This Is Your LAST CHANCE To Get Rich In Upcoming RECESSION! | Jaspreet Singh

jasper is saying there are more millionaires made in a recession than any other time but my question is how and what can the average person do to take advantage of that moment or since i know the punch line really any moment and guys make sure that you stay till the end because i'm going to give you the eight things that i have learned from amazing answers from just breathe like you're about to hear all right so let me start with the simple answer and then we'll kind of break it down into more complex answer recessions create more millionaires than any other time like you said because when you have a recession a market crash people get scared and then they sell their assets what's an asset stocks real estate crypto gold it can be any type of investment depending on what the crash is what the recession is about and that then creates a buying opportunity for somebody who has access to cash or capital and somebody who is financially educated so if you have the cash you're prepared and you have the education of knowing what to buy but now a crash creates a discount for you to come in and buy an investment on sale you can think of it like black friday for investors you get to go shopping at a discounted price because now people are selling because they're scared and what you want to look for now is good investments that are being hurt not because their investment is on the verge of bankruptcy but because the economy is pushing the price of good investments down so that's kind of on a in a nutshell to answer your question what that means but now if we dive a little bit deeper we go a little bit higher level how do you do this what does it mean well if you ask the majority of people or if you just ask anybody is a recession a good thing or a bad thing most people are going to say it's a bad thing but it's really relative depending on which side of the equation that you're on see it's bad for so many people because recession means i might lose my job i might lose my home i might lose my savings so it's bad in that sense where if you're not prepared you might not be able to weather the storm and you might get financially hurt we've seen this happen for i mean forever now that anytime you see a bubble burst the people who are not financially educated the people who are not prepared the people who don't understand what's going on in the economy get burned i remember the first time it occurred to me i was like wait a second if i don't lose my job then a recession doesn't impact me now that was before i had any money invested so now i have a better understanding of if you're counting on income or whatever from your investments then it can still be a dicey period but that was one of those things like the a recession was a boogeyman it was like something to be afraid of i didn't really understand why i was supposed to be afraid and so my question is why do people get scared in a recession what is it that makes them sell i'll give you a very specific thing so in crypto i haven't even though the price is plummeted i haven't sold a single eath not a single satoshi i've just been holding not tense about it so why do so many people get scared in a recession so there's two reasons why someone sells either it's a forceful sale or it's a voluntary sale the voluntary sale is a little bit easier to understand so i'll explain that first so when the 2020 pandemic hit we saw the stock market crash now i think most of us understand crash has a definition by the way well yeah crash bear market is when you see the market fall by 20 or more now the stock market when the economy shut down in march of 2020 we saw the fastest stock market crash in the history of time now naturally people got scared faster than great depression whoa people got scared and i think most of us understand that your 401k for example is a retirement plan that you don't want to touch until you are near retirement what happened well we saw a massive amount of people sell out of their 401ks near the bottom of the 2020 stock market crash because they're convinced this is going to keep going lower and it's like i got to get out now you just see your portfolio in the red you lose 10 20 30 40 50 you get scared and you're like i want to save whatever money that i can because you don't understand what's going to happen i mean if you look at it from the last 100 years chart you'll see that crashes happen but then each time they happen our economy is stronger rebounds the market moves higher but we get this like narrow vision we're looking at today tomorrow the day after next week and now we want to pull out as fast as we can to save quote unquote save our money and so you sell so this is a voluntary sell where now you get scared you panic people talk about how the world is ending i mean the media is in the business of some hype okay it's as unfortunate as it is you have to understand this things are typically never as bad as they seem and things are typically never as good as they make it seem so it's typically somewhere in the middle and so now when you know that you'll understand that okay the stock market is a liquid investment meaning you can buy and sell a stock with the click of a button i can buy and sell a share of a company literally within two seconds and so what does that mean well if i start reading headlines i see the market going down and start getting this anxiety i started getting this fear i might just want to sell i mean i can do it in two buttons and if all my friends talk about how they're selling how they're losing money and the media keeps talking about how the market's collapsing the world is going to end because the media is either going to say the world is ending or nothing bad will ever happen right it's typically one of these two extremes because that's what drives and i want to get to that that's one of the things i'm going to push you on later is like i've heard you talk about this people lie a lot they do and then they come out and admit yeah we were lying but we had a reason but i won't derail this now but like that kind of stuff freaks me out and that's and it's the reality of life and we'll talk about that so now if you understand that what does that do it manipulates people's emotions emotions then drive our actions and what are these actions we sell at the bottom and then we buy at the top because at the top is the same thing people say oh everyone's making money on the stock you can't believe how much money these 17 year old kids from high school are making you can't believe how much this hedge fund made you can't believe how much money whatever your neighbor made and now you get jealous you get this fomo you don't want to miss out you come in and buy then at the bottom is the opposite of motion so that's the voluntary stealth because most of us don't have the psychology which is a part of the financial education of how to manage our investments the second is the forceful sale now the simplest example that i can give you of this will be if we backtrack look back to the 2008 real estate crash now if you bought a home for four hundred thousand dollars and you had a adjustable rate mortgage which was very common back then and it's getting common again it is getting very common again which is very bad news but they were very common and another thing that was very common back then was a zero percent down payment but let's assume we put a little bit of money down because you were you wanted to put some skin in the game so you put a little bit of money down you put three to five percent maybe ten percent down well what happened was a few years after you bought the home interest rates went up and now you realize really fast i want to walk people through what an arm is an adjustable rate mortgage i had one if i had known how dicey talked about would not have done it so an adjustable rate mortgage you're basically betting that the future is going to be better than the current moment so you take something with uh a a certain interest rate and you're like okay i'm going to be able to refinance either the value of my home is going to go up or interest rates are going to come down whatever but i'm going to be able to refinance my home so the story goes or i'm going to be able to pay it off whatever before that huge increase and you are betting literally your house that you're going to be able to either make enough money to cover the increase or that you'll be able to sell your house at a price that you like or be able to refinance it before that happens exactly it's so dicey so people end up getting in these insane situations that tends to go along with when people are getting pretty loose and fast about not expecting as much money up front so now you don't have any equity in the property you get upside down meaning that the house is worth less than you owe so even if you sold it you're going to be selling it for a loss and so now you're in this really dark spot where you can't sell it the interest rate just jumped sometimes dramatically right and so now you owe significantly more i mean it could be 50 more a hundred percent more and you're just in a really big you can't get out from under it unless you just let them foreclose on you right or you have to find a way to pay that money and it is speaking from experience i was so convinced that my life would be in a fundamentally different place right than it was when i took it so i put a five-year bet on myself and dude it ended up working but oh my god in the intervening five years i became so much more financially literate that i was like what was i doing like that was the most dangerous thing i could have possibly done it's a very dangerous vehicle when it's given with no financial education and the problem is it's not given with any financial education because see a banker so i'm gonna just explain this for a second a banker is in the business of making money how do they make money by selling you money so they're trying to sell you as many loans as possible and now if you're looking at this 400 000 home well let's just assume for rough numbers that the mortgage on this 400 000 home is 2 000 a month and you might see i'm kind of stretching myself a little thin but i want to own this home the banker doesn't want you to not buy the home because if you don't buy the home they don't get paid so now what they can do is say well how about you buy this four hundred thousand dollar home you don't pay two grand a month but instead you just pay nine hundred dollars a month off are you telling me i can buy this four hundred thousand dollar home for nine hundred dollars a month with nothing down yeah how about you have this free tv as well because there was promotions back then where they would give you a free tv you literally put no money down now you can buy this home and so what was happening is people were buying these types of homes with these types of deals thinking they have this amazing price 900 a month and it was given with zero to extremely little financial education because then what would happen is after a number of years your interest rate would readjust because you were given this low teaser rate for the first few years and the pitch was well don't worry about it home prices always go up so if home prices continue to go up or not if when home prices go up in a few years if you can't make the payments don't worry about it just refinance out or sell the home and then you have cash in your pocket so what could go wrong and this was the pitch now again many people are not financially educated we're not taught about money in school so that was the first aspect the second aspect was these loan officers banks are incentivized very heavily to sell as many mortgages as possible because the more mortgages you can sell in a month the bigger your bonuses and so you had these two aspects happening so now you bought this 400 000 home you pay 900 a month and things are great then a few years go by you get this letter in the mail saying your payment's going to go from 900 a month to let's just say 2 000 a month now if you don't have the ability to pay this extra 1100 a month you're going to say oh that's quite a bit oh well no big deal let me call up my banker and tell him the situation and he'll tell me what my best options are because my banker is a good financial advisor right call up the banker say hey banker i can't afford this 2000 a month what are my options he says well you can refinance or you can sell this is what was happening now getting closer to 2008 and so you said okay well let's get an appraisal or let's look at the value of the home you you bought it at 400 000. now you maybe owe 380 000 over the first few years because the first few years of your mortgage are interest heavy meaning the majority of your monthly payment is going towards interest not paying down your balance and so now they look at it and they say so the value of your home is now 350 000 you owe 370 380 meaning you're under water so now if you owe 380 000 under 350 000 home no bank is going to want to refinance because now you're underwater they're not going to want to re-lend you any more money otherwise you're going to have to bring cash to the table you can't sell the home because if you sell your home for 350 000 you need to still pay the bank the other 380. so you need the 30 000 coming out of your pocket and if you don't have 30 000 you can't sell so what's the next option pull if you can't make the monthly payment either you're going to walk away or the bank is going to force you to walk away through a foreclosure this is now a forced sale so now the bank comes in they take the home from you and now the bank wants to liquidate because they want to not own properties they want to just lend money that's their business they don't want to own homes and so that was what happened and so many more homes hit the market you see the same thing happened in the stock market when you buy stocks on margin and now what does that mean it means you're using debt to buy stocks and when you use debt to buy stocks your lender your brokerage doesn't want to see your portfolio fall by a certain amount if it falls by a certain amount they're going to ask you now to cover meaning put some money in and if you don't have this extra cash the reserves to put more money in because you thought your investment was going to go up so you went all in well now they're going to force you to sell and that is now again a forced sale so now markets are going down what causes people to sell either voluntary because you get panicky you get scared you get worried or you think you have a bad investment so you want to exit as fast as possible or on the flip side it's a forced sale where now you used debt and you were over leveraged and now you're under water and now you're being forced to sell so what does this do this increases the supply of this asset now again what is an asset stocks real estate crypto it can be any asset out there an investment so now when you increase the supply of this asset well that can now bring the price of things down because the price of anything really whether it's an asset or something else depends on supply and demand when you have a lot of supply of something with no demand or very little demand the price of this thing is going to fall because now all the sellers are fighting against each other to get somebody to buy it on the flip side when you have a lot of demand but no supply the price of this is going to go up this has been the