How To Become A MILLIONAIRE In 2023: BUILD WEALTH Starting With $0 | Jaspreet Singh

everybody in America should be a business owner however not everybody should be in the business of starting a company and not everybody should be in the business of operating a company so what does that mean well you can be a worker and an owner right you this concept of equity you have to understand this because wealthy people are working for Equity they're not just working for a salary bringing this back to the idea that there are habits that keep people poor so one of them is living and thinking in cash and so if you're storing your money in cash you're not buying assets like you were talking about earlier things that you purchased that give you money the company that you're talking about building now the company that I built those are assets apartment complex and asset potentially there's actually some complexities there um but buying into the stock market right assets right so if you're thinking in cash and the cash Supply is being inflated then your buying power is going down so going back to your point about the poor getting poorer so we're pulling down their buying power um and then also just the way that you start thinking like an entrepreneur about like I don't have the upfront Capital this is another mistake people make oh that's okay for people that are already rich they can do things that I can't do but you weren't thinking that right so you I'm sure went to people and they said okay cool give us up from money you didn't have it so you go on to the next person but because you keep going until you find the person that's like okay word like come in throw your party I'll take half up front you even find Partners again paying them in equity you're paying them with future money that you don't currently have right like that one thing alone is a huge habit difference between people who think I trade time for money right I go and I work I give you my time you give me that money nothing wrong with that and it's it's the path that most people will take right but for people that really want to understand what we're about to go through because this this could be nothing in a year from now we look back on this video and we think whew thank God that it didn't get as bad as it could right but we could also be headed into a recession like a deep Global recession that could last a year or two years or more sure uh so getting people to think more entrepreneurially like you're laying out in the story I just want to to orient people to the fact there's nothing necessarily different about you anybody can think like that and get the kind of results that you end up getting I think it kind of goes back to what you were saying uh it was maybe before we started rolling where you said you were dumb and so you asked a lot of questions for me I said I was dumb because I don't really care about risk I never even looked at risk for me it was opportunity that's all I saw and it was just a way for me to get started and you know I was called stupid and dumb all the time and nowadays if I'm not called stupid it's probably not a crazy enough idea and so that's kind of exactly what you're saying I started making this little bit of money and it started to grow and it has some cash in the bank and now I'm started reading these books to talk about investing in real estate I was like all right let's try this so I was uh 19 at the time and I started looking at real estate investment properties and again I didn't know what was normal and I took my MCAT on August 22nd August 23rd I closed I'm a first real estate investment property it was a small 1 000 square foot condo water foreclosure and I bought it for eight grand it was a total price of the condo and that's insane that same condo sold for 150 Grand just a few years prior and that condo then started paying me 600 a month and now you talk about staying your time for money see in the beginning I didn't understand that concept because when I was working in this event planning company it was just me if I didn't do everything nothing was going to happen but then this real estate investment property changed the way I thought about it because now all of a sudden this asset I bought this condo it's paying me money and I don't got to physically go host a party I don't got to go flip pretzels I used to work at Auntie Anne's pretzels as well I don't have to go and do something it was just there I owned it and now this condo is paying me for just owning the asset and now all of a sudden I start thinking different I started to get a little bit upset because I was like well why was I never taught about this we're not taught about investing we're not taught about financial education we're not taught about wealth and and that's you know talking about now money habits well how the next habit you got to understand is is you got to be able to ask questions because if you don't understand the way the system works they're never going to be able to answer or ask the right questions because the way that the system works in across the board is you know in a company you have the workers then you have the owners it's kind of like a overlap and sometimes the workers are the owners some of them kind of in the center but the workers are the ones that are now working every single day you get your salary the owners aren't working for a salary they're working for Equity profits so they're hoping that now the workers will be able to drive up the profit so now the valuation of this asset is higher now when you have the sort of inflation who Hurts the Most the workers your incomes don't grow to keep up with inflation however the asset value which is not the value of the company disproportionately gets benefited because now this money gets printed it gets created out of thin air it flows into assets and that makes the valuation of companies for example to go up so now you have these two things right you have the workers and you have the owners this is how the customer works so it it it depends on what companies get that money how did they decide so this is the first time ever that they decide to buy uh Company stock how did they pick Bundy teeth Bond sorry uh so who how does the FED decide I have no idea how they decide however let's think of it this way so stimulus checks went out right people get cash you feel wealthier in the short term your bank account goes up some people took this cash maybe they paid off some debt maybe you go and invested this money but a big chunk of people took this cash and then they went out and they spent it well if you need this money well yeah and you had this whole range right some people really needed it some people went to uh Walmart they went to Kroger they went somewhere and they bought groceries but still the money where do they go they went to Walmart Kroger and those those companies have bigger profits because as money was printed it goes into the hands of people and then it flows to the corporation other people went to Louis Vuitton they went to Gucci they went to the Apple Store they went to Lululemon again who does that benefit so the money was printed out of thin air somebody has to pay a price for that the regular person average people they have to pay now higher taxes which is inflation in this case yeah the invisible it's not a true tax they'll be confused by that but they get invisible tax right it lowers your buying power lowers your buying power the tax and then where does all the money flow it flows now to whatever you buy the wealthy the rich and so now what do you want to do you know go back to that system the other workers and the owners everybody in America should be a business owner however not everybody should be in the business of starting a company and not everybody should be in the business of operating a company so what does that mean well you can be a worker and an owner right you this concept of equity you have to understand this because wealthy people are working for Equity they're not just working for a salary and so what you want to do now is you want to understand okay I'm working every day to get paid now what are you doing with the salary either you can take the salary and go out and spend all of it or you can take some of the salary now and work to build equity maybe that's in stocks maybe that's in real estate maybe that's in your own company so if I buy stocks I'm buying Equity You're Building Equity you're literally buying ownership in companies if you go out and buy a share of say McDonald's you become one of the owners of the McDonald's company and now when the McDonald's valuation goes up you get to share in that because the price of your stock the value of your stock goes up do you know the Wall Street Trapper I do I've seen his videos with you dude he's so dope so he talks about if I'm gonna wear it I'm going to own it yeah so if I'm gonna wear a Louis Vuitton then I'm going to own Louis Vuitton stock yeah and Ah that's so smart like just be here's the like I know what this video would have sounded like to me if this was the first video I encountered it's it's so heady it's just like oh my God these ideas are so complicated right so going off of what you're saying let's give people a waypoint here just to help them anchor so we've got a few really important ideas so one there's a saying the hidden taxes you call it which I love that idea so you've got inflation now the government is trying to help you I'm not even going to say that there's anything Sinister they really were just doing their best we got hit by the pandemic who the hell knew what the way out was going to be they work with the FED they pump just a lot of money into the system so we end up having what was looking to be the greatest Global depression since the Great Depression in 1929 but it only lasts for two months because we end up injecting all this money into the system right so cool the catch is that the way to get that into the system it can be give people money directly which they did but the people that really need it they're going to buy groceries so it doesn't they're they're still trading time for money in essence right because they haven't broken that cycle if the government's not giving them money they don't have anything then you've got people I'm talking averages here you've got the middle class they're going to Louis Vuitton oh word like I've already got my groceries taken care of so now I can go buy that handbag that I want to do a little Instagram flexing whatever right so they didn't help themselves out but then you've got the wealthy or the the educated that's probably a better way to think about it you've got the financially educated because they're educated they owned assets already which is the easiest way the traditional way right for the fed and the government to pump money into the system is to buy assets right so they're going to buy these bonds just to keep it really simple this is overly simplified but they're buying these bonds so now you've got people like me who was not a good investor but I can afford a money manager and so the money manager is like yo you need bonds not now this was before sure so I buy the bond so hey now I'm back by the government because they know that they can print money out of thin air so now I'm getting this return on my money my money's protected instead of being deflated they're buying my assets so now now I want people to know the wealthy some of them myself because I'm I was not financially educated as of two years ago I'm only just now