The 5 Steps To FINANCIAL FREEDOM

nobody comes out of the womb producing millions of dollars worth of value debt is just a way for you to take your future income and spend it right now if you have to work every single day in order to fund your lifestyle you are not wealthy you have no freedom what's up everybody i am just praying singh from the minoritymaster.com where money mind is rethink rich everybody's goal financially is to be financially free but the steps that you need to take in order to have that financial freedom aren't always so clear that's why in this video i put together some of our best clips that will walk you through what you need to know to be financially free let's go if you're in a place where you're earning money but you feel financially stuck because you just don't know what to do with your money to get to the next level you are not alone the inspiration for this video came from a conversation i had with my friend just a week ago because we were talking about money and he was telling me about how when he got his first job which wasn't that long ago he really had no clue where to start with his money and he came onto our channel and he was still kind of overwhelmed because he didn't know where to start so i figured okay this would be a good opportunity for me to go out there and really just put out a video that will lay out the foundation of how to use your money from a to z this video is going to be a little bit different than my other videos because i don't have a script i just have the 10 different things that i'm going to be talking about and everything else is just me so i'm about to grab my whiteboard that way i can draw it all out but before we get into that i need you to do me a quick favor and smash that thumbs up button below because the way the youtube algorithm works if you do not smash that thumbs up button then youtube is much less likely to show you and other people our financial news and education videos the very first thing you got to do before you worry about investing your money or budgeting your money or doing anything is you got to calculate and figure out how much money is coming in and how much money is going out if you do not know how much money you have coming in and out you are just going to be one big question mark when it comes to money so i want you to pull out a piece of paper pull out your pay stubs pull out your credit card statements and your bank statements look at how much money you have coming in every single month and then look at how much money is going out this is going to give you a good idea of just kind of a broad picture overview of where your finances are right now the reason this is so important to start with is because the majority of people in america are living a life where they have a dollar coming in and for every dollar that comes in they have a dollar and 20 cents going out because they're financing their life with credit cards and lines of credit and debt the crazy thing is that there's a lot of people that don't actually realize that they're living like this because they're just making the minimum payments and all their cards and their debt payments and so they're making money and they're making the payments thinking that everything is okay because they never actually take a look at their finances so what i want you to do is literally just take a piece of paper and draw three columns on it draw one with how much money is coming in so your income one with how much money is going out so this is your expenses and then draw one with where else this money is going so are you investing are you saving where else is your money going maybe it's charity you got to know exactly where this money is going once you got that piece of paper that shows where all of your money is going keep it because you're going to be looking at that every single month because i want you to do this financial analysis of your money every month that way you can see how you're improving on your finances i used to guest teach in detroit public schools i love teaching and i used to go to these schools to talk to the kids about entrepreneurship and just general money management and one time i asked the class how many of you kids are working a job right now and almost every kid in the class raised their hand and then the next question i asked them was how many of you have a bank account and out of all these kids that had their hands up there was like two or three that maybe kept their hands up they had all these kids that were going to work getting a paycheck but they didn't have a bank account so what they did was they would get this physical check from their job and then they would go to the liquor store pay the liquor store under 10 of their check to get their cash so if you made a hundred dollars your liquor store owner is going to take 10 bucks so you got 90 bucks left and then on the way out you're going to buy chips you're going to buy pop you're going to buy a bunch of other dumb things and by the time you're out half your paycheck is going to be gone banks are in the business of making loans okay the way they make money is by keeping you in debt you need to understand that this doesn't always mean that you should just avoid banks or never use them that means you need to know how banks work that way you can use banks to your advantage you need to have at least two different bank accounts you want to have a checking account and you want to have a savings account they have two different purposes because they have two different uses these two are the bare minimum once you get more involved on the investing side of things you might open up a third bank account to hold your cash for your investments but let's just focus on these two for now so your checking account is the money that you're going to be using for spending so if you have a credit card or a debit card this card is going to be linked to your checking account because checking accounts let you do a lot more transactions in that bank account so this checking account is the cash you have to spend every single month your groceries your rent your shopping all of that goes out of this account right here your savings account is your savings money this is not the money that you use to go buy grocery zone the savings account is the money that you're either going to be saving for a big purchase or for your emergency fund you should actually have two different savings account if you're going to have this emergency fund and you're saving for a big purchase like a down payment on a house because you don't want to commingle the two you need to have an emergency savings account this is the money that you use for emergencies only so if you lose your job or if a tragedy happens this is the money you have for that this should be its own savings account and if you're saving for something like a house or if you're saving for something big that should have its own separate savings account checking accounts and savings accounts have different rules at banks like i was kind of mentioning earlier you can do a lot more transactions in and out of a checking account than you can do with a savings account so with the savings account a bank might say you could only do six transactions a month and if you do more than six transactions a month just for an example then they're going to charge you a fee savings accounts also sometimes pay you a higher interest on your money because the bank knows that the money isn't going to be leaving or saving this account as much as it will your checking account the tricky thing with that in the environment that we're in right now in this economy is that we are in a very low interest rate environment now what that means is if you go out and take a loan your loan is going to be a very low interest rate which is good news if you're borrowing money for something good but the downfall is your bank is going to pay you a very low interest rate on your savings there used to be a time when banks would pay two three four five percent interest on your savings now you'd be lucky if you get one percent interest on your savings one thing that you can do here with your savings and one thing that i do with my savings is because i don't use my savings every day like i do my checkings account you can move your savings money into a high interest online savings account because these online banks have lower overhead fees because they don't have all these like retail branches everywhere they don't have to pay for tellers and all of that so they don't have all these retail fees so they can pay you a higher interest on your savings now it's not anything crazy it's not going to make up for an investment or anything like that but it's better than what you're getting at most traditional banks by the way i'm going to be talking about a ton of different topics throughout this video and if there's something that you want to learn more about like high interest savings accounts i'll put more resources for you in the description below okay so you want to have a minimum of two different bank accounts your checkings account and your savings account and what you want to do is when you get your money direct deposited into your bank account from your job what you should do is create an automatic transfer that moves money from your checking account to your savings account automatically that way every single month you have money being saved without you having to touch it that way you know okay i don't have extra money to spend because this money has already left your account and has already been saved that way you can't accidentally spend the savings money on a brand new tv many banks offer features like this for free so make sure you ask your bank and you also want to make sure that your bank is not charging you a monthly maintenance fee so my grandma who doesn't really speak english had a bank account with bank of america for 15 years and one day this is actually not that long ago i went to kind of look at her financial bank statements with her and i found out that bank of america was charging her i think it was 15 a month as a monthly maintenance fee for doing nothing essentially so for the last i don't know how many years they were charging her 15 a month for no reason and she kept paying it because she didn't know that there was alternatives out there you do not need to pay a monthly maintenance fee just to use the bank account okay we are in a new digital age where these type of fees are just you don't need to do that okay so make sure you do your research on your bank look for the different bank accounts that you can have create a way that when you get paid you automatically have money moving to your savings account and if you have a separate bank account for your investment cash do the same thing for that that way your money is automatically going to the places where it needs to be and do not pay any fees that you do not need to pay third let's talk about debt because not all debt is the same if you have any sort of high interest debt so these are things like credit cards or hard money loans if you have this type of high interest debt then your sole focus in the beginning right now should be to pay off this high interest debt all your friends are probably talking about how much money they're making by investing tesla or this other hot stock this should not be your focus right now right now the only thing that you should be doing with your extra money is paying down this debt because when you have this type of high interest debt where you're paying 10 12 15 a year in interest then your money is compounding and building wealth not for you but for your credit card company you need to pay this off as fast as possible and use every extra penny that you can to pay off this high interest debt do not worry about investing do not worry about doing anything else until you pay off this high interest debt i mean to be honest you should not be going on vacation you should not have a netflix subscription you should not be eating at restaurants if you have credit card debt if you have this type of high interest credit card debt you need to be laser focused to pay down this high interest debt first so when it comes to debt you want to get rid of it as fast as possible and you want to stop fueling the thing that got you into this debt in the first place if you cannot control your spending get rid of your credit card until you can control your spending and until you can pay down this debt the secret to building wealth is not by pinching pennies it's by using your money strategically to buy things assets which are things that are going to make you more money this is what investing is all about and anybody who wants to build wealth has to invest their money but just like how all debt isn't the same all investing isn't the same the first thing you want to do when it comes to investing is put aside some cash that you can use towards your wealth building fund this is the money that you're going to use to make yourself wealthy by investing in this money the second thing you have to do is you got to ask yourself what your risk tolerance is if you have any sort of low interest debt so these are things like a car payment or a mortgage or student loans one of the things that you can do to invest your money and get a guaranteed return is pay off your debt early because let's say you have student loans that's charging you six percent a year and you pay off your student loans two years early that's six percent you're going to get on your money guaranteed during this two years because that's six percent interest that you do not have to pay to the bank this is the least risky way to invest your money because you're getting a guaranteed return on your money if you don't have any sort of low interest debt or you want to take on a little bit more risk then you can put your money into the market now when i say put your money into the market everybody assumes i mean that you need to go and start picking stocks but the majority of people shouldn't actually be in the stock picking game there are other ways that you can invest your money into the market without actually picking stocks by investing in something called an etf an etf is essentially a fund that gives the exposure to multiple different stocks so now instead of you going out and trying to find the best stock to invest in you can invest in an etf or a fund that's going to give you exposure to the entire stock market now if the stock market goes up your fund goes up stock market goes down your fund goes down or if you want to be a little bit more specific or technical you can invest in an etf that gives you exposure to the tech stocks or an etf that gives you exposure to health care stocks so this is a way for you to now invest your money and get the returns that you get in the stock market without actually having to pick stocks if you want to be more involved with your investments then you can look at investing in something like individual stocks or real estate now like i was saying before the further you come down this the more risk there is like paying down debt has the least risk investing in the etf has a little bit more risk and investing in individual stocks so real estate has even more risk than that but more risk comes with more potential not always more return but more potential return because you can invest in a company right before it goes big or you can invest in real estate in a location where there's a lot of demand coming and there's a lot of developments coming so the value of your real estate goes up and your rental values