MONEY HABITS: The Main Difference Between RICH PEOPLE & Poor People! | Ramit Sethi

and this is a key thing i want everybody to pay attention to everyone teaches you how to save money but almost no one teaches you how to spend it so what do high earners do with their money why do some people spend money on business class tickets i used to think it was stupid oh we're all getting to the same place anyway and yet as you earn more you start to change your calculus of spending and hopefully we can talk about some of that something crazy happens when you get organized with your finances and your money it's like the stress starts to go away or there's new type of stress which is like learning how to make more and learning how to manage it better once you have more but the stress went away from feeling like i don't have the control in my life in this area because they don't teach you this in school no they don't and thank you for sharing that because you know i sit here and i write this book and i write my emails to my email list and my social posts but it never gets old hearing a real person in front of me telling telling me how they use the book to change their life game changer man yeah i appreciate that because you know a lot of this money is not just money like it's great that you can have twenty thousand dollars in your bank account or many of my readers they use this it came out in 09 they did exactly what the book said and now they have hundreds and hundreds of thousands of dollars which is amazing but i think the more meaningful part of it is they start to realize wow i can use money as a tool to create a rich life money doesn't have to be this thing that's bad it doesn't have to be this thing that everyone tells me what i can't do no lattes no jeans no nothing i can actually use it and if i want to fly business class i can if i want to buy something really nice for my parents i can and you start to almost open up your life and realize oh money's not holding me back it's actually amplifying what i really want to do i want to talk about uh two different things today one for those who are earning a lot of money what should what should they be doing with their money because there's actually a new problem once you earn a lot of money if it's just sitting in a bank that's actually a bad thing i think totally yeah and nobody talks about it yeah no one really talks about it so there's a lot of high earners who are listening so what are some of the things and listen there's a lot of things you can invest in there's real estate there's stocks there's um you know starting businesses you can invest in other people just lose house conference there you go yeah summon up greatness you can invest in a lot of things and then so i want to talk about that what do the high earners do with their money how can they manage it at a high level how can they save taxes how can they do all these other things to really earn more and save more and then also for those in the i guess hundred thousand and below range a year what can they really be doing so they don't feel so stressed and overwhelmed about their money because they're probably a little bit in debt using too many credit cards maybe they're buying too many things that they shouldn't be buying at that stage um and they're behind in their finances or they feel overwhelmed yeah so i think i want to start with the high earners first okay because you've been good at teaching this to kind of like the 60 to 150 000 a year earner this is kind of like i think that book is kind of in that range when you say maybe up to 200 000 i think so but then what happened was the people who followed the advice started making more they're balling they have hundreds of thousands they're like what do i do with all this money i don't know what to do and that's the challenge it is a challenge because uh you can't really talk about it online no you go on to reddit and everyone's like oh i you know i rewarm my oatmeal nine times and i can get a lot out of it it's like i don't want to take advice from you oatmeal warmers right and then uh if you talk about it publicly people are kind of like dude boo hoo what a problem what a jerk and actually you know look if you have been successful if you've followed a program whether it's my program or anyone's program you've invested you've saved you now have new challenges and your biggest question is what's next like i sort of won i won that game of personal finance what's next i'm not in debt i'm not in debt so 99 of advice doesn't apply to me and people telling me you know i should uh i should cut my pieces of bread in three to save no that doesn't apply to me because i have earned and saved a lot so then then you start to say what's next am i missing something and finally and what i think is actually a highly advanced question is what do i do with this money not and this is a key thing i want everybody to pay attention to everyone teaches you how to save money but almost no one teaches you how to spend it so what do high earners do with their money why do some people spend money on business class tickets i used to think it was stupid haha we're all getting to the same place anyway and yet as you earn more you start to change your calculus of spending and hopefully we can talk about some of that you know what's interesting is ice is i used to sit in the back middle seat coach southwest or like american whatever the cheapest flight is what i would look for and now i look for only first class or business class which is a business class and i look for can i get it for free can i get it with points nice i don't want to pay still for it but i do sometimes because like for example i just went on a trip to um this event called 29029 which was you hike for 36 hours the equivalent of mount everest you go 22 miles high it was in vermont a couple weeks ago and i'm still recovering from it my legs are sore still and i said to myself before i went to this event i was running out of points i was out of points but i was like i'm gonna pay for a first class flight or business class because i don't think i'm gonna be able to move my legs and i'm gonna be so uncomfortable in this five hour flight on the way back to la like i need some space yeah and it's gonna be worth the price for the flexibility and the freedom in that moment i don't care if i could have bought a laptop with that money that's why i used to think like it's a thousand dollar for a flight i can buy a laptop with that i can buy a new iphone now it's more for me about like do i feel good am i recovered is it am i gonna feel good when i get home so i can work harder and earn more yeah that's the way i think i love that and i wanna unpack a couple of things you just said in that example first off when when anyone says you know i bought a business class ticket notice the almost instinctive reaction it's like ugh this you know what a show off and all these other things that come along with it and i want to challenge people i have this principle i call the d2c principle and it instead of uh being derisive and saying oh so stupid that's ridiculous i would never do that i actually want to encourage everyone to be see curious why would a guy like louis intentionally spend money on a business class ticket then he he earns good money he has a lot of options he must know something that i don't and i want to understand why so from d to c and if you start to take that perspective especially on high earners and how they spend their money all of a sudden you stop saying that's ridiculous or if i had a million dollars i would never do that instead you say why did that person spend on it and i want to know maybe i don't agree maybe you know you become a multi-millionaire and you don't want to spend on business class you just don't care but it's it's interesting that you do it and i'd like to know more yeah that's the reason i did it for that and on the way here i actually didn't have points as well for this flight all my uh points were used for booking first class tickets for the the speakers at the summit of greatness so i used it all on that and um so i i didn't want to pay for another first class ticket or actually i think they were full so i said okay what's got the most leg room so i always do exit row i just upgrade a little bit to get the exit row and have that leg room i think the question we're all wondering louis is a giant though when are you gonna get that private plane and then fly me out i was funny i was thinking about this actually last week i was like do i ever desire having a private jet yeah i don't know if i i mean listen i it'd be great to have so much money that you have to think about it you can afford a jet and you don't feel bad about it i think sure if i had that much money i would do it but what i care more about is knowing 20 people that have private jets okay so let's talk about this and having free rides with them whenever i want to yes so that's what i like more and that is actually very revealing so i want to share another principle we have which is this concept of money dials and money if you think about 10 dials in front of you and each of them represents a different area of life that people spend on it turns out that each of us has one money dial that we love spending on and what you just said is extremely revealing your money dial i would be willing to bet is relationships oh yeah okay so really so i have a friend nick ray nick gray loves hosting people at his house he every day he's trying a different party he's testing stuff he invites people over he does all kinds of crazy stuff he loves relationships that's his money dial and a money dial the reason i say it's a dial is you you start off you know maybe you have a couple people out to dinner and you as you start to get more money and more success you turn that dial until you are totally dialed in you have the perfect appetizer you have the perfect icebreakers you have maybe friends who have jets you're really turning that down there's other money dials the most common one is frugality most people actually focus on cost above all else and you can tell because when they buy something what's the first thing they say look at the price they look at the price and they tell everyone else i got this for sixty percent off okay so that's that's right about how discounted they got it part of their identity whereas for you dude i see your photos i see your conference your identity is about relationships yes now there's a few others there's wellness which is more and more common and you'll see people they have the perfect diet they have a chef they and i'm talking when they really dial it in this is the point of the control time trainer there yeah this is the point of an advanced personal finance which is you don't have to have a trainer when you start off right you can but you went and you searched for five hours you found the perfect program but as you have more money you start to say i want better results i want faster results and i have money i'm going to throw it at the problem mine my money dial is convenience so i love convenience me too and i wake up everything's delivered to you everything's delivered i have a chef when i leave to travel i have this thing called travel protocol that gets activated with my assistant and my