getting that way so I've been a good entrepreneur a bad investor but because of that like the system is I'm learning about it by asking all these dumb questions and I'm really seeing how it works so it's not like I I was doing something nefarious for me to get richer during this time it was just like oh I need assets break the time for money equation I've got all this risky money in building my business I wanted a more sure thing so then the bad thing happens my sure thing gets taken care of by the government and now it's like oh it looks like you know the rich are getting richer it's just education so now getting into money habits the other thing that you talked about is while your friends were spending their money at a party you're spending money on building a business right like that fundamental difference of spending it on fun [ __ ] that goes away or equity in this case your own company is a world of difference yeah so I just want to Anchor everybody background to those like money habits you've got what all my mom would have called pissing money away right literally an alcohol you're just pissing that money away yeah um or putting it into something that's going to go to work for you in your case it was a business it was real estate yeah and if people can just grab that fundamental difference like of hey start thinking about the world in this different way they're going to be a huge step forward and it's all a learning process because I don't drink I don't smoke I never drink but for me it was the only it was it was a hustle right it was the only way that I knew to kind of start making some money um and so it's how you start and you learn and each one of the things that you kind of do you're going to learn something new and you're going to be able to apply that to the next thing and it really is that shift you know I call it the minority mindset thinking differently than the majority of people because it's it's doing something different most of us are taught just to be consumers yeah we're tired time for money you go buy cool things to flex exactly and that's it we're never taught to do anything else and I mean think about the last time your teachers taught you about the importance of investing your money they don't know how to do it either exactly they couldn't hope to teach me and and so that's where you have to be willing to go out of your way to learn how some of these things work because if you don't you're just going to be a pawn in the system and it's very unfortunate it sucks and you know this is where I'm trying to help provide that education because these are things I never grew up learning these are things that I wish somebody would have told me uh you know I've seen it I see it as so many people I used to guest teach in Detroit public schools whoa and you know these are good kids from rough areas a lot of times don't have two parents in the home sometimes don't even have a parent in the home there were some kids who didn't have or his mom is not around he was raised by a gang just because there's no parents and so they provided him shelter and it's crazy because you get stuck into a system a cycle because you don't have any way of learning or seeing anything else and you know like one of the first times I was there I asked the kids how many guys have a job most of them raise their hand most of them have an income and they're in high school right they're going to school and they're working and next question is how many of you have a bank account nobody not a single person had a bank account Jesus man so I was like what do you so how do you guys what do you do with your money so we get a check we go to the liquor store we cash the check now the liquor store owner is going to take you know one to ten percent of that check oh God and then what are you gonna do you're gonna buy candy you're going to buy pop you're going to buy a bunch of dumb stuff on your way up and now you're left with only half of your check and now what do you do is it's just I like to call it Net Zero thinking where if I have cash I need to spend it I have 500 on a bank account I got to make that zero if I have a thousand dollars I gotta spend it because we think oh my God if I had 10 grand I would go on this nice vacation if I had 50 Grand I would buy this car we think in terms of it's the consumer mindset of if I have this money I need to spend it but this is where we have to break out of that and understand what can we do differently and instead of just spending all of this money and it's much more difficult now because of the higher cost of living but it's so much more important now than ever where you got to create this margin I call it like an equation where you know your wealth is really you you take your income minus your expenses and that's equal to your Investments plus your savings so you take your income whatever money you make you subtract your expenses your houses your home your clothes your car whatever your expenses are and if you have some money left either this money is going to be saved or it's going to be invested well if you have some money left you're already you know doing something that a lot of people are not doing you're more than the majority of people right now I just read a study yesterday seven out of 10 Americans across the border living paycheck to paycheck 50 of Americans that are making 250 000 a year are living paycheck to paycheck that's crazy it's not how much money you make it's what you do with the money you make that is so important and so now if you have a buffer you're already better than the majority of people now the question is what do you do with it well we're taught save it save all of it so your Investments are zero and your savings you're trying to grow that thinking that you're trying to you're going to become wealthy but you're never going to be able to outsave inflation you're gonna your savings are literally making you poorer each and every day however you don't want to just not save any money you got to be strategic with it what I like to say is there are three reasons why you should be saving money you save money for an emergency have somewhere between three to twelve months worth of expenses depending on your risk tolerance save money for a big purchase you want to buy a car you want to buy a house you need some cash to do that save money for an investment if you're not saving money for one of these three reasons you are saving your money the wrong way and it's making you poorer each and every day now you didn't say save for retirement you invest for retirement you know you talk about retirement Detroit we're about to face a big retirement crisis because traditionally retirement was what people like to call a three-legged stool you had your Social Security you had your pension and then you had your own Investments or your savings well a lot of people like to do well pensions are something you only written in history books anymore they're a thing of the past so those don't exist anymore Social Security is running into a very very very big dilemma because right now if you are you know under the age of 45 the Social Security money that you're paying isn't going to go to fund your social security income it's going to fund somebody else to retire because the Social Security program has much bigger expenses than income and so it is on the path of being completely dried up of just running out of money is this because the younger demographics are just a smaller cohort than the older or there's a lot of reasons for it it's how the Social Security money is spent it's it's how many people are requiring Social Security money how long people are living for how long these Social Security checks have to go out for a lot of bad calculations bad investing and so in the Social Security fund is now drying up and so now everyone says well I'm not worried about it because the government can just print more money and do bigger Social Security checks that's what we're seeing this year we saw between 2021 and now the biggest Social Security raised errors between five and six percent something in their range which one is already not keeping up with inflation so yeah you got a bigger social security check but oh no it's not buying you as much as you could have last year but then the second issue is just think about that for a second if the government is going to print more money which means the FED is going to print money give that to the government to give you bigger Social Security checks what does that mean you got a bigger check great but now the cost of things have grown even faster than the growth of a check you cannot out print inflation it just creates more inflation and so you know so you had the pension that's that's essentially gone for the vast majority people Social Security is not going to be able to fund your retirement which leaves people with the third stool which is your own Investments now traditionally users oh I'll save some money save 10 of your income that's not going to do it your savings are going to make you poor each and every day and the second thing is your 401k and you know it's a great start for the average investor because now it is like automatic putting a little bit of money into some Investments however your 401k was never ever ever intended to be your sole investment plan the founder of the 401K even came out and said that the 401K has gone awry it is a monster because now so many people are hoping that they're going to be able to rely on their 401k to retire and that's not what it's intended for and it will never be able to be enough for you and so a lot of people have this false hope that okay yeah whatever Social Security will give me a little bit extra but my 401k will take care of me but that was never the plan and so what does that mean your 401k just think of that like as if you invest in your 401k your IRA that is the absolute base your savings are not going to do it this is where you have to go out and invest yourself and that's where oh my God how do I do that we're never taught how to do this we're never told how to do this we're never given Direction on how to do this so you have to be the one now to go out of your way to start learning this and thank God for YouTube because I'll be decentralized education but the question is now you have to be willing to do it and you have to understand who your teachers are because there's there's crap on YouTube there's also good stuff on YouTube and we're never taught how to learn we're usually just taught what to learn so now we have to be willing and go other way to become smarter to one start learning and understand how do we learn the right things and then apply it because the the downfall with investing is it's risky you got to be willing to get punched in the face you have to be willing to lose money because it's a part of the process and it sucks it sucks losing money I made a video on uh my YouTube channel minority mindset where I went over my worst real estate deal ever and the reason why I made it is so you can see look every real estate investor has got at least one bad deal and to date that's the only deal that I've ever lost money on and I'll walk you through every single bad thing that I mean because everything that could have gone wrong went wrong plus a whole lot more and it is one of the biggest headaches of my life but my goal is you know yeah you can laugh at me make fun of me but you're gonna see like holy cow things can and will go wrong so just anticipate it because that's it's a real life tuition