so you know if you look at
like for example the college education
system
where
back in the day
it was not easy to get a student loan
and back then college was also a lot
cheaper and back then a lot of people
were not getting a college degree so if
you had a college degree what happened
you stuck out you were different you had
something
well what happened later you know i
think was in the 70s now
the united states government maybe the
70s 80s around that time
the united states government passed a
law
that said
that if you want a student loan
we'll guarantee it
anybody can get access to college
education the government will guarantee
a student loan now this sounds like
great news hey everybody can get
educated
how can that be bad but
colleges
heard this and it was music to their
ears you're telling me that i can charge
any amount that i want
and the government is going to guarantee
to give that to our students
sign me up now we can hike up our
tuition rates and people keep paying now
everybody can go to college because we
think that we need to go to college in
order to become successful and now where
we are today everybody has a college
degree if you go and apply for a job
with a college degree you don't stick
out you're just like everybody else
dude this makes me really sad so this is
human nature so i'm not going to waste a
lot of time complaining about it but
take the ppp loans
so the biggest financial fraud
in the history of america yeah that's
terrifying
and i remember when it was all happening
dude when it's going to be really easy
for people especially young people to
forget
what covid was like when it first popped
off
and it was
is everyone going to die like is this uh
is this a 1918 type flu where 50 million
people die like
it was just really really unknown and so
when businesses were just closing close
and closing and the government came in
and said hey
we got you like we're going to cover
this i was actually stoked as a
free market capitalist guy
i was still like word their government
has a role this is amazing i'm super
stoked now i didn't take like you i did
not take a dime of ppp money i thought i
want to leave it every dollar i take and
i can afford this moment every dollar i
take is a dollar somebody else doesn't
get right but
i should have though i did not
predict this will get abused
to
the extreme i've done so many contracts
in my life i was just reading one
yesterday
and
the lawyer put a provision in it
and i was like why like it was a
provision that's good for me but at
first i was like why did they put so i
started making a note like hey don't do
this like there's and then i was like oh
my god they're protecting against
xyz scenario and i was like
holy hell like yes people would do that
i was like i hate that you have to
protect against that yeah but a thousand
percent like there is
a percentage of the population like
here's one thing that winds me up
the we don't prosecute uh theft under a
thousand dollars or whatever it is
welcome to california yeah 999 dollars
you've got people running into stores
for grocery bags
into the bags and out the store dude
welcome to california welcome to humans
yeah it's like it it's huge and that's
going to be this now we're spending more
money to go after the back
bad stuff on the ppv on the people 87
000 new irs agents being hired yes oh my
god so the inflation reduction act has
just been signed by president biden
and uh one of that provision is billions
of dollars going
to
beef up the irs now i do want to clarify
one thing about the 87 000 agent thing
because i think there's a lot of
misinformation out there that's a real
number 87 000 is a real number it's over
but it's not today they're hiring those
87 000 people over a course of 10 years
so
though
let's let me go over both sides because
i always like to balance this out so
people understand what's really going on
that we can understand what might be
coming
so the 87 000 people that they're hiring
is going to be over a course of 10 years
they're anticipating that i think around
50 000 of the current 80 000 agents so
there's 80 000 agents right now they
want to add on 87 000 more
about 50 000 of the current agents are
expected to retire over the next 10
years so the new 87 000 is one supposed
to be replacing the people that are
leaving and then stack on the workforce
what are they going to be doing
well
on paper not on paper by word they're
saying that it's going to be only going
after
people making over 400 000 a year to
audit those people
they want to go after the people who
have taken fraudulent ppp money
fraudulent money from the government are
they going to actually do that well
that's not what the bill says the bill
says is they're just going to be
increasing the irs workforce to do more
what they do now the next question is
what do they do
well how do we just look at history
2021
50
of irs audits
run people making less than 75 000 a
year
what does that tell us
well
if they bring on more people what they
want to do they want to
increase tax audits they want to go
after more people for tax dollars now we
can debate all day long what is ethical
and taxes you know that's this whole
different thing let's just look at the
fact with the irs thing they want to go
after people who owe a specific amount
of money which is what the taxes say
that they're supposed to get
so that's what they said that they want
to do well if 50 of people who are being
audited are making under 7 5 000 a year
what is probably going to happen with
this additional irs agents well they're
probably going to follow a similar
percentage of people that they're
auditing they will probably try to go
after
bigger corporations part of the
inflation reduction act if i'm not
misunderstood i this just happened like
i'm reading this before this interview
was they want to create a
minimum tax for corporations so they
want to go after corporations like
amazon who use deductions to pay little
to no money in taxes legally so they
want to close some of those loopholes
they want to go after people who
potentially didn't pay enough in taxes
so they're going to be doing a lot of
this stuff i'm so worried about young
people that were not thinking about
taxes with crypto and just going ham
like
it's crazy yeah yeah small business
owners if you're a small business owner
