Update: How I Would Handle Every Paycheck Today

So here's the thing, entrepreneurs, leaders, salespeople, we all want to create consistent, repeatable, and scalable ways to grow our business and our income. And we want to do it better, faster, and more seamlessly. Why? So we can actually enjoy our lives, take vacations, and spend the quality time we want with the people that we love. How do we do all this without spending a fortune or running ourselves ragged? That's the big question. And this show is dedicated to the answer. Does YouTube really need another reaction video? I don't know, but my team pulled me aside and said, would you be open-minded to watch your most successful video on your YouTube channel that has 10,000 comments, most of which are very negative, by the way, which I love. And it was around the conversation of, hey, how do the rich properly manage their money? And I framed this by saying, having worked with so many agents, I see the disciplines that most people do, which is like they don't have an LLC, they get a check, it goes inside an account, and they just blow the money versus a smaller percentage of people that actually have an LLC, they've incorporated themselves, and they've got a way to make sure that there's a tax account, a business account, and a personal account. And then what do the wealthiest people do to actually create wealth inside of their real estate practice? So I can't wait to read your comments and get your feedback and perspective on this. I'm sure I'm gonna say something that will be controversial. I can't wait to see your comment on that. So let's go back in time to 2017 and let's see what Tom Ferry was thinking about How the Rich Manage Their Money.

So how many of you, how many of you were raised perhaps like me, where in your family maybe there was some split mentalities around money? How many of you know what I'm talking about? You know, like maybe mom had a certain way of thinking and dad had a certain way of thinking. So how many of you guys know who my dad is? My mom and dad got married when they were like 22 years old. My dad flunked out of college. Right, as a speech and communication major, which is pretty awesome considering he's like one of the greatest motivational and real estate training speakers ever, right? And his mindset, because his mentor, this is what his mentor said to him, you wanna make a lot of money? Go buy a Rolls-Royce, go get a big fancy watch, and go get a really expensive car and a really expensive house and you will be motivated like crazy and you will go do whatever it takes to be successful. And guess what my dad did? He went up in a big fancy car, big watch, you know, Rolls-Royce, the whole nine yards. And every day he was like this, holy shit, I gotta make money. My mom, on the other hand, grew up in an environment with a few more kids. My grandfather, my mom's mom, passed away when she was very young, and she immediately had to go to work at like 14 years old. By the time she was 16, she was working at Disneyland as a Mouseketeer, you know, Orange County, California, and she's doing great, but all of her money went back into the family. So she would work only to basically have no for herself benefit from it. So in her mind, every cookie in the cookie jar mattered. You should be very mindful with every single dollar. Imagine growing up in that house.

So first, it's very weird to look at a video from like 8 or 9 years ago because I had red hair back then, and now I am an official old dog with gray hair. It is interesting to reflect back on this time, 'cause I know where I was at. I was trying to help as many people as they could to make better decisions with their money. So I know that sharing my story, which was my dad was kind of this way, my mom was this way, you know, kind of gave people permission to also say, yeah, I wasn't raised in an environment where people said you should tithe or you should save more money, you should invest more money. You know, you should forego the many pleasures that everybody seems to want today, but instead sacrifice a little bit because if you do that over the long haul, you're going to be so much better financially. So some people have asked me, am I more like my biological mother or my father? And the answer is I'm blessed to have those two great parents. I'm also blessed to have a stepmom, Fiona Ferry, my dad's second wife, who really was the one that got me to think about being more disciplined with my money. She was the one that said to me, hey, if you can control your weight, control your environment, and you can control your money, you'll put yourself in the best possible position to be wildly successful. About that. Like, I'm like, I don't know, 15, 16 years old, you know, punk rocker, kicked out of one school, now living with my stepmom. And she's like, Thomas, you need to control your weight, you need to control your environment, which is a nice way to say clean your damn room, and you need to control your money. So when I was working at a grocery store from midnight to 9, she was taking my entire paycheck and then giving me an allowance from my check, forcing me to save all this money, which thank goodness she did, because she kicked me out a year later and I had like 5 grand sitting inside the bank. And I was 17 years old.