go up again this is now going to depend on what your financial goals are and you have to be honest with yourself what kind of life do you want to live financially if you really want to live large and do these lavish things and all you're doing is just paying down debt with all of your extra cash you are going to have a tough time getting there because you're going to need to earn more money yeah you also have the potential to lose more money because you're taking on more risk but if you don't take that risk then you don't have the opportunity to get towards your goals you should also understand the different ways that you can make money through your investments so when people invest in the stock market most of the time their goal is to buy a stock today for let's say a hundred dollars and then five years from now or 10 years from now sell that stock for 200 or 300 or whatever so you're buying an investment today at a certain price and you want to sell it at a much higher price in the future with real estate it's very different you're buying real estate not to just flip it for a higher price you're buying real estate now to get rental income so you're creating passive income with real estate because you can go out and buy a house or buy an apartment complex or something and now you're going to have tenants living there and these tenants are going to pay you rent every single month so if you buy a property and you lease it out for 1200 a month you might make 700 a month in profit from that property every single month as long as you have a tenant living there so this can help create your passive income you can do the same thing with stocks through dividends but a lot of times when people invest in stocks they're looking for that appreciation so they want to see the price growth so you got to know what kind of goals you have when you are investing your money robota switch gears to number five but if you do want to learn more about this investing and money management we do have a free ebook on money management and investing that you can read for free when you sign up for our financial education emails which are also free you can get a free ebook and start reading our financial education emails by clicking the link up here or by clicking the link in the description below now number five spending when it comes to spending the first thing you have to understand is the difference between an asset and a liability an asset is something that puts money in to your pocket a liability is something that takes money away from your pocket so now when you're spending money you got to know what you're buying and you got to know where your money is going is you're spending taking all of your money away from your pocket or is there spending bringing money back into your pocket most of the things that we buy are liabilities so your clothes your shoes your cars you know everything that you're wearing and showing these are all liabilities because when you spend a hundred dollars on a new shirt or you spend forty thousand dollars on a brand new car that money is gone and if you try to sell that thing you're not gonna get your money back like even if you go out and you buy a brand new car today for forty thousand dollars and you drive it around for a couple years when you go to sell it you're not gonna get anywhere near the forty thousand dollars if you bought a brand new shirt for a hundred dollars today and you try to sell it you're not gonna get a hundred dollars for that shirt so liabilities are things that take money away assets are things that put money back into your pocket these are what we just talked about investments so stock market investments real estate investments these are things that you buy for the purpose of making money and building wealth if you really want to become wealthy you got to be buying more assets than liabilities the only way that you can do that is by spending less money on liabilities that way you have more money to spend on assets right now the majority of people are living paycheck to paycheck because all their money is going to liabilities and then they have no money left over to buy assets so what i want you to understand when it comes to spending now is if you are buying a liability so if you're buying a car you're buying anything that's not putting money back into your pocket you are no longer allowed to finance it period okay the only thing that you can consider financing here is your own home but your car your clothes everything else like that no more financing it no more store credit cards because you don't have the money to buy it no more paying zero percent apr for something because you don't have the money to buy it now i know what you're thinking zero percent apr what's the big deal about that you're not paying any interest yeah but there's a reason why zero percent apr is so profitable for businesses and banks zero percent apr works because they know that if you go into a monthly payment plan on something that's a thousand dollars so you're buying this brand new phone for a thousand dollars and you get a paid off zero percent apr for the next one or two years well what's going to happen that means you don't have a thousand dollars to buy the phone today so you are going into debt to buy the phone and the majority people are not gonna pay it off in time so now you're gonna get slapped with a big fine at the end of your zero percent apr period because you don't pay it off in time and you also think that you have more money to spend right now because you didn't have the pain of a thousand dollars leaving your wallet today so yeah you might not be paying any interest on that money today but you're also not feeling that pain of the money leaving your account so you're more likely to go and spend more money on liabilities that you shouldn't don't play that game if it doesn't put money back into your pocket buy it with cash and don't worry about it and the way that you know what you can afford when it comes to liabilities is by following a rule of five if you cannot buy five of them you cannot afford one of them if you follow that rule when it comes to liabilities for things that you do not need to survive you will have more cash to buy more assets which are going to put more money back into your pocket going along with spending let's talk about credit cards depending on who you are and depending on your spending habits credit cards can be your biggest enemy or your biggest ally i love credit cards i try to only make my purchases on credit cards because i get cash back i get free perks i get free rewards and i get free purchase protection so when i buy things i buy with my credit card because i get all these rewards and i know that i'm always gonna pay my entire credit card balance in full every single month that way i never have to pay a penny in interest if you want to use a credit card the right way you need to first understand how a credit card company makes money that way you can understand this and that way you can use your credit card in a way that's going to benefit you so every time you swipe your card your credit card is going to charge the store a fee for processing the payment so if you go to walmart and you check out with your visa now visa is going to charge walmart a fee for processing this transaction and for processing this money so every time you swipe your card the store owner is going to get charged a fee they might charge your store three percent which is why the credit card company can pay you one two percent cash back the second way your credit card company makes money is through apr so if you don't pay off your credit card and you gotta pay a credit card company interest then your credit card is gonna make a windfall because they're gonna get a crazy interest rate on money that you are not financing from your credit card you never ever ever want to get into the game of paying this apr for credit cards okay this is always a losing transaction so if you're using a credit card you need to treat it like a debit card that way you're only buying things that you normally would with cash and then pay off your entire credit card balance in full every month that way you never have to pay a penny in interest now if you're not going to get charged and extra free to use a credit card you might as well use your credit card because your credit card is going to charge the store a fee and then they give you a kickback for doing that that's what your rewards are so if you go to walmart and you buy a hundred dollars worth of groceries and you swipe with your visa visa might charge walmart three dollars to process this transaction and if you use a visa they might pay you back a dollar and fifty cents in cash back just for using their credit card if you didn't use your credit card you'd have to pay walmart a hundred dollars in cash and you wouldn't get any cash back but because you used your visa you got 1.50 back but this only works if you understand how to use a credit card the right way and if you can control your spending if you cannot control your spending and you don't think that this is going to work for you because you're going to overspend or you're not going to pay off your credit card then don't use the credit cards the rewards are not worth it but if you know that you're never going to pay a penny in interest because you're only going to buy what you can afford and you will always pay off your entire balance in full every single month then get a credit card that way you can get your rewards once you get to this point now you were really on your path to wealth and now is when you want to start thinking about how you're going to protect your wealth and pass on your wealth this is what estate planning is all about now i am an attorney which is why i want to talk about this but i am not your attorney so if you do have specific legal questions talk to a professional in your area so the first thing when it comes to estate planning is you got to think about okay when i die because i know eventually everybody will die it sucks to think about but it's reality when you die what do you want to happen to your assets and your money who do you want to get it so this is what a will is all about it will essentially tells the world okay when i pass this is what i want to happen all my money you do not want to get into a situation where you die without a will and you have these assets because now this is going to create fights within your family it can create a whole bunch of issues and you do not want the state to decide where your money goes another option is you can create a trust which essentially tells the world what you want to happen with your money after you pass but again this is what a professional can help you with depending on your personal situation so you need to have a will or trust that way you can dictate how your assets are going to pass second if you are building your wealth and you don't have this wealth built yet you need to have some sort of life insurance in place to protect your family from a tragedy the way life insurance works is if you were to unexpectedly die then life insurance will come in and they will take care of your family financially because you're gonna buy this policy so let's say you buy a million dollar policy you're gonna be paying this policy every single month either for a certain number of years or for the rest of your life depending on what kind of plan you get and so you're buying it to this policy and if you were to unexpectedly die then the life insurance is gonna come in and they're gonna give your family a big check so if you bought a one million dollar policy they're gonna come in and they're gonna give your family a one million dollar check personally i look at life insurance the way i look at car insurance it's there as tragedy protection is risk management it is not something that you want your family to rely on to survive after you your goal should be to invest your money and build wealth with your own assets and if something tragic were to happen along the way that's when life insurance comes in as that bridge and they can come and take care of your family because you never want to run into a situation where somebody who is a breadwinner of a family tragically dies and now this family already has to deal with this heartbreaking loss but now they don't have a way to pay their bills and what i think a lot of people overlook is how affordable life insurance can be like if you are a healthy 30 year old male you can get a million dollar life insurance plan for something like 30 a month so you pay 30 a month and if you were to tragically die during the term of this life insurance plan then the life insurance policy will kick in and they will pay your family a million dollars now if life insurance is something that you're interested in learning more about then i recommend you checking out our sponsor policy genius i like policy genius because they don't make you deal with pushy sales people all you have to do is go onto their website and enter in a few pieces of information and then they're going to present you with different life insurance quotes from different companies that way you can make sure you're getting the best deal possible and if you do have questions about life insurance they have experts that you can talk to at any time and these people are not incentivized to upsell you anything plus they stand by what they do if you go out and you find a lower life insurance quote anywhere else just show it to policy genius and they will give you a hundred dollars just for wasting your time so if you want to learn more and get a free life insurance quote in just a few minutes i got the link to where you can do that with policy genius in the description below minority mindset is a partner with policy genius so if you use them we will get compensated but there's no additional cost to you so if you want to learn more and get a free quote i got the link to where you can do that in the description below there are two things certain in life death and taxes if you are making money you need to pay taxes and even if you think you're not making enough money to really pay taxes you still need to file a tax return because that's just the way the government works okay if you do not pay your taxes or you do not file your taxes it is a big issue you can go to jail for doing that so do not play that game okay if you are making any sort of money you have to file a tax return if the money you're making is just coming from your job then you can use one of those online tax filing softwares they are very cheap to use and a lot of times they might even be free and they will walk you through all the different deductions and exemptions and credits that you can get that way you can pay the least amount of money in taxes so if you have just a simple tax return where you're just making money from your job then use one of those online things because that's going to be the most cost effective ways to go if you get a little bit more sophisticated like now you're investing in real estate or you have other businesses that you're part of that's when you really want to start thinking about getting your own accountant because an accountant's job is now to manage your bookkeeping and check the numbers and see how the numbers are going and then find you the most deductions that you can get that way you can pay the least amount of money in taxes when i was in law school i spent a lot of time when i took a lot of classes on taxes the tax code is thousands of pages long it is not worth your time to try to find