if you're investing your money because
even if you're a side hustler because
you know
in the last couple of years we saw the
new six hundred dollar rule if you're
getting money on venmo
600 rules oh you don't have to pay taxes
yeah well in venmo never really
tracked or reported these transactions
rather versus now if you're getting a
lot of money in venmo you have to report
it venmo will report it even if you
don't report it so you know doing side
hustles become more difficult i never
even thought about that so there's a lot
of different things that i mean
this so this additional irs agents isn't
something that just happened overnight
this has been something that's been kind
of
building up i've been talking about this
on youtube jesus where i mean
this is kind of one of the downfalls of
a digital dollar is everything gets
tracked every transaction gets tacked
every purchase gets tracked every spend
gets tracked because if there's no cash
you know everything is going to be taxed
and
tracked
so that's one of the the downfalls in
that sense and this is where uh you know
of course i'm not saying
break the law i never advocate for that
you know you got to pay what your taxes
say you got to pay you as a tax advisor
to make sure you pay the least amount of
money in taxes legally be tax efficient
be tax efficient be tax efficient there
is a reason look i'm not terribly tax
efficient i'll be honest because i find
that so boring i'd almost rather
just pay more money
but
being tax efficient makes a huge
difference but if i could just psa for a
minute
pay your taxes please like i'm begging
you the people get in trouble
shout out to mr beast
he gave that guy a million dollars guy
won a million dollar forget what the
hell why but he won a million dollars
and he actually took him to a tax
advisor
and recorded it they wouldn't let him
show it on camera but he was like he
walked through here was the advice first
of all you're gonna have to pay it's
close to fifty percent yeah like you're
gonna have to pay about five hundred
thousand dollars of your million it's
just gone bro tax tax government got you
but pay it
pay it because if you go spend that
million dollars and then realize that
you owe me a 500 check dude you you have
no path to that 500 000 your ass is
going to jail you're either paying or
going to jail exactly that is some scary
exactly pay your taxes pay it be
tax efficient pay your taxes exactly so
i've become much more passionate about
this over the last
while
taxes pay them or be tax efficient both
well well i've always had an accountant
but i've had good accountants and i've
had bad accountants
and i will tell you
it is it pays to pay for a good account
and the reason why is because i'm going
to give you just a straight example
um
i this is i forgot what day this was but
i was in the office in my office get a
call from my accountant
he says hey joseph how are you doing i
said good he said hey listen we made
some miscalculations
i need you to do me a favor and send a
hundred thousand dollars to the irs
by tonight
and another fifteen thousand dollars to
the state
by tonight
and i got a little upset i was like what
are you talking about
how can you say that and then you say
well one more thing i want to say before
you say that that you also are probably
going to pay a penalty on this
and i was like how can you say that this
is my fault he's like it's no one's
fault it's just we made a mistake and i
said if i'm the one that has to pay the
fee and the penalty
you know sometimes i had enough i fired
him
i paid a lot more money for a good
advisor
and this
blew my mind because one now would we
him and i meet
we are actually like going over he he
records all my books he goes through
everything he's like here's your revenue
here's your expenses here's what they
look like here's where you're spent
here's how things have changed here's
your profit here's your tax liability
here are things that you can do right
now based on the tax law to limit your
tax liability here's the things that we
recommend here's what you may want to
consider doing and now i'm like
wow
you're telling me that like i could have
been paying this so i'm paying way more
than it was before but i'm saving that
money in taxes and so that's this is
actually a very recent thing this is the
first time i'm talking about this i
actually over the last number of months
i talked to him i said look man this is
a service
many people need business owners because
most times we're not taught this type of
stuff so him and i are working together
to actually build
a proper tax firm tax advising firm for
we can start with small business owners
to help you
understand your cash flow understand
your tax liability and understand how to
legally
manage this tax liability because the
irs tax i'm telling you from an attorney
i studied a lot of tax law
the tax code is over 2000 pages long
you can't understand this versus this
guy my advisor he has a whole team he
lives breathes this is all he does like
he wakes up and thinks about taxes okay
like you know it takes a special type of
person to do that and i was like look we
need to get your mind into more people
so him and are working together to build
something so if you're a small business
owner and you want the type of advice i
mean i don't have any website or
anything but uh you just email me maybe
my um my assistant can send you over to
him team the minoritymindset.com
so like it is so important now 87 000
new agents come in
they're they're going to want to raise
taxes why it goes back to inflation
inflation reduction act kind of a a
funny
name a spending bill
spend more money to reduce inflation the
goal is that they're going to
reduce costs more than what they spend
my concern
without getting political which has been
happening many times is that the
government is not efficient with their
money
they think that they're going to spend x
what ends up happening is they end up
spending 10x
and get a return smaller than what they
expected
so i hope
i hope that the inflation reduction act
will reduce inflation my concern would
be what happens if it increases
inflation
and the united states government is
facing
almost 31 trillion dollars of national
debt oh god how do you pay that back
they need to make money how does the
