5 Ways To Build Wealth [MASTERCLASS] EP 1363

Why do people not invest? They're afraid of failing. Corrections happen all the time, but you need a strategy that when markets go up and down, you don't go up and down. So I teach people the rules of the game so they don't get screwed. But the most important thing is this.

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. Welcome to this special masterclass. We've brought some of the top experts in the world to help you unlock the power of your life through this specific theme today. It's going to be powerful. So let's go ahead and dive in.

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Why do people not invest? They're afraid of failing. They if you're a millennial, right? So you grew up witnessing 2008 when you were still relatively young. How old are you now?

33.

Okay, so you were what, 27, 2008.

You.

Yeah, 27, I guess.

Yeah, 27. 28 years old. So you're a young man and you're watching the world melting down in front of you. For most millennials, they are the first generation since the generation that went through the Depression that is not investing at the ratio they need to even close.

And they have more debt than everyone, probably right? With all the.

They have more college debt than everyone. Absolutely true.

I have a friend that has $400,000 in debt, dental school.

President Obama just paid off his debt five years ago while he was still president. No, I swear to God. Oh, my gosh, it's mind boggling. And he had a bunch of schol. But the last bit, it took them that long. So what I tell them is, listen, paying off your debt's not enough. You've got to become an owner or you're always going to be in that place. So, yes, pay off your debt. But here's what you need to know. You got to become an owner, you got to get in the game, but you got to understand the rules of the game. You don't know the rules of the game. The old phrase is when a person with experience meets a person with money. We know the phrase, the person with the money ends up with experience. The person with experience ends up with your money.

Right?

So I teach people the rules of the game so they don't get screwed. But the most important thing is this winter's coming, but people react. So let's take last year, last January 2016, we had the worst stock market opening in the history of the stock market. Worst. First, I think it was 10 days. There was a drop of $2.3 trillion with a T. Crazy. Everybody's freaking, thinking, the bear market's here, the market's over, the crash is here. I think the market dropped 800 points one day. And on that day, all the richest people in the world were in Davos, Switzerland, for the big conference that they do every year. And they went there, MSNBC went there, and everybody's freaking, what's happened? What are we going to do? And they said, let's go ask Ray Dalio. Now, your listeners may or may not know Ray Dalio, as if you're not in the financial business, probably never heard of him. You've probably heard of Warren Buffett, but Ray Dalio's done more. You had to have a $5 billion net worth and $100 million to give him or he wouldn't talk to you 10 years ago. Now he doesn't Give a how much money you have, he won't talk to you because he's got a closed fund. But they go and they put Dalio on television, cnbc, he's the king. What do we do? And he says, well, you don't need to panic. Corrections happen all the time. But you need a strategy that when markets go up and down, you don't go up and down. And he said, I spent 15 years of my life to perfect such a strategy. All of my money's in that plan. And he said, it's called All Seasons. And I've never revealed it before, but I gave it to Tony Robbins. He extracted from me. And it's his book. So you ought to go read his book. He says on national television, the data markets are crashing. And that day, to give you an idea, which is the beginning of February, I think it was nine days into February, the market was down 9% in the first five weeks of the year. His strategy, which he gave me, which is made money 85% of the time for the last 75 years, it's averaged a 10% return just under. And the average loss when it 15% loss was 1.6. So if you go to go to Vegas and you could spend 85% of time, make money, and when you made money it was 10%, your loss is 1.6, you go forever. His plan made 2% while the market was down 9%. So it was up 11% difference. Now, I'm not suggesting that's the only strategy to do. There's many. His is the smoothest ride with the least risk. But what it did was combination of that. And then right after that, I interviewed Fed chair Alan Greenspan. He was the head of our economy, the most powerful man in finance for 19 years, four presidents. He was there, ran it. I was just with President Clinton this last week. He was the Fed chair for him. And I interviewed him for like two hours or three hours off stage, two hours in front. And I asked him in the very beginning of this thing, I said to him, I said, look, if you could be put in the Fed today, what would you do? And he looks at me and as I said, he leans forward and he says, resign. So I look at that and go, oh my God, I need to write a book that will free people. So here's what will free you. Everybody's afraid of the crash. So here's what you need to know. Two terms you should understand. Correction versus crash. Anytime the market drops from its high by 10% or more up to 20 it's called a correction. If it drops 20% or more up to 80%, like in, you know, the Great Depression, then it's called a crash or called a bear market. Okay, so how often does a correction happen? How often do we have to be prepared for it? Since 1900, we've had a correction on average every year for 116 years. So when is winter coming? This year, on average, it's like, how often does winter come? You wouldn't be surprised if it stormed and rained. Now, some winters are long, some are short, some are harsh, some are light, but winter always comes. So I wasn't panicked when this happened last year. I'm not panicked whenever it happens because I know it's supposed to be. How long does it last? Average 56 days. Okay, so just under two months. What's the average drop during that time? 14% over the last 30 years. 13.5 of the last hundred years. So I use the more recent one. 14% get your attention, right? 14%. You get a little gut check. But here's you need to know. 80% of all corrections never become a bear market. 80%. So all this fear and what people do is what you said you did is they see it, it's freaking out. I'm losing money. I'm the hell out of here. And they get out. The stock market never took a dime from anybody. Only you can take it from you. You sold. That's why you lost.

Right?

Right. So if you look back and say, what was it like in 2008? I can remember vividly being with my platinum partners and saying, you see these $80 stocks? This is six months before the crash. I told them in April, I brought them to Dubai, and I said, these stocks are going to go to 8 and some are going to go to a buck. And by October, and I told them what to do, so they were able to get out October. I go on the Today show in October of 2008, and they go, Tony, there's been $3 trillion meltdown. Pump the country up. You got four minutes. Ready, go. That's not what I do, first of all. And I said, I'd be alive. I'm not going to put Boba at that point, the $80 stocks were 8. I said some of those. I said, I'm not a market forecaster, but I work with Paul Tudor Jones, one of the greatest investors in the history of the world. In the biggest market crash in history, 1987, he made 200% when everybody else was losing their entire life. I've been coaching him continuously now for 24 years, every single day. So I said, I work with the best in the world. And they're telling me, based on history in the 30s and history in the 70s, this $8 stock, some are going to be a buck. And I remember the day In March of 2009, Citibank, which had been, I think, $70, sold for 97 cents. You could go and take your money out of the atm. It cost you more to take your money out than to own the bank, right? And then I told people, it'll jump from 99 cents to 6, 10, $12 in a month or two. And it's exactly what it did, right? So what you got to know is corrections happen every year. You got another couple months. Got to know it's 14% and you won't lose, because 80% of the time, it doesn't go to a bear. Now, what about the bear? The bear market, it happens to give you an idea. In the last hundred years, every three to five years, you've gone eight without one. We're way overdue in modern years, last 30 years, it's about every five years. The average length of a bear is one year. The average drop is 33%. A third of those drops go 40% or above that. I don't care how well prepared you are. That's a scary thing. But it is the greatest opportunity in your lifetime to go from wherever you are financially to where you want to be. I hope your audience is listening right now. Hear me. If you want to leapfrog and you're a millennial and you think there's no future, or you're a baby boomer and you think you're too old and it's too late, the greatest gift you have is coming. I know it doesn't sound like it. This is not positive thinking, bull. This is the truth. Wall street, the stock market, is the only place that when things go on sale, people freak out. If I said you like Ferraris, sure. If I said to you, Ferraris go on sale for 50% off, awesome. But when I tell you Apple's on sale for 50% off, you go, oh, what am I gonna do here? What's wrong? The whole world's coming to an end. If you think about it, how old are you?