every single deduction hire a professional that way you can save the most money on taxes and that way you don't have to deal with the headache now if you get to this point and you ask yourself wow if only there was a way to fast track my way to wealth well there is once you know how to use your money which is all the things that we just talked about then you can fuel the system by adding more money into the system by earning more money the simplest way to make an extra five to ten thousand dollars a year is just by asking your boss for a race so if you think you've been doing a good job and you've been working at your place for a while then you can go to your boss and demonstrate the value that you provide and show how you're gonna make the company more money and show how you can take out more responsibility and in exchange you can ask for a raise that way you can make more money for some of you that's not going to be an option because you can't stand your job or you don't want to put any more effort into your job or whatever so you might want to consider getting a side hustle so there's a lot of different ways you can do this if you are really a big fan of the internet you can become a virtual assistant you can be a freelancer you can do design work there's a lot of things that you can do on the internet to make extra cash either by doing something creating something yourself or by creating services and offering these services to other businesses that need them the advantage with this is you can do these side hustles usually on your own schedule and on your own time and wherever you want but the downfall is it takes more effort to get started like if you get this raise then you just keep doing what you're doing and you're already making this more money with the side hustle you have to go out and really earn this money so it can take you weeks or months or maybe even a year to start making money depending on your effort and depending on how good you are and what you do and if that's not good enough then you can go out and you can consider starting your own business or you can consider investing in somebody who's starting a business so starting a business obviously has the most risk because the majority of small businesses fail i can tell you from first-hand experience that starting a business is hard work and you're not going to see the returns that you want immediately it takes years to really get any return out of starting your own business if you get any return but if you feel like you have the entrepreneurship bug and you really want to be a business owner then this is an option for you and you really just got to go out there and start and this can give you the opportunity to earn more money but is not guaranteed and finally number 10 check yourself kind of like what we hinted at in the beginning of this video where you took out a piece of paper and you looked at how much money you had coming in and you looked at where all the money was going out you need to make sure you keep doing that every single month because you want to make sure that your money is staying on track this is not something that you can just do once and then hope for the best being wealthy and building a financially healthy lifestyle is a lifestyle it's something that you have to do forever every single month pull out a piece of paper look at how much money you had coming in look at how much money you had going out and compared to your goals when something goes out of whack in your finances it can mess everything up like in 2019 americans paid something like 11 billion dollars in overdraft fees that's money that americans didn't have because they spent money when they had no more money in their bank account you need to be the cfo the chief financial officer of your finances so see how much money came in and see how much money came out and make sure everything is adding up now before we get into the next clip i do want to let you know that if you are interested in learning more about money management and investing our team has put together an amazing guide that will walk you through the things you need to know about managing your money and starting to invest your money the right way that way you can build your wealth this guide is completely free when you sign up for our daily newsletter so if you want to download this free guide and start reading our daily newsletter i got the link to how you can download it for free in the description below if you're like most people you grew up and told that if you want to become successful you got to go to school get a good degree get a good job work really hard at your job save some money in your 401k and then you will be able to retire wealthy or at least hopefully financially free or at least be able to retire i always wanted to be financially successful my parents are immigrants from a state in india called punjab and i saw how hard they worked and so i wanted to be financially successful that way i could give back to my parents and i could take care of my family because i saw the hardships and the struggles that they went through but i started to look at things differently than what everyone said that you should do when one day i was in college and i was sitting in the library and i was like you know let me just take a look at the four's richest person list and over there you know you have people like warren buffett mark zuckerberg bill gates and i'm looking at these people and what they do and what's interesting is none of these people follow that traditional path that everybody tells you to follow to become wealthy or to become successful now i know not everybody can be the next mark zuckerberg or elon musk or bill gates and build a multi-billion dollar business i'm not saying that's what you should do but there are many ways for you to become wealthy and retire a millionaire that many of us never learn actually a lot of the financial advice that we get from the people around us is the reason why so many people are broke now when it comes to really understanding money there are three main points that i need you to understand that most of us have been completely lied to about money and these are the three things that i'm going to be talking about in this video but before i do that i need you to do me a quick favor and smash that thumbs up button below the first thing that all of us are taught about money is that money must must be earned through labor and this is one of the biggest lies out there when it comes to money and this is a big reason why a lot of people will never become wealthy growing up this was the only thing that i saw my parents were immigrants like i said and so when you come to a new country with not that much money where you don't speak the language where you don't know the culture you have to hustle to make it work and so my dad had this thing where he would say there's no such thing as sick days because if you take a sick day that means you're not going to work if you're not going to work you're not getting paid if you're not getting paid you don't have money to eat now i was very fortunate i was never poor i never had to worry about where my next meal was going to come from but i really understood the value of working hard because in my mind the more you worked the more money you would make and it was to the point where if my parents had a saturday and a sunday off a whole weekend off this was considered a long vacation but this method of earning money is how we're all taught to earn money here's how it works here's you right here gotta draw you you know a nice mustache or for our female audience draw you a nice braid or as we say in my native language a good so here's you and here is your job and so what do you do you go to your job and every time you go to your job your job pays you a paycheck now if you want to earn more money in the system what do you do well you go and get a good degree or you go and get a certificate you get a master's you become a doctor you become an attorney you become an engineer so you get a better job to get a higher paycheck but at the end of the day it's still labor sure maybe it's not physical labor but you're still working you go to a job every single day to get this paycheck if you have a better job you make more money but this is where kind of one of the disconnects are about money because yes you can make money here but this is not the only way to make money because this is one of the biggest misconceptions that i had because i always assumed that if you wanted to make money you had to go to a job you had to do a task you had to do some work in order to get paid but it doesn't work like that wealthy people and rich people do not make money in the system sure maybe that's how they started off or maybe this is how they attract some money but that's not the only way they make money what every single wealthy person does is they understand that they do not want to earn all their money through their labor because there's a limit to how much you can work there's a limit to how many days you can work there's a limit to how many hours you can work and so what they do is they take this money right here we'll call this your e i your earned income this is money that you have to go work to earn and now they're gonna make this money and they're gonna put some of this money aside right here and they're gonna take this money and they're gonna put it to work somewhere else for their pi passive income because there's a difference between your earned income where you have to go to a job or we have to go to your business where you have to do something to earn money and your passive income where your money goes out and makes you money this ei this earned income right here is not going to make you rich i don't care what job you have i don't care if you're a doctor you are never going to become rich just with your salary right here what you need to do if you want to become wealthy this is whether you're making 25 000 a year or two and a half million dollars a year is you got to take some of this money aside and you got to start putting it towards your passive income this is what wealthy people do wealthy people take as much of this money here and they put it here because they understand that this is not gonna make you rich because it doesn't matter how much money you make as soon as you stop working the money stops coming in and so if you look at really what becoming wealthy is wealthy is how much freedom you have here it doesn't matter if you're running a business or if you have a job it doesn't matter because now if you stop working you stop getting paid now this is assuming that you don't have a big business where you don't have to work in there to get paid but if you have a small business or if you're working a job you have to work to get paid now what you got to do is you got to take this money put it here that way now you're getting paid even if you don't go to work even if you don't do a specific task and this is where real wealth is built when i realized this concept that was when i changed my life completely at least financially because i stopped working just for this before anytime i made money i'd want a nicer car i'd want to upgrade my car i'd want a new watch i'd buy all these nice things but when i realized that my money could fund my lifestyle not just by making money and spending it but by making money and using it the right way by buying investments assets real estate stocks things that pay you then i started changing what i did with my money instead of buying cars and watches i started buying real estate and these were things started paying me with cash flow and so what i understood was if i made enough money here from my passive income then i could fund my entire life without making any money here so it was a big shift in my mind and this is where a lot of us are never taught that you can make money outside of just your job in most of our minds we think okay if we want to make money what do we do well we can get a job we can start a business but both of these are going to require a lot of work on your part and if you don't work you don't get paid but you have to get paid even if you don't work if you want to become wealthy the way you do that you get paid whether it's from your job your business whatever you get paid you have to put money here now i'm not going to be getting into investing and how you do that in this video because i got other things i want to talk about but if you do want to learn more about how you can start investing in real estate for cash flow i already made a video where i explain all that and i'll link that video for you in the description below this system is why you have some doctors that are broke and you have some people making 30 000 a year that retire wealthy because when you live off of this you will never be able to build wealth but when you work to grow this so you can live off of this you will become wealthy and so what you want to do is stop living off of this and start living off of this the second wrong thing that we're all told about money is that money is evil or some sort of variation of this like in my house money wasn't something that we really talked about because in my culture you don't really talk about money in that way like it's just kind of something that you just kind of assume is going to be okay you don't talk about money so at the same time when i was growing up my parents always told me that if i wanted to become successful i should become a doctor but we never talked about money management or investing or saving because these things were kind of just bad and distractions so we never talked about money and anytime i did i was always told don't worry about money it will be okay once you are a doctor but here's the thing in my culture i'm going to keep it just completely real with you in my culture we don't talk about money but at the same time we have so many people drowning in debt we have so many people that do not understand how to spend their money you have so many people blowing their money on nice cars but now do not have any money for their investments we have so many people blowing their money on the wrong things and do not have a way to afford a decent lifestyle or afford a good education for their kids and so we have all these kind of like confusions and the way that people use their money and it all comes down to this because we are scared to talk about money but the reality is we have to start talking about money that way we can start being good with our money that we can start building wealth for ourselves instead of making everybody else around us rich and the unfortunate thing is the media does not help with this the media especially nowadays we really start to see this kind of like divide between the rich and the poor and anytime you hear people talk about someone rich or a corporation or whatever on the news is always portrayed as this evil person right because rich people are evil in the media but the thing that you have to understand is money at the end of the day does not make you a good person money does not make you a bad person money is just a tool okay it does not make you bad it does not make you good it is a tool that you can use to take better care of your family it's a tool that you can use to take better care of your parents it's a tool that you can use to take better care of your spouse it's a tool that you can use to take better care of your community we live in this culture right now where people hate rich people why because they're rich and this is where we have to kind of start breaking