The 6 Ways To SURVIVE & THRIVE In A Recession! (DO THIS NOW) | Lewis Howes

I think you just got to keep investing in you until like, oh, now I'm making $3,000. Okay, boom, reinvest all that again. But what we do is we start taking it off the table, right?

We save it, we don't invest it.

So I think people just need to get on that cycle of... If you got $1,000, I would like just keep, you know, keep investing yourself until you got another thousand.

Okay.

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

Right.

Right, so if I invest in myself, then, and look, you know, there's things I bought that I didn't get a return on right away. But I didn't quit investing in a course or a workshop or training or education because it didn't work.

Or your health or-- I spent 17.

Years going to school. None of it was any good for me.

Mm-.

But it did teach me, it did teach me how to go to school.

How to study.

How to study, how to go there, how to complete a course. Like I completed college. I'm not proud of that, by the way.

You're not proud you completed it?

No, no, because it was ridiculous. I should have dropped out. I knew it was a bad thing.

What'd you major in?

Majoring in accounting. It's a good degree. It's not like just some business degree.

Right.

But you should have dropped out of it.

I should 100% because I would still, I would still, Well, I'd have a five-year jump on my career. But the problem is I was on drugs. So, you know, actual drugs.

If I wouldn't have been on drugs.

I would have quit college. 'Cause I would have had enough confidence in myself. When you're on drugs, you can't have confidence. 'Cause you know you're drugged. So everything is second-guess. Because my self-esteem was like through the basement. And so I'm like, I need to quit college. But everybody around me's, oh, no, you gotta finish college, you gotta finish college.

I'm like, what do I know?

I'm a drug addict.

And if I drop out, I don't have a degree. Then I gotta hire me.

And, yeah, I didn't even worry about any of that because, you know, I didn't worry about that. I just didn't have the confidence to follow my intuition. You can't. When you're on drugs, when you're not yourself.

So what do you do with a thousand bucks?

Right? You know, I think you just got to keep investing in you until, like, oh, now I'm making three thousand dollars. Okay.

Boom.

Reinvest all that again. But what we do is we start taking it off the table, right?

We save it, we don't invest it.

So I think people just need to get on that cycle of like, okay, I'm gonna keep repeating this activity. I'm gonna reinvest the money in myself, go to the workshop or whatever. Monday I gotta be hustling again. Until, okay, now I got $4,000. Okay, now I got 5,000. Now the income's starting to pick up. Income has to pick up. The income should be an indication that whatever you're learning is helping you. That's interesting. Until one day you're like, okay, I have more money here than I can.

Actually invest in myself.

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

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

And now it would be, okay, I gotta spend money on marketing. I wouldn't go look for an investment right now. I'm gonna spend money on marketing now. Now I'm gonna spend money on marketing to get me more leads. And I would, you know, big mistake I made in my career was not spending more money on marketing.

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

I was 50, I was 51 when we started playing the social media game, and I was probably 56, 55 or 56 when we started spending money on marketing.

Wow.

Yeah.

51 when we started doing social media.

Yeah, yeah.

And I should have been spending money. I should have been spending money when I was 25 years old, when I was selling cars. I should have spent money, been spending money on ads, but I'm scared, man.

So what made you not scared 25 years later? 26 years later at 51.

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

Yeah.

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

Wow.

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

Really?

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

I was 50, maybe 55, the first one. I bought it because I studied what Coca-Cola was doing. They bought planes. I said, why are they buying planes? Oh, then I learned how they write them off, and then I learned how they trade them every three years. That's crazy. So notice every three years I'm trading a plane. I'm getting rid of it, replacing it with another one. But what are they using it for? They don't use it for pleasure. They're not using it for Instagram photos.

They're using it to go and set.

Up headquarters in other countries.

Wow.

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

Offices.

I wanted to walk in and see what it was like. These are 100, multi-100 billion dollar companies.

Crazy.

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

What were they doing different?

They owned the building.

They weren't renting the building.

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

Because all they're doing is getting investor money.

That's all they do. Okay? And the difference is, what I do is I could go to Goldman Sachs, I was there, they would give me money.

Mm-.

And I'm like, I'm not gonna get money from them. I'm gonna do what they do.

From individuals.

Exactly. From my friends, from people that follow me, from people that support me, okay? Goldman Sachs will give money to anybody.

Right.

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

How are they able to do that?

