The Middle Class Is Getting WIPED OUT

like people have so much money that they have the ability to go into debt to buy the newest airpods and then you see a huge chunk of the country lose their life savings they lose their investments if you buy a gold bar and you put it in a vault it just sits there and stares back at you what's up everybody i'm justin singh from the minoritymindset.com where money minds read the rich you hear all over the time in the news the rich are getting richer and the poor are getting poorer the middle class is getting wiped out and the ultra elite the ultra wealthy owned the vast majority of the wealth in the world well in this video i'll put together some of our best clips that will walk you through what's going on and why the middle class is shrinking and what you can do about it that way you can earn your share of the wealth so let's jump right into it 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 the 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 gonna 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 the 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 gotta 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 at 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 going to have a different path people are going to have access to different resources people are going to have access to different connections people are going to 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 got 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 twenty thousand dollars with the credit card debt you have sixty thousand dollars 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 in 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 win 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 this 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 shop 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 data 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 interests 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 debt 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 vocations 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 why 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 vacations your hospital bills go up and it's kind of funny and sad at the same time because the federator 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 our 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 now before i get into the next clip i do want to let you know that if you are interested in learning more about how you can start generating passive income either by just investing your time or by investing your money and your time our team has put together an amazing guide that will walk you through different passive income strategies that way you can create new streams of income today either completely passively or kind of passively this guide is completely free and you can download our guide on passive income and start reading it when you subscribe to our daily newsletter so if you want to read our free guide on passive income i'll put the link to hike and download the guide in the description below there's one concept that the majority of people do not understand that it's keeping the majority of people broke and it's the reason why the poor keep getting poorer and that's why the middle class is getting wiped out and it's probably not what you think inflation investing financial education all three of these things are very important when it comes to your financial success and these are three things that the majority people tend not to understand but that's not what i'm talking about in today's video the thing that i want to talk about in today's video is the term fiduciary duty now this might be something you may have heard of may not have heard of but this single term right here is why the middle class is being wiped out because the majority of people do not understand how this term plays an effect on their lives the first time i learned about the term fiduciary duty was back when i was in law school because attorneys have a fiduciary duty towards their clients so if you hire me as your attorney and you give me some confidential information like you stole some money from somebody and you tell me this i'm not supposed to go out and tell the police i'm supposed to represent you and give you some good legal advice the whole idea with that is it's supposed to incentivize you to be honest with your attorney now you don't got to worry about doing that with me because i don't practice as an attorney which is why i am not your attorney but the reason why this term is so important for you to understand is because you need to understand how this plays effect with how much money you're making here's the thing we live in a society where the majority people live paycheck to paycheck the majority of people have virtually no savings and the majority people have virtually no investments and this is where so many people say that they deserve to be paid more money from their company walmart and mcdonald's make billions of dollars a year in profit they have the resources and the means to pay their employees a more livable wage but they don't you've heard people say this again and again and again but the thing you need to understand about this is fiduciary duty this is why so many people end up getting screwed by the system because they don't understand how this works let me show you what i mean so over here we have company x and this company can be walmart mcdonald's whatever company you want and the people that run the company the people that make the kind of the day-to-day decisions and the big level are your company executives so i'll put executives here this is the people like your ceo your cfos your ceo your high company executives and these are the people that tell your kind of your daily employees your people that do the cashier the people that flip the burgers these are the people that kind of decide how much money these people make and this is where everyone says well the executives and the company are making billions of dollars how come they don't send some more money out to their employees well what you have to understand is who are these executives reporting to right who do the executives have a fiduciary duty to do they have a fiduciary duty to take care of their employees first do they have a fiduciary duty to take care of their customers first or who do they have to take care of first well neither of the above the executives have a fiduciary duty not to their employees they have a fiduciary duty not to their customers they have a fiduciary duty over here to their shareholders the people that own shares of this company so if this is mcdonald's these are the people that own the mcdonald's company because the people that run mcdonald's are different than the people that own mcdonald's the people that own mcdonald's are people that own shares in the company so this might be some of the executives but the other people that own shares in mcdonald's are the big investors in mcdonald's this can also mean people like you if you own shares in the mcdonald's stock or the walmart stock if you own stock in the company you are one of the shareholders of the company now the executives have a fiduciary duty to make you the shareholder the most money they don't have a fiduciary duty to pay their employees the most money this is where everybody gets things confused and this is why everyone gets upset because they don't understand how the system works they say i'm working so hard for this company and i'm making this company so much money how come they don't pay me more money well it's because you have produced a certain value and now because you produce that value this company is making a bigger profit and this profit goes not just to the executives but to the shareholders the people that own the company and who is the fiduciary duty of the executives to well to the shareholders not to the employees and so people say well they should pay me more money well that's not how the system works the fiduciary duty goes to the shareholders now i'm not saying this is right i'm saying this is how the system works because the majority people don't understand this in your newer companies and your startup and growth companies you see kind of a different dynamic just because people want to have a different company culture like in our company minority mindset we have a different type of structure where when a company makes more money everybody makes more money because we have a revenue share program where as the company grows everybody grows with it but in your more traditional companies this is where so many people end up getting the short end of the stick just because they keep asking for more money and they don't understand why they don't get more money it's because they don't understand where they lie in this fiduciary duty system you're over here the goal for the executives is to drive the most profits for the company which makes money for the shareholders it doesn't make money for the employees and so this is where everyone says pay us a better wage pay us a better wage pay us a better wage which sure makes sense and it'll make their employees feel good but a lot of companies are not running a company where executives have the goal of making their employees feel good a lot of companies are running with the whole idea of executives running a company to make their shareholders the biggest profit this is where some people make the argument that if executives just paid their employees more than their employees would have more livable wage they'd be happier they wouldn't have to stress so much and so they'd be able to do a better job at their work and if they do that then the shareholders will ultimately make more money because employees are doing a better job and yeah that is a fair argument and some executives see that while other executives don't the reality is that some companies look at their employees just as numbers i'm not saying this is right i'm saying this is what happens and so what they're doing is they're looking at the numbers and they're working to drive as much profits as possible are the employees they're trying to squeeze every dime that they can that way they can bring the most profits up here to the shareholders which is why i want you to understand how this works look you might not like me for saying this but i'm not the one who made the system i'm just telling you how it works that way you can understand why the majority people in the middle class are getting wiped out because they don't understand how the system works they're on the losing side of the equation because they keep thinking that executives are going to run the company in a way to make them feel good but executives have a different goal in mind their goal is to make shareholders rich not to make the employees rich and so this is where you're going to understand the dynamic and understand what's going on that way you can make decisions that will make yourself rich so how do you do that well you are right here but you also want to be here you also want to be on