5-Step Formula To Invest To Retire Early w/ Jaspreet Singh EP 1411

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How much money you make isn't the sole determining factor of how wealthy you will become. The majority of Americans, broke people, middle class people, they make money to spend money. While wealthy people and wealthy minded people, they're making money for one purpose.

Welcome to the School of Greatness. My name is Lewis Howes, a former pro athlete turned lifestyle entrepreneur. And each week we bring you an inspiring person or message to help you discover how to unlock your inner greatness. Thanks for spending some time with me today. Now let the class begin. This podcast is sponsored by Northwestern Mutual. Everyone wants to feel good about their finances, right? Well, that's why I've had life insurance with Northwestern Mutual for years. their financial professionals ask the right questions, truly listen, and help uncover opportunities most people miss. I've seen it firsthand. Northwestern Mutual has been a part of my journey from the very beginning, providing the security and peace of mind I need as a human and an entrepreneur. Find a better way to money@nm.com the Northwestern Mutual Life Insurance Company, Milwaukee, Wisconsin. Paid testimonial by a Northwestern Mutual policy owner.

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Yeah, so I think it's an interesting thing now kind of being in the 30s because what I've been seeing happen, especially recently over the last couple of few years, is I've been getting a lot of calls from my friends who kind of like woke up. It's like this thing where, hey man, I've been working for five, 10 years. I've been making a decent income. But I have nothing to show for it. Like I have a nice car, I have some nice stuff, but I have very little cash in the bank. I don't have any investments. I have no idea how I'm gonna retire. I have no idea how to become wealthy.

Like what is going on?

They have a lot of liabilities. You have a lot of liabilities, even if you don't have any payments. Like I have some friends who are doctors who have nice stuff. They kind of grew up with this mentality of debt is bad. They don't have any payments, but they have no investments. And they have no cash. You have no cash, you have no assets. You don't have any cash flow. It's just you have some stuff, but you have no wealth. and so it's like you kind of go through this like waking up process of realizing, is this right or should something be different? And I think that's where people start their journey of what do I do? And fortunately because of YouTube, it's become much more accessible for people to find information. Before YouTube, it was much more difficult, but even then, you know, it can be very overwhelming. So it's like, what do you do where do you start? And the unfortunate thing is, We're never taught this stuff. And this is what really got me so into the financial education space. It's because I was very fortunate that I kind of got exposed to financial education by accident in my late teens, got into entrepreneurship, started reading books, and kind of dove deep into this journey to figure it out earlier. But it's kind of a lonely process because no one else is really doing it. And you might be like that. A duck trying to figure out what do I do? How can I now go and achieve this wealth? And we're never taught this stuff. We're never taught how to build wealth. We're never taught how to build passive income. We're never taught how to really build this stuff. We're taught to go to school and get a job and make some money. And then what do we do? We spend that money. And this is where now, if you can start thinking a little bit different, now you can start doing things differently. And a couple of things you have to know is for one, how much money you make isn't the sole determining factor of how wealthy you will become. Because the first thing people think for the majority of people is, okay, I have all these payments. I'm making just as much money and I don't really have that much cushion to really save money or become wealthy, so I just got to make more money. But statistically, what we have seen is for the majority of Americans, when you make more money, you dig yourself into- you- spend more. You dig yourself into a deeper financial hole. Really? Yeah, because now when you make more money, you qualify for more loans, you qualify for higher credit limits, for higher credit cards. You pay more in taxes. You pay more in taxes, and we'll talk about that too. But now you spend more money. And statistically, this is what we have seen happen, which is why for the majority of people, you make more money, you end up even brokered. Wow. And what's interesting is now if we kind of take a step back and we zoom out and we say, okay, how do we become wealthy? Somebody making $50,000 a year can become wealthier than somebody making $100,000 a year. And when you hear that you might say, wait, how is that possible? Well, if you just look at the numbers, you can kind of see what happens. Because if you have two people, person A, person B, one person, person A makes 50 grand, person B makes 100 grand, they both invest 15% of their income. So that means person A is investing $7,500 a year, Person B, 15% of 100,000, $15,000 a year. If person A starts investing when they're 21 and they can get the average market return, which has historically been 10% a year, and they do that from 21 until they retire, person B starts, say, when they're 30, like what we're talking about, a little bit after because they partied in their 20s like everybody else did. They bought some nice stuff and they say, you know what? Let me start investing 15% of my income. if person B starts investing twice as much money because they're making twice as much money, they are going to retire with not as much wealth as person A. Person A will have over a million dollars more in wealth, even though they make half as much money. They're investing half as much money because it started a little bit sooner. Now, if you're 30 and you're hearing this, you might be saying, well, what am I supposed to do now? Are all of my options gone? No. What I'm saying is this is where financial education is so important. Time is just one factor when it comes to building your wealth. There's a couple other factors that I want to go over that will determine how you will become wealthy. But this is where that financial education is so important. It's not just how much money you make that matters. It's what you do with the money you make, and that will determine how wealthy you will become. So now when we talk about what are these steps, five things that you need to work on. First, you need to know how to spend your money properly. Second, you got to know how to grow your money. properly. Third, you need to know how to save your money properly. Fourth, you need to know how to earn more money the right way. And then fifth, you need to know how to protect your money. You were talking about now how do you pay less money in taxes legally. This is where it comes down to protect your money. And each one of these things build on top of one another. So maybe we can start with number one and then go over to that way we can kind of build on top of this whole process.

Before you go into number one, Let's just say there's a 30 year old watching or listening right now. They just turned 30 or about to turn 30. And they're in that, you know what? I'm probably only gonna make 50 to 100 grand for the next 10 to 15 year range. Maybe I break through it, but maybe I don't. Let's say I never make breakthrough in the next 10 to 15 years, 100 grand. And I really wanna set myself up for financial wealth in the future. If I don't educate myself around anything else, if I don't take any other action and if I never learn another thing you say. And I don't even know these next five things. But if I put my money in one place every month for the next 20 years, and I just live my life, how much should I put away and where should it go to set me up for financial success? Even if I make all the other mistakes, but this will support me.

So I'm thinking, I will answer that question in this first step because you have to know how to spend your money the right way first. And before I jump to that answer, I wanna explain it because I like to help everyone understand the answer 'cause it will help it make more sense. See, the first mistake or the first issue that people face is how do I actually become wealthy? How do I invest my money for wealth when I have no extra money?

Right, when I'm barely getting by.

I'm barely getting by. And this is where you have to start with your spending because that is the most accessible thing that you can do. And this is where now, how do you spend less money in a world where the world wants you to spend all of your money.

Everyone's marketing you to buy, to spend, to buy things, to travel, all this stuff. Go out to eat, do all the things that are luxurious that keep you poor.

Well, our economic system thrives on this.

Yes.

And this is where the first education we should all have before we leave high school is how does our economic system works. Because most people never understand this and then they wonder why they're living like a rat in this rat race. all the time because we never understand how the system works. Our economic system is made up of three different parts. We have the economy, which is the businesses in the economy. We have investors, which are people who own a piece of the economy. And then you have the consumers. This is people, you, me, rich people, poor people, middle class people, businesses. Every single person is a consumer. Now, the problem that most people face is most people are only consumers. they only spend money and they don't own a piece of the economic system. So now if you look at the way this works, our economy thrives when people spend money. The more you spend, the more money that's going into the economy. The more you spend at Chipotle, the more money Chipotle makes. If you're not buying the double guac, Chipotle is not making as much money.

That extra cheese.

Right? So it's a system where it encourages people to spend and corporations will hire, like you were saying, the best and most smartest marketers in the world to people to open up their wallets and spend money. This is what's happening. But none of us are really given a shield of knowing when should I open up my wallet and when should I not. See, if you don't understand this system, it can make you one broke, but then also very angry because they're like, I have no money. My banker is taking all my money. These greedy corporations are taking my money. My boss isn't paying me enough and you just feel like you're stuck. But when you understand, Hey, look, bankers are in the business of lending money. They want to lend you more money. They want you to go into debt because that's how they get paid. Corporations want you to spend money. That's how they make more money. Your job now is to be a smart consumer and a financially educated investor. That way now you can have the nice stuff, but also benefit from the way that the system works. So now going back to this topic of spending money, you were saying how much should you invest? This is where I would say start off with A simple system, I like to say 75-1510, which means that for every dollar that you earn from here on out, 75 cents is the maximum that you can spend. 15 cents is the minimum that you should be investing. 10 cents is the minimum you should be saving. Now what you do now, you ideally want to create three different bank accounts and automate this whole process. So you get paid, it goes into one bank account, and then you have an automatic withdrawal deposit where that money is pulled out of one account, put into your investment bank account and put into your savings bank account. That way you don't accidentally spend your investing money. You don't accidentally take your emergency savings money and use it to buy a new TV. So you want to automate it and a lot of banks will do this for free where you just automate it that way you don't see that money. So now it's a matter of, okay, understanding that, hey, the way that the system works, it encourages me to spend. Now, what do I spend my money on? And this is where knowing, okay, I need to spend a little bit less on things that aren't producing me with value, which we'll talk about in just a second. That way I can make myself rich before I make everybody else rich.

But let me get this straight again. Spend 75, invest 15, save 10. Is that right?

Right. So if you're making $100,000 a year, you can, and this is take home, 75,000 is now what you can spend. 15,000 is what you're investing over the year. 10,000 is what you're saving.

Seems pretty reasonable.

And now this is what you can do regardless of where you are, whether you're making $25,000 a year, $250,000 a year, $2.5 million a year, 25 million a year. The numbers scale this way. Now you're always, no matter how much money you make, you're always paying yourself first. And by paying yourself first, I don't mean going out and buying a new Gucci.

Yes.

Wallet or belt, you're paying yourself by buying assets which make you wealthy before you go out and spend your money to make somebody else rich.

What are the top three assets you should be spending on?

So this brings me to number two is now how do you grow your money?

Okay. But did we talk, did we finish spend first?

