MONEY HABITS: The Main Difference Between RICH PEOPLE & Poor People! | Ramit Sethi

And this is a key thing I want everybody to pay attention to. Everyone teaches you how to save money, but almost no one teaches you how to spend it. So what do high earners do with their money? Why do some people spend money on business class tickets? I used to think it was stupid. We're all getting to the same place anyway. And yet, as you earn more, you start to change your calculus of spending. And hopefully we can talk about some of that.

Something crazy happens when you get organized with your finances and your money. It's like the stress starts to go away or there's new type of stress, which is like learning how to make more and learning how to manage it better once you have more. But the stress went away from feeling like I don't have the control in my life in this area. Because they don't teach you this in school.

No, they don't. And thank you for sharing that because, you know, I sit here and I write this book and I write my emails to my email list and my social posts, but it never gets old. hearing a real person in front of me telling me how they used the book to change their life.

Game changer, man.

Yeah, I appreciate that. Because a lot of this money is not just money. It's great that you can have $20,000 in your bank account or many of my readers, they use this. It came out in '09. They did exactly what the book said and now they have hundreds and hundreds of thousands of dollars, which is amazing. But I think the more meaningful part of it is they start to realize, Wow, I can use money as a tool to create a rich life. Money doesn't have to be this thing that's bad. It doesn't have to be this thing that everyone tells me what I can't do, no lattes, no jeans, no nothing, I can actually use it. And if I want to fly business class, I can. If I want to buy something really nice for my parents, I can. And you start to almost open up your life and realize, oh, money's not holding me back. It's actually amplifying what I really want to do.

I want to talk about two different things today. One, for those who are earning a lot of money, what should they be doing with their money? Because There's actually a new problem once you earn a lot of money, if it's just sitting in the bank, that's.

Actually a bad thing, I think. Totally.

And nobody talks about it. Yeah, no one really talks about it. So there's a lot of high earners who are listening. So what are some of the things, and listen, there's a lot of things you can invest in. There's real estate, there's stocks, there's, you.

Know, starting businesses, you can invest in other people.

There's a Lewis Howes conference. There you go, yeah, Summit of Greatness, you can invest in a lot of things. And then, I want to talk about that. What do the high earners do with their money? How can they manage it at a high level? How can they save taxes? How can they do all these other things to really earn more and save more? And then also for those in the, I guess, 100,000 and below range a year, what can they really be doing? So they don't feel so stressed and overwhelmed about their money because they're probably a little bit in debt, using too many credit cards. Maybe they're buying too many things that they shouldn't be buying at that stage. and they're behind in their finances or they feel overwhelmed. So, I think I want to start with the high earners first.

Okay.

Because you've been good at teaching this to kind of like the 60 to $150,000 a year earner. This is kind of like, I think that book is kind of in that range. When you say maybe up to 200,000. I think so.

But then what happened was the people who followed the advice...

Started making more.

They're balling. They have hundreds of thousands.

They're like, what do I do with all this money?

I don't know what to do. And that's the challenge. It is a challenge because You can't really talk about it online.

No.

You go on to Reddit and everyone's like, oh, I re-warm my oatmeal nine times and I can get a lot out of it. It's like, I don't want to take advice from you oatmeal warmers.

Right.

And then if you talk about it publicly, people are kind of like, dude, boohoo, what a problem, what a jerk. And actually, you know, look, if you have been successful, if you followed a program, whether it's my program or anyone's program, you've invested, you've saved, you now have new challenges. And your biggest question is what's next? Like I sort of won, I won that game of personal finance, what's next?

I'm not in debt.

I'm not in debt, so 99% of advice doesn't apply to me. And people telling me, you know, I should cut my pieces of bread in three to save, no, that doesn't apply to me because I have earned and saved a lot. So then you start to say, what's next? Am I missing something? And finally, and what I think is actually a highly advanced question is, what do I do with this money? And this is a key thing I want everybody to pay attention to. Everyone teaches you how to save money, but almost no one teaches you how to spend it. So what do high earners do with their money? Why do some people spend money on business class tickets? I used to think it was stupid. We're all getting to the same place anyway. And yet, as you earn more, you start to change your calculus of spending. And hopefully we can talk about some of that.

You know what's interesting is, I used to sit in the back middle seat, coach, Southwest or American, whatever. The cheapest flight is what I would look for. And now I look for only first class or business class. You say business class. And I look for, can I get it for free? Can I get it with points? I don't want to pay still for it, but I do sometimes because, for example, I just went on a trip to this event called 29-029 which was you hike for 36 hours, the equivalent of Mount Everest. You go 22 miles high. It was in Vermont a couple weeks ago and I'm still recovering from it. My legs are sore still. And I said to myself before I went to this event, I was ran out of points. I was out of points but I was like, I'm going to pay for a first class flight or business class because I don't think I'm going to be able to move my legs. And I'm going to be so uncomfortable in this five hour flight on the way back to LA, I need some space. Yeah. And it's gonna be worth the price for the flexibility and the freedom in that moment. I don't care if I could have bought a laptop with that money. That's what I used to think. That's $1,000 for a flight. I can buy a laptop with that. I can buy a new iPhone. Now it's more for me about, do I feel good? Am I recovered? Am I gonna feel good when I get home so I can work harder? and earn more.

Yeah.

That's the way I think.

I love that. And I want to unpack a couple of things you just said in that example. First off, when anyone says, you know, I bought a business class ticket, notice the almost instinctive reaction. It's like, ugh, what a show off. And all these other things that come along with it. And I want to challenge people. I have this principle I call the D to C principle. And instead of being derisive and saying, oh, so stupid, that's ridiculous. I would never do that. I actually want to encourage everyone to be C, curious. Why would a guy like Lewis intentionally spend money on a business class ticket? Man, he earns good money. He has a lot of options. He must know something that I don't, and I want to understand why. So from D to C, and if you start to take that perspective, especially on high earners and how they spend their money, all of a sudden you stop saying, that's ridiculous. Or if I had a million dollars, I would never do that. Instead, you say, why did that person spend on that? And I want to know. Maybe I don't agree. Maybe you become a multimillionaire and you don't want to spend on business class. You just don't care. But it's interesting that you do it and I'd like to know more.

Yeah, that's the reason I did it for that. And on the way here, I actually didn't have points as well. For this flight, all my points were used for booking first class tickets for the speakers at the Summit of Greatness. So I used it all on that. And, So I didn't want to pay for another first class ticket or actually I think they were full so I said okay, what's got the most legroom? So I always do exit row. I just upgrade a little bit to get the exit row and have that legroom.

I think the question we're all wondering, Louis, is... Giant though.

When are you gonna get that private plane and then fly me out? It was funny, I was thinking about this actually last week. I was like, do I ever desire having a private jet? I don't know if I, I mean, listen, it'd be great to have so much money that you don't have to think about it. You can afford a jet and you don't feel bad about it. I think, sure, if I had that much money, I would do it. But what I care more about is knowing 20 people that have private jets.

Okay, so let's talk about this.

And having free rides with them whenever I want to. Yes, so that's what I like more.

And that is actually very revealing. So I want to share another principle we have, which is this concept of money dials. And money dial, if you think about 10 dials in front of you, and each of them represents a different area of life that people spend on. It turns out that each of us has one money dial that we love spending on. And what you just said is extremely revealing. Your money dial, I would be willing to bet, is relationships. Oh, yeah. Okay, so I have a friend, Nick Gray. Nick Gray loves hosting people at his house. Every day he's trying a different party, he's testing stuff, he invites people over, he does all kinds of crazy stuff. He loves relationships. That's his money dial. And a money dial, the reason I say it's a dial is you you start off, you know, maybe you have a couple of people out to dinner and you as you start to get more money and more success, you turn that dial until you are totally dialed in. You have the perfect appetizer. You have the perfect icebreakers. You have maybe friends who have jets. You're really turning that dial. There's other money dials. The most common one is frugality. Most people actually focus on cost above all else. And you can tell because when they buy something, what's the first thing they say?

Look at the price.

You look at the price and they tell everyone else, I got this for 60%. 10% off.

Okay, so that's brag about how discounted they got it.

It's part of their identity. Whereas for you, dude, I see your photos, I see your conference. Your identity is about relationships. Now there's a few others. There's wellness, which is more and more common. And you'll see people, they have the perfect diet, they have a chef. And I'm talking when they really dial it in. This is the point of it.

Yeah, full-time trainer.

This is the point of an advanced personal finance, which is You don't have to have a trainer when you start off, right? But you went and you searched for five hours, you found the perfect program. But as you have more money, you start to say, I want better results. I want faster results. And I have money, I'm gonna throw it at the problem. Mine, my money dial, is convenience. So I love convenience.

Me too.

And I wake up... Everything's delivered to you. Everything's delivered. I have a chef. When I leave to travel, I have this thing called a travel protocol that gets activated with my assistant. and my plants get watered, my email gets handled differently. I mean, it's like, I've been thinking about this for the last 15 years. I'm a psycho, but that's my money dial. And I love it.