the shareholder side of things because now when you are the owner of production you own the means of value creation now you are also on the winning side of things because now you own the companies where these executives are driving the profits so if you're an employee somewhere how can you do that how can you be one of the people that owns the means of production that way you can benefit from the system but for one you can start by smashing the thumbs up button below and hitting the subscribe button because this is what we talk about all the time on our youtube channel but this is where you want to be a shareholder you want to own a piece of the companies that you like the simplest way to do that is to use your money to buy stocks in companies that you like on the stock market like you can use your money to go and buy shares in mcdonald's and walmart and chipotle and lululemon and apple and amazon whatever companies you like you can use your money so now you're working as an employee you can take your money put it in the stock market to buy shares in these companies now when you buy one share of the mcdonald's company you are one of the owners of the mcdonald's corporation so now you started off here and when you buy one share of the company you end up here now you're one of the shareholders when you work at the company you're right here you're helping to produce value which makes the shareholders rich now what you also want to do is you want to take your money here that way you can also be one of the people that are benefiting from the profits of the company the only way you can do that is if you're one of the owners of the company the way you do that is by buying some of the shares of this company on the stock market if you're not familiar with how to do that our team put together an amazing article that walks you through investing in the stock market how to find a stock brokerage and how it all works if you want to read the article i'll link it for you in the description below and it's on our website the minoritymindset.com the second thing you do is work to improve your skills that way you can start working for one of the smaller kind of startup companies where you get paid not just a salary but maybe you get a revenue share bonus or you get some equity in the company that way as the company makes more money you get a piece of the pie as well because now you're working to grab some of this you're working to grab some of the profits so you got your salary but now as the company makes more money so do you option number three is you can go out and you can start your own company because now when you do that you own 100 of this new company that you started but it's not for everybody i know they make it seem very easy on the internet we're starting a company as a breeze but starting a company and building a sustainable business is not easy it's not for everyone and it requires a lot of work now that you understand how the system works let me explain why the rich will continue to get richer the poor will get poorer and the middle class will get wiped out because this is kind of just the foundation for why that happens the rich are the people that own the means of production they are these people right here shareholders it all starts with the mindset because anybody can own the means of production by owning shares in companies but when people talk about the rich that's what they're talking about they're talking about asset owners they're talking about the investors they're talking about the shareholders so rich people own the means of production while the middle class are your high income earners and your poor are your low income earners and so now what's happening is we are entering a society where our dollars are being devalued the government is working with the federal reserve bank to print dollars on command and the value of our dollars are dropping like a rock and so what's happening now your middle class earners and your poor people who are earning these dollars working very hard to save money who think they're doing the right thing are becoming poorer and poorer because the dollars you're working so hard to earn and the dollars are working so hard to save are not having as much buying power and they don't stretch as far and so now when you want to go grocery shopping or you want to go on a vacation or you want to buy a nice gift for your spouse you need more dollars in order to do that because your dollars don't have as much buying power as it did before so now you're working really hard to earn this paycheck and they're working really hard to save this money but your dollars aren't as strong as they were and they don't have as much buying power but at the same time the rich continue to become richer because the rich own the means of production and so now as more dollars are printed and they're entering our economic circulation whether it's through stimulus programs or bailouts or stimulus checks or whatever the government and the federal reserve bank create this money they inject it into our system and where does that money go well it goes into the hands of companies because even if you get a stimulus check or even if this money goes to businesses this money eventually will either stay at businesses or go back to businesses because when people who are not financially educated get money what do they do they go to walmart they go to amazon they go to kroger and they go spend this money so now the people who have all the money are the corporations the shareholders the rich the people that understand money well now the poor and the middle class are holding on to less dollars than they did before because these dollars have less buying power and so now the poor are becoming poorer because you're still working to just earn this paycheck which doesn't stretch as far the middle class is being wiped out because they keep thinking i'm earning this big paycheck how come i'm still poor hakama still can afford my dream lifestyle because my dollars can't stretch as far and the rich continue to become richer because they understand financial education they understand what they need to own they want to own the means of production they want to own the value creation they don't just want to spend all their money on liabilities fancy cars clothes shoes vacations they want to own the things that are going to make them money and so now the middle class and the upper middle class your high income earners your doctors your attorneys your accountants your engineers people who went to good schools and got good degrees your middle class and upper middle class are now getting wiped out if they are not asset owners or shareholders or investors because now you thought you did the right thing you got educated you have this good salary but your salary doesn't buy you the lifestyle that once did because your dollars don't stretch as far that's why your middle class is getting wiped out and the poor continue to get poorer because they're working hard to earn money and save all their money while your earnings and savings do not stretch as far and they don't understand why the executives do not pay them more it's because the fiduciary duty here is to these people not to these people this is where financial education is so important because now you got to understand how to use your money and your resources the right way because you want to understand how the system works that way you can win in the system instead of being one of the people that's getting abused by the system this system the way it works rewards those who are financially educated period doesn't matter what your job is or what your degree is or where you went to school or who your daddy is what matters is how financially educated you are because when you understand how money works and you understand how the system works now you understand what to do with your money when you get paid and when you know what to do with your money that's when your money can work hard to make you more money and to make you wealthier that way you aren't just a pawn in the system making everybody else rich and you understand how to make yourself wealthier in this situation and in the system that's what i want from you i want you to be financially educated that way you can become wealthy that way you can take care of your family that way you can take care of your community because these are things that we are not taught in school which is why you need to go out of your way and learn to be financially educated because no one's going to tell you this well i guess we do on a youtube channel but this is why it's so important for you to be financially educated because you want to stop being on the loose inside of the equation because you want to understand how the system works so you can win in the system [Music] when the united states enters into a recession like we saw happen in 2020 the government works with the federal reserve bank to do two things to help stimulate the economy first they cut interest rates and then they print money so the federal reserve bank is known as the central banking system in the united states and the thing that you really need to understand is that they're not a real bank where you can go to and deposit your money but what they do do is they control the monetary supply and they control interest rates in the united states and so when you enter into a recession one of the first things that the federal reserve bank will do is they will cut interest rates because that makes borrowing money cheaper see the thing is our whole economic system runs on spending so you go to work and you get a paycheck and now once you got this paycheck you have money to pay your rent you have money to go out and buy a car you have money to go shopping and you have money to go out to eat once you spend your paycheck now your landlord gets paid the car company got paid the shopping mall got paid and that restaurant got paid and now all of these companies have more money to hire more employees and grow their companies and make more money the more money that you spend the more money that someone else makes that's why a lot of people call the united states a consumerism culture because this whole country kind of relies on people spending their money but the interesting thing is we don't live in a cash-based society in the sense that people live off of how much money they make we live in a credit-based society where people don't spend how much money they have they spend how much money they can qualify for if you make four thousand dollars a month and let's assume that this is after taxes you might assume that the most you'll be able to spend every single month is four thousand dollars but that's not the case thanks to the help of credit and debt now instead of just spending four thousand dollars a month you might be spending five thousand dollars a month thanks to the help of mortgages and loans and credit cards this might not be good news for you as a consumer because if you don't understand how the system works and if you don't understand money then you might be drowning in