What It Takes To Go From $0 To MILLIONAIRE In 3 Years - Here's What To Do... | Tom Bilyeu

all right so Tom my question to you is if I was starting from scratch as in I had zero dollars in your opinion what will it take for me to get rich in three years whoa okay getting rich in three years that's that is a very aggressive timeline the only way that you're gonna get rich in three years and we should probably Define that I'll say seven figures or higher seem like a reasonable Baseline okay so the only way that you're gonna get that kind of wealth is and I'm assuming that you're not able to invest something go buy something or something like that so we're literally starting at scratch so you're going to have to create a company create something that generates a lot of value typically that's going to be a company so you're going to create a company that meets a very well-known need that has not yet been serviced by a product that is relatively easy to get across the finish line and into the marketplace it needs to be something that is going to resonate with social media and it needs to be something that doesn't cost a lot of money to get started so either you're gonna layer on way better marketing so if somebody has a solution to a well-known problem but they don't know how to Market it you can go and partner and say hey look I understand marketing I'm going to be able to get this out there or if you have an information product that can be associated with a known problem that you uniquely can solve I happen to know a little bit about your background so if there's an element to working in the music industry to becoming a professional singer improving your voice or something like that that you really have a beat on that you know a lot of people are interested in that you could turn into a course for instance that people would really resonate with that could be a great one the reason that I keep coming back to information products is you're looking for something that doesn't cost money up front if you're going to like take Quest Nutrition for instance when we were building that there was still a substantive amount of investment that we had to make even just buying a bunch of protein powder was expensive buying the liquid fiber you have to buy them at 55 gallon drums so it's like there were still thousands of dollars that we had to put in in the beginning and so to find something that really takes little to no money down you're either going to be doing an information product or you're going to be doing something that you can make yourself that doesn't have expensive uh constituent parts or you're going to be finding something that's already made that the person doesn't understand marketing so it's really about what is the bit of value that you're going to be able to bring to that that's unique that somebody else can easily replicate that the world is going to know instantly that they need and you just have to make them aware of it because three years is fast and so quest for instance depending on what you mean by Rich so for instance three years into Quest we had a billion dollar brand but I was I didn't have a billion dollars that I could put in my pocket so I was still driving I think by then I had finally upgraded my car but for the first couple years of that I was still in a beater car even though I was worth a lot of money and so if you need the money to be in your pocket that's probably going to take a fair amount of time longer and if I can take a minute to get everybody watching to understand the difference between net worth and income that would be really valuable so if you don't mind generating a million dollars plus a net worth now we're back to you just have to build something that other people say that they want to have the actual money in your bank account you have to build worth in something that people say that they want and then you have to sell that thing so it's very rare that you're going to get rich off of the operations of your business you get rich by building a company where somebody's looking at that God this is going to get complicated fast so ask follow-up questions so you're either going to build something that's going to IPO okay initial public offering and what you're saying is hey I built this really cool thing it makes a lot of money or people think it's going to make a lot of money and by going to the SEC they'll actually let me fractionate my company break it into a bunch of pieces known as shares and then I'm going to sell some of those shares on the open market the public markets and then people can buy those shares and so that's a way that you're going to be able to put that money in your pocket but you're you're literally selling a piece of the company that you own otherwise you can sell a minority controlling or total interest in the company to private Equity Venture firms something like that but usually when people do that they're not doing it for founder liquidity they're doing it because they expect you to invest the money back into growing the company which is why IPOs get people really excited because some of the shares you will sell as part of the company treasury which generates operating Capital some of the shares will be yours personally that you get for being a founder and so you can use that as a liquidity event so now you actually have that money in your pocket but most people in three years it's gonna be tough you could get to an IPO stage but that's going to be a really rare moment that again follows the equation of you're solving a problem that people already know exists in a very Dynamic way that people are basically falling over themselves to give you money for and you've actually created a company that can be sold which is we could do a two-hour class just on what that means so it's interesting when you ask that question I really want to give you a hot sexy take and just be like oh go do this but the reality is to to have a seven figure exit that fast would be hyper rare it does happen and I would rather get people thinking about how do I build a business that's doing a million dollars in Revenue all the following things apply but then it's really about reinvesting every dollar that you're getting back into the company to grow and scale but again it's a problem with a killer solution that you're doing in a unique way that didn't require startup Capital yeah and so going off of that who would be the I guess the top three people that I should first hire to take on this this event this you should hire nobody you should be going after people that are going to partner with you so that you're not paying salaries because the thing that eats companies alive is overhead so when you're starting if your goal is like look I've got no money and I'm trying to build a million dollars in value in the next three years now you want to be focused on what is it that I'm good at so what's the problem I'm solving who's my audience who am I making this for and what skills are missing from myself right so even if you're doing an info product you're going to need maybe a marketer you're going to need a tech person that can help you package it up you're going to need customer service you're going to need somebody to run the day-to-day operations so there's a lot of things that are going to have to be done but you don't necessarily have to pay somebody to do it and so the mistake that I see entrepreneurs make is that they're imagining oh my God it's going to be worth a hundred million dollars why if I give you you know even 10 percent of my company that's 10 million dollars like why would I ever do that because you'll never get to 100 million dollars if you don't have other people so to give you an idea I've never once done a company where I didn't have a partner ever so I highly encourage people obviously and I've become fantastically wealthy so I highly encourage people to bring on partners that you trust it's it is literally like choosing a romantic partner that you're going to be married to for a long time and it's going to be hypers it's like having a spouse and kids right but you don't just have one two or three kids you have 10 20 30 kids and all the stresses of running a business so be very thoughtful about who you partner with but bring out a partner who's strong where you are weak and then you guys are going to be able to really multiply your efforts and you can work things into it like if they end up flaking out if they quit that the shares then revert back to the treasury so it's what's often referred to as Phantom shares so you guess what we do here at impact Theory so we give Phantom shares and we say hey as long as you're an employee in good standing you own that much of the company if we exit boom you get it but if you leave or get fired for any reason the shares revert back to the treasury because what we're trying to incentivize is performance we want people that are in here killing it doing it long term versus the sort of traditional Tech VC back company that knows they're going to exit in three to five years years and so that's a very different mode of being that's raising a lot of capital that's having the idea that sounds amazing on paper it's knowing that you're part of a portfolio so let's say they invest in 10 companies they're only expecting one to hit so it means nine of them they know are just not going to work out nobody can really see the future so I would say especially for beginning entrepreneurs get partners that you don't have to pay that are going to work as hard as you and they're good at something you're not awesome thank you to follow up on that do you need an entrepreneurial mindset to become wealthy no doubt I mean you could win the lottery or have your parents give you money that certainly is possible I don't think you're ever going to get what I would call wealthy in the short term without an entrepreneurial mindset now in the long term you can invest very traditionally and generate incredible wealth it's really pretty startling what compounding interest looks like over time and if you're willing to sit in the stock market which which returns an average percent of seven percent over inflation so being in the stock market for 30 40 50 years really is pretty amazing and you double your Capital every seven years so you put it in you know if you've got fifty thousand to begin with seven years later you've got a hundred thousand dollars seven years after that you've got two hundred thousand dollars seven years after that you've got four hundred thousand dollars so it gets big number pretty fast right when you're going from one million to two million two million to four million but you've got to be in it 50 years right so you've got to have a lot of those seven year cycles and that quite frankly for the vast majority of humanity is exactly what you should do you're effectively if you do it the right way do not try to pick stocks okay don't try to pick stocks I nobody beats the people like Ray dalio right he's got hundreds of millions of dollars in AI eighteen hundred employees that all they do is that for a living and they know how to make Arbitrage on milliseconds if you're not going to play at that level and you're basing your decisions on things you hear about on Twitter it's already too late by the time that makes its way out so that's where people make the mistake they want to do it sexy they want it to feel like gambling they're trying to treat an nft like an investment vehicle all mistakes you want an index fund and the reason you want an index fund is index funds are you're betting on on a sector of the entire economy so you're not trying to pick a winner it's kind of like saying I'm going to the horse track all I'm going to bet on is that a horse wins the race a horse comes in second place a horse comes with their doesn't matter which I just know that they tend to work out on this distribution so I'm going to invest in something like the S P 