How To Prepare For Financial Freedom In A Changing Economy EP 1254

The greatest problem of mankind, I believe, is people having opinions that they're stuck on.

But the most important thing is that you got to know that if you live in America and you're having a money problem, it is not because you're stupid. And it's not because you're lazy. It's because you have the wrong information.

The givers, the teachers, the helpers of the world, most die broke because we don't know.

Welcome to the school of greatness. My name is Lewis Howes, a former pro athlete turned lifestyle entrepreneur. And each this 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. The economy is always shifting, and creating a financial abundance and independence is one of the most important things you can do for yourself. It gives you the freedom and the confidence to take control of your life. And today, I wanted to bring together some of the most impactful conversations from experts on the topics of money, investing, and breaking through the mindset that holds us back from attracting wealth. So in this episode, we discuss the three most important things billionaire Ray Dalio believes everyone should be knowing about money, the skills you need to master to create wealth with Grant Cardone, and the 10 disciplines to know for maximizing your energy and success with Gino Wilkman. I hope you enjoy this one. Make sure to subscribe if this is your first time here. Share this with your friends if you're inspired by it. And in just a moment, let's let the show begin. In this first section, billionaire investor and hedge fund manager Ray Dalio talks about the three most important things we need to understand about the economy and how to prepare for what's to come.

The greatest problem of mankind, I believe, wow, that's a big statement, the greatest problem of mankind, and it is an exceptional problem at this moment in time, is people having opinions that they're stuck on, you know, like I have to have my opinion and that's right and so on, because it prevents them from resolving it, from moving forward to finding the best answer. from compromising and or doing, you know, so like everybody's arguing over everything and it's almost like they're killing each other. And we're in a society, you know, I have another principle, which is when the causes that you're behind are more important to you and others than the system, the system is in jeopardy. So are you just literally going to go fight? So here we are as we think, will we fight or will we have protocols for having thoughtful disagreements and getting past them?

That's why I love your principles and protocols. In your opinion, how has this last couple of years been in the history of investing for you, in the history of the last 40, 50 years, Is this a really, really bad time in your lifetime, or is this just another bad time, but not greater than previous bad times?

You mean in the world?

In the world.

Yeah.

There are three things that are going on now, the three most important things that are going on to great extremes that have not existed since the 1930 to 45 period. Okay. And it's important to know those three things and then to understand them well.

Okay.

The first is what is going on with money and credit when you get to something like a zero interest rate and you need buying power, the government needs buying power, but they can't tax it. So what we have is the production of a lot of debt, that the central bank prints money and buys that debt to spend. And the last time that happened, in the last few years, it happened starting in 2008, interest rates hit zero. They couldn't lower their interest rates, so they had to print a lot of debt and the government went in and bought it. And we're coming to the end of a debt cycle. Okay, so this is a big thing. because where does the money come from and who will get what? The government will now determine that and then they'll print it and it'll devalue money. Okay, this is, and how money flows, a big deal. So that's number one. The second one are wealth and political gaps that are causing great conflicts. Throughout history, there's always been, the main things that everybody's always fought over is money and power. power, particularly political power. So what we have is a situation when you have a large wealth gap and you have an economic downturn, particularly if you put a lot of debt having at the same time, you have a fight. I mean, that's been true through history. And it's reflected in the political gap. So the political gap is, It's classic political that left, right, okay, capitalist socialist. How do you distribute it? How are you going to deal with that? That becomes the other. And how you fight. So that's the second of the two, this wealth political gap that's causing the conflict. And it's coming at a time where we don't have much money. Because we're print, we don't have a good financial position. We're printing and then putting it out.

We're still paying off debt still, right?

Yeah, but with made up money. Meaning what happened, like COVID was such a good example. Okay, you have COVID and a lot of people and companies had falls in their income that would be ruinous.

Mm-.

Okay, if checks didn't go out, we would have had a revolution. Right. And so those checks and how do you save everything and so on, okay, so, and it's not like the government had real money. Like they didn't have any money. They already owe a lot.

So they just printed more money to.

Give to the- so they made more debt and then the government and the Federal Reserve printed it and the, you know, the checks went out, which diminishes the value of money. and so on and changes things. So then the third thing is the rise of a great power to challenge an existing great power. So the rise of China to challenge the United States. In all history, there are world orders. What that means are the dominant power. You know, it's like in nature almost, you know, the big bull or something. Anyway, there's the dominant power. And then what happens is in 1945, we entered the American world order. The United States won the war and it ended. And then in 1945, the winners of the world carved up the world. We had 80% of what was considered money at the time, gold, 80% of the world's money, essentially. We counted for half the world's economy. and the rules were set in the United States basically. That's why the United Nations is in New York, the World Bank and the IMF are in Washington, DC, because we began the American century. And then we are now at a time, we've never had somebody, another power challenges us in the same way. There was the Soviet Union, but they were always a fraction of the size economically, so couldn't compete on that same basis. they had nuclear weapons, but they didn't have the economic power and so on. But now we're dealing with China coming on as a power. I spent a lot of time in China over the last 36 years, by the way, and I admire how they're doing a lot of things. I mean, I know it's controversial to say that, but in terms of like, they're a power. Whoa, like since I started going there, their average income has increased by 30 times, you know, so they're a comparable power and they're also growing faster. And so that has an effect. So those three things are things that never happened in my lifetime before, but happened before in history, which led me to do the studies of what happened in history and the lessons I could gain.