And it wasn't until in my mid-20s when I met one of my mentors who he showed me something which I'm going to show you. The bottom line is this, guys. Money is a tool. Nothing more, nothing less. Say that out loud. Nothing more, nothing less. Listen, if you're a jerk, money makes you more of a jerk. If you are Mother Teresa, money makes you more Mother Teresa. It is just a tool. But this is what I know. How many of you know someone that doesn't have enough money? I don't know about you guys.

I don't want to be that person. So here's my question. If I was sitting with you one-on-one and I said to you, what are your beliefs about money? What would you tell me money is? Some people would say biblically it's the root of all evil. Other people would say people with money, you know, are selfish or the top 1% and they're greedy. Every single one of us has a belief about what money is and how, how about how money impacts an individual, I just go back to the same thing. Money is just a tool, right? It's a way that I get food. It's a way that I get shelter. It's a way that I'm able to travel. It's a way that I can contribute back to others. And like I said in this video, I mean, the worst person on the planet, money just amplifies that. And the nicest, most gracious person, it amplifies that. And the person that is committed to contributing on a big level, it just gives them more access to funds to do the things that they're really inspired about. So I don't know, I just keep it really simple. Money is just a tool, nothing more, nothing less. It's what you do with it that matters most. So what do we both know is true? We know that when you are in commission-based sales, right, in any commission-based business, you're going to experience what we call the vicious cycle, right? Poor, rich, poor, rich, poor, rich. And usually what that looks like is when you're poor, you're doing everything in your power to find the next client, to, to get the property, you know, reduced to the right price where it's finally going to sell, to get the buyer to write an offer that might finally go through so you can earn a commission. But here's the challenge, right? What most people do is they hustle their face off when they have nothing going on. And then once they have all that stuff happening, that's when they stop doing the things that got 'em there in the first place, creating the vicious cycle. So my question for you is, can you have the awareness that you are responsible for that? There is no one else doing it to you. If you don't take the time to do your marketing, your prospecting, your follow-up, every single day, you're the one that's creating that vicious cycle. I'm just asking you to stop it.

Especially if you've ever met with a financial planner or, you know, you watch CNN Financial, they all say the same thing. Write down 5, 15, and 80. 5, 15, and 80. 5%, 15%, and 80%. 5%, 15%, and 80%. And as all the studies show, it says 5% of the planet are basically generational wealth. They have created generational wealth. It's not the top 1%, guys. Somebody who is worth $5 million who has paid off their home, and when they pass on, they transfer all that wealth over, that's generational wealth. You with me on this? Some of them are worth millions, some of them it's tens, some of them are hundreds, some of them are now billions. But that's the 5%. The 15%, write this in your notes, you ready? They are the middle class. They got a house, they got a little savings, they go on a few vacations, and they're comfortable. And there's nothing wrong with that 15%. But where do you think the 80% sits? Darcy, the 80%? 80%. 80%. Look around the room. Potentially 80% of this room, I don't think so, but potentially with the numbers, 80% of this room when they are older either A, have to work to make money, or B, are dependent upon the government or their family to subsidize their lifestyle. 80%.