Because they scale, right? Because they think big. So they're funding everything. Everything that happens on this planet from media to pharmaceutical is gonna be funded by those two. two companies. So it just, when you're studying your rich uncle or the neighbor down the street, the think is only so big. And then when I started studying these other companies, I was like, okay, this is who, if you want to create that kind of legacy wealth and really help a lot of people, because they are in a position to help or hurt a lot of people. That's the scale you got to think at. Yeah.

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

And more and more.

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

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

Yeah.

Do you think that you would have been able to get there faster? Yeah, 1000 years. Or do you feel like money only comes to you when you're ready for it?

No.

When you're ready to make it and when you're ready to take on the risk or the responsibility.

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

What would they do?

They'll be like, I'm not getting in a $100,000 ride. If they can't bring me, they're gonna be like, hey, if this doesn't have a billion dollar possibility, they're gonna pick, this is the wealthy, they put their kids, their kids see things differently if they're not ruined. If they're not completely ruined and scathed by having whatever they want. then they'll see opportunities different.

Yeah.

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

Top three industries to pick.

Hedge funds have to be one of them.

Really?

Advertising and marketing's gotta be a space to be in. And probably, you know, something to do with healthcare. If I could scale healthcare, if I could scale the organic alternative medicines, you know, so those are three massive spaces. Maybe financial too, the financial world, you know, in the next 30 years, we're probably going to have a disruption of the dollar.

Right.

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

Yeah.

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

Big firms selling stocks before Amazon.

Yeah, before Amazon. And then he saw some, he saw something came across his desk where There was a spike in internet activity. Eyeballs going to the internet. That's when he said, I'm gonna go do Amazon. And he followed traffic. I didn't ever follow traffic. He followed scale. He followed scaling possibilities. And then what did he do? He followed this traffic, the possibility. Then he invested in the possibility. And then he went into debt on the possibility. And then he was willing to not get paid any money. But what did I do? I need money today. I gotta have money this week. I need to have a little more money next week. And if I get a little more money after that, I'm gonna save it all. And then I'm gonna go do that again. And I'm gonna feed the bank. And I'm gonna keep feeding the bank. I don't even know how much money the bank's made off of me for 20 years. Really? We don't know anybody that works harder than Grant Cardone. And as soon as he gets a bag, he brings it to us. What do they do? Hey, y'all wanna borrow this money? Now repeat that 300 million times.

Wow.

And that's the American people.

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

Yeah.

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

Well, then keep, you know, money, if you think money's gonna save you, you know, you're just, Again, they're stacking information on top of bad information. Okay? You know, the money that you have saved in the last six months has probably dropped 11%. So the money that you have, you got 100 grand, I gotta have six months of savings. I need, you know, 4,000, my bills are four or five thousand bucks a month. I gotta have 30 grand in the bank. Gotta have 30. But they really have 180. So first of all, I guarantee they have more than six months. and they don't even know it because they're living out of terror. It's not logic. You say it's logic. I need six months, but you got three times more than you need. Sure. Number one. Number two, you've never had an emergency that cost you 30 grand in your lifetime. Very few people ever had that emergency. Everybody hears about, oh yeah, my guy got in a buy, this happened, blah, blah, blah. But if you had assets, if you'd been investing in assets, you can always go use those assets for collateral to loan out. You can do cancer surgery.

You can get a loan out from the bank.

Oh, 100%. Or if you just took the money that you earned and keep reinvesting in assets that pay you, not assets that you wish one day will pay you, but assets that pay you every month, if you keep investing in that asset class, one day your cash flow will be your emergency account. My emergency account last month paid me a million six. My cash flow.

That's crazy.

My free cash flow.

That's crazy.

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

Right.

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

Something, yeah.

So I'm gonna go, I'm not gonna buy a cup 'cause the cup won't pay me. So in December, I had a bunch of money, boom.

I'm like, make a deal.

You were in it, yes, a couple days ago. Yeah, yeah. Take that house. Take that cash, that garbage that you have. Already had a surplus of money. So if I can't buy two of these, I'm not gonna buy one of them. If I can't write off some portion of it, I'm not gonna buy it. If I can't do it out of passive income, I'm not gonna touch it. Interesting. So those are my criteria for making investments, right? And it needs the cash flow. So I took a bunch of this cash that was sitting here just deteriorating, not providing me with safety, and took it and put it into this asset. And people are like, are you ridiculous? You paid that much money for that thing? Okay, we'll see. So I buy this thing, this thing will provide rental income. I think this year I'll make three million bucks on this deal. Wow.

