Why Prices Don’t Go Back Down When Inflation Slows | CoinPicks Live Class
In this live‑class, Alexander Lorenzo walks a group of participants through a deep dive on personal finance fundamentals, focusing on why the financial system leaves most people at a net‑negative and how to build a "cash‑flow gap" that creates investment options. He begins by highlighting statistics that even high earners (>$100K) often live paycheck‑to‑paycheck, and that the median U.S. household income (~$87K) leaves an average family with only about $222 of investable cash per month. Using simple arithmetic, he shows that to achieve a $1 million retirement nest‑egg (adjusted for inflation) one would actually need roughly $3.3 million. The core concept introduced is the cash‑flow gap – the difference between income and expenses – and the two levers to widen it: increase income (the preferred lever) and reduce expenses (subject to diminishing returns). He distinguishes two forms of income: "addition" (steady cash‑flow from wages) and "multiplication" (compound returns from investments such as crypto). Lorenzo argues that focusing on increasing cash‑flow enables one to avoid selling crypto during market lows and to fund investments rather than savings or premature debt repayment. He debates lifestyle versus investment spending, giving examples (nanny, personal chef, luxury car, boat, house) and classifying them based on whether they generate future cash‑flow or merely consume it. Opportunity cost is repeatedly emphasized, with concrete calculations (e.g., a $4,800 larger cash‑flow gap yields $480 extra at 10% return). Decision‑making is broken into dimensions: consequences, alignment with purpose, economic cost, emotional/spiritual impact, risk, and reward. Lorenzo ties these dimensions to trading behavior, illustrating how personal habits translate into market decisions. He also critiques common misconceptions about debt, savings, and "buy‑and‑hold" mentalities, promoting the use of debt strategically when the return on investment exceeds the loan rate. Throughout, participants (Jesse, Carlos, Jonathan, etc.) engage in Q&A, reinforcing concepts with examples and role‑plays. The session concludes with three actionable takeaways: evaluate decisions, consider opportunity costs, and focus on increasing income, framed as a biblical principle of counting the cost before acting.
Chapters
What's going on, everybody? Welcome back to Coin Picks livestream. We're going over the entire financial system. We went over the basics of money. for the past like 4 or 5 days or so. And today we're going to be going over specifically personal finance, how to take control of your money so that the financial system doesn't wreck you, right? Because as we went through everything, we saw that the financial system kind of leaves people at a net negative. And so you kind of have to make money to outcompete inflation and other variables. But if you guys are new here, we do a live stream every day at 3 to 4 PM Eastern Standard Time. And then actually today, Friday, we do a live stream from 4 to 5 PM Eastern Standard Time. in the internal communities where we're going to go into like the market, you know, what I'm thinking about buying, what I'm thinking about selling, and how, you know, is the market going to go up, down, all these things, like more of like a market overview for crypto. That's what our internal communities— again, that's 4 to 5 PM Eastern Standard Time. But for today, or at least right now from 3 to 4, we're going to be going over personal finance specifically. Now, the reason why I put this in the course is because a lot of times when people try to become traders, they don't have their personal financial situation in order and it seeps into their trading. So a lot of, like almost 100% of the time, of all the people we talked to, it's basically people that should have bought crypto earlier, right? Oh man, in 2015, I knew about Bitcoin, but because their personal finances weren't in order, they didn't have the cash to buy it, or the opposite to where they did have a lot of Bitcoin, they had a lot of Ethereum or whatever, and they were forced to sell it at a premature time, because their personal life exploded, and they needed the money to pay for that, right? So the financial foundation is extremely— it actually is the best strategy known to man. There is nothing more important than having cash when the market's low. Does that make sense? And it just so happens to be that nobody ever has cash when the market's low. No one. It's like the hardest thing to do. And it all stems from your personal financial situation. And it's very important that when it is low, if you do have crypto, to not sell it. Those 2 things, right? And it seems simple on the surface until you have to get a new car and you can't get to work, and then you have to sell your $10,000 of crypto to pay for the car, right? So we need to attack the personal financial situation as aggressively as we possibly can. And today we're going to be talking about the gap that builds options. And to be clear, just because you have a high income does not mean you have this gap. And I'm going to explain what I mean by that. Actually, it's a crazy statistic. Maybe Dot, help me. What is the average amount of money? I forgot the exact statistic. $100,000. There was a statistic where I saw people making over $100K, and it really showed that they were in debt or they just didn't have any free cash. Maybe you could find the stat for me. I'll continue, but go look that up for me,
Doc. Yeah, let me pull that up.
I forgot what it was. It was like a crazy stat.
Checking— It was like people who were over $100K a year, like, are broke. Highest pay earners.
I'll find it. All right, so the gap that Phil built up—
You might be thinking of this one. A 2022 Lending Club and PYMTS survey found that 50% of Americans earning over $100,000 reported living paycheck to paycheck. It's older, but it makes your exact point really well. High income doesn't guarantee surplus cash each month.
That's crazy. When I first heard it, I was like, yo, so 50% of people making $100,000 plus Are living paycheck to paycheck in America, and then maybe you could find the stat. But we kind of did it yesterday. The average American household makes eighty nine thousand a year. So those like yeah
okay let me check.
Okay sorry go ahead dot. Average household in America I think makes eighty nine thousand a year.
Whenever you're ready, I've got that fact check.
Go ahead dot.
Slight correction. The Census Bureau's 2025 median household income is $87,460, not $89,000. That's household, not individual.