plants get watered my email gets handled differently i mean it's like i've been thinking about this for the last 15 years i'm a psycho but that's my money dial and i love it like so so you'll pay a premium for that money dial exactly but i could not care less about certain other money dials yeah other common ones that a lot of people watching probably have or listening is travel so at a basic level people say i like to travel but imagine you've truly truly become more advanced and you've become more successful and you want to throw a lot of money at the problem because you value it suddenly maybe you're going three months a year maybe you are leading excursions i mean there's you can just expand your mind as to what you could possibly do beyond the typical eight days of vacation a year so i share this with everyone because i like to challenge people to do something take a look at your spending from the last two to three months and ask yourself what is my money dial and your money dial is the thing that you love to spend money on it's the thing that gives you joy and it's the thing you you could spend endless amounts of time optimizing and feel good about it and feel good about it and so the reason once you know your money dial then it enables you to do two really cool things one is you can cut back on stuff you don't care about okay so if you just don't care about wellness or if you just don't care about travel that's okay you can cut the spend to that but i think the cooler thing is it allows you to take that money and now spend extravagantly on the thing you love which is your money dial so if if you're lewis suddenly you don't mind throwing a lavish dinner for your friends with a performer and all kinds of crazy stuff because that's your money down yeah no need to apologize for it so for everyone especially the advanced folks who have money you you got to think now you're at a different level you're not just trying to cut your debt you're not just trying to cut back you actually can spend on the things you love and that to me is really exciting so figure out your money dial and spend more intentionally on those things as opposed to spending lots on everything exactly yeah i mean for me it's funny you say that because i almost always pick up the check on every meal it doesn't matter if it's a smoothie or like a few hundred dollar meal with a bunch of people it's like i always want to pick it up because i want to be investing in relationships i don't even know where i learned that i think i learned it because i was poor for a couple years and people used to always pick up my tab and i felt bad yeah but i also felt like man they really took care of me and i want to make sure that everyone else feels like they're taking care of around me i feel that way when i was a college student everybody picked up my checks because i would invite a lot of people out like i'd email ceos and just be like i'm interested in what you do can we grab coffee i'm poor yeah and you know nobody will ever let a college kid pay for it true never and i and the truth is like they had more money than i did too but now i feel really fortunate that picking up a check whether it's 10 bucks or a couple hundred bucks makes no difference to me but it can make the difference to somebody else absolutely i love that man yeah the money dollar but i'm also always trying to save yeah like i'm willing to spend but i want to save a lot if it's going to be expensive i'm like how i'm always telling my assistant like look for the deal look for the deal like even if it's a thousand bucks try to get it half off okay so so that's willing to spend yeah but save me money too okay so that's that's a great point that i want to demystify a little bit about high earners uh a lot of folks think that once you make 250k or 2.5 million whatever the number is that suddenly you're just throwing money around left and right and that's not quite correct it might seem like that because to spend say seven thousand dollars for a business class international flight just seems like oh my god that's so crazy but i want you to get more nuanced uh you're telling your assistant say i don't mind spending but save yes what i do with my financial system is i set a target each year this is how much money i'm going to save and invest and those numbers are aggressive there's that's a lot of you're going hard yeah like every 10 30 yeah so anywhere between those ranges and we have folks who what you earn correct yeah and and then remember whenever i make any unexpected income let's say i did a speaking gig or something yeah i might get myself some i might go out to dinner but the rest i'm just putting straight in investments wow okay so that money grows aggressively and i also want to remind everybody especially the entrepreneurs watching i know you have a lot of entrepreneurs you wouldn't believe how many entrepreneur friends i know who have a good business and they don't invest at all and that's a huge mistake what should we be investing in if you have a good business simple low-cost target date funds is a great way to go entrepreneurs yeah index funds yeah they get a little too smart for their own good they say i could just put that money in my business and i always say look i'm glad you have a business that's throwing off tons of cash that's awesome most businesses don't last 80 years so be smart give yourself a small plan b put 5k a month 10k a month whatever's appropriate for your level of success and hey maybe your business does really well that's awesome but maybe one day something goes wrong always want to be prepared you never want to have your back against the wall so i just want to encourage everybody whether you're making 250k or 2.5 million for the high earners here don't get too smart for your own good keep investing and saving what are the three or four main things you invest in with that 10 to 30 a year and does it change year to year yeah i'll kind of walk you through for the high earners and then we can talk about people 100k and less so once you have a certain amount of capital you do have a few opportunities that you probably didn't have before um everybody has this idea that you know the rich have all these crazy tax breaks and captive insurance and this and that and i've looked into all that stuff right i know building insurance companies and all these other things right yeah here's the truth the truth is some stuff is a little sketchy but yeah definitely and i'll say my core values are that when it comes to things like taxes i love your principle on this i'm very conservative i'm like dude only in this country could i have been this successful i love this mindset i'm happy to pay my taxes it means that i had the opportunity to create something great and if i pay an extra 5 000 or 30 000 it doesn't change my life at all and i want to be able to give back to the society that enabled me to do what i do that's a powerful mindset and it and it gets you away from you still want to optimize tax breaks that are out there but it gets you away from trying to constantly look for some of the shortcuts or like schemes or something it's like yes i've always found that the people especially entrepreneurs who talk about tax breaks all the time are typically the most unsuccessful ones two reasons one why are you talking about tax breaks instead of growing your business yeah and two it's a very scarcity driven mindset oh i only have this much that i have to protect when really you can just grow the pie and your taxes are simply a proportion more just make more now yes you do want to optimize and take advantage of all legal tax breaks so as you earn more you do have more opportunities you have not only your 401k you have all kinds of advanced ira options you have hsas you have a variety of things but at a certain point if you're making enough you're going to max all of those out okay what do you do when you max it all out so then the next step is to simply create a taxable account it's just a typical non-retirement account just that vanguard or where i use vanguard whatever you want and you just continue to invest so that's one and that's going to keep making you money over the long term it's just you're not going to get those tax breaks from a 401k an ira et cetera the other thing is as you accumulate more and more assets you're going to start to notice a lot of different people are going to come with opportunities dude i get text messages from these crazies they're like hey i'm opening up a bar in brooklyn i'm like i don't want your stupid bar i'm not investing in that i could burn my cash easier but you're going to want as you start to accumulate a lot you're going to want to do have a little fun with your money when it comes to investing so some people want to do crypto i think a lot of these people are complete nut jobs great okay look you could put a little bit in there just to like have fun but i was like thank goodness i didn't put more in there because everyone's losing their money exactly and they you know they're all okay i don't want to get into crypto because i'm going to get a lot of angry emails hey if you want to email me about your angry crypto opinions just send it to trash i will teach you to be rich.com don't send it to me but you know what i like what you said you took a little bit you had some fun yeah had some fun five to ten percent once you've got all your other stuff automated you've got your index funds lockdown hsa your different accounts um i don't have any problem i think you should take five to ten percent and you should have some fun with it for me i did angel investing and i basically learned that i suck yeah my injury investing is not good i haven't made any money yeah but my deal flow sucks my choices were okay some hit most didn't i basically just wrote that money off but it was fun and it allowed me to have an outlet and you learned i learned to meet people and you yeah yeah so if you want to do crypto if you want to invest in somebody's bar you want to do angel investing if you're qualified etc be my guest but don't jump to that first get all your stuff automated and at a certain point the compounding is so insane you will start to actually earn more from your investments than you will from your income even if you're making 500k a year from the index funds you're talking about if you're investing in that what if the market's going down or up should you even worry about that let's say you put a half a million in yeah it went up a hundred thousand over a couple years but then it went back to the original investment should you be like oh my gosh i need to take this out do not do that i'll give you a i've put two years of my money into this and it's still the same amount she just left in the bank no you shouldn't have left it in the bank all right so this happened to me just about two weeks ago so the market went down and uh i hardly ever log i log in about once a month tonight i see like yeah and really you should not be checking your investments every 10 years once a month is good and like don't you're not a day trader okay so so i happened to log in and i saw that in the 11 days of that month in one of my accounts i had lost 75 000 okay so for everybody listening yeah how would you react if you lost 75 000 in 11 days most people