80%. Wow, a lot has changed in the last 8 or 9 years. We know that there's this subculture of people that just want to demonize anybody that has created enough value for themselves to create the kind of net worth that, quite honestly, those people are just insecure about their own. And just a little side note before I share the updated numbers, I wrote down Comparison, criticism, and complaint are the enemy of growth. Let me say it to you again. Comparison, criticism, and complaint are the enemy of growth. See, somebody once told me, you can never climb out of rock bottom, whether it is financially, in a relationship, or heaven forbid, we don't wish this on anybody, some kind of addiction. You can't climb out of rock bottom until you finally realize there is no one else to blame and there's no other circumstance to blame, that it's 100% 100% on you. It is in that moment where you have liberation because it's easy to blame society, your parents, the job market, the current administration, the federal government, whatever you desire. But the real deal is when you're constantly comparing yourself to others, you're creating miserable, a miserable emotional state for yourself. When you're constantly criticizing everyone else that's doing it, what are you accomplishing in that? And then of course, complaining is not a strategy for joy, for happiness, for love, for abundance, and certainly not for creating wealth. So just think about that. Those 3 C's kill a lot of people's potential, especially when it comes to money. So let's go look at the, the most recent data. We have this just pulled up. This is as of 2025. Uh, so the top 10% of wealth held today in the US, which shows that approximately, uh, $173 trillion, which is staggering, uh, that group controls, it looks like about 31%. So the top 10%. Control about 31% of the net worth today. Then if you go to like kind of the— I guess it'd be the 90th to 99th percent, right? That group holds about 36%. And then the next group is 40%, controlling about 29.4% of the net worth, uh, of the U.S. And then the bottom, you know, kind of 1 through 50th, sit at 2.5%. Now the obvious question is What is the difference between the people in the bottom 50% today and the people that are in the upward 50%? I always go back to, you know, one of my great teachers, a guy named Jim Rohn, lived in Southern California, was a very prolific author, writer, speaker. My goodness, he, he birthed people like Tony Robbins, Brian Tracy, and so many others that work for Jim. Jim used to say all the time that you get paid in direct correlation to the value you deliver to the marketplace. You get paid in direct correlation to the value you deliver in the marketplace. Now, I know Immediately when I say that, you might have some comments, I'd love to see them in the YouTube video, of, well, Tom, that's not fair because, you know, someone's got to do this job in order to have this on our table or whatever it may be. And my response is, who said it was going to be fair? There's nothing in our founding fathers that said all must be fair and equal. I think that would be more like communism, right? So that's not the game. So unfortunately, people that do something that provides little value that is very easily replicated or anybody can do creates less value in the economy so they earn less. On the flip side, we have a lot of people in our society today that aren't working at all. So how do we count them into this mix? We have elders that maybe, you know, their net worth is smaller and maybe they have a reverse mortgage. So they're, you know, they're kind of living off that. We have others that are living off the government, living off their family. So I guess the way I look at it is simply this. This will create a lot of heated debate, and I can't wait to see the comments in the YouTube. At the end of the day, I just go back to the same thing. You're a real estate professional, you're a loan officer, you're, you're building a tech company, you're in title sales or escrow sales. You and I both know, ready? Your income is in direct correlation to your ability to deliver value in a differentiated way, in a unique way that provides an unbelievable service for people. And if you do that, you make money. But that's the first step. This, this isn't just about making money. This is about what do they invest in? Or what do they not invest in? Do they buy a house and wait, or are they waiting to buy a house? Are they putting money in their 401(k)? Are they putting money into the stock market? Are they putting money into their SEP IRA? There's so many vehicles to create wealth. I always have to go back to the same thing. My stepmom, God bless her, control your weight, control your environment, and control your money. She was the one that told me, Thomas, I've made my entire net worth off buying real estate. She came from Honolulu to LA when she was like 18 years old, met a wonderful a guy, kind of family member, Billy, who taught her way back in the day, and it's harder to do today and probably doesn't even exist anymore, how to buy real estate for no money down back in like the '70s and '80s. And you know what? She did that. And then she parlayed that, like she made that part of her concentration. My point to you is simply this. There's just gonna be a lot of people in our society that are never going to get it. They're never gonna get your income's in direct correlation to the value delivered in the marketplace. Don't deliver any value, you're not expected to then turn around and have every pair of Nike shoes Nikes, the brand new iPhone. But the problem is everybody wants that stuff, and I think that's the centerpiece of all the conflict. That's comparison. Comparison, right? If they got it, I want it. Yeah, but that person worked her face off to make that happen. That person sacrificed. They did what it took to put themselves in the best possible position, and maybe, just maybe, you didn't. And someone will say, but Tom, that's not fair because some people did and it didn't work out. Yeah, That happens also. I've had plenty of endeavors that I've gone for, investments that I've made, startups that I've created that have failed epically, and I've lost millions of dollars in the process. But you know what? I didn't stop. A lot of people just stop, right? But one of the things, and I'm sure we'll get into it sometime during this video, one of the notes that I have is one of the biggest mistakes that I see people make, especially in investing, is they put all their chips in on one thing. And that's never a good idea. But we'll probably get into that a little bit. Can't wait to read your comments.