33.

33. So let's assume if you were 35 and you lived at 85, you got 50, 52 years ahead of you. That means you have 52 more corrections to live through. That means you're probably in those 50 years, gonna have 10 more bear markets to live through. If you're gonna have a gut checks every time or you're gonna leave out of it if you didn't participate, cause you thought, oh, the market's too volatile, I can't trust it. All that stuff you missed 250% return in the last eight years. I mean, you've missed out on everything while you're waiting for things to be better. And if you won't do it when it's like this, when it crashes, you're not going to get in. So here's the good news about the bear, the good news about the bear average ones a year could be longer, but that's. The average could be shorter. But here's what's cool. Every single bear market in the history of the United States has led to a bull market, meaning right afterwards. So 2008, this plummeting, what happened in 2009, up 67% in a year. I can show you every single bear market and the next year when it comes out, it's this explosion. Now that's not true in every market in the world. It's true for two centuries in the United States. So that's why Warren Buffett says, I want to be greedy when people are afraid. And I want to be afraid when people are greedy. If you remember 2008, he was telling everybody buy. He was having the time of his life. Buy, buy, buy. Everything's on sale. So what you have to do to become unshakable is turn. The metaphor I use is turn the snake into the rope. Meaning we all know the story. It's the middle of the night, you're walking through the yard or someplace and you see a snake and you're freaked out. You pull back, you come in the morning and it's a rope. Once you know it's a rope, you're never afraid again. I want to take for people investing and show them how to turn that snake into the rope. It really is. And I'll tell you one final stat on all this. People always say, and you start to bring it up, timing, how do I time it? Like right now, things are too expensive. I want to wait. People have been saying that for eight years. Is there going to be a correction? Yes. But when it corrects, you want to invest again, you'll get dollar cost averaging. If you paid a little too much here, you'll be paying less here. It'll bring the average price to a reasonable place. It's going to allow you to succeed. But here's what people need to know about timing. If you are not in the market, it's the most dangerous thing. This is so counterintuitive. So I hope your audience is listening. Let me show you. There's two different research projects. One was done by JP Morgan. I just spoke for them the other day at their alternative Investments conference. And to be in the room, there are 400. You have to have a billion dollar net worth to get in the room. Crazy. It was mind boggling. Right. So J.P. morgan did a study and also Schwab did a separate study, 20 year studies in the last 20 years. To give you an idea, the average S&P 500, that index has produced 8.2% over 30 years. It was 10.28, but in the last 20 years, a little bit less still. Great. You double your money, you know, roughly, you're in a position where you double the money a little more than every, you know, you know, what is it now? 7.2. So be like a little more than 10 years. But here's what they found out. If you miss the 10 best trading days in 20 years because you're trying to time the market and you're not in it, during one of those days, you went from 8.2% return over that period per annum per year, it dropped down almost half, 4.5. What are the chances of you knowing the past 10 days to trade in 20 years? None.

Right.

Warren Buffett said market timers and market forecasters are only there to make fortune tellers look good because no one can do it successfully. Even if they do it for a while, it doesn't last. It's luck. Jack Bogle told me, started Vanguard $3 trillion company. He said, we took gorillas a thousand in a room and had them flip coins. And we said, how many times he got heads, how many got tails? Just gorillas flipping them randomly. And he said, one gorilla in that set of, of those turns flipped heads 21 times in a row. Now when you look at that and see all these gorillas doing it, you look out and say, what a lucky gorilla. He said, but in the hedge fund industry, in the mutual fund industry, when somebody does 10 in a row, you go, what a brilliant investor.

Right.

What a genius. And it's just averages and luck at that time.

Yeah.

In fact, he showed me that 96% of all mutual funds fail to match the market over a 10 year period of time. Only 4% make it. And they're constantly changing. So the statistic I want people to know is if you missed the 20 best trading days in the last 20 years. Just 20 days in 20 years. One day a year in 20 years. And you're wrong. You're wrong on timing. Your 8.2 doesn't drop to 4.5, it drops to 2%. You might as well been on a wing of bond, have no fluctuation, at no risk. If you miss the top 40 trading days, to give you an idea, you are minus 2%. So you gotta get in the market. And if you're saying, what about my timing though study was done by Schwab. If you've got the perfect timing for the year, the right day, the best possible day to buy some people, the worst day, someone else dollar cost averages. Keep spending the same amount every month, regardless of prices, and somebody stays in cash. Who has the worst return?

The guy trying to time or no cash the cash.

You get nothing for cash.

Gotcha.

The guy who was the best had the best timing.

Got it.

The guy that was the worst. The guy. The dollar cost average and the one that was on the worst day were almost identical. But after seven years, there was only a $20,000 difference in accumulated assets between the worst day and the best day. The worst was not being in the market. Right. See, you got to be there. And I'm not saying put everything in stocks, we teach in the book all these different aspects of diversity, but stocks in the last two centuries have provided the highest return. So you have to have significant exposure to that if you want to get the highest return.

Got it. And what I love in the book, you say that 80% of financial success is psychological, 20% is mechanical.

Right.

So it's not about timing and trying to like figure all these things out and when's the best thing or the best fund or best fund.

This is not about trading, it's about investing. Trading is trying to do that. And most people lose money trading. Even the guys that tell you make money, see it all, they're making money. From now, they usually eat the dust, Right?

Exactly.

So, yes, you've got to have the psychology. And my best way of psychology is not to pump you up. If you want to be unshakable, you want to be educated and you want to know the facts. You want to know, look, every five years I'm going to get a bear. Maybe three years I'm going to get a correction every year, but I'm going to be in the market, make money. Do you know that six of the 10 best trading days in the 20 years happened within two weeks of the worst Trading day. So when Trump was elected, the market dropped, I think it was 800 points that night. Then at 3 or 4 in the morning, he made a speech where he was somewhat human and normal and the market got all its money back. And since then, we're up 14% in November, December, January, in three months, February, you know, three and a half months.

What are you telling to people right now who are saying, you know what? I didn't follow your advice, I didn't do what I should, I should have done. I still love off credit cards. I overbought, paid for my house and I've got this expensive lifestyle and credit cards that I know I'm wrong, I made a mistake, I own it and now I'm screwed. And I just got 50% cut in my work. I might lose my job in two months. I got all these bills. Like, how do you even, how do you even respond to something like that?

Well, I certainly don't say I told you so. That's not, that's not the message because I've been there. I've done stupid stuff too. And that's not helpful. And it doesn't bring, it doesn't bring any healing. The thing is this, we all get wake up calls. We get wake up calls in our relationships, our spiritual walk, our leadership styles. We get wake up calls in our finances. And some people, the phones ringing off the hook right now, they're getting wake up calls on a bunch of things. They're at home with their family and it's, and they're starting to realize I was disconnected from my family. I haven't been plugged in. They got a wake up call on their relationships at home. They've gotten a wake up call on, you know, I don't have any savings and I've got, I'm deeply in debt. This isn't working. And so the, you know, the cool thing is when you get the call, then you have to make the choice. Are you going to answer the phone? If you pick the phone up, that means maybe it's time to change and you can look back and you might be 27 years old right now watching this and you're screwed. You lost your job, you got no money, got no savings, and you feel like it's all over. And I remember in 1970, I was 10 years old and I was in my grandpa's backyard, we were tearing down an old deck and I pulled some nails out of those old boards as we were taking the boards off and he taught me to put them down and straighten them with a hammer and save those used nails in a coffee can. Now, my Grandpa Ramsey was one of my favorite people on the planet. This is 1970 and he was still answering the phone that rang in the Great Depression. It changed his life. He was frugal and careful and wise with money the rest of his life. And so someday, 27 year old, you're going to be sitting on the back porch with your grandkid and you're gonna remember back in 20 there was the Corona virus and it changed my life, you know, and that you're gonna be that guy, you're gonna be giving dad jokes, you know, and grandpa jokes, right? Like I am now. And you're gonna get that opportunity. I was 28 years old when I lost everything. It was my fault. It was the SNL crisis, The banking climate changed. I'd built a house of cards. I, I was stupid. And the phone rang. It was my wake up call. Are you going to answer the phone? Are you going to change your life to where you say never again? I'm going to control the controllables to where I'm the little pig in the brick house. Never again. That may be the only thing you get out of this crisis. And if it is, you got enough.