So you'll pay a premium for that money dial.

Exactly. But I could not care less about certain other money dials. Other common ones that a lot of people watching probably have or listening is travel. So at a basic level, people say, I like to travel. But imagine you've truly, truly become more advanced and you've become more successful and you want to throw a lot of money at the problem because you value it. Suddenly, maybe you're going three months a year. Maybe you are leading excursions. I mean, you can just expand your mind as to what you could possibly do beyond the typical eight days of vacation a year. So I share this with everyone because I like to challenge people to do something. Take a look at your spending from the last two to three months and ask yourself, what is my money dial? And your money dial is the thing that you love to spend money on. It's the thing that gives you joy and it's the thing you could spend endless amounts of time optimizing.

And feel good about it.

And feel good about it. And so the reason, once you know your money dial, then it enables you to do two really cool things. One is you can cut back on stuff you don't care about. Okay, so if you just don't care about wellness or if you just don't care about travel, that's okay. You can cut the spend to that. But I think the cooler thing is it allows you to take that money and now spend extravagantly on the thing you love, which is your money dial. So if you're Lewis, suddenly you don't mind throwing a lavish dinner for your friends with a performer and all kinds of crazy stuff because that's your money dial. No need to apologize for it. So for everyone, especially the advanced folks who have money, you got to think now you're at a different level. You're not just trying to cut your debt. You're not just trying to cut back. You actually can spend on the things you love. And that to me is really exciting.

Out your money dial and spend more intentionally on those things as opposed to spending lots on everything.

Exactly.

Yeah, I mean for me, it's funny you say that because I almost always pick up the check on every meal. It doesn't matter if it's a smoothie or like a few hundred dollar meal with a bunch of people. It's like I always want to pick it up because I want to be investing in relationships. I don't even know where I learned that. I think I learned it because I was poor for a couple of years and people used to always pick up my tab and I felt bad.

Yeah.

But I also felt like, man, they really took care of me. And I want to make sure that everyone else feels like they're taking care of around me.

I feel that way when I was a college student. Everybody picked up my checks. 'Cause I would invite a lot of people out. Like, I'd email CEOs and just be like, I'm interested in what you do. Can we grab coffee? 'Cause I'm poor. Yeah. And, you know, nobody will ever let a college kid pay for a meal. That's true. Never. And I, and the truth is, like, they had more money than I did, too. But now I feel really fortunate that.

Picking up a check, whether it's 10.

Bucks or, A couple hundred bucks makes no difference to me, but it can.

Make the difference to somebody else. Absolutely. I love that man. Yeah, the money doll. But I'm also always trying to save. Like, I'm willing to spend, but I want to save a lot if it's going to be expensive. I'm always telling my assistant, look for the deal, look for the deal. Even if it's a thousand bucks, try to get it half off. Okay, so I'm willing to spend, but.

Save me money too. Okay, so that's a great point that I want to demystify. a little bit about high earners. A lot of folks think that once you make 250K or 2.5 million, whatever the number is, that suddenly you're just throwing money around left and right. And that's not quite correct. It might seem like that because to spend, say, $7,000 for a business class international flight just seems like, oh my God, that's so crazy. But I want you to get more nuanced. You're telling your assistant, I don't mind spending, but save.

Yes.

What I do with my financial system is I set a target each year. This is how much money I'm going to save and invest. And those numbers are aggressive. That's a lot of money.

You-'re going hard.

Yeah, like every year.

So like 10%, 30%.

Yeah, so anywhere between those ranges. And we have folks who-- Of what you earn. Correct. And then remember, whenever I make any unexpected income, let's say I did a speaking gig or something. Yeah, I might get myself some-- I might go out to dinner, but the rest I'm just putting straight in investments. Wow. Okay, so that money grows aggressively. And I also want to remind everybody, especially the entrepreneurs watching, I know you have a lot of entrepreneurs. You wouldn't believe how many entrepreneur friends I know who have a good business.

And they don't invest at all. And that's a huge mistake.

What should we be investing in if you have a good business? Simple low cost target date funds is a great way to go. Entrepreneurs. Index funds. Yeah, index funds. They get a little too smart for their own good. They say, I could just put that money in my business. And I always say, look, I'm glad you have a business that's throwing off tons of cash. That's awesome. Most businesses don't last 80 years. So be smart. Give yourself a small plan B. Put 5K a month, 10K a month, whatever is appropriate for your level of success. And hey, maybe your business does really well. That's awesome. But maybe one day something goes wrong. Always want to be prepared. You never want to have your back against the wall. So I just want to encourage everybody, whether you're making 250K or 2.5 million for the high earners here, Don't get too smart for your own good. Keep investing and saving.

What are the three or four main things you invest in with that 10 to 30% a year? And does it change year to year? Yeah.

I'll kind of walk you through for the high earners and then we can talk about people 100K and less. So once you have a certain amount of capital, you do have a few opportunities that you probably didn't have before. Everybody has this idea that, you know, the rich have all these crazy tax breaks and captive insurance and this and that. And I've looked into all that stuff. Right, I know.

Insurance companies and all these other things, right? Yeah.

Here's the truth. The truth is... Some of it is a little sketchy, but yeah. Definitely. And I'll say my core values are that when it comes to things like taxes... I love your principle on this. I'm very conservative. I'm like, dude, only in this country.

Could I have been this successful.

I love this mindset. I'm happy to pay my taxes. It means that I had the opportunity to create something great. if I pay an extra 5,000 or 30,000, it doesn't change my life at all. And I want to be able to give back to the society that enabled me to do what I do.

That's a powerful mindset. And it gets you away from, you still want to optimize tax breaks that are out there, but it gets you away from trying to constantly look for some of the shortcuts or like schemes or something.

Yes, I've always found that the people especially entrepreneurs who talk about tax breaks all the time are typically the most unsuccessful ones. Two reasons. One, why are you talking about tax breaks instead of growing your business? And two, it's a very scarcity driven mindset. Ooh, I only have this much that I have to protect. When really you can just grow the pie and your taxes are simply a proportion.

Just make more.

Just make more. Now, yes, you do want to optimize and take advantage of all Legal tax breaks. So as you earn more, you do have more opportunities. You have not only your 401, you have all kinds of advanced IRA options, you have HSAs, you have a variety of things. But at a certain point, if you're making enough, you're gonna max all of those out. So what do you do when you.

Max it all out? So then the next step is to.

Simply create a taxable account. It's just a typical non-retirement account, just that Vanguard or where I use Vanguard, whatever you want. and you just continue to invest. So that's one, and that's gonna keep making you money over the long term. It's just you're not gonna get those tax breaks from a 401k and IRA, et cetera. The other thing is, as you accumulate more and more assets, you're gonna start to notice a lot of different people are gonna come with opportunities. Dude, I get text messages from these crazy start-ups. Hey, I'm opening up a bar in Brooklyn. I'm like, I don't want your stupid bar. I'm not investing in that. I could burn my cash easier. But you're gonna want, as you start to accumulate a lot, you're gonna want to do have a little fun with your money when it comes to investing. So some people want to do crypto. I think a lot of these people are complete nut jobs. Great.

Look, you crypto-- I put a little bit in there just to like have fun, but I was like, thank goodness.

I didn't put more in there because everyone's losing their money. Exactly. And they're, you know, they're all, okay, I don't even want to get into crypto because I'm gonna get a lot of angry emails. Hey, if you want to email me about your angry crypto opinions, just send it to trash@iwillteachyoutoberrich.com, don't send it to me. But you know what? I like what you said. You took a little bit, you had some fun. Yeah, it's fun. 5 to 10% once you've got all your other stuff automated, you've got your index funds, lockdown, HSA, your different accounts. I don't have any problem. I think you should take 5 to 10% and you should have some fun with it. For me, I did angel investing and I basically learned that I suck. My angel investing is not good.

I haven't made any money.

Yeah, my deal flow sucks. My choices were okay, some hit, most didn't. I basically just wrote that money off.

But it was fun and it allowed me to have an outlet. And you learned.

I learned to meet people and you, yeah. Yeah, so if you want to do crypto, if you want to invest in somebody's bar, you want to do angel investing if you're qualified, etc. Be my guest. But don't jump to that first. Get all your stuff automated. And at a certain point, the compounding is so insane, you will start to actually earn more from your investments than you will from your income, even if you're making 500k a year from the.

Index funds you're talking about. If you're investing in that, what if the market's going down or up? Should you even worry about that? Let's say you put a half a million in.

Yeah. It went up 100,000 over a couple.

Of years, but then it went back to the original investment. Should you be like, oh my gosh, I need to take this out?

Do not do that. I'll give you a real example.

I put two years of my money into this and it's still the same amount.

I should have just left in the bank. No, you shouldn't have left it in the bank. All right, so this happened to me just about two weeks ago. So the market went down and I hardly ever log. I log in about once a month to my account. So, see like, oh, yeah. And really, you should not be checking your investments.

Check every 10 years.