Yeah, let's go into growth because now we're talking about assets. Because why do wealthy people want to own investments? Well, they want to own things that pay them. this is where if you look at the mindset of a broke person and a wealthy person or somebody who wants to become wealthy, we're not looking at how much money they have in the bank, somebody who wants to become wealthy and somebody who is broke, their mindsets are very different because the majority of Americans, broke people, middle class people, they make money to spend money. Well, wealthy people and wealthy minded people make money to grow their money. And what does that mean? That means they're making money for one purpose, to buy these assets, these investments that pay them for owning it. And it's a completely different way of thinking because when most people make $1,000, they think, I can go buy a new watch. I can go on a vacation. I can go out to a nice dinner. When somebody who is wealthy or wants to become wealthy makes that grand, they say, Where can I put this money to work? So this $1,000 can become $2,000 or so this $1,000 can pay me with dividends every month or every quarter or every year, So I'm getting some cash flow from these investments. So this is where now we talked about 75, 15, 10, that 15, the money that you're putting towards your investments, where do you put this money? And I'm gonna give you more than three, but I think the first place that, especially if you're just getting started, the most accessible place for a lot of people is their 401k or their IRA. And the mistake that so many people make here, is for one, they don't know what their 401k or IRA fees are. NerdWallet did a study where they said that 92% of Americans don't know what their 401k fees are. And so if you're watching this and you don't know that your 401k is costing you a fee, sorry to be the bearer of bad news. We'll talk about how to analyze that. But then the second mistake is they expect their 401k to be the sole retirement plan. It was never ever, ever intended to be your sole retirement plan. You have so many Americans that are relying on their 401k to be the reason why they're going to be able to retire rich. But that is not what it was intended for. Even the founder of the 401k has come out and said that the 401k has gone awry.

Really?

Because so many people are using the 401k as their sole retirement plan. It is not going to be enough.

Should we invest in that at all then, or should we just move it into another investment?

Look, It is a good place to start for many people. I don't invest in a 401 because I can get better tax advantages, better growth and better control and better access of my money by doing my investing myself. But I'm also- you- access over it. I'm an investor, right? This is what I do. If you are not, start with your 401. And also you're gonna do other investments that we're gonna talk about. And then you make that decision for yourself. If you say, Hey, you know what? I find better investments, better returns, better opportunities. I rather have the control over my money somewhere else. Then now you can make that decision, but a more educated decision, not an emotional decision. That's the key. Don't jump to conclusions just because you hear some random person on YouTube saying something. Make your own educated decision because what's good for you isn't necessarily good for me. So you can start with, you know, your traditional retirement accounts, which can offer some tax advantages, whether it's a Roth or a traditional 401k or IRA. The difference between a traditional and a Roth is with a Roth, you pay taxes first, your money grows, and then you can generally pull your money out tax free. With the traditional, you don't pay taxes, so more money goes in today. But then when you pull them out, pull the money out, you can generally, then you will, that's when you're gonna pay taxes when you pull your money out. Now beyond that, this is where now you have a lot of opportunity because this is the area now that no one's really operating in because most people assume I'm putting my money into my 401k, so I should be fine, right? No, this is where you have to now look at what are the other opportunities? And I'm gonna break this down into your passive opportunities and active opportunities because some people want to be involved with their investments. Some people are money nerds like me where you're like, you know what? I like studying numbers. I like looking at companies. I like looking at real estate. I like looking at the financials. I want to be more actively involved. Some people will say, I hate that. I just want a place to put my money where I don't have to worry about it. Set it and forget it. Set it and forget it and work to build wealth. That way I'm not stressed out about money and I can actually live my life financially free. So let's start with the passive side because now what passive investing is, it's you're taking some of your money every time you get paid and it's automatically going to be invested. What I say is got to be automatic, consistent and passive. So you want this to be a system where no matter what's happening in the economy, no matter what's happening in the world, you're gonna just passively and automatically have some of this money invested into something. Now, where can this money go? Well, the most common passive investments are into the stock market. Now, because of technology, you can also invest into real estate indirectly into some funds passively. But I think the stock market is the most accessible way. And what the stock market allows you to do is we're talking about that economic system. you have the economy, the businesses, the investors and consumers. When you invest in the stock market, you become one of the investors. You now own a piece of the economic system. Because if you invest in the Amazon stock, even if it's just one share, you become one of the owners of the Amazon corporation. Now, this is where most people assume that you have to pick stocks to invest in the stock market. well, let's look at the numbers historically, because what you'll see is historically, the stock market over the last century has gone up by around 10 a year. Yeah. Most people lose money in the market, which, if you think about it, it doesn't really make much sense. Like, yeah, we see crashes. I mean, we see crashes, like, what, every decade or so? We see dips. But if the market historically has gone up on average, not every year is going up 10, some years more, some years less. but on average it's going up about 10%, how are most people losing money in the market? Well, most people are investing their money in the stock market the wrong way. If you're not willing or don't want to research companies, you don't want to keep up with earnings calls, you don't want to read the financial statements, you don't need to invest in individual companies. You can be a passive investor and invest in funds that give you exposure to the broader stock market.

It's hard to lose when you do that. If you do that, automatic, consistent and passively every month, 20 bucks a month even, something small, 100 bucks a month, more if you have more. And you put it in a fund that is going to continuously rebalance itself and continuously set you up for success over time. It's probably going to get around 10% annually over time. If you just did that for 20 years, you're going to see your money grow.

Right.

It may not be as sexy and big spikes. And oh, I doubled my money in three months. Like some stocks could potentially do. But that could also lose half of your money in three months also. You know that old saying, it's not what you say, it's how you say it. I think that goes for how we live too. It's not just what we do, it's the energy, the intention, the presence we bring. And that's exactly what the Range Rover Sport brings to the road. The Range Rover Sport is built to take on roads anywhere without any unnecessary details. It combines a dynamic sporting personality with elegance and agility and delivers an instinctive drive. Its assertive stance hints at an equally refined driving performance. Defining true modern luxury, the Range Rover Sport features the latest innovations in comfort and convenience. The Cabin Air Purification System alongside the Active Noise Cancellation creates a new level of quality, comfort, and control. Terrain Response 2 offers seven terrain models to choose from, fine-tuning the vehicle for any challenging roads ahead. Build your Range Rover Sport at range.rover.com/us/sport. We all know that staying hydrated is.

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Right.

That's why doing this approach, automatic, consistent and passive in a fund that is a solid fund will support you and.

And to that point, I think the, the big thing that stops a lot of people from seeing that success is they assume that the success will be instant.

That's slow.

It is slow. You're going to go through ups and downs because what we saw happen in.

2020 will go down.

Yeah. The market crashed and we saw people selling out of their passive funds because they're like, well, I thought it was going to be a guaranteed return. Now I'm down 40. Well, yes, in that moment. But remember, you're you're supposed to be investing for the long term where it is the longer you invest for, the lower your returns are. And what you have to remember as a passive investor is you're pretty much marrying your investment funds here because we're not investing now with the goal of, of trying to sell in six months or two years.

And take it out and use it.

No. We're trying to invest for the long term, meaning multi-decades now, when you look at that Horizon. Now, yes, your risk goes down significantly, but most of us you don't have that level of vision to think that far ahead. And when you see the market go down, you get worried.

And you don't have the patience.

And we don't have the patience.

And that's why I think if you, if you use this approach like you talked about, 75, 15 and 10, and you said this 15 that I'm going to invest in every month, automatic, consistent and passive, whether it goes in one fund, real estate, multiple things, whatever you want to split it up and do Diversified, I think knowing I'm not touching this money for a period of time. And it should probably be a decade.

At least.

At least a decade for you to be like, this money, I'm going to invest in it because I want to buy a home in a decade. Because I want to do this big thing in a decade, or I want to be able to retire in 30 years, or I want to be able to do whatever at a certain time. But that 15%, you should not be thinking about, I'm going to spend this in three months. And I want to make it go up 20% in three months so I can spend it.

Right.

That approach will not work. Spend the 75%, save the 10% so you have a window of buffer to pay for things as emergencies that come up, but not with the investment dollars, right?

Right. The investment money is working to build you wealth. You become wealthy with your investment money. Your savings are there to protect you against an emergency. Your spending money is what allows you to live your life. Live your life and have the nice things. And so now, We'll get into now, how do you live more, live better today by earning more money in a bit? But this is where now the passive investing is the most accessible way for somebody to start investing. And then somebody's gonna say, what do I invest in? Right? Because we're talking about, well, you can invest in the stock market. There are funds like there's index funds, ETFs, mutual funds that all work similarly with some nuanced differences that allow you to invest into a basket of stocks, a group of companies. so for example, I like ETFs just because they're very convenient. So you invest in a ticker symbol ETF stand for exchange traded funds. So for example, if you wanted to invest in the stock market, the general stock market, there's a fund, an ETF called VTI. Now, I'm not telling you what to invest in, just giving you some examples. VTI is a total stock market ETF. If you invest in that one ticker symbol, you're getting exposure to the United States stock market.

You're getting diversified.

Getting diversified in the stock market, not across different asset classes, but within the stock market. You could then, you know, pick, oh, I want to invest in, let's say, the S&P 500, which is the 500 largest companies in the stock market. SPY, there's a ETF that gives you exposure to that. Let's say you want to invest in the Dow Jones. That is the most commonly discussed fund. It is a group of 30 companies in the stock market, big, large companies. DI is a ETF that gives exposure to that.

So you can invest in three stocks, which would be hundreds of stocks throughout those three investments.

ETFs. Yeah, those three ETFs will give you exposure to hundreds, not thousands.

And all you need to do is invest in those three things and set it and forget it.

And now you can just set it, remember, automatic. So the key here now is you invest when the market's up and down. You don't change it. So when you see the market crash happen, you don't stop, you keep investing. The only thing that you would change is potentially buy more. Yes. Because when you see these types of market pullbacks, most people are selling and they're running away because they're panicking and getting scared that my investment is going down. That's when you want to be coming and buying aggressively because now investments are going on sale. And so this is where it's, again, that mindset shift of understanding what is it that you want to be investing in and how long are you investing for? If you're investing for the long term, who cares what's happening in the next two months or next two years? You're investing for the next 20 years. I call it a decade of sacrifice. If you want to become wealthy and seriously wealthy, not like, oh, I have a little bit of money. No, you want to become wealthy. You got to put in what I call that decade of sacrifice where you're working to spend less and earn more. That way you have more money to invest. And most people are not willing to go through that sacrifice because that means I can't have that Gucci belt today so I can have more investments today. I can't show off my stock portfolio or my real estate portfolio the way that I can. my Gucci belt. And most people would rather have the show, would rather have the look than the actual thing that will make you wealthy. And that goes back to the mindset, the thing you talk so much about. Your mindset has to be focused on saying, you know what? I want to become wealthy. And that's hard because now, for one, you have to be convinced yourself. And now you might have a spouse, you might have kids. And that means you all have to be on the same page financially, right? Because money is a team game. It's in the house. If you think, you know, I'm gonna go and try to build my wealth myself and then your husband or your wife is going out and spending all this money, they're gonna be pulling you back. So you gotta be on board where I'm mentally on the same page, my spouse is on the same page, my kids are on the same page, we're gonna build wealth and we're gonna build something that we've never seen before. And that's that first mindset where now I believe I can do it, I'm going to do it, now you start putting in that sacrifice. So we started about the passive investing. Next is active investing. And I also should mention that you can do passive and active investing. I do both. I do.