Preach to me, Dave. Come on now. I love this. What's the biggest wake up call for you this has had? Maybe it's not the financial side of things or business because you guys are thriving. Is there something relationship, family, friendships, health? Is there anything that's woken you up now or in the near future recently?

Well, I've spent the last 15 years pouring into our leadership team and into the Ramsey personalities, creating this succession plan. And so it's not a wake up call, it's more of a source of pride as to how our leadership team and our Ramsey personalities are reacting in the moment here without me coaching them. They already knew what to do.

They're leading.

They're out there doing it. They're doing it. They're out there.

They're not waiting for Grandpa Dave to say, what do I do? Tell me the steps.

They're, they already did it. They already did it. And then I found out about it, you know, and that's, that's awesome. And so it's just a sense of, ah, this is starting to work, you know, I mean, when Rachel Cruz and Ken Hogan and these guys are doing, Ken Coleman are doing all these hits and Chris Hogan, all these guys are doing all these hits, these radio and TV and appearances and all this stuff everywhere. And the networks are calling and asking for them, which is awesome. And so, you know, that kind of thing is. I don't know if it's a wake up call as much as it is. It's very satisfying to say, you know, all that work of the last decade and a half of getting everybody ready to win because we were winning in a winning environment. But then when you get the pressure's on and you get squeezed, you see what comes out and it's good stuff coming out.

Mm.

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I guess it's probably leadership. And I probably get one of those calls every day. There's some days I'm a world class leader and some days I'm just a.

But in what way? Like, how are you?

I mean, sometimes I do a better job than other times as a leader and I, I own it. I'm. I get it. But you'd think as old as I am, I'd be doing better, so. But I know what I'm supposed to do, but sometimes I just don't have the energy to do it. I don't care. And I should just care more. I really should. I shouldn't be such a grouch.

Oh, no, you're. You care a lot about a lot of people. I'm curious, what's the best. What's the best dad joke you share?

Oh, Lord, I can't. I don't have no idea. You got me. I'm not a dad joke guy. Really? Other than just stupid stuff off the cuff, that doesn't even make sense generationally.

So, yeah, no good dad jokes.

What.

What is the most common thing that you're hearing with your, your, the people that are calling in for you right now? What's the thing that you hear over and over again that they need the most support with?

I think there's a sense, I think when hope gets gut punched the way it has for folks right now, the answers fall. A lot of them fall in the category of this is not going to last forever because there's this sense that, you know, stock markets down, do I take my investments out? Well, only if you think it's going to stay down forever.

Right.

Because, you know, you're, you're 35. You're gonna be investing for 30 more years. You don't think it's gonna come up in 30 more years? I mean, really, are you predicting the end of America? I mean, that's, that's silly. But your emotions tell you lies when, when they're based in fear and when they're based in Anger. And they tell you lies and, and they tell me lies. We believe those lies in situations like this. So, you know, I lost my job. I know, but that's happened before and probably happened again. Just get you another one. Well, yeah, there's a lot of people hiring right now. There are a lot of people hiring Amazon. Amazon's hiring a hundred thousand people right now.

Yeah.

So, I mean, there's jobs. It may not be the one you want, but you can get some food. Yeah. I mean, get you a leaf blower. And rich people are afraid of leaves. You know, I mean, you can make some money. So there's some stuff to do out there. But the, so the thing that, the sense that, that the thing you're afraid of is going to last longer than it is, whether it's the actual virus, whether it's the shutdowns, whether it's the economic repercussions of the shutdowns, whether it's the employment situation, whether it's the quarantine. It feels like it's gonna last forever. But I mean, the chances of you being in the exact situation you're in in a few months is almost zero. Your life is not a snapshot. You're not trapped in this moment. It's a film strip. The story is going to continue to unfold. Yeah. And so that, that when hope takes a gut punch, though, we only get down in that fear or we're mad or what. However it is we manifest that stuff, that those negative things we, the emotions that we all have in these situations. That's where a lot of my questions are coming. They're all built in that I'm spending all my time going, yeah, but it's not gonna last forever. Yeah, but it's not gonna last forever. Yeah, but let's visit this in May. I think you're gonna be okay by June. Are you even gonna remember this? It's the great toilet paper shortage of the. You know, I don't know. I mean, what is it? You know, it's. You know, some people are gonna have devastating, horrible things that are gonna be life changing, but that's a very small percentage compared to the number of. That are worried about it.

Yeah.

And so, you know, and you're gonna.

Get out of it.

You're gonna get out of okay.

Most, I mean, you're, you're gonna be okay.

I like, I like Preacher Dave, man. This is a, this just be preacher show, you know, I like this. What is the worst investment people should be making during this time? And what's the best investment they can make.

In my life. When I have become desperate right after, that's when I become stupid. Yeah, and explain the other one. The other one is when I get. Well, when, you know, when you get scared and you go rushing towards something out of fear, that sense of desperation, this thing when you do that, you're getting ready to screw up. I mean, just count on it. And the other time you do that is if you're greedy. If you think you. Okay, I got this one. I can take advantage of this. And I mean greedy as a lack of virtue greedy. I don't mean greedy in a positive way where I'm being ambitious. Okay. I mean the negative sides of greed. And so if you're functioning in desperation or in this no holds barred, I've. I'm gonna just clean up on other people's pain thing. That's when you're getting ready to screw up and you're getting ready to make a major mistake. And so you're set up also for con artists when you do that. And so if you're. If you're functioning in high emotion, your brain just doesn't work good. My friend Art Laffer says people, when you're panicked and when you're drunk, you don't make good decisions. And so you know, you. When you're on high emotion, your brain is. Your critical thinking skills shut down. And so that's when I've made the biggest mistakes in my life, is when I was desperate. And the few times that I was greedy where I thought, oh, I'm gonna slip in there and that's gonna be easy money.

What was that?

Easy money.

Could you share a story of one of those greedy times where you tried to jump in and get a buddy of mine?

A buddy of mine? I was in my 20s and a buddy of mine was buying gold. And now this is in the 80s, okay? It's a million years ago. And he's buying gold. And he had this friend that was a gold. He was a gold bug. He was picking gold. And this guy had picked the gold prices where they were going within a dollar like 14 times in a row. And so we both dropped five grand into this thing. And if we had hit, it was a margin deal. And so I would have made 50 grand. And I thought, I'm putting money back in here. I'm gonna make 50 grand. But it's a margin play, which means you're either gonna make 50 grand or you're gonna make zero. And so he picked it. Right. 14 times the time I got in the 15th time, missed it. I got zero. Turned 5,000 bucks into zero instantly. Last time I bought gold. Last time I played stuff on margin. Last time I got greedy.

Was there, is there ever a time where. So what's the difference between greed and a great opportunity of being ambitious? Can you make money? Can you make money fast in certain things or is typically most things take certain amount of time and energy and effort.