Okay, Dot, only respond when I ask you, okay?
Got it. I'll stay quiet until you ask.
Okay, so we did the math recently that the average American in the United States— oh no, we didn't do it with the public. I did it with you guys. So I did it with you guys. If you break down the math, and this is probably a good lesson for this, On average, if you, you know, extract expenses, the average American household could only spend or at least invest $222 per month. That's about it. And so what we did is we did the math on essentially putting that $222 into the stock market and it appreciating by 10% year over year, which is what the stock market appreciates at. And if you do the math, it comes to find out you need to save up if you want the equal purchasing power of $1 million, it's a hard concept, but everyone here wants to retire with $1 million, right? Does that sound right? Yeah. Okay, so if you retire at 65, it takes 20 years to get to 85. Let's say the average American dies at 85 or something like that. That's 20 years. So that means you're gonna live with $50,000 a year, right? $50,000 a year doesn't sound good at all. It sounds actually horrible, right? But the thing is, is that if you do that in today's terms, adjusting for inflation, for you to do that, you actually need $3.31 million, was the number? So you need $3.31 million to basically retire with $1 million worth of purchasing power of today's money. Does that make sense? Adjusting for inflation, if you adjust it for inflation. And so we did the math, and I think it was like you could retire at like 75. With only $1 million and you actually need $3.31 million. We'll do the whole study later so you guys, I could actually break it down for you. But basically what the gist is, $87K doesn't really cut it. And now we're coming to find out according to statistics, it sounds like almost even $100K doesn't really cut it, right? That's kind of what it said. 50% of Americans that have $100K are living paycheck to paycheck. If they're living paycheck to paycheck, do you think they're investing? No. No. Or maybe a little bit, maybe like their 401 getting 10% year over year, but even that is not significant. You need more, and I really wanna go over that. I'm gonna go over that one more time with everybody so they can kinda see. And the whole point of that teaching is to show you that the default safe, white, and proven route of finances is not real. It's actually a figment of your imagination, and it is technically set up for your failure. How many people have like a, A mother or grandmother right now can't retire, right? How many? Like, they just can't. They don't have the financial being to— like, they don't have the finances to retire. It's like a lot of people, bro. And it's significantly worse even right now with us. It got way worse with inflation rate and things like that, right? So the gap that I'm talking about, and this is, I think, the solution to all these problems, is called the cash flow gap. Who can explain to me what the cash flow gap is?
The cash flow gap is the excess income you're making over your expenses per month.
Correct. So you want to widen that gap. So it's basically how much money you're making in comparison to how much you're spending. That's what you really want. It's not really about— it is about your income, of course, But it's really about the cash flow gap. So for example, let's say, and I think this is referring to this example here. Let's say hypothetically somebody's making $100,000, but if they're spending $95K, these are simple concepts, but then none of you got it, right? So like I love to break it down simple, right? $95K, if they're spent, their cash flow gap is $5K a year, right? And then $5K a year divided by 12, it's not that much money. But then if you have somebody that's making $60K, But they're living off $20K, they're in a better position. Does that make sense? So it's not about the income, it's the gap, right? Now, in my opinion, it's actually significantly easier to increase your income. So if we look at both, we have 2 levers. The levers are lower your expenses or increase your income. In my opinion, it's significantly easier to increase your income than lowering your expenses. If you try to lower your expenses, there's really like there's a there's a diminishing return. Essentially, there's a certain point where you cannot lower it, right? So like let's say hypothetically you drop your expenses ten. Okay, great. You dropped your expenses ten percent. You can't go lower than like what else are you going to do? Live on the freaking street? You can't go lower. And then also the thing about the expenses that sucks is that it's a the economy could just like raise in expenses and there's nothing you could do about it. So this one's a little bit out of your control. You could do stuff like, and it's wise to steward what God has given you, and there's nothing wrong with it, but it's just, this is so much easier. It's so much easier to raise, increase your skillset, get your character up and make more money. And you can go forever. You can increase your income by 300%, but you can't lower your income by 300%. It's impossible, right? You can't go— like, there's a diminishing return on that. So what I tell people is like, like, when you're— when according to your finances, what we do is the solution to most of our problems is just make more money, right? Just make more money, right? Tax issues, just make more money. So we just recently came into that, just make more money, right? If there's, um, something's going on with the whatever house, just make more money. It's really the best answer. It's, it's the strongest lever. And nobody will teach that. And it even kills the concept of debt, which I'm going to go into. A lot of people believe I don't believe in debt. I mean, I do believe in— I believe in using debt for sure. I could prove it definitively. But all right, so the gap that builds options. And this obviously, this, as you can imagine, this is very important for investing because if you have a massive cash flow gap, that means you have a lot of capital to play with for the multiplication. So really quickly, we'll go through that real quick because it's a good concept. There's 2 different There's 2 different forms. Who can explain to me? Who can come up here and write on the board the 2 different forms of income? Come on. Somebody boldly. I've taught this too much. You need to know this. Why is it always Jesse? Jesse, sit down. Come on, somebody else. Come on, Carlos. Write it on the freaking board. You know what it is. Write the 2 things. What are the 2 different forms? Let's go.
Multiplication.
And addition. Now explain the difference between multiplication and addition. Let's
go. Okay, so addition is— Which we consider cash flow. It's like, uh, gradual, it's steady. Uh, so our month— our life is broken down into months. So a lot of people receive paychecks every 2 weeks or monthly.
Yep.