500 which is a list of the 500 strongest is probably the right way to think about it the 500 strongest companies in the economy if one of them ceases to meet that criteria they fall off stop being a part of that portfolio a new one comes on and becomes part of that portfolio so it's it is not what they call actively managed so nobody's trying to buy a quick stock they just it meets this criteria or it doesn't as you get fancier you can invest in more index funds so maybe you want a growth index or an index out of China or developing economies whatever and you can start to broaden out like that but still index still passive still long-term hold it's the only reliable way historically to buy low and sell High which sounds stupid but is the hardest thing to do in investing the easy thing and what most people actually do is buy high and sell low now the question becomes if we all know that's dumb who would ever do that it's because of the emotion you buy High because you think it's actually low it's euphoric numbers going to go up forever even though it's a really high number compared to where it was a year ago it couldn't possibly go down come on everybody knows this is all only up only up it's different this time and so people convince themselves at this time it really is different you live through the crypto Euphoria you know exactly what the feels like and it feels good it feels good it was so fun I was having a ball now thankfully I don't trust myself so I was like I'm gonna invest this much and that's it and no more and even though when I hit that number I was very sad because I wanted to keep investing and keep investing and keep investing I was like no I know better than that and so we stopped and then of course the numbers come down now the problem is they bought on the way up Euphoria felt good number go up forever and then as it starts to come down they panic and it's like whoa that sense of like it couldn't possibly go down you realize isn't true it is going down and now you're terrified that you're never going to get your money back and if you got yourself in too deep and you don't have money to live on you start going oh damn like to pay my bills I'm gonna have to get money me out so now you've effectively got a life gun at your head that's telling you to live your life you're going to have to cash out even though that would have been worth ten thousand dollars you know three weeks ago it's now only worth fifteen hundred but you need the money so now you lock in your loss by selling low you buy High you sell low that's what most people do and they do it all for emotion on that note uh so if there's certain things about understanding your emotions what are certain things that people need to understand about money to actually Attract it into their life or to build it build out wealth what do you think are those key things that they need to understand okay so you don't attract money the only thing you can hope to do with your mindset is to allow yourself to be optimistic enough to do the right things to move forward what I mean by that is it's what I call the only belief that matters the only belief that matters is that if I put time and energy into getting good at something I actually will get good at that thing so you do need to have that mindset so Napoleon Hill in the book Think and Grow Rich he says like it was like page 45 he kept saying I've already told you the secret to this book on every page and he was like if you don't get it by now you're never going to get it and I was like what has he said on every page and I was like the only thing that he's repeated on every page is that if I think I can I can and if I think I can't I can't I was like oh my God that's so true if I think I can then I'm going to act in accordance and I'm going to go learn and do the things and ask other people that invest and I'm actually going to take money and invest it and I'm going to figure it out because I think I can but if I think I can't I'm not going to read the books I'm not even going to try because I already believe that it's not going to work and so you do have to get your mind right in that way so that you have that belief so that you are moving forward so that you are learning but make no mistake if you had the best mindset in the world if you say a thousand times a day that you are I already am a millionaire I'm attracting money into my life it isn't going to work and the reason it's not going to work because that's not how value is created that's not how money arrives right so and if that did work there'd be a lot more rich people so it really comes down to do you going back to the first question do you do the things that you need to do to generate money which then enough of that stacks and becomes quote unquote wealth and to do that you have to identify a problem solve it and solve it in a way that people get right away and they're like oh damn you solved my problem and now I would rather have that solution than the money that I have in my hand and if you fail to do that you're never going to get anywhere and so unfortunately a lot of people think that thinking about something moves me forward because it really does feel good it puts you in an expansive mindset it makes you feel like you've made progress but the reality is you haven't and this is why the most like hardcore manifesters who are like this is all you have to do none of them are on the Forbes 500 it's just never gonna happen so you've got to get those are going to be people that are just die hard executors so how in your in your opinion would you say how can we get into a money mindset what is a money mindset to you I guess just you know how when we're when for example me anyway growing up I was told you know whenever you have extra money save it put it in the bank and if you can buy a house blah blah like very traditional but I'm learning especially just with all the resources that are out now that there are other ways to make I don't know to just invest your money in a more smarter way and I I would classify that as like a money mindset where I'm just smart with where I allocate my money let me use different words that I think are really going to help people it's not about a money mindset it's about mastering the game money is a game and it's played by extremely Savvy people that know the rules and you don't know the rules and because you don't know the rules they get you to contribute to their wealth fund by buying the things that they want you to buy by investing in the way that they want you to invest like I remember so there's a whole thing which most people don't even know about called accredited investor so to buy something before it reaches the public market you have to be an accredited investor now I remember when I became an accredited investor which meant that you had a net worth of over 1 million dollars so the day before that I couldn't invest in something private and the day after that I could and I was like why I'm not a better investor from the day before till now I know how to make money so fair enough being able to start a new company yes you should let me do that because I've proven that I can but you shouldn't be rewarding me as an investor because they are entirely different skill sets and so I was a little bit offended on behalf of the rest of the world who do know about investing but don't have the money to qualify and so now those guys are stuck and so there are years and years and years where they're going to have to go play in the public market game to build enough net worth that they can finally go be an accredited investor now why does it matter being an accredited investor means that you get what they call Deal flow for the people that want the fancy words you get deal flow where people are coming up to you and they're saying hey hey I'm starting this company and if especially if there's something about you so let's say people will come to me and say things like that because I have a platform and they know that if I talk about their company then that's going to be valuable to them so they'll ask me on their Advisory board or whatever and they're going to give me shares in that company so if I wanted to buy some shares in that company they might come to me and say hey we're going to have an over subscribed round so let's we're raising 50 million dollars it's going to be over subscribed meaning we'll have people that want to put in more than 50 million dollars but hey Tom we're coming to you because we know that you're Savvy you know what you're doing we'd love you to um you know give us advice or whatever and the secret thing that they're not going to say is you also have a platform we hope you talk about us so it's like Okay cool so now I get deal flow because I'm an accredited investor where I can invest in that but think about a tick tock influencer that may have a way bigger voice than I have socially they can't do that same thing and so that to me is crazy now there are other ways you can work it out you can become a partner and things it's not like there aren't ways around it but in terms of being an accredited investor you can't do it now usually in the private round is where the bulk of the meat is picked off the bone so the people that end up getting really wealthy are the ones the VCS that come in early when a company is still private they invest at a very low valuation then they spend three to five years trying to blow the company up even farther and then they exit and that's their whole thing is that the exit is often going public so all the value that they capture from the moment they do their investment to the moment that they exit that's all where the average person they'll never get to capture that value ever now they still have an incredibly powerful tool at their disposal which is now we've gone public and where does it go from there so they still get to capture all of that value but is that remaining value is that an extra 20 an extra two thousand percent who knows but what we do know is the person that invested here and exits you know at the same time the public investor exits they got a lot more juice from that so that is very frustrating to me that instead of it being knowledge based it's based on how much money you have in your account which they're trying to use a proxy for being Savvy but I think it's a terrible proxy so people should be very thoughtful about that so getting away from the notion of having a money mindset and just really understanding the nature of the game so understand oh okay literally just in listening to that part of the answer you now already know three or four different things about how the game works you might not have understood before going very deep about how the stock market Works what like what's an index fund um what does it mean to do a put or a call options trading what is all of that stuff what are Futures what are Commodities when you begin to learn all of that stuff then the magic happens and this is the thing the very nature of learning itself is the following when you understand something it makes a prediction and now you can test your prediction to see if you're right 92 percent of people that set a New Year's goal fail to achieve it which is why I've created a 90-day challenge designed specifically to ensure that you hit your goals you really can radically transform yourself just click the link below to join me and the entire impact Theory university community to kick off 2023 right with the impact 90 challenge alright guys now back to the episode so you understand all of these things and you're like hey wait a second if all of these things are right it makes the following prediction and cool I'm going to make a bet on that prediction now the Market's either going to reward you or slap you down so I'll walk you through a prediction that right now probably is about as controversial as it's ever going to be and so we're going to get to see if I'm right