The vast majority of people who are successful financially and successful have done it incrementally. There's very few people who you see a meteoric rise in their wealth or their success that keep it. And I think because you build your character along the way to be able to hold on and be able to do it. I think that's, that's my theory on it. I mean, I got rich quick. I started with nothing. By the time I was 26, I had $4 million worth of real estate. I built a house of cards, you know, and I had a million dollar net worth. I made $250,000 in 1984, I was making 20,000 bucks a month and in my 20s. So I mean, but you thought I had it all figured out. Meteoric rise to the top. But the very thing that caused me to be the incredible overdrive of ambition caused me to go so fast that I missed the blind spots. I missed the detour signs, I missed the bridge out signs. And so I built this house of cards I thought was a stone house, but I was naive and didn't know. And along comes some regulations, changes, a few shifts in the economy, a little SNL crisis and all comes down, you know, all of a sudden Dave looks like an idiot instead of a genius. And so it turns out I was a little of both. Because you don't build something like that at 25 if you're not somewhat of a genius. But I was obviously an idiot in the way I built it. And so I get to do it again. Get the opportunity, the wonderful opportunity to start over the right way.

Yeah, yeah.

But I mean, in the midst of that, as I was falling, it took two and a half years to lose everything we own. I had stuff presented to me. I almost got conned. Serious con, like people. Just a real con artist type guy. There's not many of them out there. Most of the time you get screwed by well meaning ignoramuses. But these were real, real con artists coming into my path. And I was about to give them money because I so desperately needed to turn quick money into big money to save myself. I was desperate. And right about the time you get desperate is when you get stupid.

So don't, don't make those decisions. So there's not really. So what I'm hearing you say is the wealthy, wealthy people, it takes time and it's incremental. It's not an overnight thing. It's not a quick rise. There might be some spikes here and there, but it's typically over time, it's.

Okay to take a spike, but anytime I get a spike, I'm always a little suspicious of it. Really, it makes me. It makes me even more careful. I draw back and I go, well, that's really cool. Is it? Okay.

So what are you personally doing to prepare for the next, for when that happens with your own money and assets? And are you saving money, cash? Are you investing now? Real estate, all that stuff? And what do you recommend someone to do, whether they're an employee or maybe they have some extra cash?

Sure. So I would say, you know, this is a lot going to depend on you because I'll be very personal with what I'm doing because I'm an entrepreneur. So I look for different types of opportunities and somebody else might. So if you are an employee, there's going to be different opportunities for you. If you're a business owner, there's going to be different opportunities for you. If you're an entrepreneur, there's different opportunities for you. So I invest my money in five places, invest my money into my own business. I talked about market briefs. I invest my money into real estate, invest my money into stocks, invest money into crypto. Then I invest my money into physical gold. This is the order that I invest my money into. This is my type of diversification. Now I understand what's going on and I do have some cash. I always have some cash put aside for like, you know, things going wrong, investments. I always have some cash putting aside there. And what I've been doing is I passively invest my money, meaning no matter what's happening in the markets, whether the market is up, whether the market's down, it's automatically every month you have a.

Certain amount going in.

Yeah.

And this is happening into stocks, into crypto and into physical gold. That does not change, that never changes. So I get paid. Money is automatically invested no matter what. Then in the past, I've had my more active strategy where I would take money and actively go out and buy real estate and actively go to buy stocks. And in this situation, I am looking for good deals, meaning a good price. So I haven't Been doing that as much recently, not because of what's happening in the market, but because I see more opportunities for me in the entrepreneurial business side. So I've been investing money into market briefs like I talked about, hiring more people on your team, hiring more people, building infrastructure. And then I'm also working on a tax firm. So I'm going to talk about tax for one second if that's okay, because it's a very interesting thing happening right now because going off of inflation. President Biden just signed something called the Inflation Reduction act.

Was that 80 billion or something?

It was a huge, it was a huge, huge. I think it's even bigger than that. 80 billion is just the IRS.

The IRS.

So the tax side.

So they're hiring, they're investing 80 billion in the IRS to start auditing more people essentially to start trying to get more money from people.

And that's only one part of the Inflation Reduction Act. So let's go big to go small. Because the Inflation Reduction act is supposed to reduce inflation. That's what the name says. The fun is. I'm laughing because it's kind of silly because how do you reduce inflation? You spend less money because the government has spent so much money they didn't have, which caused money printing.

You tax more people, you collect more.

Exactly. So that's how do you now pay off all this debt? Remember, the government doesn't make money. They tax you. They tax me that. They collect taxes and then that's what they use to pay off their expenses. Now it's not surprising that the government is running into an issue because they have 31 almost trillion dollars of national debt that they need to pay off. This is not fixed rate debt. So as interest rates go up, their payments on this debt go up as well. So we talked about what happened in the housing market. Imagine that on a $30 trillion level now. So the payments are getting bigger. So what does that mean? Well, if they have this pool of money, either they're going to need to inject more money into the government, the Fed has to print more money, but they can't do that anymore because of inflation, or they're going to need more tax dollars. So that's one of the reasons why through this Inflation Reduction act, one of the things they want to do, which is one of the most like financially interesting topics, is they want to invest very heavily billions of dollars into the IRS to help them beef up and collect more tax dollars and past tax dollars. Now, I do want to clear up some of the false information out there because the act is working to hire 87,000 more IRS workers.

That's crazy.

It is crazy, especially considering that today there are about 80,000 IRS workers. Double yes and no. So the 87,000 people that they're hiring are not all IRS agents and they're not all being hired today. They're going to be hired over the course of 10 years. And the whole idea is this is what they say. Again, this is what they're saying. What might happen is it could be a little bit different. So I want to be just completely transparent because I don't want to mislead people. I want to make sure everyone's fully understanding what's happening. You have about what's scheduled is about 50,000 or so people in the IRS are scheduled to retire over the next 10 years. So these 87,000 people are supposed to replace them and beef up the agents that are actually going to be doing the auditing to go and collect more money. Now, even if 50,000 people retire, that's still adding almost 50% more people to the IRS. Who are they going after? Well, they say the wealthy, the super rich, and there's about a thousand billionaires in the United States. Do you need tens of thousands of people to go after them?

No.

So you go a little bit deeper now. Again, what do we look at? History. I'll look at history to answer the question, because they keep saying that we're not going, saying it's not in the bill, it's not written anywhere. This is what they say, that we're not going to go after middle income people or anything like that. Well, in 2021, 50% of IRS audits were on people earning less than $75,000 a year.

Come on.

50%. 50%.

How do they know?

How do they.

Is that public information?

Go search it on Google. Wow. Google has a lot of information of.

The audits were on people that were.

Making less than under $75,000 a year.

And why are they doing that?

Well, probably because if you're making less money, you're not going to have the resources to hire a good accountant and hire a good attorney to represent you. So it's a little bit easier, less costs. I mean, it's just. It's just easier, right? I mean, you're maybe less financially savvy than somebody who's making half a million dollars a year or $2 million a year, because now you probably have more resources to defend yourself. So that's a bigger fight for the irs and you're probably More protected because you have good advisors who've told you what to do. Because now, let's say you're making.

You're filing your taxes, you're doing all the right steps.

And maybe if you make a million once you start making a lot of money, like if you're making over a million dollars a year, you're not trying to play the game of trying to hide $10,000, because now you're already under scrutiny. Yes, the IRS is trying to see you do something wrong. And so if you try to get $10,000 under the table, it's a bad idea, because you already know you're being watched.

You're trying to.