And that's what we call gradual addition. Multiplication is, uh, investments that appreciate over time.
Yes.
Uh, kind of like Bitcoin or crypto. Yeah. Asymmetric returns. Asymmetric returns.
So multiplication is basically like babies having babies. It gets compounded. But the problem with multiplication is that you have to wait a long period of time and it's not sustainable on a shorter-term perspective. Because we live on a monthly schedule, we need monthly income to pay the bills. The world was never like that before. Like this— I think it was Henry Ford. Henry Ford advocated for a 9-to-5 schedule. Henry Ford came in, he put in a petition to advocate for a 9-to-5 schedule every single day of the week except for Sunday so that he could sell trucks. He literally said that. There's a famous quote where he's like, hey, I would say to work for everybody to work every day, but I'm gonna keep off Sunday so they could buy my trucks. He literally— it was literally a man-made thing advocated by a billionaire that came and instilled this 9-to-5. And the reason why it's so off is because they give you a check every 2 weeks, and before that, that didn't really exist. Before, what would happen is a person would actually work until the job was completed. So they would work at it And then if it took 3 weeks, 4 weeks, 5 weeks, they wouldn't stop until it's done. And then they get paid, right? That's how society worked. So you would go and hunt for food and to eat. And that's the way you're supposed to do it, to actually complete the task, right? So there's like an actual success and there's fruit being bore. But instead, they've conditioned us to this 2-week cycle to where the task will not be completed, the fruit is not bore, and and you still get rewarded. Does that make sense? So that's why this is like the most powerful, but in the context of our current situation in the world that is set up, unfortunately, we have to really focus on this. And now I, in my opinion, I'm leaning towards cash flow because it allows for this to happen. Does that make sense? You guys understand? Go ahead, Jesse. You have a question? Just ask it. Go ahead.
Would you say Because there's always going to be more ways to do the X regardless of what it is.
What do you mean by that?
Like you said, you need the plus, you need the addition, but if you're, if you're constantly stacking the addition, if you, and you have enough money, there's going to be new opportunities that come to do the X.
Yes, exactly. So it's like a, it's like, uh, being prepared, like you have cash. So like the, the Correct. So like, um, what he's saying is basically if you have a lot of cash, when the opportunity presents itself, you'll be prepared. That's basically what it is. So you should just have a lot of cash and you should have a big cash flow gap. And then if you have a lot of consistent cash, meaning like your monthly income is actually big, like a lot— the amount that you make versus your expenses is huge— then you don't even need savings and you'll have access to capital. That's actually how me and Gabby live. We have a big cash flow gap. We can make pretty radical decisions with our investments because we know that, like if something went south next month, I'm just about to just pay it off. Like it's just the best way. I'm telling you, it's the best way to possibly live. Okay, so I flipped the entire script. I don't believe in savings too much. I don't believe in paying off debt. All that capital should be used for investments, and it'll pay the debt and save for you. I believe in that fully, bro. And unless I'm Unless someone convinces me otherwise, but I could prove it definitively, like on every perspective, and I've studied it very well. I don't believe in paying off debt prematurely unless you absolutely have to, if there's like a different reason for it. So yes, so this is probably leaning towards this in importance because it sets you up for this, but this is significant— Significantly more powerful. So like what I mean by that is the compound effect allows massive multiplication, clearly. Does that make sense? Okay, I think we're getting a little high level here. This might be a little bit beginner start. What comes out straightforward, I think everybody understands how to subtract. So it's your income minus your expenses. That's your gap. And you want to get that gap as big as you possibly can. Does that make sense? So when you make more money, you do not increase your lifestyle. You keep your lifestyle the same, and if you do, you increase it gradually, just a little bit. Jesse has a statement, go ahead.
Unless you're buying bags of weed.
Unless you're buying back your time, correct, which is not a lifestyle change. It is an investment. That's different. Does that make sense? So yes, that's a good question. So what is life? So maybe it's just verbiage, but what I mean is don't increase your lifestyle. This is so much better. Let's do this. So what I mean, don't increase your lifestyle. What is like? What's the definition of lifestyle? Dot. What is the definition of lifestyle?
Your typical way of living, especially your spending habits and the comforts you regularly pay for.
Okay, so yeah, that's it. But comforts, like things that are like comfort, Disneyland, like new car, like things that don't benefit you. So when you, when you get like a nanny, you could hire the nanny in the context of just doing less work and slouching and being lazy. Or you can hire the nanny in the context of using that time to work harder. And in that case, it would be an investment. In this case, it would be like you're just trying to increase your lifestyle and be lazy. Does that make sense? Yeah. So lifestyle, what I mean by lifestyle is I mean things that don't benefit you, like absurd amounts of vacations. I mean things that just genuinely don't benefit you, that don't increase. There's a difference between investment and lifestyle. Does that make sense? Yes. So what would be an example of a lifestyle change that doesn't benefit you? Go ahead, Jonathan.
Going on vacation 3 times a year.
Yeah, you can go on vacation, you can blow off steam, you can go like, you know, do that. There's nothing wrong with that, but if you're doing it excessively, it becomes like, that's the lifestyle. You're trying to change your lifestyle. Go ahead.
Going from a really nice car to an even nicer car without a reason.
Correct, without a reason. So for example, if I'm using it for recruiting and I want to get more people in because they like to work for a rich guy, can that be an investment?
Yes.