or not so I got introduced to the blockchain which allowed me to figure out oh now I understand what this technology does it takes a digital asset and gives it the properties of physical assets so this is utterly fascinating what most people don't understand why did gold become gold why did it become the gold standard right most people know that for a long time money was backed by gold but most people never stopped to ask the question why the reason is for something called proof of work so however many billions of years ago Stars exploded when they explode one of the elements that they shoot out into the universe is gold that gold then crashes into a forming planet and that gold chunks get locked into in the case of the earth into the crust right so you see it it in the mountains and things like that so you can go and pick it a mountain you can actually find gold that was an exploded star it's crazy right so first of all you have the work of the universe being done to formulate that element then you have the work of the person chipping it out and finding that thing so those are two very difficult things to do so if you have a piece of gold you know this was a star that exploded that's going to be very hard to replicate and somebody had to go find it get it out of the ground whatever so we know that the supply of gold is never going to balloon up too far it does balloon up which is another thing people don't know about which is inflation which people know that buzzword but do they really understand what it is so that's how gold becomes gold it's scarce and it's valuable and it's extremely hard to replicate and it's very resilient so you can melt gold and then you can reform it again and there's no loss whatsoever gold doesn't mold uh it doesn't get water damage right so there's all these properties that it has has but it's heavy as hell so that's one of the things that's sort of a strike against it but this idea of proof of work so now you get people going okay wait a second if all gold is is proof that a star exploded and that somebody found this in the ground and therefore is provably scarce what if I could perfect that because gold inflates at about two percent a year which doesn't sound like a lot it's a lot so that's inflating away so its value is constantly dropping due to inflation which we could get into a whole rabbit hole which I know George really wants to about what psychopath called The Bad Thing inflation because it sounds awesome and what person called the good thing deflation it sounds bad but it's amazing it means your buying power goes up over time okay when something deflates which by the way economists hate and we could derail into why but this is the game of money right see how many rabbit holes I can keep going down so when you talk to somebody that really knows what they're talking about and they're like yo the currency in China I believe I understand this much I predict right my knowledge makes a prediction I predict it's going to start deflating which means if I transfer my inflating US dollar it's going to be worth less over time into a deflating currency in China that means it's going to be worth more over time yo send my US dollars over into Chinese yuan hold it there it's what they call Arbitrage one dollar here gives me something over here and the values are going in opposite directions and I'm actually making my well simply on that difference I didn't create anything new I just took the Arbitrage of a deflating currency sorry I should be using this hand my deflating currency over I'm making this up I'm not saying that China is actually deflating although the US actually is inflating uh but just example example example not a financial advisor either this is not Financial advice so in this hypothetical example where the Chinese currency is deflating it's actually increasing in value so a deflationary asset isn't devaluing an inflationary asset is devaluing now some people say that that was done on purpose to create a mind virus that makes people think inflation is good when you start thinking about why would somebody ever want to trick the public into thinking that inflation is good and this is a conspiracy theory but if somebody wanted to do that I would understand why because inflation in a small amount stimulates the economy by changing your behavior because what are you going to do if the money in your pocket is worth less tomorrow than it was today what are you going to do with it you know spend it yeah because you might as well get something that retains its value could be a car could be a book could be a handbag a fancy shirt whatever but you're going to spend it on something that that price is going to be the same tomorrow but my dollar is going to buy less of it so I'm actually better off you're literally incentivized to spend your money now and in hyper inflating economies people go out and buy a hundred iPhones they'll buy 50 cars they'll do things like that because they need something that's going to hold its value and because a car or an iPhone has intrinsic value it's better than the paper money that's being devalued by inflation right so something super sketchy about those words now whether it was done on purpose is a totally different question but you have to begin to understand like all this like confusing mess of interconnectivity of one thing means this another means that but it all makes predictions so if I could get people to master the game of money to the point where they go oh I know what this means I understand the last time this happened it meant this and so now I've got a prediction and now I can begin to bet on my predictions or now I understand how to use leverage or when not to use leverage and so all these tools that are available to the quote-unquote hyper Rich are available to anybody you may only have ten dollars to invest in that same way but it is a knowledge problem it isn't a money problem now there's a speed issue for sure the guy starting with a dollar it's going to take him a lot longer to get to 100 million than the person that's starting with 10 million to get to 100 million takes a lot less doublings right to get there takes a lot less risky stuff you've got a lot more things you can try that don't work all of that I'm not denying any of that so scale becomes a question of what your how quickly you're able to generate that money but you can play the same game I actually want to call back to when you're talking about accredited investors and so my understanding is they have certain income you know brackets or like you know Network bracket where you can jump into it because of how they view risk and they're assuming again these people have more I guess bandwidth to take on that risk and so I'm curious for you how does risk play into like wealth generation because again timing also plays into it because in my head when you're talking about the S P 500 index funds these are like safe right over long periods of time but at the same time you know if you want to take risks that's also where you get like the 100 X's or things like that so how do you view risk in wealth building yeah so I think people if you want to there's two paths before you to build wealth you can invest in building something or you can invest in assets and we'll Define an asset as anything that actually pays you to hold it so there are other ways but just for Simplicity let's stick with those two building something is going to be ultra high risk but high risk High reward so that's how I generated my wealth I didn't own a single stock in a single company until after I was worth hundreds of millions of dollars so none of my money did I generate in that way all of my money I generated by building a company that became incredibly valuable to somebody else to Own by just making hundreds of millions of dollars a year in Revenue so another company looked at that was like yo those hundreds of millions of dollars owned by us we can either grow it or it's a creative to our bottom line which makes our share price go up or that product we recognize is a necessary part for our brand portfolio to own whatever for whatever reason it was extremely valuable to them here's another money Master the game idea so when you're talking about buying a company there are two ways to value a company more but these are the two really typical ways you can get a multiplier on Revenue so oftentimes that's 1X 2x something like that so if you're making 300 million dollars we'll give you 300 million dollars to buy the company or you can get a multiplier on what's called ebitda so ebitda is just an acronym it stands for earnings before interest taxes depreciation and amortization I always forget the eight you've got your all it's basically the money you make minus fancy accounting is the easy way to think about it so you've got uh you're trying to eliminate all the different ways that a company can do accounting and just look at how it's making money without all the accounting stuff and that could be 10 times ebitda 16 times ebitda 20 times ebitda because they want to know how profitable effectively is the company so I'm only going going to give you 1X your purchase if it's just based on Revenue but I don't like the way the revenue is going or if you've really shown that this business is functioning we can do it as a function of ebitda so while I can't disclose the multiplier Quest sold on ebitda and that was part of how we were able to win so well was we had put together a high functioning company and so looking at the different ways that something can be structured it becomes really important now we started getting a field what was the basically about risk and how to manage that right so going back to risk so you have those two paths before you've got the high risk High reward then you've got the much lower risk much longer time Horizon to get wealthy and so that's where I would advise people if you're going to bet on yourself accept a lot of risk but know that it's like most businesses fail but it could still be the right of a lifetime if you've got me meaning and purpose right so I still don't know if impact theory is going to do what I wanted to do but I show up every day and fighting for it feels awesome and so I've already spent six years of my life just doing the same trying to build it it's been six of the best years of my life so it's like okay well nothing can take that away so even if it ends up failing while I will be you know there'll be a moment of emotional trauma that doesn't negate all you know going after something that really matters so for me that's where I invest the vast majority of my net worth is um I guess technically the vast majority of my net worth is effectively buried in bonds so that I can't lose anything uh which is me saying I'm a very low risk investor and so all of my high risk dollars though are in building impact Theory right so we're just pumping money into it to continue to scale and grow and grow and grow so if I were doing risk I would do that but for most people I would say you'll be a lot happier you'll sleep a lot better if you put money into an index fund as boring as can be and just leave it in for a really long time dollar cost average in so don't put all your money in at once buying slowly over time no matter what price up price down you just keep if if you're going to buy in a thousand dollars a month you're buying a thousand dollars a month a hundred dollars a month a hundred dollars a month ten dollars a month whatever and you just slowly slowly again index funds don't try to pick stocks so I would Ward P if you're an entrepreneur you take risk if you're not don't I have a follow-up question on the risk tolerance of uh index funds and S P's 500s do you see it as more risk given Ray Dalia's most recent book about the changing World Order so I love Mia Ray dalio uh Rabbit Hole so I would still say that it's your safest bet you just may want to be thoughtful about