In cash flow. And how much do you have to put down or do you buy the whole thing?

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

Deal, but this is a terrible deal.

Keeping the cash. Keeping the cash is garbage. This Malibu house is probably one of the worst investments I ever made. Okay. But I had a bunch of surplus cash. I had already bought, in December we bought, almost 2,000 apartments. If I could have got another apartment deal, I would have bought another apartment deal with the 40 million.

But I couldn't.

You couldn't find one? I couldn't find another deal, okay? I still had this money left over. End of the year, it's just the.

Thing that I do.

End of the year dump out, literally like flush the toilet on your savings. So every day I look at my savings accounts, okay? It's not because I'm worried about any more money anymore. I know for sure the money's going down in value. Everybody knows that this year. Your money is depreciating, right? It's dropping down in value. What you were told that is 100 grand is not 100 grand. The bank's not even telling you the truth. It's 100 less 11,000.

It's 11% right now.

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

That's crazy.

But you're gonna still see 100 because this is invisible taxing, right? It's inflation. So I know that. I know it's not a hundred. So when you guys look at your check, I got 180,000. You're lying to yourself. Because you're not doing all the math on money. This is why Mike Saylor went and took all that money he had and invested in Bitcoin. Bitcoin, yeah. Because he's done the research. So I would listen to him, and I'm not saying you guys should go buy Bitcoin, but I'm not buying Bitcoin at those levels. Okay? I'm buying assets that can provide you with more cash, with more income. Maybe I should be buying Bitcoin, I don't know. But anyway, so I dumped this out. I dumped this for now, I've been shopping this piece of real estate for 19 months. I've been working this deal for 19 months. So I'm not being like, okay, I just gotta go buy something. I'm not gonna do that. But I'm trying to get rid of this cash to go into an asset that has the potential to go up in value over time. I dump out in January, okay? I do three webinars. That's why everybody wants to know, man, what's the rush to make more money? Because I'm broke, man.

And I got a new house.

Right.

You got bills to pay now, you got expenses.

So January 1st comes, I've done three webinars already to start filling this up again.

Mm-.

Right now, if I walked into January 1st with 40 million bucks sitting in.

A bank account, dude, you're not hungry.

What's the rush, bro?

You're not hungry.

Yeah, let's plan, let's do some planning this year.

Mm-.

But what I do is I dump out. So every year for the last 15 years, every January, I end up with more assets.

What have you found are the top places that people should be investing?

First, calculate how many days, weeks, months, or years you can live on your saving.

Mm-.

Because when you do that, you'll start to, you'll gain security, you'll gain that. Okay? So look at how much you're spending, okay? And then say, how much do I need? And whatever that number is, you're going to need more than that because it may go down rather than go up. So, okay, now do I have a year's spending? Okay, so I think you start there. Then you start to think, what are the things that are most important for me? And then you start with your business or your residents that have a symbiotic relationship and that you know well. Let's say if you start with your business, okay, you're closer to that, investing in yourself with whatever that may end up being, that may be your best investment.

Not real estate, not stocks, not the market.

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

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

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

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

Well, as I said before, I remember watching the movie, I was young, David Copperfield, with WC Fields and he speaks to David Copperfield and he says, he said something like, and I'll put it in dollar terms, you earn $100 and you spend $105, that's misery. If you earn $100 and you spend $95, you'll have a good life. I mean, it wasn't exactly like that, but basically, I know so many people who don't earn much but are there. Because if you start to think about what it is that it costs you to live in terms of, let's say, the basics, give me a bed to sleep in, give me the food, let me be educated, and so on and so forth. I think most people can get themselves in a position where they're net positive. So if you can be net positive and you could do that, that's number.

One.

As I carry that. So that's number one. Then I guess it was the list that we went to. The second is, what do you do next? in terms of what do you need? What do you invest in? You know, and then, and then, you know, going beyond it. And then there avoid the following mistake, the most common mistake of investing, thinking that the investment that did good is a good investment. People rather more expensive. The things that quite often Those markets that did really, really well became more expensive and everybody, smart money, is all the time comparing them and competing. So what happens is the naive money buys the thing that was hot or is hot. The thing that has been terrible, which might be the thing that's beaten down, So, I would say also an important element. Okay, so here's another one that's really important. Diversify.

