4 Ways the Financial World is Lying to You (Whom CAN You Trust?)

four ways the financial world is lying to you who can you trust it's brian preston the money guy yeah brian i think uh i think this show was going to be sort of interesting because we live in a world now where we're inundated with information i mean we have whatever you want to know in any realm of the universe at your fingertips in real time but i don't know that that's always a good thing well i think the typical person doesn't realize the biggest deterrent the biggest obstacle to their success is actually what resides right between their ears your brain is going to be you're you're going to want to react you're going to want to have all these influences cause you to do something and our biggest goal is i think one of the biggest benefit the biggest benefits to watching the money guy show since we have hearts of educators is that we help you to know what's coming your way so hopefully it turns into wisdom that's right that you can actually weather this stuff so we have today's show is kind of the four different influences that i think are kind of seeping in all around you constantly you know and how you can kind of stand up to that and know what actually you should listen to what you should avoid and what's actually you know actionable something that you should actually implement with your personal finances love it love it love it so do you want to go ahead and jump into the first one yeah click on them very first one and this is one that's not going to be incredibly surprising because this one gets ton of a ton of play although we ring this bell all the time and the fact that i've even on twitter um it's yahoo finance it's cnbc they'll talk about something devastating going on in the market and say they'll use they'll so cavalierly talk about the market's getting crushed right and it'll be down less than a quarter of a percent you know they'll do that stuff constantly and it drives me crazy because the financial media it is so hard to trust anything they say because they've gotten to the point where it's all about the clicks it's all about keeping your eyeballs your ears they want to keep you engaged so they can sell more advertising make more money it's not necessarily to make you better at what you're doing with your personal finances yeah it's even less about conveying useful tangible information it really is about keeping people engaged dialed in for as long as possible now there is a timeless thing anybody who's taken journalism as a as a degree or a class ft daniel you come from a background of being a journalist as well as a financial financial planner do they teach this they don't teach us do they no no it just happens when you get out of this but it's under there it's there it's there it's implied because here's what it is if it bleeds it leads understanding fear-based media and i thought it was so interesting when i was doing show prep i actually found an article from psychology today and it had an interesting quote and i thought this i mean even though this was written in 2011 it's pretty timeless listen to this because this this totally plays into today 2020 in this crazy year that we're living through here's the quote much of today's television news looks to the spectacular the stirring and the controversial as news stories it's no longer a race to break the story first or get the facts right instead it's to acquire good ratings in order to get advertisers so that profits soar it's all about making money it's all about what's the ultimate profit mode of not sharing good sound information anymore so and and the whole the whole adage if it bleeds it leads really has two purposes um if you think about sweeps week on your local news media i i think there's even services that sell these headlines now is that they don't have to get creative and come up with this stuff anymore tell me if this if this example is not something that's happened i know i've seen this at least probably 10 times in the last 20 years that i'm thinking about it in every town that i've lived in because here's the headline what's in your tap water that you need to know about well now i've got to read it it's got a voice might have water to be important and i need to know about it so that's what they in the industry they call the financial media and in the media in general calls that the teaser the whole purpose that is to grab your attention keep you focused but they also here's the other part the other purpose is to persuade you that if you will just tune in that they will provide the answer and you'll be have you know you'll have the comfort of knowing that since you tuned in you're in a better place that's the second aim that's not really what happens i don't think anybody because i know i always have a let down feeling if you get caught into this teaser feeling at the end you'll go wow wow that was nothing they didn't actually know the answer to that you know there's nothing by the way it's not that okay they put fluoride in the water i mean it's you know it's it's it's just not as big as what they build it up to and look it's not even the financial media they've this has been so successful at keeping your eyeballs keeping you scared into focusing that the advertisers that even advertise on like talk about your am radio stations with talk radio if you think about your cable news stations they've gotten into realizing hey if it works for the media it should work for us advertisers too let's use fear to sell and that's why you come up with stuff like seed banks i think it's so crazy these crisis seed banks that now i haven't seen these as much as i did in 2000 2009 when we when we first started doing this together i feel like they were all over the place like you could get your five gallon bucket of seeds to go plant your crisis garden and you could have that forever i don't feel like that's happening as much anymore but it'll come back these things always come back we will see them again i don't know that if you're really scared about things going kind of wonky a seed bank is the thing you probably ought to go run out and grab i mean you can see survival seed banking plant acres just give them a little bit of money and that leads to the the other part that i think is the other crisis currency is gold oh that's yup now look and you said you put this in the show notes but you said you're not actually gold's not horrible always yeah i'm not suggesting that gold is something that doesn't ever have a purpose inside of someone's investment portfolio or inside the allocation there's a very real reason why someone might want to hold gold but i think that what's really interesting is the time that gold often gets pitched the hardest and you hear the most about it probably isn't the time that you want to be running out and adding gold to your portfolio yeah i mean and here's the thing i want to give because this is something i think never gets covered