Correct. So it's all the context of the scenario, right? So for example, if you're going on vacation and you're a lifestyle traveler with millions of followers, is that an investment or is that a lifestyle change? It benefits the brand and it builds money. It's an investment. And the smartest people in the world, they— to where they genuinely love what they're doing, but at the same time it makes them significant amount of money. Does that make sense? All right. Yeah, I think.
I'm just gonna give an example.
Yeah, what example else you got? Come on.
I was just gonna say like moving into a bigger house, like without a need for it.
Correct. So like for example, me and my wife, we were talking about our current house. We have a pretty big house. You know, we can afford more, but we've been fighting it for like two years, like and it just never makes sense. I think Jonathan, you asked me that the other day. You're like, Alex, when did you get a bigger house? Was it you? Somebody asked me the other day. He's like, Alex, you want to get a bigger house? I'm like, bro, do you really? Oh no, it was Dre. And I was like, bro, do you realize that I have to hire a whole person to clean it? It is huge. Like, there's maintenance costs. Like, it— like, I told him, I was like, it's like pure luxury. Like, I'm good where I'm at. Um, and I like it, to be honest. Me and Gabby, we're actually about to downsize. We're purposely not to save money, but because like we just didn't like to maintain the freaking huge house.
Yeah.
It's so— it's annoying, bro. You'll get over it. You'll get over it. Like, it just—it's not that cool after like you got a frick. The whole backyard's in chaos, and you have to—and your plants are dying in the front, and your neighbors—and your neighbors are mad at you because it is that and the third. Like, it's not at the yeah. Like, it's annoying to maintain, to be honest. It's very annoying to maintain. So that's what I mean by the difference between lifestyle. So if you make like, for example, your hundred thousand a year or whatever, or say you let's do realistic numbers. So you make your seventy k a year. And you bump it up to $100K. So that's a $30K increase of gap, right? That's pretty big. So what would be valid uses for your money? We already talked about buying back your time with like buying a nanny, a driver potentially, right? What would be some other really cool use cases that people would portray it maybe as a lifestyle change, but it's not if you do it right? Personal chef. Personal chef, okay. So you this is this is where like testing your decision-making process, right? I would tear that up because we've because you can meal prep. What's wrong with meal prepping? Well, they could cook you a meal for like two weeks. They could, but it's significantly harder than just going to a company that meal preps. So I would because we experienced that, by the way. The reason I know that is because I got a personal trip. Then it wasn't even that his food wasn't good, and it wasn't even the fact that he couldn't meal prep. And I don't say specifics, but bro, like, I don't want anybody in my business, in my house. I now have become a manager. Does that make sense? And I have to literally manage this person. That's work on my half. I'd rather just go to a company. I don't have to manage nothing. Meals show up, blah blah blah. That's it. Does that make sense? That's actually better. Expensive. Same quality and there was a chef and no chef, I'm picking no chef. Does that make sense?
Yeah.
Okay, you have to weigh the cost. Go ahead.
Nice clothing or nice suits.
Yeah, so nice clothing and nice suits would be, for example, somebody that worked in construction.
Probably unnecessary.
It would be unnecessary unless you're trying to change career paths. Does that make sense? If you actually wanted to, your work would Benefit from a suit, then this would make sense. But it wouldn't make sense. This is also why pocket watching and watching other people in envy is such a bad strategy, bro. It's such a bad strategy because people are trying to live a lifestyle or live a life. They'll see somebody traveling the world, and they think that it's just traveling the world. And sometimes these people are just eating off of it, and then they're putting themselves in a situation, and they're getting wrecked. But then they just don't know the back end of it. For example, if I bought an Escalade, if I just told you right now I'm buying an Escalade for $170,000, you guys would look at me like I'm crazy. But then on the back end, it's a tax write-off. I'm going— it saves me money because I don't have to have flights going over certain places. I could have my driver take me there. I can work on the wheels, right? It's also a brand thing for my brand can see it. There's so much back— it's a huge tax write-off, right? It's a real tax write-off, like, by the way, it's real. Like, it's a real thing. It's a weight. It's a— what is it, like over 2 tons or something like that? I forgot the whatever weight Or £8,000 or whatever. So yeah, so like, so like there's— it's all the context of your life, right? And is it— that will determine if it's an investment or a liability. So tell me a liability. Go ahead.
Oh no, I was gonna say investment would be Coin Picks VIP.
Coin Picks VIP, buy the thing, man. Buy the thing now.
Press buy.
He's like, look at me now. Hi, my name is Jonathan. Yes, correct. Yes. So what are you doing with— when you pay for consultation? Tell me. You're getting the right strategy to actually invest correctly
and make money instead of burning your money in this crypto market.
Yes, for sure. So like, basically, you're paying for wisdom, knowledge, and understanding if somebody has been through the fire for you. So you're buying your time back in the form of trial and error. So you could pay for the trial and error 2 different ways. You could pay for the trial error by doing it yourself, falling flat on your face like every other human that would try it. Or you can buy that back specifically by not having to fall flat on your face and doing it for somebody else that's already done it. That's what you're buying back. And trust me, that is one of the best investments on the face of the planet. And I'm not just saying that because I own the business. I actually created the business because of that. It is one of— it is the best investment is consultation. That's why AI is popping off right now. Why? Because AI is able to extract— it's called artificial intelligence. It's an intelligence block. Token usage is now being constructed into a block. It's artificial blocks of intelligence. We're getting to the point where we're paying for wisdom and understanding. This is the first time in economics where we had that capability, and look at how much money is being pumped into it. It's the most lucrative industry on the face of the planet. Does that make sense? All right, what's a bad investment? A really bad investment? This is amazing. This is the greatest teaching here. It is so organic and real. Come on. Give me the worst possible investment you can make.