What's the example for you?

So I invest my money in five places. I invest my money into businesses, which are my own businesses and startups that I invest in. Invest my money into physical real estate. Invest my money into stocks. Invest some of my money into cryptocurrency, a little bit more of a speculative play. And then I invest a small piece of my portfolio, about 2% of my overall investment portfolio into physical gold. So my gold, my cryptocurrency and some of my stock market investments are passive, meaning this happens for my stock market every week, for crypto every day, for gold every month. It's the automatic passive and consistent. I don't touch it. It is automatically pulled out of my checking account and it is invested.

Interesting. And your bank, you can set up parameters in your bank to automatically do this.

Yes.

Two specific places you want to invest.

Exactly. That's nice. Technology has made investing so much more accessible.

Do all these banks do this? or what are like the top few that you see that?

Many banks will allow you to move money from one bank account to the other. These investment accounts, you're going to have to work with a particular brokerage. There's tons of brokerages out there that do this. You can find whatever you like for, let's say you want to invest in the stock market. There's a bunch of brokerages out there that will allow you now to invest your money into the stock market through this passive type of system. You just have to find what's right for you. And this could depend on what country you're in. you know, and just the, your, what interface you like the best. And it's become very accessible. There are so many, it is so much simpler now than 10 years ago, let alone 50 years ago. Right. So we are very blessed to be able to do this now. Right. On the active side, this is where now I invest into my own businesses. I invest into real estate, and then I also invest in some stocks.

You do real estate funds or do you do your own individual real estate? buildings yourself.

I have done some real estate funds, but that is the smallest piece. Most of it, probably 99 point some percent of it, is actual physical real estate that I'm going on and buying myself. And so now it's, when we talk about active investing, what does this mean first? This means now that you are going out, finding investment opportunities to invest in, and then you're putting your money in and Now this is where the research is important. So like for example, with business, I invest in my own businesses. I also invest in some startups. Startup investing is very risky. 9 out of 10 startups will statistically fail. So I know that when I invest my money in these startups, a big chunk of this money will I will probably never see again. But my goal is now that a small piece of these startups that I invest in will go big and then that will make up for the other losses with real estate. my goal is completely different. With real estate, my goal is cash flow. I call it cash flow because cash flow funds the guac flow. Now what that means is now when I own a cash flow producing asset, I'm getting money coming into my account now every month with my real estate that I don't have to actively work to earn because I have a property management company in place. I have a system in place. So it's not like I have to go to work to earn this money. I buy the properties, I have the systems where we renovate the properties with the contractors, we do the right inspections, Then I give the keys to the property manager. My job is done. Now every month I'm getting cash deposited into my bank account. Every month and every quarter I get financial reports going over what's going on with my properties. So it's hands off. I still review the properties. Like I review the financials, I review what the property manager is doing, but I'm not going to work to earn this cash. Now I should also say it took me a ton of work and a ton of time and a ton of headache, and a ton of mistakes to learn how to do it the right way. Yeah. Because, you know, I didn't grow up with real estate investors in my family. I had to go out and just kind of do it and figure it out. And it was very stressful. You know, a lot of people on the internet make real estate investing seem like this. Holy Grail, go buy some real estate.

And you're going to be swimming in the dough. But here's the thing. When you buy real estate on your own, it's almost like a full-time job managing the property. If you're doing the Airbnb or short-term rentals, it's like you're going to constantly clean and adjust and promote it and market it and deal with the Airbnb stuff. Or you need to find someone to pay to manage it.

Yeah.

But ultimately, at the end of the day, you got to deal with the taxes of it. You got to deal with the expenses of it. You got to deal with the fixing of it. You got to deal with the regulations around it, whatever it might be.

So how do you invest where it.

Doesn'T become a time suck and an extra job in real estate, but it's actually cash flow that is more passive.

Is that even possible with real estate? for. I can only speak from my experiences because for me, it was a huge time suck.

It was like a full-time job.

It was more than a full-time job. I couldn't sleep at night because of how many issues I dealt with. But so why.

So why be in real estate today if it caused you so much pain previously?

Well, see, I. You. You go in with the vision, right? Like entrepreneurs, you have to be a little bit crazy. You don't know how something's gonna work out, but you're. You're putting in. countless hours. You're not sleeping at night. You're sacrificing vacations. You're not talking to your family. You're doing a bunch of crazy things because you think this thing is gonna work. That's how it was for real estate. I'm known for being, like, that stupid person, and I've always been that thing. And for me, it's like, I believe something so much that I'm willing to make a lot of sacrifices and keep doing something. And for me, when I invested in real estate, I was 19 when I started, when I bought my first property, and. I did it kind of all by myself because I told my dad I wanted to invest in real estate and I grew up in a very traditional Indian house. My parents were immigrants. My state in India called Punjab. So my parents came to this country with very little. And so, yeah, exactly. You got the Punjabi moves down. That's our dance. We were just talking about before this. It's a traditional dance. But my parents came here with very little and. You know, they wanted me to be a doctor and it was very like strict that you have to become a doctor. Nothing else is the option. So anything that wasn't medical related was like a big no-no.

So becoming a lawyer, you were a failure.

I was, yeah, that was a huge compromise for me to become an attorney with my parents. But this is before I even became an attorney where I said, I want to invest in real estate. My dad was like, and I was actually studying for the Medical College Admission Test when I had the idea to start investing in real estate and I had some cash saved up. up because I was working on a event planning company at the time when I was in college. My parents didn't know about that. So I was making a little bit of money, and I was like, I want to invest in real estate. My dad's like, you're stupid. Go study, go become a doctor, and then worry about all this other stuff that you're doing.

So I was like, all right, I'm.

Just gonna do something. Yeah. Yeah. You know? So how much was your first deal? My first deal. So it's gonna sound crazy because this was at the bottom of the 2008 crash. So it should have been very cheap. Very cheap. This was in the Metro Detroit area. It was especially hard struggling that it was a small condo that I bought. The condo about three or four years prior to me purchasing it sold for about 150 grand. It went through foreclosure. The banks had it listed for $8,400.

Oh, man, you got the jackpot of that thing.

It sounds like I made an offer for four grand.

Oh, my gosh.

I don't know what I was doing, right? So I'm like, well, did you get it? Well, I put an offer for four grand. They said, we'll give it to you for 7,000. And I said, no, I don't know what I offered. Something else, maybe less than five grand. Yeah. And then another person came in to potentially buy the property. And so the bank says, we have another offer on the table. Give us your highest and best offer. Now, to put this in perspective, I didn't know this was a good deal because I'm 19. I knew nothing about money.

Five grand is a lot of money at 19. It's like all your money.

Yeah. So I know nothing about investing. I didn't know what passive investing was. I had only read books about investing. So I'm, I'm reading some books and now I'm just going out doing it because I know nobody in real estate. I didn't even know you could invest in real estate. So I'm like, okay, well, somebody's making an offer. I kind of like this deal because I'd looked at a few other properties. So I was like, well, how about I make an offer for eight grand? We'll see where they go. And the bank took my offer. The other person offered less than what I did. Wow. So I bought it for eight grand, I put in a few thousand dollars worth of work, and then I listed it for $600 a month. And the profit on that was between $250 to $300 a month, depending on the month, which now sounds great, right? This is the beauty of real estate. The downfall is it was a big pain because I didn't know what I was doing. I hired a, I don't want to say scam property manager because I haven't been able to validate that, but I don't know if they were licensed. Right. the tenant moved in, we didn't have a lease. The tenant was absolutely crazy. They had my phone number. So now I'm going to class. Like, I remember I was coming out of my chemistry classes or my physics classes, and I had these voicemails, these multi-minute long voicemails of the tenants talking about how the world is ending. They're like, this property is going to go up in flames. So I was like, what's going on? I get an electrician out there. We go to the property, and this was like, after multiple issues that happened, I went with an envelope of cash. I probably had like $50 of cash in this envelope that I gave to them because I felt Bad for the tenant. Electricians looking at the property, they're like, yeah, your light bulb fused. We can just replace that. That's it. That was it. There was an instance where they were cutting cucumbers on the countertop. They missed the cucumber, they scratched the countertop. She calls me crying that she needs a brand new countertop.

Oh my gosh.

I gave it to them. Oh. Because I didn't, I don't know what's going on. So like, I dealt with a lot of issues. and that was just the first one. I've been like the first, I would say three or my learning curve where I was like a full-time, like I'm on the phone talking to people, trying to find contractors, I'm trying to find the right attorneys. I got screwed over by attorneys. I got, I mean, I made every mistake possible.

Why'd you keep doing real estate after the first three failed?

Yeah, see, this is where the, the stupid comes in out of me. Well, I read books and people talk about how investors own thousands of real estate units. I was like, how can somebody deal with thousands of tenants like this? Like, it's not possible. Like, there has to be a system. I just had to figure out how to crack that code. How do I break this system? And that was my journey, was learning it. And it was very painful, very expensive and very stressful because the third deal literally depleted my bank account. I was talking to my wife about this the other day where that third deal was so stressful because I made every mistake possible. I talk about this on YouTube. It's my worst real estate deal ever. I bought the deal because my contractor told me it was a good deal. He told me that, hey, we can fix it up for not a lot of money. And because it's such a good deal, you're gonna be able to make a lot of money on it. So he's like, don't even worry about getting an inspection on the property. Just qualify it. So that's what I did. I trusted right? Bought the property, gave him the money, he ran away. I didn't know that he wanted the money because he was running into financial problems. Then this property, it turns out, had a lot of defects behind the scenes, which I didn't know. We had the city come out and look at the property, and it was the repairs cost way more than what the actual property cost. And so now I was really in trouble because I wanted to get this property rented out. my bank account, that property account literally went negative. And I had an overdraft fee on this account, which I had no money to pay at the time for that property because I was putting all my cash into this. And like I was saying before, I was in that event planning party business, which was a cash business. So I had, like, literally a bag of cash in my room. So I went to my last Resort, which I pulled it the cash out of my bag, and I gave it to the contractor. I was like, we got to get this done. I need to get this. I need to get some income out of this property because I couldn't sell it.

Right.

I couldn't get a certificate of occupancy. I couldn't rent it out. And so it was like, I was so stuck. I was fortunate that I had that cash. But, I mean, it was a tough situation. That was my real life tuition. Like, that was where I learned. Like, I say that one deal taught me years worth of real estate in one property because I learned so many things. Wow. That I should not do. But then from there, you know, I was able to stabilize. I made some more money with other Ventures that I was doing because I was making money for one reason to buy real like, that's all I was doing. And losing it in the real estate. Losing it in real estate. But I was learning, right? That was my learning process. So I guess I can't, you know, I, I wouldn't change it because I learned a lot from it.