but it's the limitations of gold let's talk about this by the way this was one of our first videos we did back in 2011.11. guys we might at some point have to do a reaction video to some of our old videos from 2011 because we kind of came at youtube hard in 2017 and we've stuck with it yep but we tried this in 2011. it's pretty funny so we might have to have a reaction video on that but here's what here's the thing about gold it's not going to innovate so it doesn't matter you can put gold on your desk you can put it in some room in your house and you can leave it there for five years come back it's gonna look it's just gonna be a little bit dustier it's not gonna innovate it's not like it's gonna create a new processing chip it's not like it's gonna come up with a better business model there's no innovation coming out of gold it has no income component same piece of gold that's sitting in your closet or hopefully you got it someplace even safer than your closet um you you have to it has no income component and the fact that it's not going to have interest it's not going to pay you rent there's no dividends it just kind of sits there and shines that's it's really its only purpose so that's a a struggle in the fact that it's not actually doing anything for you it's not reproducing or growing it's just sitting there not only that it's actually a suck of resources because it costs money to store it if you're going to store if you have a lot of gold and you want to keep it secure you got to pay to do that so it's not only is it not going to create income or generate income from you it's actually going to pull income away from you realistically yeah you have to cost you know it costs you money to keep it safe and then it just sits there it shines it's small it doesn't even smile at you but you can at least go in there and polish it up and look at it and go oh my sweet gold my precious you know because that's really all it's doing for you and the only way you can make more money on gold is if you can convince somebody to pay more than you paid for that's really the only way you make money with gold and always the thing is when people tell me that they're they're thinking about gold i'm like so does that mean you think that the whole system is about to implode upon itself if it is you're gonna need a lot more than gold gold is not the most valuable thing if you think armageddon is coming so it's um it's so interesting that that is typically when gold is pitched higher is when there's uncertainty out there but we want to go a step further i mean we have all these resources we have fte daniel we're like let's ring the bell and actually look and see what gold has done yeah and so what we did is we said let's look at the price of gold and let's just kind of lay that right next to the s p 500 which is something that innovates and does create income and does have yield so in 1980 you could buy an ounce of gold for 594.90 or you could have invested 594.90 in the s p 500. well if you fast forward 40 years today that ounce of gold is worth one thousand nine hundred fifty nine dollars and thirty cents so went from five ninety four to almost two thousand dollars so that seems that's pretty good it went well in the fact that it looks like it almost quadrupled it you know a little less than quadruple that works out too over 40 years though this is if you think about the typical person this is what your working life would be if you were starting saving and you're 20 and you grew it it's 2.98 per year i mean that doesn't sound as good in like recent memory like money just sitting in a in your like savings account could earn more than that right like that's just not a ton of return i don't know if my cash was earning 2.98 percent but that is over 40 years that seems like less than perfect so so what is the s p 500 done if you took that same 594 dollars in the s p 500 it would actually be worth 52 267 it's multiplied by a factor of 88 times over that 40 year period i thought that was by the way that's very poetic and daniel's the one that brought that to our attention and the fact that now realize the annualized performance on that is 11.84 because remember the thing is is that we when we run 88 times over we talk about for a 20 year old if they will invest one dollar when they're 20 years of age put it in something like the s p 500 by time they're 65 so that's 45 years in the future that's we assumed a 10 rate of return it'll be worth 88 i think it's quite interesting that after only 40 years looking at it from 1980 to 2020 or into 2019 that it actually is 88 times over so maybe we're even a little more conservative when we look at it but that's that's that's pretty powerful when you look at the difference those two numbers what i think is interesting is we can think about all the major world events that happened in the 80s and the 90s and the 2000s and if gold is supposed to be this thing that's supposed to like keep you safe and keep you protected i would argue that a basket of goods like the s p 500 did a much better job of being a safe asset for you then that hunk of gold did now i do want to protect you guys because a lot of you are going to notice in the financial media when the advertiser is pitching gold to you they're going to show you the 2000s they're going to put the gold they're going to put gold the price of gold compared to the s p five or the stock market in the 2000s because look we know that that was the lost decade the recession of 2008 was so bad that it's considered the last decade that's why they always started in like 2000 that's right versus 1980. we wanted to show you a more full picture so you can see what history actually shows when you show as much time as possible yep so let's talk about the next thing guys i had to fight for this one just to let you know pre-show i mean i felt like a prize fighter i was having to go to work on this just for you guys i was working overtime to make sure this show matched what it needed to be because here's here's the next thing i want to talk about i want to talk about the fact is can you trust the media predictions and the there's a there's a reason that i wanted to set the table on this is if you think i'm thinking about the media is there even any value to the predictions because you think about cnbc fox business there are talking heads available 24 hours a day to you can hear about what's going on in the world well i'll tell you which way the world is going to go they want you i mean i think the way they position this is this is actionable information for you but don't get in a hurry and stand still because it's just not this is not actionable content and what does the oracle of omaha warren buffett say about all these people making these forecasts he says this the only value of stock forecasters is to make fortune tellers look good he was very nice by the way they didn't he didn't put weather people in that's right he could have gone fortune