Go ahead.
A boat. A boat. Okay, but you can justify that, right?
You can.
How?
I feel like you could justify it if you're like a fisherman and you're online fishing, for instance, and you need a better boat because it's gonna attract more people. But I would say like as a normal person, you don't need a big boat.
Yeah.
You're just gonna sit there.
Most people wouldn't need a boat. I could justify it, but I would say most times it's unjustified. So yeah, boat, like, I want a boat, by the way, so bad.
He's like, stop talking to me now. No, but it's like, dang, I was talking to my future self.
But like, for example, if boat was like less than 1% of my net worth, then it would, it would be justified because it would be like an increase of lifestyle. That's, it's, it's good. All right, what's another bad investment? Kind of bad investment. Go ahead.
A house.
Okay, all right, watch. We're gonna confound some people with this freaking house subject. Okay, ready? Watch this. Life change now. Who thinks that buying a house is good? Raise your hand. You guys are lying, bro. You guys are lying.
You're buying like a— we're talking about investment-wise or living-wise?
Living-wise.
VA loan.
Okay, what's a VA loan? I'm gonna destroy it. Ready? Watch this. Let's do the best possible— what's a VA loan? VA loan is 0% interest. Right? Oh no, no, no, it's not. It's 3% interest, 0% down. In that case, I'm not gonna lie, it's kind of cracked. It's kind of cracked. That's kind of cracked because what really kills a bad house investment is
the
down payment. The down payment, like 20—
what is it, like 10%?
I said I put a B. Down payment.
You don't have to put 20. You can put anywhere from All
right. In the VA, you can only get a house like $300K, $400K, I think, right? Nope. I looked it up. It's a— that's a veteran's loan?
Yes.
Okay, that's why it's a vet. No, we looked at first-time homebuyer, it's like $300K.
I think it's like a—
so in this case, it's horrible because you got to go to the Army.
Yeah.
And I can— I'll tear that up. What? He's like, but if you're already done Oh my gosh, you have been indoctrinated. All
right, no, like 5 veterans in your comment section right now.
Yeah, they're like, you guys are good, I promise. Thank you for serving your country. All right, so right here, uh, for real though, opportunity cost, right? So who can explain the concept of opportunity cost? Come on, come on.
It takes to
Close.
Bro, this is like the best, the best financial principles you'll learn. I'm telling you right now. The opportunity cost is what? This is like the one of the most sound principles of finances. Come on, guys. So what is the opportunity cost of you not having a cash flow gap of five thousand? What is the opportunity cost of you not having a gap of $5,000? Let's say right now you have a gap of $200. Specifically. Yeah, say right now you have a cash flow gap. Cash flow gap is what? Income minus expenses. Your cash flow gap is $200. But then you have another guy that has a cash flow gap of $5,000. They both invest in one investment and that one investment returns 10% year over year. Both of them, same investment. What is the opportunity cost that this guy lost versus that guy? Come on, Jesse.
He lost basically—
No, come on, stand up. You're going to have to explain
it. So $5,000 minus $200 is $4,800.
Yep.
So you do $4,800 times 10%, that is— what's that? $480. He's right.
Correct. A 10% increase on $4,800 is $480 plus the $4,800. So what he meant by that— well, can you explain that in simple terms for people?
You blew my mind one day where it comes to like, for example, like paying off debt. So for example, if I have a debt of, let's say, an APR, right, on a loan of 8%, right? Realistically, I have $10K, so a loan of $10,000. Instead of taking that $10K and investing into 8%, if I put an investment that gets me, for example, 16%, Then I pay off that 8% interest, and I'm still up 8% on top of that loan.
Correct, so the opportunity cost missed by paying off the debt early would be 8% because you could have made 16%, instead you made 8%. Does that make sense? So opportunity cost is what you could have done instead of your— the opportunity that you took. So the good opportunity versus the bad opportunity. This is very important. This even plays into investing. So for example, if you buy an asset, this is gonna like, this is gonna hurt some people's feelings, but if you buy an asset and you're down 50%, right? You see that it's down 50% and then you see another asset that's better and you genuinely believe that that asset is better, what do you do? Go ahead. You would invest in that asset that's gonna give you a higher profit margin to return. But where do you get the money for that asset? From the down 50%. So you have to sell at that 50% loss. Yep. Most people don't want to sell that. So what they'll do is they'll say, hey, I'm not going to sell at a loss. And they'll justify by— like, when I mean most, I mean like almost 100% of people will say, I'm not going to sell at a loss. And the reason they make that decision is because they think that holding forever is going to somehow solve their problems. You don't lose until you sell. That's not true. You can lose to the opportunity of the other asset class going up. That is a net loss. So for example, if you hold the asset that's down 50%, In five years, it goes break even and it goes up fifty. You would have made fifty percent. Amazing, right? But if you have invested in the other asset and that asset goes up three hundred percent, you would have had an opportunity cost loss of two hundred and fifty percent or two hundred two hundred percent because you could have invested in the other asset that went up significantly more. So opportunity cost is a massive pro. It's not a problem, but it's it's such a hack. It's such a hack. Like, for example, the opportunity cost of me going into crypto for 5 years earlier, I would be worth $20 billion right now. Does that make sense? Like, there's the opportunity of what could have happened. Now, it doesn't lead to regret, but it does allow you to move like in a very clear way. Does that make sense? It's almost like letting go of your past immediately. That's in the context of investing or even anything. So right now, what's something that you're holding onto that you could let go that would lead to an increase of opportunity cost in your finances? I'll tell you one thing. Time. I'll give you an exa— that's time. Be specific. I'll give you an example, and maybe it'll convince my wife. And I bet you, I'll bet you that it's probably a big return. I'll give you one, right? The opportunity cost of not hiring 10 more salespeople right now, right? So let's break that down a little bit. If I do not hire 10 salespeople as immediately as I possibly can, what will happen is I could potentially miss out, like the projected revenue is like $500,000 the next 30 days. Mm-hmm. Like literally $500K. Right? But it's not just about the $500K. What else happens after the $500K? Go ahead, Gabby. Did you raise your hand?