would be freaked out they'd be freaked out they would take the money out yeah which is exactly the opposite of what you should do that so everyone says this common thing and they just roll their eyes oh buy low sell high but in reality they actually buy high and sell low so you know what i did i did nothing i logged in i felt no emotion it wasn't like my life is over it was like watching someone offer me concrete to eat like i felt nothing i'm like that's fine whatever i just closed the window the key there is every month my system is automatically investing it's called dollar cost averaging it's just automatically investing and you should set the same thing up too you shouldn't be paying attention manually you shouldn't be sending a check it just works automatically and so i knew this month the market is down and if you think about any other thing you buy if the price of toothpaste goes down you're happy if the price of milk goes down you're happy the only time we get weird is when the price of the market goes down and then we're like oh let me pull all my money out bad move the price went down if you're young and you have a long time before you need the money you're getting the market edition get excited you should get excited so i just said great it went down fine doesn't bother me and i just closed the window and a few days later my system will just purchase it again so it's up it's down it doesn't matter in the short term but over the long term we know that the market tends to return about seven to eight percent but it can go up it can go down and so you do not want to be paying attention in the short term let's say you've got a half a million to a million dollars extra cash okay laying around you've maxed out all your iras you've got five to ten grand a month going to your index funds you've got you've dabbled in the uh the the smaller investments and startups and you've kind of you've done it all yeah you've got a little bit of crypto you've tried everything what you do with that extra million dollars a year okay great question first off um this is like somebody saying to a fitness instructor you know i've done everything what should i do next and that you know what that fitness instructor is going to say they're going to say when you say everything what do you really mean like show me are you doing foam rolling are you doing this yeah are you all balanced for the person who's doing this i'm going to give you your answer but i'm going to first say are you sure have you planned out so you know that 10 years from now you're going to buy a house do you have a 20 down payment set aside i do and i have no plans to buy a house anytime soon but i have 20 set aside for a house that moment yeah yeah for when i so i already plan for what i know is coming even though i have no interest in it today what about the first year of your kid's life do you have that set aside what about xyz are you taking care of your parents when they get older um one thing that that i really love to do is um talk about relationships so i love to invite my family once a year for a big big vacation where we can all stay in a house and there's a you know like a chef and all this stuff and we can all be there and the kids can be playing is that something that's important to you or cool right so plan for that now if you've done all that stuff you've got your six month emergency fund you've got your investments automated on autopilot and you still have money left over you're in an awesome position and now you can do a couple of things one if you want to keep growing that money you can simply invest it in a non-retirement taxable account and that money will grow like crazy if you're putting in 10 20k a month that money will turn into massive amounts and you can if you guys don't believe me just go search for compound interest calculator bank rate has a really good one and plug in 20k a month for 10 years and that's it just stop and watch what happens what is that seven or eight percent yeah at seven percent returns and watch what happens it is it becomes like an a tsunami you cannot stop it so that's one the other thing is if you want to invest in a little bit of fun stuff if you're like hey i want to take 10 of this and invest in like this crazy investment my buddy's starting a thing go ahead just be prepared to write it off maybe it works maybe not and then from there you should also remember a third thing and nobody really talks about this maybe it's time to increase your quality of life maybe instead of uh staying in the middle back seat right it's time to upgrade to the exit row right in business class business class or maybe it's time to eat at a different restaurant maybe it's time to really think about your money dial and say hey i always claim that wellness is important and yet i'm still eating like the same old thing i used to eat 10 years ago maybe it's time to upgrade what i eat and and where i work out and all that kind of stuff my my gear you can do that you've made it you already won the basic game so now you get to benefit from it what about real estate because a lot of people you're there i hear people that are all in on real estate investment or they're kind of like all in on the market uh yeah i think that real estate so a lot of people gonna hate me after i say this i know you guys have all been told uh since you were like two years old real estate's the best investment ever and it turns out that's not really true a couple of things that might surprise you buying one home if you're buying a house and living in it if you're buying multiple units or buying multiple homes and that's your business yeah it might be a better investment correct let me make the distinction so most people in america are told that the american life the american dream is graduate from college get married buy a house white picket fence 2.5 kids and you made it and i think we all just have to look at people who are a little bit older than us to realize that might not be our american dream we might want to travel more we might want to work remotely i mean here we are in the middle of a weekday yeah chit chatting and sharing it with millions of people this is our dream so i want to challenge people to really question what you've been taught that's number one number two most people who buy a house and live in it think that it is the best investment but most people have never my piggy bank yeah they think that they don't understand that when you spend money on a house you've incurred tons of phantom costs you have taxes you have maintenance you have all kinds of things that you don't count and if you actually factor all those numbers in real estate often in fact many times is not a great investment at all it's a place to live and you have these phrases like you're throwing money away on rent it's not true uh your landlord's making a profit otherwise they wouldn't do it that's not true your landlord can't charge you whatever they want they can only charge you with the market market yeah so if you search my name in real estate you'll see all the numbers played out now on the other hand if you are a real estate investor and you're disciplined that's a different story and that can be effective but mom and pop who who are thinking that they bought their house in 1970 for 200 000 and now it's worth 600 000 they think they made 400 000 actually not if they had taken that money and put it in the market they would probably have much much more really yeah wow and less headache way less headache well depending if they looked at their investment every week maybe they'd be more stressed out the level that's going up and down yeah yeah so and listen if you i will buy a house one day okay so i don't want anyone to think that i'm telling you never to buy a house yeah if you want to rent for the rest of your life you absolutely can many people in new york san francisco and other high costal living cities no there's no shame in that i rent by choice i could buy a place tomorrow cash and i choose to rent why do you choose to rent after you've been here for 10 years and you've been renting the whole time yeah on purpose and how much is that do you think over over half a million dollars oh yeah it's a lot of money well over i rent a nice place yeah um why do i do it because you could have used that money in something else you could have put it in i did i put it in the market and i made more and because you didn't put it into a home correct where there was a lot more money up front it was more money up front i used that money instead i put in the market but there's also other reasons too i couldn't get for the amount i'm paying where i live if i were to buy a place in the same building it would be four times more expensive so that's the first second is maintenance i'm gonna give you an example uh i woke up one day and the doorman was knocking on my doors like 8 30 in the morning on a saturday he's like sir sir do you mind if we come in and take a look at something i said okay and we go into the living room and there's a pool of water just sitting there in your apartment yeah it had dripped down three levels so i was like oh my god they're like sir go back to sleep we'll take care of it that day they came they repaired the floors not just of mine the ceilings for the next two levels down that's probably likely to have costed them let's just say 50k maybe 100k because it's manhattan and it's a weekend service who knows that's not my favorite you didn't pay for it no and and i and i said great that's their problem i'm going back to sleep man i got another hour of sleep here so i want everyone you don't have to believe me you don't have to believe what someone else does all you need to do is run the numbers that is my only suggestion to you go to a buy versus rent calculator make sure you plug in all the fees not just the taxes the realtor fee uh if you get a bigger place you're probably going to get more furniture for it the hoas or the yeah the lawn maintenance or trash service or whatever it is the key thing i think whether it's a house or investments my point to you guys is take your money seriously once you take your money seriously and you put some time in it whether it's this book or wherever you want to get your information you're going to be better off for it you don't want to delegate this to somebody else i want you to understand it and once you understand it and you automate it you make a few good choices in life you never have to worry about lattes or appetizers again how did you make the emotional shift when you're when you started renting an expensive apartment and you're like man if i added all this up after a year that's close to a down payment on a nice house in the midwest or they can buy a whole house in the midwest you know what i mean yeah how do you emotionally rationalize that where you're not frustrated like oh gosh i just spent 10 years yeah you're throwing this money away because sometimes i feel that way sometimes like man i just spent a lot of money these last few years well let me ask you this um but i like the freedom and the flexibility of not having to incur all those other yeah what do you like to eat you like strawberries no okay what do you like to eat some good steak and veggies okay steak once you when you buy a steak