real estate market for the last two years or so we have had this massive demand of people wanting to buy homes why well for one the pandemic changed our workforce where now you can work from home so people want a home with an office in the home second people want to move out of the big cities because they're realizing if i can work from home i don't got to pay this 5 000 a month in manhattan i can go live in a suburb and pay a fourth of that and have a bigger home and then third mortgage rates were the lowest that we have ever seen ever in the history of american modern history we've never seen mortgage rates this low so this created a massive demand meaning people wanting to buy homes so you had this flood of people wanting to buy homes while the supply of homes was extremely low so some people didn't want to sell because they were worried about the pandemic they didn't want people to come in their homes who could have potentially been sick second builders couldn't build homes because we had a labor shortage we had and still are facing supply chain issues so what does that mean you want to build a home well do you remember there was a period where there was a huge spike in lumber costs builders could not get access to certain materials certain materials were backed up it was harder to find labor to find workers to help build the home and then on top of that the cost kept going up because now workers wanted more money the cost of materials kept going up so it was this big dilemma in the building side so the inventory of homes was artificially low you could not build more homes so for the last you know 18 months or so two years we saw the situation where demand was through the roof literally and supply was very low some of the lowest supply levels that we've ever seen that pushed home prices up at the fastest rates essentially ever and now we're starting to see that slow down where now demand is starting to go down because mortgage rates have gone up so significantly people are looking at the higher prices of homes saying i don't want to pay this higher price so that is starting to flip but this is where you know understanding how supply and demand works and you now as a financially educated person as an investor what you want to be looking for now when you see market slowdowns a recession a crash what you want to be looking for is not the emotion but now cutting through the noise cutting through the media but now looking for the actual financial fundamental investments where you have a good asset a good investment that's being hurt by the economy that would now you can come and buy it at a discounted price and that's what you want to be doing and that's um i don't want to keep going on this same topic but after the 2008 crash happened that's when i first started buying real estate and i think we talked about this before i didn't understand what was going on um i was 19 i had some cash saved up because i was running some entrepreneurial ventures detroit which is kind of my home base metro detroit ford gma chrysler were the main drivers of our economy gm and bankrupt chrysler went bankrupt ford was on the verge of bankruptcy so the michigan real estate market was hit exceptionally hard and real estate prices had fallen by 90 to 92 percent in some instances oh my god and so that was where i was able to come in i didn't know all this like i look back and i understand this now but i was 19 i had a little bit of cash saved up and that was when i bought my first rental property because i didn't have any real estate mentors or guidance or people i didn't i didn't know any real estate investors my first real estate property was an eight thousand dollar condo i bought it out of foreclosure from the bank and uh it previous to me buying it it had sold for a hundred and fifty thousand dollars just a few years prior and that was just the market where there was nobody there to buy it people thought that i was the crazy one the dumb one for wanting to go and buy real estate when the world was ending when real estate was collapsing when nobody wanted to own real estate everybody told me that i had lost my mind but that was the situation and you have to understand the psychology i've said this before i'm gonna say it again history while it doesn't repeat itself it does rhyme yeah i wanna talk about that psychology and i want everybody make sure you guys stay tuned to the end i'm actually going to go through the eight things that i've learned from jess breit from this is now our second time together so i have i think a pretty good lock on some of the core things you talk about i'm gonna give you guys those eight things at the end so hang tight but i want to talk about the psychology this is where i think people really get themselves in trouble i've talked about this in entrepreneurship a lot the entrepreneurs that do well are the ones that can self-soothe and what i mean by that is so in the context of the economy the price starts dropping if you didn't anticipate that going into it like when i bought into cryptocurrency i was like this is a highly volatile asset so i cannot be panicking when the price starts dropping i have to know that that's a part of this right and michael saylor had said look when you're dealing with bitcoin he was talking specifically any time frame less than four years is just noise so i was like word anything less than four years is just noise so when it started dropping like a rock i was like has it been four years no it has not so then i shouldn't be freaking out yeah and the reason that i've had success in business is i can self-soothe very well so if i fail up i can self soothe i don't lose a lot of time worrying about the fact that i made a mistake or whatever and the same is true now for me in the financial world now had i been taking the kinds of risks i guess i'm i'm relatively risk averse meaning i don't do anything on debt and i don't um invest more than i can afford to lose so that's always been my operating principle but you you hear the advice buy low sell high and it sounds like a joke it sounds like somebody's toying with you they're trying to troll you but that really is the best advice that you can offer somebody but what people don't understand is it's hard as hell to do because in moments of euphoria which i had never paid attention i've lived through them but i wasn't paying attention to the market i never lived through a moment of euphoria we've just come out of that so i'd say we're about nine months out of euphoria right now and i'd never gone through that so i didn't know what it felt like i didn't know what it looked like and i remember and i won't rat the person out that said this but this is a big influencer and they were like maybe the economy now has gotten to the point where it's so global it's so interconnected that there could never be a recession again and i remember when he said i was like oh ah that doesn't sound right i'm not sure that that's how this time is different yeah exactly and so there was everybody just was like man this time is different and so i was like i don't know about that so i was like okay i need to make sure that i am detaching my emotion i'm realizing this why i was obsessed with ray dalio i'm realizing that history is going to rhyme that this time isn't going to be different this is going to be another one of those as ray says and so what does that look like what's going to happen when this goes down do i buy more am i trying to sell and watching everybody one that people buy and leverage terrifies me and man like you've really got to know what you're doing like if it isn't your full-time job my ignorant uninformed advice is to not use debt because you can get into a forced liquidation that's just terrifying in fact remind me i want to talk about covenants i'm going to write that down uh because that is i don't know if if they use the same language in investing but that's what you talk about in business or covenants anyway we'll get to that in a minute what is up my friend tom bilyeu here and i have a big question to ask you how would you rate your level of personal discipline on a scale of one to ten if your answer is anything less than a 10 i've got something cool for you and let me tell you right now discipline by its very nature means compelling yourself to do difficult things that are stressful boring which is what kills most people or possibly scary or even painful now here is the thing achieving huge goals and stretching to reach your potential requires you to do those challenging stressful things and to stick with them even when it gets boring and it will get boring building your levels of personal discipline is not easy but let me tell you it pays off in fact i will tell you you're never going to achieve anything meaningful unless you develop discipline all right i've just released a class from impact theory university called how to build ironclad discipline that teaches you the process of building yourself up in this area so that you can push yourself to do the hard things that greatness is going to require of you right click the link on the screen register for this class right now and let's get to work i will see you inside this workshop from impact theory university until then my friends be legendary peace out if people can go all right this is volatile stock market is volatile crypto's volatile housing markets can even be volatile i'm not gonna panic in a down moment i'm gonna set myself up or i'm not investing more than i can afford to lose i'm not doing this on debt you have to keep your income going so whatever it is whether it's a job or whatever you have to be very thoughtful about that but setting yourself up well knowing that there's going to be a downturn that it's about time in the market instead of time in the market right and then you can just ride this out exactly and i think for the majority people the vast vast majority of people that is the best advice that you can give them don't invest with debt don't invest more that you can lose and i'm gonna take it one step further because i think for 90 percent of people out there regular retail traders investors you don't need to be buying individual companies just put your money into a low-cost etf into a low-cost index fund and that's it fox what are those though and so just breathe most people don't know what that means so let's let's break that down so an etf is an exchange traded fund and it is literally a group of companies a basket of stocks so instead of you going out and investing in let's just say mcdonald's the corporation and now all your eggs are in mcdonald's meaning all of your money is in the investment in mcdonald's so if mcdonald's goes up you can make a lot of money if we dumps goes down now you're gonna be panicking because your whole portfolio is down well the issue is you have the most upside but also the most risk because if the executives at mcdonald's run their company into the ground and they go bankrupt their whole investment's gone now if you invest into something like an etf or an index fund which are very similar to each other now you have a group of companies where now it might be mcdonald's and 499 other companies so now what happens you lower your risk your lower summary upside but you also lower some of your downside because now if you run through that same scenario where the mcdonald's executives run the corporation into the ground and they go bankrupt well you have 499 other companies in the portfolio so you're okay and so then what can happen in a low-cost etf or an index fund is they have computers and this is automated where they will kick out mcdonald's because now they're no longer fits within this 500 companies and then they'll put in another company to take the place at mcdonald's so now it's passive on your end because if you're not willing to put in the work to do that active investing to do that sort of fundamental analysis meaning listen to the earnings calls study the revenue study the profits study what the corporation is doing if you don't care about doing that if you don't want to do that and if you're not willing to do that don't invest in individual companies because now you're taking on all the risk hoping for some upside versus you can mitigate a lot of that risk by just investing in etfs or index funds and you can do this right off of really any stock brokerage app out there and now you can buy them now how do you buy them well two strategies passively or actively passively which is a great strategy is now ideally every week or any time you get paid you put a little bit of money automatically into this etf system do you use for that so i use a platform called m1 finance there's m1 finance m1 finance there's tons of brokerages out there you can find whatever one you want where now it is completely passive money is automatically pulled out of my checking account on wednesdays you pick the day it doesn't matter and it's automatically invested in two dollar cost average dollar cost averaging into my portfolio etf so i have a number of different etfs in there it happens every week whether the market's up or the market's down and i don't touch it it just does its thing the active side would be now you're looking for a good price point and this is where it gets a little bit more advanced where if you're willing to do the research you know you could you can pick etfs or index funds where if you see a big crash you see prices go down you can put more money in or now you can start looking for good companies that you believe are undervalued but again this now gets a little bit more advanced where you have to yeah the average person they're not financially literate would you rather if they had a thousand dollars would you rather they play blackjack or try to actively trade that money play blackjack or actively trade that money don't trade i think trading unless you want to do it to learn i trade it i'll give you my personal experience i know you would trade because you know what you're doing well i wouldn't trade i wouldn't even you wouldn't trade would you treat your only options blackjack active trading so explain that for you i'm not a casino person so blackjack is the one where you go to 21. oh you're going to lose either way or you're going to lose either way the reason i bring this up is i really think that the average person would be better off taking their thousand dollars to vegas and playing blackjack because it will be fun if you try to actively trade you're going to lose your money now is that a hundred percent of the time no of course not but ray dalio for people that don't know runs the largest hedge fund in the world when he explains this i'm like oh my god i'm never going to try to active trade he said you're going up against people like me i spend whatever 200 million dollars a year on research yeah and i have ai which is making trades in milliseconds right we know how fast the fiber optic cable is to make sure that our trades go through slightly faster than the other person which can be the difference between you know a percentage point which could be millions of dollars he was like you're going to lose and he was like it's hard for us and we've got whatever 1500 employees like i said ai that they've been building for the last 25 years fiber optic cable measuring things in milliseconds he's like the odds of you finding something that we haven't already traded on is basically zero yeah every person that i know this is a very small sample size i'm well aware of that every person that i