Once a month is good. And like, don't, you're not a day trader. Okay, so, so I happened to log in and I saw that in the 11 days of that month, in one of my accounts, I had lost $75,000. Okay, so for everybody listening, yeah. How would you react if you lost $75,000 in 11 days?

Most people would be freaked out.

They'd be freaked out.

They would, Pull the money out.

Yeah, which is exactly the opposite of what you should do. So everyone says this common thing and they just roll their eyes, oh, buy low, sell high. But in reality, they actually buy high and sell low. So you know what I did? I did nothing. I logged in, I felt no emotion. It wasn't like my life is over, it was like watching someone offer me concrete to eat. Like I felt nothing. I'm like, nah, it's fine, whatever. I just closed the window. the key there is every month my system is automatically investing. It's called dollar cost averaging. It's just automatically investing. And you should set the same thing up too. You shouldn't be paying attention manually. You shouldn't be sending a check. It just works automatically. And so I knew this month the market is down. And if you think about any other thing you buy, if the price of toothpaste goes down, you're happy. If the price of milk goes down, you're happy. The only time we get weird is when the price of the market goes down and then we're like, oh, let me pull all my money out. Bad move. The price went down. If you're young and you have a long time before you need the money, you're getting the market at a discount.

You should get excited.

You should get excited. So I just said, Great, it went down. Fine. Doesn't bother me. And I just closed the window and a few days later, my system will just purchase it again. So it's up, it's down. It doesn't matter in the short term, but over the long term, we know that the market tends to return. about seven to eight percent over time. But it can go up, it can go down, and so you do not want to be paying attention in the short term.

Let's say you've got a half a million to a million dollars extra cash laying around. You've maxed out all your IRAs, you've got five to ten grand a month going to your index funds, you've dabbled in the smaller investments and startups, and you've done it all. You've got a little bit in crypto, you've tried everything. What should you do with that extra million dollars a year?

Okay, great question. First off, this is like somebody saying to a fitness instructor, you know, I've done everything. What should I do next? And that, you know what that fitness instructor is gonna say? They're gonna say, when you say everything, what do you really mean? Like show me, are you doing foam rolling? Are you doing this? Are you all balanced? For the person who's doing this, I'm gonna give you your answer, but I'm gonna first say, Are you sure? Have you planned out so you know that 10 years from now you're gonna buy a house? Do you have a 20% down payment set aside? I do, and I have no plans to buy a house anytime soon, but I have 20% set aside for a house.

For that moment. Yeah.

Yeah, for when, so I already plan for what I know is coming even though I have no interest in it today. What about the first year of your kid's life? Do you have that set aside? What about XYZ? Are you taking care of your parents when they get older? One thing that that I really love to do is talk about relationships. So I love to invite my family once a year for a big, big vacation where we can all stay in a house and there's a, you know, like a chef and all this stuff and we can all be there and the kids can be playing. Is that something that's important to you? That's cool. Right? So plan for that. Now, if you've done all that stuff, you got your six month emergency fund, you've got your investments automated on autopilot and you still have money left over, you're in an awesome position. and now you can do a couple of things. One, if you want to keep growing that money, you can simply invest it in a non-retirement taxable account and that money will grow like crazy. If you're putting in 10, 20K a month, that money will turn into massive amounts. And you can, if you guys don't believe me, just go search for compound interest calculator. Bankrate has a really good one and plug in 20K a month for 10 years and that's it. Just stop. and watch what happens as it goes. What is that?

7, 8%.

Yeah, at 7% returns and watch what happens. It becomes like a tsunami. You cannot stop it. So that's one. The other thing is if you want to invest in a little bit of fun stuff, if you're like, hey, I want to take 10% of this and invest in like this crazy investment my buddy's starting a thing. Go ahead, just be prepared to write it off. Maybe it works, maybe not. And then from there, you should also remember a third thing and nobody really talks about this. Maybe it's time to increase your quality of life. Maybe instead of staying in the middle back seat, it's time to upgrade to the exit row.

Right. Or business class.

Business class. Or maybe it's time to eat at a different restaurant. Maybe it's time to really think about your money dial and say, Hey, I always claim that wellness is important and yet I'm still eating like the same old thing I used to eat 10 years ago. Maybe it's time to upgrade what I eat and where I work out and all that kind of stuff to my gear. You can do that. You've made it. You already won the basic game. So now you get to benefit from it. What about real estate?

It's a lot of people, you're either, I hear people that are all in on real estate investment or they're kind of like all in on the market.

Yeah, I think that real estate, so a lot of people are gonna hate me after I say this. I know you guys have all been told since you were like two years old, real estate is the best investment ever. And it turns out that's not really true. A couple of things that might surprise you. If you're buying one home.

If you're buying a house and living in it. If you're buying multiple units or buying multiple homes and that's your business, it might be a better investment.

Correct. Let me make the distinction. So most people in America are told that the American life, the American dream is graduate from college, get married, buy a house, white picket fence, 2.5 kids, and you made it. And I think we all just have to look at people who are a little bit older than us to realize that might not be our American dream. We might want to travel more. We might want to work remotely. I mean, here we are in the middle of a weekday chit-chatting and sharing it with millions of people. This is our dream. So I want to challenge people to really question what you've been taught. That's number one. Number two, most people who buy a house and live in it think that it is the best investment. But most people have never... Like my piggy bank. Yeah, they think that. They don't understand that when you spend money on a house, you've incurred tons of phantom costs. You have taxes, you have maintenance, you have all kinds of things that you don't count. And if you actually factor all those numbers in, real estate often, in fact, many times is not a great investment at all. It's a place to live and you have these phrases like you're throwing money away on rent. It's not true. Your landlord's making a profit, otherwise they wouldn't do it. That's not true. Your landlord can't charge you whatever they want. They can only charge you what the market bear. So if you search my name in real estate, you'll see all the numbers played out. Now, on the other hand, if you are a real estate investor and you're disciplined, that's a different story and that can be effective. But mom and pop who are thinking that they bought their house in 1970 for $200,000 and now it's worth 600,000, they think they made 400,000. Actually not. If they had taken that money and put it in the market, they would probably have much, much more.

Really?

Yeah.

Wow. And less headache.

Way less headache.

Well, depending if they looked at their investment every week, maybe they'd be more stressed up the level that's going up and down. Yeah.

Yeah. So, and listen, if you go, I will buy a house one day. Okay, so I don't want anyone to think that I'm telling you never to buy a house. Yeah. If you want to rent for the rest of your life, you absolutely can. Many people in New York, San Francisco and other high cost of living cities, they rent. Oh yeah, yeah. No, there's no shame in that.

I rent by choice. I could buy a place tomorrow, cash.

And I choose to rent.

Why do you choose to rent? After you've been here for 10 years.

And you've been renting the whole time.

Yeah, on purpose. And how much is that, do you think? Over a half a million dollars.

Oh, yeah. It's a lot of money. I rent a nice place. Why do I do it?

Because... Could have used that money in something else.

You could have put it in a house.

I did. I put it in the market and I made more. Because you didn't put it into a home.

Correct. Where it was a lot more money up front. It was more money up front. I used that money instead I put in the market. But there's also other reasons too. I couldn't get for the amount I'm paying where I live, if I were to buy a place in the same building or it would be four times more expensive. So that's the first. Second is maintenance. I'm gonna give you an example. I woke up one day and the doorman was knocking on my door. It's like 8:30 in the morning on a Saturday. He's like, Sir, sir, do you mind if we come in and take a look at something? I said, okay. And we go into the living room and there's a pool of water just sitting there.

In your apartment?

Yeah. It had dripped down three levels. So I was like, oh my God. They're like, Sir, go back to sleep. We'll take care of it. That day they came, they repaired the floors, not just of mine, the ceilings for the next two levels down. That's probably likely to have costed them, let's just say 50K, maybe 100K, 'cause it's Manhattan and it's a weekend service.

Who knows?

That's not my fault. You didn't pay for it? No. And I said, Great, that's their problem. I'm going back to sleep, man. I got another hour of sleep here. So, I want everyone, you don't have to believe me. You don't have to believe what someone else says. All you need to do is run the numbers. That is my only suggestion to you. Go to a buy versus rent calculator. Make sure you plug in all the fees, not just the taxes, the realtor fee. If you get a bigger place, you're probably gonna get more furniture for it.

The HOAs or the lawn maintenance or trash service or whatever it is.

The key thing, I think, whether it's a house or investments, My point to you guys is take your money seriously. Once you take your money seriously and you put some time in it, whether it's this book or wherever you want to get your information, you're going to be better off for it. You don't want to delegate this to somebody else. I want you to understand it. And once you understand it and you automate it, you make a few good choices in life, you never have to worry about lattes or appetizers again.

How did you make the emotional shift when you started renting an expensive apartment and you're like, man, if I added all this up after a year, that's close to a down payment on a nice house in the Midwest. Or they can buy a whole house in the Midwest. You know what I mean?

Yeah.

How do you emotionally rationalize that where you're not frustrated, like, oh, gosh, I just spent 10 years. Yeah. Throwing this money away. Because sometimes I feel that way. Sometimes like, man, I just spent a lot of money in these last few years.