teller versus weather person probably a toss-up on on the coin toss and then the second thing he said was forecast may tell you a great deal about the forecaster they tell you nothing about the future so be very careful and we want to kind of give you case study examples of being is there any value to the media's predictions you know the answer the answer is absolutely no and we have proof and what i think is so interesting is this isn't even a recent phenomenon this isn't something like oh in this new day and age that we're in this is a new thing we're seeing it's really not uh if you we look back to august of 1979 this is a business week cover titled the death of equities i think you know you were around back then that was a pretty popular popular message that would be funny it is kind of funny when i look at that because i'm like yeah i was around back wasn't even born yet i mean 79 was a good year it was a year after my little brother was born oh awesome awesome uh okay so this is what they said the death of equity so surely you're thinking in 1979 i want to just stay away from the stock market no way am i going to be buying stocks no way am i going to be investing well now we know the rest of the story and over the next 12 years the s p 500 annualized almost 17 per year over the next 12 years 80s was a good decade so i'm going to do this just for my own benefit notification is that is there any value to the media's predictions in 1979 no no if you had done something with this you'd have been disgusted with yourself okay let's see so they obviously can't tell you when markets are going to recover how about buying when things you know should you listen to them when things are good when things are good okay so let's look at march of 2000 this is money magazine this is how to invest in the hottest market ever so they're going to tell you this market's hot here's what you need to do you got to get you some of this don't miss out well the s p 500 over the next two and a half years lost 14.65 per year over the next two years next two and a half years well yeah they were right at the top of the bubble of the the dot-com bubble so it was just a horrible prediction so well this was old school things have gotten better we've modernized that's right if you think about this bo because you just showed me an example from 1979 you just showed me an example from 2000 that was all before the internet and everything revolutionized if you think about now we have all these smartphones information is traveling better i bet things have improved oh yeah they've gotten much better uh in october of 2008 this was the new hard times and i i think i think that's a soup line yeah they they grabbed a great depression picture by on time you and i were hanging out in 2008 i don't remember a ton of like soup lines then so i don't it literally says free soup it says free soup back there so they said you know the new hard time so it's not going to get any better well we know that over the next 11 years the s p 500 annualized 14.68 percent over the next 11 years i talk about this all the time is that you need to look at investing is that you are throwing the yo-yo i'm talking literally that childhood yo-yo that duncan yo-yo that you had as a kid with the butterflies on the outside look at investing is that you're throwing it up and down but you're walking up a higher mountain if you look at the visual we have of what the last 11 full years have been that has been a yo-yo ride that's not even that it's not it's like your string on your yoyo was very short because it just a very smooth walk up that mountain so it's just kind of these just be careful who you let into your brain because it's not the financial media that's working for your wallet if anything they're working for your eyes and your ears could care less about where you're going to put your kids in college how you're going to retire how you're going to build financial independence always keep that in focus so you don't make bad mistakes all right so we said that the financial media can't be trusted but surely that means that financial professionals folks that are out there folks like us folks like us yeah surely those types of folks can be trusted right surely folks that are professionals in the financial world can be trusted right well i mean why would we go soil our own brethren i mean that seems this seems like this is this is either mean it sounds a little self-serving but i do think it is educational sometimes it's okay to be self-serving if it's a win-win scenario so if we can help our audience why not tell everybody how our industry works because bo you know you worked for an insurance company through college i worked as a registered rep for a number of years is that sometimes we get things a little out of whack instead of becoming experts and getting that 10 000 hours of working for five years in the industry how to be a great financial advisor a lot of times our industry is more about the whole sales side of things right so we see that and so here's here's the first piece of guidance is your financial advisor lying to you and that's kind of a scary thought right because obviously whenever someone signs out with a financial advisor their first thought is oh this guy looks like a crook i think i'm going to sign up with him right but a lot of times that's what happens out there in the financial world but it doesn't have to happen there are ways that you can protect yourself well i even think sometimes because lying that you guys grabbed that that word i always kind of cringe a little bit when we were doing the pre-show and i saw the word i'm always like i give people a benefit doubt i'm assuming maybe they're not lying maybe just don't know any better sure because there's a lot of i think well-intentioned financial advisors that just don't have the chops of knowledge experience to know that they just don't know what they don't know so let's kind of but here's some things you can do to protect yourself the first thing guys do your research yep i mean this is so easy i mean i think about when i first entered my career in financial planning you couldn't google people as easily as you can now you can go type in anybody's name and you can we do this on job applicants we do it with prospects we do it i mean you can google about anybody so go do your research go see what you can find online about the financial advisor you're thinking about working working with and then here's the part use the there's government regula regulating bodies that you can also go see if there's some data points out there the sec actually has an entire website called check your investment professional and it's easy enough it's sec dot gov slash check dash your dash investment dash professional the dash is screw it all up but but you see you don't say check your investment professional with dashes in between and then that's the sec that's your registered investment advisors and things like that