know has lost money on a long enough timeline actively trading yeah the only people that make money are people that are that and i will use my language this is how i think about myself i am too stupid to beat the market i'm too stupid to be ray dalio that's for sure and radialis entire team and ai and all that so actively trading is off the table just because i know it would be like me trying to play uh professional soccer right i'm going to get my ass handed to me my by messi the the difference between me as a footballer yeah and messi is the same as me as an active trader and radalia right the gap is so catastrophically large that at least playing blackjack i would have a good time and i think the difference is now differentiating active trading versus active investing because trading i tried trading one summer in college and i spent every day staring at charts candles which are these little ways that you can make a stock chart and you get glued to the screen you glue to the emotion and it is very difficult yeah watching candles is emotionally yeah and so i stopped it because i realized i was never going to make any real money doing this active investing what i mean by that now is you're looking at companies and when you see this company fall because the whole world is getting scared the whole market is tanking well this is an opportunity for you to come in buy a great company at a discounted price and then you just hold on to it now would you do that at the company level or at the etf index now again who is the person for me i would do it at the company level for the average person do it at the etf level because again you have to be willing to put in the work to research companies keep up with the earnings statements if you want to buy and hold for the long term i am doing active trading right now not right now but extra investing active investing i am not actively investing my money into the market i am passively investing the reason why for one active investing means i'm putting my money into the market when i see a great buying point second thing is it's now going to interest my personal life what is the best use for my money right investment money in five places my own business i put my money into real estate into stocks into crypto into physical gold in this order right now i see the most opportunity in my own business market briefs and so instead of actively putting my money into the finance now my favorite thing you read every morning it's a great newsletter right so it's where we uh break down what's happening in the financial markets into a fun ready easy to read email but for me i see the opportunity there it is the biggest purpose for me bet on yourself and the most excitement for me so instead of me putting my money into the market instead of me putting my money into real estate which i love doing i've been stopping these active investments and putting more money back into market briefs that we can build the company build the infrastructure build it into something bigger and so now obviously i knew the punch line which is why i asked the question but i want people to understand that you make a living researching this stuff knowing about it and even you aren't doing the active investing you're doing passive for sure very wise set that up but for the average person the average person the odds that they will do better by trying to go in and saying oh i know where this is going well enough to know that now is a good time to buy yeah mcdonald's whatever they're they're going to have heard headlines about tesla and things like that and and i'm not saying that there aren't moments that present themselves but like if you watch wall street bets do you watch wall street bats i don't read it at all it's scary you get these kids committing suicide because they don't understand like um [Music] they'll do something where i forget if it's calls or puts or whatever i i am so not good at this i want people to be i know my limits but whatever it is where there's an unlimited downside yeah and so they end up owing like 75 000 all of a sudden and they're like uh what do i do and so now they're just absolutely devastated yeah so anyway so let's put trading out the window people careful don't be trading don't trade your money and now when you're investing in money don't invest with debt don't invest more than you i want to go back to recession yeah i think this is a huge moment of opportunity even though i'm warning people as vociferously as i can about trying to beat ray dalio i do think that understanding that if you're playing your cards right and you're not overextended and you've done what you're talking about you've got your five buckets of investment we're going to get into remember to hang till the end because i'm going to give you the eight things that josh bree teaches a lot but if they're doing it well this is black friday for assets and if people think of it that way like don't get yourself in trouble don't be overextended don't have debt uh but if you think of this as black friday there's huge opportunities and this really is a moment where i want people to pay attention and take advantage of this moment i am so hungry for the average person to get educated on this stuff yeah because i am i have lived the american dream and i mean not the like it's your house and all that but but that you can change classes i grew up lower middle class and now i'm wealthy and so i'm like no no this is a set of ideas if you get your head around the right ideas like you can really win yeah but you have to simplify simplify simplify and because of the internet because of meme culture people get so caught up in the emotion it's the one thing you can't do right and you have to be like stone cold logical you have to get that emotion out and it's hard because everywhere you look on the internet youtube included there's a lot of emotion now i'm gonna i'm gonna be completely blunt completely honest here because i'm gonna talk about how the youtube algorithm works because i think we've talked about this before i see this on my own platform where sometimes youtube is going to promote certain video titles over the other so let's talk about the market going down if i say you one youtube pedal is the market goes down three percent here's what you need to know be prepared for market crash what's going to get more clicks be prepared for be prepared for market crash now i hate that because i hate these titles now you're going to say just breathe but you and every major youtuber has titles that sound like this oh someone got to this video through a clickbait title someone got through this right and and that's and so now let's let's dissect this because i have a team and for a very long time they kept saying just please make these types of titles and i refused what happened views went down like this now i had a heart to heart with a couple people on my team where they're like just pretty listen your videos are i'm saying what they said i don't want to sound like a super narcissist but they're like your videos have real financial education that people need to hear and it's better than what a lot of people are putting out i was like okay they're like if this title is what it takes to get people to learn what you're saying within the video why not make it and so it was one of those things where i was like oh my god i hate this but it's the only way to provide that financial education to get people to click it because if i need to click that video and now i can provide you real education without saying oh my god i need to panic and sell no understand the opportunities be calm look for the options that's my goal so it's one of those things where i see it because i'm in it and you know i'm going to talk about marketplace for another second because that's another driving reason for me wanting to create market briefs because the internet is full of sensationalism especially in the titles because they need to get you to click that's how just the internet works it's the reality okay i mean it is what it is i have fought it for a long time i hate it but it's the reality now the reason why i like market briefs and the reason why i'm so passionate about it is because we can completely separate ourselves from that because now we are one email we are you know you no one is coming into inbox every day it doesn't matter what the title is because it's in the email once you open the email everything is right there and so now we can give you the actual news without any of that you know that hypiness and so that's the way you know you and i operate but there's a lot of people now that take it one step further that even the news then the actual content of the news becomes just super crazy sensationless it doesn't make any sense that's sometimes an outright lie which then takes it one step further where now you have to be able to dissect the crap dislike the good because the reality is if it doesn't have a quote-unquote clickbaity title you're never going to see it it's never even going to cross your phone your screen it it will be hidden into the depths of the internet so now if you see it and has a clickbaity title the question is what's inside that content and that's where you have to be able to dissect and dig a little bit deeper understand if this is good and this is not and the general rule of thumb is that generally when times are good they're typically not as good as the media makes it seem and when times are bad it's typically not as bad as the media makes it seem it's usually somewhere in the middle and this is where now you have to really be able to understand and do that financial education for yourself now as an investor but the best thing is you know just just keep investing your money looking for those opportunities but then also be able to understand what's happening which is taking some of your emotions out of the equation and so this is now kind of you know building that financial education where it's difficult to do but it's so important especially in this day this age where the internet is our means of education where accessibility is so much more where anybody can invest and put their money into the markets anybody has access to these tools like one thing that i want to mention is when we talk about building wealth rather in a recession not a recession the majority of people i think assume that it's a lack of tool set that's stopping them from getting to where they want to go when in reality for the majority people it's a lack of mindset most of us have access to the tool set it's just our mindset that's lacking you don't need a ton of money what's the mindset problem the mindset is one believing i don't have enough money i don't have access enough tools i don't have access to enough things to go and do it that if i want to go and build a business i need this this this and this i need ten thousand dollars i need a hundred thousand dollars to go out and do that i need to have this type of degree i need to have this type of parent i need to have access to these types of people in order to go and build a successful business if i want to go invest my money i need ten thousand dollars before i can invest for it to be worthwhile why would i want to start investing with ten dollars what is that going to do when in reality these small investments do build up if you are 21 years old today and you start by investing just a hundred dollars a month which is just over three dollars a day and you do this consistently until you retire until you're 65 years old 66 years old and you can get an average 10 return on your money that doesn't mean it's a 10 return every single year it's an average 10 return over the course of investment which is the average stock market return you will retire a millionaire on the 100 investment assuming you never increase the amount of money investing and we're talking about less than four dollars a day that's a hundred dollars a month not a one-time hundred dollars hundred dollars a month yeah yeah less than four dollars a day you put a hundred dollars a month for the rest of years and so even if you get a raise and you never put another penny into your investments you will be able to retire a millionaire on the four dollars a day that you're putting aside yeah see that's why i want people to get stoked on that like look there is an entrepreneurial side and we can talk about that later that's exciting and high risk and pour yourself into it you'll pr you will get kicked in the face over and over and over but if you care about the thing that you're doing and you have a strong enough why even losing can be incredibly fulfilling but that's a separate bucket when it comes to investing and thinking about retirement it is a totally different ball game right that comes it really does boil down to buy low and sell high now how do you get to that point you can do what you just talked about which is you put a little bit of money in doing dollar cost averaging and you may be dollar cost averaging simply because you don't have the capital saved up to do it any other way right uh by the way capital's just a fancy word for money so you don't have the money saved up to do it any other way so you're just every paycheck it's pulling out you say you do it on wednesdays whatever just at some increment it's pulling some amount of money which can be very small to your point 100 a month but doing it consistently and not selling in moments where everybody else is freaking out and then like as advanced as you need to get is if we're in a downturn and you're doing your etf or your index and you know that we're in the middle of a difficult time maybe instead of a hundred dollars that month it's 150 or 200 right it's you're not going crazy you're still just dollar cost averaging but now you know that when it's black friday for assets that you're going to spend a little bit more just because you know it's going to go farther exactly but it isn't sexy man and this is why like having now witnessed euphoria i'm like people act a fool and i had the impulse to act a fool i was like no no go more you're so smart like you get this this and i was like i know better than that yeah i am a fool the only thing i can hope for is that by staying rational and calm and not overextending that i can stay in this long enough to sort of wash out my ignorance just just through time exactly the walls i think is wall street journal that used to do this thing back in the day where they used to bet against a monkey where a monkey would throw darts at a stock i love this and they would uh compare what the monkey picked against traders it really happened this really happened look it up on google and so the monkey obviously had no uh financial education it just literally threw dots at these companies that would hold on to it but i think it was a ten year span or it was a long-term thing compared against these massive traders guess who won not the traders the monkey oh my god and it just shows we turn that into a t-shirt that feels like a t-shirt this is so hilarious it's really really important for people to understand a monkey outperformed professional traders professional traders i'm gonna have to look this up look at that it's way too important this is the reality where it's it's just the value of owning an investment for the long term and it like you said that short richness is loud it's flashy everyone talks about oh my god i doubled my money in this meme stock oh my god i made so much money here it's loud and splashy but that's also fleeting it's