Very stressful. Like, when I say I lost sleep, I lost a lot of sleep during that time. So when you're gonna buy a property now, what is the approach that you take so that it maximizes your return, saves you time and energy and minimizes stress? If you like, what is the approach if you're like, okay, Am I buying single unit properties? Am I buying apartment buildings? Am I buying duplexes, fourplexes? Am I working with another investor and buying a bigger deal? What is that thought process into buying a deal? First off, and then how do you set it up so it doesn't take.

You a lot of time to manage it? Sure. So I would say the first thing is I need to know what my return is going to be. And generally, my general rule of thumb is I need a 7% cash on cash return. Annually. And what that means is for every dollar that I invest, I want to see seven cents of cash flow. That's money that's hitting my bank account after expenses that has nothing to do with appreciation. So I want to look at those financials. I want the seven percent cash on cash return. Then I got to look at where am I investing. So I like to invest in areas that are growing that have more like up and coming-ness to it. So this is now I want to see populations at least stable, if not rising. Do a quick Google search of any city and Google will tell you what's happening with the population.

It's made it so easy. Wow. What are the top three cities that are rising that are also not over, I guess, overpriced right now? What are those top three cities? Let's see in 24 months where that.

Actually is because we're going through this correction in real estate right now. So let's see where interest rates go because that's going to influence True. Housing prices and real estate prices in general.

Interesting.

But keep an eye on interest rates. The general thing is as interest rates go up, property prices will... Maine, where.

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What do you think is going to.

Happen over the next 12 months with interest rates? well, the Federal Reserve Bank says that they're going to raise interest rates. And if they keep doing that, they're going to push this economy into a.

Lot of pain because it came down a little bit, right? Recently.

So mortgage rates and interest rates are two different things. So, okay, interest rates set by the Federal Reserve Bank are called the federal funds rates. This is the interest rate that one bank pays another when they lend each other money overnight. so that think of it like the wholesale price, right? When you go to buy this mug from Amazon, Amazon's buying it from the manufacturer. They're buying it cheaper. Then they sell it to you at a marked up price called the retail price. So banks have this wholesale price called the federal funds rate. Then they jack it up and sell it to you as the mortgage rate. So federal funds rates, the Fed rate.

Can influence where mortgage rates are going. So interest rates can be different than mortgage rates.

Right. They are different than mortgage rates.

What's the current kind of interest rate.

At the time of this interview?

For mortgage rates?

For the interest rate versus mortgage rates. So the federal funds rate right now is right around 5%, just under 5% the federal funds rate. Mortgage rates are hovering around the mid 6% for a 30 year fixed rate mortgage. Now the question is, where are we going to go from here? The Federal Reserve Bank has a mission to fight inflation. that is a big deal. It is a super serious problem. And we've discussed this in other interviews. I'm not going to go too deep into, like, what is inflation? Why that's happening. We have an inflation problem, and that is a serious problem because if we don't solve the inflation problem, then we risk a serious currency crisis. We risk potential hyperinflation. We risk our, our dollar losing the reserve currency status. So it is a serious issue to bring inflation down because Yeah, a recession is bad. A currency crisis is even worse. That's why the Federal Reserve Bank is working to increase interest rates because that brings down inflation.

Now- They're looking to increase them. Increase interest rates.

And what about the mortgage rates? So that pushes mortgage rates higher. Higher. So now rising interest rates have a consequence. And that consequence is a slowing economy because when you raise interest rates, it makes borrowing money more expensive. Unless people want to buy. Less people buy. And now if you remember what we said just a few minutes ago in our economic system, spending is good for the economy. Higher interest rates, less spending, bad for the economy. Our economic system wants people to spend money. In fact, they want you to be in debt and spend money. Because if you're in debt and you're spending money...

They're making money.

They're making more money. They want you to be in debt because more debt means more spending today.

That grows the economy. They don't want you to win.

They don't want you to win. They don't want you to be spending. Exactly. and this is where, like going back to what I was saying of you want to be a, a smart consumer and a financially educated investor. You have to understand this because it is not your patriotic duty to be broke for the sake of the economy.

And be in debt and be in debt.

Right. So understanding now that as borrowing costs go up, it slows the economy and high inflation also slows the economy. So we have this double whammy going on. And this is going to be, this is not something that's going to just blow over. like this might take a little while to see the full effects of this, but in the coming years we are going to see the effects of high inflation and the higher interest rates. And the question is this is where a lot of people have guesses, but we don't know. The question is, what is the Federal Reserve Bank going to do? Are they going to stay strong and continue to raise interest rates, even if it pushes the United States economy into a recession or even a depression, or are they going to reverse course? start stimulating, cut interest rates, do quantitative easing, which could then make the inflation problem even worse.

Didn't they do this last two years though? Didn't they stimulate by giving us so much money?

And what did they do to the economy? The economy boomed. 2020 and 2021 were boom years for the economy. Businesses were making record profits. Now we're seeing those same businesses do layoffs. And this is an interesting- A lot.

Of these businesses are laying off.

It's the exact same businesses, but why? See, you would think that if a business is making record profits that you would then have huge cash piles to sit on, right? And they were. In 2021, we saw the largest cash piles with these businesses ever. So what happened to that? Well, when a business has cash in its bank account, there's three things that it can do with it. You can save some of the money for emergencies. You can spend that money back in the business. reinvest back into the business, hire more employees, open your new manufacturing plants, acquire companies, acquire companies. But the third thing that you can do is you can give the money away, not to anybody, but give it away to the shareholders, to the investors. And you would think that a astute business would want to save money because, well, I mean, you want to be protected against a recession, right? It is the least attractive thing to do.

Save money.

Save businesses do are not incentivized to save money. Because if you save money, you're taxed. You've got to pay a lot of tax. So if a business makes a hundred million dollars of profit, you're going to pay a big tax bill. Big tax. Half of that money might go into taxes. So now you have the shareholders of the company, the investors that are saying, why would you want to take that a hundred million dollars that we have, spend 30 to 50 million dollars of that to the IRS and then only leave 50 to 50 million dollars? why don't we take that money and do something more productive with it? Productive not by giving it to the IRS, but putting that back into the company or giving that to us as the shareholders. That way you pay less taxes. That way you pay less or no taxes. So option two is now we spend all that money, we hire more employees, we open more growth because if we have 100 million of profit, but then we spend all 100 million to invest in something that will pay off taxes. Now we have no taxable income, no tax bill. Or option three, which is what we saw happen. the shareholders said, we made 100 million dollars of profit. We've been investing in this company for a long time.

Time to pass back.

We want our share. So what did we see happen? We saw the largest stock BuyBacks happen in the history of time. Now, if you're thinking a company made 100 million dollars worth of profit, they're going to buy back 100 million dollars worth of stock. You're thinking small. Because if you remember back in 2021, what else do we have? we had the lowest interest rates ever.

So what did they have, like two percent or something?

Some of them were the lowest we've ever seen.

Crazy. So now, should have bought a home then.

The shareholders and the corporate officers said, huh, if we have a hundred million dollars worth of profit, we can go to the bank and borrow 500 million dollars at two and a half, three percent. And now what do we do? instead of doing $100 million stock buyback, we can do a $600 million stock buyback. And now they gave away the $600 million, whether it's through dividends or stock buybacks, shareholders made a lot of money, no more cash in the bank account, but the corporations are left with a big bill, right? That debt has to be paid back plus interest. Now, what are we seeing happening? We're seeing revenues falling and at the same time, expenses are rising. Why are expenses rising for one, inflation? but second, because debt costs are rising. See, you can go out and get a 30-year fixed-rate mortgage. Corporations don't do that. They get variable interest rate terms. So maybe their debt readjusts after 12 months or 24 months or 36 months or five years, but that debt readjusts. And so now what we're seeing happen today is more and more corporations are saying, oh, our revenues are not growing as fast as they would like, but our expenses are rising or about to rise. Why are they rising? Well, we're seeing our debt costs rising because our cost of servicing these debts are skyrocketing. Interest rates are going up. And so now when you're a corporation and you're in a situation where revenues are falling and costs are rising and you have no cash in the bank, what do you do? You lay people off. Yeah. And so that's why we've been seeing so many of the same corporations that.

Have huge layoffs that have been doing buybacks over the last couple of years, not doing layoffs. Is there any massive companies that isn't doing layoffs right now? The big tech companies, it just seems.

Like all-- I don't want to say a company today because tomorrow they could do a layoff. Right, right, right.

But it seems like a massive percentage has been making big layoffs from 8% to 15% layoffs, it seems like, of their employees. You just keep hearing it every week, another big company doing this or making their second round. Do you feel like that's going to keep happening over this year?

Yes.

Really?

That will continue to happen as long as we keep increasing interest rates. If we don't increase interest rates, we could see a short-term boom in the economy, but inflation is going to be the thing that then skyrockets, which will have its own effects. So it's do we want to deal with the issue now and go through the pain, or are we going to put a little Band-Aid on it?

No matter what size business you are, say you're making $100,000 a year in a business, $1,000,000 a year, 10 million or 100 million? What advice would you have to business owners during these next six to 24 months to prepare for if interest rates are going to go way up? If you could think this is going to go up in a big way, how should I prepare no matter what level I'm at? 100,000 million, 10 million, 100 million. What should I be doing?

So let me tell you what we're doing at Briefs Media. because we have a newsletter company. We talked about market briefs. That's one of our newsletters. We have business briefs and we have a Spanish newsletter as well. So we have a newsletter company. It's free to consumers. So if you want to stay up to date on what's happening in the news, you can go to market briefs, briefs.co. But we are an advertiser supported business, which means that we rely on other businesses to pay us so we can continue to give these newsletters for free. Now, if we look at history, because I love reading books, especially biographies, and what we see happen is anytime we see a recession, the first thing that businesses cut are their advertising dollars. So who does that affect? Companies like mine. And so I'm reading this and I'm seeing what's happening in the economy. And what we've been doing is over the last number of months is we've been working to build up a cash pile. to protect us against whatever might happen and also working to pivot of what can we do to make sure that we can self-support ourselves. So that's when we also officially launched Market insiders, which is kind of like a sister company to briefs media, which is our education platform, which is where now, if you want to learn more about how to invest your money into the real estate market, how do you invest your money into stocks, how do you actually build your wealth and manage your money? How do you the actual education of the investing. Now we can service our own readers with that education. It's the app. You like, you can do it on your phone. We have a web platform. So that's marketinsiders.com that we created as a way to surface our briefers, especially with what's going on in the economy, because now we are now kind of diversifying how we're generating Revenue. So that's what we're doing. It's to protect yourself against what could happen, building the cash piles, and making sure you have more than one stream of income.