out of this mold and take a step back and say why are we thinking like that why do we think this person's rich because they have become successful maybe instead of us hating on success and this richness or whatever you want to call it how about we figure out how this person became successful so we can do it too because being broke has never helped anyone period okay you can help more people if you have money money is just fuel it amplifies what you do if you want to feed hungry people having a million dollars can help you feed more hungry people if you want to do more community service sure you as your person can do that but if you have a million dollars with you you can do a whole lot more community service okay so money is just fuel it doesn't make you a good person doesn't make you a bad person it amplifies who you are it allows you to do more of whatever it is you want to do i realized i never changed this one to a two so let me do that right now look at the end of the day money is just one part of your life and yes there are things that are way more important than money like you got to be physically healthy if you're on your deathbed it doesn't matter how much money you make because if you're about to die or even so obese where you can't live your life it doesn't matter how much money you have you got to be mentally healthy if you're depressed or you have all this anxiety so you can't even live your life it doesn't matter how much money you have if you cannot live happily you have to have spiritual health that doesn't mean you have to be religious when i say spiritual health i mean you got to have a purpose in your life you got to have a reason to get out of bed in the morning if you don't have a reason to get out of bed you can have 10 million dollars in the bank but it doesn't mean anything because you don't have a purpose to your life once you have the physical fitness the mental fitness and the spiritual fitness now is when being financially healthy is the most beneficial but this is where everyone gets things screwed up because everyone says money doesn't buy happiness so don't worry about money yeah money is not going to buy you happiness but being broke is not going to make you happy either money can help buy you the things that you want to do that way you can do things that make you happy and money can buy you freedom but you got to understand where money plays a part in your life and when you just put up the smoke screen by saying things like money is evil so you don't got to talk about it now you're just ignoring the issue and you're living in fairy tale la la land and this brings me to number three and for the purposes of this one i'm gonna call this our dollars money the third thing you gotta understand which is one of the biggest lies that we're told is that this money is real money when i was growing up i had never heard of the word investing no one in my family was a real estate investor no one in my family knew a real estate investor and so for us in our household money management and being financially smart was working hard at the job working as hard as possible and then saving as much money as possible and so you work hard save as much money and what do you do with the savings you let those savings sit in the bank you know i've joked around about this before because there's a lot of difference between the traditional indian culture and american culture because in the indian culture people make a dollar to spend 20 cents in the american culture people make a dollar to spend two dollars with the help of credit cards and loans and lines of credit and so in that kind of traditional indian culture we have this kind of like saving bread into our blood and so my parents were the same they worked very very hard and then they saved as much money as possible thinking that it was the financially smart thing to do now it is better to save your money than to blow it at gucci and louis vuitton and buy a whole bunch of nice things but there's so much more to what you can do with your money and the only way you're gonna do that is if you understand what money actually is these dollars right here are just pieces of paper and it only cost 12 cents to print a hundred dollar bill i don't have a hundred dollar bill on me so i'm gonna show you 50 but it cost 12 cents to print a 100 bill and so this piece of paper now can be printed as much as the government and the federal reserve wants and as more money gets printed and enters our circulation the value of each dollar that you save and the value of each dollar that you earned now gets diluted so if you were making three thousand dollars a month and more money gets printed that three thousand dollars a month in a few years is not gonna have the same buying power that three thousand dollars a month does today because three thousand dollars a month in a few years is gonna be more diluted because of all the dollars now in circulation than three thousand dollars a month does today and so what happens the price of a rent goes up the price of your groceries go up if you want to go on a vacation your vacation costs go up gas prices go up and so the prices of everything around you keep going up while the wages don't necessarily keep up with now the higher cost of living and the higher standard of living the average person's financial advice is work hard make money and save whatever you can and this is the reason why most people will never become wealthy a wealthy person would never follow that financial advice a wealthy person is gonna work hard take whatever money they can and invest it and only save what they need a wealthy person is only gonna save money for three reasons they're gonna save money for an emergency and so now you gotta have an emergency fund this might be three months worth of expenses up to a year's worth of expenses depending on how conservative you want to be and while the person will save for big purchases this might be a home this might be a car and a wealthy person will save to invest their money if saving your money does not fall into one of these three categories you got to do something with that money this goes back to what i was talking about earlier where financially educated people will take their money their earned income and they're going to convert it to passive income well it comes back to this right here too because when you make money and you leave it in your bank account your money stays flat it's dead but at the same time the price of everything else keeps getting more and more expensive so your money in your bank account is dead but everything else keeps getting more expensive so you are effectively becoming poorer and poorer day by day that's why what wealthy people do is they take this money and they convert it to something else they convert it to assets this might be stocks this might be real estate things that now make them more money when you own shares of a stock now you own a piece of a company and this company is working hard to make more money and as the company makes more money so do you because your stock price goes up or you get dividends when you own real estate you own a physical property or if you're talking about crowdfunded real estate or something like that now you own exposure to real estate but we own real estate you own a real piece of property you own brick you own land you own windows and now if a tenant is living there they're going to be paying you rent every single month so you have a stream of cash flow and you have a physical building and so now you have real assets that are worth something because you own shares of a company or you own shares of a building when you own money just cash just pieces of paper you own pieces of paper that are losing value every single day that's why you got to understand why you're saving money after you get past that you got to convert your cash to something real i get it some of the stuff is going to seem really weird and really out there especially if you haven't been exposed to financial education before but this is the reality of what's going on if you are not happy with where you are financially if you are struggling paying your bills if you're struggling paying down your debt if you do not know how you can be financially free it is possible but it starts with financial education and it's tough because none of us are taught about money or financial education when we're in school this is where you're gonna have to be the one to go out of your way to learn this financial education and then actually put it to action but lucky for you it is easier now than ever because there's so much information that you can access for free literally on your fingertips and if you're looking for a place you can learn you can subscribe to our youtube channel because we talk about this every single week [Music] the stock market is a place where you can go and buy shares or ownership in some of your favorite companies amazon chipotle lululemon amazon when you invest in their stocks you get to own a piece of the company that when they make more money so do you because the stock price goes up when you invest in real estate you're buying physical properties like you can go out and buy a home and then you can put a tenant in that home and every single month this tenant will pay you rent for living in your property and now you have a cash flow producing asset now here's the thing while these things sound nice it's not always as easy as it sounds i mean everybody likes the idea of owning their favorite company but why is it that so many people lose money in the stock market and everybody likes the idea of having rental properties but why is it that so many people cannot manage rental properties or at least can't do it profitably that's why in this video i'm gonna be going over five things five secrets that you need to understand but before i get into that i need you to do me a quick favor and smash the thumbs up button below and a quick word from our sponsor fundrise if you are interested in investing in real estate but you don't want to deal with the headache of managing a rental property you don't want to deal with tenants you don't want to deal with contractors then you can invest in crowdfunded real estate with as little as a thousand dollars and if you want to see how you can get started i got the link to how you can do that with our sponsor fundrise in the description below the first thing you got to understand is the importance of money conversion so anytime i go to india to visit my family the first thing i do is i go and i convert some of my dollars to rupees because in india people do transactions with rupees not dollars when it comes to you building your wealth you have to convert your money your dollars into something that is going to make you more money because the reality is the dollars that you have the dollars that you work so hard to earn and the dollars that you save in your bank account are losing value to inflation because as more and more money is printed the value of each dollar that you have gets diluted so what you want to do is you need to be converting some of your dollars your paper dollars into assets investments that will make you money so in this case we're talking about stocks and real estate and the thing that you need to understand here so i'm going to assume that this side of the equation is your stocks and real estate these are your assets so what you want to do here is you make your ei your earned income this is the money make from your job or the money you make from your business and you want to take as much of this money as possible and put it here towards your pi your passive income investments because this is the thing that will make you wealthy what wealthy people do and financially educated people do is they take as much of this money here and they put as much of it as possible here because this is what is going to make you wealthy not this doesn't matter how much money you make i don't care if you're a doctor you will never become wealthy just with the salary make from your job because as soon as you stop working you stop getting paid so what you need to start doing is as soon as you get paid you need to start transferring this money here towards your passive investments that way you can start making money without having to physically go to work because if you want to become wealthy your money has to be generating your money because if you have to work every single day in order to fund your lifestyle you are not wealthy you have no freedom the reason i'm talking about this right now is because for any of the things that i'm about to talk about to work you have to have the money to actually invest and now how do you get that money well now when you get paid you want to take as much of this money as possible i like to say a minimum of 15 but the more the better you want to take as much of this money as possible and put it towards your investments in this case stocks in real estate i'll talk about that in just a second but this is why it's so important because you're never going to build wealth with this you're going to build wealth with this as you want to convert as much of this here as possible because this money even if you just save it is losing value and it's making you poorer each and every day because the value of your dollar is dropping the price of everything else keeps going up that's why you want to move this money here because this is going to make you wealthier this is going to make you more money and this will happen on the side without you having to physically go to work or do something to get paid because you're putting your money in the right places that's gonna pay you for owning it if you are a newer investor or you haven't started investing yet this concept is gonna seem weird because it doesn't make sense how you can make money without getting paid i went through the exact same thing i didn't grow up learning about investing or passive investments or stock market investing or real estate investing i just thought that if you wanted to become wealthy you need to get a better degree that way you can get more money here you can get a better job so you can make more money but when i started investing in real estate for the first time i bought a small condo out of foreclosure and i rented it out for 600 a month this was the first investment that i made here ever and this condo after paying all my expenses was putting like 250 a month into my pocket every single month and i didn't have to do any work i had a property management company handling all the day-to-day stuff and every month 250 was being deposited into my bank account and i didn't have to do anything to earn that money that was when the gears really started to turn in my brain because i never knew that you can make money without physically having to go to work or do something to get paid i didn't know that your money could be the one making you money and this is what you got to understand that wealthy people work on making their money here while broke people focus on just growing this yes if you have more money here that can help you grow this but what you have to remember here is you want to take as much of this as possible and over here that way you can become wealthy it doesn't matter if you make twenty five thousand dollars a year or a quarter of a million dollars a year you can start with whatever you can take as much of this and move it here as possible because when you can build this you will be wealthy it's not gonna happen overnight this is something that's going to take time but you need to