the first time you lose money where it's like yeah you gained all that money but then you lost it exactly but that other the real wealth real true sustainable wealth is built in silence it's quite because it just keeps happening in slow increments over time and now you start to build this you know there's the snowball analogy where from michigan right we have snow there you start by building a small snowball like this you put on the ground and you start rolling it in the beginning you got to roll it a lot because you have this much surface area to pick up as much snow as you can as it gets bigger it grows faster because now you have all the surface area that could pick up more snow so you roll it and it picks up more snow and gets faster and bigger and faster and bigger and faster and bigger and before you know it now you can have a massive pile of snow but the initial one is the hardest because you're starting with a hundred dollars you're like what's a hundred dollars going to do but you can stay consistent with a hundred dollars and if you make more money you keep putting more money in and you just stay consistent letting the hundred dollars grow then you put in another hundred dollars now the first hundred dollars is growing and then you add another hundred dollars and then you add in another hundred dollars now the first hundred dollar has grown hopefully the second dollar dollar has grown hopefully now you add another hundred dollars to grow and you just keep doing that month after month after month after month now you're really starting to build the snowball that's growing and growing and if you look at this not month after month but year over year that's when you really start to see the returns but the problem is who wants to wait that long nobody wants to wait 10 years 20 years 30 years because we're thinking about when can i bomb a lamborghini tomorrow how can i bomb a lamborghini next year how can i have the nice stuff now and this then becomes a different question we're turning to these investment long-term investment vehicles to make us rich next month as opposed to actually doing what it's supposed to do which is make us rich over the long term we're trying to do it the wrong way so now we got to flip the question if these types of investments are there to make us rich for the long term how can we make more money today and so this is where people turn to things like trading oh i can flip these stocks i can flip these houses i can do whatever to try to make a lot of money right now and for some it might work in the short term but it is very difficult over the long term and this goes back to what you're saying regarding something like entrepreneurship this is more of an income issue because now we're trying to create an income through trading now if you are a full-time trader you have the systems you have the tools this is all you do maybe it works for you but for the vast majority of regular people it is not going to work and this is where now something like you know just like entrepreneurship it's not going to work for the majority people majority people are not meant to be entrepreneurs but you have to start asking the question of how can you increase your income if you want to have that better lifestyle but now i want to caution that a little bit more too because you know we talked in our previous interview about building systems how to become financially smart this is where now one of the simplest not easiest but simplest ways to become wealthier faster is when you increase your income to not increase your expenses and so the best way for me to give an example of this is if you ask the majority of people what's caused your financial issues the majority of people are going to say it's an income problem if i just made an extra ten thousand dollars i'd be able to put money aside for my investments i'll be able to do this i'll be able to do that i'll be able to do so many other things but what data has showed us is for the vast majority of these people is when you make that extra money what happens your expenses go up right with your income now you got to buy a new car that matches your new income you got to go on a vacation you got to celebrate you got to go out you got to you got to live this lifestyle that matches your income so instead of doing that create a system that flows no matter how much money you're making and one of the simplest things that you can do is follow something like a 75 15 10 plan which means that for every dollar that you earn from now on 75 cents is the maximum you can spend 15 cents is the minimum that you're investing putting aside for investments 10 cents is the minimum that you're putting aside for your savings so now whether you're making 40 grand a year or 4 million dollars a year it doesn't matter you're still following the same system where it's just a percentage based on how much money you're earning and the only thing that you're going to change is your savings because you don't want to save your money forever you want to save your money for three reasons save your money for an emergency save your money for a big purchase like you want to buy a home or a car or save your money for an investment if you're not saving your money for under these three reasons don't be saving your money now when we talk about saving your money for them bold statement yeah that's a bold statement there's no other reason to save your money because now you're just saving money we're going to have to get into inflation otherwise people are going to derail but i also let's start there so why why not save that's all i was taught as a kid safe safe safe me too so i grew up in a traditional indian house where the whole idea of plan and becoming wealth this is for me was become a doctor why because doctors have a big status and doctors have a big salary now when you make this big salary what is the plan to become wealthy not by investing not by doing some fancy stuff it's by saving your money have a big bank account so live small live off of ideally 20 to 30 percent of your income save the other 70 and that might sound extreme but this is the reality of what a healthy financial household looks like for a indian doctor was it for emergencies like what what is the purpose of saving in that particular mind so it's not for emergencies it's literally just to build up a big savings account too that's on your kids to pass on to build wealth so be wealthy and live in a shoebox like what is the is there like are are they ever articulating why you're doing it like for my if my mom if i'd pressed her what would she have said you never know when you're gonna need it uh that's the only way to get rich she would have said something like that but if i had then pushed farther and said okay what what's the point of being rich well then you can do this that and the other well not if i'm saving forever i can't so if we i think it has to do with the times that somebody grew up in so this safe heavy culture is a big byproduct of my parents culture people who grew up were born in the 60s especially in india so now if you look at that time frame where you look at before 1970 in india it was a very tough time where poverty was very common most people were poor see that i get that's a protection against i don't ever want to be hungry i don't want my kids to be hungry but that mindset hasn't gone away and so it just kind of trickles down right you you see what you know because i personally many my friends are doctors many of my friends make a lot of money many of these people also have zero investments and have huge bank accounts because then you're beaten away from this idea of doing something risky like investing your money investing in money is dangerous it's bad like when i i mean i when i wanted to invest in real estate nobody in my family had ever heard of this concept of real estate investing either had i nobody i knew was an investor so i told my dad dad i want to invest in real estate i found this condo for eight thousand dollars i want to rent it out blah blah blah blah my dad's response was you are stupid go become a doctor go do something worthwhile and you know he said it out of love i love my dad but did he really say worthwhile yeah yeah now i get the reason why my dad said was that extreme about it because you know indian parents have this thing where they like to create stories to scare someone away from doing something and so you know his whole thing was oh uh what happens if your tenant doesn't pay you what happens if you go to your tenant's door and then they shoot you because they don't want to pay you that escalated quickly i mean this this was the example that he gave me and so it's just it it's just you start creating all these fears where it's like if you invest in real estate you might die and that's supposed to scare you from not doing it it's one of those things where it's this lack of financial education lack of ever experiencing it because you don't know that it's possible you don't know anybody doing it you don't know anybody that looks like you doing it you're you're still new in this country how are you supposed to go and do it it's just very scary but this is the safe thing is just saving money if you save a hundred grand today and look at your bank account a year from now it's still going to be 100 grand maybe a couple extra pennies if your bank is giving you some interest but you know that's it if you invest why isn't that the best idea ever well going back to what you said inflation inflation by definition is diluting the buying power of your dollar so what i thought this was a fundamental law of nature it's really human intervention yeah it really is inflation comes from the word inflate what are you inflating when you have inflation and it's funny if you've been watching some of your content or my content you know that it's you're inflaming the monetary supply when you increase the amount of dollars out there without increasing the amount of wealth the value of each individual dollar goes through broke brains how do you increase money without increasing wealth so if i just print money the federal reserve bank who which is the central banking system of the united states they have the ability to print money they can increase the amount of physical dollars out there or increase the amount of currency through digital things so the amount of money in circulation they can increase this and so if we go to a very basic example if we live on a hypothetical world where there's me you and three other people and each one of us us five have twenty dollars each and that's it we are each equally owners of twenty percent of this world's wealth but what happens now if this new alien government comes in and then they magically gave us 20 more each are you going to be 20 you know double as wealthy as you were before you might feel like you are for a minute because you see oh my god i have 40 dollars there's only 100 in this world i have 40 now and then you go and talk to your friends and you go shopping and you realize oh everybody has 40 so now all of a sudden the price of anything you want to buy is going to be double because you've increased the amount of currency in this case without increasing the actual wealth and so this is where you kind of have to differentiate currency from money because you have to kind of define what money is because money can can have a couple different definitions it can be a store of value or it can be a means of exchange and what i mean by that is money as a store of value if you look at physical gold for example gold is your traditional store of value because it takes time effort and labor to mine physical gold so that time effort and labor is represented through a physical gold bar and that is the value the physical gold now if we compare that to something like our paper dollars it's very easy to transact with it's a very good means of exchange gold is difficult to transact with if i wanted to go to mcdonald's and buy something with some gold it's going to be very hard to do that versus with dollars it's very easy to exchange however it can be easily manipulated because the federal reserve bank can print money essentially on command so they can increase the amount of dollars out there which decreases the value of each individual dollar so while our dollars serve as a very good means of exchange it's not a very good store of value this is where now what wealthy people do is they want real money they want something that's not only going to store their value but also hopefully increase in value this is what assets do if you look at hope we hope right there you invest in assets for the purpose of making money how does it make money by increasing the amount of value that it provides when you invest in a company or etf or anything you want to invest in something that you believe will be more valuable in the future if you didn't believe that you wouldn't put your money in there how is it going to become more valuable how is mcdonald's or amazon going to become more valuable their goal is to produce more value to create something new that will provide more value to more customers and then the value is represented through revenue through profits through money so you're investing in something that you believe will produce more value same with real estate you want to invest in an area that you believe will be a more desirable area because if you invest in an area where businesses are moving to where people are moving to where jobs are moving to now you own that land you own that property you own that building that is now more valuable because more people want to be here and now that is represented through money through this currency where now more people want to be there so now rents are higher property values are higher this is why this stuff gets complicated and why people turn their brains off because for instance if you pick the wrong neighborhood you can lose your ass right this is where etf's index funds become very interesting to use real estate as an example i personally because i recognize how ignorant i am i would much rather be investing in a whole bunch of neighborhoods across not only this country other countries because i don't know which one's going to pop off yeah right so because there is so much uncertainty it's like as you spread that out now but to your point you're limiting your upside but you're limiting your downside right that to me is far wiser you're never gonna you don't become the next ray dalio by doing that so you're not going to turn into a billionaire but when you think like when ray dalio was pressed like what would you do like if you could only leave a set of instructions to your kids about what to do with their money you couldn't actively manage it for them you couldn't have your company do it you just had to give them instructions and he came up with what he called the all-weather fund yes and so it's just like ah i don't know what's gonna happen so here is like the diversification that you should put it across and you're not gonna make as much money but you're not going to lose a bunch of money either exactly and so all of this stuff is so freakishly complicated that even better it is so easy to be wrong and so hard to be right that your odds of getting it right consistently enough because it's to your point about the monkey if you looked at it in six months monkey probably loses you look at in 12 months monkey probably loses 18 months probably loses two years maybe loses three years though it starts to