By not just relying on advertisers, but also being able to provide a service or course or program to be able to sell direct to your audience.

Something, something that will provide more value to your audience or your customers itself. Yeah. And so this was a direct integration for us because people are now reading what's going on in the news. Hey, if you want to know how to invest, we have an app that can help you with that as well. So it's knowing what can serve your customers in the best way possible. Right.

Okay. So that's what businesses should be thinking about.

Businesses should be prepared for anything. And look, if nothing bad happens, if the economy continues to boom, hey, you have some extra cash. Now you can go and hire more employees. You can go and go to Disney World. You can go and take your employees somewhere fun. Exactly. So, you know, it's, it's, there's no cost to preparing, but there's a huge cost if you don't prepare. That's true. That's, that's the main thing that you need to understand. So going back to active investing, right? Yes. So we talked about real estate, which is one way. Stock market.

But first off, how do you set yourself up for success to not be an extra job investing in your real estate now? If you're spending 30% of your time on an asset that's causing stress, energy, you having to go there, you having to fix it, calling the contractors, more investing to fix things up, like how do you make sure you find the right properties and what are those properties you look for?

So I think we've got past the first part, which is I want 7% cash and cash return.

You said you're looking for the growing areas. Locations with Yes.

Okay. I think that's where we left off. So we want an area that is growing. I want to see businesses moving in and people spend thousands of dollars to research, like where are people going? Where are the trends? I can give you a $10 tip that will give you that same level of analysis, maybe even better. Go to the neighborhood where you want to potentially invest. Go to a local coffee shop, buy a cup of coffee, sit down with the barista and ask them, Hey, I'm thinking about moving in here. Do you live here? In this area? And see what they say. If they live there, now you have a conversation with them. And they will tell you what's happening. Crime is increasing. I love the area. Restaurants are moving in. I'm thinking about moving out. And that will give you a gauge of what's going on from somebody that's actually living there. Talk to two or three different people. If you see these two or three people talk about how much they love this area, because there's new restaurants coming in, there's more nightlife coming in, there's more cool things happening. People want to work there, people want to live there. Now you have your info telling you that this is a cool area.

Okay. And then, and then when you, you see the environment is set up for a thriving success.

Yeah.

And you see those measures. What type of properties do you look for?

So for me, I like residential, which could mean for me, whether single family or apartment complex. whatever is going to give me at least a seven percent cash on cash return. I look for value add deals, meaning if it's a single family home, most people will walk into it and walk right back out. It's got holes in the walls. It smells like crap. The carpet is not there. It's got a lot of issues. So I have a team now over the years that I've been able to build up that we can do the renovations. If it's a apartment complex, I like distressed deals. These are typically apartment complexes now that somebody bought a property and they didn't know how to manage it. And now the tenants are not paying rent. It's half vacant. It's got a lot of issues. It doesn't look good. I can come in and I can fix up this property, make it look beautiful, fix the neighborhood, make people want to walk by this area and build a property now where people want to live.

So you look for broken down places.

I like those deals.

You like when people shy away from? You like going in because you know you have a team that can support you and fixing it up. Adding value and equity to the property mindset.

Maybe doing what everyone else is not doing, right?

Exactly. And then, so you're willing to get dirty, but you've got a team that.

Supports you in doing that. Yeah, and that took time to build, right? And I talk about, because you're asking now, how do you do it without putting your time in? I don't have an answer because I put the time in. Yes. And there's, look, a lot of people are looking for shortcuts to do things. There isn't always a shortcut. Sometimes you just gotta put in the work. But in the hours, lose some sleep and do the things that are hard because we try to desensitize ourselves from a lot of pain. But look, sometimes you can't. Pain creates wisdom. And sometimes you have to be willing to go through that. And so, you know, when you say, how do you do it without putting that work? I put in a lot of work, which is why now I can, I have the teams in place that makes it much more passive for me where I can text my contractors. I can text two or three guys. say, Hey, look, I'm buying this property. Here's the code. Can you go through it? Here's what I want to do. Let me know what your cost will be. Now I got a few different options. I tell my property inspector, Hey, I'm looking at buying this property. Let's go meet at this property. I tell my property manager, they're going to give me comps of what they think we can rent it out for. It's much more systemized for me, but it took me, I mean, a lot of stress to get there. Now, are you willing to go through that? Can you avoid some of that stress? I'm sure you can. like, I was very naive. I didn't have mentors. I didn't have people guiding me. I didn't have much education. I just went and did it. Right. If you kind of, you watch some more YouTube videos, you get some more education, maybe you find a good real estate agent that can guide you. You might be able to save a ton of time. You might be able to do it much faster and much better than what I did. I just know what I did. Sure.

And so I don't want to guide someone to say, do this when that's not what I do.

And are you considered a real estate professional, too, then, where you can write.

Essentially all your taxes.

So technically I am because I'm also a licensed real estate agent. So I went in, right? When I bought my first property, I was like, I don't know what I'm doing. I want to get more experienced. I don't know how to do that.

Right.

YouTube did not have real estate education then. It was just books, and I hated reading. Yeah. So I was like, well, I don't know what to do. Let me go get my real estate license. So I got, I don't know. Right. And so I was 20. I got my real estate license. I started selling real estate. I started helping people buy and sell real estate. And I also started wholesaling real estate because my broker, the boss in my office, she said, Dusty, you're the youngest agent in my office. What? Why are you doing this? I said, well, I'm in college. So then why are you here? She said, well, I said, I want to invest in real estate. I want to do this. I like real estate. I want to do this. And she's like, well, I teach real estate investing. Now, a lot of people call real estate investing things that it's not like she was calling a real estate wholesaling, real estate investing, which I would disagree with. What's the difference between wholesaling and investing? So wholesaling is essentially you're flipping real estate.

But now buying and you sell six.

Months later after you fix it up or whatever. Yeah, but without actually buying the property, you enter into a contract to buy a property and you flip the contract. So it's a little bit less risk, but it's essentially a form of flipping real estate. People call that real estate investing. I would not consider that investing. but I did that. And it was a way for me to start earning money. I met more people. I went to real estate conferences. I mean, I got fully immersed. That's just how I do things. When I want to do it, I get go all in into it. So I bought one property, I got my license, I started selling real estate, I got into wholesaling real estate, and.

Then I did more of it. And so that's how I got in, and I met a lot of people.

So you've been a real estate professional.

For 20 or 10 years then, since you were 20, roughly.

More than 10 years, but, yeah. So that does that mean you're able to pay zero tax as a real estate professional. So it's not zero tax once your income crosses a certain threshold. But there are things that you can do if you qualify as a real.

Estate professional, meaning 750 hours or something, or 51%.

Right. What that means is if you put in a lot of work into your real estate, you can qualify as a real estate professional on your taxes, and then you can get a bigger write-off on your real estate income.

Right.

That's essentially what and so this is where you want to have a good accountant to help you find the best deductions out there because the tax code is a rule book which we will talk about when it comes to protecting your money because there's a lot of things that come to taxes that can help you save money in taxes legally. So real estate, are we good on real estate?

Yes, I think so.

Okay, so real estate investing is one way to actively invest. The stock market is another way. So we talked about passively investing in stocks which is reinvesting in funds. Now it's the opposite reinvesting in individual companies. Research companies, you look at earnings calls, you look at the financials, the balance sheet, the income statement, the profit and loss statement. You look at these things and then you make your decision. I like this company. I like the products. I like what they stand for. I believe in the future and the numbers make sense. I think it's a good stock price. Now I'll come in and buy.

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Of each before moving your retirement assets. Fidelity Broker Services LLC member NYSE SIPC. Most people try to do this without actually doing it. And this is where understanding that if you really want to succeed as an investor, you want to pick stocks, fine, nothing wrong with it. But understand that it will take work if you really want to see the success. like Warren Buffett spends all day, every day, reading books, studying financials, looking at the numbers. That way he can come up with the best analysis for his companies that he wants to invest in.

And he only has like 10 stocks to invest in.

He doesn't invest in 10,000 companies. I mean, he invests in a small piece of, I don't know the exact number, but he has a small portfolio of companies that he actively manages. When I say manages, I mean he reads what these companies are doing. he reads the earnings calls, he's reading the numbers, he's analyzing, he's reading books, he's always learning even today. So that's where now active investing is a way for you to be more involved. Now the question is why would you pick one or the other? And this goes to now how wealthy do you want to become and how does that align with your goals? Because there's three factors that will determine how wealthy you will become. This is math. One is how long you invest your money for, the time. Two is what return you're getting on your money. And third is how much money you invest. We can't go back in time. You can't go back 10 years ago and start investing. So the best time to start is today. So time is out of the picture. When it comes to how much money you invest, we'll talk about how to earn more money in a second, but you can earn more money that we have money to invest. The last factor that will determine how wealthy you become is what return you get. When you leave your cash in the bank, you're getting next to nothing, especially in a traditional bank. You're getting less than 1%. It's going to take you forever to double your money. So now the question is how can you double your money faster? You need a better rate of return. How can you get a better rate of return? Well, you can be more involved with their investments. And so just understanding now risk versus reward. Higher risk means you have the potential for higher reward. Does it guarantee higher reward? no, I've lost money on my fair share of Investments, even in my own business. Like, your own business is the highest potential reward.

And the highest risk.

And the highest risk. Yeah. You know, I've made very bad business decisions, which lost me a lot of money. And it's not fun. It's not fun. But it's your tuition, right? You real life tuition, because I went through a lot of school. I had never learned a single thing about wealth or entrepreneurship from my school. So it's a matter of now, how do you learn? You learn by doing. And you will always keep learning. Like in the beginning, a $5,000 mistake, before that, a $500 mistake was like the end of the world. Then it was a $5,000 mistake. Then you go to a $50,000 mistake. Then wait till you make half a million dollar mistakes.

Right?

And that happens. And it's you learn more things as you get bigger. and the more you grow, you're going to keep making mistakes. Just the dollar amounts get bigger. And that's how you learn. You keep learning, you keep going through this tuition. And so it's like you learn by doing that. Also keep reading books. I love reading books. I actually listen to audiobooks, but, you know, get books because there's a lot of knowledge in there.

You just launched a new book.

Read your new book.

Greatest mindset, man.

Greatest mindset. Definitely get that. Check it out. Watch YouTube videos and then see, maybe you want some coaching from somebody, maybe you invest in some other educational platforms when it's right for you. Like even with market insiders, I never tell anybody to buy who one doesn't have the money. If you can't afford it, do not buy it. This is only for the right people who are actually going to use that education. It's not expensive, but it's we want use the free education. And when you're ready for more handheld guidance, now you have more education there for you. So that's where now the active investing gives you an alternative to passive investing, that way now you can decide how involved you want to be for the return that you get. So now we talked about how to spend your money, right? We talked about how to grow your money. The third thing is how do you save your money the right way? And this is- Should we save our.