What is that? Those three things, money and credit, wealth and political gaps and the rise of China. What does someone like myself or some 30, 40, 45 year old, 20 year old, what should they do with that information? What should they be aware of? How should they apply it? Does it apply to people in America, general America, or is it only applied to the wealthy? What should we be thinking about?

No, it affects everybody. You know, it affects We know, let's start with ourselves. Most importantly, forget about the outside thing. Can we be healthy and strong? And what do we need to do? To know that you have to be in it together. If we can row in the same direction, okay? If we can have thoughtful disagreement and get past that, if we can be in it together, like the wealthy and the poor, And, you know, and if you figure it out, and I know it sounds so difficult, but at the same time, if you read history and you see what happens when it's not, when you have a civil war, like we could be on the brink of a civil war. That sounds so crazy, but the truth is, in most countries, and almost every century, there was a civil war or a revolution. some form of civil war or revolution. So it's almost inevitable that we're gonna have something, okay? You either resolve it or you start fighting so badly that you really do damage to each other.

Until you resolve it, yeah.

Once you cross a certain line, there's no coming back, okay? Because you do the damage, you demonize, and that person's such an enemy or that class of people is such an enemy that the communication's gone and the fight, well, you see this in politics today. In other words, is there a respect for the system and a mutual respect of trying to fight, resolve these types of things, or will they go to any lengths to win? Because a constitution or law will only carry you to so far. Okay? There has to be an element of respect for it, right? You think about the presidential election, it's quite something that we as a country, as a people, when somebody might win the popular vote, somebody else wins the electoral vote, there's not even an argument. Like in other countries, you might say those who had the popular vote would say, what the hell? I've won the popular vote. I think it matters. And somebody says electoral vote and so on. Okay, there's not a question about that. Okay, now when you start to say, okay, is it this vote, that vote, or this thing or that, and how far are you willing to go to fight and do rules matter? When you start to get across that line and you do harm, you hurt and you alienate, then you go to accelerate this process. and people should know what that looks like, how terrible it is. So maybe if they know what it looks like and how terrible it is, and they can empathize a little bit. But I see people don't see it. I'm living in Greenwich, Connecticut. Connecticut has the highest per capita income in the country, and it's got the largest wealth gap. Most of the people in Connecticut are pretty poor.

Really?

I mean, some cases very poor. Oh, I'll give you an example. This is the community my wife works to help high school students. 22% of the high school students in Connecticut are either disengaged or disconnected. What that means is disengaged means they have an absentee rate which is greater than 25% and they're failing classes.

They don't show up to class.

That's right. They show up three quarters of the time and they're failing. Or that's disengaged. Disconnected is they don't know where they are. They've dropped out of school, 22%, one in five. So school is not working for them. And they're in desperately poor areas. Like, okay, we have the coronavirus. And so her efforts and our efforts are philanthropic. that's what got her involved. They don't have computers, they don't have connectivity, they have problems getting food, they get food in school, they need the food in school because they don't have adequate food. Okay? And this is Connecticut and it's right up the road. So we had to, we bought these kids, 60,000 kids, computers, and then we're trying to get connectivity and so on. and you start to see this, okay, this is the same world. Now, so I live in one neighborhood with my community, and then there's the other. They don't understand each other. They haven't lived there. They haven't empathized. And in fact, there are resentments on both sides, right? Like the people in my community, they're very rich by comparison to those other people. but also to take care of their families, to educate them. They have their own challenges, the work-life balance and so on. They've had their financial insecurities and so on. So that's what they're focused on. And then they might think, oh, these other people, they're not taking care of themselves. Why don't they pull themselves up by the bootstraps? Do you know what it's like to be a kid growing up in that neighborhood and trying to... What are you talking about? You can't pull yourself up. from, you know, there's a problem. There's not enough food, there are gangs, they even are walking to school, past neighborhoods that are gang shootings and you can't, and there are not enough police to do it, okay? So these two worlds exist, and then the others say, you know, well, here we are, and you're walking around with your fancy cars and your, you know, fancy clothes, and so on, and we're suffering, I mean, come on. And so they don't understand each other and so on. We have to get past this. We have to be in it together, I think, otherwise we're gonna kill each other.

How do we, what's the main thing that both sides need, whether that be in Greenwich, Connecticut or in the USA on different sides? Is it empathy? Is it compassion? Is it awareness? What is that thing that both sides need in any rich, poor dichotomy?

Well, there's the intellectual thing they need and the emotional thing they need. Okay, intellectually, what they need is, or maybe emotionally, the fear and the understanding that where this will lead will be devastating, okay, if they don't deal with it. If they don't deal with it together, and you look at history, you need the fear. You can't give people necessarily empathy or love. You know, we could say, oh, they should care about the other person. Okay, that's too much to ask. Yeah. You know, that's not realistic. Okay. But realistic is that you, if we all don't get it together, we're gonna have, you know, you like all that stuff you got, well, you ain't gonna have it anymore. And all of a sudden, the things that are the most basic in terms of take care of it. And then if you start to realize that it's productive, like, what do you need to be successful? That's all I had when I grow up was I had parents who loved me and took care of me. I went to a public school. Okay. And I came out to a world in which there was equal opportunity. Those are the only things you need. And, you know, health care, but when you're young, you don't need much of that. So those are the only things you need now, even in these communities. Sometimes you can't get the parents. But you can get people who care about them, they're teachers and so on. But you have to try to strive for equal opportunity.

Do you think we have equal opportunity?