Okay, go ahead, Jesse.
Come on, Jesse.
We're about to go into a bull run.
Well, so what could I do with the $500K?
Turn into a lot more money. Multiplication.
So the opportunity cost is not just about the initial $500K, it's also about the fact that I have the skill set to invest in Ethereum, which could do a 5 to 10x. So we're not talking about $500K, we're talking about $5 million. So that opportunity could be— and that's a smooth, sound investment because it's just Ethereum. I'm not hinging it off of like a crazy, like I'm gonna 100x my coin. No, we're just talking about just throwing it in Ethereum, that's it. But throw it— so this, the opportunity of hesitation, and then obviously you want to back that up with like real— like for example, we want to interview— if we're hiring 10, we want to interview 50, and then You have to build up demand for more interviews, and that process is there. And that would bring it all the way back to paying for ads to get more interview prospects, right? And so that would be the opportunity cost of maybe not spending $10K on getting more people through the door, right? So the $10K to run ads to get more hires and people to apply to our website, the opportunity cost could be like $5 million, right? Yeah. Is that a sound— can you guys break it down? Is that like a true statement, or are you just saying yes? I'd say it's true. So Ethereum, uh, Bitcoin went up by 7x. We could reasonably say we can get an easy 3 to 4x on Ethereum, right? So if the sales team, extra 10 people, generates $500K, even if they're undertrained, even if they know nothing, right? Again, $500K times 4 is what? Uh, $2 million. So it's not $2 million, it's not $5 million, it's $2 million. That's very sound. That's a very sound So the hesitation is way more expensive than you think, right? Okay, so now ask yourself a situation. Where have you hesitated? Where you're putting your time or your money into a situation where you're missing out on opportunity costs in a better direction? Why do you think that a lot of the teaching we do, I go straight to the core and try to get you to align with basically working harder here? Break out the mindset of the poverty mindset? Yeah, but because the opportunity cost of you not making a sale or the leads not being generated is significantly more than any of the opportunity costs in your life currently right now? And I'm willing to bet that. Is there anything else in your life that makes you more money than closing a deal or not getting a lead or appointment setting? There's nothing. So if I can get you to just go hard at that, it would be the best return on your opportunity cost financially.
Yes.
Does that make sense? It's that you guys are in a strategic advantage like that. If you're not working at this company, the best opportunity cost for you is to get a higher paying job. And then we just break it down. Higher paying job leads to a better skill set, more character, and we just keep going down. You build the skill set and character necessary to get a higher paying dollar per hour. Does that make sense? Yep. All right, any questions on opportunity cost? You're not supposed to get obsessive about it or get weird or have anxiety. It's just a— it's just there is like consequences to your, your decisions that are not accurate. Does that make sense? And the consequences are The opportunity that you could have gotten. And that's the same thing with your personal finances, the cash flow gap, pretty much everything when it comes to trading or monetary loss or gain. Okay, amazing. So this is like, now we're getting into Decision Making 101. So let's dive into Decision Making 101. This is good. We're kind of just completely switching everything here. So let's talk about the dimensions of a decision. Oh my gosh. All right, let's talk about the dimensions of a decision. What are the— how should you think about something when you're making a very important decision? Let's brainstorm here. I don't know why it's going into this right now, but it's going to be cool. All right, decision-making process, because we said if we make bad decisions, it could lead to a bad opportunity cost, but it's not just about money. The world is not just a dimension of math and money. There's other dimensions of it. Right? So let's go through it. We have a decision. What— how do you guys think about something? Number 1, let's go. When you think about something, what do you think about? Go ahead. Analyze what could happen after making a decision. The consequences. Okay, what else? Does it align with current purposes? Current purposes. 3. What did you say again? I was just gonna say, and then for me, I just wanna make sure God told me to do it, right? Because he's like the answer to everything. Isn't that his purpose? Yeah, correct, his purpose as well. But sometimes God will like not speak and then just allow you to, 'cause you already know what he told you anyways. So like, yeah, I'm talking about like a decision of like, should I buy this car or not? Okay, so like 4, what else? Price. But not really, because the price is in relation to what you can afford. So it's like, So like the economic cost, right? What else? Is it going to increase my emotional well-being? Okay, what does emotional well-being mean? It will be like a negative impact on your emotions? Like I don't want it to have a negative impact. Okay, I would say that's probably like— these 2 would be like spiritual, right? Okay. All right, these 2 would be spiritual. The consequences That will be like the negatives. So if you do the negatives, then you want to do— this is like the money. So if you do the negatives, then you want to probably weigh out the positives, right? What else? And then in trading, the negatives will be considered what? Losses. Potential losses is what? That's no potential losses is what risk? I'm gonna show you how trading is life. So risk, and then what is reward? Correct, positives reward. This is really turning into a crypto trading seminar here. So what would this be considered, the money for the car, of you trying to figure it out, what would that be considered in the context of trading? Investment? Close. Come on, Jesse, you don't even know? So if I'm economically looking at a car, if I can afford it or not, right? If I can afford the car or not, what's the same parallel in trading? Close. He's actually close. He's the same, so he's actually—he's a casual guy. He's actually close. I'm not gonna lie. It's actually close. Come on. Closer. Come on. No. Risk management.