Well, let me ask you this.

But I like the freedom and the flexibility of not having to incur all those other.

Yeah. What do you like to eat?

You like strawberries?

No.

Okay, what do you like to eat?

Good steak and veggies. Okay, steak. Once you, when you buy a steak and you eat it, do you feel.

Like you just threw your money away on that steak?

No, I enjoyed it. But it's, where is it? I don't see it. Where's my investment?

Right.

In fact, isn't it coming out in the toilet in a couple hours? It is, yeah. So what are we talking about here? You get value out of a steak. just like you get value out of renting. Now, if you want to incidentally build equity, that's great. But remember, you can also lose equity. Right now in Manhattan, do you know rents are down? Yes. And so are prices of houses if you want to buy. They're going down every month. Wow. A lot of people like, oh my God, it's so expensive. Sometimes, but sometimes it goes down 5%, 10%. Some of these neighborhoods are down 15%.

Yeah.

So a lot of people don't realize. In fact, I did a survey of my readers. I said, Do you think it's possible for real estate to decrease? Over half of people said no. They had never even thought about it. So I wanted to-- Remember 2008, 2009?

Memories are short.

You would think they would remember, but they don't. I heard people, dude, they had three houses. They bought it. They were destroyed financially. Their credit was ruined. They had to give up these houses and their identity as an investor. And three years later, they're like, I think I want to buy another couple houses. Wow. It just goes to show I'm not saying they're stupid, it's not that at all because a lot of people have gone through this. It's the idea that the propaganda to buy a house or to follow a prescribed set of rules for the American Dream is so powerful that even losing your own houses doesn't change people's perspective.

So how do you teach people to overcome the emotional rationalization of blowing their money on rent?

Okay. It's funny.

Besides that story you just told which helps me.

I'll tell you what. I want to acknowledge that it's real because-- It's a fear that people live with. Yeah, and I'll give you an example. Like I call it the handshake effect. And it's when people would come over to my apartment and for the first time and they would say, Wow, this is an amazing view. And then they always say the same thing in New York. Do you own this place? And we're like shaking hands, right? It's like we just met. How much you pay on this? Yeah, how much you pay? It's classic New York. And I say, no, I rent. And it's that moment where if I had said I bought, they would be like this.

Wow.

Pretty impressive.

Really cool. Yeah. And you kind of get this, this pride. And then I, and then when I don't say that, they get really confused because this is the I will teach you to be rich guy. But also he rents. And I thought renting is for people who can't afford it, but I, you know, they don't understand. And they give me this look. And I realized that so many of us are looking for somebody to approve of us while we are shaking their hands, someone we don't even know. Wow. And so instead of getting your approval from somebody you just met 10 minutes ago or from your parents who probably are not the most sophisticated investors, if you're watching this show, you know, you talk about greatness and being great means choosing your own path. Sometimes you might choose to buy. I have no problem with that. If you ran the numbers and you consciously decided, sometimes it means you don't. But if you want to live the life of greatness, you need to be comfortable making different choices than what other people expect.

Mmm. Zing. I like it, man. Do you have like a spreadsheet? I'm just curious about how the way you think about your money. Do you have a spreadsheet or some type of system where you're kind of have all these things logically mapped out where you know exactly where all your money is going and where you want to put it in five or ten years? Yeah.

In fact, it's even more It's like scientific. It's like, yeah, it's like minority report. Like I wake up and I just go, yeah, yeah, no, this is what I did. So my money dial is convenience. Okay? So as I became more advanced, I realized it was time to put on a new lens. And I think this is really important for people. Many people, when they're starting out, they think that growth is linear. That basically, you know, I'm dribbling the ball. I'm gonna use the sports analogy. And I'm on thin ice because I don't know anything about sports. You know, I dribble ten times a minute and as I get faster, I'm gonna dribble 20 times a minute. Okay, this is a horrible analogy, but just go with me. At a certain point, you're not just counting the number of dribbles. You're actually counting ball handling, you're counting whatever else you're doing. With money, it's the same. You're not just creating a more sophisticated spreadsheet as you grow. You're actually changing the way you think about money. So I'll tell you what you're changing. You're reinventing. You're not even using a spreadsheet. So I'll tell you what I did. I started off doing everything myself, and that's what's in this book. It shows you exactly how to go from, I don't even know where my money's going, or I have 5,000 bucks sitting in my savings account, to everything is running automatically and I spend less than 60 minutes a month on my investing. That's in the book. But what happens when you get to the next level? I'll tell you what I did. I realized that it wasn't a good use of my time to be manually tracking anything, even for 60 minutes a month, because things had become complex. I had multiple investments. I have a business.

Different accounts, everything, yeah.

All that. So I found what I call a personal CFO, and what I did was I worked with them and I said, here is exactly what I invest in. Here are my core values. Here's how I want you to deliver me information once a month. So they created a basically a dossier they hand to me every month. and it's in the format that I want. Why? Because I'm the boss and they're working for me. So it shows me a couple of core things. What's my net worth? What were any spending areas that I need to be aware of? I typically have two spending areas that I track that are more variable. Like sometimes I'll go out and buy more clothes. That's a variable area for me. I said, Look, I love Kashmir. What am I gonna do? Okay, and then another one I think is, Mm-. Or travel. Aside from that, all my expenses are very stable. Like I spend the same amount on stuff. I've had the same apartment for 10 years. Like I'm not going crazy. I'd rather save my money and invest it and spend a little on the stuff I love. We talk for 15 minutes each month and if anything needs to be changed, they handle it. So for a lot of people, the next step is not necessarily just doing what you're doing, but better. It's actually a whole different way of looking at the problem.

Where does someone find a personal... What is it?

A personal CFO?

CFO.

For a lot of people, the basic thing you can do to start with is to get a bookkeeper. And you know, we have this advanced personal finance course and we talk about how to find them. A bookkeeper is a good thing to start with if you've got a business or if you've got you know, a few hundred thousand dollars a year coming in and you've just got a number of accounts and maybe you have kids and stuff like that. Okay, they can help you organize things. as you get more sophisticated, a personal CFO, which can be part-time or if you're really sophisticated, it can be full-time, they can help you do more sophisticated things. And they pair, they work directly with your accountant, your bookkeeper, all kinds of stuff.

Got it.

Okay.

Interesting. Just go on Craigslist and look.

Yeah, you can do that. And the best place you do it is honestly you ask your friends. Your friends who have sophisticated net worths.

Ask them what they're doing.

Ask them.

Before we get into the strategy for those who are making $150,000 a year and less on how they can really optimize everything, I'm curious, who are the high earners that you talk to for advice privately behind the scenes in the special secret rooms on the private jets? Who are those mega earners that you learn from?

I have a CEO group, a CEO council that I belong to. And we're really candid with each other about where we spend our money. Some of them are married, some of them are divorced. How does that play in relationships, all kinds of stuff. So that's one. It's like a-- Is it like a.

New York group or is it all over the world?

Yeah, it's distributed. We're all over the place.

Talk online, you meet in person.

Both. We meet in person twice a year and we talk on the phone about once every month and a half. And I think that's important for everyone. listening and watching which is have a group of folks that are ambitious and that want to succeed. What's interesting is these guys aren't in my field at all. I actually prefer that. We're not talking about online stuff. That's not the point. We're talking about culture, we're talking about life, we're talking about relationships. I think that's great. I also have a lot of entrepreneurial friends who will share stuff just off the cuff, we're hanging out, and then finally my audience, like a million readers a month, and they're emailing me the craziest stories.

Really?

They're telling me everything. People are, they crave talking about what's going on with money because no one else will. And so I hear the best stories from my readers and that's what I get to kind of bring to everyone else.

Why is it hard for us to talk about money? Why is it scary? Why don't we talk about it enough with our friends or family? Why is that?

There's one great study showing people would rather talk about their sex lives than their amount of credit card debt. I think that's totally true.

It's true.

100%. And think about what money means. It means that you were successful in this culture. And I am here, you know, people know me as the I will teach you to be rich guy. And I have always said money is an important but small part of living a rich life. Just because you make more or less doesn't mean we're better friends. Not at all. It has nothing to do with that. But it is important for people to be in control of their money, whether they're making $15 an hour or $15,000 an hour. And there are people I know who make that. So that just simply shows are you in control of your life at whatever level you are. It's embarrassing for people. They're never taught this. And then suddenly they graduate and they're supposed to know what tax withholding is and what a 529 and 401k and all this crazy stuff is. Nobody taught it to him. So my goal here, the reason I'm talking about this is for people to feel more confident about their money, for them to take control, and for them to stop being afraid and listening to random people giving them advice. 'Cause I feel like it's hard when.

You'Re making 150,000 or less, it's hard to talk about it and feel comfortable talking about it with your peers who are in the same category 'cause everyone kind of feels embarrassed.

I know I felt that way.

For sure. And if you stay in that space, it's gonna be hard to get past it.