No, of course not. Let me look at any of the statistics. I mean, I can give you examples. I studied this issue because first we, when populism started to come around, and I thought that was, I needed to study. Donald Trump is a populist. And then it's all around the world. And I needed to study the different quintiles, the top 20%, next 20%, and so on. And I saw what the pictures of the lives of the majority of people are like, the bottom 60%. And equal opportunity, no. Put that in perspective. Those in the top 40% spend on average on their kids' education, five times as much money as those in the bottom 60%. It's a self-perpetuating thing. It's not a bad thing. Those parents care about having their kids well educated. So because they do and they take care of their kids, they're taking care of their kids, they're getting them well educated and so on. But not being well educated means you're not gonna have equal opportunity. And so as that gets narrower and narrower, you have that phenomenon. So there are a lot of ways you can measure whether there's equal opportunity, but I don't even know we can agree that we should have equal opportunity. I mean, like, I'd almost take a poll, you know, of the American people and see, could we agree that we should have equal opportunity? Okay, that'd be an accomplishment. Okay, then if you could do that, then we say, can I take measures, metrics, by which key performance indicators, by which I could say, how are we doing on the equal opportunity goal? And then monitor that and you say, ah, it's getting better or ah, it's getting worse. If we could do that, we'd accomplish a lot.

Yeah, we got to get to that point first. This is fascinating. I'm curious about the mindset of making money. And there's a massive wealth gap. There are people that who are making money and some that seem to be making more and more money and others that are always seem to be stuck in the ability to make money, to save money, to invest money. They always seem kind of trapped in not making it. What would you say is the mindset that wealthy people have around making it and growing their money for them versus the mindset of people that stay stuck in not making it?

Well, I want to distinguish there's big differences in opportunities.

Yes.

So let's say, supposing you have two people of comparable opportunities.

Yes.

And then they were going to do that. Okay. The marshmallow test, as you know apparently, is you take a kid and you say, okay, you can have one marshmallow now, or you could have two marshmallows in 15 minutes or so.

If you don't eat the first one, yeah.

If you don't eat the first one, right?

Yep.

Okay. Once you start to realize that deferred gratification is going to make you better and so on, and you start to count and you say something like, How many days, weeks, months, or years can I live if I don't have money come in? And you start to focus in on that. That's the first step, okay? Like the marshmallow test. Okay? So I want to save. You gotta start there. Then if you do that, you're necessarily gonna go save in what? and then you'll start to get exposure to how these things are different. Okay, then you start to care. I can have one of these and one of those, and you start to experience, and then you start to learn. And basically that's what makes the difference.

That's it. So first, having the ability to have delayed gratification, then obviously diving in, researching, testing, and and trying different things, but the more and more you can say you don't want something now for greater later is the essential key.

Well, and what it does then, when it comes to the money, that means money. Now at that moment that you don't want it, you have savings. That means I want savings. Now you got savings. So the next thing inevitably that's gonna come at you is where do I put it? And then you get your choices and then you experience it and you learn, right?

Yeah.

'Cause there's lots of places to put it for investments. There's real estate, there's stocks, there's building your own company, there's different places to invest. What have you found are the top places that people should be investing?

Well, I think first you start with one of the most important things that you're closest to, like Is it your business? First, calculate how many days, weeks, months, or years you can live on your savings. Because when you do that, you'll start to, you'll gain security, you'll gain that, okay? So look at how much you're spending, okay? And then say, how much do I need? And whatever that number is, you're gonna need more than that. because it may go down rather than go up. So, okay, now do I have a year's spending? Okay, you start there. Then you start to think, what are the things that are most important for me? And then you start with your business or your residents that have a symbiotic relationship and that you know well. Let's say if you'd start with your business, Okay, you're closer to that investing in yourself with whatever that may end up being. That may be your best investment.

Not real estate, not stocks, not the market.

Well, it depends if you're doing something where you can do it yourself and that's the thing. But if you're in a job, that's not the thing.

Right.

Because you're in a different position. Okay. And then I really think there's something good about you a basic thing about your home because it's nice forced savings. And it also means that you fix it up, you're saving, you find out there's, oh, well, if I add this thing or that thing, and you're enjoying it. So when you're enjoying it and you're controlling it and it's yours and so on, that's pretty good. And if they keep mortgage tax deductions and so on, there might be some benefits to it also. But that's not a black and white answer. You could take a short pencil and say, Is it better to rent or buy? Okay, that's a different question. Maybe yes, but by and large, am I going to move? All of those other questions. So when you start with, okay, what is it that's close to home? and how much you need a certain amount that's liquid. In other words, you got it in your house, you got to make a mortgage payment or something and all of a sudden you're, you know, it's not liquid and you lose your job, well that can cause you trouble. So how much do I have that's liquid? How much do I have that's not liquid? Okay, and you start to get those things right. Okay, I've got enough liquid. I got enough, okay, not liquid and those other things, okay, pretty soon you're getting yourself in good shape. You do those things, you know, you're pretty much in good shape and then you're also having some experiences and then you go beyond that, you know, and then so you start to, okay, what, you know, okay, what's a stock, what's a bond, and then, you know, you learn through experiences. I learned, through my experiences. I started when I was a kid, 12, I used to caddy, and I took my caddying money and I put it in the stock market. And I was lucky. What happened to me, by the way, is I took my caddying money and I bought the only company that I ever heard of that was selling for less than $5 a share. And I thought that that You know, well, I was really dumb. I thought, I'll buy more shares. So if it goes up, I'll make more money. And it was the only company. It was a company that was about to go broke, but some other company acquired it and it tripled. And I thought, ah, this is an easy game. And I like it. Easy money. But you experiment and you learn.