You do everything by the book. You're trying to do the best.

And you have good advisors to guide you to do everything legal so you can pay the least amount of taxes. Impossible legally. Now, if you're making 50 grand a year and you have a side hustle making you $1,000 a year, you might take that in cash because you might say, this is a grand a year. It's just the reality, right? You're taking pictures at people's weddings, you're doing whatever, you're making some cash, and you're just doing it under the table.

You and the IRS wants that thousand bucks.

And this is one of those things where it's not surprising, because if you look at what's been happening over the last couple of years, this is almost like, been a foreshadow of things to come. Because you remember over the last couple of years, we've seen this new rule on Venmo, right? On Venmo transactions, where they want all Venmo transactions over $600 or something like that. Where now if you're, you know, let's say you're a photographer and you're taking pictures at your friend's wedding, and he pays you $700, and Venmo has to report that to. They want to know that they never said why. But now you're starting to see all these things start to add up where if you're doing these small things, you know, it's just like things starting to fall into place where, oh, no wonder they started wanting all these details for this. No wonder they started really going after cryptocurrency brokerages. No wonder they really started doing all of this stuff, maybe creating a digital dollar, because they want to be able to see every transaction, which means they want to be able to tax every transaction. Of course, I can't validate this, but, I mean, it's Just like puzzle pieces starting to come together.

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Quints.com Lewis and so this is where the tax thing, why is it so important? Because of inflation, because of the national debt. The government needs more tax dollars to be able to go and fund their payments. And so what are they going to do? Well, they're going to try to find the easiest hanging fruit. Is it going after a billionaire? Probably not. Because the billionaire is going to say come after me. I have my resources, my army, all my accountants, everything. We have everything there. Everything is documented because we want to play by the books. Because we know you're already watching right Now. I'm not saying that everything always is right, right. There's of course exceptions to this, but this is where you just have to understand, you know, they say that they're not going to go after anyone making middle income, whatever.

But after you go after you look at the thousand or so billionaires, okay, you gotta look at everyone else.

I mean so this is again, right? That's what we would have to.

You got 8, 000 people working on it.

It's like, all right, it's just looking at history, right? I mean, this history is the best indicator for what's coming. I keep saying that. I'm sure your audience is getting very bored on the way to me saying this, but I mean, it's what the best indicator because I can't look into the future and say what's going to happen, but I can look in the past and see what has happened happened. And I see that, hey, this is what happened in 2021. This is what's been happening. Because this is just the situation. And so for me, I've also seen a big difference between good tax advisors and bad tax advisors. Because.

Is that why you're starting a tax.

That's why. Because I, you know, it's the entrepreneurial mind where when I get scammed, I get screwed over. I get, you know, these things happen. It makes me want to find a new solution. That's how I started Minority Mindset. I got scammed. When I started Minority Mindset, I got screwed over. When I started my event planning company, I got completely screwed over. My first real estate investment deal. Pretty much every part of me had to do with something really bad happening. So I had a really bad tax advisor. He was really just an accountant who filed my taxes and was never on time. And I got this call. It's horrible. It was just a mess. I got a call from my accountant one day. I'm in the office. This is right before my morning huddle. So we have a 9:30am Morning huddle. Calls me. I think it was like 8:45 in the morning, I'm in the office, says, hey, Jaspreet, how are you? I said, good, how you doing? He said, hey, listen, I need you to do me something. Can you wire or send the IRS $100,000 by the end of the day today? And can you also send about $15,000 to the state government by the end of the day today? I was like, what? He says, sorry, we had some miscalculations. We did something wrong. We missed this, and you need to send this by tonight. And I was like, jeez, are you serious? Oh, yeah, One more thing. You're probably gonna have to pay a penalty on this as well. Oh my gosh. This is a completely true story. Like, when was this? This is not. I mean, this is less than a year ago.

Oh my gosh.

And so it's. I mean, it's painful. It's very painful. And so I'm like, okay. Like, I was very frustrated because I'm like, what did I do wrong? Like, what are you talking about? He said, you didn't do anything wrong. And I was like, well, if I'm the one that has to pay this and I'm the one who has to pay the penalty, something's not right here. And so I paid it, and then I fired him pretty quickly, right? Because, you know, that's. That's not the way I like to do business. I like, I want. I want everything to be clean, but I also want people who care about what they do. And he was a cheaper accountant. Yeah, I got what I paid for. And so I went on the hunt for. To find a top accountant. Top of the line accountant, and I pay a lot more than what I used to. However, the situation scenario is extremely different because he has a very different personality. Well, a different Persona. And the way it works now is one, he manages all my books on time and handle schedule. So every month he meets with me and he shows me, hey, Jaspreet. Here's your profit. Sorry, we'll start from the top. Here's your revenue. Here's your expenses. Here's what your expenses look like. Here's how they changed. Here's your profit. Here's your tax liability, and here are the things that you can do to limit your tax liability.

That's cool.

Here are three recommendations or whatever that we believe based off of what's happening right now, to legally limit your tax liability. And he has given me so many interesting ideas because the tax code is over 2,000 pages long, and you need. I'm an attorney. I studied a lot of tax. It takes a lot of knowledge and education to understand and read the tax code. But then things keep changing all the time. Like, even this inflation reduction act is changing corporate tax structure. So you need somebody who literally eats, breathes, and all they care about is tax. And this is this guy, right? And I'm like, dude, like, this is amazing. Like, I love this because I don't have the time. I don't want to spend my time thinking about taxes and all the cash flow stuff. I want to build my business. And so I got to know him, got to build, see how he worked. I really liked it. And after a number of months of working with him and seeing him in action, I was like, hey, man, like, you have nothing on social media. Like, can we work together? Like, let's. Like, he's very good at what he does. But I was like, let me Work with you. Like, I think we can create a lot of things here because there's a lot of small businesses that need what you have to offer, because there's a lot of small businesses who have bad accountants, who all they do is file their taxes. And you need a tax advisor. Especially now, as we're going to see a big change. You need an advisor who's going to guide you on what to do with your money, how to document what you do, like, just to make it completely seamless. That way you don't have to stress about it.

Right?

And he was like, I'm down. So over the last couple of months, we've been working to build this together. It's not launched yet. We're just talking about it because it came a conversation. But that's something that I've been really working on. So, you know, if you're listening to this and you want a good tax advisor, just email me team at the minority mindset.com or send me a DM on Instagram minority Mindset and I will connect you. But these are. I mean, this is where. What am I doing?

I'm.

I like entrepreneurship. I like this stuff because it gets me excited. It's the way that my brain works. It's the way that purpose. Right. And so I do that. I like investing in real estate, I like investing in stocks. I'm passively doing it in stocks. But right now I just see more opportunity for me to invest in things like market briefs, to invest in things like this tax firm. Because, like, I see the opportunity. It's fun. I have a blast doing it. I get to meet really cool people. So, you know, it's just, it's a matter of now, what is that lifestyle now? If I didn't, if I wasn't an entrepreneur, what would I be doing? Yeah, I'd be stacking up cash to find good investments either in the stock market or the real estate market or to buy a startup because it's very accessible now thanks to the Internet, thanks to all the crowdfunding sites out there. And I'd be passively investing. Like, I would not change that. So, I mean, I think everybody should be.

You can put a hundred bucks a month away into stocks or into. Into an automated account that is investing for you.

Did you know, if you're 21 and you start investing $100 a month and you never change that, and you just get a 10% return on your money, which is the average stock market return, and you do that until you're 65 you will retire a millionaire. Come on, we're talking about less than $4 a day, 100 bucks a month, 100 bucks automatic, automatic.