you got to be willing to learn um and and you know it's a price to pay and it's one of those things where you know just like with entrepreneurship everybody wants to be successful as an entrepreneur everybody wants to be rich how many people are going to be willing to get punched in the throat and keep going keep getting back up and keep doing it it's very difficult which is why you know what not everybody should be an entrepreneur try it but it's not for everybody but everybody can work to own this Equity right this ownership these assets and everybody needs to 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 match with what you actually want if you want to become wealthy question answers yes okay what are you willing to sacrifice yeah but 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 we 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 who want to be rich today you want to be rich tomorrow not be rich in five ten years and so what then what does that do it then drives our actions if you're ready to level up all you need to do is take the steps with the curriculum and Community that's going to get you there enroll right now in Impact Theory University 50 courses 100 hours of content and live sessions with me every week where you can get any question answered act now and get my exclusive live Workshop make any goal stick click the link and change your life 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 do 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 it shows 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 emotions 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've changed this that's what a woman wants to hear by the way if you get 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 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 yes 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 the beach but you know it's it's honestly it doesn't matter where we are if you're in my basement eating some whatever pizzas 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 um 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 so 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 just in a professional play oh wow and that meant that I got to skip calculus 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 yeah 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 [ __ ] regular role I'm not saying money isn't powerful money is incredible I want to make more money because you can do incredible incredible things with it right 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 gonna 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 and it actually addresses the thing that money is good for which is money problems right and so you there are 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 going to 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 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 yeah bawling on you know the beach I could I know but that doesn't give you fulfillment you know I did a show uh I was in New York last weekend 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 a shovel off right back into 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 you know 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 quadrific theory where there's four Quadra fit quadrupt so uh what I say that 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 about like a triangle we're on the bottom of the triangle you have to be physically fit then mentally fit then 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 dollars 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 your you're just the only thing on your mind is to be healthy again you know we all know the 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 is mental Fitness being around people that you love not be 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 have seen this so many times where I try to bang this into people's heads if you think that making a million dollars is gonna suddenly make you happy it's gonna 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 his 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 yourself purpose what are you waking up for every single day like you said you've had millions of dollars at your bank account you don't got to go to work every single day you don't gotta 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 enough do anything you need to have a reason to get up want to thrive whether you have ten dollars or ten 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 in 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 you'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 well 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 what he'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 gonna ruin everything else because if you don't have money you're struggling about your bills you're struggling how you're going to pay for anything you don't know how you're going to take your spouse on the vacation to hear she wants you're not gonna be able to pay for your kids education they'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 gonna 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 uh clickbait titles are necessary because that's how the human mind works um Euphoria in the market human mind fear in the market the human mind uh 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 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 going to work and if it works oh my God like the world is going to be mine yeah that's way more fun than actually winning and getting the thing yeah and so enjoying that ride Journey 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 to 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 high 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 uh 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 yeah like life's Peak Joys are available to everybody yeah regardless of money like I think Warren Buffett under plays wealth a little bit like he said look I'm eating 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 there 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're talking 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 was because when you pay down your home what are you building in your home equity is 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're 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 right now you can come in and buy more Equity at a discounted price and this is one of those things I'm gonna go back to 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 the wealth is built through Equity so earn a salary do 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 they come up 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 you were talking about earlier that 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 happening when somebody is getting over extended with uh either sort of so 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 to a 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 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 this 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 five million dollars to buy it if the property ceases to be worth five million dollars then we're gonna basically call it because I know that's what ends up happening to somebody in the crypto Market yeah 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 it's 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 there's a crypto for my understanding because it can be pretty instant you get that Margin Call 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 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 closed 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 uh 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 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 cells there's nothing else like they're either going to say give us ten thousand dollars right now or we're gonna sell your 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 backtracked 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 of the mainstream brokerages in that sense where Robin Hood now is mainstream huh they're they're pretty amazing how long have they been around for oh I don't know the exact number of years 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 a hundred years ago and then we'll kind of take this little time lapse 100 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 we 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 uh 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 and 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 you were kind of doing an indirect trade for you as the trader it made no difference or 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 Robin Hood and these platforms would then lend you money based off of how much money you have in 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 that 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 a 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 if it was my first year in college um I spent a summer doing trading and I was using a platform and uh they told me that hey I could 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 uh we will also give you more money to trade with margin I didn't that this shows you how naivea 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 jasperid 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 I'm just gonna 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 started seeing this like deductions for my account 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 it does I was I don't know 18 years old 17 18. I had no way 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 it's the financial education along with everything else accessibility is great but the accessibility without Financial education can be dangerous now if we 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 uh you know there are so many people have thousands of dollars worth of 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 up 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 in my business if I spend a hundred thousand dollars a year a half a million dollars a year I'm gonna get a big cash back check that I could put right back into the business I can spend it I can use it on a 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 just screws 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 in a credit card you're going to spend all your money making everybody else a terrifying statement that 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 it 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 run your money Gucci Louis Vuitton you'll be buying the extra guac because hey you got that money then how are you gonna buy it you're going to buy it buy that extra you're gonna buy the 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 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 later 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 there'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 bad thing I think you asked me that last time or are you talking about you know the way the system works again hence 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 things 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 the 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 not 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 all right so I have a sincere belief that there are habits that keep people poor and that anybody regardless of where they're born what their circumstance is if they do the right things over a long enough