You're a very philanthropic individual. You and your wife, your foundation, your company, You give back in a lot of ways. Some might be through donations, like computers, some might be through financial, some might be through just your work and your content on LinkedIn, which is amazing. I recommend everyone subscribe to on LinkedIn. The content there is amazing. You're giving back in lots of ways. I'm curious, what's the greatest gift a rich person or someone with money can give someone who doesn't have money?

To give the knowledge, teach a man how to fish is better than to give him a fish. I mean, I think you can give them both. You can give education and you can sure, but ability, the capacity to be productive, because, you know, if I can give you the capacity to go out in the world, it's like go into a jungle. I give you a knife and can you live in the jungle? Okay. If I give you that capacity, that's the best thing I can give you. That's why I wrote the book. and pass it along. I wrote those principles over years and I wrote them down and that's what I want to pass along. That's the most important thing. But if you've got money, you can help people a lot in a lot of different ways, which is thrilling.

What would you say then are the three greatest skills that people that aren't financially abundant or that are struggling financially should learn to master? in order to be in a better position financially. Three skills, what would you say they should learn?

Well, as I said before, I remember watching the movie, I was young, David Copperfield with WC Fields, and he speaks to David Copperfield, and he says, he said something like, and I'll put it in dollar terms, you earn $100, and you spend $105, that's misery. If you earn $100 and you spend $95, you'll have a good life. I mean, it wasn't exactly like that, but it was, but basically, I know so many people who don't earn much, but are there. Because if you start to think about, what it is that it costs you to live in terms of, let's say, the basics. Give me a bed to sleep in, give me the food, let me be educated, and so on and so forth. I think most people can get themselves in a position where they're net positive. So if you can be net positive, and you could do that that, you know, that's number one, you know, as I carry that. So that's, you know, that's number one. Then I guess it was the list that we went to, you know, the second is, you know, what do you do next in terms of what do you need? What do you invest in? You know, and then, and then, you know, going beyond it. And then there avoid the following mistake, the most common mistake of investing, thinking that the investment that did good is a good investment. People rather more expensive. Quite often, those markets that did really, really well became more expensive and everybody, smart money, is all the time comparing them and competing. So what happens is the naive money buys the thing that was hot or is hot. The thing that has been terrible, which might be the thing that's beaten down. So I would say also an important element. Okay, so here's another one that's really important. Diversify.

So don't put all your eggs in one basket.

Right.

Because what I learned about this is that, first of all, all Investments compete. And it's not easy to tell whether one investment is better than the other, because if people could do that, life would be easy and everybody would make a ton of money. And this is a competitive game that's very difficult to compete in. It's very difficult to say which one's better or worse. You could take experts and do all sorts of tests, and you'll find out that they can pick that, and you can't tell whether the worst ones are.

Going to be better.

Because of that, You understand that even picking the best ones is difficult, and particularly if you're naive. Like we spend hundreds of millions of dollars each year on research to try to give us an edge. Now you've got to compete with us. So competing in the markets is more difficult than competing in the Olympics. You wouldn't go think I'm going to compete in the Olympics. but there are more people who try harder in order to do that. So it's a zero-sum game. But diversification that they're different will reduce your risk without reducing your return. So if you know how to diversify well, so that's critical. So I would say again, get your savings right. And the reasons I say, I would say have great humility about what you, what you don't know. Don't buy the thing that was hot, just because you think it's hot. And then know how to diversify. Well, that those would be the most important things I could convey.

In this second section, entrepreneur and real estate Grant Cardone talks about the skills you need to master in order to create wealth. I don't want to lose money. You don't want to lose money. But why do you think people are afraid to just talk about money, to make decisions on investing money? They're scared to go earn more. Why are people afraid of money in general, do you think?

Well, yeah, I can tell you for me, like I was always scared of money, you know, and I was terrified of it. So, so, like, if you look at still today, like I look at the bill of everything.

It's a bill of everything.

If something costs something, I want to know how much it was. And so, like, how much is it? Like, I'm going to ask that question, whether it matters or not. It doesn't matter where I get in my life. I don't think I'm ever going to be free of how much was that? How much was the dinner? How much was the dinner?

How much was the tip?

How much was the coat? How much was the jacket? What did the, you know, me and Elena, like, Elena's like, Hey, it's going to be fine, man. Like, look what, look at, look at, look at, look at what you've done. We cannot spend this. And I'm like, how much was it? I want to know how much it was because when I grew up, do you had to know what things cost? And so the point, your question about money is, it's a terrifying thing because it's the one thing in life that, you know, the NFL is not going to give me the ball and, and I'm never going to get a chance to golf. I can't win in those environments, but with money, Everybody gets money. It's the one place where everybody gets it, and now what do I do? And I can lose it now. So it's a terrifying concept, like power. Very few of us ever get any kind of influence or power, right? Once you get it, you're like, hey, what do I do with this? Am I gonna do it? Am I gonna do the right things with it? And so I think people withhold themselves because they don't, we're not educated about money. We don't know where it comes from. We have a lot of misinformation about it. our parents terrified us. You know, money doesn't grow on trees. Save your money, it'll save you. All these things our parents told us because they were enamored or encumbered with the same kind of liabilities around money. I don't know how to get it. I don't know how to keep it. And the third, the worst part that we're all at is I don't know how to invest it. So what I'll do is I'll Some people get good at getting it. Very few actually. Fewer people at keeping it, but probably more than getting it. There's probably a big group in America that have learned how to keep money.

Because they're afraid to lose it.