and then if your person is a commission based advisor um kind of with a broker-dealer um they're going to be on broker check by finra and that one's just brokercheck.finra.org we actually have a real real world example where we were hiring someone who had been in the industry for a while and one of the things that we did is we went and checked these resources to see if they had any sort of disciplinary actions or anything like that and it enlightened us to some information that we were not privy to in the interview process so we even as professionals can use these resources yeah so make sure and look you're probably anybody who's thinking about hiring a financial advisor you need resources you need something to let you know how do i do this because you can you can educate yourself through the process you don't have to just work with whoever shows up or who your aunt tells you is great or the friend at the cocktail party you can be involved in the process and actually do your own due diligence but we want to speed up the process yeah we want to help you so if you go to moneyguide.com resources we actually have and i'm going to hold it up because i'm nerdy eight questions to ask your financial advisor you can go download this for free just go to moneyguy.com resources eight questions ask your financial advisor it's going to kind of give you some some discussion starters to really help you speed the process up absolutely and it's a great thing even if you already have a relationship with an advisor these questions are great questions that even your current advisor should be able to answer very very easily very very straightforward now probably thinking back i would have probably put the example first before we gave him all the education because we've we've actually closing this section with the example of why these three resources are so important is i think that everything i just shared those those three websites between googling people going to finra going to sec there are filings and matter of fact if you work with a registered investment advisor they're required by law to give you disclosures i know that broker dealers are also required to give you forms you know like with an an ra it's a adv part two you know you have to give your brochure out to everybody and it's gonna have all kind of disclosures and guys i can tell you from doing this for over 20 plus years now there are clues when you're working with a crook and and the perfect example is oh uncle bernie madoff now bo i had to fight for this slide you thought you fought hard for a lot because i realized and and thank you ribby for kind of making this possible is because i said look we are now getting over 10 years from when bernie madoff had the largest ponzi scheme in american history and i think that i always worry as you get older and you have time there's constantly people that means that there is 10 to 12 years where there's a whole new breed of investors that have come out and graduated college out there in the workforce they might not know who bernie madoff is and i want you to be protected from that because i did shows realize i've been creating content since 2006 i actually did a show where i went line item by line item all the horrible things that were in bernie madoff's sec filings before he got found out i mean you would no more in the man on the moon work with this guy if you just read what's actually put out there on the internet yeah i think the thing that was so remarkable to me is hearing about all the people that did get swindled by by bernie madoff and all the like very intelligent folks who if they would have just done a little bit of research if they would have just read the document they just would have gone a step further they would have protected themselves from losing millions and millions of dollars because there's crooks out there right now i i don't know when it will happen but it will it seems like every few years there will be some new crook that is unmasked and will and the financial media will explode and we'll go oh my gosh how do so many people get ripped off and i'm just going to nod my head and be like i guarantee we can go pull their filings and we're going to see that they disclosed that they were crooks right there in front of everybody and i want to give you an example like bernie madoff think about this they checked only one box on how they get compensated and it was commissions meaning they get no fiduciary obligation now that doesn't necessarily mean they're crooks but it does give you at least an insight into the fact that they don't have to put your interest ahead of their ability to sell products to you and then here's the here's the big one this is the one that i even bold faced in the show notes because there's a question because here's the here's what was checked yes and guys when you go look at the sec website and you see something like this your spidey senses ought to be kicking up because here's the quote question that they checked yes to has any self-regulatory organization or commodities exchange ever found you or any advisory affiliate to have involved in a violation of its rules that's a pretty big deal yeah if you're saying yeah broke the rules so he every brochure that he's handing out he's kind of letting people know hey yeah i kind of cut some corners in the past you should be very aware of that go do your research before you work with somebody and i think that will save you a lot of heartache it will also hopefully ward off you getting into a bad situation and look i i think at the end of the day when it comes to work with a financial professional if it sounds too good to be true sometimes it may be is if you have someone who's guaranteeing you exponential rate of return with no risk and they figured out this secret to wealth building that nobody else knows but if you sign up with them they'll let you in on it maybe that's not the direction you need to go maybe that's not the right kind of advisor for you bo i feel like today's show we're kind of picking on ourselves a little bit because you see what number three is oh yeah influencers now we're baby influencers we're not we're not mega influencers yet we're working on it we're growing the tribes i mean 18 000 away from being we're almost at a hundred thousand we'll get the plaque we'll put it somewhere on set so you guys can see how proud we are so remember we're trying to get to a hundred thousand by year end please go subscribe so we can speed this process up but we are we're gonna pick on influencers here a little bit because i think that this is so important because you guys know here's i will tell you i love this but i also hated about youtube youtube's algorithm i mean if this thing was your child you'd be so proud of it because it is just smart i mean this thing if you think about whenever you go log into youtube or you don't really like it go to youtube okay you notice the home page has tons of recommendations a