so for those who don't know Ray dalio's principles for changing World Order is an extraordinary book that points out a fact that every Empire in all of human history has ended up collapsing and their currency along with it so whether you're talking about the age of England and the Sterling being the world's Reserve currency whether you're talking the current U.S being the reserve currency when the Dutch were the reserve currency so on and so forth forever the Romans when they were the jam and every one of them has failed all signs point to it's a it's a six phase cycle and phase six is total collapse and Ray dalio pegs is somewhere in the middle of phase five as the U.S Empire so we are clearly on the decline in the world order in the last 18 months as the time of filming this uh 40 of all U.S dollars ever made in the entire history of the US dollar were printed in the last 18 months so that is a very bad sign so when you think about uh an Empire collapsing it usually begins with inflating their currency it begins with inflating their currency and beginning to lose their standing on the world stage and that there's another Rising superpower and of course right now that would be China so there are a lot of things but Rey will be the first to tell you he doesn't know if it's five years 50 years or 150 years they do tend to collapse somewhere in the 150-year range give or take a hundred years though that's a pretty big swing so we are at what the US is 250 almost 230 something like that no almost exactly 250. so we're almost exactly 250 years old right now so we're along in the tooth so uh even if it's the plus 100 years uh according to Ray dalio's research and of course nothing is ever a hundred percent so one might want to not just invest in a U.S Index Fund but I certainly would not think somebody investing in the US economy is stupid because what you're saying is that you just trust that the U.S economy is going to grow and the odds of it not growing over the next 50 years to some meaningful amount is effectively zero I can never say nothing is zero but historically certainly that's a very positive sign like even somewhere like England it's not like they went to nothing they're still a major economic player especially for a country the size that they are but it's worth paying attention and seeing does China start to pop off do you hedge your bets a little bit do you start doing emerging markets do you do based on technological sectors whatever and looking at that but the only sort of dumb thing to do would be to pick the major um like the S P 500 the I'm sure there's a global index to get as broad of a portfolio as you can that is a well-trusted index fund and invest in that and then as I say uh diversification is critical you're going to hear people say diversification Is for Suckers the crazy thing is they're both right because what they mean is there really will be a winner and a loser and if you bet on the winner then you make all the money and this is the guys that get incredibly wealthy it's never on index funds you'll get Wealthy by sort of family standards but you're never going to become uh Elon Musk or Warren Buffett betting on an index fund so if you look at somebody like Warren Buffett who did make his money in the stock market the way that he did it was he picked somebody's he made like 80 of his wealth off of three trades I mean it's really ridic it's less than five for sure so there are precious few companies where he looked at it got it right and went all in now if he had looked at it got it right and then was like well I'm still going to hedge my bets across everything he would have much less risk for losing money but he never would have become the richest man in the world so again it's optimizing risk for what you're comfortable with I'm hyper risk-averse in investing and I'm hyper risk tolerant in building so the bad news for my wife is if I put all or most of my money at risk to build impact Theory and it ends up failing I still feel like a warrior who is in the arena and that's how I want to view myself if I were to failed to take that risk and never try to build something great that would really bum me out but if I lost all my money on an investment I would feel like an so because I don't consider myself to be a clever investor so I need to be very thoughtful hedge my bets be very risk-averse and So for anybody following the FTX drama Lisa got text messages from friends who were like oh my God I'm so sorry uh that you guys you know you must really be panicking I think they said to her and she was like oh my God what the hell and so she reaches out to me she's like what is FTX and I'm like your husband is way too paranoid for that like we have no money in FTX my heart absolutely bleeds for people that did the loss of human capital as an app an absolute tragedy but because I'm so risk-averse on investments we didn't do that we didn't expose ourselves to D5 or anything I'm just too paranoid so know thyself know what your risk tolerance is but most people would get queasy if they saw how much risk I've taken in my life on the entrepreneurial side and then they would laugh at me if they saw how little risk I take in the stock market I'm actually going to interject here but you you made one comment which I don't know if it was a mistake but you said D5 which just in the crypto world it was actually a centralized exchange that caused like all the drama you know I was not trying to say that FTX was defy I'm saying you don't not only did I not that I didn't do defy or any of the things to get people excited because the yields are amazing but thank you so that nobody thinks I'm conflating the two um they were just when I got into crypto which already I only invested in three total coins one I sold and boiled down to just two Bitcoin and ethereum um even then when there was so much excitement around the kind of yield that you could get when Banks were paying you nothing I was like nope it just seems too good to be true I'm going to stay safe and so even if I look like a chump because I don't make a lot of money on the D5 and other people are fair enough but I'm also not going to lose money and then literally like a few weeks later uh was when Mark Cuban lost God only knows how much on a D5 thing and I was just like yeah and the thing it really does come from an acknowledgment of my level of ignorance so I don't want anybody to think I'm smart I want them to realize how risk-averse I am as an investor and so you just have to and the reason that I'm so risk averse I don't think I understand it well enough and so you need to know your level of knowledge because again your knowledge makes predictions if you don't have enough knowledge your predictions are going to be terrible and so the only things I invest in are things where I feel like I understand it well enough to make a prediction so that to go back to an earlier answer that I can really Buy Low and sell high so as the price of Bitcoin fell and ethereum fell I didn't even think about it because one I was investing for the long term I knew that they fluctuate wildly within any four-year window the fluctuations on Ethan Bitcoin since their Inception have been violent and so I was like well I know they're going to be violent swings so I'm only going to invest so much that I still have plenty of capital dry powder as they call it to live my life and build when I'm building and then I want to make sure that I don't see that number and panic and go oh my God I have to sell it's never coming back it's like you have to be sober in that moment and go what what was the knowledge that made a prediction it's what people call my thesis right you'll hear that a lot in crypto my thesis is still intact what they mean is you learned something about the way that it worked which made a prediction and that's your thesis so my thesis is that the world becomes more digital relies more on the blockchain and more of the things that we think of as being physical like money are going inevitably to become digital if it's going to become digital what do I think will be the digital currency uh honestly the digital currency will probably be nation-based digital stable coins if I'm completely honest but I think Bitcoin will be digital gold and then ethereum because we we actually build on it ourselves here like that one to me is even more than a currency it's it's a whole universe of creation so anyway as long as my thesis I Theses whichever the case may be as long as those remain intact I'm I don't have an emotional problem right so even the other day when I saw that uh ethereum was down to 1100 I was like whoa it was almost more a fascination of like wow like volatility is really real but then when you see people being devastated devastated to the point of like weeping and obviously we know unfortunately it can go even farther than that and it really becomes scary for me it isn't emotional because I followed a set of criteria again because I know my level of ignorance this is not a clap for Tom this is a hey maybe I can own up to I am as ignorant as Tom and therefore will be as cautious as Tom and play at that level many people change their thesis over time so how do you decide if you're gonna change or how do you always stay focused throughout the ups and downs one I don't chase it because I don't know it well enough I don't spend enough time but if you look at somebody like Ral Paul who I think is a brilliant macro Economist when he's spending all day every day watching the macro Trends two he is extraordinarily educated because he's been in this for a long time and so he's lived through a ton of these Cycles so even in the Euphoria he was like guys you have to be careful you have to be thoughtful here the macro Trends this is what this makes as a prediction be very thoughtful and just walk people through historical Rises and falls and so you'll get people like that that as their thesis changes they change their portfolio so one point he was what he called irresponsibly long on ethereum so he had something like 95 percent of his net worth now as things began to change he started changing that ratio for me I was just like this is how much which I'm willing to put into crypto once I hit that level then I just stop and I'm going to turn my brain off to it for the next five to ten years now if 10 years from now it doesn't hit I'll be like yeah maybe that was a mistake but my thing was I put the money in it and and if if over that time my thesis changes then I may rethink but the way that I see it right now today I would ride ethereum and Bitcoin to zero I have no intention to sell the reason that I would write it to zeros as of right now today I in my do not follow my advice way believe that right now those are the Front Runners to be the ones that last because I think everything not everything I think a lot of things are going to go digital a lot of important things are going to go digital and those two things still matter to me for the reasons that I was explaining a minute ago so okay those still matter so even if the rest of the world momentarily says these have no value it's my belief that they will once again realize no actually they do and and because I'm so familiar with the technology and have built so many things now on the back of ethereum and really have researched the life out of Bitcoin the protocol why it matters watch the adoptions just seeing some of the greatest thinkers in the world think through predicting their own future and where this goes I have a pretty robust map of where it goes and obviously it could be wrong but I have confidence in that such that for now it's just wait and see now if through all of that like if the Bitcoin protocol were to suddenly stop or we realize just kidding there's not 21 million there's 22 million then I'd be like whoa my whole thesis has changed now I want out right so if any of us saw the supply of Bitcoin inflate at