debt and you might spend the rest of your life just paying off this debt but for the economic system this is great because in the economic marketplace in the economy nobody can tell the difference between debt and money because if you go to a restaurant and you spend a hundred dollars they don't know if this is a hundred dollars that you have in your bank account or if this is a hundred dollars that you're borrowing from your credit card to the restaurant that hundred dollars is a hundred dollars so now if you make four thousand dollars a month and you spend five thousand dollars every single month thanks to the help of debt and credit well now you are spending 25 percent more money or credit in this case but there's more money flowing in the economic system which means now you might be able to rent a better apartment you might be buying a better car you might be wearing better clothes and you might be eating at better restaurants and spending more money so as you spend more money the economy makes more money which helps the economic system grow i'm not saying this is right i'm just telling you how it works as soon as you enter into a recession the first thing that happens is people lose their jobs or wages get cut when that happens now people have less money to spend so if you have less money coming in now you don't have as much money to pay your landlord you can't buy as nice of a car you can't shop as much and you might not be eating out at restaurants which means these companies and these businesses are now going to be losing money and they're going to have less money to pay their employees they're going to have less money to invest in more stores and so these companies and businesses are going to struggle that's why as soon as you enter into a recession one of the first things that the federal reserve bank will do is they will slash interest rates because now when interest rates go down borrowing money becomes cheaper so people are more likely to go out and borrow more money and so you got to understand if wages go down the real money in the system goes down but interest rates go down now debt or credit in the system will go up which kind of helps balance out this kind of lack of money in the economy because in the economic system money and credit or debt is treated the exact same way and so to balance out this lack of money the federal reserve bank cuts interest rates which increases the amount of debt in the system which helps more money flow into our economic system because our whole economic system runs on spending and if people aren't spending money and the whole economic system suffers now i don't want to go too deep into how our economic system works in this video because i already made a video explaining all that so if you want to learn more about that i'll link a video where i explained it already in the description below the second thing that you'll see happen is the government will work with the federal reserve bank to print more money and inject this money into the economy in the form of stimulus checks or bailouts or other government investments to help get the economy moving in the case of the 2020 pandemic and recession we started by seeing donald trump signed a two trillion dollar stimulus package after he signed that historic stimulus plan then donald trump signed another 900 billion dollar stimulus plan and then after that joe biden came into office and he signed a 1.9 trillion dollar stimulus plan so we're talking about almost five trillion dollars with the stimulus packages that were passed between march 2020 and march 2021 to help stimulate the economy and this doesn't include all the money that the fed printed to bail out the stock market now before i get into what this means for you i need you to do me a quick favor and smash the thumbs up button below so the united states government passes like five trillion dollars worth of stimulus aid that way they can send this money out into the economy in the form of stimulus checks and grants and bailouts and other financial aid from the government but the thing that you have to understand here is the government didn't have five trillion dollars sitting in the baltimore i mean the united states government is drowning in debt and so to fund the stimulus the united states government has to work with the federal reserve bank who then prints this five trillion dollars and then the federal reserve bank loans this money to the government to give it to the government but then the government has to pay it back plus interest and then the government now has this cash that they can inject into the economy through the form of stimulus checks and grants and bailouts and other financial aid now to really understand the cost of what's going on let's take a step back away from the government away from the dollar away from money printing and let's think about starting a company let's assume that i am starting a mustache wax company and i'm starting this company with three other partners so i'm going to represent the ownership of this company with this bar and i'm going to assume that i own 200 shares of the company so this is me right here and my cousin let's call him bundy he owns 200 shares of the company and then person let's call it a owns 200 shares of the company and then person c also owns 200 shares of the company so right now all four of us owners are equal owners each one of us owned 25 of the company and we all share in the profits of the company 25 25 25 and 25. now if i wanted to go out and raise money and i wanted to use this one to help grow the company i could bring in another investor i'll put this in red so i'll call this person i so i might go on to shark tank and say all right i'm going to sell 20 of my company for 10 000 so i've gone to shark tank and i find this investor i and i want to sell them 20 of my company well in order for me to give them 20 of this company where is this equity these shares gonna come from one option is all of us can give this eye some of our shares but what you more commonly see happen is instead of people giving this person their shares more shares are created and so in this case i might get 200 shares which are now created essentially out of thin air so when this happens i gets now 20 of the company they get 200 shares and now all four of us had our ownership diluted before i owned 25 of the company because i was one of the four owners who owned 200 shares each but now i'm one of the five owners who owns 200 shares each which means i am now 20 owner of the company so my ownership was just diluted and if i want to maintain my ownership structure if i want to keep being a 25 owner then i'm gonna have to use more of my money to buy more shares of the company so maybe you have to come in here and buy another 50 or 100 shares of the company that way i can maintain a higher ownership structure so as more shares are created the original owners are now deluded in their ownership unless you go and buy more shares because when more investors come in more shares have to be created the whole idea behind me doing this as an entrepreneur here is i get to use this investors cash that way a company has more cash that we can invest and let's just say that when this investor came in our company was worth i forgot what i said earlier but let's just say it was worth fifty thousand dollars my goal now is to use this cash to get more sales to get more profits and maybe one day this company will be worth half a million dollars or a million dollars so my goal is to make the company more valuable by creating more value through the company the thing that i want you to remember is that as more shares are created in this company the original shareholders get their ownership diluted unless they go out and they buy more shares unless they accumulate more shares in the economy we see something very similar happened because now as more and more money is printed it's essentially like creating more shares and so what happens is the value of your dollar gets diluted here your value of ownership got diluted but now in the economic system the value of your dollars get diluted because each dollar that you have now doesn't have as much buying power and it doesn't stretch as far just because we have so many more dollars in circulation this is what inflation is so when you get a stimulus check or when a company gets a bailout is good temporarily because maybe you got some extra cash that you can go out to spend with right now but over the long term this has a very expensive consequence because over the long term the value of our dollars get diluted which means each dollar that you have saved doesn't have as much buying power and each dollar that you're working to earn doesn't stretch as far but it's not just the money printing that causes inflation lower interest rates causes inflation too because when you see lower interest rates what that causes is more money gets printed because when more people are going to the bank to borrow money more money gets created through banks through the federal reserve bank because when banks don't have enough money they go to the federal reserve bank to borrow more money and the federal reserve bank creates this money so as interest rates go lower more people go out to borrow money they might go out and get another mortgage they might go buy another car they could put more money in their credit card so more people are borrowing more money from banks which means banks go to the federal reserve bank which makes more money created and so as more money is created here and more money is created here more inflation happens which is interestingly exactly what the federal reserve bank wants now i should also mention that while inflation causes your house of living to go up it causes your rent to go up it causes your grocery prices to go up because their vacations don't become more expensive it also is supposed to make your wages go up but what we've seen happen over time is that yes while wages do go up with inflation it doesn't usually keep up with our cost of living and the standard of living so as more inflation happens you're gonna see things become more expensive and yeah while your wages might go up a little bit it doesn't keep up with the rising cost of living the most obvious losers here are the people that are just saving all of their money because your savings are getting eaten away by inflation it's also the people that are not financially educated because when you're not financially educated you're falling into the traps of just going deeper into debt to finance a whole bunch of things that don't make you any money while the financially educated and the wealthy are now using this system to buy more assets to buy more investments that are growing with inflation so you're seeing the rich get richer and the poor get poorer this again is why financial education is so important and if you haven't read our free money management pdf i'll put the link to where you can download it for free in the description below but the interesting thing about this is market watch has kind of made it