and you eat it do you feel like you just threw your money away on that steak no i enjoyed it but it's where is it i don't see it where's my investment right in fact isn't it coming out in the toilet in a couple hours it is yeah so what are we talking about here you get value out of a stake just like you get value out of renting now if you want to incidentally build equity that's great but remember you can also lose equity right now in manhattan do you know rents are down yes and so are prices of houses if you want to buy they're going down every month wow a lot of people like oh my god it's so expensive sometimes but sometimes it goes down five percent ten percent some of these neighborhoods are down fifteen percent yeah so a lot of people don't realize in fact i did a survey of my readers i said do you think it's possible for real estate to decrease over half of people said no they had never even thought about it so i remember 2008 2009. memories are short you would think they would remember but they don't i heard people do they had three houses they bought it they were destroyed financially they had their credit was ruined they had to give up these houses and their identity as an investor and three years later they're like i think i want to buy another couple houses wow it just goes to show i'm not saying they're stupid it's not that at all because a lot of people have gone through this it's the idea that the propaganda to buy a house or to follow a prescribed set of rules for the american dream is so powerful that even losing your own houses doesn't change people's perspective so how do you teach people to overcome the emotional rationalization of blowing their money on rent okay it's funny besides that story you just told which yeah helps me i'll tell you what i i want to acknowledge that it's real because it's a fear that people live with yeah and i'll give you an example like i call it the handshake effect and it's when people would come over uh to my apartment and for the first time and they would say wow this is an amazing view and then they always say the same thing in new york do you own this place and we're like shaking hands right it's like we just met just how much japan yeah how much you pay it's classic new york and i say no i rent and it's that moment where if i had said i bought they would be like this wow pretty impressive really cool yeah and you kind of get this this prize this pride yeah and then i and then when i don't say that they get really confused because this is the i will teach to be rich guy but also he rents and i thought renting is for people who can't afford it but you know they don't understand and they give me this look and i realized that so many of us are looking for somebody to approve of us while we are shaking their hands someone we don't even know wow and so instead of getting your approval from somebody you just met 10 minutes ago or from your parents who probably are not the most sophisticated investors if you're watching this show you know you talk about greatness and being great means choosing your own path sometimes you might choose to buy i have no problem with that if you ran the numbers and you consciously decided sometimes it means you don't but if you want to live the life of greatness you need to be comfortable making different choices than what other people expect zing i like it man what do you have like a spreadsheet i'm just curious about how the way you think about your money you have a spreadsheet or some type of system where you're kind of have all these things logically mapped out where you know exactly where all your money is going and where you want to put it in five or ten years yeah in fact it's even more it's it's like scientific it's like yeah it's like minority report like i wake up and i just go yeah yeah no this is what i did so my money dial is convenience okay so as i became more advanced i realized it was time to put on a new lens and i think this is really important for people many people when they're starting out they think that uh growth is linear that basically you know i'm dribbling the ball i'm going to use the sports analogy and i'm on thin ice because i don't know anything about sports but you know i dribble 10 times a minute and as i get faster i'm going to dribble 20 times a minute okay this is a horrible analogy but just go with me at a certain point you're not just counting the number of dribbles you're actually counting ball handling you're you know you're counting whatever else you're doing with money it's the same you're not just creating a more sophisticated spreadsheet as you grow you're actually changing the way you think about money so i'll tell you what's changing you're reinventing you're not even using a spreadsheet so i'll tell you what i did uh i started off doing everything myself and that's what's in this book it shows you exactly how to go from i don't even know where my money's going or i have five thousand bucks sitting in my savings account two everything is running automatically and i spend less than 60 minutes a month on my investing that's in the book but what happens when you get to the next level i'll tell you what i did i realized that it wasn't a good use of my time to be manually tracking anything even for 60 minutes a month because things had become complex i had multiple investments i have a business different accounts everything yeah all that so i found what what i call a personal cfo and what i did was i worked with them and i said here is exactly what i invest in here are my core values here's how i want you to deliver me information once a month so they created a basically a dossier they hand to me every month they send it and it's in the format that i want why because i'm the boss and they're they're working for me so it shows me a couple of core things what's my net worth what were any spending areas that i need to be aware of i typically have two spending areas that i track that that are are more variable like sometimes i'll go out and buy more clothes that's a variable area for me i said look i love cashmere what am i going to do here okay and then another one i think is um eating out or travel aside from that all my expenses are very stable like i spend the same amount on stuff i've had the same apartment for 10 years like i'm not going crazy i'd rather save my money and invested and spend a little on the stuff i love we talk for 15 minutes each month and if anything needs to be changed they handle it so for a lot of people the next step is not necessarily just doing what you're doing but better it's actually a whole different way of looking at the problem where does someone find a personal what is it a personal cfo cfo for a lot of people the basic thing you can do to start with is to get a bookkeeper and you know we have this advanced personal finance course and we talk about how to find them a bookkeeper is a good thing to start with if you've got a business or if you've got you know a few hundred thousand dollars a year coming in and you've just got a number of accounts and maybe you have kids and stuff like that okay they can help you organize things as you get more sophisticated a personal cfo which can be part-time or if you're really sophisticated it can be full-time they can help you do more sophisticated things uh and they pair they work directly with your accountant and your bookkeeper stuff got it okay interesting yeah just go on craigslist and look see yeah you can do that and the best place you do it is honestly you ask your friends your friends who have uh sophisticated net worths right ask them what they're doing ask them before we get into the the strategy for those who are making 150 000 a year and less on how they can really optimize everything i'm curious who are the high earners that you talk to for advice privately behind the scenes in the special secret rooms on the private jets who are those mega earners that you learn from i have a ceo group a ceo council that i belong to and we're really candid with each other about where we spend our money some of them are married some of them are divorced um how does that play in relationships all kinds of stuff so that's one uh it's like it's like a new york group or is it all over the world yeah it's distributed we're all over the place talk online you meet in person both we meet in person uh twice a year and we talk on the phone about once every month and a half and i think that's important uh for everyone listening and watching which is have a group of folks that are ambitious and that want to succeed what's interesting is these guys aren't in my field at all i actually prefer that we're not talking about you know online stuff that's not the point we're talking about culture we're talking about life we're talking about relationships i think that's great i also have a lot of entrepreneurial friends uh who will share stuff just off the cuff we're hanging out and then finally you know my audience like a million readers a month and they're emailing me the craziest stories really they're telling me everything people are they crave talking about what's going on with money because no one else will wow and so i hear the best stories from my readers and that's what i get to kind of bring to everyone else why is it hard for us to talk about money why is it scary why don't we talk about it enough with our friends our family why is that there's one great study showing people would rather talk about their sex lives than their amount of credit card debt i love that i think that's totally true it's true 100 and think about what money means uh it means that you were successful in this culture and i am here you know no people know me as the i will teach you to be rich guy and i have always said money is an important but small part of living a rich life just because you make more or less doesn't mean we're better friends not at all has nothing to do with that but it is important for people to be in control of their money whether they're making 15 an hour or 15 000 an hour and there are people i know who make that so that just simply shows are you in control of your life at whatever level you are it's embarrassing for people they're never taught this and then suddenly they graduate and they're supposed to know what tax withholding is and what a 529 and 401k and all this crazy stuff is nobody taught it to him so my goal here the reason i'm talking about this is for people to feel more confident about their money for them to take control and for them to stop being afraid and listening to random people giving them advice because i feel like it's hard when you're making 150 000 or less it's hard to talk about it and feel comfortable talking about it with your peers who are in the same category because everyone kind of feels embarrassed i know i felt that way for sure and if you stay in that space it's going to be hard to get past it yeah so what's the conversation starter that's someone who's making 150k or less or very little what's the conversation starter they can have with a peer or a family member or a parent or a friend or a co-worker that's not going to throw someone off but that's going to activate the conversation about money okay having the conversation if you most people don't want to most people don't want to and