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

Right, because what I learned about this is that, first of all, all investments compete. And it's not easy to tell whether one investment is better than the other, because if people could do that, life would be easy and everybody would make a ton of money. So, and this is a competitive game that's very difficult to compete in. So it's very difficult to say which one's better or worse. You could take experts and you could, and do all sorts of tests, and you'll find out that they can pick that and you can't tell whether the worst ones are gonna be better. So because of that, you understand that even picking the best ones is difficult, and particularly if you're naive. We spend hundreds of millions of dollars each year on research to try to give us an edge. Now you've got to compete with us. Competing in the markets is more difficult than competing in the Olympics. You wouldn't go think I'm going to compete in the Olympics. But there are more people who try harder in order to do that. It's a zero-sum game. So, but diversification that they're different will reduce your risk without reducing your return. So, if you know how to diversify well, so that's critical. So, I would say again, get your savings right and the reasons I say, I would say have great humility about what you don't know. Don't buy the thing that was hot just because you think it's hot.

What do you wish we taught everyone from the ages of 10 to 20?

Sure.

Five different things around money.

First thing would be what is money? Because money as we know it is fake. Our dollars are just pieces of paper. I grew up thinking that our paper dollars are like the Holy Grail. You want to save this money because it is the most valuable thing there is. as I became older, I started to realize that that's not the case. Our paper dollars are just pieces of paper. It's fiat currency, which means it's issued by the government and the value is backed through the strength of the government. Now, we're lucky here that the United States is the world's superpower. We have the world's strongest military, we have the world's strongest economy, but we can't stay on top forever. And, you know, inflation is when the value of a dollar goes down. So these dollars, which many of us think that if we hoard this, we'll become wealthy, saving money to wealth is actually keeping you poor and it's making you poorer each and every day. So the first thing you have to understand is what is money? Second thing you gotta understand is what do wealthy people work for? And most of us, the majority of us are taught to work to get a job and climb that corporate ladder, but wealthy people are doing something completely different. They're working to own the corporate ladder. They're working for something called equity. And this thing really blew my mind because wealthy people are not working for that paycheck. They're working to own a piece of the company. That way they can get a piece of the profits. So the best way to understand this is, you know, a lot of times people complain about how much money I'm making. I wish my boss paid me more. And this is where if you start to understand the system, you'll start to ask the right questions. See, a big company, you have to ask the question, who are they working for? Are they working to take care of their employees? Are they working to take care of their customers? Neither. They're working to take care of one person, their shareholders. It's this concept called fiduciary duty. I learned this in law school. The executives of a company have a fiduciary duty not towards the employees, not towards the customers, but towards the shareholders, the owners of the company. Now, what that means, an easy example of this is you're going out to dinner with your girlfriend or your wife, and you're on a date, and you get a text from one of your good friends, say, Hey, let's go play Fortnite right now. Your fiduciary duty at the moment is to be with a girlfriend, to be with a wife, to be with a partner, to spend time with him or her. If you go out and leave, you're gonna get in trouble, right? So it's who is your alliance to? And the shareholders, the executives, the CEO and the executives company, their fiduciary duty is to the shareholders, the owners of the company. So what are they trying to do? They're working to drive up the valuation of the company. So once you start to understand that, you'll realize why there's this big discrepancy between what people are paid and what people want to be paid. And when you start to understand that, you're going to change what you do with the money. that's why I said a minute ago or a little bit ago, wealthy people are working to climb, not climb the corporate ladder, but own the corporate ladder. So how do you get that equity, that ownership? You have to own a piece of the corporate ladder. Now, if you work for a public company, that means that you can take some of your income and you can buy stock in the company. Maybe they pay you with equity. Maybe they give you some sort of revenue share. That's what we do in my companies. Or if your company doesn't do that, then you have to start taking this money that you're earning and you have to start investing it. into a place where you're getting equity. Maybe that means stocks, maybe that means real estate. It could be, you know, a number of different investments, but you have to work towards that equity.

Yeah.