least people that that's part of their thesis which it is mine that would invalidate everything and I would be in a mad scramble because then suddenly my thesis goes away and I'm left like yo I want to get out right now so but as long as everything stays intact then I'm good the truth is hitting your career goals is not easy you have to be willing to go the extra mile to stand out and do hard things better than anybody else but there are 10 steps I want to take you through that will 100x your efficiency so you can crush your goals and get back more time into your day you'll not only get control of your time you'll learn how to use that momentum to take on your next big goal to help you do this I've created a list of the 10 most impactful things that any High achiever needs to dominate and you can download it for free by clicking the link in today's description alright my friend back to today's episode do you believe in the advice about in order to get rich you have to follow your passion and do what you love and if that doesn't work out how do you know when to stop and to explore a new hobby or a business venture so it goes back to there's two primary ways I know the comment's gonna light me up with what about this and what about that there's two primary easy to discuss ways to get rich way number one build something way number two invest like you're watching paint dry as um I have heard from ramit seti so if you are doing the just invest then no it's going to be super boring if you're doing the build building is hard and building will question your will to continue not once not twice dozens hundreds thousands of times like my life as a roller coaster every day and the funny thing is when something's going right and my day is awesome like today we just announced something big and the Discord it was so fun and people were loving it I was like yeah I know something is going to go wrong today so today will be part good part bad right every day has something bad not every day has something good so at least on a day where there's something good I'm like word so you have to have the emotional fortitude to weather all of those storms and it really is like life is a computer game and the AI is going to make it as hard as humanly possible for you to keep going but if you do and you develop that perseverance you can accomplish some really extraordinary things because of the way the human mind works where knowledge Stacks knowledge has utility utility means you can do something other people can't do and now you're able to monetize that utility so it really is about time in the game so that's huge to have time in the game you have to be passionate because when you say you're knocked to your knees you're embarrassed you failed you lost money it's just hard it's boring you'd rather be out with your friends your kid is sick whatever all those things that are going to come for you when you say why am I doing this you better have a physical feeling to the positive when you answer that question if it's purely intellectual you're in trouble and I think that's what people are trying to get out with passion passion is psychological energy it's like if you've ever put you've been dragging ass all day you're tired I gotta go to bed you guys please I just need to go to bed and then somebody puts on your favorite song you can rally for 10 minutes and be hyphy it's crazy there's something about the way that you can shift your neurochemistry that makes you feel more energetic all of a sudden that's passion it's it's just like putting a song on you get that image again of who you're fighting for what you want and now you're back in it so so passion will give you the energy to persevere so you talked about the Neuroscience of passion or just like getting into rallying uh that's a lot about health so we've only talked about wealth being about finances is it actually more important to focus on your health first and invest into your health rather than just purely uh money and for sure I would say do both if you want a truly wealthy life you need to be both Healthy and Wealthy that's really important and there's the age-old adage of a healthy man wants many things but a sick man wants only one that's really really true and so I think it's it's important for two reasons one that that if you're not healthy you can't enjoy anything and then the other reason is that if you take care of your body it's going to show you that your actions have positive or negative consequences like I'm so even right now I'm wearing a continuous glucose monitor because because it reminds me that what I eat has an impact in my body that sometimes is invisible but when I'm tracing it I'm like why do I feel weird I can actually if I feel weird guaranteed my blood sugar is high like I'll feel completely normal until about 120. now the average person I promise you lives their entire life above 120. if you're not paying attention you're 120 to 180 210 all the time I don't feel good above 120. I don't feel as good but because I live my life between 65 and 85 with the occasional like Spike to a hundred it's like dude I feel awesome and then it which just feels normal by the way but then I'll be like God I feel weird why do I feel so weird beep 133 I'm like yep because I ate a bowl of ice cream or whatever something now that I track it and can correlate that feeling to what I've eaten I'm like do I really want to eat that thing and so you get into that with your money and your lifestyle and it's like when you gamify saving money and you're like I know what it feels like at the end of this month when I bought you know a bunch of meals out or I bought myself clothes the last you know three or four days of the month were sweaty like I did not feel good I was stressed I used to live like this legitimately there was a time in my life if you've ever heard me tell the story that I took myself from scrounging in the couch cushions to find enough change to put gas in my car okay in that period I would have to decide what Bill am I going to pay this month because I couldn't pay them all so it was like okay I'm gonna skip electricity this month because I know I get a past due notice and as long as I then pay that past due notice they're not going to turn me off so you can constantly be like a month behind on different things and so I would just go okay these bills get paid this month then I'll pay these bills next month and I'll go back to these bills and so that is not a good feeling and so as you go through that and track okay I see when I spend my money on this I don't feel good when I save my money over here at the end of the month I still have everything I need my stress levels are going down so getting that correlation between oh when I eat this way I feel this way you start to carry that over and then if people are willing to really trans form their physique there is not a single thing more powerful if you want to be successful if you want to get rich all of it change your body first it does something to your mind it forces you to develop discipline it forces you to develop resilience because you have to push through the pain and keep doing that thing you don't want to do and it works and then on top of that I guarantee at some point they're going to find the biologically embedded subroutine that tells you to feel good or bad based on the state of your body and so if you are strong and you look good in the mirror you will have a subroutine in your brain that's like yeah you have it's a form of self-worth this is exactly how people get obsessed with it because it feels innately good if you do what I'm telling you as somebody that used to walk around with a six-pack and it's never too far from it now uh when you lift up your shirt and you see a six-pack you feel some kind of way even now because now I'm less focused on the six-pack but more just making sure that I maintain a you know slightly bubbly physique bodybuilders is going to laugh at me for thinking I have one but you know in my own reduced uh amount I do and so when I'm working out in the gym I'll I feel differently about myself based on the because I always this people are going to be weirded out by this but I work out in the dark but I can see my shape in the gym and when my shape looks right in the mirror I'm like yeah it makes me feel some kind of way about myself and people totally discredit that to their detriment get control of your body prove yourself that you can do it get that discipline go push through the pain see the tangible results and then apply that to every area of your life and then just one last follow-up on this is uh getting your body in good shape is you talk a lot about influence inflammation in your health content do you ever see the parallel between inflammatory in your body and inflammation in the economy like wealth as well like do you see any parallels I have never thought about that George let's think is there a parallel in the economy that is like inflammation here's the first thing that comes to mind when you have inflammation in the body you have an over-reactive system so the system has a real threat it really does need to deal with it but then it goes Haywire so we all learned about that with covid in the cytokine storm so most people in the early days died of covid not because they couldn't kill the germ but because they had such an inflammatory response that the body's defense mechanism was like yo everybody's an intruder everybody out they were just slaying and killing left right and center and so they just ended up killing themselves right literally the body tearing itself apart and when you look at either Euphoria or Panic that's exactly what happens if people were in the situation that I'm in forget scale right percentage of access to Capital deployed in what way so I've got roughly call it 20 of my income tied up in some long-term way right then I've got say 60 that's just like yo bro you're good and then 20 that's um being pumped into building something high risk high high high risk okay so it's like cool the 20 I wish it were up that'd be amazing I'd be super pumped but it's not but I've still got the 60 percent that runs my engine that's word so if I lost the 20 over here because I invested it in something long term and it's down and so now I need to leave it and be patient for 10 years right it's probably going to come back around but not for 10 years long ass time and then the 20 over here I just outright lose because it was ultra high risk and I fail so now effectively I've lost 40 percent of my net worth I sell 60 so I can run my life do all the things that I want to do so so as Ethan Bitcoin are going all over the place one as etha's going up I'm not just investing investing investing more I had a number and when I hit the number I stopped investing and like well I was kind of sad because it was like oh numbers keep them going up but I was like I've hit the amount that I'm willing to deploy and I did that dollar cost averaging right so over like 18 months or whatever and so I was like cool that's all that I'm going to buy that's as much as I'm comfortable investing in all of that same thing with real estate and all that stuff I'm not going to keep buying I hit a number and then I stop so for me all that crazy volatility up and down sometimes I laugh because it's so crazy I just can't believe it like oh my god when it was up it's like it's up another 30 you're like this this is insane and then it was down 70 percent 80 same thing equilibrium right and that's where I want to see people live so that you're not reacting like the you know inflammatory response and you're going crazy it's like you want to be even Keel you want to deal with the issue so if there's a change in your thesis you want to address it reallocate move on but you don't want to be panicking freaking out you never want to do an investment that's going to make you cry if it goes wrong which is why every person