apparent that this higher inflation is also bad for people nearing retirement essentially what this article says is that the people that are hit the hardest by higher inflation or none other than people that are entering retirement because when you are entering retirement the whole idea is you invest your money into things like stocks but as you get closer to retirement you're moving money out of stocks into safer investments like bonds and bank cds and things that give you kind of more fixed income because you want something more stable that you can rely on that way if a market crash happens your entire retirement is not dependent on this market crash and so if you are nearing retirement you kind of move your money towards the safer investments and so if you're in these fixed return investments as a retiree now the amount of money you're going to be making every single year is flat but if you have higher inflation then the cost of everything keeps going up and up and up so you're not making any more money but the cost of living keeps going up which is why it becomes harder and harder for people that are in retirement or near retirement to be able to survive the reason why this author brett arenz is worried is because inflation is ramping up he says that before the election happened before the 2020 election inflation was right around 1.6 percent now just a few months after the election is at 2.3 percent that might not seem like a super drastic increase in inflation but that's a 40 jump in inflation in just a few months the other thing that i want to mention about this 2.3 number is that it's really just an average that's not the real inflation rate that a lot of people are feeling because we have a whole generation of people that yeah might be facing this two and a half percent inflation but they can't afford housing they can't afford their groceries they can't afford basic living because real inflation is way more than two and a half percent a year but sticking with this article essentially what it's saying is that we have all these people in retirement or near retirement that have these fixed return assets and they're going to be the ones paying the price because the cost of living is going to keep going up and they're not going to be making any more money so he's essentially saying that you need to be financially educated and move your money into places that are going to grow with inflation because the cost of living is probably going to be a lot more in the future just like how a dollar in 1970 was worth way more than a dollar today well our dollar today is going to be worth way more than a dollar in 2050. so the whole issue in a nutshell is we have this recession and to combat this recession we're seeing lower interest rates and all this money printing which causes high inflation which is expensive not just for retirees but everybody who is not financially educated retirees are going to pay the most apparent price right now because a lot of retirees have this fixed income where the amount of money they make every single year isn't changing but at the same time the cost of living is going to keep going up and for younger people if you're not financially educated and you're saving all of your money or your income is not growing then you're also going to be paying the price because now well everybody else is going to be richer the cost of living is going to go up while you continue to become poorer lucky for you i do have a solution the first solution is if you haven't already make sure you subscribe to our youtube channel because we release financial education videos every single week but something a little bit more practical for your money is now you gotta understand what's going on which we have just talked about but second you need to take your money and put it in places that are going to grow with or faster than inflation that way you can kind of combat this new inflation that's happening there's a few different ways that you can beat inflation now this is a big argument and debate on wall street as to what is the safest way to beat inflation because everything has their own risks and i'm gonna go over all of these so one of them is tips gold real estate stocks cryptocurrency and businesses let's start with tips tips are treasury inflation protected securities and these are literally just investments they grow with inflation so you would buy tips if you just want your money to grow with inflation the whole idea being that you put your money here so that when inflation happens your money will grow with inflation you're not going to see your money grow faster than inflation it is just kind of a hedge against inflation because as inflation happens your money is supposed to grow with inflation in this investment so if you're just worried about the value of the dollar dropping and you don't really care about creating more value with your money and producing more money through that more value then tips might be a way to go gold on the other hand is a commodity so gold if you invest in physical gold you own something tangible physical that you can see feel and touch and there's a limited supply of gold in the world and gold does have some practical uses the whole idea here is that gold is supposed to be a hedge against inflation because there's a limited supply of gold in the world but there's not a limited supply of dollars so as more money your dollars are printed then the cost of gold will go up because the value of your dollars will drop but the thing about gold is again gold doesn't produce any more value if you buy a gold bar and you put it in a vault it just sits there and stares back at you it doesn't produce any more value so your goal here again is just to kind of meet or match inflation because gold is supposed to be a hedge against inflation the next option is real estate when i talk about real estate i mean real estate as an investment only rental properties when you buy real estate as an investment again you own something that you can see feel and touch but now you own something that's going to produce value because if you buy a home then this home produces value to somebody else a family because this family can live in your home and they might be paying you 1500 a month to live in your home now the interesting thing here is as more inflation happens and rental prices go up while your rent might go from fifteen hundred dollars a month to seventeen hundred dollars a month so as more inflation happens yeah you're gonna see your expenses and your taxes and your insurance might go up a little bit but at the same time to kind of combat that your rent would also go up as well and so you would be benefiting from this higher inflation because your rental prices would go up and if you are buying a property in a good area where there's more demand and more money is flowing then the property value would also be going up so not only would you see growing rental prices but you'd also be seeing appreciation and property values next is stocks because when you take your money and you put it in stocks now you are buying shares of companies that are now benefiting from inflation because if lululemon has to charge now five hundred dollars for pair leggings instead of two hundred dollars well now you are going to be on the beneficiary of this because now your company that you invested in assuming you invested in lululemon here is going to show bigger revenues and bigger profits just because a dollar figure of their products has gone up and so you now as the owner of this company would be on the beneficiary side because as more inflation happens you're going to see the prices of products being sold go up and if that happens to asset prices like stock prices will also go up and so you can be on the beneficiary side of that by owning stocks now this is where things get a little bit tricky because people at the same time are also worried about market crashes and so you have this kind of risk of higher inflation but what if stock prices crash or what if real estate prices crash because that is a concern well there's no perfect answer here because it's impossible to predict when a crash is going to happen and the best thing to do when the crash happens is to have some cash on the side and use this cash to come in and buy aggressively because when asset prices crash well then you can come in and buy these assets at a discounted price so another investment position is cash but cash doesn't protect you against inflation cash is just a good resource to have when markets crash because then you can use this cash to come in and buy more assets but cash doesn't protect you against inflation so it's a double-edged sword so yes you can rest here and here to help protect yourself against inflation but if a market crash happens that's when you want to have some cash that we can come in and buy even more cryptocurrency is really turning out to be like a new asset class and a lot of people are looking at cryptocurrency like a hedge against inflation but there is a lot of risk involved here because no one knows what the future will be for cryptocurrency i mean there's a lot of believers with cryptocurrency who think that this is going to be the future but you can't see the future until you're in the future and so there is some risk here but there is kind of the same benefits you get with gold because some cryptocurrencies have a limited supply and it really just comes down to how valuable and how usable cryptocurrency is because if cryptocurrency becomes a commonly used commodity then this kind of limited supply of cryptocurrency will help limit the inflation side of cryptocurrency and so yes it could be a hedge against inflation assuming that it becomes more usable and practical in the future and finally if you want to beat inflation another thing that you can do is invest your money into businesses instead of just stocks so this would be you going out and either starting your own business or investing in other companies that are not on the stock market actual companies because now as more inflation happens businesses would be able to now charge more for their products to now combat inflation and if you're the owner of the business well now you're on the winning side of inflation instead of being the person that just has to pay these higher products but again this all turns into a balance because if the cost of living goes up so much where people can't afford anything anymore well that's how you get into a big economic recession and a big economic depression and that happens when you see too much inflation to handle so the thing that i need you to understand is that the value of our dollars are going to drop our dollars are being diluted and so you need to do something you need to be first financially smart and not just spend every dollar that you have but now after you have this extra cash you just don't want to save it all yes you need some savings to protect you from an emergency but you want to be turning your cash your savings into something else you want to turn your savings into other investments