be like all bets are off and by the time you get to 10 years like the monkey's winning just because you just left it alone yeah instead of thinking that you could outsmart the scenario and warren buffett did a very similar bet against some major hedge funds on wall street where he bet it was a 1 million bet that the winner would give a million dollars and then they would go to charity and his bet was that the average person would be better off by investing their money into a low-cost index fund as opposed to actively managing their money actively trading their money like the hedge funds were doing over the long term over a 10-year period and what happened was exactly what you said in the beginning the hedge funds were crushing the index fund uh the the the index fund was down hedge funds were going up because they were able to find these trades and make all this money in the short term and the media was asking warren buffett how do you feel about it he said the 10 years are not up yet yeah and then come year 10 well then we had some swings on the market some hedge funds had some losses you took out their fees which is also a big chunk of it after factoring in the fees and all that other stuff the index fund won and what did he do he just put his money into it set back and didn't do anything versus the hedge funds are spending all their time managing the money trying to beat the markets and they did for a little bit but then over the long term they didn't and then when you factor in their fees for spending all that time trying to beat the market now your returns are less than if you just put your money into the market and didn't have to do a thing and so this is that basic financial education where it's not as attractive people want to be able to show off like it's just like people would rather look rich than actually be rich and you would say oh no i would rather be rich well people's actions speak louder than the words because if that's true you should not have a gucci belt if you don't have that same amount of money in the market you should not own a bmw if you do not own any investment portfolio right i mean it's just it's just a matter of looking at what you do it doesn't matter what match with what you actually want if you want to become wealthy question answers yes okay what are you willing to sacrifice yeah bmw in the driveway you got the gucci belt of the louis vuitton if you have this nice stuff but you don't have the nice assets your priorities are in the wrong place and this is just a matter of you looking at yourself in the mirror and being honest with yourself and understanding what you want and for a lot of people more you know maybe this is a matter of financial education maybe this is a matter of preference but many people would rather look rich than be rich if you just look at you know what it is now if you dive a little bit deeper are the people that want to actually be rich we want to be rich today we want to be rich tomorrow not be rich in 5 10 years and so what then what does that do it then drives our actions so it's very difficult now to to understand that hey i'm willing to sacrifice not only the nice stuff today but then also not doing the attractive the sexy the things that that are hot that are making people so much money today because i believe in this long-term investment that has been time tested because it's so boring but the reality is that boring is where the real wealth is built i always tell people boredom kills more entrepreneurs kills more dreams than fear or failure it's it's the daily grind like when to your point about watching candles when crypto was really popping off i had to stop myself from watching it because it was so fun and so exciting and i was like you can't spend time there because i'm i'm not going to want to watch it when it's down so it's like you want a system you want to set it you want to forget it yeah and the if i could get people to understand the psychology of how money impacts you like oh my god to your point about people would rather look rich than actually be rich when you think about what money really does for you you have to understand peak emotion there's only so much emotional amplitude that you can have in fact do you do you have an image in your mind of the highest emotional amplitude moment of your life as where i felt the most emotion yeah the the highest positive emotion you've ever felt positive emotion yeah positive for sure you know it's funny um my wife used to get really upset at me because i never showed emotion and she was like what's wrong with you like you never like you never get excited you never said i'm like look the only real emotion that i feel is hunger i get hungry uh i i've changed this that's what a woman wants to hear by the way if you said hungry for you baby that's the only thing i ever feel you might have a shot yeah so i've evolved since then where i've you know i'm working on that you know uh but i think you know the happiest is really for me being around my family and the people closest to me and just laughing yes that is my favorite thing in the world like what do i want i literally want my friends and my family in one room and us just joking around because i you know we we make fun of each other and it's not enough mean way it's just the you know our personalities when we laugh and have fun that is if i could think of my favorite thing to do would be that maybe if you want to take it one step further maybe do it on a beach but you know it's it's honestly it doesn't matter where we are if we're in my basement eating some whatever pizza some indian food and just laughing yes so now i believe that to be true of what you're saying it's certainly true of what i know in my life so i have had the fascinating experience of uh i spend christmas with my family and my wife's family together and it's amazing and i've done christmases in a middle class home and had an absolute ball and i've done christmases in a big fancy mansion and had an absolute ball and while doing it in the big fancy mansion is fun especially because other people they don't get to do very often like oh my god this is so cool uh the the peak emotion is not higher yeah in fact the highest amplitude emotion i've ever had is when i was in high school i got cast in a professional play oh wow and that meant that i got to skip calculus and dude i was over them i got paid to be in a play it was like the craziest thing ever i was like i can't believe this is really happening now i have had millions of dollars show up in my account like that and i'm telling it was cool it was neat but it wasn't as neat as getting cast in a professional play where i made 75 a week in high school there's only so much amplitude of emotion you're ever going to experience and i know no matter what i say to people they're not going to believe me they're going to have to go through the same rigor my role i'm not saying money isn't powerful money's incredible i want to make more money because you can do incredible incredible things with it i'm just saying that it doesn't touch fulfillment it doesn't do the things for people that they want it to do yeah and so the reason i say that is okay you're going to be bored doing it the right way it isn't going to be sexy you're not necessarily going to be able to flex it's going to take decades but it will work right and it actually addresses the thing that money is good for which is money problems right and so you they're really two paths before you if you want to be an entrepreneur like that is high risk high potential reward high potential failure if you optimize your entrepreneurial journey for failure mode and you're like even in failure i'm having a good time you're gonna hate failing don't get me wrong but like that i'm pursuing something that really matters to me i'm getting better every day i'm serving other people and myself i'm uh increasing my skill set even if you're losing that's going to be amazing if you're thoughtful about your mindset 100 but if you're making all the money in the world and you're not able to laugh and play and have a good time and feel like you're doing something that matters it won't matter like i this is where i want to like grab the camera and start biting it to get people to understand like dude set it and forget it let the make an income work at something that matters if you want to be an entrepreneur i love that i can even help you do that well but the money isn't going to change how you feel about yourself 100 it is not going to make laughter more joyful right it isn't going to make human connection better yeah it will get you on the occasional beach but if people could internalize that i think that they would make very different choices they wouldn't be so worried about making all the money right now in fact let me ask you another question what do you spend the most money on my business a hundred percent what do i spend the most money on my business so it's like it's not like i'm out balling on you know the beach ever i could i know but that doesn't give you fulfillment you know i did a show i was in new york last week i did a show there and they were asking about the first time i made a million dollars and i went through that i was like you're not gonna like my answer because the first time i made a million dollars in a year i think i took home twenty thousand yeah which is what i should offer right back everything back into the business because you know i was like i'm fine driving a 500 car like i'm getting from point a to point b i i'm getting by just fine like this is my this is my fun passion and on your point of you know the fulfillment this is what i call my quadrafit theory where there's four aspects quadrafit so uh what i say my theory is if you want to live a happy fulfilled life you have to be fit in four aspects of life and just think of it like a triangle around the bottom of the triangle you have to be physically fit then mentally fit and spiritually fit and on the top financially fit if you want to live a fully fit life physically fit because if you're on your deathbed it doesn't matter if you have 10 million in the bank the only thing you care about is being healthy again to be able to breathe again you want to be physically healthy because if you are morbidly obese you can't move you're you just the only thing on your mind is to be healthy again you know we all know that feeling where you're sick you don't feel good where you can't do anything the only thing you want to do is feel better then it's mental fitness being around people that you love not being miserable if you're struggling with anxiety depression if you're not happy more money is going to make you more miserable and we all i mean i i'm so passionate about this because i've seen this firsthand i used to not believe in this but i've seen this so many times where i try to bang this into people's heads if you think that making a million dollars is going to suddenly make you happy it's going to make people like you it's going to make people want to be your friends it's going to make you find the love of your life you are so wrong and you are so far from the truth that it's going to be extremely painful for you to learn it because you have to work on this mental health as its own aspect of life learn how to build self-esteem how to be happy how to manage anxiety how to manage and fight depression learn about these things it's its own part of this you have to be mentally fit then spiritually fit now this doesn't have to mean religion spiritually fit i mean finding your self-purpose what are you waking up for every single day like you said you've had millions of dollars in your bank account you don't got to go to work every single day you don't got to go and hustle yet you do why because you see a bigger purpose for yourself you have a reason for you to get out of bed because if you don't have a reason to get out of bed more money is not going to do anything you need to have a reason to get up want to thrive whether you have 10 or 10 million dollars to want to hustle and then at the top this is where financial fitness has the most impact the most power and the most ability to allow you to live a more fulfilling life because more money is just putting fuel on the fire it gives you the ability to do more of the things that you love to do more things that make you feel more fulfilled to do more things that you want to do to give back more to do more of that but having more money is not going to solve your physical fitness maybe he'll buy you better food or a better gym but it's not going to give you the mindset to go to the gym it's not going to make you feel okay when you're drinking something healthy you're going to say man screw the smoothie give me something nasty give me some unhealthy food right i mean it's mental fitness more money is not going to fix that more money is not going to give you a purpose in life it is its own aspect of life and this is where you have to understand that yeah work on all four of these each one of these requires its own attention its own nurturing its own thing like i focus on the financial side because i feel like i understood that but that's not the only aspect of life and this is what i really try to hammer into you know on my channel to the people that watch my videos is yeah look money's great understand it conquer it understand how to master your money but also understand that it's not the only aspect of your life you got three other huge aspects where if you don't have money yeah it's going to ruin everything else because if you don't have money you're struggling about your bills you're struggling how are you going to pay for anything you don't know how you're going to take your spouse on the vacation that he or she wants you're not going to be able to pay for your kids education you're not going to be able to do the things that you want but if you have money and you don't have these other three things you're going to feel miserable and then what's the point of having money if you're not happy yeah just go back to the middle class home and laugh yep yeah and it's really interesting because of course when you're in that so all of this everything we've been talking about today you're up against the nature of the human mind from clickbait titles are necessary because that's how the human mind works euphoria in the market human mind fear in the market the human mind the fact that you're not trolling somebody to say buy low sell high because it's one of the hardest things you're going to do yeah it's the human mind at work right like really getting to understand what the psychological aspect of all this is so i know somebody and even myself when i was in a lower middle class existence i was obsessed with getting rich and that was just like all that i wanted to do now getting rich the thing that surprised me is that it didn't dull my ambition it it can't quench your need for fulfillment and feeling like you're doing something that matters and so i just found myself right back in the game wanting to build something and create and have a great time and thankfully i had learned that you really have to optimize for the failure scenario because um despite being successful i fail a lot so it's like really understanding the nature of that what i call the physics of progress that failing is just a part of the the thing um but so i get it i get that people that are on the come up are not going to believe the following statement but i promise that it's true the most fun you're