that I think is Saints has never invest more than you're willing to lose because you never know it could all go wrong right and you need to be very very open to that and when you think this time is different it can't go wrong like I won't throw this person under the bus because this person really is bright and people really should listen to a lot of what they say you shouldn't listen to all of what anybody says and I remember this was maybe two years ago they were like I don't know I think maybe the economy is different this time and maybe the world is so intertwined that the economies will never uh be able to have these huge drops again and I remember like if you guys have ever been on Reddit and the guy with his head that's like you know receding out to here I was like brah uh no it is never different they nothing repeats exactly but it Rhymes so closely like it's never different this time you've got to be incredibly careful things are going to go up and they're going to go down and now the crazy thing is that was only 24 months ago and we're already talking about a world that's completely decoupling so things change in fact if I could give you a buddhist-esque idea brought to me anyway by Phil Jackson whether he's ripping it off from the Buddhist I don't know but he said things come together Things Fall Apart that is true of companies friendships marriages nation states currencies everything it comes together for a while and then it falls apart and anytime you're investing or building or whatever if you think it's forever you're wrong even impact Theory there's nothing that we've done that's forever there's nothing Disney's done that's forever most companies Come and Go Disney's only what a hundred and a hundred years literally next year they'll be 100 years old in the long Arc of human history that's nothing there are trees older than that there are turtles older than that so it's like when you're not even as old as some turtles like you just you're not really you haven't done anything yet bro you know what I mean so it's like and trust me I put myself in that camp so recognizing things come together Things Fall Apart you have to be very thoughtful I want to dive into something a little bit more personal and then expand it into something that will affect kind of everyone and kind of get your take on all of it so we're talking about inflammation we're talking about inflation we're talking about all these things and you say you know we'll always see this again so for me in my early earning years it's the first time I feel like I'm living through a high inflation type of time I don't know if you've been through that before but now I'm going to be curious about am I thinking too much about inflation or am I not thinking enough because there is a big part of me that worries about people you know if inflation is seven percent which I think Shadow stats is more like 10 15 plus if you haven't made that in a raise your person in power has gotten cut by that so I'm like how much should I be worried about that because that compounds over time right so that's that in my stage versus maybe you've gone through this or now that you're in you know your stage of wealth and everything how are you thinking about that so one how should younger people or people who are just entering the field be thinking about that and then how are you kind of thinking about that okay so the only thing that should scare everyone is inflation in inflation was the thing that made me realize I had to take investing seriously because I was like look I'm Richmond I'm perfectly happy to just have my money in Fort Knox and not think about it and when I need to make a withdrawal to live my life I will and that's that and I love the idea of never having to think about the the money just put in a savings account and be done and I'm happy to you know just okay that's how much I have that's how long I expect to live and you just spend that amount of money and all's well and then I realized oh wait a second even when inflation is under control that's two percent two percent compounding so it's two percent compounding you can run the math on that it gets devastating very fast something like in 30 years your purchasing power is cut in half at two percent so I was like whoa so that was really distressing and if it really is 7 15 now all of a sudden it's your cut in half in five years so I was like wow I really can't ignore this so that's when I realized okay I've got to go learn about investing so that I can be more intelligent about it and so in all of that people need to think about it now I will say be thoughtful enough to realize that unless the currency hyperinflates at which point it really becomes worthless and that does happen and it happens more frequently than people would like to believe that inflation tends to go up and down and so we're already seeing this right the fed you want to talk conspiracy theory the FED has the ability to pull levers that wildly impact the inflation rate now because the FED knows that nobody pays attention to what they're doing except the very small Cadre of people who can scream as loud as they want nobody listens they will tell you exactly what they're doing and the chairman of the FED said hey we're going to over correct because and I quote I have medicine I think he said for dealing with a broken bone meaning I'm going to break the back of the economy but I have a way to deal with that but I don't have a way to deal with inflation so I've got to yank this thing so hard that inflation goes down so much that we snap the back of the economy but don't worry we know how to inject stimulus back into that and grow people because let me tell you if we had started all of this in a seven percent environment right then it's like oh you just cut the percentage and now the economy is stimulated everybody's happy businesses invest like crazy and get cheaper money boom Roaring 20s everybody's excited but when you have high inflation people are freaking out oh my God what do we do and so we were at uh zero percent interest rate which was causing everybody to spend money like crazy town he had to like throw the numbers into the trees to break the back of the economy to get it to slow down and then he knows ah cool now I've given myself the ability to stimulate the economy by bringing them back down but that's manipulation it's crazy and so there are some people that are up in arms they're just like leave it alone when something goes bad Let It Go bad like what is everybody saying about FTX right now it sucks my heart goes out to anybody that lost money but it needed to happen this is all fake anyway you gotta let it burn away the detritus let people who were gambling get washed out and even though it's going to set us back years will ultimately be better for it right once it becomes impossible to undo that's what everybody says and what the people the proponents of saying just let the market do what the market does their whole point is yeah it's going to hurt but it will re-regulate itself very quickly and people will rapidly see that oh if we had just left it alone it will self-correct there and I don't we're now at the edge of my understanding to be clear but there is a moment I think it was the new deal so they were trying to use the New Deal to simulate the economy to get us out of the Great Depression and some economists say that that caused the depression that we were already showing signs of coming out of it like two or three years in and that that may have continued the Great Depression on for years like four years longer than it would have if we had just left it alone now we're at the edge of my understanding I don't know if that's true I'm simply repeating a headline but it's interesting that credible economists say hey if they had just left it alone the market will recorrect the problem is we don't want to see people suffer and So to avoid people suffering we start playing with these levers trying to fix things as we go but you get these wild swings now I'm going to tell an interesting story so there is this I don't know to call it a documentary or what but as you guys know in airplanes they have a black box recorder and there's this like play that they filmed like kind of a you're filming actors on stage but you're filming it and they're they're reenacting the exact words from the black box so they're taking the transcripts and doing it exactly and one of the flights that they reenact was this flight where a guy brings his kids into the cockpit this is this is a a commercial airliner so there's like 200 people on board brings this kid into the cockpit and the guy doesn't realize with the Kid's Foot or something bumps autopilot so it takes the thing off autopilot but he thinks it's on autopilot now the thing that you would do if you have autopilot is like you would try to steer or whatever and then autopilot realizes in it it's moves things out and because he didn't know the autopilot had come off he was like doing these big moves and it was like whipping the plane from side to side and he could not understand why that was happening and you hear him go not again because it was over correcting from one side to the other from one side to the other and then they crashed and everybody dies and it's like it's tempting to think that doing these big moves is the right thing but you can tear the plane apart by that kind of whip lash movement so that's the thing that makes me as the lay person and nobody should take Economic Policy off of me but I do worry about that big Whiplash now I don't think that they should probably take their hands completely off the wheel I think that they're we're at the edge of my understanding again there are probably things here's what's interesting my knowledge makes predictions and some of those predictions are if there were no hands on the wheels all hell would break loose for what period of time I don't know maybe 10 years and then everything would be great but my fear over what happens in that 10-year period wait now it could just be that I don't know enough maybe or it could be that it just you need some governance and again I want to dive a little bit deeper here so now I'm learning you know what the FED does how they're kind of manipulating the economy but as far as I know I can't elect the FED I can't tell them what to do so now again back to you know some of these people are in different stages of their lives like what with this knowledge now you know for me I might be hedging through different stuff it seems like you know your portfolio split seems like you have some safe buckets you have some like risky buckets you have some things you control um is there something that you can recommend everybody or is it something that's so like just individual they would have to all do their own research and figure out yeah I mean of course like with all the caveats but the the one thing I would say is you need to have a Year's worth of savings liquid immediately available to you one of the best ways to do that is probably Lee government bonds because the U.S government will back it and say we're at least going to match your um your principle so we may not be able to make good on the interest that we promised but we're going to guarantee that your principal's back you can do those very short terms say a month and then you can cycle your money in and out of that so sometimes you'll get at least a little bit of yield other times you won't but at least your money is more or less being protected now if inflation is higher than whatever yield you can get you are technically losing purchasing power but at least the number in your bank is the same so that's one way to keep the money that you need access to your life immediately available to you then I would invest in index funds whatever you're comfortable investing I would do it in a totally hands-off passive way your dollar cost averaging in whatever amount