start by taking some of this the money you make from a job and your business and moving here that way you have these passive investments that will pay you forever the second secret that you got to understand is equity so when most people think of equity they think of their homes i own a home that's worth a hundred thousand dollars and i owe eighty thousand dollars i'm a home so i have twenty thousand dollars equity in my home but when it comes to investments this becomes just as important because if you don't have any equity in your investments and things go wrong which they will happen the thing is about stock market investing and real estate investing things will go wrong sometimes the economy will go down sometimes the stock market will crash sometimes the real estate market will crash and sometimes your tenant is not going to pay you or the company that you're invested in is going to struggle and so you got to understand that things will go wrong and if you have no equity in what you're doing then you have no margin of error and if things go wrong and you have no equity now you're going to be the one paying the price and you're going to be the first person to lose your shirt now if you spend any time at all on the internet looking for ways to become wealthy through your investments by now you're probably getting ready to type but just please i've heard of so many people becoming rich with no money down real estate and by using high margin investments in the stock market let me start by talking about no money down real estate okay the way no money down real estate works is kind of like this so there's this home right here and this home let's say is worth a hundred thousand dollars and the bank is willing to loan you eighty thousand dollars now you have to come up with the other twenty thousand dollars somehow and you can take this twenty thousand dollars from your own personal account or if you don't have twenty thousand dollars you can go to the seller of the home so let's say this is the seller right here madram a nice mustache and so the seller says hey you know what you seem like a trustworthy person how about i loan you the other twenty thousand dollars so now the seller loans you twenty thousand dollars the bank loans you 80 000 and you buy the home with next to nothing sure you might have to pay the closing costs you might have to pay some other renovation costs but in general you're buying this home with very little money with the hopes that now someone else let's say this tenant right here is gonna move in and they're gonna pay you rent and they're gonna cover all your costs in theory this looks great you have very little money out of pocket and if the numbers work out you're gonna have some profit coming into your pocket every single month and you had to put up very little money but here's the reality of how this works when the economy is growing and when home prices are appreciating and when tenants have money to pay rent this is good so when things are good you can make money doing this but as soon as things slow down you are going to be the first person to not have money to pay your bank because you have so much debt on your property you're going to be the first person to not be able to renovate your property and make the property nice when tenants want a better home you are going to be the first person to go bankrupt or file for foreclosure when a tenant damages your property and you don't have money to make the renovations these no money down deals are good sometimes yes they have made some people rich but you want to know something else these no money deals have also made me a lot of money because when this person buys this property with no money down and then something goes wrong and then the bank has to take the property away from you and to sell it to an investor for a below market price that's when i come in and i buy the property because you were not able to take care of your investment property so yes no money down deals can work but they come with their own fair share of risk and if you have never invested in real estate before and you don't have any savings cushion then you are going to be the first person to lose your shirt when things go wrong and then somebody else a more savvy real estate investor is going to come in and they're going to buy that property off of you for pennies on the dollar you see the exact same thing happened in the stock market you'll see people offering these classes on how you can get rich trading options and doing day trading and doing this other short term trading where now you're trading with 10x margins so you invest a thousand dollars and then you borrow ten thousand dollars from your broker and now you can invest with so much more money than you actually have and when things are going up and the market is growing it's no problem because everybody's making money and now you're making money hand over fist but as soon as things slow down and things start going down now you're gonna be the first person to lose everything because now not only did you lose everything that you have but now you owe your broker money that you don't have so the thing that you have to understand about equity as an investor is if you take on more debt yes you can make much more money very quickly that is a fact but it also comes with more risk so if you have never invested your money before or if you do not know what you're doing then you're taking on more risk without the experience so that's something that you got to understand yes it is possible you can make a lot of money doing this if you have cash reserves and if you know what you're doing but if you don't know what you're doing then you got to understand you're taking out a lot of risk without understanding what you're doing and the second thing that i want you to understand about equity as an investor is if you want to build wealth for the long term you have to plan for things going wrong one of the ways you can do that is by having some equity in your deals and having equity in your investments because now we have a margin of error because guess what things will go wrong the market will correct i don't care if we're talking about the real estate market or the stock market things will correct things will go up things will go down and you want to be able to weather whatever happens and the best way to do that or one of the best ways to do that is just by having some equity in the deals meaning some of your own money in the deals so you're taking some of your earned income put into your passive income here with real estate or stock market that when things do go down you have equity to protect you the third secret which really should not be a secret is if you want to become wealthy you got to understand the game and you got to keep learning i mean we have a lot of new investors entering the market right now in the real estate space and the stock market space and the thing that always kind of concerns me is when someone starts investing their money but they have no idea or no plan on how to invest their money and now they go out and they start teaching people on how to invest their money just because this one person has made the first ten thousand dollars or for us a hundred thousand dollars and the thing you have to understand here is that when the market is going up it is very easy to make money anybody can make money in a bull market because everybody thinks they're a financial genius when the market is going up but the real test of who's a good investor and who's not is what happens when things turn around and so this is where you got to understand the game and you got to keep learning because this education is what's going to help you build wealth over the long term i'm going to talk more about that in number four but you got to understand how the game works i'm going to start with real estate then i'm going to go to the stock market then i'm going to go back to real estate and then go back to the stock market you'll see why i'm going to follow that order in just a second but here's how it works in real estate let's see buy this home right here and stick with the example where you paid 100 000 for the home and now your goal with real estate is cash flow you want a cash flow producing asset which means you're gonna make money every single month from rent so in my area i'm looking for a seven percent return which means here i'm making seven thousand dollars a year in profit from this property assuming i had to put in a hundred thousand dollars so i put in a hundred thousand dollars and every single year i get 7 000 a year in passive cash flow from this property and the stock market is a little bit different in the stock market i am looking for appreciation so i might invest in this company right here company x now you could put in whatever company you want chipotle apple it doesn't matter you are putting your money in this company with the hopes that this company is going to use their money smartly and they're going to become more valuable so you're going to hope that this company makes a bigger profit they make bigger revenue they create more products and that this company makes more money if this company makes more money then the stock price will hopefully go up because more people will want to invest in this company and if you have more demand for the shares of the stock the price of the stock goes up and now you just made more money because your stock price went up so here we're talking about appreciation here we're talking about cash flow now there is ways to make cash flow on the stock market side of things if you invest in dividend paying stocks so some companies in the stock market have a lot of cash and these are your bigger more mature companies so companies like apple verizon at t these companies at least at the time of recording this video are very large and at the end of every year they have a lot of cash sitting in their bank account and they don't know what to do with it so one of the things that they do in this case is they just give this money away to the shareholders people like you in the form of dividends so here every three months you get a check from these companies just for investing in them so there is way to get cash flow in the stock market through dividends but in general when people talk about investing in the stock market they're looking for appreciation when we're talking about real estate people are talking about cash flow so this is the investing side of things but there's also a way to be a trader both in the stock market and the real estate market going back to the same example let's say now you bought this home for a hundred thousand dollars and then you put in another twenty thousand dollars of renovations so you upgraded the kitchen maybe you upgraded the bathroom and now this home is worth a hundred and fifty thousand dollars and you sell it now you are no longer a investor because the definition of an investor is you're holding on to a property for the long term which typically is a minimum of a year here you want to get in and out as fast as possible you bought the home you did your graduations and now you're flipping it and you made good money you made 30 000 in this case you got to subtract your expenses your you know closing costs and all that but in this case you're making like 30 000 just by flipping this property so this is not investing it's a way of flipping you see the same thing in the stock market so in the stock market you can buy a stock and you own it for 20 minutes you own it for two days you own it for two months and so you're buying the stock with the hope that it's gonna go up quickly that way you can sell it for a quick profit this is trading this is not investing and so this is where you got to understand the game and you see this more often here with the stock market than real estate but a lot of people don't understand why they're buying or what their strategy is because you have to understand what are you doing in the stock market what are you doing with your money are you looking to make money over the next 10 to 30 years or are you looking to make money in the next 12 months and so you have to have a strategy and when you go in you have to be willing to stick with it because what happens to a lot of people is they come into the stock market and they think i'm going to be a long-term investor i find a few companies that i like i invest in them because i believe in these companies six months later something goes wrong my company's down five percent now a panic and a sell and so you went from being a long-term investor to being a trader because things didn't work your way and so you gotta have your strategy in place you gotta understand the game i put game on the inside of this we're supposed to be the outside but you gotta understand the game how are you looking to make money and even within this there are so many strategies to trade there's day trading there's swing trading there's momentum trading so you got to understand what are you looking for and you can't just be flip-flopping strategies because most people's strategies when it comes to investing money especially in the stock market is i'm going to put my money in what i like and hope that i make money hoping you make money is not a strategy you got to understand what your strategy is before you put your money in and this is a mistake that so many new investors make because they're just looking to make money quickly or they're just looking to make money and as soon as things go wrong they panic they switch strategies and things just flip so if your goal is to be a long-term investor then what you need to be doing is you got to find the right companies or the right etfs that you want to invest in and now you got to be listening to the earning calls and if the company or the fund that you invest in is continuing to produce value and you continue to believe in it you should continue to hold on to your investment and even if things go down the only thing that you should be doing is buying more because you believe in the underlying fundamental value of your investment and you're looking to make money over the long term not over the next six months not over the next two years and so if that is your goal then you got to keep investing in your company your etf because you're investing for the long term not the short term here if you're looking to make money quicker if you're looking to be a trader then you've got to have your risk parameters in place what happens that you got to sell when are you going to sell if your company falls more than 10 you have to have the risk parameter in place if you tell yourself that you're going to sell after it goes down 10 percent you have to sell because just because you made a smart investment doesn't mean it's going to go up and so you just have to have your risk parameters in place and understand what rules you have set for yourself this is something you have to do before you actually start investing because if you start investing and then you start to set rules for yourself that oh i'll sell after i make a 30 profit or after i make a 50 profit then what ends up happening is your stock goes up 30 then you say hmm now maybe i'll sell it after 50 because now you're getting greedy you see the stock shooting straight up and you think it's not going to slow down i think it's going to go up 50 then at 50 you're gonna say you know what i'll sell it at 70 profit and then it goes up to 65 percent and you take it just a little bit more and now i'm gonna sell and that's when things turn around and now you start