Yeah.

So what's the conversation starter that someone who's making 150K or less or very little, what's the conversation starter they can have with a peer or a family member or a parent or a friend or a co-worker that's not gonna throw someone off, but that's going to activate the conversation about money.

Okay, having the conversation, if you, most people don't want to. Most people don't want to and that's okay. If you simply want to improve your own money, do that and you'll become a role model to other people. And I think that's probably the most effective way. But if you do want to have a conversation, you know what I would do honestly, not to plug my own thing, get my book, get somebody else's book, it doesn't matter. Get a book and say, hey, I realize I need to learn about money.

Read any book about money.

Any book, yeah. Okay, and does anybody here want to join me and let's do a little book club.

Ooh.

So suddenly it's not, it's not you and me talking about our money, which really reflects our value in this society. Okay? I use value in quotes. It's, let's talk about this book, which is a third party in this dynamic. And we can say, I agree with this guy. I disagree. I I really like how.

Let's try this.

Let's try this. And, like, let's see. So suddenly it becomes an experiment as opposed to. you're worth X or my value is Y. And that's really something you can work on together.

I like that. Yeah. Bring something else into it to the mix. Okay, let's talk about the 150,000 a year and under people. They've been, you know, working hard jobs. They've been trying to save their money, but it just seems like they haven't been able to get past whatever it is, 50 grand a year, 100 grand a year, 150k. They've been kind of stuck or they've crossed 100 grand a year and more problems have come to them. because they're making more and spending more. And they feel more broke than ever because they have no clue what they're doing with their finances still. It's the end of the year. They're about to start a new year soon and they feel overwhelmed or just clueless still about and educated about their money and what their options are for just being having peace of mind, structure, organization, and knowing that they don't have to stress about it and they can go earn more and it's going to pay off for them. What's a few simple things that they should be doing right now to have a checklist to do before the end of the year to then crush for a whole 12 months moving forward?

All right. I'm going to give you something called the Ladder of Personal Finance, which tells you where your money should go. Okay, this is just step by step. Put your money here. And if you want to know all the details about it, you can check out the system.

It's in the book too.

It's in great detail in the book. Got it. Alright. So, if you've got some money lying around, what should you do with it? First of all, if you've got a 401k match at work, you should max that out. That's free money. Take advantage of it. And if you're not sure what that means, go to your HR person and say, does this company match any 401k contributions? If they say yes, do what I said. Next, if you've got debt, pay it off. Pay it off aggressively. You know what's interesting is that most people in debt who I talk to don't actually know how much they owe. And that's shocking. You would think, of course they would know. No, they don't. Because who wants to stare at their debt all day? Yeah, and just feel bad about it. But you know what? You feel much better when you have a plan. And the number one question I ask folks when they tell me they have debt, I say, number one, do you know how much you owe? They never do. Number two, for the rare people who say, you know, 15,000 or 70,000, whatever, I say, what is your debt payoff date? You can actually plug it in, you can plug in a debt payoff calculator online, you can map it all out, and you will be able to know the exact month your debt will be paid off. Based on how much you're spending right now. Based on how much you're contributing to that debt payoff. Now, you'll be able to see that if you add an extra 50 bucks a month or 100 bucks a month, that thing will actually oftentimes shorten by years because of the interest. It doesn't matter if it's gonna take you three months, or four years to pay off your debt. It doesn't matter to me. What matters is that you know the date. Okay? So, that's number 2, pay off any debt you've got. 3, if you've got money left over, go to your Roth IRA. And if you can, max that out. That's a great tax-advantaged account. It grows tax-deferred, is that right? Yeah. Okay.

So, that's 3?

That's 3, okay? It's actually post-tax money. And then 4, if you still got money, you're gonna go back to your 401, which is another tax advantaged account. You're gonna max that out. If you still got money, you're gonna create a non-taxable non-retirement account and just put your money in there. Now, there's a few other wrinkles to this. There's HSAs available. There's also your emergency fund that's talked about in the book and all these things are details. But that just shows you when you've got money, this is where you go. There's a structured way of thinking about it.

A ladder towards financial success.

Exactly. And if you follow the steps, it's almost like a waterfall. It just goes from step one to step two to step three, and your money's going where it needs to go automatically, and you will feel great. You'll feel great, which is so important. And also, you're gonna look at your accounts and see debts going down, investment and savings are going up. And all of a sudden, you wake up six months from now, and you're like, oh my God, I didn't realize I have that much saved in my savings account. That's because of the decision you made today.

Let's say you're, you know, working a job, making decent money, but you're not really breaking through and you're struggling to earn more to get out of that 50K a year type of range, maybe around there. And all your friends are making the same amount. All your peers are in the same boat and everyone's stressed about money. And you hear someone say, well, you know, you may earn the average of the five people you spend the most time with.

Yeah.

Should they cut all those five friends out of their life? Because like, well, My peers are holding me back if they're having those negative conversations or how can they start to level up without cutting people out of their lives? Yeah, I never encourage anyone to cut.

Off their friends and I think that's a common misconception that you have to close all the doors to your friends. Look, I've got friends from high school, junior high that I still hang out with and I'm not judging them based on their bank account. I don't even know how much they make or how much they're worth. That's not why I'm friends. but the average of the five people you're surrounded with, that is a very powerful idea. And instead of closing the door on the people you hang out with, why not open the door to some new people? Why not find people who go to your conference, for example, or who are on my site, people who are ambitious, who have gone through these programs and say, you know what, can we set up a weekly check-in? It could be five minutes, it could be over text, but let's set up this check-in and just say, what'd you want to do last week? Did you execute? Why or why not? Every week, 9 a.m., Monday, let's do it. That's how you suddenly meet a group of people who are unapologetically ambitious. And that will change everything for you because instead of having to drag people to these self-development conferences and they say, that's weird, I don't want to do it, the people you actively seek out are gonna be like, yeah, I'm in, let's do it.

Let's do it. And that's powerful. Yeah, so find new communities that you can have these conversations with. Yeah. And don't cut everyone out of your life, but just start having those conversations with people that are more aggressive.

Yeah, like, do you know what I told people to do on my Instagram account? So I told people, it's important to find other people who support you. A lot of you are waiting around for some, like, millionaire to fall out from the sky and invite you to their private group. It's never gonna happen. Never. Instead, why don't you start it yourself? And I said, go into my comments, write who you're looking for, and then invite someone to join you. You don't need to wait. No one's coming to rescue you. It's not a Disney movie. Nobody's coming.

It's only you.

You. So take control and go find someone and then build that together.

I like that.

Cody working on the cameras here asked a really good question. Does my opinion on investing in real estate change if you live in the Midwest? And I think the answer is yeah, it can. The calculus on buying a house in the Midwest is different than cities like Manhattan, San Francisco and LA. So again, the message here is not Don't ever buy a house, but it's run the numbers to make sure that you're making the right financial decision.

Because in Columbus, Ohio, you can buy a house for 200 grand.

Yeah.

And a nice one. There you go. It may be better to do that just to have the peace of mind.

Of your own space or whatever it may be. Yeah. So another question from Cody here, great one. What is my opinion on Dave Ramsey's concept of the debt snowball? So I think Dave Ramsey is really good for people who are in debt. That's not really the folks that I speak to that often, but I think he does a great job with them. And what he talks about is the debt snowball is encouraging people to pay off their highest balance first, right? Their highest balance. So if you have four different credit cards, you're paying off the one with the highest balance, whereas the mathematically correct answer is to pay off the credit card with the highest interest rate. So he's actually taking advantage of a peculiar quirk of human psychology which is that we want to see a win. We want to get a win. And it doesn't matter if we're paying a little extra in interest, once you get that first credit card paid off, you're going to want to do the next one and it's going to snowball. I happen to think it's actually really smart. And one of the reasons that I think my book has done well is that it factors in human psychology. So I'm not telling you in the book, don't spend money on lattes. In fact, I want you to spend as much money as you want on lattes. I'm gonna get one right after this. Exactly. Get your credit right, negotiate your salary, get a good job, automate your money. You could buy 10,000 lattes, it doesn't make any difference at all. And so whether it's the debt snowball or whether it's earning more, whether it's automating your money, you want to make.

Sure that this advice is something you're actually gonna follow. And that means you need to bake in psychology. Yeah, I love it. And if you guys wanna learn more about how to earn more, about how to negotiate, whether it be rates or other different things, and other things that Ramit talks about, then post an Instagram story right now and tag @lewis howse and @ramit and say, Yes, I want more of this. And we'll do a follow-up interview sometime in the future talking about how to earn more, how to build a side hustle, how to do all those different things and negotiate rates better as well. So post that in Instagram stories right now at Ramit and Lewis howse and let us know and connect with us. Final thoughts, man. What's your definition of greatness?

My definition of greatness is deciding what kind of life I want to lead and then creating it unapologetically, even if it means making different choices than other people.

That's good. That's good.

What's yours?