lot of the stuff is you probably looked at some content from this person but they'll also you know throw up some stuff that you've never seen before a content creator and like wow that thing is is smart well in addition to that besides the algorithm throwing content that it thinks you might like you'll also notice everybody usually who's a content creator will have youtube ads sure and you can skip them in five seconds typically um and it's just part of the experience you know there's gonna be advertising on the the on the web page on the youtube channel just part of the game it's just part of it well i've noticed on ours i'm gonna set the table here i feel like i also need kind of some music or some crashing wave sounds because it's always this influencer who's trying to sell you their system and they're walking the beach or they're sitting in a fancy car or they got some beautiful person of the opposite sex that's sitting next to them and they're telling you if you will just buy their system youtube you can have this yep and i see this on our channel all the time so i want to give you before we start picking on some of this i want to give you some some tips some preachable teachable moments so you can insulate yourself from the sales tactics that are being used the first thing i always do when i'm trying to to figure out an influencer it's kind of the chicken or ag approach i want to know was this influencer were they successful pre-influencer status or has the success come because they are now an influencer it's a whole chicken and egg approach whether you've got to have that part understand understood because i think a lot of these people are great entertainers but i don't know if there's some benefit to buying the product and that leads to the next thing what is their why why does this person create content is it to sell you something and i think that's a big part is there a system or a product and if they do have a system or product ask yourself is this actionable is this measurable or is this just a feel good moment is this are they just trying to make you feel aspirational feel like if you just do what they've done you will have everything they have and you'll have the attractive person sitting next to you the fancy car walking on the beach in the middle of the day so it's that's the stuff that's out there so i wanted to put up and bo you you kind of have a setup story is that you had some of this stuff start showing up on your feed i don't know what it was but this one particular individual started showing showing up on all of my social media so if i was on facebook uh his advertising advertisements sponsored content would be there to be him talking about here's how i bought my jet or here's why i bought my jet or he'd be on my instagram feed and he was just all over my stuff and i started thinking who is this guy and why is he showing up on all of my social media why does the algorithm want me to know about this guy so we did a little bit of digging we actually went and did some research on him so i think it's interesting go ahead and pull out the picture this cracked me up because this is grant cardone and um there's so much going on in this picture by the way this if you think about the three annoying things that are is four annoying he's got three of the four annoying things that social media influencers do it's first of all he's got a click bait title now we've got i'll tell you what the titles that he uses is stuff like why i bought my gulf stream jet yep well i kind of want to know why he had to have a gulf stream i mean that is he had a very clickable title there but he'll also have some he'll have a look at this he's got a g5 with his name on his name on the back he's even got a bow you gotta he got a little pump he might have done some push-ups before he took that off he's got a little pump going on he's got the fancy watch i mean it's all the stuff that if you think about this he's going to tell you how to do your system just like him and the only thing he's missing of the the four things because he's got the click bait title he's got a flashy toy if you watch his content he will have some explicit stuff in there he'll drop some he'll drop some con you know some language on you and then the last thing this is the one thing i will take to tell you grant does not have and i give him credit for it there's not half naked people there's no scam because there are a lot of content creators out there that are hitting all four of these annoying things that people do is kind of call them hacks to getting their audience um i don't love that but here's the thing i think you need to think about with grant is can he be trusted and is this something how does he get paid i always want to know how does grant how does somebody who has a g5 obviously is this success it's but go back to my three questions that i was talking about where did his success come from what's his why and then try to figure out how is he doing everything that he's doing and we kind of found some disturbing information out there it was eye-opening and i was pretty impressed as we started like digging in because i again it's one of those things when you see this you start thinking how do people not not catch it and now look i'm not saying that grant is bernie madoff but i'm just saying that there are disclosures grant to to his credit he's very transparent if you will just go read his cell circulars that are out there on the sec he point blank tells you what he's doing i think he's just assuming his prospective people are not reading so he's not going to go i give him credit i mean if you don't care if you don't have the conscience to worry about are you making the world a little bit better place he's a marketing genius and the fact that he is convincing people it's the whole other people's money he's subsidizing his life off of other people's money and you're going here's the proof i want to go a little deeper let's show what is available out there on the sec's website yeah so if you actually go read this circular uh it's fees upon fees upon fees and this is what it says uh when he goes into any sort of real estate deal or if you invest money with him he gets one percent of the purchase price of the property up front okay right so one percent percent that's pretty you know look we work in the industry it charges one percent i get one on the part it's a little weird that it's on just the purchase so it's getting you on the coming in okay all right well then uh one percent of the sales price of the property so i get one percent of the front and then i'm gonna get one percent on the back as well okay that's kind of a sales charge that's you know we've we've kind of our industry's gone where it used to have you there were a shares where you had the commission on the front or you were b shares where you had the commission on the back yep um so it's kind of weird that he's getting both but it's all right and then and then