They don't want to invest it. They don't want to use it. They don't want to, you know. Kanye talks about this, how white people save all their money and they just keep it. They just store it. Like I had an uncle, he buried everything he ever made. It went in the backyard.

Wow.

The other uncle was, he worked hard, very, very frugal, Italian descent, and he would buy real estate, but it was always buy low and sell high. He actually never sold anything, but that was the concept. Buy low, buy the cheapest, lowest, get everything on a deal. If there's food stamps to be gotten, you go get those food stamps. If there's a government deal, get it. If it's Section 8 and the government will pay you, pay it. these guys different kind of mentalities were extremely frugal. My other uncle worked in a refinery. He basically saved all his money, paid everything off, got out of debt. That was their lifestyle. My dad died when I was 10. So he paid all his debt off, had everything paid. And so that's all I had, right? Everybody around me was like, Get money.

Keep it.

Keep it. Don't use it. But you should invest. but nobody ever learns that third one. And so I think we're just a bunch of people walking around terrified of this apparentcy of it's scarce. Right. And it's not.

Mm-.

You know, it's not, there's nothing scarce about it.

Didn't they just print more in the last 10 years?

I think we printed more money since the last time I was with you than they printed in the last 100 years.

That's crazy.

Since I saw you last.

That'S nuts.

So everybody should have got a pay raise. And I know, I know people are scared of the bubble right now. They're like, oh, my God, man, things are, things have to, real estate's too much and stocks are too much. None of this stuff has gone up equal to the amount of money printing. So if the print is this high, you know, if, if the print is that high and inflation that we're hearing about all the time is this high, you'd have to assume it would have at least this far to go. But that's only because people don't understand when you print this much money, you need to multiply times nine. Because money, money's printed, and when you take your money to the bank, as soon as it goes into the bank, the bank gets notified and the bank now has the ability to loan that money out nine times.

Nine times.

Nine times. So they don't keep money, okay? So if you put a million dollars with the bank today, they're gonna go make $9 million worth of loans tomorrow.

That'S how do they make that? How do they do it? Well, that's what they're allowed to do by their regulations.

They can take a million dollars that you give them.

That's why they want deposit so much.

And then they can go give $9.

Million in loans on that one.

That's right.

Within a year, two years, within one second.

In one day, they can loan out $9 million. When you, when you, this is what people understand. They, and this is what our parents didn't understand. Okay, so Bob goes out, Bob or Betty goes out and they work and they make, they do really well. They make 200 grand maybe they're online doing online sales. Hustle, hustle, hustle, trading their most valuable thing. This is what I did for 25 years, from 25 to 51 years old. Spent my most valuable asset time to get money terrified, terrified every second of every day. That's really what's driven me the whole time was terror. Like when you don't know, you're gonna be scared. Yeah. So, I'm going out to get money. I won't spend any of it because I'm terrified if I can't, I don't know how to get more. I'm worried I can't keep getting more. So then I get the money and then I rush off and spend my most valuable asset time again to bring it to the bank.

And then they go multiply it.

Dude, they're telling me to save it and they don't. And so when I quit listening to everybody that's got an opinion about money online or my neighbors or my uncles. And I started saying, what are they doing? The banks. When I quit studying the influencers and started studying the banks, Goldman, JP Morgan, KKR, there's just an endless list of these guys. You start studying those guys, Elon, study Elon. Elon doesn't keep any cash. He thinks the whole thing's a joke, which he's probably right. So what does he do? He reinvests everything. He's not paying debt off. He's accumulating debt. But Apple has debt, Google has debt, Facebook has debt, and they have cash reserves that are the biggest cash reserves on planet Earth. They could pay cash for everything.

But they don't. Why do they get debt when they have all this cash?

Exactly. Why do they do that? Because if I take, Apple just did this, okay? I want to make a $90 billion purchase. I want to make a $90 billion, and they're like, yeah, we got the cash for that. In fact, we have cash Plus another 50%. We got plenty of cash to do this. Okay, and then one of their people says, okay, bro, you do that. That is not a tax deductible event. What we should do is we should go keep this and go borrow 90 billion. Really? At like 0.005%. Like they're gonna pay a half of 1%. for this debt. Maybe they pay 1%. Who cares? They're like, I don't care. It's a tax deduction anyway.

Interesting.

So now they have the best of both worlds. They have their cash and they have debt. Now back in when I was growing up, this debt would cost 10, 12, 15, 18%.

It's so cheap now.

This debt, because we print money. Money is not scarce like our parents told us. Like, well, I was growing up, I bet you I heard, I heard at least from my mother, from the age of 10 to 15, if I didn't hear this 500 or 1000 times, I never heard it once. We don't own the electric company. Turn those lights out, boy. I still have that going on today. My dad, my mom told me my dad would, because he worked so hard, dude. He was so like, oh, I finally got it. I finally made it. Now I gotta protect it. He got stuck in the second piece, keeping it. you know, it's an emotional keep. And so it's not a rational thing, 'cause you're hoarding now, you know? Still today, man, it's tough for me to buy blue jeans if they're not on sale. I'm like, this is stupid, man. I'm just gonna wait. Right.

You know?

So you know what I'm saying, but it's really stupid that I even worry about it. Right. And I'm not saying on the come up, I think you should worry about it. Right. But there needs to be where you.

Can turn that switch off. You said there's a lot of misinformation and people just aren't educated on money in general when they're growing up, or there's just a lot of information out there.

I think the misinformation is more, it's not a financial illiteracy, it's a financial, it's almost like we've been hypnotized with the wrong set of rules.