losing your profits and so you gotta have your parameters in place beforehand because when you start setting these parameters after you invest now the emotion kicks in you get greedy when things go up and you get emotional and you panic sell when things go down you got to know when do you sell when things go down and when do you sell when things go up when you're investing in real estate especially here you gotta know what your goals are for me i gotta make a minimum seven percent return and so when i look to invest in properties i'm looking for an area where money is flowing too so i can talk to the city i'll do whatever other research i gotta do to see where businesses are going if i find an area that i like that i think is going to be more valuable in the future then i'm going to look for properties that's going to make me a 7 return if it doesn't make me the 7 return i'm not interested i don't care what this property could be worth in the future because i'm not investing for appreciation i'm investing for cash flow now if i get appreciation that's great i want to find an area where the demand is going to go up because i want the rental values to continue to stay the same or go up so i want to make sure i can continue this appreciation and if i get the appreciation great but this is what i'm investing for not this when i'm investing in real estate so you got to understand the game before you start investing because if you're just throwing your money around hoping you make money well now you're the one that's losing money making everybody else money the fourth secret that you got to understand when it comes to building wealth with stocks and real estate is patience and i left everything here because you're going to understand how patience plays a part with this traders in the stock market and flippers and real estate make more money in the short term than investors do but over the long term the people that make the most money over the long term are the long term investors that's this is what you got to understand what game are you looking to play and how are you looking to play because if you're looking to build wealth over the long term and you're looking to do that passively you got to do this now you can make a lot of money here i'm not saying you can't make money here you can make a lot of money here but what you got to do is you got to take this money that you make here on the active side with your trading and you got to move it here into your long-term investments and so if you want to build wealth you have to understand that wealth is a long-term gain yes you're going to take your earned income and you're going to put it towards a passive income here if you want to amplify that you got to make more money one of the ways you can do that it's about trading money being a flipper now when you make this money here you got to understand that no market stays the same forever if you remember we had 2020 stock market crash which killed a lot of traders we had the 2008 real estate crash which killed a lot of flippers here so you got to understand yes there's a lot of risk here but you can make a lot of money very quickly and so once you make the money here you want to keep it which means you want to put it here because these investments are going to make you money over the long term and they're going to build you wealth for the rest of your life if you keep following that money here and here wealth is a long-term game this is a marathon right here this is something that you got to plan for the next 10 20 30 years these are sprints you can make a lot of money with these sprints but you got to put them somewhere safe which is the marathon and so you just got to understand the game which i just talked about and you got to understand that the most money is made over the long term over time because when you have time on your side and you have the patience to have time on your side now you're letting your money grow and you're letting your money compound which means your money is growing and the money your money made is going to be making you money and the money your money is money's made made is now working to make you more money your money is money's money you know what i'm trying to say and so it's all about compounding but that only happens if you have patience because the issue is we have a lot of people that are looking to make money very quickly i mean it's human nature who doesn't want to get rich quick but when you are constantly focused on just getting rich quick here and you do not have kind of that rational mind you're just kind of getting greedy because you're looking to make money quickly now you're more susceptible for things to go wrong and when things go wrong now you're going to be the one paying the price and so you got to understand what the game is and you got to understand if you want to build wealth over the long term you need the patience which takes time and the fifth secret that you got to understand is you got to go all in when the opportunity presents itself the common saying that everyone has is scared money don't make no money when you see an opportunity you have to be willing to jump on it if you're the one that's just scared sitting on the sidelines you're not going to make any money when the 2008 real estate crash happened i was squeezing every dime out of me to buy as much real estate as possible because i wanted to buy these properties at a discounted price when the 2020 stock market crash happened i was buying stocks every time that the stock market went lower because i knew that this was another great opportunity these things are going to happen again if you miss a 2008 real estate crash if you missed the 2020 stock market crash these things will happen again okay that's the way the market works our asset cycles are cyclical that's why they're called asset cycles you'll see times when real estate goes up you'll see times when the stock market goes up and you also see times when these things go down now this doesn't mean that you shouldn't buy them when things are going up you got to be strategic you got to be logical you should buy things when you see good deals because nobody can perfectly time the market nobody knows when things are going to go down nobody knows how far they're going to go down four but when you see an opportunity whether it's this way or this way you have to be willing to go all in okay you can read all the books you can watch all the youtube videos you can buy all the courses but if you're not willing to actually put your money to work you will never have a chance to become wealthy and the reason everyone's scared to do this is because they think what if i lose money now the easiest thing that you can do to get over that fear is just tell yourself you will lose money because the reality is yeah you know there will be times where you do lose money you're going to invest your money in the stock that you think is amazing and this stock is going to go under you're going to lose money you're going to lose money in the real estate market if you invest in real estate eventually i even talked about my worst real estate deal ever on youtube if you want to watch that video i'll link it for you in the description below but if you're going with the mindset that your invested money is now gone right as soon as you invest the money it just disappears you'll be more okay with things when they go wrong now you don't want to just keep losing money okay you will lose money eventually but you got to use them as kind of learning tools but you have to understand that yeah it's not going to be kind of riches overnight and there will be times where things go wrong but you have to be willing to put your money in and if you use this as a learning tool eventually you're going to make your money back plus more and the loss was just your tuition your kind of education fees to learn how to actually make money but the only way you can do that is if you actually put your money to work and if you take that risk because if you don't take any risk you're not going to make any money [Music] i have a feeling that if more people understood how debt worked then you'd have less people drowning in debt and living paycheck to paycheck when most of us think about what debt is we think that debt is just when you borrow money you go to the bank you borrow some money and now you got to pay this money back plus interest but if you think a little bit deeper what really is debt debt is when you take your future income and you spend it today and then when you pay this money back you have to spend your future income paying this money back so debt is just a way for you to take your future income and spend it right now and the price that you have to pay or the markup that you have to pay to spend your future income today is interest now debt at the end of the day is just a tool it is a tool that makes banks rich and it's a tool that makes the majority of people broke banks use debt to get rich because banks use debt as an asset because they lend this money out to people and then people have to pay the bank back plus interest so to the bank debt is an asset but to the majority people debt is a liability because now when the majority people borrow money they go out and they finance the car they buy themselves new clothes they go on a nice vacation and so they're using debt as a tool to buy things that are losing them money now there are ways for you to use debt without being a bank that will make you richer and you wealthier this is what investors do all the time an investor can use debt as a tool to buy an asset that's going to pay them with cash flow i'll give you a quick example let's say that this is an apartment complex and this apartment complex is on sale for 1 million and every single year this apartment complex generates a profit of 70 000 a year so these tenants pay rent and then you pay your taxes your insurance your maintenance your management and all the other fees not your debt fees but all the fees to run this apartment and there are 70 000 left in the bank account every single year because the department complex is making a profit now you might not have a million dollars sitting in your bank account to go out and buy this property but if you can use debt to go out and buy this property now you can be the owner of this property and you're going to have to pay some money to the bank now you might have to send the bank a 55 000 check every single year to own this property but you had 70 000 with a profit so now this other 15 000 difference is yours and you get to put that in your pocket so now you're using debt to produce cash flow and more profits and more money in your pocket because you're using debt to buy an asset that's making you money and if your apartment complex is in a good area and there's more money coming in this area and there's more demand in this area then maybe in a few years you'll be able to sell this apartment complex for 1.5 million dollars so now you use debt as a tool to buy real estate which is making you money every single month and if it's in a good area now you can sell this property for a big profit and this 500 000 profit is yours you can use debt to buy businesses some people and institutions use debt to invest their money into stocks and so there are ways to use debt to buy assets that are going to pay you but the majority people are using it the wrong way now if you've ever read any finance books or some investing books or watched youtube channels on investing you might have heard people talk about good debt and bad debt good debt is debt that you use like i just talked about to buy assets things that are going to make you money bad debt is what the majority people use debt for this is when you use that to buy a car or when you use that to finance your close or go on vacations that's bad debt because now you're using debt to buy liabilities i don't like to look at debt as good or bad at the end of the day debt is a tool even if you use debt to buy assets it can still turn bad if you don't know how to manage assets or if you don't know how to run your assets and so even though you use good debt that good debt can turn very sour very quickly if you don't know what you're doing so at the end of the day debt is a tool and the more debt you take on the more risk you take on and so that's something you just got to understand yes that can help you build wealth and become rich very quickly because you can amplify your buying power but if you don't know how to use your debt then you're going to be the one paying the price literally the topic that i really want to focus in on today is we have somewhere between 7 to 8 out of every 10 americans living paycheck to paycheck that means every time you make a hundred dollars a hundred dollars flows out this can be an issue if you're living paycheck to paycheck the wrong way because almost everybody is living paycheck to paycheck the wrong way and i'll explain what i mean in just a second but before i do that i need you to do me a quick favor and smash the thumbs up button below we live in a society where when people want something they want it now and when you want something now when you don't have the cash to buy it what do you do well you turn to your handy-dandy friend debt when you hear people say that americans are living paycheck to paycheck what that means is somebody is making three thousand dollars a month and then they're spending three thousand dollars a month or sometimes more on all of their expenses but just because somebody's living paycheck to paycheck doesn't necessarily mean it's a bad thing assuming you're doing paycheck to paycheck the right way the issue is nobody is doing paycheck to paycheck the right way except for a very few people so the issue with people living paycheck to paycheck is people are living paycheck to paycheck here on the liability side of the equation and they're not living paycheck to paycheck here on the asset side of the equation a liability is something that loses money this is what i've been talking about all video so your car your shoes your clothes your vacations these things are nice they make you look rich but they keep you broke if you buy something and it doesn't put more money back in your pocket it is a liability assets on the other hand are things that you buy for the sole purpose of making money so an asset might mean a stock it might mean real estate as an investment it might mean gold it might be commodities it might be cryptocurrency an asset is something that you're buying for the sole purpose of making money and so what wealthy people do is they take their money and they spend whatever money they can not here not on fancy cars not on gucci clothes not on things that'll make them look rich on instagram but they spend as much money as possible here on assets because assets are what make rich people rich and it's what keep wealthy people wealthy if you own assets that is what's gonna keep your wealth so when you hear that somebody is living paycheck to paycheck what that means is over here they're making three thousand dollars a month and the three thousand dollars a month is leaving right here all the three thousand dollars is leaving to go to your housing payment is leaving to go to your car payment your insurance payments your food payment your going out payment your entertainment costs and so you make three thousand dollars but all three thousand dollars go out over here but on the other side of things the good side of paycheck to paycheck is now let's say you make three thousand dollars a month