ever going to have the the pinnacle of existence is that moment where you're working really hard at something that could pay off tremendously and you believe it's going to work yeah there's nothing better than that moment oh my god i'm working really hard at this i think it's gonna work and if it works oh my god like the world is gonna be mine yeah that's way more fun than actually winning and getting the thing yeah and so enjoying that ride yeah like that's that's the juice and so i found myself wanting to re-get back into that position of like oh my god i'm building something and if we pull this up it's like so i know that it's not about the money it's it's really about fulfillment that i don't want to harp on that too much but like just getting people understand you're in a battle against your mind if you can get to the point where you realize that being around the people that i love is going to be huge emotional amplitude doesn't matter if we're on the beach or if we're you know in a hut as long as we have our basic needs met because for sure that matters but we have that emotional amplitude isn't going to go any higher by having a ton of money but that moment of like i'm building something that matters i think this really might work and if it works like you know like we've got some big victory that's the juice and you're going to constantly want to be in that now given that all of that is true make sure that you're taking some percentage of what you're doing and just put it in the set and forget it that way you should get older yeah and it gets harder to be sort of peak energy all that stuff that you've got money it's going to be doing its thing and then and maybe it's just taking that like you said you can spend 75 okay cool so if we know that we have to save some we know that we're going to buy assets with some then why don't we take some of what we're going to spend and spend it on building something starting a side hustle whatever seeing if that works for you i mean we're going through a period now where it's like everybody wants to start their own thing try it like see if it's your bag i think people will i heard you quote you have to be willing to get punched in the throat i always say kicked in the face but like it's the same thing maybe both very very yes yeah uh if you like it and that's something that you enjoy then that's a tremendous outlet and that can be the thing where you're really gambling on big upside yeah but man if i could just get people to internalize this idea of emotional amplitude like life's peak joys are available to everybody yeah regardless of money like i think warren buffett underplays wealth a little bit like he said look i'm meeting at the same restaurants that you're eating at uh i'm staying at the same hotels you're staying at i'm living in the same place look money can do some pretty interesting things yeah but it can't change the amount of emotion that you feel 100 and if i can tie this back into what we talked about in the beginning of this video where we talked about we talked about the real estate market we talked about everything going on with that and i think the best way to explain that now because you're putting some money aside what are we looking to buy because i've talked about this recently a lot on my channel where the american dream because you mentioned this the traditional american dream was being able to buy a home paid off and now you own a home the reason why this was the american dream for anywhere in the world is because when you pay down your home what are you building in your home equity it's this concept of equity and we assume or we for lack of better we don't have the financial education to know that that equity which we think is going to make generational wealth because equity is where real wealth is built can only be found in the home that we live in but that's not true and this is where so many people get things wrong because they now stretch themselves too thin they do risky things take out adjustable rate mortgages use too much debt to buy a home because they think that it's an investment that's going to make them wealthy because now you can pay it down build equity and have something to pass down however there are many other ways to build equity to build real wealth that you can then pass down this goes back into the assets that we talked about right when you invest your money into stocks you are building equity in these companies when you go and invest in real estate as an investment now where you live in yourself as a rental property you're building equity in your real estate portfolio and this is different than your home because when you buy a rental property you're buying it for one purpose you're buying it for the purpose of making money you buy a home for the purpose of making memories so if you're buying something for the purpose of making money you're probably going to make more money because you're going to do a different type of analysis than in the home that you live in and you know one way is you can go and actually buy it and the second way like you've been talking about entrepreneurship is you can build the equity so when you build a company you're building equity in the company like if you go and start a company you are the 100 owner of the company well if your company can make a hundred thousand dollars of profit a year your equity might be worth two hundred thousand half a million a million dollars depending on you know whatever type of company it is but you're building equity in a company so you can build this equity you can buy this equity and the whole idea of a recession is now this type of equity these investments these assets can go on sale and this is where now you could come in and buy more equity at a discounted price and this is one of those things i'm gonna go back to we keep mentioning what we talked about before in a previous interview we are never taught this because school teaches us to become an employee what do you do when you're an employee you get a salary do you get any equity with a salary no maybe your company gives you separate equity as a compensation package or something but your salary is payment for hours that you work and that is nice today but once you spend your salary you have nothing left real wealth in this country in this system is built through owning equity we're never taught this this is what gets me really heated up because we're never taught about this and so if you're if our whole system is taught around building and earning a salary how come we're never taught about building equity because now what we should be teaching is hey go to school get educated but understand that wealth is built through equity so earn a salary doing whatever you want whether you're a doctor or you're working at a factory doesn't matter take some of your salary go out and build some equity we're always taught and think and told that the way you do that is to follow the american dream just buying a home because now you can pay down your home build some equity but that is honestly one of the worst ways to build equity you never talk about wealthy people becoming the richest people or wealthy people because i paid off my home no you become wealthy because you own a company you built a company you invested in stocks you invested in real estate you invested in equity somewhere else and your home is honestly like one of the last things that wealthy people think about yet for the majority people when think about becoming wealthy and building this type of generational wealth what are they thinking about buying and paying off my home and there's so much more to that but it requires that financial education yeah i want to go back to something we were talking about earlier debt covenants so you were talking about at the time that there's two kinds of selling there's selling because you choose to but oftentimes people are doing it out of panic and then they're selling because you're forced to um in business when you're taking out a loan they put covenants on it meaning the following things must be true for you to have a loan in good standing so even if you're making your payments if the ratio of like your accounts receivable so the amount of money that you know that you have coming in if it drops below a certain level if that's one of the covenants or you have to have a certain amount of savings in the bank or your profit margin has to be 13 or higher whatever they put these covenants right on that is that's what's happening when somebody is getting overextended with uh either sort of so um if we talk about real estate first when you go now there's a couple different levels of real estate investing and loans assuming you're buying with debt now in the beginner level they're going to look at your income very heavily your income to debt ratio just like when you go and buy a home they're going to look at all the things same things to go and buy a rental property then as you get a little bit bigger they're not even going to really care about your personal financial situation what they're going to be looking at is primarily just like you were saying the actual investment itself because now you're buying essentially a business if you're buying an apartment complex well now you're buying essentially business and then what they want to see is okay what's the price of this how much rent are you generating every month every year what are your expenses what is the margin because they know that this property is going to continue to generate rental income and the rental income is going to then pay for the mortgage the loan on the building and so that's what they're looking at and of course they're going to want to see your personal financial situation because they want to see okay if things go bad what can you do do you have any access to access cash do you have any other access to capital do you have any other wealth do you have any other experience but the primary thing as you get bigger and bigger is just going to be the property itself in the stock market oh man well let's stay on property for a second so are they going to call the loan like there will be a predefined set of things i imagine that if they stop being true they'll call the loan so for instance as long as you have 20 equity in the building we're fine but the second the value of the property drops like if you put out let's say 5 million dollars to buy it if the property ceases to be worth five million dollars then we're going to basically call it because i know that's what ends up happening to somebody in the crypto market yeah if your crypto is worth a million dollars and you've got a million dollars uh borrowed the second that that's worth a million they're gonna uh do a margin call sure because now it's like if it goes down anymore then they're out money so they literally the second it drops to the amount that you owe boom it's gone it works similar to that in the stock market but in the real estate market no they're not paying attention to the valuation of the property day-to-day because that's also kind of ambiguous a property is worth really what someone's willing to pay for it you can run an appraisal you can do comps but at the end of the day is what someone else is willing to pay for it so instead of them looking at the valuation of the property or what they think it's worth what they're looking at is are you making the payments um because if you're making the payments they're not going to ask you questions if you stop making payments that's when they start asking questions and that's when they start uh trying to figure out what to do and then they might force you to sell now forcing you to sell in crypto is very different than forcing you to sell in real estate because forcing you to sell in real estate is not going to depend state to state what the foreclosure process looks like how intense that process is and how long that process is versus crypto from my understanding because it can be pretty instant you get that margin called they can take your crypto back pretty quickly real estate we can be a year and then there's a lot of different tools that can be done like in the 2008 real estate crash one thing that was very popular was a short sale this is separate from a foreclosure a short sale is now where there's three parties working together the seller the bank and the buyer are working to now come to an agreement on a price where the bank agrees hey we're going to lose money in this deal we're willing to lose x amount of money on this deal the seller says yeah i'm going to walk away from this deal and not make any money but at least i don't get foreclosed on and the buyer says fine i'll pay this money i was involved in multiple short sales and one of the short sales that i was involved in they also had an additional provision where okay the bank's going to agree to lose however much money i don't remember the exact numbers the seller agreed to walk away and not get a penny from the home and then they also wanted me to write a separate check at closing to the seller's contractor because he had done some work on the property never got paid and had put a lien on the property meaning he essentially made a claim against the seller backed by the value of the home that hey i need to get paid so i then had to also work out a deal with the contractor where all these parties where the contractor had to agree to a certain amount of money this was a long time ago so i don't remember the exact numbers but so it was two separate checks that had to go one was to the contractor to make him happy and whole and then one was to the bank where the bank now was okay with losing a certain amount of money and they're willing to do this the bank in that situation because if they had gone gone through foreclosure they would have to spend way more money on legal fees they'd have to spend way more money on administrative fees and then they'd probably even sell the home for less money when it came to the actual foreclosure process and the seller would prefer a short close a short sale in this situation because if you don't do a short sale and you go into foreclosure then your credit score gets hit you have to go through the entire foreclosure proceeds so you don't take a hit if you do a short sale if you do it right you typically don't have to get the same sort of credit score hit because you're just selling the home versus a foreclosure i mean so there are again the reason why i said you have to do it right because there's provisions there's certain contracts that you want to make with the lender saying that they're not going to come after you for the previous money and they're not going to file some other things so there's specific contracts so it gets very complex where you want to make sure you have a good attorney because it could affect your credit score and it could also not affect your credit score as much depending on how good your representation is and how well you draft these agreements so it becomes very complex versus you know we talk about with crypto or with the stock market if the value of your investments fall to a certain amount and you don't put in a certain amount of money it just sells there's nothing else like they're gonna say give us ten thousand dollars right now or we're gonna sell the investments for you and there's really no other if ands or buts it's like almost automated in that sense so it's a very different situation how do people get into the stock market with debt it's actually very simple most brokerages make