what's the third one then it's one percent of the total amount of contributed capital on all the members annualized paid out monthly so it's one percent ongoing per year so look at this i do think this is quite interesting he has all three ways that our the financial industry gets paid but it's not like it's an either because at least in our industry it's an either or right on you choose which a b or c scenario grant is just like i'll take them i'll take them all so he's gonna take it on the front end he's gonna take a fee on the back end and then he's gonna take a fee every year he's gonna take one percent every year of the money that's been invested with him but that's not where it stops but wait there's this is the part where i told daniel now he didn't do it i don't think because when we were doing pre-show i kind of let this slip because if i because i i felt bad that i already added a bunch of new slides if i had my way this next number this is if you want to know the genius of taking money for out of a situation this is the genius of what grant did and this is what i'd love to have been in the meeting when they were figuring out their offering and they're like well grant you know um hedge fund managers they have the whole two two right the the 220 because you know i'll take two percent of annual fees and then they'll do a 20 performance fee on anything you know they'll just take twenty percent of the return and grant was probably like twenty percent twenty percent no guys no no i think y'all are not understanding my folks love me i get these people so excited about what i'm doing that they're not going to read this cell circular so just tell them what it is his number i wanted this number big i wanted it blown up i wanted it spinning around i wanted fireworks because i think people oughta have to see how big this number is because it's not 220 and here's the other thing i think is brilliant though if you look at the seller circular now on a different page this is carried interest which means it's taxed right at long-term capital gains he's just like a hedge fund manager in the fact that when you hear politicians talk about taxes that they want to raise because they feel like it's being taken advantage of grant was like i want to structure this thing where i get this i want to pay the lowest taxes possible check out this number 35 profit interest and 35 percent of distributable cash so okay this is worth repeating guys one percent on the front end one percent on the back end one percent ongoing that's three percent right there and then he's now going to take 35 of the profit that is created on these deals holy cow but we are babies influencers well you know i'm not willing to put myself up there as you know some of these guys have a million followers but i do think our intent speaks for itself i'm willing to put myself under the same microscope that i put these guys the chicken and ag approach that's the first question we had our you know we had our success and wealth it's still not coming from youtube it's helping but the business success was much more so definitely the chicken came before the egg on ours of what the golden goose has been this but it's also in the fact that we had successful business interest and working with successful people also i'm very proud of the abundance cycle i wake up every morning feeling like in my own small way by creating this content where for over 14 years we've been giving away free advice i mean completely free advice you come you learn apply grow and then my only ask is down the road when you reach level of success because we've been in our second decade now call us up so you can consider hiring us because the fruit is in the way we've trained you and what i think is interesting how would it be if we're giving you all this advice for 14 years and then when you hire us we don't do index funds we don't do all the things we no it's not that way at all we do everything we tell you on the free side we also are doing for our paid clients as well and look and i think that a lot of people because we got the comments we have a new course out you know and go out there and get the free deliverable on the financial order of operations you can go to moneyguy.com resources a lot of people were troubled that we actually have a premium version that was paying because they're like you've always given stuff away for free why would you change my thing is is that if i'm going to do actionable where it had worksheets it had downloads it actually had a much deeper dive than we could do on a podcast or a youtube show it's okay because i still am leaving the free resource i'm reading leaving the breadcrumbs out there for you to see if you can do this and it's true if you watch probably two three years worth of our content you'll get the same type of stuff but if you want to accelerate the process get the nudge get the data gathering that's what we were looking for it was not to undercut the brand or do anything but i think that is that intent that desire is what's different we didn't have to do the course we did the course as an acceleration to try to get you through the abundance cycle and it still ties back to are we making the world a little bit better place with all this content yep and i think that's so that's a contrast right of of i'm gonna call a negative influencer who's the guy that's trying to sell you on a system and then obviously we try to be positive influencers but there are other influencers out there that are net positives that they are they do great stuff uh three of the ones that we threw out just like off the cuff dave ramsey graham stefan clark howard they're all and i think what's interesting about each one of them is there are tangible results from what each of the three of those have done if you want to talk to someone about getting out of debt and really changing their life and changing their behavior say what you want about dave there's he's second to none when it comes to actually getting people motivated to get out of a bad spot into a positive spot he's also not a i mean a bad guy in the fact that we work in dave ramsey country i mean we are in franklin tennessee his organization i think is quickly approaching a thousand employees so they're a big employer here in the community i know people from my church i know people from my neighborhood you do too that work there and you want to get somebody excited talk about the shopping days he does at green hills some of the charity events i mean he does do good work now look we don't agree with dave on everything i think you guys know we've even done some shows where we call in to to action about his investment philosophy compared to but otherwise i think you can if you're looking to get out of debt dave ramsey is the best motivator of getting you out of those behavioral things i kind of consider us graduate level studies for the people who don't struggle with the behavioral things that dave is