that are going to grow with or faster than inflation that way as more inflation happens you were on the benefiting side because now you own the assets which are growing in price as more inflation happens [Music] if you are between the ages of the early 20s and the early 40s then chances are you've had to go through a lot of things financially that older people didn't have to deal with for one previous generations didn't have to drown in debt just to get a college degree and then when you got a job previous generations had something called job security because people would just work at the same job for 40 or 45 years and then previous generations never had to really worry about retirement because retirement was essentially spoon fed to you with the help of pensions and social security now pensions have become a thing of the past and social security social security is drying up now my goal is for you to make smart financial decisions today that way you can live your life the way you want tomorrow without relying on other people or the government to take care of you and the kind of crazy thing and sad thing and the thing that really just kills me to see is that although a lot of millennials and generations ears because it's even worse for generations of years although a lot of young people have started to understand that social security might not take care of them the way that they might expect you still have three honor for millennials that are expecting and hoping social security to take care of them when it comes time to retire news flash you do not want to rely on the government to take care of you but just breathe i've been paying social security taxes every time i get paid i should get paid back you're right you are investing your money into social security that way when it comes time for you to retire you can use this money and some because hopefully the government will invest this money the right way and give you more money when it comes time for you to retire so you have an income when you retire but the only issue with that is social security is drying up so your social security money that you're paying right now is paying for all the people to retire today is not going to be going to fund your retirement now this is not supposed to be a video about social security sorry about the rant what i want you to understand is that there are certain factors out there that are screwing millennials financially so you want to understand what the system is doing that way you can be smart with your money and build your wealth even though the majority of people keep getting screwed by the system but before we get into that i need you to do me a quick favor and smash that thumbs up button below there are four main ways that young people are getting screwed by the system through the education system to the cost of living through what's happening with savings accounts and what's going on with your investments i'm gonna first be talking about these four things once i finish up with that then i'm gonna be talking about what you need to do so let's start with number one education the system that pretty much all of us including me are taught is that you need to go to school then after you finish 12th grade it's time for you to go to college and then if you don't have the money to go to college if you don't have rich parents you got to take on some student debt to go to college and then after college if you really want to get an advanced degree you got to go and become a doctor a lawyer an engineer an accountant something like that you got to go and get a specialized degree and then you got to take out some more student loans to do that and once you got this specialized degree now you can enter the workforce with a mountain of student loans but now at least you can make a decent living i have some very strong opinions on this so hear me out my parents are traditional indian immigrants from a state in india called punjab and when they came here they wanted a better life for me and my brother my parents came to this country with next to nothing and they busted their butt that way me and my brother could have a better life now the way that most immigrants especially immigrants from india feel that you can have a better life is through education because if you can get educated if you can get a good degree if you can become a doctor now you can earn a good salary you'll be able to have bigger savings and you'll be able to live a good life financially now the issue that i have with education is that i went through a lot of schooling i finished up my 12 years of high school then i went to college after college i went to law school because i told my parents i didn't want to be a doctor and they were like no way we can't have that you gotta at least become an attorney so i went to law school got my law degree and well i don't really use my degrees the way most people would expect i have the same conversation with my uncles and aunts all the time i start off by talking about how school is done and then everybody says oh no school is not dumb you have to go to school to get your degree to become successful in life but the thing that i need to understand here is that education is the backbone to success school is not the only place you can get education and the issue with school isn't just school let me talk about this a little bit deeper i can pretty much guarantee that i would not be where i am today if it wasn't for the schooling that i went through now you might hear that and say wait how can you say that but then at the same time say these bad things about school well the value that i got from school wasn't in the classroom when i was in college i majored in a subset of psychology and i took a bunch of biology classes i took a bunch of psychology classes i took a bunch of physics classes i took a bunch of math classes and i honestly don't remember anything that i took for the last two years of my college degree when i was trying to find psychology classes to take the thing that i paid attention to was what room my class would be in because we had this one big lecture hall which had these really soft cushiony seats that kind of reclined and i knew that if i took a class there i could fall asleep in class most of my college classes were completely worthless now this is not to say that these classes were bad classes they just weren't for me i wasn't interested in them so i would just go there and take a nap it was a waste of money for me but there were some classes that i really really loved i took a class on real estate investing i took a class on marketing i loved those classes and they really got me thinking those were the classes that i paid attention in and i did really good in those classes i did pretty decent on my psychology classes that i slept through because i just learned how to study and i would cram all this information for the exam and then right after the exam all this information would just leave my mind so i don't remember anything that i learned in the vast majority of my classes but there's a few classes that i absolutely loved and i got a lot of value from those classes coupled that were the education that i got outside of the classroom because when i was in college that's when i got into entrepreneurship and i started a few businesses of my own and so i got to network with other entrepreneurs i got to start my businesses and i had this kind of cushion when i was starting my businesses because i was still in school so i didn't have the real pressure of making money tomorrow because i wasn't in the real world yet i was still in school so school had value for me but not in the traditional way the issue that i have with their education system is that our education system has not changed since the industrial revolution we still churn out educated students like we do factories you come in you sit in a classroom from nine to five and you read books you just kind of listen to whatever the teacher says and then you leave now obviously that's changing because of the pandemic with the work from home type of stuff but at the same time we haven't really changed the way that education works we need to if we want to be competitive in the world we need to promote innovation we need to promote creativity we need to promote sciences and maths the things that are actually going to keep us competitive as a country and as people instead of just farming our students just passing out these degrees our society has kind of built a stigma that this is the way that you need to become successful you need to go to school then you got to go to college then you get a higher level degree and then you can go out and enter the workforce and if you don't do that if you do something different then you're looked at as weird you're looked at as dumb you're looked at as broke but the reality is that there are so many other opportunities out there and we need more people to look at these opportunities so we as a society need to really start pushing and educating people about the different opportunities out there like trade schools and creative fields that way people have different opportunities because some people should not be going to school the way that they are they're just racking up a whole bunch of debt they're graduating school and then they're wondering what do i do now the average person in america graduates college with something like 40 000 of student loans you're 18 years old all of your friends are going to college all their teachers keep telling you to go to college all their friends keep telling me to go to college every aunts and uncles tell you to go to college and you have no idea what you want to do and so you just sign the paperwork for the student loans because you have no idea what 40 000 is actually gonna cost you and so you just go to college you start taking a bunch of classes you have a lot of fun because college is a lot of fun there's a lot of fun in college i had a great time in college but then you graduate college forty thousand dollars in debt later and now you're trying to figure out okay what am i good at what are my skill sets what kind of job can i get what kind of job should i get and now you enter the workforce you're making thirty thousand dollars a year you have forty thousand dollars with the student loans now you wanna go out and buy a car you wanna buy a home and you're trying to figure out how to make ends meet this doesn't mean that traditional schooling is useless if you want to become a doctor an attorney an accountant an engineer you have to go through schooling you have to get these degrees you have to get that education and we need these fields these are important for our society to function but we want to have the best people doing this we don't want people doing this who just want a big paycheck we want the people doing this who actually love what they do and i was going down the medical route for all the wrong reasons i was going down the medical route not because i loved medicine i mean i thought i loved medicine but the real thing that i loved the idea of was