Money if it just sits in the bank and loses money based on the interest rates going up and us essentially losing the money every day it sits in there not earning as much as the interest rate?

Man, you like read my mind for me.

You know, that's what happens when you.

Watch your show, you know? when you save, you got to save the money strategically.

You gotta have some money saved for expenses, for a rainy day, you know, be six months ahead, I'm assuming.

Is that your strategy? Exactly. You save strategically. I sit somewhere between three to 12 months. And this is going to depend on where you are in life. Yeah. If you have no spouse, you have no kids, you are willing to take on a bunch of risk. Maybe you only need a few months worth of savings. If you've got a spouse, you have kids, you don't like taking on risk. Now you can have six, 12 months worth of expenses, depending on where you are. But the big thing here is now like understanding really the difference between needs versus wants, assets versus liabilities and not, I mean it kind of ties in with spending but it's not justifying liabilities as assets. Assets are something that put money in your pocket. Liabilities are things that cost you money. You need a car to get to him from work. You just want a beamer. You need some clothes. You just want the Gucci. yeah, you want a home. You actually, you need a home. You just want the mansion. And now it's like, okay, where can you make sacrifices? And again, this is the decade of sacrifice that I was talking about. What are you willing to do? And this is where.

And know what season of life you're in. You know, it's like if you're just in, if you're trying to get out of debt, you're trying to get to a certain level of savings and Investments. Don't overspend on things that you don't need to get from point A to point B. Yeah, you need clothes, but you don't need thousand dollar suits every day. You need a car, like you said. Yeah, but you can also take the bus and walk or ride a bike for a season of life, depending if you need to for a few months. You don't need, or you can buy a used car.

Yeah. You know what I mean?

For a few grand and get around town.

What's most important to you at the time? Because I'm not saying don't buy nice things. I want you like the whole purpose of understanding money is to live your life financially free. and to do what's valuable to you. If you like nice cars, like I like nice cars, fine. Make sure you can afford it first.

Yes.

That capital A, you gotta afford what you want. You want to go on vacations, fine. Like it really, really, you know, things that like personally get to me is like when you see people come to you, like especially because now people come to me because they know like, hey, you know, you talk about money, you've seen success with money. People that I know come to me and they say, hey man, like I'm struggling financially. and they'll lay out the situation and I feel very empathetic and I'll come up with a full plan for them. Here's what you can do to start improving your financial life. And then you see them go finance a new vocation, you see them go buy a brand new car. And it's like we just had a call about you and I were like, you just said you're gonna go and sell your car, buy something used that is gonna save you a lot of money, you have no more payments, and then you go and finance a brand new truck. Look, I want you to have that truck. I got nothing against trucks. I'm from Detroit, right? That's nice. Cool. But I want you to be able to afford it. Being that smart consumer and a financially educated investor is so much more mental than it is financial. Just look at a financial sheet. Look, this is the most you can spend. Now you figure out where you spend this money. That's the financial side of investing. The mental side is now, what are people going to think when you go from a BMW to a Camry? Yeah. And now people are like, Hey, are you okay? Like, is your car in the shop? Like, no, this is my new car. Right? And that's that tough part where people look at you like you lost your mind. And now what are you gonna do at that point? Are you going to accept it and say, you know what? I am making a change in my life. Or are you going to give in and say, you know what? Let's go on a vocation. Let's go do something.

One of the things that causes us to doubt ourselves the most is these kind of three fears that I actually talk in my book. And one of the fears is judgment. It's the opinions of other people. And if we can overcome the fear of what are people going to think about me, that's usually what holds us back from making wiser decisions, from acting on the things we want to create in our lives, from putting something out there because we're afraid of other people's opinions. So if you have a vision for wealth, I want to be a wise investor, a wise saver. I want smarter with my money. And I need to make some adjustments and really take a look at every decision you're making in your life. How is this supporting and serving your vision for a wealthy lifestyle for the future? And if you really take a bigger picture and assess everything, and if you say, okay, you know what? This car, I don't need to be making $600 a month car payments to look good. Yeah. I can make $200 car payments or I can buy a used car and pay it off up front For the and have it for seven to 10 years and not to put more money into it. I don't need to buy new clothes. I can go secondhand store and still get quality stuff. Whatever it is that's going to help you in making healthier choices for a wealthy vision of your future. And if you can learn to face accepting and loving yourself for making these conscious decisions and making your future self to prouder and, and manage the couple comments or people's opinions potentially about what they're saying about you. If you can manage that courageously, you will set yourself up for so much more financial peace over financial pain in the future. But you got to be willing to face the fear of judgment, what people think about you in order to do this, especially early on, when you make these tough decisions.

And that's so hard.

So hard.

And you're so right, because we've all been there. Every single person. And, you know, I remember, you know, I was supposed to be a doctor. Like I was saying, you're such a failure, man. Yeah.

Such a failure of being a lawyer and a real estate agent, an investor.

Imagine hearing that, though, when you don't have anything. I know, man. It's scary. And I. Before I got it. So I. In between, I also started the sock company. The only way I learned was by doing things, and I was supposed to be a doctor, and now people know me because I'm selling socks. and, you know, people have these high expectations for you. They, oh, Dusseldorp is going to be a doctor. Now he's a sock salesman. And now imagine going to these parties, right? And Indian aunties, they have this, like, the gossip culture.

They love to judge and gossip and.

Yeah. And so, you know, critique and. And they'll say to your face, oh, so you're selling socks now. And then they don't just tell you, they tell your parents.

Everyone.

They tell your grandparents. And now you start hearing from every single person around you, why are you throwing away the sacrifices your parents made? Your parents gave up everything to come to this country. So you could have a chance to be a doctor. And you're throwing it away because you want to do this dumb thing called entrepreneurship?

Oh man, the shame around that must be tough.

They put it all and now you have nothing to show for it.

And you're failing at the thing. And you're failing that you're trying.

And you're screwing up. and you have no idea like you just have this vision that like, you know, when I'm 65 and I look back at my life, 75, 85, whatever year you want to put on, let's just say 100. Hopefully we can make it there. We look back at life. What are you like? Are you going to be upset that you tried and failed or are you going to be upset that you never gave it a shot? And I remember that was like what I kept telling myself. I was like, look, I'm going to be old one day, hopefully, and I'm going to look back at life. and that's when I'm gonna say, you know, am I happy that I tried and screwed up? Yeah. Or am I happy that I never tried?

And here's the thing. Pain is the price of admission for greatness.

Yeah.

And we just have to ask ourselves, what type of pain do I want to experience? Do I want to experience pain of not doing anything?

Yeah.

And then feeling unhealthy and sick and, you know, bankrupt because I didn't take action and I was afraid and the pain comes to me later, or do I want to put myself through controlled pain by facing the insecurity, by facing the fears, by doing the challenging things consistently with my health, with my finances to set myself up for more peace in the future? Either way, we're going to experience pain.

100%, man.

But the controlled, conscious, daily consistent pain is the price of admission for greatness. And we've got to be willing to lean into that if you want to have something in your life that feels like peace.

You know the biggest drug that holds us back from doing that? Comfort.

I know.

We get comfortable and it becomes a drug. And we get addicted to this idea of I need my health care. I need my steady salary. I need my 401k. I need these things to feel safe.

I need my lattes every day.

I need more. You know, and those are the things that then hold us back from then following and doing something else because we can create a million excuses, right? It's easy to make excuses for why I had the side hustle idea, I had this business idea, I want to go start investing, I want to do something. It's easy to make excuses. Oh, I don't have a million dollars. My parents didn't give me a million dollars. Oh, I don't have rich parents. So I look a certain way. Look, man, you know, it's excuses are easy. Yeah. And this is where now, look, sometimes we go through real problems like mental health is a real problem. If you are struggling, you can't get up because you're depressed, you're anxious. Okay, let's start with that, right? You can't build a business when you can't even get out of bed. It's not you break it down. Okay, if I'm struggling mentally, you got to get that taken care of first. Go spend whatever it costs, do whatever it takes. Start working on that. Pain creates purpose, right? And now you can then start to work towards something else and then you start work. But you got to get away from that comfort drug. Yeah. Understand, you know what? Sometimes you got to be willing to be uncomfortable. I had this talk with me, so it's kind of. This is funny. I don't think I've ever talked about this publicly, but I. I remember I used to go through, like, the worst case scenario. I was like, worst case, worst, worst case. My parents kicked me out of the house. I make no money. I'm homeless. Yes. What's the big deal? Okay, I can make that. I'm like, can I make it work? And. And so. a funny kind of segue from that is later on, I went and started a, I co-founded a community service organization. And we did a lot of, or do a lot of help. We call it Seva, which is a Sikh word. I'm from the Sikh faith, S-I-K-H. That's the name of the religion. And Seva is a fundamental tenant, which means selfless service. And so one of the things that we do was we would do a lot of things in the city of Detroit. to help people there, primarily homeless people. And kind of as a joking idea, kind of as like a serious thing, I told co-founders I was like, Hey, you know, we're doing a lot of things for homeless people healer, but we don't know what they're going through. Why don't we try being homeless? And I like doing kind of different things and putting myself through it. And so a couple of guys were like, yeah, let's try it. And so, you know, I know I could never experience real homelessness because I know I have a home, I have a family, I have that comfort that I knew I was gonna go back to. But for four days, we slept on the streets of Detroit. We had $15 a person and we were gonna figure it out. And to kind of prepare myself, I didn't shower for a week, leading up to it and we just tried it. And this is where now, you put yourself in uncomfortable situations. For me, I kind of try to do that because it gives you New perspectives, new ways of thinking and people call me crazy and all this stuff all the time. But it makes sense to me now because I don't do things the way everybody else does. I don't see the world everybody else does. And I want to try things that way I can see the world from different places. Like we were talking about before, people with different opinions. I look for that. Most people, especially in this political climate, if you disagree with me, block, turn you off. talk to me. I want to hear what you have to say. We don't have to agree, but I want to learn from you. And that's where wisdom comes from, is when you can listen to two different points of view and then come up with your own analysis. Like when we talk about stock market investing, I'm gonna tie this back to finances. When people talk about how do you know if it's a good company to invest in, like one of the things that we talk about is, and I talk about on YouTube, is listen to people's opinions about a company. But don't just listen to one side's opinions. listen to people that think that the stock is going to the moon. Listen to people who think that the stock is going down.

And now you have both perspectives.