So if you could only share three pieces of information to your kids or the younger generation, or anyone stuck on hoarding and keeping money, what would you say would be those three things that you would share to change the philosophy and mindset around the fear of money?

Well, I think number one is there's a bigger problem with hoarding in this country than there is with spenders. But what we hear is all the.

Spenders who are getting into debt.

Yeah. Oh, my God. You know, he did this and he's overspending. But really, really, you have more of a hoarding issue than you have a spender issue. Number one. I think people err more on saving and not knowing how to use money than they do on buying Richards and Lambos, even though you see all that around LA. I walk into Vegas and I sit down at a table in Vegas and I know the three guys playing that are playing 10 times more than I am. Like they're playing $2,000 a hand, I'm playing $25. I'm like, I know they, I know I'm in a better position to play what they're playing for, but I can't do it. So, the advice I would give people is like, I would just assume that everything you know about money is incorrect.

Everything.

Every single thing you know is wrong.

Just assume it so you can get back to where?

So that you can actually have a white, you can have a clean board to operate from. Because if you go out right now and try to stack new information, financial literacy on top of, you know, a toxic Foundation, it's all going to get all, that's why when I tell people, don't go buy a house, everybody freaks out. They're like, that can't be right. That can't be right. Why? Because that's what you've been told to buy a house your whole life. Because the banks want you to buy a house. Now, everybody just heard that's going to say, I just saw you buy a house in Malibu. I can do anything I want now. Right here comes the arrogance. So, but I mean, I'm in a position now, like if I want to buy that house in Malibu, I can't, but on the come up, Buying a house is not what you should do. You should, one, I would scrape off that you don't know anything. Two, I would invest everything you can in you. It's tax deductible. You never lose it. A person's personal appreciation will always be bigger than any other asset class.

I love that.

Okay. Bitcoin can't match it. Real estate can't match it. My personal asset appreciation will always, it is infinite, you know, who knows? I could be the next male Oprah. Right. Or somebody watching could be the next rock or whatever, right? Like that, what is that appreciation value? It's straight up. So the first thing people should invest money in, even use debt on, is their personal improvement. If you told me you had to go borrow $1,000 to go to one of your classes to become great, and it had any potential at all, like even a 1% chance, of make putting you on the road to greatness. I'd be like, dude, go. You go give Amex or Visa $1,000 right now. I don't even care what the rate is.

Right.

Because the infinite return beats 18%.

Okay.

So number one, invest in yourself. Number two, I would invest in your business. Whatever your business is or your department, your division is like the first 30 years of my career. I didn't have I didn't own a company, but but I did invest in my department. even though I worked for a company, I had a secretary. I didn't have the company pay for my secretary. I paid for that. I wanted her to work for me. It was my mom, by the way. And so invest in yourself, you know, like invest yourself, then invest in your business or your department, your skill set. If it's your company, then invest in your company, even down to zero. I wouldn't keep money around. Okay. I wouldn't save for a rainy day. I wouldn't have an emergency account. Why not? Because you don't need it. what you need is you need hustle, you need other people's money, you need to go knock on another door, make another contact. You don't need reserves of money. What you need is cash flow.

Okay, so how do we get cash flow?

So you by making investments, that's the third and other things, other things that don't require my skill set. So that would be the third piece of advice is start investing in real assets, that cash flow, B, they can appreciate three that are provide tax shelters. And if you look at those three criteria, Bitcoin doesn't cover it. Stocks probably don't cover it. Gambling doesn't.

Right.

That one gold doesn't. Silver doesn't. Real estate. NFTs don't. Yeah. NFTs don't. Because they don't cash. That's why when you invested in nfts and you're like, okay, they're cool. You're crossing your fingers, hoping, but you don't see a check with the real estate. I'm sending you a check every month. You're like, okay, I just got another check. I just got another.

Check.

I just got, like, you don't have to be in mystery. Right. But the most important thing is that people need to, like, you got, you gotta, you gotta know that if you're in, you live in America and you're having a money problem, it is not because you're stupid and it's not because you're lazy.

What is it?

It's because you have the wrong information.

The wrong information.

If you're losing at the table and there's people, other people winning there, okay? You just have the wrong data. And I believe that Americans, particularly Americans, have the wrong data about money. That they're financially, they have been, there's medical misinformation, there is financial misinformation in the marketplace. That is perpetuated by the banks and the institutions, because every time you operate under their hypnotism, you benefit them, not your family.

So if someone's got between a thousand and ten thousand, and they're trying to multiply it to 100,000. What would be the steps they would take? How long do you think it would take them to go from 1,000 or 10,000 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 like cash flow, appreciate and provide tax shelters? What would you do?

If you got $1,000, I would like just keep, you know, keep investing in yourself until you got another 1,000.

Okay.

And then invest in yourself. Now you got 2,000 invested. You 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. So if I invest in myself, then, and look, 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 a 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. How to study. How to study, how to go there, 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 not?

No, no, because it was ridiculous. I should have dropped out. Like I knew it was a bad thing. What'd you major in? Majoring 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 shouldn't 100% because I mean, I would still, I would still, I would, well, I'd have a five year jump on my career. But the problem is I was on drugs. So, you know, actual drugs. If I wouldn't have been on drugs, I would have quit college. 'Cause I would have had enough confidence in myself. When you're on drugs, you can't have confidence. 'Cause you know, you know, you're drugged.

Right.