you're willing to do and then I would take some amount that's we'll call it play money where maybe you're going to do higher risk and Investments you're going to pick some stocks because it's fun for you you're going to invest in your friend's bar whatever all things that if it goes to zero you're completely comfortable so that would be roughly how I would think about it you've got the long-term really simple tried and true method of investing then you've got uh more speculative dollars that are fun but that's probably going to be five ten percent of your investable dollars and then if you um want to buy a house would be the only last thing and I would say remember that buying a house is not a great way to invest unless you own it but you don't live in it and you let somebody else live in it and they pay you more than you pay for interest uh depreciation um the cost of the um the government charges you every year property tax thank you so if you're all in fixes repairs if after that you're still making money cool that can be a good investment but if you own the house and you're living in it basically what you're doing is paying a lot of money to keep up with inflation so it's forcing you to invest that money so that you know I'm gonna have whatever this house is worth and houses tend to keep up with inflation so it's like I know that I have this quote unquote Nest Egg that's going to match inflation that I can either leave to my kids or whatever but the thought that that is money that you've made so let's say you bought the house for a million dollars and then you know 30 years from now it sells for seven million dollars you didn't actually seven extra money you probably would have made a lot more money by investing that million dollars into the stock market into an index fund but if you're going to live in it make the memories and all that good stuff then wonderful so be it but it's basically just a mechanism forcing you to keep up with inflation but it's going to cost you a lot to keep up with inflation so for somebody who might be a little older like in their 50s or 60s what advice would you give to them if they're worried about not having enough money to retire keep making money so you're going to need to start investing right away but again you're going to take less risk and the thing is I haven't talked about higher risk albeit still somewhat cautious investing so most young people are going to have if they're working with an advisor are going to have their money spread across the really basic uh things that I'm talking about in Index Fund but then they might also do growth Market investing Emerging Market investing things that have higher upside bit higher risk they might start doing corporate bonds the company goes out of business you're out of luck but they might pay significantly higher interest rates so they might be doing some of that they might be doing which I don't understand well enough so I can't advise people up or down a lot of people make a lot of money here but this is also when you hear about people committing suicide it's almost always that they did something with Futures options calls where I forget which one of those but one of them has an infinite downside so you could end up losing more money than you have and that's where people get into trouble because they go from oh my God I'm up a hundred thousand dollars to I'm down five hundred thousand dollars and now I'll never be able to make that back and so that's where it gets very very scary because it's very much like gambling but anyway they might have those more risky stock market government approved ways of what from where I'm sitting is just gambling and so they're in there doing government approved gambling they get themselves in a lot of trouble but let's say that they've got a portfolio that has some of that in it the first thing I would say is if you're in your 50s or 60s you want to start getting out of that riskier stuff because if you take a loss you don't have time to make it back so we're going to be getting into things that are less risky that we're going to be able to just map out so if we know that our money is going to double every seven years then it's like okay you're 60. the speaking from a perspective of an Actuarial Table you're going to live to 78. cool so you got several almost three doublings in that time so how much do we have how much can we afford to shove in there my mom didn't retire until she was like 72 or something like that so it's like if you're able to retire at 65 don't right if you need the money now just keep pumping money as much as you can possibly bear during those years you should still be high functioning I expect to be high functioning into my 80s you need to take care of yourself but if you're taking care of your body and your cognition you should be high functioning well into your 80s I get it if you don't want to work but imagine if you're passionate I don't plan to retire I plan to work until right because I love what I do and so it doesn't make sense I don't want to retire now I'm in a position where I could retire any second but because I don't want to and I control whether I do it's a great place so anyway you're going to be making money doing something that you care about you're going to be putting as much money as you possibly can into your retirement fund you're setting aside any of the but it should have been different don't waste time on that I get it you could lament that mourn that all of that it's not going to help so we're going to Sock away as much money as humanly possible knowing that we're going to double every seven years and now we're just going to run the math so so if it doubles every seven years and I'm 60 and I want to get to that third doubling that's 81. cool we know it is what it is or nope I only needed to double once rad then you're only going to be 67. so it all comes down to how much do you have already hopefully you're not starting from Dollar zero so if we have some money in there already you're going to take X strategy it expects to yield X over time maybe in seven years you know the volatility is so weird that in the seven year span it didn't double but in the 14-year period it has you've done the two doublings so it's like people have to remember it's on average so be very thoughtful about that but if we go 14 years so now you're 74 cool maybe at that point you've got enough to retire or maybe I mean math math is math so the math is going to say what the math says and if your your current job not getting enough to put money in what are you doing to make sure that you can make more money so you can invest more money doing a side hustle getting better skills in your current job and this is the one place I am deeply compassionate towards people but I have no compassion for somebody who doesn't want to improve their skill set so you can improve your skill set at any age you can negotiate a better salary at any age this all comes down to are you able to deliver value I don't care if you're 60 I don't care if you're 70. if you're crushing it you're the most valuable person in the company word and let me tell you right now don't think for one second I'm not going to outperform all you whippersnappers when I'm 70 right because all my knowledge is going to be stacking and I'm going hard I've got energy for days so that's where I need people to to really like man or woman up get tough get after it I really love that message because again I can come from a place of fear or I can see an opportunity here again I can see the inflation maybe even stock Glacier because we're heading into recession and it's like stocks are down lots of things are down uh while at the same time all my purchasing power is inflating away but I can use that again to fire under my ass to be like okay I need to get skills that can out compound the seven percent or whatever and then this is opportunity where things are down which means I can buy these things and if it ever reverses it's actually a great opportunity to do that so I really like meaning now you're buying things on discount exactly and again I think you touch on a really great point about actually again focusing on the skill set um because some people will have the year saving and maybe they can like dump it into the stock market and all that but I think for a lot of people living the paycheck to paycheck life seems like they can buy less and less every single month if they just focus on again what are the where can they learn these things what do they have in natural Affinity towards that has a Marketplace that is open to Value um I think for me that gives a lot of Hope of just like okay this is where we can focus on and have control over so yeah I mean this is why they say that more millionaires are made in a depression than any other time in history and the reason is hiding in that depression is the next Amazon where the stock is hyper undervalued and people can come in and pick it up I forget I think it was Amazon stock dropped to like seven dollars a share or something like that yeah and so Amazon still goes on to be Amazon so if when Amazon was seven dollars a share you bought seven thousand dollars worth you're laughing all the way to the bank because it's that then skyrockets and becomes one of the most valuable stocks on planet Earth it's like you've really got something but if you were trying to buy it when it was a hundred dollars spending seven thousand dollars to get you a lot less a lot less like 10 times less more than 10 times less so it's a really big difference but this is why they say be fearful when other people are being greedy and be greedy when other people people are being fearful which by the way is just another way of saying Buy Low and sell high it's low because people don't think it's going to be anything and it's high because they're convinced that it's going to be and odds are then not odds are at that point then that the reality of that has already factored into the price because the people are right and it is going to go up that's already factored into the price so you have to bet against the consensus and be right that's where this gets hard so how do you get good enough where you can make the counter-intuitive bet that nobody else sees and you end up being right and that's why Euphoria is so dangerous because when everybody's like yeah it's already built into the price and Euphoria always breaks it always breaks nobody can party forever and if you can really extrapolate that analogy and just think about what it's like to be at a party you're going it's fun you want it to last forever and you're going ham and you've had drinks and your friends are there and you're talking and it's great you've been dancing and then it's like oh my high heels are kind of starting to hurt right my feet are a bit sore like oh man we've been dancing the song for a long time like I just kind of you know I want to chill like this is so fun I really did have a great time but it's like now I want to get off the dance floor that's natural like you can only sustain that fever pitch for so long and knowing that the number literally can't go up forever that even if every dollar went into one asset class over uh you know 18 month period even then it still hits the top and so somebody bought at the top and then everybody realizes oh wait there's nowhere else to go and so now you get people that are like wait I need liquidity there's no bigger fool as they say that's going to come in at a higher dollar amount and so now you get into all the pump and dump schemes where people like no I just need a little burst so that I can get out so they do that and so you see what they call Chopping where the trend line is just chopping it's just people trying to wait to that local high to get out and then it drops again because everybody's selling and then people try to build it back up so that they can get out again and it drops I mean all this