time period they can get out of it we are living in horrendously uncertain times yeah what are the things the habits that keep people poor well well the first one really has to do with understanding money because unless you understand what money is none of the other habits really matter because at its core what is money and when you ask people that you might say it was a hundred dollar bill a 50 bill that's what money is but what is that money because that money that we have today is different than what money was 60 years ago the money that we call money today is currency it's really just pieces of paper and when you understand that it's going to change what you do with the money and the reason why I'm saying that is because uh I'm from my family's from India state in India called Punjab and over there it's a very traditional thing that when you earn this paper dollars many people will convert this cash into gold because they understand that these paper dollars lose value and it's just paper so they want to convert it to something real something tangible so they will go out and buy gold with it all right really fast explain to people why paper money loses value over time so our paper dollars can be manipulated and controlled by other entities such as the Federal Reserve Bank yeah and the government now the interesting thing about the Federal Reserve Bank is it's called the Federal Reserve Bank however it's not federal it says so on their website they're not a reserve they don't keep cash reserves anywhere they're not a bank you and I can't go there to deposit money so what happens is should I hear wolves howling in the background like is there something sinister going on do you think for real or is it just the system and it's just how it works well it depends if you understand the system you can use it to your advantage if you don't understand the system it is going to screw you over many many many times yeah this is my obsession so as you and I were talking about before we started rolling camera two years ago I considered myself very good at making money very bad at investing money right and then the pandemic hit and I really started to panic for other people that look I'm gonna make it out of the pandemic fine but I don't know that that will be true for people that don't understand money right and so getting educated like for me to try to help other people I've had to educate myself about what money is right getting freaked out by inflation and I've heard you talk about this so I know you know this well but that the government when you say manipulate the money they literally just make more of it right magically literally and and this is where the rich will become richer the poor will become poorer and the middle class will get wiped out and the reason why is because some people rich people will understand money and they will continue teaching the kids and everybody else the majority of people who have no idea what's happening will continue to become poorer because they don't even see it happening and so what happens is so you have the government and the fed the government spends money now where did they get their money well they get their money from taxpayers people like you me people watching this video through tax dollars now can we Hammer that for a second sure the government does not make money the government takes money from people who are making money right now that's not necessarily bad because they provide a lot of amazing things they're not necessarily efficient with their dollars So yeah so we can dive into that for a second so you know you have to understand what someone's role is if you are a company right you you have a company your job is to make a profit because if you don't have a profit you're not going to be in business unless you have some other stream of you know Venture Capital debt or something but if you don't have a profit you can't continue operating and so your job is to be as efficient as possible as a company the government can actually be benefited by being inefficient because what is the government's job you have to understand what is the role if their goal is to create jobs well then you can be as inefficient as you want and you can achieve that goal because if my goal if I'm the government I just want to create as many jobs as possible I can pay people to pick up this mug and put it from the left hand to right hand I just created a job you're employed you have an income but you're not producing anything of value and this is where you have to understand okay what is that purpose and so now you know if we get away from the politics for a second the government now spends money they get money from taxpayers because the government is not a for-profit entity they don't create a product and sell it for or create something and sell it for a profit instead people make money and then the government taxes your income now just like anybody else there's checks and balances if the government has a million dollars they can only spend a million dollars you would think but that's not how it works so the government has a million dollars and what's happening now is they're going to spend significantly more than a million dollars now if you have a certain amount of income and you spend more than that what do you do well you're going to have to subsidize or find that extra cash somewhere and in the government's case what they can do is they can go out and look for a loan it's called a treasury bond for as long as anyone can remember have been considered the safest investment anybody can make well what it is is you're literally loaning money to the government but what happens now if there's not enough people out there to loan money to the government if the government wants trillions and trillions of dollars if there's not enough people out there to loan that money to the government and they keep wanting to spend more money you still got to make up this cost so what do they do they call up their friends at the Federal Reserve Bank and they say hey we need a two trillion dollar loan and then the FED is going to say okay we got you now remember what I said they're not a reserve they don't have a cash pile anywhere so what do they do they go to the money printer and now they can print out two trillion dollars they loan this cash to the government and now the government got their two trillion dollars the federals are printed it out of nothing the government can now take this two trillion dollars and spend it in whatever way that they want it can be inefficient they can try to create efficient products but their goal is to hopefully help people now whether they're inefficient or not is a political debate however you know that that is what they do now really fast before we move on so this is the part that people need to understand about why the rich get richer because I'm super as a rich guy I'm like oh I'm gonna get richer like what great so what happened I never understood how so now what happens you just printed this money right and then which you don't actually print by the way you just increase the database somewhere it's a bunch of digits yep and now this money enters our economic circulation but what happens now when more dollars enter without actual wealth being created because we saw this happen in textbook form of 2020 2021 where nothing was being produced except money well when more money gets produced it effectively reduces the value of each individual dollar this is what inflation is the word inflation comes from the word inflate what are you inflating the monetary Supply so you're increasing the monetary Supply causing the value of each individual dollar to go down which effectively causes the price of things to go up and so in 2020 2021 no one's producing however the government is spending money like crazy where are they getting this money the Fed so the fed's printing money giving it to the government the government's spending it like crazy now people are getting money it's people it's businesses it's corporations and this money is being spent and now everybody is like wow I'm sitting at home and I'm rich you have some people who are getting big unemployment checks you have some businesses getting millions of dollars and everything is running smooth but and people are spending money like crazy buying things but nothing is being produced so then what happens well now you have a supply chain mess because everyone's buying all the stuff in stores however no business is able to produce anything because the economy shut down so the supply chain issue then you start to see is a byproduct of the inflation because everyone's trying to blame oh the inflation is happening because of supply chain issues but you have to look at what is the real root cause the inflation is what causes the supply chain issues and now we're trying to go backwards but this is where rich get rich and the poor get poorer because as the value of the dollars drop what happens for regular people your salary doesn't stretch as far your savings don't buy you as much and so you're effectively becoming poorer each and every day because for most of us we're taught to save our money that's what I was told to do growing up uh you know the traditional Indian houses save save and so I was told to save my money and your savings are becoming less valuable each and every day well what wealthy people do is they're not storing cash they're buying assets and so when when we have this sort of economic system can you explain what an asset is and as this we're now getting to the root of how the rich actually get rich right this was the part it took me a very long time to understand but now that I get it one it doesn't need to be the rich that are getting richer anybody can own assets yeah but they have to understand what assets are and then actually buy set assets right because this is how the government pumps the money into the system and this was a part like I'm grateful sometimes that I'm kinda dumb for real but and and this really I had a breakthrough moment back at Quest we were dealing with nutritional science and I didn't always understand it and so I would have to keep asking keep asking keep asking keep asking but what I found was if I just totally got rid of my embarrassment over not knowing yeah and I kept asking until I understood it so well that I could explain it to other people sure that ended up propelling me forward because I was no longer just nodding and smiling and going along I was like no no I don't get that I don't understand I don't understand yeah and so by pushing into that then I actually began to understand the biology I began to understand what ingredients made sense and all that right so but I had to be willing to look stupid yeah and so now because I've been willing to look stupid for so long in the world of Finance right I finally asked the magic question which is when people because I actually thought they were printing money I thought that hundred dollar bills were coming off of a printing machine that's not how it's done at least not to the vast majority of it it's zeros and ones in a database and when they create that money I was like whose database entry is it like are they actually going into rich people's like accounts and giving them money no what they do is they buy oftentimes government assets I don't want to introduce the word bonds and stuff sure but like they're buying assets from the government right but the question is where did those assets get purchased in the first place and they got purchased by