just being financially secure so i could take care of myself and so i can take care of my family but if you want to become a doctor an attorney an engineer an accountant whatever it is you should be doing this because you love what you do not just because you love the idea of the paycheck that you could get because we need people who are actually good at what they do and who love what they do not just crappy people in these positions who are trying to make a lot of money the reason why i keep hammering this point is because there are so many ways for you to become financially successful without having one of these degrees if you can have one of these degrees and you love what you do yes you can become very financially successful but that's not the only way to become financially successful you can do something else find something that you love and become very financially successful and be more fulfilled and do a better job at what you do if you just care about what you do and if you don't care about what you do and you're just doing it for a paycheck then you're doing it for all the wrong reasons you're hurting yourself and you're hurting your patients or your clients so when it comes to education the issue that young people have is right now everybody thinks that they need to go to college or everybody thinks that they need to get a higher degree that way they can be competitive in the workforce because everybody has a degree now you can compare that to the previous generations where very few people had a college degree and so one college didn't cost as much and second if you had a high school degree you were competitive if you had a college degree you were very competitive nowadays if you have a high school degree it doesn't really matter no one cares everybody has a high school degree if you have a college degree same thing everybody has a college degree now you need to have an extra layer of degrees or certificates to be competitive which is one of the reasons why it's costing more money in order for people to actually survive but now on top of that the price of education has skyrocketed partially due to the fact that the united states government will federally guarantee student loans so colleges heard that and they said oh so we can charge whatever we want and you the government will make sure that you loan students whatever money they need okay so then colleges started hiking up their tuition rates and now it is extremely expensive for someone to go to a four-year university and everybody feels that that is the only way that you can become financially successful so everybody's going to college just trying to figure out how they can get a degree and become successful you graduate school with tens of thousands of dollars with the student loans and then you enter the workforce with no idea of what you want to do or how you're going to make money we have to improve our education system if we want to continue to be competitive as a country because so many countries around the world are working on ways to innovate their education system and make the education system more accessible for people and to make their education more beneficial for their students and so us as a society we need to see reform and we need to see an improvement in the way that we educate our students because education is the backbone for success and we need to improve the type of education that we're giving our students so people can continue to stay competitive in the future the second way that young people keep getting screwed over by the system is because what we've seen happen decade over decade over a decade is that our paychecks get bigger which is good but the amount of buying power that our paychecks have keep getting smaller and so while it looks like you're making more money because the size of your paycheck is bigger you're actually broker than previous generations were before because the cost of living the price of everything keeps going up faster than your paycheck let's take a look at the numbers between 1970 and 2021 wages have gone up by around 800 percent now that looks good when you look at it by itself because it tells you that people are making more money now than they did about 50 years ago which is good but that's just looking at one side of the coin yeah you made more money but you also got to look at the expenses at the same time housing prices housing has gone up between 1970 2021 by 1500 percent your wages are not keeping up with the growth of housing costs the cost for you to go out and buy a car has gone up by around eleven hundred percent and that's not all what about health care health care costs have skyrocketed health care costs have gone up by just over 1500 percent between 1970 and 2021 now that 800 wage growth doesn't look as attractive when compared to all of your expenses but it's not just a higher cost of living it's also a higher standard of living because back in 1970 no one was buying an iphone no one bought a cell phone nobody bought lululemon leggings people weren't buying extra guac and so our standard living has gone up as well and so not only do we have a higher cost of living but now you gotta add a new cost because people gotta have all their electronics all their accessories their smart watches their smart tvs on all the other fancy technology that we have now in addition to the higher cost of living so how do you make up for this well one of the things that people are doing now to make up for this is two people are working in a household today unlike in the 1970s and before when you typically had a household with only one person living so you have two incomes now versus one income on top of that more and more people are attending to debt because if you want to keep affording life and you want to keep your standard of living by having all of your nice things and your two household income cannot afford it anymore well now what do you do you go to the bank you get a credit card you open up a line of credit and now you got some extra cash to go out and live a lifestyle and now you're playing the payments game where anytime you get paid you're using your money not to build your own wealth but to pay off all the things that you bought that you couldn't afford in the first place by the way if you're a money nerd and you're trying to figure out why the cost of living has skyrocketed so much well this has to do with the fact that around the 1970s that's when the united states dollar was taken off of the gold standard and that's when we started printing more money which caused more inflation which caused the value of our dollars to be diluted which made the price of everything else go up if you want to learn more about that and what has caused all this inflation over the last number of decades i already made a video where i talked about this and i will link that video for you in the description below the third reason why young people keep getting screwed over by the system is because of what's going on with our savings if you could believe this there were previous generations that became wealthy just by saving their money because savings accounts paid you a good enough interest rate where you don't have to rely on your investments if you just saved a little bit of money you were gonna be able to retire because now you had your savings and then you had pension and then you had social security nowadays we live in a society where if you can get a half of one percent interest a year on your savings account you were in the cream of the crop of savings accounts and you were getting some of the best interest rates out there most savings accounts right now are paying something closer to 0.1 if not 0.01 interest on their savings accounts which means if you are able to save up a million dollars and you save all one million dollars in your savings account your bank is gonna pay you a whole less than ten dollars a month in interest on your savings on a million dollars again just look at the numbers in the mid 1980s if you went to the bank and you put your money into a cd a certificate deposit whether it was a six month cd or a one year cd or a five year cd you could get more than a ten percent annual interest rate on your money from your cd this is just by saving your money in the bank you could get a 10 or 11 almost 12 interest rate a year on your cds now people can't even get that on their investments but before people could get that in the bank this is one of the most obvious places where people who are financially educated are being rewarded and the people who are not are being screwed again let's just look at the numbers if you go and you save all of your money at bank of america not only are they gonna charge you maintenance fees but they're gonna pay you 0.00 percent a year in interest on your savings but now if you took your money and you invested it into the bank of america stock they're going to pay you a 1.7 annual dividend because you invested in the bank of america company instead of keeping your money at the bank it's not just a bank of america let's took a jp morgan chase bank if you go and you save your money at chase bank they're going to pay you again 0.01 a year on your savings but if you invested your money into the jpmorgan chase bank stock now you own a piece of the bank and they're going to pay you a 2.2 annual dividend on your investment a dividend is a cash payment that a company will pay you just for investing in that company what this tells me is that these banks are making huge profits and if you're financially educated and if you invest your money into the banks as an owner of the company well now they're going to reward you for that but if you just save your money at the bank like the majority people do they're not going to reward you for that now of course when you invest your money into a stock that comes with more risk because when you invest into a stock the stock market could go down something could happen with that company and you could lose the value of your investment versus when you just save your money you don't have the same risk but you kind of ought to understand what's going on here banks are able to afford these huge dividend payments but they're not going to pay you the interest on your savings this is why again it pays to be financially educated and the people that are not financially educated keep getting screwed over by the system now by the way if you are interested in learning more about how you can actually build your financial education and learn how to manage your money the right way i'm not going to go over all that in this video but we do have a free pdf on money management and investing that will walk you through the financial education that you need that we all should have learned when we were in school if you want to download this pdf it's completely free when you sign up for a daily newsletter and i got the link to how you can download this pdf in the description below and the fourth way the young people have been screwed over by the system is through their investments so young people are fortunate or unfortunate because