stuff is like hyper predictable so and by the way that's never going to happen not all things are going to suck into one resource so the party does end voluntarily at some point and if people don't recognize that oh this is going to stop being fun people are going to start backing out that's going to cause it to collapse then that's how so many people get themselves in trouble so you have to be very cognizant of where this all goes the music is going to stop talking about like the Amazon stock uh being like undervalued what opportunities do you see that are being undervalued like the Amazon stock or a skill set like learning to program I'm not the guy that's going to be able to give you what is undervalued right now because I do not consider myself a talented investor so all I will say is that going to if you're a builder you want to figure out what is an underserved problem so learning to code is about figuring out what's going to be that next skill that people really need so what is a problem that the world faces and who is going what is the problem that the world faces that the world recognizes it faces wants a solution and considers that solution very valuable and so that's why you want to get there so we all know that more and more things are going to be written with code and so learning to code is going to continue to be a very valuable skill but you don't want to be a mediocre coder there's going to be a lot of people doing it so getting into that now the area that I think people should be learning the most about is AI in no uncertain terms how do I as an artist a copywriter a marketer whatever how do I work with AI because I don't think AI is going to replace the Strategic creative thinker it's going to replace the person that sort of manually doing things so it's going to make everything that much easier so imagine if instead of like for instance let's say that I want to be a songwriter but I'm not good with Beats I don't know the technical knobs or how to go find a new sound effect and instead and mark my words this what I'm about to describe while it doesn't exist today it will where you can type in give me something that sounds like a metal stick hitting uh an empty drum a bigger drum bong but higher pitched right and you just keep describing it until you get the sound that you want you don't have to walk around like Charlie puth is doing now opening a door does this squeak in the way that I want it to squeak tap it with this that and the other which is already brilliant and amazing and he's going to then put it into Pro Tools or whatever and edit it which is already extraordinary you're going to be able to do it through prompts man it's gonna be crazy so most people get emotionally shut down by that because they built their career on like but I'm the one that knows what to tap on and I'm the one that understands all the secrets and Pro Tools and how to do that never invest like that be the person that is excited about the Innovation to make things that were hard easier so that you can push what you do up to a higher level and get into really more and more interesting pieces of this so AI to me is the name of the game and 2022 was the year that it became real and So for anybody wondering like oh if we had that threshold moment absolutely it happened now at impact Theory we have already released imagery that contains AI generated elements people would not be able to pick out which is which we will continue to do it more we have backgrounds and videos and stuff that have been made by AI it's really extraordinary what you can generate with AI already right now today in commercial applications what is going to be in five or ten years will be bananas I have a question around like being rich and being wealthy so do you feel like there's a difference and at what point of your life do you feel like you've got rich and then at what point did you feel like you got wealthy it's really interesting so the classic answer to that question is rich is when you've made enough money that if you spend your principal you're going to be able to live the way that you want to live wealthy is where you can live your lifestyle on the interest of the money that you have so that it's generational wealth you'll be able to continue to pass on the capital and if they're smart they'll keep living only off of the interest which means hey when you have a good year you're living Rich when you have a bad year you're not but the capital you preserve your Capital as they say so that bulk amount that's kicking off the interest never changes that's the classic definition now I would say there's a wiser way to look at it with which is that rich is about money and wealthy is about mindset and when you understand you can have all the money in the world and still feel poor because it's never enough or you can have very little money but realize that money can't do the one thing that people really care about which is give you a sense of fulfillment fulfillment has a recipe maybe a better way to say it than a math formula it has a recipe there are elements and if those elements are in your life then you're going to be A-Okay and they go like this you want to be work working really hard for something just that's the way the human mind works if you're not working really hard you'll never feel good about yourself so you're working really hard to acquire a set of skills that allow you to do something for the group that uplifts them and yourself and then the one thing I will add to that is there better be somebody in that group that you love and care about on an interpersonal relationship level if you have that life will always be worth living and if you don't it won't no matter how much money you make so there's just these really intricate patterns that run in our brains that make us feel some kind of way now Money Matters money's really powerful and it does something incredibly useful it facilitates so money lets you build the things you want to build create the things you that you want to create and so we all know that money is extraordinarily useful which is why people will always chase money but people think that money is going to make them feel better about themselves give them fulfillment and it can't it's just that's not a thing that money can contribute to be Beyond giving you the money to build the thing that gives you meaning and purpose sure so if that money is necessary to create something that allows you to use your skill set to contribute to the group then it's useful right it's exactly what money does for me now it's letting me build impact Theory which is the thing that allows me to contribute in the way I want to contribute so it's powerful in that way but it is the contribution that makes me feel the way that I want to feel so you have to be thoughtful about that but those are the two sort of one is a little bit woo-woo and then the other is very concrete so I'll let you pick which one you prefer so when you first started Quest did you have any idea that it would get to where it is now and is there anything that you would have done differently knowing what you don't know I knew it would get where it got that was the whole point of starting the company but we didn't think it would get there that fast so that really was a rocket ship and is proof that what you're looking for is the right product at the right time with the right marketing and if you're missing any of those elements you're not going to get there and so I get asked a lot like oh my God would you guys do a quest I'm like I will tell you literally day by day it's not going to work now because now the world has reacted to what we did and so it seems commonplace in fact if I walk people through what we did be like bro that's so mid like how on Earth did that work but it wasn't mid when we did it it was revolutionary but it worked so well everyone started doing it so now it's just table Stakes if you're not a killer at social media if you don't have a protein bar that's actually good for your health if you don't Market it around food if you don't have social media marketing that reflects the user base if you're not building Community it's never going to work but when you do all of that and nobody's done it before it's like oh my God this is crazy and it was explosive so if we were to try to launch Quest now it wouldn't work because somebody already did it so you have to get that timing right product right marketing right it's all got to be right right right so that's why it worked what would I do differently now well now I would have to find that angle where we're doing something that other people aren't doing the big thing that we're leaning into now is going to tie some strings together that we had so one understanding that your brand has to have a face and a voice so that people know what you stand for that's a big part of it I actually tried to be invisible at Quest wasn't until the last like 10 months that I was at Quest that I stepped in front of the camera so for the longest time we did what we call mirror marketing then I realized there was a shift and I was like cool gen Z even Millennials to a lesser degree but they both want to know what does the company stand for who are you what are you all about they want visibility another thing that I would do is the way that we Market has changed completely so the marketing needs to not only add value but it needs to be entertaining in some way and then working with influencers is way more important now than it used to be but working with them in a way that makes an ad that I'm like word thank you for sending me that ad like shout out to cap cut cap cut their their whole ad I didn't even realize they were ads at first because they were just tutorials they're just like hey let me show you how I did this really cool thing and I was like yo teach me how to do that that's so sick and then like 30 videos in I was like oh my God these are all ads for cap cut so but now they've got me talking about it because I was like that was so dope that I actually want cap cut ads in my feed because I want to know those tutorials and I keep sharing them with the team to be like yo did you know that you can do this you know you can do this hey here's a really cool way super dope trends that we could be using so that is like we tried to be that with like recipes and stuff at the beginning but we didn't know how to do it where it was like I'm actually showing up on your interest graph feed that's another thing we were social graph back then so interest graphy need working with influencers for them to create content in their native style that's super entertaining where even though it's an ad people like yo give me more give me more give me more so some of it is like a nuanced twist and then some of it is just very very different well guys those are wonderful questions I hope that helped all of you guys there are many rabbit holes we could go down be sure to drop in the comments if there was a rabbit hole in there that you want to be hearing more on we can do another video if you haven't already be sure to subscribe and until next time my friends be legendary take care peace if you want to avoid going broke be sure to check out this next episode when it comes to making decisions about your money do not let yourself get sidetracked from your goals

Channel: Tom Bilyeu

Views: 748,725

Keywords: Tom Bilyeu, Impact Theory, ImpactTheory, TomBilyeu, Inside Quest, InsideQuest, Tom Bilyou, Theory Impact, motivation, inspiration, talk show, interview, motivational speech, tombilyeu, Conversations with Tom, Health Theory, mindset, podcasts, how to be successful, entrepreneur, achieve goals, achieve success, building wealth, how to get rich, investing, inflation, financial freedom, money, make more money, being broke, financial struggle, tired of being poor, waiting for payday

Id: ZNksisbRYvs

Length: 93min 44sec (5624 seconds)

Published: Sat Jan 21 2023