So everything is second-guess because my self-esteem was like through the basement. And so I'm like, I need to quit college. But everybody around me is, oh no, you gotta finish college, you gotta 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, then I gotta hire me. And I didn't even worry about any of that. 'Cause, 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, now I'm making three thousand dollars. Okay. Boom. Reinvest all that again. But what we do 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 four thousand dollars. Okay, now I got five. 5,000. Now the income's starting to pick up. Income has to pick up. 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. I'm developing skills, I'm working, I'm earning more.

Now what's the next step? Yeah, now it would be, okay, I gotta spend money on marketing. I wouldn't go look for an investment right now. I'm gonna spend money on marketing 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.

'Cause you turned, what, 50 when you really started investing in...

I was 51 when we started playing the social media game, 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 then, 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 spent money, been spending money on ads, but I was scared, man.

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 have 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 when I quit studying individuals and started studying people, everything shifted for me. When I quit trying to be 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 gonna go do what Coca-Cola does. It's when I bought the plane.

Really?

Yeah. How old were you when you bought the plane?

I was 50, maybe 55, the first one. I bought it 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 I was 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 then that goes back to that thing about the financial misinformation, Right? It's like, who am I studying? That's when we started, you know, open up the funds for, I was at, went to New York City to go walk in Goldman Sachs and JPMorgan's offices. I wanted to walk in and see what it was like. These are 100, multi-100 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 owned the building. Well, they don't care if they rent. They could rent it, but they owned it. The elevators were bigger than the studio. One elevator. And 60 people got on that elevator and went to the 120th floor. And then there was six of these elevators, people going up and down. Everybody told me, Don't take people's money. Do not let investors invest with 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 Sachs, I was there, they would give me money. And I'm like, I'm not gonna get money from them.

I'm gonna 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 TikTok. 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, they're the devil, but they're close, okay? Because they, they, they're not going to call you up and say, how What are you doing, man? Without saying, hey, you got any money to invest? It's just not, that's not what they do. Their job is to make money, period.

In this section, entrepreneur and bestselling author Gino Wickman breaks down the biggest mistakes people make with their money and the 10 disciplines to know for maximizing your energy and success in life. For those entrepreneurs that you guys work with, that all of a sudden start to make more. They implement this system, they start bringing in more revenue than they've probably ever made in their life, right? And then paying themselves more than they've probably ever paid in their lives. What do they need to prepare for if they start doubling their income, tripling their income, giving them a big bonus check at the end of the year? How can they prepare themselves for the abundance of wealth coming in?

That's a good one.

Where they don't self-sabotage, mess it up, then deal with all the people in their life saying gimme, gimme, gimme, and hurting all their relationships, which I've heard that happens a lot.

Yeah, yeah. So this one I feel a little bit equipped to answer. You're prompting two or three points here. So the first is, you know, I have been broke three times in my life.

Yes.

Okay, so 21, 25, and 31. I wanted to be a millionaire by the time I was 30. I achieved that goal by 31, so I missed it by a year. But what I left out of the goal, I want to be a millionaire by 30, I forgot to say and keep the money. I lost everything by 32. So I went from being a millionaire to $200,000 in debt. So I know this pain all too well. And so that's point one. Point two is, for our EOS implementers, we have over 450, as I talked about, these people earn a lot of money. It's a good gig that we do. We are transforming companies, making a lot of money. And so what I do for them is the ones that reach a certain level and beyond is I do a special full day session for them called a Freedom Forum. And my sole purpose is to get them to not piss it all away.

Freedom Forum.

It's called the Freedom Forum. But this is strictly for EOS implementers. This is for our inner sanctum, our love in that is EOS worldwide. And the reason I do it is because I have the givers, the teachers, the helpers of the world most die broke because we don't know, we're all trying to fill a hole and so we just keep giving and giving and giving and giving and giving and giving. Serve, serve, serve, serve, serve. Keep it.

Right, right.

So I've watched so many of the thought leaders die broke and so I just, oh, but I can't disclose a lot of them. So in that, I'm teaching them how to keep the money, okay? And so it's all about, I jokingly like to say, it's not time to buy boats and cars and planes. And so it's this mental shift. And for me, it starts with the end game that just says, Do you want to retire someday? And most people are gonna say yes, which means you can live off your money and not have to work. Most people are gonna say yes to that. Okay? And so what kind of a lifestyle do you want to have? And let's hypothetically you say $100,000 a year lifestyle. Okay? Simple math. So then that means you need $2 million sitting in account on that retirement day paying you 5% and you can live off that and then you need to factor in sit with a financial advisor, they'll teach you this. I don't take my word for all the math, but the point is most people don't get that and they think that for some reason the money machine continues forever and it just doesn't. And so it's a day of reprogramming their brains and teaching them. And so once they understand the math, then they realize this extra 100, 200, 300, $400,000 they have in their account count, the urge to go buy a bigger house, buy a boat, buy a car, buy a this, they realize, Whoa, I can put that toward the 2 million. And so, it's just a mental shift because most people are conditioned to spend that money for whatever reason and think that the money is going to keep coming in. And it just doesn't always things change. So, does that answer the question? -Of course. -I hope it does.

-Don'T spend it all when you're making it.

-Oh, my God. Yes, soccer Sock it away, sock it away, sock it away. That's the best book I've ever read on the psychology behind it. The people that you don't think are millionaires are millionaires and the people that you think are millionaires are not millionaires. That's true. Who wrote that book?

Is that a... Two gentlemen and I.

Cannot remember their names. Millionaire Next Door, a masterpiece.

It's kind of like the Millionaire Next Door that has a 20-year-old car and.

You know, Changed my life in my late 20s for sure.