people right who are effectively trying to park their money as they call it yeah so I for years was parking my money in government bonds because the government guarantees it yeah and so the way that the government raises money without having to raise your tax is they put bonds out into the world that then people buy so when they're pumping money into the system they just go buy those bonds so now they're buying them from rich people because rich people were the ones that were educated enough and had the capital to buy said bonds impact Theory University one full year for only 997 dollars and if you act now you get to join my exclusive live 90 minute Workshop called make any goal stick the great news is I don't care if you were the highest achiever in the world in 2022 or of 2022 beat you down hard 22 has been a brutal year for a lot of people and that's why I'm going to be going live later this month to host a workshop on exactly what you need to do if you want to make any goal stick do not miss it that's correct and it goes actually a little bit deeper because in the pandemic we saw something that we've never seen happen before so the Fed has the ability to work with interest rates I'll talk about that in just a second and then they can print money and give it to the government and then when you have an emergency time we saw this happen in 2008 we saw it happen in 2020 they can do weird things so what they did in 2020 this is the first time it's ever happened in history is they directly gave money to corporations in the form of purchasing corporate bond ETFs so think of it this way the biggest corporations in America can go out and raise money from a bank they can go out and raise investment dollars or they can put out this loan say if you are a regular person you want to loan money to US you can do that and so there's ETFs which is a group of corporations that are looking to raise money uh and it's a way to kind of track those debt Investments well in 2020 because a lot of Corporations had no cash and now all of a sudden they're like oh we can't sell products we're going to go under the FED did something that has never been done and they started buying corporate bond ETFs in the first time in history and this is where things got really dicey because now how do you decide who gets that money or not I mean they're printing money somebody's got to pay for that who pay who's paying for it regular people average people because now it's a hidden tax because the government can't just spend money without somebody paying for it they have to generate the tax dollars if they don't pay it through tax dollars somebody's still going to have to pay a tax and inflation now is a hidden tax it's a silent tax it affects the people who don't understand money and it disproportionately affects the poor and the financially uneducated and this is why Financial education is so important is because if you don't understand this you are going to get screwed over by the system because now guess what your guess is going to be more expensive your groceries are going to be more expensive your home cost is going to be more expensive the cost to do anything is going to cost you so much more today next year the year after that while your salary hey you got a raise but you're actually broker now than you were before the race because your raise isn't keeping up with inflation and so what's happening now this money gets printed and it enters our economic circulation and now you can own the assets or what happens let's say you own stocks you own real estate well the FED can also manipulate interest rates so when interest rates go down it makes borrowing money cheaper well when you make borrowing money cheaper more people and institutions are going to go out and borrow money this also creates more inflation because now when you go to the bank and you borrow a million dollars or a hundred thousand dollars the bank is going to work with the FED to print this money and that's how it gets injected at the economy so lower interest rates create more inflation and if you are somebody who's financially educated you own assets and we didn't explicitly answer what is an asset it is something that gives you equity and at the broadest form an asset is something that puts money in your pocket liability is something that takes money away from pocket what's an example of an asset this could be owning a business investing in stocks investing in real estate anything that you buy for the purpose of making money right and so when interest rates go down because now the FED working with the government want to create more inflation more dollars are going to enter economic circulation more people are going to want to buy a home well if you have more demand to buy a home where the home prices go up who owns homes well yeah if you're a homeowner but if you are a real estate investor now the value of your assets have just because now you own multiple real estate Investments your rents have gone up your stock Investments have gone up because now businesses can borrow money for effectively nothing you borrow money for three four five percent and now you can borrow hundreds of millions of dollars to grow the company and if you can grow your company by six percent well if you just made a profit off of the free debt and so now corporations become wealthier because of asset prices go up and what does this do the reason why it makes rich people richer and poor people poorer is because not only is your cost of living higher but now if you want to go and invest your money well asset prices are more difficult to attain it's harder to buy the same level of stocks it's harder by the same level of real estate because now the people who own these have already seen that appreciation and now if you're wealthy and you understand this and you're buying these assets and you've been buying them now you're seeing the real gains and you start to see this divide between the rich and the poor and this is where inflation disproportionately hurts the financially uneducated and the poor and disproportionately benefits the wealthy and that's why the middle class gets wiped out and the crazy thing is none of us are taught this I didn't grow up learning about money I didn't grow up learning about financial education I didn't grow up learning about investing I didn't grow up learning about any sort of wealth my parents are immigrants from a state in India called Punjab like I was saying before and in my household success meant go to school get good grades get a good job and and for me uh that good job was I had to become a doctor I was actually given two options become a doctor become a failure I could choose they let you choose let me choose right and uh so I saw how hard they worked uh for my dad if he had a Saturday and a Sunday off that was considered a long weekend and so you know I wanted to give back to my parents I knew I wanted to become successful they wanted me to become successful and uh so I kind of followed that path like doing what everybody says following the system trusting the system right and it just didn't make sense to me because on one hand in my house money was a taboo topic you don't talk about money you don't worry about money you don't it's it's a bad thing but at the same time I see how hard my parents are working to get paid you know to to pay for our Our Lives now we were fortunate I never had to worry about my next meal and we were never poor or anything like that but I saw how hard they worked and it wasn't until I got to college until I realized something isn't adding up because I was actually studying to become a doctor I was taking the Medical College admission test the MCAT and as I'm studying for this test I started doing a couple things first I started reading business books because I was just interested by this that was the first English is my second language so I never grew up reading books in uh you know my grade school years even English class I almost failed my English class and I think it was middle school because I just didn't understand how to write papers or do all that but as soon as I started reading business books I started reading them for fun because I was interested by it and then I started going on to Google and I started researching just random things from things like the richest people in America and you know you see like Warren Buffett Steve Jobs Mark Zuckerberg I don't even know he was on it back then but he had a bunch of people who none of them were doctors none of them went down that traditional path and I was like wait I thought that grades correlated linearly with income like if I got better grades my income would directly correlate with that so that was like my first like wait is something wrong here was was something like it just wasn't adding up stock markets volatile crypto's volatile housing markets can even be volatile I'm not going to panic in a down moment I'm going to 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 fast 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 of people out there regular retail Traders investors you don't need to be buying individual companies put your money into a low-cost ETF into a low-cost index fund and that's it facts what are those though and so Jasper most people don't know what that means so let's let's break that down so 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 you're in 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 some of your 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 yeah 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 in 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 anytime 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 date doesn't matter and it's automatically invested dollar cost average dollar cost averaging into my portfolio of ETFs so I have a number of different ETFs in there happens every week whether the Market's up whether 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 ask you a really blunt and interesting question 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 it because 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 think 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 Ray Dalia's 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 messy the the difference between me as a footballer yeah and Messi is the same as me as an active Trader and Ray Dalia right the Gap is so catastrophically large that at least playing Blackjack I would have a good time I think the difference is now differentiating active trading versus active investing because Trading think 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 glued to the emotion and it is very difficult yeah watching candles is emotionally yeah addicting 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 because 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 earning statements if you want to buy and hold for the long term I am doing active trading right now not right now but actually right that's the best thing active investing I am not actively investing my money into the market I'm 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 I'm going to just 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 market now my favorite thing you read every morning it's a great newsletter right so it's where we break down what's happening the financial markets into a fun really 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 more money into real estate which I love doing I've been stopping these active Investments and putting my money back