we have gone through two once in a lifetime crashes in just over one decade first we went through the 2008 real estate collapse this was a once in a lifetime crash where we almost saw the entire financial system come crumbling down and then things started to recover and then came the 2020 pandemic and recession which was again a once-in-a-lifetime type of crash and recession and so young people saw their life investments this other investments to saw their savings go at risk and they saw their investments get slashed in half almost overnight and what happens during these crashes as many people sell out of panic out of fear because many people are not financially educated and so many people lose a huge chunk of their life savings when these crashes happen and chances are we're not out of the water yet now one of the reasons why i said that young people are fortunate for these crashes is because the people that are financially educated kind of benefit when these type of crashes happen because market crashes and recessions are where more millionaires are born than any other time because that's when investments go on sale and so you can go out and you can buy investments and assets at a discounted price and now you can own way more investments and you don't have to put in all the money because everything is on sale the issue with that is that most people don't learn that until it's too late they see their investments go up and they feel great and then things come crashing down and then they panic and then they sell and then you see a huge chunk of the country lose their life savings they lose their investments because they didn't know how to manage their money the right way and so when we talk about investments everybody's told hey just invest your money into the 401k just invest your money in the market but they're never told how to manage their emotions they never told the risk management system they never told the psychology part of the investments and so you invest your money thinking that your investments are only going to go up because that's what everybody says everybody says that the stock market is going to grow by eight to ten percent a year and you think okay fine i'm gonna put my money in the market and then as soon as you start investing you might see some growth which makes you happy and then when things start coming down you don't know what to do and so when you see your portfolio in the red what do you do well you sell to cut your losses but now even if we take a step back and we look at our asset classes from a broader high level standpoint we are kind of on choppy waters as a country because we've been printing so much money our economy isn't as stable as it used to be and so we kind of see these huge wild swings in the market where back in the day you didn't see the same level of volatility that you see now i mean yeah you still had volatility back in the day everybody has seen volatility everybody has seen emotion in the markets everybody has seen market crashes these things have always been there and they will always be there but the level of volatility that we have now is much more than we have ever seen in the past and so if you don't have the financial education or the risk management or the psychology now as an investor you can really be the one paying the price because it can be very painful to see your portfolio in the red so now the question is at this point what do you do you're a young person that's working hard you're trying to save some money try to invest in your money what do you do to build your wealth well the first thing you got to do is you got to get financially educated you got to learn about money you got to learn how to save your money the right way you got to learn how to live below your means then you've got to understand how to invest your money what are stocks how does stock market investing actually work how do you analyze the company okay learn about real estate investing what is real estate investing how can you build cash flow through real estate investments and cryptocurrency because this is such a hot asset class right now you want to understand what you're investing in and you got to understand basic investing principles what is debt what is the cost of margin and if things go down what is going to happen because we have a lot of young people trading money investing money on margin who don't really understand the cost of this debt because if things slow down or if we see things come down then that can become very expensive the very first thing that you got to understand is that you need to have savings everybody needs to have money in the bank account to protect you from an emergency now i know i talked about the issues with savings earlier because savings accounts are paying you nothing but what you have to understand about your savings especially now is that your savings are not there to make you wealthy your savings are just there as a shield to protect you in case of an emergency so you got to have some savings and the only reason why you should be saving besides for an emergency is to make a big purchase like a house or a car or to save money to make an investment if you already have a year's worth of expenses saved in a savings account and this money is there for your emergencies and you don't have any big purchases coming up and you just keep saving your money not for an investment but just saving it because you think that's the best purpose for your money well now you're getting screwed over by the system because inflation is eating away at the value of your savings if you want to save money for an investment maybe you're worried about the price of assets maybe you can't find a good value asset maybe you don't know where to invest your money that's okay you can save this money until you're ready to invest but you gotta at least have that intention to invest this money next when it comes to your investments the next issue that a lot of people are making is they're investing their money based off of emotion based off of hype based off of what everybody else is doing instead of actually doing the analysis themselves right a lot of people have this feeling of how can i get rich quick with my investments what can i do with my money to double my money how can i get 100 returns of my money and these are the type of returns that are not sustainable so you got to be smart as an investor you got to know what your goals are and you do not want to be one of the people that is trading or investing on emotion because the people that make the most money over the long term the long term are the people that invest in financials not emotions emotions can make you a lot of money very quickly but you can also lose that money just as fast this is where again it pays to be financially educated this might not be the most attractive thing for you to do but this financial education is what will build your wealth over the long term not just the short term again if you want to learn more we have a free pdf that you can download in the description below we have tons of videos on our youtube channel and you can check out our website the minoritymindset.com because we're posting new articles every single day that will help you be better with your money now before i get into the next clip i do want to let you know that if you are interested in learning more about how you can start generating passive income either by just investing your time or by investing your money and your time our team has put together an amazing guide that will walk you through different passive income strategies that way you can create new streams of income today either completely passively or kind of passively this guide is completely free and you can download our guide on passive income and start reading it when you subscribe to our daily newsletter so if you want to read our free guide on passive income i'll put the link to hike and download the guide in the description below [Music] my family is from a state in india called punjab and punjab or the whole country of india is very different than the united states like our family home in punjab we don't have running water and electricity 24 hours a day the water gets shut off at around 11 a.m and then it comes back around 2 or 3 p.m and then sometimes it goes out in the evening again and so you don't have running water all day long you don't have electricity all day long and so when it's 110 degrees outside and when it's so humid that you feel like you can cut the air with a knife you don't have ac it's a very different lifestyle over there and it's very hard for someone to become very successful because you have a lot of government regulations which restrict you from doing that if you live in a first world country you can understand what i'm saying and you have access to technology which lets you watch this video then you're blessed you have everything that you need in order to become successful i guess the only thing you need besides that is the right mindset because if you have these things if you have the ability to watch this video if you have the technology to watch this and you live in a first world country where you have the ability to do that well now that with the right mindset gives you everything you need if you want to become successful but sometimes we don't realize how good we have it i was at the furniture store a couple weeks ago picking up some stuff and the salesperson was really cool i got to know him before he was a salesperson he used to be a teacher and he was talking to me about how kids don't realize how good they have it here because he was telling me how the students were given books and school supplies and if they didn't have money they were given lunch and they were given assistance and tutoring all these things were given to them but he felt like a lot of kids just didn't take advantage of it and according to him everyone just kept complaining including the kids parents this was interesting because my dad would give me the same talk all the time because when he grew up in india they had very little and so he would always talk about how spoiled i am in america because i have clothes i have shoes i have all these things and so the salesperson from liberia was telling me that when he was in school and even now he's like the kids weren't worried about books they weren't worried about all the stuff all they wanted was a pair of shoes because he was going to school barefoot because his family couldn't even afford shoes for him the united states of america is not perfect we have issues racism exists we have systemic issues our education system has issues but at the same time we are the richest country in the world and yet many times we use this as kind of like a smoke screen to create excuses as to why we cannot become successful because we weren't given some extra thing people are so rich in america that they are literally drowning in debt like people have so much money that they have the ability to go into debt to buy the newest airpods they have the ability to go into debt to buy the newest iphone