government make money they tax people
you earn money you get taxed everything
you do gets taxed you spend money you
pay tax you buy a home you pay tax you
pay tax on your property property taxes
you pay taxes when you sell an
investment i mean you pay taxes
everywhere
and if they want to pay down this
national debt they want to pay down some
of this this deficit
you're going they're going to need more
tax dollars
because they keep increasing the amount
of money that they're spending right so
if you're spending this much money but
you're bringing in this much money you
have to make up this cost somehow and a
very rudimentary
diagram
so before it was print money money print
money
that's what the federal reserve bank did
that's how the federal reserve bank has
built up a nine trillion dollar balance
sheet meaning they spent nine trillion
dollars that they didn't have to help
fund the government spending well now
what are we doing we're facing the price
which is super high inflation
the some of the highest inflation that
we've seen in decades
and now we can't keep printing money
so now what is the alternative we need
to get more tax dollars
because that's how the government can
get more money so either they're going
to go after back tax dollars
and trying to raise taxes like they're
already talking about raising the taxes
on corporations uh will they raise taxes
on people we'll see time will tell but
this is the reality this is where you
want to have
a good tax advisor
and you want to be filing your taxes you
want to be paying your taxes and
especially now you want to be prudent
because you can bet that they're going
to be trying to ramp up audits
the best way to fight an audit is to not
get into an audit it is honestly the
best thing to do
whether you're a person or a small
business owner that means
one
filing your taxes
if you don't have a lot of money like if
you're making under a hundred thousand
dollars a year and you just work a job
don't pay ten thousand dollars a year
for a tax advisor use a free service
online
use something that's going to help you
you know you show your w to whatever
else you're doing it's much simpler now
if you're making more money you have
real estate investments you have other
investments you have a business
now you want to pay and invest in a good
tax advisor because they're going to
help you document everything they're
going to help you understand everything
they're going to help you manage
everything and there's a huge night and
day difference between a good tax
advisor and a bad tax advisor i can tell
you this from personal experience and so
my goal with this will be to help bring
good tax advisors to people who need it
but
this is all about
just understanding because this is
not going to slow down this whole tax
stuff
it is probably going to be increasing
not just because of who's in office but
because of our economic situation where
inflation is so high international debt
is so high and
social security is drying up at its
current rate like
the government needs more tax dollars
and i'm not not trying to get too
confusing because it gets one more layer
uh
one more layer bigger it's like an onion
right we keep peeling back layers
the government taxes you on your income
and profits well
what happens when an economy is slowing
down
incomes go down
profits go down
so if they're taxing you based off of
that that would mean that they're
generating less tax dollars per person
or in total because now the economy is
shrinking
couple that with the issue of the high
national debt
the high deficit now you start to really
see the issues where
hey
we need more tax dollars so now if you
can't get it from a bigger economy
what's the next alternative we need to
charge more money in taxes
so this is the things that you want to
be aware of because unless our national
debt and our deficit magically go away
this tax thing is going to be a bigger
and bigger issue as time goes on
all right you're going to tell people
how they can follow you to get that and
after that i'm going to tell everybody
the eight things that i've learned by
watching a just unimaginable amount of
your content sure well i appreciate you
watching um if you want to learn more
about the tax advising service send me a
dm on instagram at minority mindset
there's a bunch of scam accounts out
there but you can send me a dm minority
mindset or email me or my team at team
at the
minority mindset.com t-e-a-m
minoritymindset.com you can follow me
minorityminds that just sing
pretty much anywhere uh youtube social
media check it out i love it
all right dude first of all watching the
content you definitely don't have to
thank me for that thank you for putting
such amazing content out now i'm going
to say these things in my words all
right you'll tell us if i get pretty
close here all right let's go but these
these are the eight concepts that i
think are incredibly powerful i hope
everybody takes away from you
uh and i think is extraordinarily good
advice number one keep your expenses low
number two save roughly six to twelve
months worth of living expenses just in
case
uh remember that you can't save your way
to wealth wow i like coming on the heels
of making sure that people do have
reserves
invest your money in a diverse portfolio
again that's my language but you're
very wise to talk about etfs and
index funds dollar cost average so that
you don't get burned trying to time the
market
invest in yourself if you're interested
in being an entrepreneur could be you
talk a lot about that for many people is
the best investment you'll ever make
don't confuse the house you live in for
an asset the house you live in is a
liability yes i think it's very wise
and then number eight if you can't
afford to buy it five times you can't
afford to buy it yes
the myrtle of five uh that's that's one
of my favorite ones man awesome i love
it brother i think that's
extraordinarily good advice speaking of
good advice if you haven't already be
sure to subscribe and until next time my
friends be legendary peace
new york city's becoming more dangerous
chicago's becoming more dangerous places
chica san francisco is becoming more
dangerous
you're seeing people leave some places
for other places the greatest danger for
most people is failing to look at
the things that could be harmful