Hey, it's Tom Ferry.

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So here's the first thing I want to show you. This is what 80% of real estate professionals do. 80% of real estate professionals, they get a commission check, and that check goes into their personal account. Their personal account. 80%. They get a check and it goes into their personal account. They go home and maybe they say, here honey, or here, I'm by myself and I put it in my account, but this personal account is not an LLC, an S corp, a limited, you know, limited partnership. It's not a corporation. It's a personal thing. Now I'm not gonna ask you to raise your hands if that's you, but I am gonna say this to you. I would like to thank you for paying lots in taxes. Thank you very much. I really appreciate you overpaying what you should be paying. Keep up the good work. So what's rule number 1? Should I have a corporation? Yes or yes? Yes or yes? So check this out, guys. If you answered this, don't feel bad. I will teach this stuff at conferences, and I'm blown away by 10 people in the room, 10,000 people in the room, the number of people that go, Yeah, I thought about doing that, but like, I don't know, like which one do I pick? I'm no expert.

Here's what you do.

You call your accountant and say, I think I need to get incorporated. Which do you recommend based upon where I live, what country, what state, etc.? But rule number 1 is no one leaves this conference in 30 days if you are not incorporated and you don't own your business and now your checks come to blankety-blank LLC, not you personally. 'Cause now you get all the tax advantages. Yes or no, guys?

So this is something that I love talking about. You know, even though a minute ago I just said, you don't compare yourself to others because it's going to kill your growth. This is not that. This is how do I put myself in the best possible position financially with my business? How do I put myself in the best financial position possible with my business? One is to, Hire someone, a tax strategist. I don't know, go to ChatGPT and get some, you know, tax advice. But by having an LLC or an LLP or an S corp or a C corp or some corporation, the bottom line is it's gonna be easier to manage your books. It's gonna be better for you from a taxation standpoint 'cause you gotta have all the write-offs, et cetera. But the bigger real issue at play here is what happens when you get a commission check? Like, what does the average person do? That's what I was trying to demonstrate in this video. They get a check and they put it inside their personal checking account or savings account and they suddenly think they're rich. I remember Glenda Baker, long time, shout out to Glenda, long time client, friend. And I've watched this funny video that she did. She said, "Man, one time I remember selling this big old house and I got like a $100,000 check and I just thought I was like the cat's meow." And what did she do? She went out and bought a car that depreciated in value. She bought a bunch of clothes, she went shopping, and next thing you know, she blew all the cash. How many times do we have to hear that story? Shaquille O'Neal, right? The great Shaquille O'Neal. Diehard Laker fan. His first year when he got his contract, when he was now playing for the Orlando Magic, like, bought dad a car, bought himself a car, bought, you know, mom and dad a house. And all of a sudden, his, like, his, you know, investment banker, you know, money manager was like, hey, partner, you've spent all of your money. You still have to pay taxes. You still have to live. You gotta, you know, eat. You gotta do all that stuff. Here's the point. Just like we would talk about asset allocation, right? Like not putting everything you have into one bet. You're going to like, you know, give a bunch of pieces to a bunch of different bets to win over time. It's the same thing here. When you get a check, how much goes automatically to your tax account? If you don't put money aside for taxes, you know what's going to happen. You know how that play works out. If you don't have a business checking account or a business savings account where now I've got whether it's payroll or money is set aside for marketing or paying for all my business expenses through that account. Again, proper taxing or proper accounting, better for taxes. and then separately, your home account. What percentage goes to run the day-to-day operations of your house? And then how much of that money are you putting aside for savings, for all the things you want to do in your life? A joy account, a buy more real estate account, a put your kids through college 529(b) plan, whatever it may be. That's really the point I'm trying to get here. And again, shout out to my stepmom, Pua. Control your weight, control your money, and control your environment. Clean your room, right? So let's keep jamming on this. This is fun.