they have the ability to go into debt to buy some lululemon leggings they have the ability to go into debt to buy a brand new tesla we have the ability to own all these nice things which make us look rich and feel cool and we have the ability to buy that but it's keeping so many people broke at the same time because we have so much money that we're just using it to buy all these things without really understanding what this money is one thing that's always been so crazy to me is we have people from around the world literally risking the lives to come to this opportunity because the united states is the land of opportunity and yet people here in this country that are complaining because they feel like they weren't given something while other people from around the world are literally willing to risk their life to be here to have the same opportunity people can be so rich in the united states that the thing that bugs us is how many likes we got on instagram here's the thing the way the united states economic system works is if you are willing to put in the work you can live an amazing life it doesn't matter what background you come from it doesn't matter where in the world you come from it doesn't matter what you look like if you are willing to put in the work you have the opportunity to succeed if you are not willing to put in the work you won't the way that the salesperson from liberia put it is that america is the poorest rich country in the world we are so rich in this country that we have the ability to complain and find issues in petty things because we're so rich and so we have the ability to complain about things that are really not that big of a deal in the grand scheme of the world but because we're so rich here that we can find issues and things that people on the other end of the world could never imagine that doesn't mean that the united states is perfect i mean the united states has things that it needs to work on like we have to work on a racism issue we have to work on our health care system we have to work on our education system we have to work on a systemic poverty issue these are things that our country has to work on but overall this is the best place in the world to be if you are willing to put in work and i think part of the problem here is our kind of culture and system though it works because we live in this fast food culture where when we have a problem we want an immediate solution and when you want an immediate solution what do we do well we try to find a cure to our symptoms instead of trying to actually fix the root cause of the problem if you go to the doctor right now and they do a checkup on you and they check your blood pressure and they say ooh you got some pretty high blood pressure here's some medication that you can take to bring your blood pressure back down what they're doing right now is they are treating the symptoms they're not treating the underlying cause they're not treating the issue that you've been eating at mcdonald's four days a week they're not hitting the issue that you're sitting on your butt all day every single day they're not treating the issue that you're not going to the gym right because it's easier to treat the symptoms than it is to actually treat the root cause of the problem because when someone goes into the doctor they got high blood pressure they got issues what's the doctor going to do they're going to give you some pills to help treat the symptoms to give you an immediate cure now this might seem a little bit crazy but how come when you go into the doctor and they find out you have high blood pressure they don't hook you up with a nutritionist and they don't require you to get a trainer and go to the gym three four five times a week to get healthy that way now you're working on your diet and you're working on the gym and maybe you need some medication too with that but now you're at least working to fix the root cause of the problem instead of just trying to treat the symptoms well there's a couple reasons why this doesn't happen firsthand is the consumer side of things because consumers want an immediate fix right it's the fast food culture where we're not willing to put in the work or wait a long time to see the results that we want and so it's much easier to just take a pill and the flip side is getting you to eat healthy and go to the gym is not as profitable as keeping you on pills for the rest of your life plus your insurance company is not going to cover your gym membership and your nutritionist and your trainer but they will cover your pills or at least a portion of it it's not just healthcare if you go to a bank and you open an account and now you get a credit card and you spend too much money and you spend more money than you have in your bank account what's going to happen well the bank is going to slap you with an overdraft fee if you do it again your bank's going to give you another overdraft fee maybe they're going to charge you a little bit more if you do it again they're going to give you another overdraft fee right it's just overdraft fee after overdraft free you have to order that free and then if you start spending money on your credit card that you don't have well the bank is then going to slap you with a 15 interest rate or 20 depending on what your credit card is and so when you do things wrong with money then you got to pay a fine instead of being educated i mean if i was king of the world i'm not but if i was king in the world what i would propose is that if somebody gets an overdraft fee or somebody gets behind on their credit card they should be required to go through a financial education curriculum that way they understand how to be better with their money like i got a ticket a few years ago and when i got the speeding ticket i had to go through like a three or four hour class on driver's training that way i could get these points removed off of the record and that would get this ticket erased but when i was speeding like five or seven miles over the limit i had to go through a full driver's training class but when somebody now is risking their financial life by spending too much money or spending money they don't have they don't get any of the financial education they just keep getting slapped with more fines and more fees and even if you don't require these classes at least give people the option to waive and overdraft fee if they take a financial education class these are things that i don't like about the system but this is where you have to be educated yourself that way you can take care of yourself because if you understand what's going on you can take care of yourself much better than the majority of people you know what while we're on this topic let me give you one more example about schooling because the way our school system works which is very outdated it's kind of like a factory right you go to school you sit in this classroom for eight hours a day and then after these eight hours you leave and you're taught to like just do assignments do specific tasks that the teacher gives you but we're not really taught to be creative we're not taught to think we're taught to just do specific tasks and it trains people to just do tasks and then what do you see happen you see every single president republican democrat it doesn't matter every single president talks about how they're going to bring manufacturing back to the united states which doesn't really make sense why do you want to bring manufacturing back when we can use our brains much better than just putting a disc inside of a box we have the brains and the technology to train robots to do that we don't need people to do that because us people are capable of so much more but a lot of us are not taught how to kind of unlock this potential and unleash its potential because we're all taught to kind of think small look this is not me hating on the manufacturing industry i have family and friends that work in factories i understand that there's a need because this is what people understand how to do but at the same time if we're thinking about the future generation if we're thinking about the future of our economy because our economy is getting old and if we want to stay the dominant force in the world we have to start being innovative and we have to start training people to be innovative because why would you want to expand your resources in this country when you could pay somebody else on the other end of the world a third to do the exact same job or you could just train a robot to do that we have to start training ourselves here to be more innovative to create more value to do bigger things instead of just the same old things that we've been doing for the last century this is where you can kind of start to decipher what's going on here because yes we have this very rich country but at the same time many people are not educated on how to take advantage of our system in this country because we're taught using our old education system that we've been doing for the past centuries which is becoming outdated today we have so much opportunity that's ripe and waiting to be seized and this is where you have to break away from the majority thinking and find it for yourself because unfortunately this is not what we're taught how to do but the reality is if you keep following the traditional path of complaining about the things you don't have of just living in debt for your whole life making everybody else around you rich you're just gonna be a pawn in this system i don't want you to be like that i want you to break away from that i mean that is why we call ourselves the minority mindset because i want you to start thinking different i want you to see the opportunity because yes we have a ton of opportunity then i want you to learn how to seize it that's where education comes in financial education is the big part that's what we talk about all the time on our youtube channel which is why if you haven't subscribed to our channel yet make sure you do that but also just understanding where the opportunity is right and so you have to understand what's going on and how to capitalize on it because we have more opportunities here than anywhere else in the world but you need to first understand that these opportunities exist and then you got to figure out how to seize it if you enjoyed this video here's a video on habits that keep people poor that i think you'll love and while you're at it download our free money management pdf and as always keep hustling 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 going to bust their butt and they're not going to spend any money

Channel: Minority Mindset

Views: 37,529

Keywords: minoritymindset, minority mindset, minority123, jaspreet singh, rethink rich, financial education, financial literacy, finances, stock market, stocks 101, how to invest, money management, investing 101, building wealth, how to manage money, financial advice, investing, buying stocks, housing market, inflation, wealth, passive income, personal finance

Id: 0lx5P4ae4xY

Length: 89min 56sec (5396 seconds)

Published: Sun Oct 10 2021