that's okay if you simply want to improve your own money do that and you'll become a role model to other people and i think that's probably the most effective way but if you do want to have a conversation you know what i would do honestly not to plug my own thing get my book get somebody else's book it doesn't matter get a book and say hey i i realize i need to learn about money read any book about money any book yeah okay and does anybody here want to join me and let's do a little book so suddenly it's not it's not you and me talking about our money which really reflects our value in this society okay i use value in quotes it's let's talk about this book which is a third party in this dynamic and we can say i agree with this guy i disagree i i really like let's try this let's try this and like let's see so suddenly it becomes an experiment as opposed to your worth x or my value is y and that's really something you can work on together i like that yeah bring something else into it to the mix okay let's talk about the 150 000 a year and under people they've been you know working hard jobs they've been trying to save their money but it just seems like they haven't been able to get past whatever it is 50 grand a year 100 grand a year 150k they've been kind of stuck or they've crossed 100 grand a year and more problems have come to them because they're making more and spending more yeah and they feel more broke than ever because they have no clue what they're doing with their finances still it's the end of the year they're about to start a new year soon and they feel overwhelmed or just clueless still about and educated about their money and what the what their options are for just being having peace of mind structure organization and knowing that they don't distress about it and they can go earn more and it's going to pay off for them what's a few simple things that they should be doing right now to have a checklist to do before the end of the year to then crush for a whole 12 months moving forward all right i'm going to give you something called the ladder of personal finance which tells you where your money should go okay this is just step by step put your money here and if you want to know all the details about it you can check out the system so it's in the book too it's in great detail in the book got it all right so if you've got some money lying around what should you do with it first of all if you've got a 401k match at work you should max that out that's free money take advantage of it and if you're not sure what that means go to your hr person and say does this company match any 401k contributions if they say yes do what i said next if you've got debt pay it off pay it off aggressively you know what's interesting is that most people in debt who i talk to don't actually know how much they owe and that's shocking you would think of course they would know no they don't because who wants to stare at their debt all day yeah and just feel bad about it but you know what you feel much better when you have a plan and the number one question i ask folks when they tell me they have debt i say number one do you know how much you owe they never do number two for the rare people who say you know 15 000 or 70 000 whatever i say what is your debt payoff date you can actually plug it in you can pay uh plug in a debt payoff calculator online you can map it all out and you will be able to know the exact month your debt will be paid off based on how much you're spending right now based on how much you're contributing to that debt payoff now you'll be able to see that if you add an extra 50 bucks a month or 100 bucks a month that thing will actually often times shorten by years because of the interest it doesn't matter if it's gonna take you three months or four years to pay off your debt it doesn't matter to me what matters is that you know the date okay so that's number two pay off any debt you've got three if you've got money left over uh go to your roth i.r.a and if you can max that out that's a great tax advantaged accountability grows tax deferred is that right yeah yeah okay so um uh so that's three that's three okay it's actually post-tax money and then four if you still got money you're going to go to back to your 401k which is uh another tax advantaged account you're going to max that out if you still got money you're going to create a non-taxable non-retirement account and just put your money in there now there's a few other wrinkles to this there's hsas available there's also your emergency fund that's talked about in the book and all these things are details but that just shows you when you've got money this is where you go there's a structured way of thinking about it a ladder towards financial success exactly and if you follow the steps it's almost like the like a waterfall it just goes from step one to step two to step three and your money's going where it needs to go automatically and you will feel great you'll feel great which is so important and also you're gonna look at your accounts and see debts going down investment and savings are going up and all of a sudden you wake up six months from now you're like oh my god i didn't realize i have that much saved in my savings account that's because of the decision you made today let's say you're you know working a job making decent money but you're not really breaking through and you're struggling to earn more to get out of that 50k a year type of range maybe around there and all your friends are making the same amount all your peers are in the same boat and everyone's stressed about money and you hear someone say well you know you may earn the average of the five people you spend the most time with yeah should they cut all those five friends out of their life because like well you know my peers are holding me back if they're having those negative conversations or how can they start to level up yeah without cutting people out of their way yeah i i never encourage anyone to cut off their friends uh and i think that's a common misconception that you have to close all the doors to your friends look i've got friends from high school junior high that i still hang out with and uh i'm not judging them based on their bank account i don't even know how much they make or how much they're worth that's not why i'm friends but the average of the five people you're surrounded with that is a very powerful idea and instead of closing the door on the people you hang out with why not open the door to some new people why not find people who go to your conference for example or who are on my site people who are ambitious who have gone through these programs and say you know what can we set up a weekly check-in it could be five minutes it could be over text but let's set up this check-in and just say what do you want to do last week did you execute why or why not every week nine a.m monday let's do it that's how you suddenly meet a group of people who are unapologetically ambitious and that will change everything for you because instead of having to drag people to these self-development conferences and they say that's weird i don't want to do it the people you actively seek out are going to be like yeah i'm in let's do it let's do it yeah that's powerful yeah so find the new communities that you can have these conversations with yeah and don't cut everyone out of your life but just start having those conversations with people that are more aggressive yeah like do you know what i told people to do on my instagram account so i told people it's important to find other people who support you a lot of you are waiting around for some like millionaire to fall out from the sky and invite you to their private group it's never going to happen never uh instead why don't you start it yourself and i said go into my comments write who you're looking for and then invite someone to join you like that you don't need to wait no one's coming to rescue you it's not a disney movie nobody's coming it's only you so take control and go find someone and then build that together i like that cody working on the cameras here asks a really good question does my opinion on investing in real estate change if you live in the midwest and i think the answer is yeah it can the calculus on buying a house in the midwest is different than cities like manhattan san francisco and l.a so again the message here is not don't ever buy a house but it's run the numbers to make sure that you're making the right financial decision because in columbus ohio you can buy a house for 200 grand yeah and a nice one there you go it may be better to do that just to have the peace of mind of your own space or whatever it may be yeah so another question from cody here great one uh what is my opinion on dave ramsey's concept of the debt snowball so i think dave ramsey is really good for people who are in debt that's not really the folks that i speak to that often but i think he does a great job with them and what he talks about is the debt snowball is encouraging people to pay off their highest balance first right their highest balance so if you have four different credit cards you're paying off the one with the highest balance whereas the mathematically correct answer is to pay off the credit card with the highest interest rate so he's actually taking advantage of a peculiar quirk of human psychology which is that we want to see a win right we want to get a win and it doesn't matter if we're paying a little extra in interest once you get that first credit card paid off you're going to want to do the next one and it's going to snowball i happen to think it's actually really smart and one of the reasons that i think my book has done well is that it factors in human psychology yeah so i'm not telling you in the book uh don't spend money on lattes in fact i want you to spend as much money as you want on lattice let's get one right after this exactly get your credit right negotiate your salary get a good job automate your money you could buy 10 000 lattes it doesn't make any difference at all and so whether it's the debt snowball or whether it's earning more or whether it's automating your money you want to make sure that this advice is something you're actually going to follow and that means you need to bake in psychology yeah i love it and if you guys want to learn more about how to earn more um about how to negotiate whether it be rates or other other different things and other things that ramit talks about then post uh an instagram story right now and tag at lewis house and at ramit and say yes i want more of this and we'll do a follow-up interview sometime in the future talking about how to earn more how to build a side hustle how to do all those different things and negotiate rates better as well so post that in the instagram stories right now at r-a-m-i-t and at louis howes and let us know and please connect with us um final thoughts man what's uh what's your definition of greatness my definition of greatness is deciding what kind of life i want to lead and then creating it unapologetically even if it means making different choices than other people hmm that's good that's good what's yours greatness is discovering the unique gifts and talents within you pursuing your dreams and using those gifts and making an impact