and your living expenses are two thousand dollars a month and now you have an extra thousand dollars a month but you don't just sit on the extra thousand dollars a month you automatically invest a thousand dollars a month every single month and so you don't have this extra cash sitting in your bank account because you're living paycheck to paycheck technically not in the way that most people think about it but in the asset minority mindset way because now you make three thousand dollars and you automatically spend three thousand dollars you have two thousand dollars going to liabilities your cost of living and another one thousand dollars going towards your assets the problem that we really have as a society is when you hear that 78 of americans are living paycheck to paycheck all 78 of those people are living paycheck to paycheck here and so this is where we have to understand okay what is going on and how can we switch this so people can live paycheck to paycheck on this side of the equation by using the money to buy assets but the majority people just don't have the ability to do that because all their money is going here this is where you have to really fully understand the picture and really understand what's going on because if you ask the majority of people here why are you living paycheck to paycheck everybody will tell you that it is an income problem i am not making enough money if i just made more money if i made an extra 10 000 a year then i will have more money to put here but what we've seen happen time and time again is that as people make more money they don't have more money going here they just buy more of these because when you get that raise where you get that bonus where you get that promotion what do you do well now you got to celebrate you got to celebrate with a brand new car you got to celebrate with a new vacation you got to take your friends out to dinner and so what happens is people make more money but then suddenly their expenses go up just with their income this is where you have to really take a step back and understand what's going on because everybody's going to tell you that they're living paycheck to paycheck because they're not making enough money and now the amount of money you make is a factor and they can amplify how fast you become wealthy but it is not the sole factor making money how much money you make is the second part to becoming successful the first part you got to understand is how you spend the money that you make because if you have apple airpods and you're wearing lululemon leggings or you have the new apple macbook and you have all these nice things but you're still complaining about living paycheck to paycheck something's wrong with this picture here now look i know there are exceptions to this rule yes there are people that are living paycheck to paycheck that are working very hard that are living very frugally but there are also a lot of people that aren't there's a lot of people that are living paycheck to paycheck they have a lot of nice things they drive new cars they have a whole bunch of fancy things and they wonder why they don't have any money to put here so the first thing you got to do is you got to fix the mindset part of finances because you got to understand what is it that's keeping you broke because when your mindset is what's keeping you broke it doesn't matter how much money you make no matter how much money you make your expenses are going to go up just with it and so you're going to continue to be broke no matter how much money you make so the first thing you got to do is you got to fix your mindset and then you got to control your spending there's three things that i want you to do when it comes to controlling your spending first stop financing things if it does not pay you do not finance it the only exception to this is your house so no more going into credit card debt no more financing things with installment plans and payment plans no more buying things you cannot afford with cash second follow my rule of five if you cannot buy five of them you cannot afford one of them this is gonna help you control their spending because now you're gonna know what you can really afford because most people think that oh if i got a hundred dollars in my bank account i can go and spend a hundred dollars no if you only have a hundred dollars in your bank account you should not be spending a hundred dollars so the second thing you got to do is you got to follow my rule of five that way you can only buy things that you can afford because there's a difference between being able to buy things have been able to afford things and third you got to create a financial system for your money one of the easiest financial systems that you can follow is our 75 15 10 plan what that says is for every dollar that you earn 75 cents is the maximum you can spend 15 cents is the minimum you should be investing and 10 cents is the minimum you should be saving once you do that now yeah you can be living paycheck to paycheck because every dollar you're making has a purpose you don't want any dollars just sitting there kind of with a question mark over his head wondering how should i be spent no you got to be the master of your money you got to tell your money where to go and so now anytime you make a dollar have your dollar flow through the system so anytime you make a dollar 75 cents is the maximum you can spend on liabilities 15 cents is automatically going to be invested or it's going to be put aside to be invested and 10 cents is going towards your savings this is your emergency savings once you have a savings account built up put that money towards your investments as well once you do these three things now you're in the business of controlling your spending now you know what it means to live below your means now you know what you can afford and you're not spending all your money to finance things that you cannot afford remember debt is when you're using your future income to buy something today and so when you're using debt to buy something that's losing money you are spending tomorrow's money to finance today's lifestyle you don't need to be a math genius to know that that's a recipe for disaster once you got the mindset and the spending side of your equation in check that's when you can work to earn more money because now when you earn more money you already got a financial system and you already know how to use your money so you can send more money here before i talk about that if you do want to learn more about how to actually manage your money and use your money the right way our team put together an amazing pdf and you can download that pdf for free in the description below once you get to this point this is when earning more money is going to have the most effect because you know how to use your money before if you didn't know how to use your money the right way and you earn more money you're going to spend your money the same way you've been spending your money your whole life now that you have a system for your money you want to make sure you continue following this system as you make more money so if you get a ten thousand dollar raise or you get a bonus send this bonus through your financial system so on this bonus 75 cents is the maximum you can spend 15 cents is the minimum we should be investing and 10 cents is the minimum we should be saving when you do this now you're building a system where yeah you're still living paycheck to paycheck but your money is being used in a way that is going to continue building you wealth because now you're not spending all of your money here and you're not using tomorrow's money to finance more things here you're using your money in a way that's going to build you wealth because now you're spending some money here but you're also spending some money here and you're saving some money for emergencies if you want to use debt you can use debt here but you got to be strategic about it like i said in the beginning of this video debt is a tool and if you don't know how to use this tool the right way it can end up biting you in the you know what this is hard not only do you have to make financial sacrifices because now you might have to sacrifice a new car you might have to wait to go on a vacation you might not be buying all the nice clothes but you also have to deal with the mindset side of things because all of your friends and family are going to be wondering why you're driving a beat-up car and why you're wearing the same clothes you wore on instagram last week but if you don't want to live like the majority of people and you really want to start developing and living this minority mindset then you got to stop doing the things that kept you broke in the first place now before we get into the next clip i do want to let you know that if you are interested in learning more about money management and investing our team has put together an amazing guide that will walk you through the things you need to know about managing your money and starting to invest your money the right way that way you can build your wealth this guide is completely free when you sign up for our daily newsletter so if you want to download this free guide and start reading our daily newsletter i got the link to how you can download it for free in the description below [Music] if you really want to understand why the middle class is getting wiped out and why poor people and the people who are not financially educated are going to continue to become poorer we got to take a step back and really understand what causes poorness and poverty to begin with now i know that's a super deep question and we have systemic issues and we have political issues and we have geographic issues but if we just focus in on the financial side of things i want to read you this tweet by a professor from the osu entrepreneurship school who says what causes poverty nothing it is the original state the default and starting point the real question is what causes prosperity that's an interesting take on things and it's essentially saying that we're all born flat zero with nothing we're all born poor but how come some people become wealthy while other people don't nobody is born a millionaire as in creating millions of dollars of value sure maybe you have rich parents who give you a trust fund and as soon as you're born you're worth millions of dollars because your parents are rich but nobody comes out of the womb producing millions of dollars worth of value so if you jump a little bit deeper into that question of what creates wealth there are five things that create wealth i'm gonna go over these five things but before i do that i need you to do me a quick favor and smash that thumbs up button below if we stick with the assumption that everybody is born flat with nothing how do you become wealthy well the first way someone can become wealthy is if you were in the genetic lottery meaning you have rich parents and so yeah you're born with nothing but then mom and dad can transfer a million dollars into your account and boom you're a millionaire even though you haven't created any value so you know this is a portion of people it's not everybody but some people do become wealthy just because they were born into a rich family there's no control over which family you're born into you can't decide who your parents are we don't get to decide what our parents did or what our grandparents did but this is just the reality some people win the genetic lottery and because of that they're wealthy the second thing is just luck some people win the lottery some people go to the gas station they pay two dollars for a powerball ticket and they win 24 million dollars some people are lucky in that sense and they become wealthy because of it and there's a lot of different kind of layers of luck because even beyond just winning the lottery if you live in a first world country and you can speak and understand what i'm saying and you have access to the internet you have access to running water you have access to shelter you don't have to worry about bombs flying over your head that's also another form of luck and so there's a whole bunch of different layers of luck but people can become wealthy just because of luck if you go out and you go to the casino or if you go out and win the lottery and these things could put millions of dollars in your lap now again is that likely no but it is possible and some people become wealthy because of luck third is hard work this one works most effectively when you couple it with number five financial education but some people are going to work two or three jobs and they're gonna bust their butt and they're not gonna spend any money and they're gonna work really hard to make as much money as possible that way they can become wealthy and they're going to take all of the extra money that they have and invest it that's why some people can work minimum wage jobs and retire very wealthy while other people retire broke because some people are willing to put in a crazy sacrifice for decades in their lives well they are living off of very little and they're investing every penny that they can because they want to become wealthy and they're busting their butt not getting any sleep working very hard to become wealthy now again if you have the right financial education it becomes much easier but some people do become wealthy just because of the efforts that they put in it is very hard to become wealthy just because of your labor and your efforts but some people do do that the fourth way and probably the most common way that people become wealthy is again a combination of four and five but it goes into education i'm speaking more of kind of like your traditional education where now you go and become a doctor you can become attorney an accountant you earn this really high salary and if you have the right financial education then now you're going to use this high salary as a tool where now you have a lot of money that you can invest and save that way you can become wealthy and that's why a lot of people say that education is the route out of poverty but if you don't have education with financial education then education can just put you into a deep spiral of debt because now you go and become a doctor and you have two hundred thousand dollars with the student loans and as soon as you start making this doctor's salary if you start enjoying this doctor lifestyle with the nice cars and the nice vacations and the nice clothing then you could be broke for the rest of your life so again this is why number five is really important with number four just like it's important with number three and if you want to keep your money here and here you got to have financial education as well but you can become wealthy if you have good education because that can help you make a better salary and if you have a better salary you know how to do with your money then you can become wealthy you don't need a doctor's salary to become wealthy if you're working hard at your job and you have financial education you can become wealthy you just got to understand number five which is the fifth way that you can become wealthy which is really a part of three and four but it's using your money as a tool instead of just spending all of the money you get because the whole idea of financial education is understanding how to use your money instead of just making money and then wondering where all your money went because at the end of the day it doesn't matter how much money you make it doesn't matter if you're born a millionaire it doesn't matter if you