talking about a lot of times that leads to and this is this one's a sentimental favorite of mine is clark howard he's on the far right a lot of you guys might not know who clark is because he's not as national he's more of a regional player he was on the talk he was on both wsb which was talk radio in atlanta when we lived in atlanta he was also on wsb the tv station channel 2 and um clark is just a consumer guru this guy was by the way if you want to look at influencer status of chicken or egg approach he was a successful entrepreneur and business owner who was retired at a very young age he already had built up enough money so nerdy so bored that he started calling into the radio station every day to one day i think he tells a story that i can't remember if somebody got sick but clark basically showed up and said hey let me let me try this out i mean he has a nerdy story that is so awesome and i think his just will to be an educator and help people grow has always influenced me i and i talk to people that he's also encouraged i got to do a tour and he kind of helped inspired this show back in 2005 and 2006. and the last one's kind of a newcomer on my radar at least i know he's been doing this for a few years now but but man graham now he does a lot of those annoying things that i'm i just think i'm getting older that's where i'm old and crotchety because he does like three of those four annoying things that influencers do but he's legit in the way that his minimalism the way he lives his life is is kind of incredible and i think his transparency you know he's he's he's not super pretentious he kind of puts it all out there for you he kind of shows you exactly what he has going on and he kind of tells you hey look if you want to do something similar to what i've done these are the steps this is how you do that and he puts it all out there you know he has a lot of content out there for free he does have some courses and stuff but i think that's great and i think he's had a posi a net net positive impact on the financial world through his influence so it's not all negative i mean there are some positive influencers out there and that's something i just want to make sure we are clear on is just pay attention train yourself to know what questions to ask to know what the intent is what the why is so that you can navigate that as effectively as possible and not fall prey to some emotional trap or some you know where they make you feel good to lure you into a trap that financially will not be in the best interest of your wallet yep love it okay let's close this out with the last one this one's interesting are you financial sheep so we've talked about financial media and advisors and influencers and now we're going to talk about society as a whole those voices out there that have an impact on us that we don't even realize have an impact by the way society is a if you think about everything we faced in 2020 if you think about way people behave when we have market downturns there's a reason when we talk to a retiree and we're talking about safe withdrawal rates and other things we always say look this is a super conservative assumption because the reality is is that when economies are in struggle zone nobody keeps hitting the accelerator on their savings even though we put that into our projections we put that into our monte carlo analysis and stress test we know that the typical human is going to slam on the brakes as soon as we hit a a downturn and that's because you are influenced by those around you you are influenced by society yep and i think the world around us us wants to kind of lie to us about money or maybe misrepresent it a little bit or just get it wrong uh you know i think one of the things that i think is so funny uh you know growing up in church i always used to hear uh folks say well you know that money is the root of all evil yeah and i remember i heard that growing up and i was like well that i know a bunch of like really nice wealthy people that can't be right well they obviously had gotten the verse wrong it doesn't say that money is the root of all evil says that love of money well it's like most things there's a there's a little kernel of truth that the whole context is not put into perspective so the actual verse by the way that when people say the money is the root of all evil they're really talking about first timothy chapter 6 verse 10 and um here's i'm just going to take a part of it because this is the important part that makes the point by the way we also had a debate about which version i'm not going to get into that whole discussion in the pre-show planning but about pharisee here with his his snobby translation versus me with my training wheels but here's the actual verse for the love of money is a root of all sorts of evil i'm gonna repeat that for the love of money is the root of all sorts of evil yep so i think that goes to back to the question we keep asking and i think i love it when in a very seinfeld-esque way things come full circle what is your why i mean what is actually driving your intent what wakes you up in the morning what does your heart say there's a reason we say what's your why and because don't love the money understand that it's a tool understand what its purpose is and i think you'll be on much safer territory and unstable ground so you know once we kind of get past understanding okay well there's nothing inherently wrong with being wealthy there's nothing inherently wrong with being resource with having resources we have to think about other lies that society tells us about folks who have achieved some level of wealth or have achieved some level of success and this one is one that i think is just really really frustrating too well yeah i fell prey to this you know i tell the story all the time is that i grew up thinking wealthy people the only way they could have got there was really at the expense of someone else it had to have been a zero-sum game for this person to be successful they had to have trashed or taken advantage of somebody here that's not the way once you actually start studying wealth understanding what creates wealth it doesn't necessarily work that way that's right so let's actually show them what is the perception versus the reality yeah so if we ask the question do millionaires inherit their wealth 74 of millennials believed that most millionaires inherited their wealth so if they were wealthy it came from mom and dad well i want to i want to add because i know you've gone ahead and pulled the baby boomers i think because i'll i'll just make a broad statement guys we speak curses upon ourselves and we have limiting beliefs when somebody tells you this and be careful who you take let into your brain because this is what drives me crazy we both come from very humble beginnings and i think that i mean i had so many people in my background who were telling you those son-of-a-guns taking advantage people it's just in our society right