Going into an index fund and you.

Just keep trying to match the market. Right. Doesn't mean you're going to get 10% returns every year.

But over the decades you will.

Yeah, that's what the historical stock market return is. Now you can just plug this into a calculator and you'll see that the $100 a month for from 21 to 65, 66, you will be a millionaire.

Is now the time to start investing or is it more? Just save up some reserves for six months to have some cash to live your life before you start investing. Or is it important to build the discipline and the habit of investing 50 bucks a month, 100 bucks a month in a diversified portfolio, no matter how much you're making.

I remember going through this because I didn't have any money.

When was this? Right?

Oh, this was 1982, 83. I had to borrow $4,000 from my dad to help to take care of my family bills. So I remember thinking, how many weeks could I live if I lost my income? And I started counting in weeks and I would try to go out because if I got hit. So I think that's the way to do it. You start to count, how many weeks can it be? A month, a year? Can I get up to a year? I didn't like debt because of the fact that there's an obligation. And it's like, oh, if I get, then I'm going to be drowning. I'm trying to keep my head against water. This is just my own bias. But anyway, count how many you can and then assume that its buying power over the next number of years can fall by 3 or 4% a year. Or if you put it in a risky investment like stocks or something, it could go buy more. So cut that number maybe in half and have twice as much. Because you have to understand that that's your freedom, that is your safety. So that first band, you must take care of that first band, take care of that. Once you get past that and you feel, okay, I could take care of my family and I could take care of mine. In a worst case scenario, then you have the freedom to then take other kinds of risk. But when you're building that portfolio, it's the same thing as when you have a lot of portfolio past that. Just you want to diversify. Well, because you could see what happens to the markets. Every market, stock market, bond Market. Most markets have had times where they've gone down over an extended period, 60 or 70% in buying power. So I think diversify, count that and build it and realize that's your saving. One thing I do for my kids and grandkids and always did, or as long as I could start to afford it was for every holiday, like Christmas or their birthday, I would give them a gold coin. And I said, I never want you to sell that gold coin until there's an emergency, a real emergency, never. Because you want to buy things. And the reason I did that, and they'll build over a period of time that'll build something. And I said, don't even sell it. You pass it to your kids unless there's an emergency. Okay. And so you're building that savings because I think we so easily spend so much money on junk, you know, so anything that I would give them, whatever it would be, I don't know, a piece of clothing, a thingamajig, a toy or something will probably be gone in a year. Yeah, okay. And so the power of saving and you know, and that resource, the relief it gives you and the power it gives you is so great. So, yes, save it, diversify it.

I want, I'm gonna, I'm gonna continue to stay on this topic, but also go off a little bit because you mentioned how, I guess it was 40 years ago, you, you lost your money and you had to borrow 4,000 from your father to just kind of survive and pay your bills. How much money had you built before then, before losing it?

I don't remember. It wasn't like it was a ton. You know, I was fairly early in my career. I had a small investment business. I don't remember what it was exactly, but it wasn't a ton of.

I'm curious how you, from having some money to losing it, how you then went on a 40 year, four decade run of getting to where you're at now. Was there something in your mindset that allowed you to believe in yourself still?

Yeah.

That didn't say, oh, I've lost it all, you know, I don't believe in myself anymore because I just ruined my finances.

That extremely painful experience was probably the best experience of my life really. And it changed my way of thinking, ways I'll describe. But let me, let me say before that I didn't have much money. My dad was a jazz musician, my mom was a stay at home mom. And I felt, of course, rich. I had two parents who loved me. I went to public school and then When I was a kid.

I did.

Odd jobs and I caddied. And so when I put in the stock market when I was 12 and I got hooked on the game, so I never had much money, but then I built up some and then had that experience. And so that experience, which was also a very public experience, was very painful. But it changed my approach to decision making in really a profound way. First it gave me the humility and fear of being wrong. That balanced my audacity to double check myself and in fact try to find the smartest people I could who disagreed with me to have them stress test my thinking. So I'm never sure if I'm right. Like my track record of being right is probably 70 or 75% ish, somewhere in that 70%, let's say something like that. And I'm used to being wrong sometimes and it's painful. So the stress testing of my opinions gave me an open mindedness to learn a lot and also diversification. I learned how to diversify without reducing my risks. If I could take a lot of uncorrelated bets, the return will equal the average of those bets, but the risk can be up to 80% less. And it changed my, it really caused me to reflect because I remember thinking to myself, it felt like I was sitting next to a jungle and I could sit on the safe side. There's always risk in return. And what would I do? Would I have a less great upside and be safe or would I go through crossing this jungle at which things could kill me or whatever in an attempt to have great upside, a great, a great life, a great upside. And so that puzzle led me to do the things I described. But also I knew that I had to go have the great upside and not be constrained by the risk. And so I did the two things that I've described. But going into the puzzle, I found that it was great that to find people who could see things that I couldn't see and vice versa, so that we were on the mission together because people see things differently. I learned how people see things differently. Somebody will spot this or that and then that back and forth helps you make better decisions and if you're on the same mission with them. So one of the things I wanted was this meaningful work and meaningful relationships. And I found that that was so good that when I, you know, sort of got to the other side, like, you know, I had enough money and upside and whatever, I still wanted to say in the jungle. And I still wanted to do this because the act of, of of doing that with people that I was doing this meaningful work and meaningful relationships with was rewarding in and of itself as well as success. So one of the things that you can learn is that you can see through other people's eyes. That doesn't mean you accept what they say blindly. It's that you think about their reasoning. And if you do that, that's good. It also gave me a principle which is one of my fundamental principles, which is pain plus reflection equals progress. Okay, we have this pain, whatever it is, and okay, the reaction is a negative reaction and can almost be, why did that thing happen to me? And so on. If instead, when one calms down from the pain, there is a lesson there about how reality works, okay, it happened. Reality works that way. And then there's a thought. How do I deal with it? Better to produce better. What's my lesson? And if you acquire that I used to acquire, I would acquire that. I still acquire that. And then I wrote them down as principles in my books. That's why the collection of principles, it's like a journal. I wrote pain plus reflection equals that. And then you write down the principle like a. And that's what the collection of principles came from.

What would be the steps they would take? How long do you think it would take them to go from a thousand or ten thousand to multiply it? And would you say, put that all in your own personal investment? Would you put it. Invest in the business that you're in? Would you invest it in other things that cash flow appreciate and provide tax shelters? What would, would you do if you.

Got a thousand dollars? I would like, just keep, you know, keep investing yourself until you got another thousand.

Okay.

And. And then invest in yourself, you know, now, now you got 2,000 investing you go, go, go. You should start making money faster. At some point you should start like every time you make an investment in yourself. If I put fuel in my car, it's supposed to take me further.

Right?

Right. So if I invest in myself then. And look, you know, there's things I bought that I didn't get a return on right away. But I didn't quit investing in a course or workshop or training or education because it didn't work or your health or. I spent 17 years going to school. None of it was any good for me. But it did teach me. It did teach me how to go to school, you know, how to study, how to study, how to go there, how to finish, how to complete a course like I completed college. I'm not proud of that.

By the way, you're not proud you completed it? Why?

No, no, because it was stupid. It was ridiculous. I should have dropped out. Like I knew it was a bad thing. I mean, what'd you major major in? Accounting. It's a good degree. It's not like just some, you know, business degree.

Right, but you should have dropped out of it.