Greatness is discovering the unique gifts and talents within in you, pursuing your dreams and using those gifts and making an impact on the maximum number of people in that pursuit. -Love it. -Wow. -That's mine. -Powerful. Did I ask you your three truths before? I'm not sure if I asked you this on the last time you were on, but I'm going to ask you again. -Okay. -If you could only share three lessons with the world, you've got all these books and programs and courses on so many different things, but if you had to take all that with you and no one had access to it, anymore. You can only write down three lessons or principles or truths. And this is all the world would have of your information left in physical form. What would be your three truths?

Man, you're putting me on the spot here.

I know.

No prep.

No prep.

Okay, I like it.

Three principles or truths for the world on anything, life, anything.

Wow. Okay, my first one would be You can create a rich life through planning and unconventional choices. My next one would be that you've got something to say and the world needs to hear it. And the third one would be you could probably eat spicier food than you think. I guarantee that.

I've had some spicy food with you. That's good, man. Well, I acknowledge you, man. I appreciate our friendship. I've known you for what, eight, nine years?

Yeah, long time.

It's been such a fun journey and I'm excited for all the many fun times ahead. But again, I would not be debt free as fast as I was without your book. So again, I appreciate you as always. I always talk about this. Make sure you guys get a copy. I will teach you to be rich. Powerful game plan if you guys are looking to get out of debt. But also a lot of the things that we didn't cover are in here. So check it out. Tag us on Instagram @remeetlewishouse. Thanks again, man. Appreciate you. It was awesome. Appreciate you. If you enjoyed that interview, then I know you'll love what we have coming up right now. What are you talking about these myths of millionaires? About millionaires? What are some of the myths that surround millionaires?

Well, we talk about six in the book, but I'll tell you two. Most people believe they inherited it all, right? You see somebody with money, you think, oh, mom or dad handed it to them. The truth is, 79% of the millionaires that I talked to, first generation wealth builders. They didn't come from anything. These are people that focused and built money over time. Next myth, well, if you're a millionaire, you make a high paying job, right? You got big income.

Yeah, yeah.

Nope. A third of the millionaires that we talked to never made six figures in a single working year.

Really?

Think about that for a second. Dual income never made six figures. So that blows that myth out of the water. A third of the millionaires that we talked to.

Wow. Right.

Now you think about six figures nowadays, it's more prevalent than it's ever been.

But for people, a lot of people.

With six-figure salaries have nothing in the bank.

Thank you.

Because they just spend it all.

That's exactly right.

And they're using credit constantly to buy bigger things. That's right. No, no, you're absolutely right. So what happens is, is people tend to think that income is so important. And I'll tell you, no, it's not. Because I was one of those people. I remember I was making about 30 grand. And I thought, all right, when I get serious, one year out of grad school making 30, 40 grand, I said, all right, when I make this amount, I'll start to get serious about my money. Well, you know that path, right? Well, when I make this amount, the next thing you know, lifestyle grows and you never end up taking control. But these are regular, everyday people that took control and were focused. It was amazing. So let me tell you this. Top three positions of the 10,000 millionaires we studied. Number one was engineer, which doesn't surprise you, right? They're good at planning.

Yeah.

Accountants. Organized. Yeah, accountants, same thing. They were number two. They're good at counting stuff.

Number three was teachers. Teachers.

They're not making that much. Exactly. And you think they're undervalued, underpaid. How are teachers doing this? Well, if you think about what it is, wealth building is a long-term view, right? Not a quick hit. And so these get rich quick schemes that we see on TV at late night, they get me riled up because they're preying on people. But these these people were people that built wealth over time, investing in their 401k, their 403Bs. So anyway, the goal of this book is to let people know their American dream is not dead. It's alive and it's well, and it's available to people.

We just have to take action. Absolutely. What are some of the things that they do on a daily basis, these millionaires? What are some of the steps to take?

And how do they think differently than non-millionaires? Great. 97% of the millionaires that we studied feel that they control their own destiny. Now think about that for a minute, because we have a victim mentality issue in America today, where we want to blame somebody for us not achieving something or getting in our way. So these millionaires think differently. 94% of them live on less than they make. So that means if they're making $100,000, they're living on $70 or $80, right?

You can't build wealth if you live on more than you make.

That's exactly right. And that's where the credit cards people start extending themselves and using credit cards, but 73% of these millionaires never carried a dime of credit card debt.

They never carried debt.

Debt.

Yeah. Right.

You might use a card, pay it off every month. Pay it off. And so the mindset, and I love to give people an economics and a PhD in economics. Interest that you pay is a penalty, right? If I use someone else's money, they charge me. Yes. Right. That's a penalty. Interest that I earn on my investments is a reward, right? So why choose to penalize yourself? Don't use debt. Get yourself out of debt and invest and grow your money to reward yourself.

Yeah.

Powerful. Yeah.

Now, how have you managed to, through all this stuff you've gone through, I'm assuming the last 15-20 years you've gone through some challenges. You told me before off camera that you have a child who has special needs and was told that they wouldn't live past a certain age. I'm assuming you've had challenges with relationships, with business partnerships, intimate relationships, family. The more wealth that I've accumulated and the attention that I've gained, there's more people with handouts expecting whatever it may be. How have you personally managed the emotional challenges that have come your way by not letting it affect your mindset around money so that you don't do things emotionally with your money? Right.

Well, I mean, I've been there. I don't know about you, but I made some mistakes.

Yeah.

Okay. And, you know, a mistake that you make one or two times, you can call it a mistake, but when you keep doing it over and over, it's not a mistake anymore. It's called a choice. Yeah. So for me, I'm very, I'm a man of faith, so obviously I'm rooted there, but I got good people around me. Yeah. I got good friends, people that have known me since my childhood, people that know me for who I am. So I'm not an author and speaker. Bigger with these people. I'm just Chris. And so those people keep me rooted, right? Mama Hogan is no joke either, okay? She'll keep me rooted. And so I think it's really important to understand what am I trying to accomplish? Like, I don't want notoriety, and I don't want to be famous. I want to be known that I help people think bigger, right? And so staying rooted in that, it helps me to be very, very clear on what I'm doing. People will come up and tell me, oh, Chris, you changed my life financially. And I go, oh, whoa, -uh-. Pump the brakes. I didn't change anything. I gave you some information. You did the changing. And so I think it's really important as, as, as we help people that we stay aware of who's doing what and our role.

Yeah, I think there's a, there's a story about Marcus Aurelius where he would go around the town and he had someone just walk with him beside him and say, you're just a man.

I remember that.

Every time someone would praise him, be like, Just a man.

Can you imagine that? I mean seriously, isn't that cool? How rooted does that keep you? You know, so, you know, John Wooden's got a quote. He says, you know, be careful of fame because fame is man-made. And if man giveth, man can take it away. You know, and so being aware of that, I think is really, really important. What's the heart behind what I'm trying to do? And so, you know, if I travel and I go speak to 10,000 people, if I get one person who's out eyes light up and they start thinking differently, then I've done my mission.

Yeah. Yeah.

What's the biggest challenge you've gone through in the last 15 years? Oh, personally, emotionally, financially.

Biggest challenge was definitely the diagnosis of my youngest son, case. At age two, they diagnosed him with this rare genetic disorder that could kill him. It could take away his speech, take away the ability to walk, ability to eat. and eventually end up on a feeding tube. This is the scariest moment of my life, sitting in that doctor's office holding that two-year-old boy, listening to that, and went to some dark places over a few years.

Really?

Well, you know what us men do when we have challenges? We don't, we're not as smart as women. Women go share.

Yeah, we don't share.

Men don't share. We isolate.

Yeah.

And then we internalize. And then we stuff. Right? And so you can imagine working through something like that isolate.

Carry.

It messes with you.

It does.

It messes with you. And that was the biggest challenge I've walked through in the last 15 years.

How did you get through that initial few years of stuffing or...

I just stuffed. You know, I didn't do what I should have done. Isn't it amazing how hindsight's 2020. I wish I would have sought out those close friends and they would check on me. And what what would I say? I'm good, I'm fine, I'm all right, and I wouldn't. And so that was a learning lesson for me that isolating is dangerous, that it's good to reach out and get help. It's good to have people you can be real with. And I came to this realization, we need four people in our lives. You need a mentor, this is somebody that's having some success and can guide you. You need a coach who will push you, right? You and I know word coach means something to us.

Right?

Because they will get on you, they will drive you, because what's the goal to try to help you to get better? But you need two more. You need a cheerleader. You need somebody that believes in you. They're not worried about what you achieve. They believe in you. And that's important to have. And then you need a friend. You need somebody you can be real with, that you can just say what's on your head, they're not holding it against you. You can be honest. So if you get a mentor, a coach, a cheerleader, and a friend in your side, that's awesome. But I want to encourage people to do this. Not only find those four, you need to be one of those four for someone else. You need to be four of those things.

That we're saying you need to be a mentor. Yes. You need to be a coach.

Yes.

A friend.