What action are you going to take in the next 30 days around this conversation? There's no more information. That's it.

So it's been really fun to watch this video because it's been a long time and I look at like 13 million views. This went viral on Google for whatever reason, probably just talking about money in the early days of YouTube. But if you and I were sitting together one-on-one, I would, I'd probably put my arms on your shoulders and I would say to you, uh, tell me about your earliest childhood memories of money. And I'd really want to unpack that. I'd want to get like, how were you raised? Because what that's going to tell me is your worldview, your beliefs about money. Like, can you? You never had it. Money grows on trees. Money is the root of all evil. I'd really get all that stuff. And then I would ask you to make a declaration. I would say to you, in 5 years, 10 years, and even 20 years out, where do you want to be financially? Where do you think the world is going? And where do you want to be financially? And then I would really— I'd encourage you to probably, I don't know, go to Grok or Perplexity or ChatGPT or Claude or something. And I would say, then let's base a plan of how much money we could put aside and where we would want to place those bets, whether it's a percentage to the stock market, a percentage to real estate. And if you're like, Tom, real estate's so expensive. No, it's not. Because you can invest in REITs, right? Real estate investment trusts where you could just buy, call it stock in those assets and actually get dividends from it, which is kind of cool. You can do syndication deals where you're buying into somebody else taking the big risk to go buy a new apartment building, a shopping center, a big hotel, whatever it may be. There's a lot of different vehicles that can get you into real estate at a low cost that allows you to sort of increase your net worth over time and then go buy your own duplex, fourplex, eightplex, 20-plex, or your next house. So I would just say to you, it's all going to come down to some form of a plan around asset allocation. And one of the things I would caution you on, and I'm sure this will be controversial for some, is don't chase fast money. Don't chase fast money. Like, I watch like young friends of mine, you know, that say to me, oh my God, did you see this new crypto coin? And I'm like, yeah, yeah, that's cool. Like, oh, I had like $40,000. I put it all inside there. And that's like a double sin for me. Don't chase fast money and don't put all your eggs in in one basket, and then the coin blows up and they've lost everything. Like, that to me is just silly. I get it. Most people, when it comes to money and investments, all they think about is home runs. Like, how do I get the next grand slam that's going to suddenly overnight make me a gazillionaire? I can tell you, my friend, sitting here like 36 years later, singles and doubles, singles and doubles for decades. Singles and doubles for decades. And by the way, as an investor, I have struck out on a ton of startup companies that I've invested in, startup individuals, companies that I've started, real estate deals that went south. But you know what? If you're always focusing on like trying to get the next huge gain, you miss a tremendous amount of singles and doubles that can make you, I don't know, you 8% a year, 15% a year, 20% a year compounded over a decade, it's pretty damn good. So I don't know. So we sit here and we kind of wrap this up. Don't chase fast money. Don't put all your eggs in one basket. That's a huge mistake. Think about that 5 and 10 and 20-year plan and the asset allocation you think today would be the right strategy for you to get there, right? I'm not a financial planner, but I can look right now on my laptop at something I created in 2015. And in 2015, I listed out all of my assets, you know, back back then I think it was like on a Word doc. Today it's, you know, inside a more complex formula. And it was like real estate holdings and the stock market holdings and private equity holdings and cash accounts and insurance and, you know, all the kind of things, right, of somebody's net worth. But then the game that I started to play with myself once I laid out the plan was not just, hey, what do I want to do in 5, 10, 20 years? Instead I said, what if I set a goal to increase my net worth by 1% a quarter for 20 straight years. 1% a quarter for 20 straight years. And I did kind of a side-by-side comparison with this plan. I did, what if I had some significant triggers? What if I started a company and I sold it? What if I happened to buy a piece of land and somebody came out of nowhere and offered me a gazillion dollars, right? So I was mindful to say I might have some big triggers, but the odds are I'm not. So I basically said I might have some home runs, but the odds are I'm not. So what would Plan A look like if I just said, how do I have an increase of 1% of all my assets by 1% a quarter? By the way, funny to think about doing that in 2015. The 2015 to 2019 run in real estate was really good. Then we hit the pandemic, things got a little shaky, and then it got really good. And now sitting here in 2026, I remember when the rates went up to 8% in September of 2022 and things got not so good, right? Shaky stock market, real estate was going a little bit questionable, like We're gonna go through these cycles. Like, it's a part of the game. But that's why I wanna have that longer-term perspective. What if I set a goal to have a 1% increase in my net worth across all my assets? Means I gotta focus on 'em. Means I gotta be mindful of what's happening. But it also means I need to be ready for the bumps and the lumps and the punches in the gut with what could happen in the economy with interest rates, with all the other factors that could impact it. But here's what I know to be true. Inside of that plan, I'm always putting money back into the investments. I'm buying more stocks. I'm trying to buy more real estate. I'm trying to, you know, look at other REITs and other things that I can do to get into sexier, bigger, interesting deals. But I never start by saying, can I get a home run? I'm always like, can I just get more singles and doubles? And along the way, my friend, I can tell you it's kind of worked out. And I hope, I hope as we kind of get near wrapping up this video, you know, I've never done one of these before. And I hate watching myself on camera, just for the record. I know you can appreciate that you probably have the same. Is I just wish you patience. I wish you discipline. I wish you persistence. And I wish my stepmom, Fiona, Pua very— Pua Pastushin, would come on the show sometime and just talk about it because I can just see her cute little half Russian, half Polynesian face saying, Thomas, listen to me, you got to control your money. What was she saying? Don't spend your money on dumb stuff. Don't chase fast money, right? Don't wait to buy real estate, buy real estate and wait. All those clichés that we all know to be true. That's all she said to me over and over again. You know what? I'm very lucky it stuck. Very, very, very lucky it stuck. And I wish the same for you. Oh my God, I'm going through the comments. The comments are just hysterical. You know, some of these people are just great, right? Like, okay, so how do you become rich? You teach others. How to become rich. Well, there actually is some truth to that. You know, there's a company called UPS, you know, the big, you know, brown, you know, buses or vans that are going all over the place. Do you know that fun fact, what they did a long time ago is they actually created an education department inside of their company. And the goal was they would for free go into other companies and teach them how to manufacture and run their business more effectively. So they'd sell more stuff and have to ship more boxes. So you were actually right. I know you were being cynical. But you're actually right.