I should 100. Because I, I mean, I would still, I would still, I would what? I'd have a five year jump on my career. But the problem is I was on drugs. So, so, you know, physical, actual drugs. If I wouldn't have been on drugs, I would have quit college because I would have had enough confidence in myself. When you're on drugs, you can't have confidence because you know, you know you're drugged, right? So everything is second guess because like my self esteem was like, like through, through the basement. And so I'm like, I need to quit college. But everybody around me is, oh no, you got to finish college, you got to finish college. I'm like, what do I know?

I'm a drug addict and if I drop out, I don't have a degree. Hire me.

And yeah, I didn't even worry about any of that because, you know, I didn't worry about that. I just didn't have the confidence to follow my intuition. You can't when you're on drugs, when you're not yourself. So what do you do with a thousand bucks, right? You know, I think you just got to keep investing in you until like, oh, oh, now I'm making $3,000. Okay, boom. Reinvest all that.

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Is we start taking it off the table, right?

We save it, we don't invest it.

So I think people just need to get on that, that cycle of, like, okay, I'm going to keep repeating this activity. I'm going to reinvest some money in myself, go to the workshop or whatever. Monday, I got to be hustling again until, okay, now I got $4,000. Okay, now I got 5,000. Now the income's starting to pick up. Income has to pick up. Up in the income should be an indication that whatever you're learning is helping you.

That's interesting.

Until one day you're like, okay, I have more money here than I can.

Actually invest in myself.

I can't. Like, there's nothing I can go to to get rid of this money. You need to get rid of that money, though.

All my free time is going to my workshops. I don't have more free time to invest in me. Yeah, I'm developing skills. I'm working, I'm earning more. Now what's the next step?

Yeah, and now, now, now it would be okay, I got to spend money on Marketing. I wouldn't go make a. I wouldn't go look for an investment. Right now. I'm going to spend money on marketing. Now, now, now, now I'm gonna spend money on marketing to get me more leads. And I would. You know, big mistake I made in my career was not spending more money.

On marketing because you turned, what, 50 when you really started investing in. I was 50.

I was 51 when we started playing the social media game. And. And I was probably 56, 55 or 56 when we started spending money on marketing.

Wow.

Yeah.

51 when you started doing social media.

Yeah, yeah. And I should have been spending money. I should have been spending money when I was 25 years old, when I was selling cars. I should have spending money, been spending money on ads. But I was scared, man. So.

So what made you not scared? 25 years later, 26 years later, at.

51, I started studying. Hey, what do all these successful people have in common? You know, whether it was the mattress dealer, the car dealer, the furniture dealer, or Elon Musk. They spend money, man. You know, they spend money. They spend a lot of money. And they don't worry about money the way I was worried about it. They used money. You know, they used it. They didn't save it. They didn't hoard money. And the greatest companies on this planet today, the ones that have just like some of these companies, have lost money for 25 years. Look at Amazon.

Yeah.

Reinvest 1.7 million employees. When I started, I remember I looked at Ernst Young. I said, I had a buddy that worked at Ernst Young. I said, how many employees you got? He's like 240,000.

Wow.

And I'm worried about 10 people. What am I thinking? So. So when I quit studying individuals and started studying people, everything shifted for me. When I quit trying to be the. You know, when I quit worrying about what Bob was doing or Pete or whoever and started saying, hey, man, what is this big company doing? Because that also relieved me of being competitive with this guy Pete and started saying, okay, I'm going to go do what Coca Cola does. It's when I bought the plane. Wow.

Really?

Yeah.

How old were you when I bought the plane?

I was 50. Maybe 55. The first one. I bought it because. Because I studied what Coca Cola was doing. They bought planes. I said, why are they buying planes? Oh. Then I learned how they write them off, and then I learned how they trade them every three years.

That's crazy.

So notice every three years I'm trading a plane. I'M getting rid of it, replacing it with another one. But what are they using it for? They don't use it for pleasure. They're not using it for Instagram photos. They're using it to go and set up headquarters in other countries.

Wow.

You know, so, so that's when I wrote, if you're not first, you're last. Because when I started studying these companies, I'm like, coca Cola is everywhere. You can't go any place and not see Coca Cola. And, and I was, I was like this big. I was always thinking about what can I keep? And they were thinking about how many shells can we get on how many eyeballs can we see? So that's when, that's when it all clicked for me, you know, and that goes back to that thing about the financial misinformation. Right. It's like, who am I studying? And that's, that's when we started, you know, open up the funds for, for. I was at, went to New York City to go walk in Goldman Sachs and JP Morgan's offices. I wanted to walk in and see what it was like, these are hundred, multi, hundred billion dollar companies.

Crazy.

You know. And I walked in, I was like, oh, my God, man. I just, it just all hit me in a second. I've been doing everything wrong.

What were they doing different?

They owned the building.

They weren't renting the building.

They own the building. Well, they don't care if they rent, but they could rent it, but they own. The elevators were bigger than the studio. One elevator, and 60 people got on that elevator and went to the, went to the 120th floor. And then there was six, six of these elevators, people going up and down. Everybody told me, don't take people's money. Do not let investors invest when you keep the whole deal for yourself. The second I walked into Goldman Sachs.

Because all they're doing is getting investor money.

That's all they do. Okay. And the difference is what I do is I could go to Goldman, I was there, they would give me money. And I'm like, I'm not going to get money from them. I'm going to do what they do from individuals. Exactly. From my friends, from people that follow me, from people that support me. Okay. Goldman Sachs will give money to anybody.

Right.

Okay. They don't know how to go to these people. They're not on Instagram or Facebook or LinkedIn or Tik Tok. So I'm going to create a fund where I can tell my audience, hey, Louis, you can invest with me. I'm going to kick Goldman out of the deal or JP or whoever. There's a bunch of these, these guys, you know, it's not that they're doing a bad thing or anything. I'm not saying they're, they're the devil, but they're close. Okay. Because they're not going to call you up and say, how you doing man? You know, without saying, hey, you got any money to invest? It's just not, you know, that's not what they do. Their job is to make money, period. So anyway, when I saw that, I'm like, okay, these people are, these are the richest institutions on the planet. They fund everything that happens. The company, BlackRock, BlackRock's going to be, BlackRock and Vanguard. These are multi, you know, probably going to be worth $20 trillion each in the next handful of years. They'll own, they say they'll own 99% of all the assets on planet earth, not just in America.

How are they able to do that?

Because, because they scale, right? Because they think, they think big. So they, that, you know, they're funding everything, everything that happens on this planet, from media to pharmaceutical is going to be funded by those two companies.

Wow.

So it just. When you're, when you're studying your rich uncle or the neighbor down the street, the think is only so big. And then when I started studying these other companies, I was like, like, okay, this is who, if you want to create that kind of legacy wealth and really help a lot of people because they are in a position to help or hurt a lot of people. That's the scale you got to think at. Yeah.

But it took you really 25 years to get there, to start thinking that way. Is that right? Because you weren't able to see yourself spending money for 25 years. You were just trying to get more.

And more and more.

Yeah, because I was just trying to. Because I was the grind. The grind, the grind was so. It was such a low level grind.

Let's say you had the right information at 25. Let's just say you had a rich uncle that did what these people did. And you got to witness this.

Yeah.

Do you think that you wouldn't been able to get there faster?

Yeah.

1,000 years. Or do you feel like money only comes to you when you're ready for it, when you're ready to make it and when you're ready to take on the risk or the responsibility?

Sabrina will never make the mistakes I made. Okay. Because she won't, she won't get in the Wrong car. I got in the wrong vehicle. I didn't know the vehicle I got in. When I was 28 years old, I could actually make 100 grand a year doing this. My daughter, my, my daughters will never get in that vehicle.

What would they do?