on the maximum number of people in that pursuit love it wow that's mine powerful did i ask you your three truths before i'm not sure if i asked you this in the last time you're on but i'm gonna ask you again okay if you could only share three lessons with the world you've got all these books and programs and courses on so many different things but if you had to take all that with you and no one had access to it anymore you can only write down three lessons or principles or truths and this is all the world would have of your information left in physical form what would be your three truths man you're putting me on the spot here i know i like prep okay i like it three principles are truce for the world on anything life anything wow uh okay my first one would be uh you can create a rich life through planning and unconventional choices my next one would be that you've got something to say and the world needs to hear it and the third one would be you could probably eat spicier food than you think i guarantee that i've had some spicy food with you that's good man why acknowledging man i appreciate our friendship i've known you for what eight nine years yeah a long time it's been it's been such a fun journey and i'm excited for all the many fun times ahead but again i would not be debt-free as fast as i was without your book so again i appreciate you as always i always talk about this make sure you guys get a copy i will teach you to be rich powerful game plan if you guys are looking to get out of debt but also a lot of the things that we uh didn't cover are in here so check it out tag us on instagram ramit lewis house thanks again man appreciate it awesome appreciate you if you enjoyed that interview then i know you'll love what we have coming up right now what are you talking about these myths that millionaires uh about millionaires what are some of the myths uh that's the surround millionaires well we talk about six in the book but i'll tell you two most people believe they inherited it all right you see somebody with money you think all mom or dad handed it to him the truth is 79 of the millionaires that i talked to first-generation wealth builders they didn't come from anything these are people that focus and build money over time next myth well if you're a millionaire you make a high paying job right you got big big income yeah yeah no a third of the millionaires that we talked to never made six figures in a single working year really think about that for a second dual income never made six figures so that blows that myth out of the water a third of the millionaires that we talk to wow right now you think about six figures nowadays it's more prevalent than it's ever been but for people a lot of people with six figure salaries have nothing in the bank that thank you because they just spend it all that's exactly right and they're using credit constantly to buy bigger things that's right no no you're absolutely right so what happens is people tend to think that income is so important and i'll tell you no it's not because i was one of those people i remember i was making about 30 grand and i thought all right when i get serious i'm one year out of grad school making 30 40 grand i'm sorry when i make this amount i'll start to get serious about my money well you know that path right well when i make this amount the next thing you know lifestyle grows and you never end up taking control but these are regular everyday people that took control and were focused uh it's amazing so let me tell you this top three positions of the 10 000 millionaires we studied number one was engineer which doesn't surprise you right they're good at planning yeah accountants organized yeah accountants same thing they were number two they're good at counting stuff number three was teachers teachers they're not making that much exactly and you think they're undervalued underpaid how are teachers doing this well if you think about what it is wealth building is a long-term view right not a quick hit and so these get-rich-quick schemes that we see on tv at late night they get me riled up because they're preying on people but these people were people that built wealth over time investing in their 401k their 403 b's so anyway the goal of this book is to let people know the american dream is not dead it's alive and it's well and it's available to people we just have to take action absolutely what are some of the things that they do on a daily basis these millionaires what are some of the steps to take and how do they think differently than non-millionaires great 97 percent of the millionaires that we studied feel that they control their own destiny now think about that for a minute because we have a victim mentality issue in america today where we want to blame somebody for us not achieving something or getting in our way so these millionaires think differently 94 of them live on less than they make so that means if they're making a hundred thousand they're living on 70 or 80. right you can't build wealth if you live on more than you make that's exactly right and that's where the credit cards people start extending themselves and using credit cards but 73 of these millionaires never carried a dime a credit card debt they never carried debt debt yeah right you might use the card pay it off every month pay it off yeah and so the mindset and i love to give people an economics and in a phd in economics interest that you pay is a penalty right if i use someone else's money they charge me yes right that's a penalty interest that i earn on my investments is a reward right so why choose to penalize yourself don't use debt get yourself out of debt and invest and grow your money to reward yourself yeah powerful yeah now how have you uh managed to through all the stuff you've gone through i'm assuming the last you know 15 20 years you've gone through some challenges you told me before off camera that you have a a child who has special needs and was told that they wouldn't live past a certain age you're you know i'm assuming you've had challenges in relationships with business partnerships intimate relationships family yeah the more wealth that i've accumulated and the attention that i've gained there's more people with handouts yes expecting whatever it may be how have you personally managed the emotional challenges that have come your way by not letting it affect your mindset around money so that you don't do things emotionally with your money right well i mean i've been there i don't know about you but i made some mistakes yeah okay and uh you know a mistake that you make one or two times you can call it a mistake but when you keep doing it over and over it's not a mistake anymore it's called a choice yeah so for me i'm very i'm a man of faith so obviously i'm rooted there uh but i got good people around me yeah uh i got good friends people that have known me since my childhood people that know me for who i am so i'm not an author and speaker with these people i'm just chris and so those people keep me rooted right mama hogan is no joke either okay so you'll keep me rooted and so i think it's really important to understand what am i trying to accomplish like i don't want notoriety i don't want to be famous i want to be known that i help people think bigger right and so staying rooted in that it helps me to be very very clear on what i'm doing people will come up and tell me oh chris you changed my life financially and i go whoa pump the brakes i didn't change anything i gave you some information you did the changing and so i think it's really important as as we help people that we stay aware of who's doing what and our role yeah i think there's a there's a story about marcus aurelius where he would go around the town and he had uh someone just walk with him beside him and say you're just a man every time i remember that every time someone would praise him like you're just a man can you imagine that i mean seriously isn't that cool how rooted does that keep you you know so you know uh john wooden's got a quote he says you know be careful of fame because fame is man-made and if man giveth man can take it away absolutely you know and so being aware of that i think is really really important what's the heart behind what i'm trying to do yeah and so you know if i travel and i go speak to 10 000 people if i get one person whose eyes light up and they start thinking differently then i've done my mission yeah yeah what's the biggest challenge you've gone through in the last 15 years oh personally yeah emotionally financially biggest challenge was definitely the diagnosis of my youngest son case at age two they diagnosed him with this rare genetic disorder that could kill him i could take away his speech take away the ability to walk ability to eat and eventually end up on a feeding tube uh there's a scariest moment of my life sitting in that doctor's office holding that two-year-old boy wow um listening to that um and went to some dark places over a few years well you know what us men do when we have challenges we don't we're not smart as smart as women women women go share we don't share men don't share we isolate yeah and then we internalize and then we stuff right and so you can imagine working through something like that isolated it messes with you it does it messes with you it does um and uh that that was uh that was the biggest challenge i've walked through in the last 15 years how did you get through that initial few years of stuffing or i just stuffed you know i didn't i didn't do what i should have done isn't it amazing how hindsight's 20 20. i wish i would have sought out those close friends and they they would check on me and what would i what would i say i'm good i'm fine yeah i'm all right and i wouldn't and so that was a learning lesson for me that that isolating is dangerous uh that it's it's good to reach out and get help it's good to have people you can be real with and it i came to this realization we need four people in our lives you need a you need a mentor this is somebody that's having some success and can guide you you need a coach who will push you right you and i know we're coach means something to us right because they will get on you they will drive you because what's the goal to try to help you to get better but you need two more you need a cheerleader you need somebody that believes in you they're not worried about what you achieve they believe in you and that's important to have and then you need a friend you need somebody you can be real with that you can just say what's on your head they're not holding it against you you can be honest so if you get a mentor a coach a cheerleader and a friend in your side that's awesome but i want to encourage people to do this not only find those four you need to be one of those four for someone else you need to be four of those things that were saying that's right you need to be a mentor yes you need to be a coach yes a friend yes and a cheerleader absolutely for someone else for somebody and when you do that now what it does is it takes the focus off of you you know one of the things you and i have in common is i firmly believe that if you've ever walked through a mess in your life uh then it qualifies you to be a messenger it does you know when you've gone through some stuff