their money through margin meaning debt because if we what backtrack so you're saying if i go somewhere like vanguard i can buy on debt so let's let's talk more about the mainstream robin hoods and uh the the more the mainstream brokerage is in that sense where robin hood now is mainstream huh they're they're pretty made as long as they've been around for it i don't know the executive reviews it's not that long right they're they're i mean they're you know one of those startup brokerages i don't know what year they started wow well let's start about 100 years ago and then we'll kind of take this little time lapse a hundred years ago if we wanted to buy just just a couple days back if you wanted to buy stocks a long time ago you would have to have access to a actual stock broker you would probably have a financial advisor it'd be a very difficult process and a very long process where if you want to buy a stock you would call somebody who would call somebody who would then make a transaction maybe multiple people to make that transaction so it was a very long process then in the 2000s early 2000s started coming these digital brokerages this is where charles schwab e-trade td ameritrade they really became bigger but the way that they would make money was they would charge you a fee a commission to make a trade so it was somewhere between five dollars seven dollars to fifteen dollars even twenty dollars to make one transaction to buy a stock or sell a stock then after the 2010s came things like robin hood and robin hood then shook things up even more where they said we're a commission free brokerage you can come trade stocks on our platform we're not going to charge you a single trading fee now if you're not charging a fee how are you going to make money well the first way that they made money was uh this whole concept of you would buy a stock on robin hood and then robin would then make that transaction a little bit later and they would sell these trades it was a very complex process where they would sell it to another entity so you were kind of doing an indirect trade for you as the trader it made no difference or a negligible difference you wouldn't even know the difference versus robin hood is then selling these trades on the back end but then the second way that they would make money is through margin meaning that robinhood and these platforms would then lend you money based off of how much money you have on the platform and then you can trade not just with the hundred dollars that you have in your in your robinhood account but now with the extra 20 50 maybe 100 of robin hood is giving you that you can now trade on margin and the amount of money they're going to give you is going to depend on the number of different factors um but then they literally will just extend you this line of credit and now you can trade and i know this from first-hand experience not with robin hood but with a different brokerage because when i first got started and we talked about trading this was when i was forget it was my first year in college i spent the summer doing trading and i was using a platform and they told me that hey i can i started trading and then they said let's upgrade your account to a trader's account i said okay cool and then they said hey we will also give you more money to trade with margin i didn't now this shows you how naive it was with the lack of financial education that i had i thought it was free money i didn't know that this money had strings attached to it i didn't know how to pay the money back i didn't know that i was being charged interest so what happened was i traded money i i don't know if you've heard there's a guy named jaspreet singh and he says the most expensive money is free it's free money i learned that lesson a very painful way so i was trading money with uh the brokerages account where i just thought that because now i'm making uh making more trades that they're going to make more commissions that there's going to you know that's how they made their money well long story short i had lost money on some of these trades that were on margin and they said hey you need to put more money in the account i was like what do you mean okay i got to make up this whatever margin so then i you know i had fortunately some money i covered it and then i decided i'm no longer going to be a trader i'm done with this so we loaned you money to make the trade you lost pay us back i paid that money back so now how long do they give you to pay back i don't remember i paid it i had the money so i just paid it because i was i understood that i had lost their money so that part made sense to me and then i was done trading i realized that this is not for me i don't want to spend this time you can't pay it back well i don't know exactly what they do but they're going to come after you i'm sure they will file a loss because i'm thinking about this i'm an attorney right from legal perspective it depends on how much how much money you owe and uh what you're going to be doing because now they can very easily file a claim against you they can you know run a lawsuit against you if you're not paying there's a lot of different things they can do and the more dollars that you owe there's more things that they can do just like with anything else but then you know i'm done trading and then a number of months go by and i start seeing this like deductions from my account i'm like what am i being charged for so i call them up and they're like it's your margin like what are you talking about i'm not doing anything well we gave you money it's in your account you have to pay interest on the money that we gave you and that's when i realized there's a cost of money right and so that's when i said turn this off take your money back i don't want this i paid interest on it and that was the last time that i did that but this is you know wow there's i was i don't know 18 years old 17 18. i annoyed probably 18. i had no idea what i was doing and this is where a lot of people get in trouble because you think oh i can double my money pretty quickly but if i use their money in addition to my money now i can quadruple my money because i only got to pay you a little bit of percentage if you know that you got to pay them back i so i don't know a lot about robin hood i am super stoked that the average person can now get into the equities market but that's how people get into trouble they're using the financial education along with everything else accessibility is great but the accessibility without financial education can be dangerous now if you start using these tools because if you don't know the cost of some of these tools it can be very bad for example think of a credit card is a credit card a bad thing or a good thing it depends who you ask right you know there are so many people have thousands of dollars with the credit card debt that is skinning them alive i only transact with the credit card why because well i get my points i get my cash back i get my fraud protection i get free insurance on my car rentals i get all these things that i wouldn't get if i paid with cash even if i debit card i don't get all these things so now when i'm spending i spend a lot of money especially my business if i spend a hundred thousand dollars a year half a million dollars a year i'm going to get a big cash back check that i can put right back into the business i can spend it i can use it on vacation i can get free perks i mean i get so many different things but that's only because i know i'm not going to change my spending because of my medium i'm not changing my spending because i have a credit card i'm just using a credit card to facilitate my transactions as opposed to using it as a free money printer and again what is it it's that financial education along with the tool it's not the tool that's inherently evil it's when you use a tool without that financial education that now you can get screwed over that you get in trouble that you start hating the system oh they're out to get you they're not giving you the financial education because it's not in their best interest to give you that financial education but this is where if you have the financial education you can use the system to advantage but the problem is we are never taught this right and it's so it's just like it for me it pulls on these strings in my brain because it's like oh my god it's just screw so many people over because it's profitable to keep people poor if you don't understand this you're going to spend more money on your credit card you're going to spend all your money making everybody else a terrifying statement you just rush past it's profitable to keep people poor it is profitable to keep people poor is it profitable to keep them poor or to keep them ignorant it's a mix of both when you're ignorant you stay poor they go hand in hand because if you don't have the financial education what are you going to do you're going to go spend your money on gucci louis vuitton you'll be buying the extra guac because hey you got that money then how are you going to buy it you're going to buy it buy that extra get a body extra walk lifestyle you're going to buy it with your credit card and you're not going to wait until you can afford it you're going to buy it now because you can and nowadays it's not just a credit card just buy now pay later and everybody talks about how buy now pay later is zero percent apr there's no cost to this money you can buy it now pay later but again like you said what i said the most expensive kind of money is free money they got to make money somehow there's a reason why there's billions of dollars pouring into the buy now pay later industry one of the fastest growing fintech industries ever because when you spend on buy now pay data what happens one you're spending way more money than you would have if you didn't buy now pay later because if you wanted to buy a thousand dollar sofa you have to have a thousand dollars in your pocket well now you can buy it down pay it later so now you can spend a thousand dollars on something else second what happens to so many people is you don't pay it off in time now when you don't pay it off in time it's no longer zero percent apr now you get slapped with a very hefty very expensive fine so now it's okay the tool plus the education the tool plus the education going back to inflation inflation you know is it a good thing or a bad thing i think you asked me that last time or are you talking about you know the way the system works again just depends depends on if you understand it or not if for wealthy people they they love the inflation hey keep paying more for my assets keep driving up the value of my assets keep making me wealthier versus for the average person you keep getting screwed over because now your groceries are more expensive your gas is more expensive your rent is more expensive everything is more expensive everything it you know it's understanding the tool and the education the tool i'm going to give one more example because this is the stuff you can see it gets me so keeps me up at night it gets me really upset because i understand both sides because i never had that financial education and now i see the benefit of it and i'm like please learn this even if there's a clickbaity title because i need you to watch it please learn this we talk about you know how the government many times like they might have good intentions but the people in government aren't economists they're not always the best decisions with their money because sometimes their goal might just be to create jobs and creating jobs is different than being efficient and so you know if you look at like for example the college education system where back in the day it was not easy to get a student loan and back then college was also a lot cheaper and back then a lot of people were not getting a college degree so if you had a college degree what happened you stuck out you were different you had something well what happened later you know i think was in the 70s now the united states government maybe the 70s 80s around that time the united states government passed a law that said that if you want a student loan we'll guarantee it anybody can get access to college education the government will guarantee a student loan now this sounds like great news hey everybody can get educated how can that be bad but colleges heard this and it was music to their ears you're telling me that i can charge any amount that i want and the government is going to guarantee to give that to our students sign me up now we can hike up our tuition rates and people keep paying now everybody can go to college because we think that we need to go to college in order to become successful and now where we are today everybody has a college degree if you go and apply for a job with a college degree you don't stick out you're just like everybody else dude this makes me really sad so this is human nature so i'm not going to waste a lot of time complaining about it but take the ppp loans so the biggest financial fraud in the history of america yeah that's terrifying and i remember when it was all happening dude when it's going to be really easy for people especially young people to forget what covid was like when it first popped off and it was is everyone going to die like is this uh is this a 1918 type flu where 50 million people die like it was just really really unknown and so when businesses were just closing close and closing and the government came in and said hey we got you like we're going to cover this i was actually stoked as a free market capitalist guy i was still like word their government has a role this is amazing i'm super stoked now i didn't take like you i did not take a dime of ppp money i thought i want to leave it every dollar i take and i can afford this moment every dollar i take is a dollar somebody else doesn't get right but i should have though i did not predict this will get abused to the extreme i've done so many contracts in my life i was just reading one yesterday and the lawyer put a provision in it and i was like why like it was a provision that's good for me but at first i was like why did they put so i started making a note like hey don't do this like there's and then i was like oh my god they're protecting against xyz scenario and i was like holy hell like yes people would do that i was like i hate that you have to protect against that yeah but a thousand percent like there is a percentage of the population like here's one thing that winds me up the we don't prosecute uh theft under a thousand dollars or whatever it is welcome to california yeah 999 dollars you've got people running into stores for grocery bags into the bags and out the store dude welcome to california welcome to humans yeah it's like it it's huge and that's going to be this now we're spending more money to go after the back bad stuff on the ppv on the people 87 000 new irs agents being hired yes oh my god so the inflation reduction act has just been signed by president biden and uh one of that provision is billions of dollars going to beef up the irs now i do want to clarify one thing about the 87 000 agent thing because i think there's a lot of misinformation out there that's a real number 87 000 is a real number it's over but it's not today they're hiring those 87 000 people over a course of 10 years so though let's let me go over both sides because i always like to balance this out so people understand what's really going on that we can understand what might be coming