They'll be like, I'm not getting in a hundred thousand dollar ride if it can't bring me. They're going to be like, hey, if this is, doesn't have a billion dollar possibility, possibility that they're going to pick the, this is. The wealthy, they, they put their kids, the kid, their kids see things differently. If they're not ruined.

Right.

You know, if they're not completely ruined and scathed by having whatever they want, then they'll see, they'll see, they'll see opportunities different.

Yeah.

You know, and, and, but when, when you see the possibility, then you're like, I'm not gonna get in that car. That car, that car. I'm gonna get, I'm gonna get, I'm going to get in a spaceship. So If I was 28 again today, I mean, I would know what, what industries to pick.

Top three industries to pick.

Hedge funds. Have to be one of them really. Advertising and marketing has got to be a space to be in and probably, you know, something to do with health care. If I could scale health care. If I could scale, scale the organic alternative medicines, you know, so those are three massive spaces. Maybe, maybe financial too. The financial world, you know, in the next 30 years, we're probably going to have a, a disruption of the dollar.

Right.

And the way money's, maybe we're a crypto currency, you know, environment in the future.

Yeah.

So any of that, any of that's going to happen, you know, but, but there, the re. The reason I would go there is like, like Jeff Bezos. When I, when I saw the first interview with Jeff, when he was saying he was studying algorithms, I think he was, he was at one of the big firms selling stocks.

Before Amazon.

Yeah, before Amazon. And then he saw some, he saw something came across his desk where there was a spike in Internet activity. Eyeballs going to the Internet. That's when he said, I'm gonna go do Amazon. And he followed traffic. I didn't ever follow traffic. He followed scale, he followed scaling possibilities. And then what did he do? He followed this traffic, the possibility. Then he invested in the possibility. And then he went into debt on the possibility. And then he was willing to not get paid any money. But what did I do? I need money today. I got to have money this week, I need to have a little more money next week, week. And if I get a little more money after that, I'm going to save it all, and then I'm going to go do that again, and I'm going to feed the bank, and I'm going to keep feeding the bank. I don't. I don't even know how much money the bank's made off of me for 20.

Really?

We don't know anybody that works harder than Grant Cardone. And as soon as he gets a bag, he brings it to us. What do they do? Hey, y' all want to borrow this money now? Repeat that 300 million times.

Wow.

And that's the American people.

What about a family that's thinking, you know, I really feel comfortable having six months to a year of savings because I got kids. I got, you know, the rent, I got the. All the bills.

Yeah.

What do you.

What do you say to someone who's like, you know what I see you're coming from, but maybe I don't feel that comfortable yet.

Well, then keep, you know, money. If you think money's gonna save you, you know, you're just. Again, they're stacking. They're stacking information on top of bad information. Okay. You know, the money that you have saved in the last six months, that it's probably dropped 11%. So the money that you have, you got 100 grand. I got to have six months of savings. I need, you know, 4,000. My bills are 4 or 5,000 bucks, but I got to have 30 grand in the bank. Got to have 30, but they really have 180. So first of all, I guarantee they have more than six months and they don't even know it because they're living out of terror.

Right.

It's not logic.

Right.

You say it's logic. I need six months, but you got three times more than you need.

Sure.

Number one. Number two, you've never had an emergency that cost you 30 grand in your lifetime. Very few people ever had that emergency. Everybody hears about, oh, yeah, my guy got in the body, this happened, blah, blah, blah. But if you had assets, if you'd been investing in assets, you can always go use those assets for collateral to get a loan out. Cancer surgery, you get a loan out.

From the bank 100%.

Or if you just took the money that you earned and keep reinvesting in assets that pay you, not assets that you wish one day will pay you, but assets that pay you every month, if you keep investing in that asset class, one day, your Cash flow will be your emergency account. My emergency account last month paid me a million six. My cash flow. My free cash flow.

That's crazy.

That's no work involved. That is not one second of one day. Okay. That was. And that happens every single month in my place. But that's. That's been. Because I made a bunch of investments for the last, you know, 25 years.

Right.

End of every year, I dump all my cash out. Every year, I'm like, you need to get as close to zero as you can and replace it with assets that did in January. If I dump out in December, January, I want a payment from that. It doesn't have to be a big payment. Just needs to be a drip off that asset. Something.

Yeah.

So I'm gonna go, I'm not gonna buy a cup because the cup won't pay me. So in December, I had a bunch of money. Boom. I'm like, make a deal. You saw. You were in it.

Yes.

A couple days ago.

Yeah, yeah.

You bought that house, take that cash, that garbage that you have already had a surplus of money. So if I can't buy two of these, I'm not going to buy one of them. If I can't write off some portion of it, I'm not going to buy it. If I can't do it out of passive income, I'm not going to touch it. Interesting. So those are my. Those are my criteria for making investments. Right. And it needs to cash flow. So I took a bunch of this cash that was sitting here just deteriorating, not providing me with safety, and took it and put it into this asset. And people like, are you still. You ridiculous. You paid that much money for that thing? Okay, we'll see. You know, so I buy this thing. This thing will provide rental income. I think this year I'll make 3 million bucks on this deal in cash flow.

And how much do you have to put down to buy the whole thing?

Well, I paid cash for this house, so. So the reason I did it is not because this is a great deal, but. But this is a terrible deal.

Keeping the cash.

Keeping the cash is garbage.

This.

This Malibu house is probably one of the worst investments I ever made.

Okay.

But. But I had a bunch of surplus cash I had already bought. In December, we bought almost 2,000 apartments. If I could have got another apartment deal, I'd have bought another apartment deal with the 40 million million. But I couldn't.

You couldn't find one?

I couldn't find another deal. Okay. I still had this money left over into the Year. It's just the thing that I do. End of the year, dump out, literally, like flush the toilet on your savings. So every day I look at my savings accounts, okay? It's not because I'm worried about any more money anymore. I. I know for sure the money's going down in value. Everybody knows that. This year, your money is depreciating, right? It's dropping down in value. What you were told that is 100 grand is not 100 grand. The bank's not even telling you the truth. It's a hundred less. 11,000.

It's 11% right now.

Could be 34 less. Some people think it's going down 34%.

That's crazy.

But you're going to still see a hundred because this is invisible taxing, right? It's inflation. So I know that. I know it's not a hundred. So when you guys look at your check, I got 180,000. You're lying to yourself because you.

You.

Because you're not. You're not doing all the math on money. This is why Mike Sailor went and took all that money yet and invested in bitcoin.

Bitcoin?

Yeah, because he's done the research so I would listen to him. And I'm not saying you guys should go buy bitcoin, but I'm not buying bitcoin at that. Those levels, okay? I'm buying assets that can provide me with more cash, with more income. Maybe I should be buying bitcoin, I don't know. But anyway, so I dumped this out. I dumped this for now.

I've been.

I've been shopping this piece of real estate for. For 19 months. I've been working this deal for 19 months. So I'm not being like, okay, I just got to go buy something. I'm not going to do that. But I'm trying to get rid of this cash to go into an asset that has the potential to go up in value over time. I dump out in January, okay? I do three webinars. That's why everybody wants to know, man, what's the rush to make more money? Because I'm broke, man. And I got a new house, right?

You got. You got bills to pay now. You got expenses.

So January 1st comes. I've done three webinars already to start filling this up again right now. If I. If I walked into January 1st with 40 million bucks sitting in a bank account, dude, you're not hungry? What's the rush, bro?

You're not hungry?

Yeah, let's plan. Let's do some planning this year, but what I do is I dump out. So every year for the last 15 years, every January I end up with more assets.

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