you learned that's right and if you're willing enough to be transparent to share it and you're not worried about people's opinions the impact you can have on someone else to give them the courage to try or to reach out and talk that's a big deal man this life is hard it's not meant to be done alone yeah wow um who is your mentor coach cheerleader and friend oh yeah well mentors obviously dave ramsey yeah this man has been an incredible mentor for me uh just guiding me and then over the 13 years of being with him my coaches man i've got a lot i've got i've got some people whether with walking with me spiritually i've got people that are walking me from a business perspective i'm constantly reaching out to learn i'm like a sponge all the time uh that's big cheerleader oh mama hogan yeah i mean that that's my that's my number one fan right there she's behind me i've got all kinds of family uncles and everybody they're just for me friends i got amazing friends childhood friends people at the office uh people that care about me as an individual not just what i do uh they know me not the book no no no they'll call me out yeah yeah you know they'll call me out i got a call from a buddy the other day he goes dude how's the road he goes you're keeping your head clear yeah you stay in focus and he said don't believe the hype that's right and so what he's telling me is is hey keep helping people keep your heart in the right place you know and so it's good to have those accountability people to check in with you absolutely it just keeps your heart in the right place yeah what would you say is your biggest insecurity fear or challenge right now you've been through different phases of your life and as you grow and expand i'm assuming there's new challenges that you overcome and then new stuff that maybe you haven't overcome yet right i think my my biggest fear is am i doing everything that i could be doing right um i um i've got three boys uh they're hilarious 14 13 and 11. and uh these boys are my legacy i would grew up with a single mom so my dad wasn't around he came around with birthdays and holidays or whatever but it wasn't there so when i had started getting ready to have kids my goal was to try to be the dad that i wish i would have had and so that puts some weight on you right uh but i was hanging out with my boys and we were somewhere and i saw a poster of a little boy at a bus stop with a duffel bag right and he was just sitting at a bus stop and i can't even remember what was under it um but i saw that little boy and i thought of me right like waiting and then i realized man oh man in my own life like you know somebody somewhere is waiting on me to become what i was destined to be and so if they're waiting on me to become who i was supposed to be to impact their life how long am i going to make them wait you know and so what that means is is that i need to do everything i'm capable of doing and some things some people say i can't do just to be able to help that person somewhere that's waiting to hear an encouraging word or or something to impact their life so that's that's something that that drives me every day yeah yeah what is it that people say you can't do oh man i've had people tell me i couldn't write a book you know my first book came out 2016 retire inspired and i taught a good buddy of mine i told him i was working on a book he goes man you can't write a book really yeah and we were in church right i wanted to punch him in the eye you can't hit people you can't hit people in church i got a feeling that's a sin right somewhere uh but but but then later on when i did when i finished the book and at the book signing in town he was one of the people there and i realized something what initially he said was that i can't write a book what he was saying was it's not something he's ever thought about doing and it's not something that he could do his beliefs it was him right and so for me that was a grow up moment he wasn't putting a limitation on me he was speaking his own limitation right and so i just remember that and i go oh no limitations and so that's where i said i'll accept compliments from anyone but i ain't accepting limitations from nobody right and that's anywhere in my life you don't get to put a limit on me that's what i love about you know dr martin luther king the fact that he had the courage to have a dream but the courage to share it you know that's something i want us all to have that mindset of stop thinking about what people say you can't do you know i mean opinions are like yesterdays everybody's got them what are you deciding in your heart to go do now start to go do that yeah yeah wow man um so what do you do now um in terms of your own wealth how are you you've probably learned a lot again over the last 20 years from the banking world like selling services you learned a certain amount to get to one level and then you realize like uh some things work well and some things don't work well and then you got to another level of your wealth and then you realize okay now i've got more wealth some things work and some things don't work and you keep i'm assuming expanding yeah i'm building my wealth i realize wow there's always something to learn that's exactly right there's always stuff now there's taxes now i've got to learn how to invest my money now i'm going to learn what's the right places and all those things so what's the phase you're at right now and what are the biggest lessons you've learned in the last couple years okay so the phase i'm at right now is obviously continued growth right because with inflation costs are going to go up so you can't hide money in a in a cookie jar and just put it in the ground it's got to grow so with me i'm always looking but i'm i'm understanding risk more you know uh this these latest crazes that come out i just cringe you know cryptocurrency right bitcoin right now there's this thing out there it's not even real that's been given a value by somebody that's not regulated right and so when you look at this you would laugh at that but we've had people seriously pursue that day trading years ago was a big thing so for me what i'm doing is i'm trying to be smart with what i do but i need to be crystal clear on what not to do meaning i don't i don't want to take unnecessary risks what are the things that are non-negotiable you won't do i'm not doing debt i am not doing that so what i don't know what does that mean that means i don't borrow money i'm not looking to to to borrow money to leverage uh borrowing money from my home to put invest no leverage schemes i don't borrow at all and i'm crystal clear on what it is i'm doing meaning the longer range view louis what i started doing years ago was i started making two year decisions i wanted to make a decision today that i look back on in two years and i'm glad that i made it now imagine some of those decisions oh gosh well i mean staying allergic to debt i mean i have people come to me all the time with business opportunities they're like hogan listen if you put in this amount we're going to do boom boom boom boom you know and and in looking at that i have to be smart enough to say no right that if it looks too good to be true we know it is right but i think it's more about making the i think i've made more money by not doing things than i would have by going down a path and did you invest in certain things early on where you're like yeah that seems like fun and interesting and you're like i've never got much oh yeah no i learned my lesson i've invested i think eight startups over the last eight years and guess how much money i've made how much lewis zero how much did you invest give me a ballpark uh probably not probably about 250 to 300 okay okay it's not as bad i wasn't going like big right i was like let me just dabble yes let me just get in the game play with it it's right it's okay if i lose it right i meant the mindset like i'm gambling right well and that's exactly what i did but here's what you learned and you know what you paid a dollar amount but you learned some stuff i learned some stuff you know what you're not going to do exactly ever again exactly and see to me that's valuable yeah uh because obviously as things grow and profiles grow the risks grow you know the bigger things come so i just want people to take that's why my website's chrishogan360.com i want people to take a 360 degree look at a lot of the things they're doing their business their life like look at this and make decisions about what you want like i'm crystal clear on what i want but i'm absolutely certain of what i don't want i don't want failure i don't want negative attitudes around me right um i i want to make sure that i'm impacting people yeah very powerful what are the things that you um so you don't borrow debt nope and so what's that mean it says you can't start something unless you use sweat equity unless you have the money pay cash pay cash pay cash yeah so that means for real estate right if there's a property that i want to buy i don't go to a bank you don't get a loan nope i save up and pay now what does that make me do it makes me have patience that means i'm not letting everything now that's exactly well and that's they don't you have kids yet no kids okay so oh you you got freedom and money okay all right i'm sending one of my boys to live with you exactly uh but but kids want what they want and they want it now yes right give it to me now right and so if as adults we do that that's dangerous that's why the average credit card debt right now is 15 grand people have 45 000 in student loans car payments of 600 or more a month so for me i look at debt as a thing that limits me from doing what i want to do not getting me there faster now i'm old school now i did my stupid i did single stocks i i did all those things and i lost a lot of money but looking at it what i was trying to do was to get rich instead of building wealth right and there's a difference between getting rich and building that's right what's the difference between getting rich and getting getting rich is where you want to quickly get money right and these are the lottery winners that i've talked to they got money in really really quick but they also lost it really really quick so building wealth is a long-term view meaning uh you can have some fun and enjoy some stuff but don't get so focused in the enjoying that you forget to plan for the future right what's the the yolo that's the hipster phrase you only live once well in my mind if you have that mentality and you believe that you broke for a long time that's right because you're doing everything for today so anyway i want people to have just awareness like you can have some fun today but let's also make sure we're doing some things using the 401ks using seps if you're self-employed put some money aside so it can start to grow for you talking to these millionaires the number one thing they said that caused them to build wealth was employer-sponsored retirement plans 401ks 403 bs and roth iras so people out there that are self-employed the seps solo 401ks you've got ways to be able to invest and that's what i want people to do and so wealthbuilding is a long-term view getting rich is a quick hit i don't want a quick hit yeah what else can you do to invest your money besides