Because if you just listen to people that say nothing is going to go wrong, you're going to be in this euphoric state of I'm going to buy everything. But you have to put things in perspective and understand there's two sides to everything. Being willing to, again, it's uncomfortable, right? Especially when you firmly believe something and then you hear somebody telling you that you're completely wrong, that you're an idiot, that you're a fool. makes you a little uncomfortable. But being willing to make yourself uncomfortable can teach you a lot. So that's, we're talking about saving money, but it also kind of ties in together of knowing now being willing to handle that judgment because that is hard, man.

Huge, man.

It is hard.

Huge.

Which then brings us to then protecting yourself, which, you know, there's a few different things here and protecting yourself and protecting your money.

And what's the fourth one? Spend, grow, save.

Oh wait, we completely skipped earning. Earning. Oh my god, we can't skip that's the most fun one, man. Wow, I'm sorry for that. So earning now is you built a system. 75, 15, 10. Every time you make money, some of your money is being spent, some of your money is being invested, some of your money is being saved. Now it's, I kind of like this financial education stuff. How can I amplify the system? You got to put more fuel on the fire. How do you do that? You need to earn more money. Now, this is where unfortunately, unfortunately, a lot of people look for that quick and easy way. I mean, who doesn't want to get rich quick? Right? That's, it's, it's very appealing. The problem is most people who try to get rich quick end up losing and you end up paying somebody selling you a get rich quick service. And unfortunately, it's very unfortunate, but that's, I mean, it's very easy to sell this idea of get rich quick. And this is where now understanding that, you know, we could go over systems of do these five things to build a million dollar business, but everything, everyone's going to be business different. And sometimes you just got to be willing to put in the work. Yeah. And there's no bypassing that. But now it's understanding how you can work hard and work smart, because most of us are taught that hard work is rewarded, and it is, but you have to complement this hard work. with smart work. Like if the hardest people in America were compensated by their level of work, construction workers would be the highest paid people in America. Yeah. But they're not.

Teachers would be making more money.

Teachers would be making way more money. They're not. We're compensated completely differently. And this makes a lot of people angry because you say, Man, I put in 20 hours, I put in 12 hours, I put in a break in my back, and this is all I'm making. And this is where it's, this is why we need to be taught how our financial system works because we're all a piece of this puzzle. But most of us are only consumers. We're never taught how to benefit from the way the economic system works. And so you have to be able to work smart instead of just working hard. And now the question is now first, you have to be willing to work hard. When people tell me, Hey man, I want to start a business because I don't want to work that hard. I can't even talk. like, like, you can't.

It's gonna happen.

It's a completely different language.

You've got obsessive or something if you want it to do well. Yes. You have to be obsessive. And a business owner doesn't get to turn it off. You don't get to clock out at five and say, I'm done for the day. Like, I don't have to worry about anything. Like, time to go home and chill and relax and just watch the money flow in. You've got to. It doesn't shut off. You're thinking non-stop about your employees and making sure they're taken care of about. Am I going to be able to generate enough money to take care of them and the expenses and running new initiatives and launching your products and making those better and dealing with customer acquisition? It never stops. And if you think starting a business is just going to bring you a bunch of passive income and cash flow, man, teach me the system on how to do that. Because I don't know any entrepreneur that knows how to do that. It doesn't work like that.

I know my dad used to joke around with me. We had to talk. Are you ready to level up your business?

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Today, my dad worked very hard. and he joked around about me because he saw this article on the internet and he was like laughing. I was like, what's so funny? He was like, work life balance. I was like, what? He was like, look at this article, you young generation. People are asking for a work life balance. And I was like, what are you talking about? He's like, there is no concept of a work life balance when I came to this country. It was work. If I didn't work, I don't have money to feed you. Yeah, right. And it's like, sometimes you got to be willing to put in that sacrifice. and obviously, look, we live a life and you want to, you know, you got to balance this, but sometimes you got to be imbalanced to have more balance.

It's a season of life that you've got to be imbalanced in order to get to balance.

Right. And, you know, when I like, I work a lot, but I don't work as much as I used to.

Yes.

And I have.

You're getting comfortable, man. You're getting soft.

I seriously gotta go back through something that's going to make me uncomfortable.

Well, the economy might put you.

I know.

But if you're not disciplined with your pain, the world will bring pain to you.

100. You're 100 right on that. But it's a matter of now understanding when is the sacrifice worthwhile and when are you going to be willing to do that? So it's now. Okay, I got to be willing to put in the work.

Yes.

The second thing is now, where am I putting that work? Now, some people are born with the entrepreneurial bug. Entrepreneurial. look. Some people are not. Some people can't handle the risk. That's okay. Not everybody should operate a business. Not everybody should be an entrepreneur. I know the internet makes it seem like that's not the case. Look, it's. There's nothing wrong with working a job. Okay, just understand now. What are the different ways that you can earn more money? Can you work to get a raise? Can you work to maybe change careers if you don't have that much upside potential? Can you get new skills?

Can you get new skills?

A certificate? Can you, can you do something to earn more money? And it's much more accessible on online now. There are so many skills you can learn online that can help you earn more money. Maybe get a second job, right? If that's not the case for you, maybe now you can create your own side hustle. Maybe you have an idea. Maybe that can become its own business. The one thing that I would say about side hustles is a lot of mistakes. The mistake that a lot of people make is you try to do too many things and then you end up doing nothing. Right? So it's focusing down on what is it that you want to do and working to scale that and really just being willing to learn and being willing to fail. Like if you have the discipline, you have the work ethic, you're willing to learn and you're willing to fail, there's really not much that can stop you because now you have the recipe to actually go out and make it happen. But it's very difficult. and you're gonna go through a lot of tough times and most people give up after the first or the second or the third. And that's where, you know, the people that keep standing are the ones that can then have the chance to succeed. Right?

That's it, man.

If you're not, I forget who said it. It might have been Kobe, but you can't beat somebody who doesn't stop getting up.

That's true, man.

Right. And it's one of those things where you just got to keep coming back and keep trying, keep learning and keep. That's it, man. And goes back to the Judgment, which then brings us now to how do.

You protect your money?

Protect that money, baby. Because now as you build more wealth, as you start to do more of these things, now you start to achieve more success. You don't want to lose it. You don't want to lose it. And now, you know, this is where the first thing I would say is taxes, because this is probably the most interesting thing about this. It's tough, man. And as an attorney who spent a lot of time studying the tax code, what I can tell you is not all income is treated the same. In general, the IRS has three different categories of income. You have earned income or your ordinary income. This is the money you make from your job, your W-2 salary. You have your portfolio income. This is your investment income. So if I sell a stock for a profit, that is my portfolio income. And then you have passive income. This is the money you make from something like a rental property. something that you're not operating but is generating you cash flow. Out of these three different types of income, the income that comes with the highest tax rates and the lowest tax write-offs, the lowest deductions is your earned income, your ordinary income, the money you make from your job. Now again, this makes a lot of people upset and angry because they're like, wait, what? I'm working so hard to make my money. You're telling me that if I made this money from my investment, which doesn't require as much physical labor where I can make even more money. I pay less in taxes. Yes. And again, we're never taught this. And that's the first frustrating part is the reason why people are upset is because they don't know how to take advantage of it. And you can't take advantage of something you don't understand. So the first step is now understanding, look, these are the rules. You can hate me for telling you, but I'm telling you what the rule book says. The IRS rule book says this. It's over 2,000 pages long, and all it really says is Here are the different categories of income. Here are the write-offs. Do you know where these write-offs apply? They don't apply for your W-2 income because most people are just taking the standard deduction that will apply for your investment income, your portfolio income, or your passive income. So now the question is how do you optimize that? How do you take advantage of that? Because the IRS rule book is a rule book. It's a guideline. Like it tells you what you can do and what you can't do. So now your goal is to understand this and say, based off of this rule book, I should be doing this or I should have been doing this. And this is where tax planning comes into play. If you're accountant, your CPA, if you have one, if you have a business or invest in real estate, I 100% recommend you have one. Always have a good accountant on your side when you have tax, when you need tax advice. But if all they're doing is filing your taxes, you are leaving a lot of money on the table. and that's where it becomes so important to understand that, you know, for many Americans, your taxes are your biggest expense because it's money that's taken out of your paycheck before you even get to see it. And now if you can understand how you can utilize certain things, you talked about the real estate professional exemption. If you're investing in real estate, real estate has some of the biggest and best tax write-offs that our tax would have to offer people like Investing in real estate for three reasons. One, you get cash flow. Second, you own a hard asset because now you're taking your paper cash to a physical piece of bricks and windows and real estate land. And third, you get tax breaks. Real estate is one of the best tools out there to use a tax code because with real estate, you get paper write offs, which means I can show the IRS, yeah, I made $10,000 with the profit. But my taxable income is maybe zero because I can show them a property is one year older. It's called depreciation. So I get to show the IRS, hey, my property is one year older, so I'm not gonna, I don't have any real taxable income, even though you have some money in the bank. And that's going to depend on now how valuable the property is. But now you can make money and pay $0 in taxes. In addition to that, you could potentially, there are some, there's a lot of restrictions on this, but if you lose money, or lose money on paper, meaning you make a profit, you tell the IRS you lost money, depending on how much money you make and how much money you lose, you could take some of this money, offset some of your job income. There's a lot of rules against this, but you can do that. Then, if you sell your real estate property for a profit, small or big, you can use all that money, go buy another property and pay zero dollars in tax today. It's called the 1031 exchange. So all these things are available, but you have to now understand that you have to want to understand it, then how do you do it? Now the first issue that people have is how am I supposed to invest in real estate? I can barely buy a home for myself. Well, you have to plan for it. It's not something that happens overnight. You're gonna have to work towards it, and if you can't find any property in your area, maybe you look in a different area. Second is if real estate is completely out of the picture, either you tell yourself you can't do it or you don't want to do it, you don't have to. You can also invest in stocks and still get some of the tax advantages because now your portfolio income has lower tax rates. And so now you can invest in stocks, you can generate cash flow from stocks, you can pay less taxes. You might not have the same tax benefits as real estate, but you still get a lot of tax benefits. And you can start with, I mean, I like to say as little as a hundred dollars, but literally you can start with as little as one dollar. There are platforms out there that will let you start with one dollar. But again, it starts with that education. The second thing when it comes to protecting, so first you got to understand the taxes. I would 100% recommend getting a good accountant. Second is protect yourself. If you have a business idea, protect yourself. Because the reality is there's people that want to come after you. In America, you can sue anybody for anything. And we are the most litigious country in the world. I've seen this for a stand. Yes. And this is where now you want to protect yourself, protect your idea. So I'll give you a quick story because when I started the minority mindset, I know the value of trademarks. So I trademarked the name. It cost a little bit of money, but I trademarked the name minority mindset. A little bit after, I was a nobody. Like minority mindset was still a nobody at this time. But then I got these messages and then I got a potential lawsuit. against me because somebody claimed that they owned the rights to the word minority mindset. And I looked at why. It's because like 10 years prior to me starting the minority mindset, this guy wrote one blog post with the words minority mindset in it. So he's like, I own the rights to this name. And me and my attorneys looked at this and were like, well, we have a federally registered trademark on the name minority mindset. So, no, you, there was nothing that they could do. So you want to protect yourself. And so now it's whatever types of legal protections you can have. One, if it's a business idea, you can have legal protection. I so, a little story. I don't work as an attorney, but I started a little law firm referral service to help people. If you have a business idea to protect it, it's called buzz legal. The referral service is free. You would just pay the attorney if we do get compensated. It's from the attorney. So if that's something that you're interested in, you need a patent, a trademark, a copyright, buzzlegal.com, we can help refer you to somebody with that.