My dad never bought a new car. He always bought used and had like this, you know, old oldsmobile that he would drive.

Yeah, yeah, he was just always kind.

Of reinvesting his money. So in properties or whatever it might be. So I love this. What else do we, what else do entrepreneurs need to know?

Yeah, well, so let's so we're going on these five pieces of content we've been talking about, right? So entrepreneur, leap, rocket fuel, traction, / EOS, EOS Life. Now, the fifth is like the aha, wala moment, the icing on the cake, and it's called 10 Disciplines for Managing and Maximizing youg Energy. And this is actually in the EOS Life book. So I decided to do something very weird, and that's add a free mini book to the back of a book. It's the last 30 pages. And the way I describe it is there's nothing else you need to do with what we talked about. Again, as an entrepreneur or any being, all the way up to living your ideal life. But then I call this one living your optimal life. Because if now you want to take it to a whole another level, I believe we are all balls of energy, okay? And we are pure energy. That's just my belief. And I believe that we are all connected. And so life will be pretty damn good if you just do everything we talked about. But to add this last little piece, what happened with this is Going back to the EOS conference that fourth year, I didn't want to teach EOS life anymore and I got very vulnerable. And so this only goes back two or three years ago. This is not very, maybe two years ago. And I decided I am going to teach the 10 disciplines I have lived by in my life for two to three decades that magnify my energy, 10X. And so in addition to living this great life, then there's this way to boom, explode your energy to a whole other level. And so that's what it is. It's teaching 10 very specific disciplines to live by every single day that will take your energy to a whole another level.

I love it. You've got a lot of great disciplines here. Knowing yourself 100%, learning to say no often, all these different things. Prepare every night. I think a lot of people talk about the morning routine, but the evening routine is something that I focus on a lot, which is what am I going into? Well, first I reflect on the day and I share three things I'm grateful for with my girlfriend and she shares as well. So we really focus on gratitude and appreciation. And I think when we focus on appreciation, we appreciate into something greater. We focus on all the good. Even if it was a stressful day, it's like, man, but there's three powerful things that happened. And that brings us into a peaceful night of sleep. and then I start to really prepare of like, what's the main thing I want to take on the next day? I look at who am I interviewing, what's happening, and I get myself ready to be focused for those 24 hours or those 18 hours or whatever. And I think that is something a lot of people miss out on. They just go to bed. They don't reflect on the day. They don't think about tomorrow. And I'm not sure your specific preparation strategy.

You nailed it. Yeah.

So if we could just go a little bit deep into it for about two minutes. You know, and as I go into these, the way I look at it is, you know, for your audience, they're driven people. These are successful people. And so this makes an assumption that you've got the basics down. In other words, you're eating right, you're exercising, you're sleeping well, and you have work ethic. Okay. Then we're going to take and magnify all that. So you're a racehorse, as I like to describe it, and i'm going to help you run faster and longer. so this discipline that you're on, which is discipline number eight, is prepare every night. And so my business mentor taught me this at 25 years old. I've been doing it every night for now almost 30 years. And you're exactly right. It is before your head hits the pillow, somewhere between five o'clock and your head hitting it, whenever your day ends, you have to sit down for 15 to 30 minutes and prepare for the next day and just lay out in a sequential and a linear fashion your day, time blocking your meetings, your appointments, your calls, your projects. And so you're just laying out the whole day so that when your head hits the pillow, you took the words out of your mouth. Those words are in the book right there. You will sleep better. So what does that do for your energy? You will literally wake up with ideas and solutions to projects you're working on the next day because your subconscious is going to work on them because you prepared so well and your energy will go through and your creativity will go through the roof because what happens is you wake up the next day and you hit the ground running. And there are people that say, oh no, I'd like to wake up and let the day come at me. You know? So if you wake up and you start checking emails or you walk out of the office, you have lost all control of your day. And so this is you taking control of your day and managing your energy and you will be I want to say twice as productive. But who knows the math, but you'll be much more productive.

This is an interesting one right here. I won't go through all these, but number one, you say 10-year thinking is really getting clear on the next 10 years and kind of where you want to be in 10 years and reverse engineering in a process that you talk about in here, which I think is really cool.

But let me say one thing to that, okay? Because it's a little more robust than that. And I learned this at 35. So, I've only been practicing this one for 19 years. But oh my God, was it transformative? And so, the whole idea is to shift your thinking from now, now, now, this year, got to have it now, got to get it done now. This most driven people, most people listening, we're so impatient. We want everything now. If you can shift your thinking to 10 year thinking, not as much 10 year goals. But I urge when I'm doing this talk, you to write down a 10 year goal to get your brain to shift to that, but it's thinking about everything in your life in 10-year time frames. There's thinking out there that says 25-year thinking. There's thinking that says 100-year thinking. I just want you to start with 10 right now and if you will do that, all I can tell you is what happened for me. And what happened for me is this peace and calm came over me. I felt less urgent. I started making better decisions and ironically, I got there. faster. When you're in that now-now-now mentality, you're making bad decisions. And so when every decision in your life is now a 10-year decision, it's just so, so much better. I can't even explain it to you. And so obviously I go into more detail in the book.

Yeah, I love that. Thank you so much for listening. I hope you enjoyed today's episode and 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 show with all all the important links. And also make sure to share this with a friend and subscribe over on Apple Podcasts as well. I really love hearing feedback from you guys, so share a review over on Apple and let me know what part of this episode resonated with you the most. And if no one's told you lately, I want to remind you that you are loved, you are worthy, and you matter. And now it's time to go out there and do something great.