now that when we see 74 of millennials this is a believe that millionaires inherited 52 percent of baby boomers believe it that still the majority of the public thinks that the only way you become wealthy is to get lucky and you know what if you want more proof of this look at who buys lottery tickets because i think a lot of people who are in lower income situations they think there's no way out and that they have to just wait for the fates to smile upon them by buying a lottery ticket i hate that i hate that that's a limiting belief if you start early enough if you start often enough when you're young you too can be successful and it's just it's that easy yeah and so we actually took this a step further and we did our money guy wealth survey this is what we found the reality to be uh only 11 of the millionaires that we interviewed inherited over a hundred thousand dollars so that's actually that's actually a chunk of money it's a chunk yeah so you inherited a hundred grand that's essentially the people that think that 74 of millionaires are inherited the actual number is closer to 11 of 100 000 now we put another stat in here so 12 of millionaires inherited some money but it wasn't over a hundred thousand dollars so they inherited something but it was less than a hundred thousand dollars i also think when you look at these stats you have to be careful because a lot of these people i think were successful their parents might have passed away after they had reached success because realize you don't inherit typically until your parents pass away so a lot of these people might have already navigated to success and then their parents passed away and that's when they inherited the 25 000 you know from divvying up the estate so it's interesting but if that leaves a pretty big chunk bo yeah the big chunk is 77 of the millionaires that we that we uh interviewed inherited nothing did not receive any they were all first generation they built it themselves so i think that that's interesting because what that ties into is if you think about this is our own money guy wealth study and survey we do this every year started last year so it's our first inaugural you see i like how i did that added a little depth to it even though we've only done one year but i did think it was interesting because this did add some depth to it is that we have 77 of our clients didn't inherit anything well at least we have some back testing this if you look at 1996 the millionaire next door you know i display it proudly the number was 80 percent our first generation affluent if you go look at the next millionaire next door by chris hogan i've got that behind me too from ramsey solutions his number is 86 percent are first generation sarah fallows the next millionaire next door in 2016. that was sarah and then you got chris hogan with everyday millionaires his was 79 nothing 84 less than a hundred thousand dollars yep guys that that ties in nicely this is not a fluke this is not because we have different types of clients as you heard from millionaire next door from the next millionaire next door as well as everyday millionaires it all ties directly into our content and our research that about eighty percent of millionaires are first generation now look there's a there's a dark side to this and this is something that you ought to to use seventy percent of second generation blows the money of the wealthy first generation 90 by the time you get to the grandkids so this is why it's always an ever cleansing process and system to wealth creation so don't let some limiting belief that the systems against you keep you from actually being that first generation that breaks seven figures yeah so if you're that young person listening and you say man i want to be a millionaire great do it you can don't let that stop you now if you're that older person who has regional success and you have millionaire status don't let your kids be part of that statistic that burns through it start teaching them how to steward that well so that it's not a vicious repeating cycle so once again we have resources because i want you to know that don't let the limiting belief go ahead and start wiring your brain to think you can do this and get excited about it go to moneyguy.com resources and you're going to see we have a money multiplier what's the actual official title how powerful are your dollars ruby is gonna have that baked into my bread how powerful your dollars is the name if you've ever won because you hear us say one dollar has the opportunity to turn into 88 dollars you go well i'm 32. we actually have the number for you i'm 46. you can go look at our money multiplier worksheet and it's going to help you know how powerful are your dollars what do you need to do to build to have the level of resources that will just put you on that next level of financial success so your money works as hard as you do with your backs your brains your eyes and your hands you all that can be taken care of with your army of dollar bills if you'll just let the money start doing the work building wealth is surprisingly simple but it's not easy it becomes a little bit easier though if you can take this and recognize who those outside influences are that are trying to steer you in one way or the other and you can just be inoculated from that influence and you can focus on doing what you're supposed to be doing the way you're supposed to be doing and we're going to be your tour guides to help keep you all along that path to financial independence so guys go subscribe go out to youtube we need to get to 100 000 by year end also understand the abundance cycle yeah that's right we keep loading you up with tons of free advice this was more of a behavioral lesson that we've given today how to protect yourself but we also do some really meaty nerdy stuff too go out there and check out some of our 401k and other shows that is the abundance cycle you come learn apply grow we know you're going to graduate to the level that you will need a financial advisor we hope that you'll come back to where it all started remember if you want an accelerator for the process go grab our free resource the financial order of operations at moneyguy.com resources and if you want to speed up the process with some nudging from us some private facebook group some worksheets some data gathering forms you can go sign up for the premium version which right now is at a discounted price until the month end go sign up financial order of operations thanks so much guys we have a great time creating content we'll be back soon with even more new shows you

Channel: The Money Guy Show

Views: 30,169

Keywords: money guy show, debt, budget, cash, real estate, insurance, how to make money, save, credit card, compound interest, buying house, buy stock, success, personal finance, 4 Ways the Financial World is Lying to You (Who CAN You Trust?)

Id: QGucEfeMcz8

Length: 52min 7sec (3127 seconds)

Published: Fri Sep 25 2020