Okay.
You're managing the risk because what is risk management? When you're managing risk, it's like I could take this super risk. But I could put a smaller doubt. That's like, can you afford it? For a car, I could buy a $200,000 car, but if I can't afford the car, that's massive risk. But for somebody that has $20 million, a $200,000 car is not that much risk. I'm managing the risk in the context of what I can afford. Risk management. And then just to get super crazy, the spiritual aspect. What is the same thing in crypto? Ah, come on. Yeah, of course. But like, what is the parallel? Come on. This one's super easy. Starts with a C. It's all over the Bible.
Is it emotional control?
Kind of, but like the real biblical version of emotional control. Count it all cost. He just pulls out a scripture. Romans 12:5. It's the direct contrast of the Spirit.
Conviction.
No! How is that? How is the Spirit directly contrasted to conviction? Carnality. Carnal versus the flesh. So when you make a decision, you can make it— I'm sorry, carnal versus the Spirit. If you make a decision, you can make it in the Spirit or you can make it in the flesh. Right? So that is make your trades in the spirit, right? Versus flesh. So I tell people all this time, I'd be like, bro, you suck at trading because your life is like personal finance 101. Do you see it? You're in the flesh because you're in the flesh. So, so like, again, like, uh, so like, if— is it comfortable to say that their life habits stem into their trading habits. And I could say that almost like definitively because they don't walk through the process of their decision makings like this, like this, like this, like this, with everything they do. Like, bro, I could just take this forever. Like, not forget the car making— or watch this. Who wants to do a role play? Come on, come up here. Come here, role play. I'll show you, I'll show you all that right there, right? There's 2 ways we can go. All right, watch this role play. You're the friend that smokes a whole bunch of weed, you hate life, you waste a whole bunch of time, and you're trying to get me to go to a concert that's not gonna benefit me at all. Pitch me.
Yo, bro, there's this cool Kodak concert. I know you from Broward County, bro. You probably an OG Kodak Black concert fan. You know, we can go. I got a ticket. I got 2 tickets already, bro.
Okay, that's good. That's really good. So you already paid for the ticket. What just got crossed off?
Money.
There's no risk to this investment. For the broke people, there is a risk. What's the risk? Time. Time! Ha! If you didn't honor my time, what would happen? I'd be like, oh, it's a no-brainer. Kodak Black concert, I don't have to pay for money. But since I honor my time, I'm going to manage my risk. What's the other risk? So we have one risk right there, time. What's the other risk?
Spirit.
Spirit, how? Explain.
Because it's a negative spirit.
So there's negativity in the Kodak Black concert, right? Which could lead to consequences maybe for the next 3 or 4 days of spiritual atmospheres, condemnation. You might even fall into temptation, fall into sin, and next thing you know, you got to repent and all this crazy stuff, right? So there's consequences there. Boom, what else? Negative. What is the negativity on the— we know that, pretty straightforward, right? So in my head I have to address, but like there could be 2 different people. There could be someone that really enjoys concerts and it could be like in the framing of their reality say that it's not a negative, I could have a whole bunch of fun, right? So the way that a person thinks is the way that they trade. So if they believe that concerts are amazing, what's gonna happen? They're gonna perceive it as a positive, right? So again, in the context of trading, when Alex sees somebody in the group and they're just like, hey Alex, give me buy call now, what does Alex do? You always call them out. If you follow buy calls, you're gonna lose all your money. Okay, so then why is it that one person that's in trading loves it, but then I hate it?
Because you know the effects of it.
I know the effects. I know I've weighed the cost of just following random buy calls. Does that make sense? So the way that you live your life is the way that you would trade. If you want— I called somebody out recently. Yes, I saw it. You saw it? And I didn't even need context. I didn't need no context. I didn't need nothing. I just knew that he wanted a quick fix. And so if he wants the quick buy call and he wants me to basically trade for him, is it reasonable to say that he might want that for almost every other dimension of his reality? Yes. So is it— do you understand what I'm saying? So for example, if I really like bad atmospheres and Kodak Black, I really like it a lot, like I genuinely have a desire, my worldview is that I like to do that, what's gonna happen to, I don't know, my marriage? Explain.
You're not gonna value your wife because Kodak Black doesn't value his wife.
Oh, I'm not gonna value my wife because Kodak Black is a— but am I too harsh if you say that? Is that too harsh?
No.
It— could it be like very true? Is there a high percentage chance that that's true?
Correct.
Why?
Because Kodak Black talks about degrades women and then you have a wife.
Right now, give me another one. If I like Kodak Black, I like bad music, I like the bad negative atmospheres and the drugs and alcohol and the fornication. If I love that a lot How will I treat my career?
You're gonna build the same aspect. You don't care much career.
So like, well, give me some specifics about like what I would not care about my career.