win a million dollars it doesn't matter if you make a lot of money because you work a lot of jobs and it doesn't matter if you're a doctor if you don't have the right financial education it doesn't matter you're not going to be able to keep your wealth because you don't know what to do with the money you make so at the core it doesn't really matter how much money you make if you have financial education you can become wealthy if you don't have financial education you never have a shot at becoming or i guess keeping your wealth because you can win the genetic lottery and you can win the lottery without producing a lot of value to make money but you're not going to keep that money unless you got the financial education now if we go back to the original assumption that everybody's born as zero and starts at zero that doesn't mean that everybody has to put in the same amount of effort or has the same effort required to get to wealth because everyone's gonna have a different path people are gonna have access to different resources people are gonna have access to different connections people are gonna have different parents people are going to have access to different things which makes the path to wealth a little bit easier i guess this kind of goes into the luck part over here like for my grandparents becoming wealthy was irrelevant because for them their goal was just to be able to survive because they were refugees when our home state of punjab which is in india was severed during the indian partition they had to literally run for their lives and so my grandfather had a sword and that's what he used to protect himself during this migration and he saw his own family members get killed right in front of him so for him there was no inclination or really stress or work to become wealthy it was just being able to survive because he lost everything he lost his family he lost his home he lost his land and so he had to start all over again and so for them it wasn't this path to wealth it was his path to survival when my parents immigrated to america they didn't know the language they didn't know the culture they didn't know the people and my dad said he had less than a hundred dollars when he came to america but he had to make it work and so now you're working off of hard work and education just so you can survive so assuming that everyone starts at zero these are the things that can build your wealth you can be born with rich parents you can be born lucky maybe you're born in a first world country you can speak english you have access to technology that's lucky even if you don't win the lottery it's lucky if you live in a first world country and you have access to running water and you don't have to worry about bombs flying over your head that's lucky now your path to wealth is a little bit easier than somebody who's living in a third world country that can't speak english that doesn't have access to the internet that's worried about a bomb flying over their head so you got a little bit of element of luck there too your hard work your education your financial education these are the things that can help you become wealthy and the things that kind of destroy wealth are now especially lack of financial education this is one of the most prominent things that you see happen in first world countries because now you have so much money and you have so much access to credit and everybody has all these nice things so what do you do well you use tomorrow's income to finance today's lifestyle with debt and now you're living paycheck to paycheck because you're financing everything you have a brand new car that you financed you have new airpods you have lululemon leggings you have 20 000 with the credit card debt you have 60 000 with the student loans just because you think this is normal because everybody else keeps spending money and has all these nice things so you think you should do it too and you don't understand the real cost of this and you don't understand how you can use your money the right way now of course even the first world countries there are other things that can destroy your opportunity to become wealthy like having a poor mindset if you don't have a good mindset you have just destroyed all chance that you had to become wealthy unless you went here or here but if you don't have a good mindset i mean that is the foundation to become a wealthy that's why we are the minority mindset because it's about the mindset of thinking differently than the majority of people which is why if you haven't subscribed to our youtube channel yet you should do that but the reason why this is so important to understand now than ever before is because we're in a society where the rich and the financially educated are becoming richer while the middle class is getting wiped out and the poor is becoming poorer thanks to two things the first is cheap debt and when i say cheap debt i mean first that it is very cheap for you to go out and borrow money so if you want to go and buy a home or if you want to go and put more money on your credit card it is very cheap to do that and the second part of cheap debt is that it is very easy for you to go out and qualify for more debt this cheap and easy access to debt makes a lack of financial education so much more painful now because we're seeing a whole new generation of people that are just racking up debt using their debt this cheap debt to buy things that are not paying them because it is now so easy to go into debt back in the day the worst kind of debt was credit card debt because with credit card debt you would have to go to the store and you could swipe your card and you didn't realize how much money you were spending so if you were bad with your money and you didn't know how to spend your money having a credit card was kind of like adding fuel to the fire because now anytime you shopped now you were more likely to spend more money than you had now we're seeing this problem become a whole lot worse because you can just shop online and so instead of having to drive to the store to spend money off your credit card you have one click push to buy and so you can rack up this credit card debt without even realizing it and it is so much more easy to go into credit card debt but even worse than that we have a whole new kind of online programs to help people buy now and pay later or as i like to call it broke now broke later because you have all these programs like a firm and after pay which allow you to shop online at your favorite e-commerce stores and when you go to the checkout page they say hey instead of paying this hundred dollars right now do you want to pay it off in installments and so we have this kind of whole new generation of people that are entering this whole new world of buying out pay later because we have never really experienced the real cost and effects of this yet like with credit cards we know that credit cards is expensive we know that credit cards can be dangerous if we don't know how to use them but if you know how to use credit cards they can be a great tool now with these buy now and pay later programs it is very easy for people to get access to money that's not theirs to buy things that they don't need and to buy things that are not paying them and beyond just that because interest rates are so low you have so many people borrowing money or pulling money out of their homes because they're thinking wow interest rates are so cheap so might as well pull some new equity out of my home because home prices have been shooting up and so people are just pulling cash out of their homes that way they have more money to spend now refinancing on your mortgage is a great idea especially when interest rates fall because now you can save a whole lot of money in your mortgage just by getting a new cheaper mortgage but when you're pulling out equity in your home this is kind of like imaginary money because the real value of your home is not what an appraiser thinks your home is worth it's what someone's actually willing to pay for your home and so now you have a whole kind of industry of people that are pulling out cash out of their homes because interest rates are so low and they're using this cash to go out and shop mortgage debt might not be as expensive as credit card debt but now we have all these people that are going into debt because debt is so cheap and they're using this money to shop and at the same time it is easy to access this debt so we have so many people borrowing money to buy things that are not paying them wealthy people and the financially educated don't do that they're not going into debt to finance their vacation to cancun they're using that if at all they're using that to buy assets which make them money because now you're using the bank's money which is cheap and you're using this bank's money to make you more money the majority of people when they're going into debt they're using this money to buy things that make them look rich vacations clothes cars these things make you look rich but they keep you broke wealthy people and rich people if they use debt they're using it as a tool to buy assets which are cash flowing which are making them money while the majority of people are not and so you have this whole kind of group of people this majority of people that are going deeper and deeper into debt to buy things that are making the broker while they're financially educated are using this cheap debt to make them richer and so this is the first thing while you're seeing this bigger divide between the rich and the poor because there's such easy access to debt and so rich people are using this easy access to debt to become richer and the poor and the financially educated are using this easy access to debt to buy things that are making them poorer the second reason why you're seeing a bigger divide between the rich and the poor is because of inflation after the 2008 crash happened you saw so much money printing happened in 2008 and 2009 and when this money printing happened that devalues our dollar and then when the 2020 pandemic and recession hit you saw even more money printed in 2020 and 2021 which caused even more devaluation of the dollar every time you print more money the value of the dollars that you're working hard to earn and the value of the dollars that you're working hard to save goes down because our dollars kind of run like supply and demand when you have more dollars in the world the value of each dollar that you have doesn't have as much buying power and so as more and more money is printed the value of each dollar that you hold goes down so the whole idea behind inflation is as more money is printed the value of your dollars go down which makes the price of everything else your rent your groceries your vocations your hospital bills go up and it's kind of funny and sad at the same time because the federal reserve bank comes out and they say that inflation is not that bad and so they're working to increase inflation while at the same time we have a whole generation of people that can't even afford their housing payments sure maybe on your projections and inflation charts inflation might not look so bad but if you look at reality not just in theory but reality the real life that people are living people cannot afford their cost of living because housing prices keep going up and your groceries keep going up while wages don't keep up and so we have a whole generation of people that are really struggling to survive financially because we have the cost of living going up we have the standard of living going up with wages that are not going up and we don't have any financial education because none of us go to school learning about how to manage our money none of us go to school learning about how to invest or how to build their wealth but if we did then a lot of people probably would be using their money very differently because if people understood about how money worked and people understood about how inflation worked if people understood about how debt worked then chances are you wouldn't see so many people racking up credit card debt to have the newest shoes to have the newest clothes and you'd have more people put the money aside to invest because when you invest your money in assets like a rich people and financially educated people are doing now your money is growing with or faster than inflation that way you can become wealthier as inflation happens because the federal reserve bank has made it very clear that they are actively working to increase inflation as they increase inflation who pays the price the poor and the middle class well the middle class is getting wiped out but the poor are the people that pay the price because now your rent goes even higher your groceries go even higher your vocation costs go even higher and your wages may or may not keep up and so the poor are paying the price because it's kind of like a hidden tax the cost of everything goes up but you don't have enough dollars to pay for everything while the financially educated are benefiting because now if you own the assets the price of your assets and your investments are going up with or faster than inflation and so this is where financial education becomes so important because if you understand this you can use your money as a tool to make you wealthier if you don't understand this well now you're just a pawn in the game that's making everybody else rich cheap and easy access to debt with rising inflation is not a good combination for the majority of people because we lack this financial education in our society it is becoming so important because these things are going to continue to get worse and every time you see the government come in and print more money you see more inflation happen and every time you see this easy access to debt you're going to see more people go deeper into debt and so we're creating this really bad kind of vicious financial cycle where the only people that are going to be able to break out of the cycle are the people that really understand money because if you don't understand how money works you're going to continue spinning your wheels and you're going to continue wondering why is it that you can't get off of this hamster wheel you just keep spinning your wheels faster and faster and faster and you're not getting anywhere financially the only way out of this mess is really financial education because now you can understand how to use your money the right way you can understand how to invest your money you can understand how to grow your money if you enjoy this video here's a video on investing that i think you'll love and while you're at it download our free money management and investing pdf and as always keep hustling so if you really want to become wealthy you got to understand it and you got to stop hating people from becoming wealthy and understand the game and win at the game now if you don't like the system then what you should do is become wealthy and then use your wealth to give back and help other people

Channel: Minority Mindset

Views: 146,382

Keywords: minoritymindset, minority mindset, minority123, jaspreet singh, rethink rich, financial education, financial literacy, money management, investing, stock market, stock market investing, real estate, real estate investing, bitcoin, build wealth, passive income, financial freedom, crypto, stocks, investing in stocks, invest in real estate, dividends, how to invest, how to invest in real estate, how to invest in stocks, stock market 101

Id: oA9XCecYQQI

Length: 103min 44sec (6224 seconds)

Published: Sun Jun 27 2021