Yes. And a cheerleader. Absolutely. For someone else. For somebody. And when you do that, now what it does is it takes the focus off of you. You know, one of the things you and I have in common is I firmly believe that if you've ever walked through a mess in your life, that it qualifies you to be a messenger. It does. You know, when you've gone through some stuff, you learn. That's right. And if you're willing enough to be transparent to share it, and you're not worried about people's opinions, the impact you can have on someone else to give them the courage to try or to reach out and talk, that's a big deal, man. This life is hard. It's not meant to be done alone. Yeah. Wow.

Who is your mentor, coach, cheerleader and friend?

Oh, yeah. Well, mentor is obviously Dave Ramsey.

Yeah.

This man has has been an incredible mentor for me, just guiding me. And then over the 13 years of being with him, my coaches, man, I've got a lot. I've got some people with walking with me spiritually. I've got people that are walking me from a business perspective. I'm constantly reaching out to learn. I'm like a sponge all the time. That's big. Cheerleader, Mama Hogan. I mean, that's my number one fan right there. She's behind me. I've got all kinds to family, uncles and everybody. They're just for me. Friends, I got amazing friends, childhood friends, people at the office, people that care about me as an individual, not just what I do. They know me. No, no, no. They'll call me out. Yeah, yeah. You know, they'll call me out. I got a call from a buddy the other day. He goes, dude, how's the road? He goes, you keeping your head clear?

Yeah.

You stay in focus. And he said, don't believe the hype. That's right. And so what he's telling me is, is, hey, keep helping people. keep your heart in the right place, you know? And so it's good to have those accountability people to check in with you. It just keeps your heart in the right place. Yeah.

What would you say is your biggest insecurity, fear, or challenge right now? You've been through different phases of your life and as you grow and expand, I'm assuming there's new challenges that you overcome and then new stuff that maybe you haven't overcome yet.

Right.

I think my biggest fear is, am I doing everything that I could be doing, right? I've got three boys. They're hilarious. 14, 13, and 11. And these boys are my legacy. I grew up with a single mom, so my dad wasn't around. He came around with birthdays and holidays or whatever, but he wasn't there. So when I had started getting ready to have kids, my goal was to try to be the dad that I wish I would have had. And so, that puts some weight on you, right? But I was hanging out with my boys and we were somewhere and I saw a poster of a little boy at a bus stop with a duffel bag, right? And he was just sitting at a bus stop and I can't even remember what was under it. But I saw that little boy and I thought of me, right? Like waiting. And then I realized, man, oh man, in my own life, like, you know, somebody somewhere is waiting on me to become what I was destined to be. So if they're waiting on me to become who I was supposed to be to impact their life, how long am I gonna make them wait? You know? And so what that means is that I need to do everything I'm capable of doing and some things some people say I can't do just to be able to help that person somewhere that's waiting to hear an encouraging word or something to impact their life. So that's something that drives me every day. Yeah.

Yeah.

What is it that people say you can't do? Oh man, I've had people tell me.

I couldn't write a book. You know, my first book came out 2016, Retire Inspired. I told a good buddy of mine, I told him I was working on a book. He goes, Man, you can't write a book. Really? Yeah, we were in church, right? I wanted to punch him in the eye. You can't hit people in church. I got a feeling that's a sin, right? Somewhere. But then later on, when I finished the book and at the book signing in town, He was one of the people there. And I realized something. What initially he said was that I can't write a book. What he was saying was, it's not something he's ever thought about doing, and it's not something that he could do. It's his belief. That was him, right? And so for me, that was a grow up moment. He wasn't putting a limitation on me. He was speaking his own limitation.

Wow.

Right?

And so I just remember that and I go, oh no, limitations. And so that's where I said, I'll accept compliments from anyone. But I ain't accepting limitations from nobody, right? And that's anywhere in my life. You don't get to put a limit on me. That's what I love about, you know, Dr. Martin Luther King. The fact that he had the courage to have a dream, but the courage to share it, you know, that's something I want us all to have that mindset of. Stop thinking about what people say you can't do, you know? I mean, opinions are like yesterday's, everybody's got 'em.

What are you deciding in your heart to go do? Now start to go do that.

Yeah.

Yeah.

Wow, man. So what do you do now in terms of your own wealth? How are you... You've probably learned a lot again over the last 20 years from the banking world, selling services, you learned a certain amount to get to one level, and then you realize like, oh, some things work well and some things don't work well. And then you go back to another.

Level of your wealth.

And then you realize, okay, now I've got more wealth, some things work and some things don't work. And you keep, I'm assuming, expanding. I'm building my wealth, I realize, wow.

There'S always something to learn. That's exactly right.

There's always stuff. Now there's taxes, now I've got to learn how to invest my money. Now I've got to learn what's the right places and all these things.

So what's the phase you're at right now and what are the biggest lessons you've learned in the last couple of years? Okay, so the phase I'm at right now is obviously continued growth, right? Because with inflation, costs are gonna go up. So you can't hide money in a cookie jar and just put it in the ground. It's got to grow. So with me, I'm always looking, but I'm understanding risk. risk more. You know, this, these latest crazes that come out, I just cringe, you know, cryptocurrency, right? Bitcoin.

Yeah.

Right. Now, there's this thing out there, it's not even real, that's been given a value by somebody that's not regulated. Yeah.

Right.

And so when you look at this, you would laugh at that. But we've had people seriously pursue that. Day trading years ago was a big thing. So for me, what I'm doing is I'm trying to smart with what I do, but I need to be crystal clear on what not to do. Meaning I don't, I don't want to take unnecessary risks.

What are the things that are non-negotiable you won't do?

I'm not doing debt. I am not doing debt. So what's that mean for people? That means I don't borrow money. I'm not looking to borrow money, to leverage, borrowing money from my home to put invest, no leverage schemes. I don't borrow at all. and I'm crystal clear on what it is I'm doing, meaning the longer range view. Louis, what I started doing years ago was I started making two-year decisions. I wanted to make a decision today that I look back on in two years and I'm glad that I made it. Now imagine some of those decisions. Oh gosh, well I mean staying allergic to debt. I mean I have people come to me all the time with business opportunities. They're like, Hogan, listen, if you put in this amount, we're gonna do boom, boom, boom, boom, you know, and in looking at that, I have to smart enough to say no, right? That if it looks too good to be true, we know it is, right? But I think it's more about making the, I think I've made more money by not doing things than I would have by going down a path.

And did you invest in certain things early on where you're like, yeah, that seems like fun and interesting, and you're.

Like, I've never got money. Oh yeah, no, I learned my lesson.

I've invested, I think, eight startups over the last eight years, and guess how much money I've made.

How much, Louis?

Zero.

How much did you invest? Give me a ballpark.

Probably allowed 250 to 300 grand.

Okay, okay. That's not as bad.

I wasn't going like big on it. I was like, let me just dabble. Let me just get in the game, play with it. It's okay if I lose it.

I'm in the mindset, like, I'm gambling. Right. Well, and that's exactly what I did.

And you know what?

You paid a dollar amount, but you learned some stuff. I learned some stuff. You know what you're not gonna do ever again. Exactly. To me, that's valuable because obviously as things grow and profiles grow, the risks grow, you know, the bigger things come. So I just want people to take, that's why my website's ChrisHogan360.com, I want people to take a 360 degree look at a lot of the things they're doing, their business, their life. Like look at this and make decisions about what you want. Like I'm crystal clear on what I want, but I'm absolutely certain of what I don't want. I don't want failure. I don't want negative attitudes around me, right? I want to make sure that I'm impacting people.

Yeah.

That's powerful.

One of the things that you, so you don't borrow debt. Nope. And so what's that mean? It says you can't start something unless you use sweat equity, unless you have the money. Pay cash.

Pay cash. Pay cash. So that means for real estate, right? If there's a property that I want to buy, I don't go to a bank. You don't get a loan out. Nope. I save up.

And pay.

Now, what does that make me do? It makes me have patience. That means I'm not letting everything you want now. That's exact. Well, and that's, you have kids yet?

No kids.

Okay, so oh, you got freedom and money. Okay, all right. I'm sending one of my boys to live with you. But kids want what they want and they want it now. Yes, you did.

Right?

Give it to me now. And so if as adults we do that, that's dangerous. That's why the average credit card debt right now is 15 grand. People have 45,000 in student loans, car payments of $600 or more a month. So for me, I look at debt as a thing that limits me from doing what I want to do, not getting me there faster. Now I'm old school and I did my stupid. I did single stocks. I did all those things and I lost a lot of money. But looking at it, what I was trying to do was to get rich instead of building wealth, right? And there's a difference. Between getting rich and building wealth. That's right. What's the difference between getting rich Getting rich is where you wanna quickly get money, right? And these are the lottery winners that I've talked to. They got money in really, really quick, but they also lost it really, really quick. So building wealth is a long-term view, meaning you can have some fun and enjoy some stuff, but don't get so focused in the enjoying that you forget to plan for the future, right? What's the YOLO? That's the hipster phrase. You only live once. Well, in my mind, if you have that mentality and you believe that, for a long time. That's right, because you're doing everything for today. So anyway, I want people to have just awareness. Like you can have some fun today, but let's also make sure we're doing some things using the 401ks, using Seps if you're self-employed, put some money aside so we can start to grow for you. Talking to these millionaires, the number one thing they said that caused them to build wealth was employer-sponsored retirement plans, 401ks, 403Bs and Roth IRAs. So people out there that are self-employed, the accepts solo 401ks. You've got ways to be able to invest. And that's what I want people to do. And so wealth building is a long-term view. Getting rich is a quick hit. I don't want a quick hit.