into Market briefs that we can build a company build the infrastructure build it into something bigger and so that's 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 McDonald's whatever they're they're gonna 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 it's scary you get these kids committing suicide because they don't understand like um 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 of course 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 anybody 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 just free teaches a lot uh 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 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 right 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 everybody 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 more be prepared for market crash now I hate that because I hate these titles now you're going to say just 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 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 were like just relisted 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 and I was like okay 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 you 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 gonna talk about Market briefs 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 brief 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 your 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 happiness 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 sensationalist it doesn't make any sense that sometimes an outright lie which then takes it one step further where now you have to be able to dissect the crap that's like 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 will be hidden into the depths of the internet so now if you see it and has a click video 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 if 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 a scene 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 the financial education for yourself now as an investor but the best thing is you know just to 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 whether 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 of 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 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 and 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 you're investing and we're talking about less than four dollars a day that 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 really 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're 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 cows to averaging simply because you don't have the capital saved up to do it any other way right uh by the way capital is 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 um 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 is 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 there's 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 already and they would uh compare what the Monkey Picked against Traders it's 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 10-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 as reality is really important for people to understand a monkey outperformed professional Trader professional Trader I'm gonna have to look this up 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 double 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 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 it 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 can 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 gonna do but you can stay consistent with 100 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 island 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 a 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 buy my Lamborghini tomorrow how can I buy my 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 gotta 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 in 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 about 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 is an income problem if I just made an extra ten thousand dollars I'd be able to put money aside from 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 gotta you gotta 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 four million dollars a year it doesn't matter you're still following the same system where it's just a percentage based off 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 saving money for an investment if you're not saving your money for these three reasons don't be saving your money now when we talk about saving your money for them that's an old statement yeah as a bold statement there's no other reason to save your money because now you're just saving your money you're gonna 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 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 of your income save the other seventy percent 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 because that's on your kids to pass on to build wealth so I should 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 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 been 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 save heavy culture is a big byproduct of my parents culture people who grew up uh were born in the 60s uh 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 again and I don't ever want to be hungry I don't want 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 of 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 realistic 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 the reason why my dad said was that extreme about it is 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 store 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 still new in this country how are you supposed to go and do it it's just very scary where this is the safe thing is just saving money if you save 100 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 has given 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 deluding the buying power of your dollar so what I thought this was a fundamental law of nature that'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 inflating 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 down 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're each equally owners of 20 of this world's wealth but what happens now if this new alien government comes in and then they magically gave us twenty dollars 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 forty dollars there's only a hundred dollars 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 forty dollars 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 do they make money by increasing the amount of value that it provides when you invest in a company or an 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 has 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 that 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 too where people are moving to where jobs are moving to uh 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 and this is where ETFs 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 Dalia 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 going to happen so here's like the diversification that you should put it across and you're not going to 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 it's 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 uh some major hedge funds on Wall Street and what he bet it was a one million dollar 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 the 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 index fund was down hedge funds have gone up because they were able to find these trades and make all this money in the short term and uh 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 one 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 yeah and so this is that basic Financial education where it's not as attractive how much did you pay for your first share of Ford Motor Company two dollars so this is what I want people to hear and I'm glad it's coming from you I was very honored to have Wall Street Trapper on as well because I want people that are I know minority um in the name of your program isn't about being a literal or ethnic minority but it's about thinking in a new way but having people that are minorities at least in this country um say like hey if you do the right things you're going to be able to change your circumstance what do you say to people that either think well it's okay for other people but for me either because I'm poor or I'm a minority it's never going to work for me so I'll kind of give you the story of my family in that sense because the reason why people come to America is because of opportunity you have the opportunity to own something own a home potentially own equity in companies build your own company you have the opportunity to build something which is something that you can't do in a lot of other places in the world my grandparents were refugees they had some land and in 1947 the state of Punjab was severed and when that happened if you were sick which is the religion that I am and you're on the west side either you migrate East or you're going to be killed whoa so now my grandparents literally all they had were the clothes on their back and a sword in their hand and they ran during the process my grandfather was attacked and he had to literally fight for his life he saw his uncle get his head chopped open in front of him put him on a horse that was the last time he saw him he got to the new east side of Punjab in India and didn't even have shoes on his feet didn't have a place to sleep had literally nothing now from there you got to start right you gotta you gotta start now all over from scratch and there's a lot of political issues you know unfortunately over there and so that's when my parents my dad you know my mom were like we want to get out of this country we want to go somewhere we have better opportunity to come to America where you know don't speak the language don't know the culture don't know the people don't know how life is I mean India is a very different world it's a beautiful place but it's very different than here and you start over why as a minority as a minority just for the opportunity because that's all you know you there's risk but you see the opportunity there and do you think looking back now do you think that because it I often think that what we refer to as being an ethnic problem is actually just there is an element of what I call school of fish like you're just you're gonna group up with people that look like you it's just so embedded in the the subconscious but I think a bigger thing is just it's either majority or minority right because globally the Indian um ethnicity is massive billions but when you come to the US now you're a minority do you think that the trade-off of going from being uh the majority ethnicity I mean everybody in India basically is shares the ethnicity I know there's religious differences sure but then coming here and being a minority does the opportunity that America provide outweigh whatever detriment there is to being a minority you know again if you're willing to work you have to be willing to work and kind of just break out of whatever anytime you see a majority kind of just group think you have to be willing to question that but you know the opportunity you have here in America is it more difficult now than before absolutely is it more difficult for some people to know there's absolutely however it's the best