Realistically, you will live your lifestyle talking about trying to get money, drugs, sex. So you wouldn't go about your life, your career with the goals to actually have a successful career, have a house, have kids, whatever
your goal is.
It'll be like the exact opposite of like the good stuff.
Now, now, it's.
Sounds kind of redundant because you guys kind of noticed. Now watch this. Bring it to trading. How will I trade? I would want what?
How will I trade?
I would want what? Buy calls and sell calls. Why would I want buy calls and sell calls?
Because you don't want to do the work to actually understand crypto to choose good coins.
But why? Because like I know that it takes money to make money. Something Kodak would say. And I know that like you should work hard. Like you can get it by any means. Like get out the mud. Like I know this. Why? Why will Why will it— just go deeper.
Well, somebody that wants to buy calls and sell calls doesn't want to— they pretty much want to reap the reward without doing the labor.
Correct, which is like fast money, which is what the rap industry promotes. Okay, so would it be reasonable to say that if someone consistently goes to rap concerts, they listen to rap music, and they're surrounding themselves with fast money atmosphere, that they might want fast money in their career path and in their life, and then they might Might want fast sex, and they might want fast everything. And do you see how like trading is life? You understand what I'm saying, guys? You know, I'll tell you what. Trading is life. The way you live your life is because because trading is boiled up into a decision-making process. It is that simple. It is boiled up into a decision-making process. You look at an investment, you're analyzing the fruit of the investment. Is it going to go up? You're managing your risk. You're managing the pros and cons, and then you're making a decision that has economic consequences up or down, and then it compounds with opportunity costs. Does that make sense? And then I'll bring it back home. The Bible says faithful with little, faithful with much. Why? Because it's multiplication. Correct. Exactly, right ahead. You're right, it's multiplication. So if I wake up in the morning and there's self-doubt, self-talk, isn't it reasonable to say if I don't address it that it might continue throughout the day? And then if it continues out the day, the negative consequences of the self-doubt and self-talk might seep into my work, and then we have opportunity cost loss, and then we have other people being affected by it, and then there's opportunity cost loss, and it's just like a compound negativity thing. Does that make sense? And then it might seep into the trades, and then it might seep into somebody— like, it just gets crazy. And it goes into the other teaching where we talked about the eternal benefits or the eternal losses. Does that make sense? What time is it?
3:55. Okay,
so that's pretty much it. Personal Finance 101, okay? We went over personal finance and decision-making processes. Personal finance. And then what do we find out is the best thing you could possibly do with personal finance? Multiply and plus addition. But like really, what is if you had to boil personal finance down to one thing? What would you do?
Decision making.
Correct. Better decisions. And then if you had to stack one more, risk management is a part of the decision making process. Stack one more. What is opportunity cost? AKA make more money. Correct. So if you had to just write 3 things down, number one, check your decisions, opportunity cost, and make more money. That's the 3, like, right now. If you do those, simple, simple, simple. Again, I'm gonna say it again. Check your decision-making process, opportunity costs, make more money. One more last analogy I heard from this one guy. really, really good. It kind of like changed my life a little bit, and I found out it was biblical after, and God talks about it a lot in the Bible. So for example, the Bible says count at all costs, right? You have to count everything. I can't quote the scripture, but it talks about before you go to wage war, you have to count the cost, right?
Count the cost.
Yeah, count the cost. So like, what is that? The concept is planning, like understanding the consequences before you wage war, right? And so For example, this is the depth of the understanding of this process. I want somebody to do it. If I buy a TV, I want you to count the cost right in front of my face of buying a TV. And if you heard this analogy, don't say anything. So if you buy a TV, that is a decision. Now what goes through your mind? Come on, stand up. All right, yeah, just go say it. Sorry, just go say it.
Time.
Okay, so there's the time of what?
Time spent watching the TV.
Watching. That's good. What else? Unboxing or like call it setup. What else? Yeah, watching but like getting addicted to maybe. What else?
Losing money.
How?
Because you're going to be watching TV.
So the opportunity cost of watching TV. What else?
I would say hosting people, like having people over to watch the TV.
Yeah, because you might have like a desire like my house is cool, like everybody come over like. Parties. What else?
Watch my TV.
What did he say?
Watch my TV. Watch my football game. That's a party.
That's part of watching TV. What else?
Time wasted choosing which TV.
Correct. Like, yeah, the actual process of like buying the TV itself. What else?
You're spending a lot of money. Oh yeah.
Yeah, correct, because you're sitting on the couch a lot. Now you got to go get a chiropractor, right?
Oh, what else?
Not spending time with Correct.
Opportunity cost of missed love. What else? Victor's like, you gave me a bad birthday gift, Alex. What else? Come on, there's more. What if now you got to spend money on like a sound system? Oh my gosh, you just opened up another world. You can't just get Netflix. Now you got to get Apple
TV.
What else? What else? Pay-per-view. That's too old school.
What happens when you move?
Oh, you gotta pay. You gotta move it. Heavy. Yeah.
So the point is, is that a small decision is not a big— it's not just a small decision. It's not just, can I afford this TV? It's a domino effect of a whole bunch of different things. And then once you start really realizing the importance of like the moment and stuff like that, you'll make less decisions. Does that make sense?
Yep. One minute.
All right.
Would you say you do that to like allow yourself?
I'm not perfect. Gabby does that. She like hounds me down. So I just hound her. I'd be like, Gabby, throw her all the yoop, and then she'll like destroy it. I'll be like, yes.