so the 87 000 people that they're hiring is going to be over a course of 10 years they're anticipating that i think around 50 000 of the current 80 000 agents so there's 80 000 agents right now they want to add on 87 000 more about 50 000 of the current agents are expected to retire over the next 10 years so the new 87 000 is one supposed to be replacing the people that are leaving and then stack on the workforce what are they going to be doing well on paper not on paper by word they're saying that it's going to be only going after people making over 400 000 a year to audit those people they want to go after the people who have taken fraudulent ppp money fraudulent money from the government are they going to actually do that well that's not what the bill says the bill says is they're just going to be increasing the irs workforce to do more what they do now the next question is what do they do well how do we just look at history 2021 50 of irs audits run people making less than 75 000 a year what does that tell us well if they bring on more people what they want to do they want to increase tax audits they want to go after more people for tax dollars now we can debate all day long what is ethical and taxes you know that's this whole different thing let's just look at the fact with the irs thing they want to go after people who owe a specific amount of money which is what the taxes say that they're supposed to get so that's what they said that they want to do well if 50 of people who are being audited are making under 7 5 000 a year what is probably going to happen with this additional irs agents well they're probably going to follow a similar percentage of people that they're auditing they will probably try to go after bigger corporations part of the inflation reduction act if i'm not misunderstood i this just happened like i'm reading this before this interview was they want to create a minimum tax for corporations so they want to go after corporations like amazon who use deductions to pay little to no money in taxes legally so they want to close some of those loopholes they want to go after people who potentially didn't pay enough in taxes so they're going to be doing a lot of this stuff i'm so worried about young people that were not thinking about taxes with crypto and just going ham like it's crazy yeah yeah small business owners if you're a small business owner if you're investing your money because even if you're a side hustler because you know in the last couple of years we saw the new six hundred dollar rule if you're getting money on venmo 600 rules oh you don't have to pay taxes yeah well in venmo never really tracked or reported these transactions rather versus now if you're getting a lot of money in venmo you have to report it venmo will report it even if you don't report it so you know doing side hustles become more difficult i never even thought about that so there's a lot of different things that i mean this so this additional irs agents isn't something that just happened overnight this has been something that's been kind of building up i've been talking about this on youtube jesus where i mean this is kind of one of the downfalls of a digital dollar is everything gets tracked every transaction gets tacked every purchase gets tracked every spend gets tracked because if there's no cash you know everything is going to be taxed and tracked so that's one of the the downfalls in that sense and this is where uh you know of course i'm not saying break the law i never advocate for that you know you got to pay what your taxes say you got to pay you as a tax advisor to make sure you pay the least amount of money in taxes legally be tax efficient be tax efficient be tax efficient there is a reason look i'm not terribly tax efficient i'll be honest because i find that so boring i'd almost rather just pay more money but being tax efficient makes a huge difference but if i could just psa for a minute pay your taxes please like i'm begging you the people get in trouble shout out to mr beast he gave that guy a million dollars guy won a million dollar forget what the hell why but he won a million dollars and he actually took him to a tax advisor and recorded it they wouldn't let him show it on camera but he was like he walked through here was the advice first of all you're gonna have to pay it's close to fifty percent yeah like you're gonna have to pay about five hundred thousand dollars of your million it's just gone bro tax tax government got you but pay it pay it because if you go spend that million dollars and then realize that you owe me a 500 check dude you you have no path to that 500 000 your ass is going to jail you're either paying or going to jail exactly that is some scary exactly pay your taxes pay it be tax efficient pay your taxes exactly so i've become much more passionate about this over the last while taxes pay them or be tax efficient both well well i've always had an accountant but i've had good accountants and i've had bad accountants and i will tell you it is it pays to pay for a good account and the reason why is because i'm going to give you just a straight example um i this is i forgot what day this was but i was in the office in my office get a call from my accountant he says hey joseph how are you doing i said good he said hey listen we made some miscalculations i need you to do me a favor and send a hundred thousand dollars to the irs by tonight and another fifteen thousand dollars to the state by tonight and i got a little upset i was like what are you talking about how can you say that and then you say well one more thing i want to say before you say that that you also are probably going to pay a penalty on this and i was like how can you say that this is my fault he's like it's no one's fault it's just we made a mistake and i said if i'm the one that has to pay the fee and the penalty you know sometimes i had enough i fired him i paid a lot more money for a good advisor and this blew my mind because one now would we him and i meet we are actually like going over he he records all my books he goes through everything he's like here's your revenue here's your expenses here's what they look like here's where you're spent here's how things have changed here's your profit here's your tax liability here are things that you can do right now based on the tax law to limit your tax liability here's the things that we recommend here's what you may want to consider doing and now i'm like wow you're telling me that like i could have been paying this so i'm paying way more than it was before but i'm saving that money in taxes and so that's this is actually a very recent thing this is the first time i'm talking about this i actually over the last number of months i talked to him i said look man this is a service many people need business owners because most times we're not taught this type of stuff so him and i are working together to actually build a proper tax firm tax advising firm for we can start with small business owners to help you understand your cash flow understand your tax liability and understand how to legally manage this tax liability because the irs tax i'm telling you from an attorney i studied a lot of tax law the tax code is over 2000 pages long you can't understand this versus this guy my advisor he has a whole team he lives breathes this is all he does like he wakes up and thinks about taxes okay like you know it takes a special type of person to do that and i was like look we need to get your mind into more people so him and are working together to build something so if you're a small business owner and you want the type of advice i mean i don't have any website or anything but uh you just email me maybe my um my assistant can send you over to him team the minoritymindset.com so like it is so important now 87 000 new agents come in they're they're going to want to raise taxes why it goes back to inflation inflation reduction act kind of a a funny name a spending bill spend more money to reduce inflation the goal is that they're going to reduce costs more than what they spend my concern without getting political which has been happening many times is that the government is not efficient with their money they think that they're going to spend x what ends up happening is they end up spending 10x and get a return smaller than what they expected so i hope i hope that the inflation reduction act will reduce inflation my concern would be what happens if it increases inflation and the united states government is facing almost 31 trillion dollars of national debt oh god how do you pay that back they need to make money how does the government make money they tax people you earn money you get taxed everything you do gets taxed you spend money you pay tax you buy a home you pay tax you pay tax on your property property taxes you pay taxes when you sell an investment i mean you pay taxes everywhere and if they want to pay down this national debt they want to pay down some of this this deficit you're going they're going to need more tax dollars because they keep increasing the amount of money that they're spending right so if you're spending this much money but you're bringing in this much money you have to make up this cost somehow and a very rudimentary diagram so before it was print money money print money that's what the federal reserve bank did that's how the federal reserve bank has built up a nine trillion dollar balance sheet meaning they spent nine trillion dollars that they didn't have to help fund the government spending well now what are we doing we're facing the price which is super high inflation the some of the highest inflation that we've seen in decades and now we can't keep printing money so now what is the alternative we need to get more tax dollars because that's how the government can get more money so either they're going to go after back tax dollars and trying to raise taxes like they're already talking about raising the taxes on corporations uh will they raise taxes on people we'll see time will tell but this is the reality this is where you want to have a good tax advisor and you want to be filing your taxes you want to be paying your taxes and especially now you want to be prudent because you can bet that they're going to be trying to ramp up audits the best way to fight an audit is to not get into an audit it is honestly the best thing to do whether you're a person or a small business owner that means one filing your taxes if you don't have a lot of money like if you're making under a hundred thousand dollars a year and you just work a job don't pay ten thousand dollars a year for a tax advisor use a free service online use something that's going to help you you know you show your w to whatever else you're doing it's much simpler now if you're making more money you have real estate investments you have other investments you have a business now you want to pay and invest in a good tax advisor because they're going to help you document everything they're going to help you understand everything they're going to help you manage everything and there's a huge night and day difference between a good tax advisor and a bad tax advisor i can tell you this from personal experience and so my goal with this will be to help bring good tax advisors to people who need it but this is all about just understanding because this is not going to slow down this whole tax stuff it is probably going to be increasing not just because of who's in office but because of our economic situation where inflation is so high international debt is so high and social security is drying up at its current rate like the government needs more tax dollars and i'm not not trying to get too confusing because it gets one more layer uh one more layer bigger it's like an onion right we keep peeling back layers the government taxes you on your income and profits well what happens when an economy is slowing down incomes go down profits go down so if they're taxing you based off of that that would mean that they're generating less tax dollars per person or in total because now the economy is shrinking couple that with the issue of the high national debt the high deficit now you start to really see the issues where hey we need more tax dollars so now if you can't get it from a bigger economy what's the next alternative we need to charge more money in taxes so this is the things that you want to be aware of because unless our national debt and our deficit magically go away this tax thing is going to be a bigger and bigger issue as time goes on all right you're going to tell people how they can follow you to get that and after that i'm going to tell everybody the eight things that i've learned by watching a just unimaginable amount of your content sure well i appreciate you watching um if you want to learn more about the tax advising service send me a dm on instagram at minority mindset there's a bunch of scam accounts out there but you can send me a dm minority mindset or email me or my team at team at the minority mindset.com t-e-a-m minoritymindset.com you can follow me minorityminds that just sing pretty much anywhere uh youtube social media check it out i love it all right dude first of all watching the content you definitely don't have to thank me for that thank you for putting such amazing content out now i'm going to say these things in my words all right you'll tell us if i get pretty close here all right let's go but these these are the eight concepts that i think are incredibly powerful i hope everybody takes away from you uh and i think is extraordinarily good advice number one keep your expenses low number two save roughly six to twelve months worth of living expenses just in case uh remember that you can't save your way to wealth wow i like coming on the heels of making sure that people do have reserves invest your money in a diverse portfolio again that's my language but you're very wise to talk about etfs and index funds dollar cost average so that you don't get burned trying to time the market invest in yourself if you're interested in being an entrepreneur could be you talk a lot about that for many people is the best investment you'll ever make don't confuse the house you live in for an asset the house you live in is a liability yes i think it's very wise and then number eight if you can't afford to buy it five times you can't afford to buy it yes the myrtle of five uh that's that's one of my favorite ones man awesome i love it brother i think that's extraordinarily good advice speaking of good advice if you haven't already be sure to subscribe and until next time my friends be legendary peace new york city's becoming more dangerous chicago's becoming more dangerous places chica san francisco is becoming more dangerous you're seeing people leave some places for other places the greatest danger for most people is failing to look at the things that could be harmful

Channel: Tom Bilyeu

Views: 1,160,818

Keywords: InsideQuest, Tom Bilyou, Theory Impact, motivation, inspiration, talk show, interview, motivational speech, Jaspreet Singh, Minority Mindset, Market Briefs, Market Insiders, Conversations with Tom, interview show, mindset, recession, how to profit from a recession, stock market crash, stock market, market crash, inflation, how to build wealth, make money in a recession, stock market crash 2008, 2008 market crash, financial education, investing, building equity, what is equity

Id: Rfk47hW1Jds

Length: 118min 58sec (7138 seconds)

Published: Tue Aug 23 2022