opportunity you have in the world and you know that's why literally even till today yeah people that are willing to risk their lives to come to this country and I mean actually risk their lives and so you know you have that aspect and I can speak for me where six the religion that I am they are a minority in India and you know there's a lot of issues that come with being a minority anywhere but again where do you know here you have more opportunity than anywhere else and so the way I look at you know for me personally is my parents came to this country with next to nothing so I got nothing to lose and everything to gain right and so this is the place where that opportunity exists but now you have to be willing to work hard but you also have to be willing to work smart I I can't stand what people say work smart don't work hard but to me that's all complete because you have to do both you have to do both because if you're not willing to work hard you're smart working is effectively worthless you have to be willing to apply both together and I had none of this you know Financial education right for me it was dad I want to go invest in real estate you're stupid go become a doctor you know it's it's I had to do all my entrepreneurial stuff in secret the first my parents didn't even know that I was doing this business stuff until I was on the news I was running a different sock company and this is now you know a couple years after and um we were doing well and we got featured on the local news now my parents got a call from a family friend and they said oh we saw your son on the news and my parents were like oh God what did he do now and they're like no no he has this company he's doing really well they're they're growing him my dad was like what and so that you know he sits me down he's like what the heck is going on and that was the first time they were like okay you can actually do something with this right and it was like you have to for me it was like I understood what I wanted I knew that I saw this like really I wanted to achieve success and I knew I was doing it for Good Intentions um I knew I didn't have like bad intentions with what I wanted to do but the question was you know how do I get there because it was like I if I know if I try to convince my parents it is like it's going to be extremely stressful for me I'm gonna stress them out it's just not gonna work so I'm just gonna try to figure it out myself and I'll fail because I'm in school so I kind of had that back up but for me like I like I went to law school as well the problem was I wasn't the best student in school in law school particularly I did well on the bar exam I loved learning and so for me like you know I knew I needed to pass the bar and so I studied hard and I actually did really well but in the classes I was not very good except for the couple of the business ones because I really enjoyed that but for me it was just like I just need to get the degree that way I can like be done with this because I went to law school because my parents found out that I wasn't going to be a doctor they're like you got to at least become an attorney to keep pride in the family and so I was like all right well if I go to law school I can go to law school part time and if I go to law school part-time I can work on me my business full-time so that was my mindset with it and you know but I knew that yeah if I graduate law school and things don't work out I don't even know how I'm going to work as an attorney because I have no idea I don't know how to file a lawsuit I have no idea like what to do so if I graduate like I I'm gonna have to like start all over and figure it out after I'm done and it used to give me a lot of anxiety but I was like you know this is why I have to figure it out it was a mission because one I wanted to do to give back to my family and myself and second I wanted to do it because I wanted to prove a lot of people wrong and I remember when I used to talk about this everyone's like oh you shouldn't do it out of spite don't do things because you want to prove someone wrong I was like you don't understand you don't get some of the you know the the things that you hear the things that you see and sure you know maybe it can't drive you forever but it can take you I mean that pain of seeing the the things that people say to because you know in between I started a sock company and when I was doing the sock business this is when you know people started to be aware that I was an entrepreneur and I wasn't like super successful I was doing okay uh and that's when I got on the news but you know just think about this I was supposed to be a doctor now here I am selling socks on the internet and everybody is like oh so you left you know this idea of becoming a a doctor now you're just selling socks and you know hearing that for years it is like one day I'm gonna have your kid want to work for me that was like in the background I never said that but I was in the back of my mind your kid's gonna want to work for me one day and uh it's like that driving force where I know I'm gonna prove this person wrong I'm gonna make this person like really like see like hey I I am worthy I can do something but it takes a lot of work you know going back to that but it's it's be with anything being willing to try being willing to take risks being willing to make mistakes and being willing to learn from it because you know I like I said you know for me I was willing to be dumb or stupid I never saw that risk until more recently because for me it was just like I know this is what I want and so the risk really was never even on my Horizon if I had a business idea I would start it like that same night because for me it was like I just gotta I want to do this I want to figure it out books weren't they were kind of giving me an idea my teachers weren't teaching me this I don't know who to turn to my experience was my teacher that's how I learned how to be an entrepreneurs how I learned to start investing that's when I started learning about money because you know the whole issue with the money stuff I mean this is something that we're never ever even remotely talk taught about and it's now becoming a real pressing issue you have to be willing to try learn risk failure you are going to fail I always try to get people to understand that failure is the most information Rich data stream that exists it sucks it hurts it can be costly but one in triggering the parts of the brain that have to do with pain you trigger the parts of the brain that have to do with memory and focus so you're more likely to really look at that thing that you don't want to happen again to figure out why that happened right memorize it and then you're going to get better the next time and to your point about having a chip on your shoulder and people telling you that you can't do something and thinking one day you know your kid's going to ask to work for me it probably is a primary driver over an extended period of time like you said it'd be a little caustic to the soul but it's so powerful in terms of so you've got light energy and dark energy right just to be like All Star Wars about it and if what I have found in my own life is that the hardest times the light energy will only get me so far and then I'll hit a brick wall and I'll want to stop and it's only when I tap into the dark energy of like I will not let this person be right about me I am not going to back down because I know they're just waiting for me to fail yeah that it actually does give me another boost now I try to split it call it 80 20 where I'm spending 80 percent of my time in the light the beautiful things I want to do the people I want to help yeah but dude let me tell you 20 of the time I'm thinking that the person that really wants to tap dance on My Grave it gets you going right yeah 100 and and you know I found the same way because for me in the beginning it was just figuring it out I went from business idea to business idea to business idea because for me I was just trying to figure it out hop it from one idea to the next but then you know you talk about the light energy for me it was my really driving my passion and my mission and my purpose and that became more of the light energy because now you know after a certain point you're like the money doesn't drive you it just is what it is right it's just like I'm fine like I I'm not a very materialistic person I don't really care you know about brand names designer names first time I made a million dollars I was driving a 500 car right it just doesn't matter uh like sure it provides some sort of benefit more comfort more value but after a certain point that money is not a driver it's now what is my purpose and for me you know that Minority mindset where rich and started making videos I wasn't doing it to make money I did this as a hobby because I got scammed in that sock company I'm just talking about things that you know I wish somebody would have told me when I was younger I like having to do a business having to do with money so I did it as a hobby and people will say you can't just do that as a hobby I'm like dude you don't understand I didn't invest any money into it I was making videos off my phone I bought like a 30 or maybe 35 tripod off of Amazon and I was just making videos for fun and like my friend asked me and I think I was around 10 000 subscribers and he asked me he's like how much money are you making off of YouTube like what do you mean say how much money are you making from your ad Revenue off of YouTube I don't know what do you mean he goes into my YouTube back end with me and this is before YouTube had requirements of like you gotta have X number of videos X number of subscribers every time anybody could monetize any video he's like dude you haven't even turned monetization on click one click and now you can start making money after videos I was like oh I didn't know that I really enjoyed it for me this was like really fun and something that I loved doing which is why I did it and then minority Minds started to grow started to make some money and I was like oh I can actually like do this like I can work on just spreading this this purpose what is it about what you guys publish that people respond to it's one email right it's a newsletter and you know when it's coming what time is coming you know where it's going to be every day and so people want to open it we don't need to have a the world is ending you know where it is and then we just break down what's happening in the stock market the real estate market the crypto Market what's happening with inflation what's happening in the global economy and then if there's anything else we'll add that in there as well and it's super fun and so you can avoid that headache avoid all that you know spending hours and now here it is in a fun way to read you know what should somebody that in this environment they want to pay attention they want to make the Right Moves they've listened they know that you bought your first stock for two dollars they know that no matter what they look like they need to be changing their behaviors that they need to find assets like in this uncertain time where should people be putting their money I know there's no one-size-fits all so so I'll tell you where I invest my money I invest my money in five places my business Market briefs and other startups and that's my money in real estate where's my money in stocks invest some money in cryptocurrency and invest some money in physical gold now I don't recommend