Nice.

But then it's now having the right protections in place. The first thing would be insurance. Especially if you're starting a business, if you are investing in real estate, you have to have insurance.

Property insurance.

So for real estate you want lenders insurance or your landlord's insurance. Even if you're a homeowner, you need property insurance. Even if you're a renter, you need some sort of property insurance. But as a landlord, it becomes infinitely more important because now, again, you can be sued for anything. I was sued or my real estate company was sued because, well, a tenant claimed that when you turned the water on in the bathtub that it got too slippery and so that made them fall. But we also had documentation, thankfully, because I had a good manager at the time. showing that they slipped and fell at a friend's barbecue. So they slipped and fell at a friend's barbecue. They claimed that they fell in the bathtub because it was slippery when the water was on trying to go after some money. This is where you want insurance because you could say, hey, look, this is a silly lawsuit, but you still have to pay an attorney $350 an hour. You still have to manage it. Still have to manage it. So that's where, you know, insurance comes in. And when you have the documentation, it.

Goes away with the least pain possible. Yes. But the insurance is the one that's going to be the first line of defense. When you buy a home, whether you're living in it or it's an investment property, someone else is living in it, should you put it in an LLC or a trust to protect you personally from anything or how does that work?

The general answer is yes. I, Jasprit Singh, own no real estate. My companies own real estate.

Do you live in your home or no? Do you rent?

I rent. But what I'm talking about the rental properties, these are all LLCs.

So one per property.

So I started off with one per property. Then so let's start with what is an LLC. So we just kind of established that when you create an entity, you are essentially building a new person, a new company. So LLC is one example, another example is potentially an S corporation. Those are the two main most common ones for real estate. You're essentially creating a new holding person or entity that owns this property. So you don't own it under your own name, you own it under this LLC name. So instead of just please sing buying it, it might be just please sing LLC. And now when I buy this property under just please sing LLC, Just because it's saying LLC owns the property. So when I started off, I had one LLC per property. And the reason why now is because when the property is owned by this LLC, if a tenant sues, they sue the LLC, they don't sue me personally, assuming you separate all of your finances and you treat the LLC like a business, meaning you're not going into the business bank account to buy your groceries and stuff. So you have your separate set of books. and everything with the LLC. Well, what happens then is when you have, well, let's explain why this matters first. Because now if a tenant sues and an insurance company, your insurance company doesn't cover it, then they might, the max that they can take, the max they can go after is whatever the LLC owns. And in this case, the LLC owns that property.

Not all of your assets.

Not all of your assets, just the property. So they can't go after your personal assets, just whatever the property owns. so that's why a lot of attorneys who want to be very legally cautious will tell you to have one LLC per property, which is how I started. That way then you're protected legally. But then you run into the second issue, which is a financial headache because now for each LLC you got to have your own bank account. You got to have a separate- Taxes and- Tax filing. You got to have its own checkbook, maybe a separate credit card or debit card. It's a lot. It's a lot. And so yeah, when you have five, no big deal. When you start getting into bigger numbers, it can be extremely painful. So then I started bundling, especially single family homes, multiple into one LLC. If it's a bigger apartment complex, I might have that as its own LLC, but I don't do one LLC per property anymore. But then the next level of protection, we're gonna go even deeper into real estate now, is now how do you protect your equity in a property? Let's say you buy a property cash. for $100,000 hypothetical. If let's talk about worst case scenario, a tenant sues you, you buy this property cash, insurance doesn't cover it, and the judge says, well you're entitled to $500,000. You say, well the LLC only has this property, it's worth 100 grand, that's the max you can have. Fine, they take the $100,000, now you're out that property. because you bought it with cash. So your equity is gone. Scenario two now is I buy this property with just placing LLC, but instead of me giving it $100,000, I loan just placing LLC $100,000. It's the same thing. It's going from my personal bank account to that bank account. I just got to do some different paperwork. Your attorney should be able to do this. You loan it. I loan it. So now just placing LLC buys the property with $100,000 loan. The home is there. subject to $100,000 loan. Tenant slips and falls. They sue. Insurance doesn't cover it for whatever reason. Judge says they're entitled to $500,000. All you have in this property, in this LLC, is this property worth $100,000. You take it. So they take your property subject to your $100,000 loan. So now they have your property, but they got to make your mortgage payments. So they got to pay the payments. So now they're going to make the money because they got the property, but.

There'S a loan on the property. so they may not want to take it then.

Well, that they might still take it.

But then they're still paying you back your loan. So you have that 100 grand at risk.

So this is strategic protection is very important.

I like that.

Having a good accountant and a good attorney is very important on your side. So then, you know, we talked about insurance, we talked about protecting your business idea, estate planning. This is one of those things that nobody wants to do. We never want to think about dying. But as an attorney, I should always say that you want to protect yourself financially by getting some sort of estate planning. And just go, I mean, there's a little bit of a cost to this, but get a will, get a trust. What you need is gonna depend on what your personal financial situation is, but get some sort of planning in place that way you can protect your family in case worst case scenario happen. I mean, we're all gonna die eventually, but you wanna have a plan 'cause the last person you want to decide where you have money and assets go with the government. And finally then is part of this protecting is knowing how do you want to give back as well? The more you have, the more you can do, the more you can give. And this is where now remembering it costs money to eat, it costs money to feed other people. When you have more, you can give more. And now how do you give? You can give with money, you can give with time, you can give with education, and how do you give? And this is where you can do what's, and this is what I love about this particular part is everybody has a different passion. Some people are passionate about mental health. Some people are passionate about world hunger. Some people are passionate about whatever disease. And when you have money, now you can do something to fuel your passion. And you're going to be criticized no matter what. When we feed people in Detroit, people will say, why are you feeding that? Why aren't you fighting the drug problem?

Look, here's the thing, right?

When you, when you want- why aren't you doing more of this or that? Or helping this way? It's usually somebody sitting on their sofa who is complaining off their phone, right? But the thing is, when you have that money, you get to decide. Yeah. And what's important to you. And you get to help however you want. Like when we, the Minority Minds YouTube channel hit a million subscribers, I wanted to do something fun to kind of give back with the team. So we did this like fun giveaway. where, well, and this was like in the pandemic time, so people weren't going to school. And so you had a lot of businesses getting hurt, especially like teacher businesses, people that were supplying supplies to teachers because people aren't going to school. So we did this thing kind of like Mr. B style, where me and my team, we went to a teacher store and we said, hey, can we buy some stuff here? She said, sir. I said, well, let's have some fun with it. So we put on the cameras and we had like my team get shopping carts and we just bought a huge chunk of the store. And it was like they're huge, just a lot of fun. We bought thousands and thousands of dollars worth of stuff, which then we went to a school in Detroit that I was working with and we gave it to them for free. And now they have a whole bunch of school supplies and I asked the principal, I said, Hey, how many teachers do you have here in the school? And he told me, and so I gave a check for $500 for each teacher in the school. Just as a way to now, the more you have, the more you can do. And this is just remembering that you have the ability to give back. It doesn't have to be necessarily religious. Like I talked about Seva and the Sikh religion. Seva is a fundamental tenet in the religion. It doesn't have to be something religious. It's just now you have the freedom and the choice now of how you can help and who you want to help and being willing to give back because it can be time, money, education. How would we help to help somebody else see that success as well?

Jaspreet Singh. Man, this is powerful stuff, man. We've covered five key things that you can do to start in your 30s to be able to set yourself up to retire in your 50s and potentially even sooner if you learn the earning and investing part and saving part better. This is powerful stuff, man. I've got about 20 other questions about earning, making money, investing, what to do with the economy and all the different things that are happening right now in the world. And if people want more, leave a yes below if you want to see another episode on all these different topics about managing and mastering your money for this year and beyond with my man Jaspreet Singh. Go ahead and leave a comment below. Yes, if you like this, if you want more, share it out. Make sure to follow Jaspreet On the minormindset.com, YouTube/minormindset, marketbriefs.co, is that correct?

It's a briefs.co.

Briefs.co, which is an amazing newsletter, hundreds of thousands of people that read weekly. Again, you've got lots of great stuff, buzzlegal.com, if you guys are looking for trademarks and different things with LLCs and protecting yourself in that space. Follow you over on Instagram, all these different places, minoritymindsetbriefs.co and how else can we be of service to you today, my man?

Oh man, well the last one is marketinsiders.com if you want more of the education side, we even have a free ebook about how to get started with investing, you can read marketinsiders.com Make sure.

To check it out, we'll have it linked up below in the description on YouTube, on audio as well. if you enjoyed this, subscribe like comment. Jasprit, appreciate you, my man. Thanks so much for coming on. As always, I hope you enjoyed today's episode and it inspired you on your journey towards greatness. Make sure to check out the show notes in the description for a full rundown of today's episode with all the important links. And if you want weekly exclusive bonus episodes with me personally, as well as ad free listening, then make sure to subscribe subscribe to our greatness plus Channel exclusively on Apple podcasts. Share this with a friend on social media and leave us a review on Apple podcasts as well. Let me know what you enjoyed about this episode in that review. I really love hearing feedback from you and it helps us figure out how we can support and serve you moving forward. And I want to remind you of no one has told you lately that you are loved, you are worthy, and you matter. And now It's time to go out there and do something great. Greg's Car Shopping and since he lives in Florida, your marketing's probably pushing something a little sporty. Too bad you don't know he's planning a move to Alaska. Turns out, marketing without a clear picture of your customer is like driving a convertible in the Arctic. A bad idea. Learn how TransUnion's 360-degree view of customer identity is bringing clarity to marketing chaos through deeper insights, smarter reach, and precise measurement at TransUnion.com/clarity. Prices keep going up these days.

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