Yeah. What else can you do to invest your money besides, say you max out all your IRAs and everything. What else can, what else do you personally do or advise people to do to, to invest?

Well, you can also, people typically think, okay, well, I can only invest in my 401k, right? no, you can invest outside of retirement plans for the future. For example, I talked in my book, Retire Inspired, I talked about I want to retire by age 54, right? And so, you know, and looking at that. And so what does that mean? Because a lot of people think retirement's an age, right? Like at age 65, I can retire and I go, well, the government's not going to take care of you, right? The average Social Security payouts around 13,000. Can you really live a dream on 1300 a month? 1300 a month. 13,000 a year. or 1300 a month. Now it depends on what you pay into it, but people were thinking the government was just going to take care of them. And you and I know better. And so I wanted people to wake up and look at that. So the mindset around investing is to grow your money. Time and compound interest help you grow money. Put some aside each and every month and be consistent. You can still have fun and do some stuff, but just don't go all in. Yeah.

What else are you investing in personally?

Oh, I mean, right now for me, I do growth stock mutual funds. which essentially what that is, is instead of going in a single stock, which is going all in on one thing, growth stock mutual funds allow me to invest in multiple different things. So I'm Diversified. And all diversification is a spreading out stuff. I don't want to put all my eggs in one basket.

Right.

So gross stock mutual funds are a big deal for me. Real estate with cash is a big deal for me. So you gotta wait a while.

So I get real estate then.

Oh, yes. Save your money, and then you put it down.

That's right. you see, you're about 100% down in cash.

100% down. 100% down if I'm looking to invest, right? So you're right, it is slower, but guess what? There's no risk. For example, you pay cash for it and you have it with the economy 2008 goes down or goes up. If I'm renting it, I need to have good renters. You don't lose it. I don't have a payment I'm making every month. What I don't want are people in control of me, right? I don't want people, I don't want to have to go work to chase money. I want to work to impact people. And if I'm working to impact people and I don't have debt in my life, then what I have to make is really small. Utilities, food, right? It changes things. And so, I mean, imagine the world we'd have if we had people that were out of debt and they were able to do the things they believed in.

Be incredible.

Oh, I mean, there's not a charity out there that would be underfunded, right? Single moms, big brothers, big sisters, any of these things out there. they would have the money to do what's needed. So I want America to wake up and look at it, learn how to count. They taught me in kindergarten, one plus one equals two, right? When you get older and you start to factor in debt, they try to tell you one plus one equals three, right? And so what we have to do is go back to basics. Remember how to count and stay true to yourself.

Wow. What do you think is going to be the biggest challenge for people right now, this time in our time, Getting out of debt because we are in the gratification now. Yeah, I want everything. I see everyone else on social media posting all this, the cool stuff they're doing. How hard is it gonna be for people to change their mindset to say, I have to slow down?

It's gonna be a big...

I don't compare myself to that.

That's right. Well, you hit on a couple of things there. Yeah, it's gonna be a big undertaking. Because we're the most marketed to country on the planet, right? We have media messaging constant Right? And we have this appetite for debt. We've got $1.5 trillion in student loan debt. $1 trillion in credit card debt. 500 billion in car loan debt. Like think about this. 500 billion. This past holiday season, people spent $859 billion in debt for the holiday season. That's credit card.

Yeah. No way.

Yeah. So now this time of year is where people are opening it up and they're starting to wake up So I think people need to understand that debt keeps you hostage. It's a thief. It steals from you. It takes from you now, but it also prevents you from investing and growing it later. And so if you get student loan.

Debt, let's say you have 100 grand a student loan debt, and you paid over 20, 30 years, you're paying 200 grand back, right? Oh, you're paying double. It's not 100 grand.

Because we talked about an interest that you pay is a penalty. Yeah, that's right. So I'm wanting people to wake up and look at it, you know, and I'm telling you, people are doing it. I had a couple that was at the book signing here when I was in LA and they told me they paid off $200,000 in student loan debt, right, over six years, 200,000. And I said, what'd you do? They were like, oh, we cut back lifestyle. Yeah, they go out to eat once a week, right? They got serious. They stayed in an apartment instead of going out and buying a home. and they said our goal was to get that out of our lives. And I said, you know what you did? When you got out of debt, you gave yourself a raise because now that money doesn't have to leave you every month. It can stay with you. So I think people are waking up to it and they're seeing it and I'm just out trying to spread the message.

How do we get people to become allergic to debt? Because that's what you do. I do. So how do we get people to think that way when they're so conditioned their whole life that, oh, you just get a credit card, just a loan. do this and pay it later. How do we flip the script?

I think it boils down to knowledge, telling people, explaining it. Me being clear about my own mistakes financially, Dave being clear about his own mistakes financially. People have to get to their point that they wake up. Now, this is typically what happens. I'm getting younger people that wake up to it as they start to get engaged or get ready to get married. But the next opening, eye-opening event as when they have kids. When you start to have kids and you got this little person that's dependent upon you, now you start to reassess things. And so I want people to know that you've got to look at it, you've got to make a decision for yourself. Do you want to keep making the credit card company wealthy or do you want to build wealth for you and your family?

No.

Right.

That's really what it boils down to.

Do you think people, when they have their first kid, they become more financially aware or do they start going into more debt?

I think there's a wave. Now let me help you out, because you don't have kids yet. So let me tell you, right? When you first have them, you're gonna get so serious and so focused. But then what'll happen is instead of spending on you, the tendency now is to spend on the child, right? Like I'm amazed, I was in a shoe store out in New York and they had these little fancy designer kids shoes, tennis shoes. Listen to me.

$110.

For baby shoes that you're gonna grow out of in three months. They don't walk. This is to hold a child wearing this fancy shoe. And I thought, see, this is, that's a cultural thing because you want your baby to look good and go, no, no, your baby needs to be loved, right? So I want parents to prepare for themselves. My greatest fear is that if I don't take care of myself financially, I end up becoming a burden to my children later in life because they're going to have to take care of me.

You know, I feel very grateful for my father because he would always teach, you know, saving and investing. and things like that. He was life insurance for a long time. I have multiple life insurance policies out of myself. Right. Because of that, because I, before even, I'm not in a relationship right now. Just got out of one. But I was always preparing even the last 10 years. I was just like preparing for my future. I was like, I want to have enough money that when I have a family, when I get married, when I have kids, like, I'm not stressing about it.

That's right.

Not everyone has that luxury.

Right.

They might have kids. at 20 or whatever.

That's right.

But I've made the choice that I'm not going to have the family until I feel like, man, you know, whenever it comes, whenever it's ready, I'll be prepared. So I don't need to make bad decisions based on debt. I want to have so much in abundance and take my lifestyle back in my 20s and my 30s. And that way I'm saving so much and investing so much. And I feel in my life insurance, Mentor was like, everyone comes to me at 40 and says they wish you away would invested.

Yes.

More 25. More 30. More 35. Right. And they wait too long.

Yes.

And that's why I'm constantly just automatically taking payments out every single month.

That's good.

That are almost uncomfortable. Like, man, that's a big chunk of money every month that I put into savings.

That's right.

Oh, into investments, right? And luckily, I can afford that because I'm You know, a single guy and my wife is doing well, but even my friends who are making as much or more than me aren't doing that. And it scares me.

Oh, it should. I mean, because here's the deal. To grow money, it means you need time and compound interest, right? And so the fact that you're putting that aside is saying you're mature enough to know what you want later.

Yes.

Right? And I think that's the difference between adults and children. Children want what they want now. Adults have to be smart enough to go, I'm going to do some stuff. I'm going to enjoy some stuff, but I know down the road, I'm going to want to do some stuff too, and it's going to cost more. So I need to invest. So I encourage people set up automatic investing coming out of your 401, your 403, or even if you're self-employed, your SEP or whatever it is, make it happen automatically that way. Because here's the deal. Your investments become your paycheck later. Think about that. Like if we're working right now and you get, you do a job, you get paid. the reason you're investing is to replace your paycheck so you can go do what you want to do. You can travel or whatever, and you've got this money that you can draw from to take care of your family. So I want young people to get started early. I want people that are in the middle of life with kids to stay consistent and control lifestyle. And even if you're older and you feel like it's too late, it ain't ever too late. If you've got breath in your lungs, you've got an opportunity to make some changes today. Let's not waste another Let's get intentional. Reach out to somebody that has knowledge you don't have and get guidance. Money is a terrifying thing because it's.

The one thing in life that, you know, the NFL is not gonna give me the ball and I'm never gonna 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.