you go on it to start putting your money everywhere start with one place how did you pick those five and how do you allocate what percentage so I don't giving a percentage will be hard because valuations change all the time but I have been less and less actively before my active investment main one was real estate that was a thing that I loved and the thing that I really understood so anytime I had extra cash I would go out and buy rental properties but now I'm doing less and less of that so I can have more money to invest in my own company Market briefs um but now what I do is out of my company's minority mindset I pay myself a salary out of that salary pretty much all of that gets passively invested it gets invested into stocks crypto and physical gold so what does that mean right well in stocks I have a system where every Wednesday you can pick whatever day doesn't really matter but for me it's Wednesday my money is automatically pulled out of my bank account and is invested into a few different ETFs so an ETF is an exchange traded fund and you could think of it like a group of stocks so instead of going out and investing in Amazon one company and then hoping Amazon grows you invest in a group of companies like some will give you exposure to 30 some will give you exposure to 500 some will give you exposure to thousands there's a bunch of different ETFs out there and there's ETFs for a bunch of different things like one example that I invest in is the S P 500 ETF the S P 500 is a group of the biggest 500 companies on the stock market and so when you invest in this ETF you're literally or indirectly slash directly investing in the biggest 500 companies on the stock market without individually investing in all of them you invest in one ticker symbol and it gives the exposure to all of them so you're in essence investing in the companies that make America America investing in America you can invest in specific sectors technology health care you can invest in uh companies around the world emerging markets and so you can find these ETFs you know again Google search YouTube you'll find kind of the things that you'll see what you're interested in buy what you're spending your money on uh and and so that's uh one thing that I do I have a few ETFs every Wednesday I'm buying that and then I have my cryptocurrencies so for me you know I I think cryptocurrency is going to have a lot of value in the future but I also believe it's going to be very volatile I think we're going to see a lot of you know just like anything else there's there's a lot of dumb money in crypto and you know anytime you have all this money that was printed right money is going to want to go to dumb places and so I think that we're going to see some cryptocurrencies go under and uh again what is that going to do it's going to create Panic okay volatility is going to create fear so you know especially when the newer asset class you have to be willing to understand that and withstand that and so you know I understand that you know I'm not the most educated person in crypto but I understand the basics I believe in the value of the blockchain so I invest in Bitcoin ethereum and a couple of smaller coins uh the things that I believe in and that's happening every day and then I invest in physical gold every month I have some cash going to buy some physical gold every month and so this has happening on autopilot it's automatic it's passive and it's consistent and it's just a simple way for me to invest because what a lot of people try to do when they invest they say I'm going to invest in the stock market okay either you know when times are good I'm gonna try to find the next hot stock the thing that's been rallying like crazy everybody's been making a ton of money on it so I come in and buy investment it starts to go down then they get scared they lose money and then they sell or when times are bad they say I'm going to buy at the bottom I'm going to wait for that perfect time to come in and buy and this happened again in 2020 in just textbook form because the market started collapsing and it was the fastest collapse that we've ever seen in the markets even faster than the Great Depression and so what I was saying was on YouTube I said look here's what I'm doing I'm buying I have the companies that I like because my ETF strategy is happening passively but actively I'm also picking and choosing what I want to buy I already knew which companies and stuff that I wanted to own I'm just waiting for a good entry point a good price to buy so what I said was look when Things fall but 10 to 15 I buy when it falls by another 10 to 15 I buy more and it falls by 10 to 15 I buy more aggressively I just buy the way down in phases because I can't perfectly time the market and anytime I said that I mean it was just a flood of comments people saying why would you want to buy now the whole Market is going to implode it's going to go way lower just wait that we can get a better buying opportunity and I said I I can't predict the bottom that's not my game I'm not trying to time the market I don't got a crystal ball and then what happened the FED opened up the money printer and and it did something called unlimited quantitative easing which is something you know we've never really seen before and so they just flooded the economy and markets with money and now you had the market the fastest collapse ever ever and then you had the fastest stock market rally in the history of time and it was like no I don't I mean I couldn't predict that I don't know who could have but if you were waiting to time the market you missed the opportunity and the people that weren't trying to and you just you know you wait for the good entry point you're buying even when everybody's scared they were the ones that were able to make a lot of money very quickly way faster than pretty much I could have anticipated or anybody could have anticipated just because you understood you know you buy in phases 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 to cash it prepared and you have the education of knowing what to buy well now a crash creates a discount for you to come in and buy an investment on sale you could 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 well 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 if you'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 but I didn't really understand why I was supposed to be a 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 limited I haven't sold a single eat 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 under crash is a definition by the way well yeah crash uh 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 that's a 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 it's just 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 and the market moves higher but we get this like narrow Vision but 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 seller now you get scared you panic people talk about how the world is ending I mean the media is in the business of selling 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 anxiety I start 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 them and I want to guess 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 in admit yeah we were lying but we had a reason but I won't be rainless 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 it's 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 they're making you can't believe how much this hedge fund made you can't believe how much money what ever that 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 style 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 but what happened was a few years after he bought the home interest rates went up and now you realize really fast I want to walk people through what an arm is so an adjustable rate mortgage I had one if I had known how dicey I talked about this 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 um a certain um interest rate and you're like okay I'm gonna 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 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 is 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 jumps 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 bit 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 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 to 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 four hundred thousand dollar home is two thousand dollars a month and you might say 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 400 000 home you don't pay two grand a month but instead you just pay 900 a month off are you telling me I can buy this 400 000 home for 900 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 two thousand dollars a month now if you don't have the ability to pay this extra 1100 a month you're gonna say oh that's quite a bit oh well no big deal let me call up my banker and tell them the situation and he'll tell me what my best options are because my banker is a good financial advisor right you call up the banker say hey Banker um I can't afford this 2 000 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 underwater 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 gonna 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 thirty thousand dollars coming out of your pocket and if you don't have thirty thousand dollars you can sell so what's the next option for 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 in 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 that 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 for sale where now used debt and you were over leveraged and now you're underwater 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 realize like if I can work from home I don't got to pay this five thousand dollar 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 don'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 the some of the lowest Supply levels I'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 started to go down because mortgage rates have gone up so significantly people are looking at the higher prices of homes think 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 slow downs 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 the 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 for GMI Chrysler where the main drivers of our economy GM and bankrupt Chrysler and 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 a 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 uh 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 does not repeat itself it does Rhyme wealthy people that know how to use debt effectively that's what they're doing they don't sell the asset they borrow against the asset and as long as there's a Delta between the cost of the loan and the amount that the asset goes up you now never have to sell the asset you can just keep borrowing against it this is how real wealth is made real generational wealth

Channel: Tom Bilyeu

Views: 1,342,939

Keywords: Tom Bilyeu, Impact Theory, ImpactTheory, TomBilyeu, Inside Quest, InsideQuest, Tom Bilyou, Theory Impact, motivation, inspiration, talk show, interview, motivational speech, Jaspreet Singh, Minority Mindset, Market Briefs, Market Insiders, tombilyeu, Conversations with Tom, Health Theory, mindset, podcasts, how to be successful, entrepreneur, how to become a millionaire, how to be a millionaire, how to get rich, how to make money, rich, millionaire mindset

Id: 8CFLg7KN0zI

Length: 155min 44sec (9344 seconds)

Published: Thu Nov 17 2022