say you max out all your iras everything but what else can what else do you personally do or advise people to do to to invest well you can also people typically think okay well i can only invest in my 401k right no you can invest outside of retirement plans for the future uh for example i talked in my book retire inspired i talked about i want to retire by age 54 right and so you know i'm looking at that and so what does that mean because a lot of people think retirement's an age right like at 865 i can retire and i go well the government's not going to take care of you right the average social security payouts around 13 000 can you really live a dream on 1300 a month a month 13 000 a year 1 300 a month now it depends on what you pay into it but people were thinking the government was just going to take care of them and you and i know better and so i wanted people to wake up and look at that so the mindset around investing is to grow your money time and compound interest help you grow money put some aside each and every month and be consistent you can still have fun and do some stuff but just don't go all in yeah what are you what else are you investing in personally to help oh i mean i'm right now for me i do uh growth stock mutual funds which essentially what that is is instead of going a single stock which is going all in on one thing uh gross stock mutual funds allow me to invest in multiple different things so i'm diversified and all diversification is a spreading out stuff i don't want to put all my eggs in one basket right so gross stock mutual funds are a big deal for me uh real estate with cash is a big deal for me you gotta wait a while you get real estate then oh yes you gotta save your money and then you put it down that's right you see you're about 100 down to cash 100 like half down 100 down if i'm looking to invest right so you're right it is slower but guess what there's no risk for example you pay cash for it and you have it with the economy 2008 goes down or goes up i if i'm renting it i need to have good renters i don't have a payment i'm making every month what i don't want are people in control of me right i don't want people i don't want to have to go work to chase money i want to work to impact people and if i'm working to impact people and i don't have debt in my life then what i have to make is really small utilities food right it changes things and so i mean imagine the world we'd have if we had people that were out of debt and they were able to do the things they believed in being credible oh i mean there's not a charity out there that would be underfunded right single moms big brothers big sisters any of these things out there they would have the money to do what's needed so i want america to wake up and look at it learn how to count they taught me in kindergarten one plus one equals two right when you get older and you start to factor in depth they try to tell you one plus one equals three right and so what we have to do is go back to basics remember how to count and stay true to yourself wow what do you think is going to be the biggest challenge for people right now this time in our time in getting out of debt because we are in the gratification now yeah i want everything i see everyone else on social media posting all this the cool stuff they're doing how hard is it going to be for people to change their mindset to say i have to slow down it's a it's going to be a big compare myself that's right well you hit on a couple things there yeah it's going to be a big undertaking because we're the most marketed to country on the planet right we have with media massage constant right and we're we've have this appetite for debt we've got 1.5 trillion dollars in student loan debt one trillion dollars in credit card debt right 500 billion in car loan debt like think about this 500 billion 500 billion this past holiday season people spent 859 billion dollars in debt for the holidays credit card yeah no way yeah so now this time of year is where people are opening it up and they're starting to wake up to see it right so i think people need to understand that debt keeps you hostage it's a thief it steals from you it takes from you now but it also prevents you from investing and growing it later and so if you get student loan debt let's say you have 100 grand of student loan debt yeah and you paid over 20 30 years you're paying 200 grand back right oh you're paying double it's not a hundred grand because we talked about it interest that you pay is a penalty yeah that's right so i'm wanting people to wake up and look at it you know and i'm telling you people are doing it i had a couple that was at the book signing here when i was in la and they told me they paid off two hundred thousand dollars in student loan debt right over six years two hundred thousand and i said what did you do they were like oh we cut back lifestyle everything yeah they go out to eat once a week right they got serious uh they stayed in an apartment instead of going out and buying a home and they said our goal was to get that out of our lives and i said you know what you did when you got out of debt you gave yourself a raise because now that money doesn't have to leave you every month right it can stay with you so i think people are waking up to it and they're seeing it and i'm just out trying to spread the message how do we get people to become allergic to death because that's what you do i do so how do we how do you get people to think that way when they're so conditioned their whole life that i can just get a credit card just write a loan i can do this and pay it later how do we flip the script i think it boils down to knowledge uh telling people explaining it me being clear about my own mistakes financially dave being clear about his own mistakes financially people have to get to their point that they wake up now this is typically what happens i'm getting younger people that wake up to it as they start to get engaged or get ready to get married but the next opening eye-opening event is when they have kids when you start to have kids and you got this little person that this that's dependent upon you now you start to reassess things and so i want people to know that you got to look at it you got to make a decision for yourself do you want to keep making the credit card company wealthy or do you want to build wealth for you and your family right that's really what it boils down to yeah do you think people when they have their first kid they become more financially aware or they start going into more debt i think there's a wave now let me help you out because you don't have kids yet so let me tell you right when you first have them you're going to get so serious and so focused but then what'll happen is instead of spending on you the tendency now is to spend on the child right like i'm amazed i was in a shoe store out in new york and they had these uh little fancy designer kids shoes tennis shoes listen to me 110 dollars for baby shoes they're going to grow out of in three months they don't walk this is to hold a child wearing this fancy shoe and i thought see this is that's a cultural thing because you want your baby to look good and go no no your baby needs to be loved right so i want parents to prepare for themselves my greatest fear is that if i don't take care of myself financially i end up becoming a burden to my children later in life because they're going to have to take care of me you know i feel very grateful for my father because he would always teach you know saving and investing and things like that he was life insurance for a long time i have multiple life insurance policies out of myself right because of that because before even i'm not in a relationship right now i just got out of one but i was always preparing even the last 10 years i was just like preparing for my future i was like i want to have enough money that when i have a family when i get married when i have kids like i'm not stressing about it that's right not everyone has that luxury right they might have kids when they're 20. that's right but i've making made the choice that i'm not going to have the family until i feel like man you know whenever it comes whenever it's ready i'll be prepared so i don't need to make bad decisions based on debt i want to have so much in abundance and and take my lifestyle back in my 20s my 30s and that way i'm saving so much and investing so much and i feel in my my life insurance uh the mentor was like everyone comes to me at 40 and says they wish you they would invested more 25 more 30 more 35 right and they wait too long yes and that's why i'm constantly just automatically taking payments out every single month so that's good that are almost uncomfortable mm-hmm like man that's a big chunk of money every month that i've already put into savings that's right or into investments i would say and luckily i can afford that because i'm you know a single guy and that's right he's doing well but even my friends who are making as much more than me aren't doing that and it scares me oh it should i mean because here's the deal to grow money it means you need time and compound interest right and so the fact that you're putting that aside is saying you're mature enough to know what you want later right and i think that's the difference between adults and children children want what they want now adults have to be smart enough to go i'm going to do some stuff i'm going to enjoy some stuff but i know down the road i'm going to want to do some stuff too and it's going to cost more so i need to invest so i encourage people set up automatic investing coming out of your 401k your 403b or even if you're self-employed your sep or whatever it is make it happen automatically that way because here's the deal your investments become your paycheck later think about that like if we're working right now and you get you do a job you get paid the reason you're investing is to replace your paycheck so you can go do what you want to do you can travel or whatever and you've got this money that you can draw from to take care of your family so i want young people to get started early i want people that are in the middle of life with kids to stay consistent and control lifestyle and even if you're older and you feel like it's too late it ain't never too late if you've got breath in your lungs you've got an opportunity to make some changes today let's not waste another minute let's get intentional reach out to somebody that has knowledge you don't have and get guidance money is a terrifying thing because it's the one thing in life that you know the nfl is not going to give me the ball and and i'm never going to get a chance to golf i can't win in those environments but with money everybody gets money it's the one place where everybody gets it and now what do i do and i could lose it

Channel: Lewis Howes

Views: 169,411

Keywords: Lewis Howes, Lewis Howes interview, school of greatness, self help, self improvement, self development, personal development, success habits, success, wealth, motivation, inspiration, inspirational video, motivational video, success principles, millionaire success habits, how to become successful, success motivation

Id: 2En-EzrVpIM

Length: 82min 14sec (4934 seconds)

Published: Sun Jun 19 2022