Let's see real fast here.

I saw one. I feel bad for this person. I'd actually like to reach out to them. They said, oh, hey bro, like you said, I opened a company. Now kindly upload the next video to show me how to file for bankruptcy. Well, my friend, first of all, William Colchester, 75, 74, 6 years ago. Hey man, everybody fails. Like it's just part of the deal. But if you failed, did you learn the lesson? There's so many mistakes that people make, myself included as a business owner. My goodness, I've made every one of them, but you got to keep moving forward. So I know you experienced some hardship. I feel some of it. I give you some grace. Now get back up there and do it again. Uh, let's see real fast here.

All right.

What this guy's really saying is spend less than you earn and invest into assets that generate income. Thank you very much. Absolutely. Yes. Let's see. But these comments are just classic. Rich versus poor. The most important difference is— I love you, One E— the rich invest and the poor consume. Spot on. Spot on. That was like 7 years ago. That was a good one. Yeah, I mean, this is just hysterical. The comments, the better comments of all time is when I released my second book called Life by Design. And Arianna Huffington, the Huffington Post, loved the book. My PR agent got me a meeting with them. They were like, we should just do a weekly blog on the 4 addictions that Ferry talks about. Oh my goodness. You have not lived until you've watched critics review your work, even though they've never actually read any of it. It was fantastic. I actually went in there probably naively, maybe just a little egotistically, and argued with people online, which was hysterical because then you know what happens The algorithm just keeps going and going and going and going. But oh my goodness, it actually helped me sell a lot of books. So yeah, the comments, I just keep the comments coming. I love it. If you want more information about this episode, including my show notes, mentions, links, and everything else, make sure you visit tomferry.com/podcast. That's tomferry.com/podcast. Thanks again, and talk to you soon.