The third thing is that you have to think bigger. I know I grew up thinking that somebody who looks like me, somebody who's brown, somebody who wears a turban, somebody who didn't have entrepreneur investor parents, could go out and do this because you think that somebody like me can't do this. My parents also told me that I couldn't do it. I didn't know anybody doing it. I didn't know any investors. But you have to be the one to take that first step. And once you start to take that first step, you're gonna learn and see the second step. Then you take the second step and you're like, oh, I can start a $100 investment here. You don't have to start with hundreds of thousands or millions of dollars. Start with $100. Apps on the internet make it so much more accessible. But anything is possible. If you live in America, you speak English, you have more opportunities than really anybody else in the world. People will literally risk their lives to come to this country because there's opportunity here. And so if you're here, you have the ability to understand what you and I are saying, and you have that technology to do it, you're blessed. That was what do you do with this?

Right?

You have to go out and start learning. You have to go out and start doing. And then the next thing that you have to do, number four, is you have to understand the concept of debt. Because we live in this consumer culture. And it's interesting where we want to live this flex lifestyle. I want to show off on Instagram. I want to show off my new car, my new Chanel Gucci purse. And we kind of get caught up where I need to live a certain lifestyle that way people can think that I'm rich. But what you're doing now is you're living broke, making everybody else rich so people think you're rich. Your product rich, you have a lot of nice stuff, but you're broke. And so when you live that type of lifestyle, you are the reason why Gucci, Louis Vuitton, Chanel are making so much money. but it's keeping you broke. The richest person in the world, sometimes he's the second, sometimes he's the third, is the CEO of Louis Vuitton.

No, why really?

Yeah, Bernard Arnault. And why? How did he get there? Because everybody wants to look rich. Everybody wants the Louis Vuitton. You know, I saw this in the pandemic especially. We were in a recession in 2021. but luxury sale of products were breaking new records.

Really?

They're breaking records in 2021. Why is that? Stimulus checks went out, people had cash, and some people used that money to save, some people used that money to pay down debt, some people invested that money, but a big chunk of people took that money to places like Gucci, Louis Vuitton, and now you go and spend it.

You would think when the economy is, well, I guess when people are losing their jobs and there's financial, uncertainty of the future, you'd think people would be saving or investing, not spending on luxury goods, especially if you can't even go outside to flex it. You can only do it on social media in the comfort of your own home.

You don't need to go outside anymore. You can just do it on social media. Yeah. And so if you don't have the cash to do it, people are going into debt to buy it. And it's becoming easier and easier because of now things like buy now, pay later. It is one of the fastest growing industries in FinTech. I love financial technology, but it breaks my heart. I mean, it just rips my heartstrings when I see the growth of this buy now, pay later, because what does that mean? I can go out and buy anything I want, not pay for it today, pay it off over three months, and then if I don't, I get slapped with 25% interest. And if you are 18, or let's just say 21, I give you $6,500. you never invested another penny, but you invested those $6,500 and you could get an 18% return on that money and you retired 65 and you look at this investment portfolio, you would have over $11 million. Wow. Now everyone watching this thing, where the heck am I going to get 18% on my money?

Exactly.

But your credit card company is doing it every single day. $6,500 is what the average American household has in credit card debt right now. And you were turning around paying these companies 18, 20, 25% a year, and they're the ones that are getting rich, not you. So what's happening? You're going into debt to buy liabilities, which are things that lose you money, and then you're paying interest on top of that, which is making everybody else rich, which leaves no money in your pocket to make yourself rich. And you have to break out of that mindset.

So what do we need to know about debt then? How do people get comfortable understanding about debt, either using it in the right ways and eliminating the debts that don't support our financial growth?

Yeah, so the first thing is never finance anything that isn't gonna pay you. Okay, so- Give me an example. Gucci, your vacations, your car, stop financing these things aren't paying you. And people are gonna get upset when I say your car because they're gonna say, wait, How am I supposed to buy a car without a car payment?

Don't buy a $100,000 car unless you've got the money in the bank to buy it. Go plus more. Buy a used car for six grand.

Exactly. Go buy a used car, good working condition car, with cash.

Yeah.

Write it for 10 years.

Exactly. The first time I made a million dollars in a year, my car was 500 bucks.

Dude.

My employees had better cars than I did.

I had a $4,000 car for the first five years living in Los Angeles. $4,000 car, used car, 1997.

I love it.

Was the car when it was made. And that thing was great. It was comfortable, got me from A to B. It didn't break down.

Exactly.

I didn't need to be flashy.

Exactly. I still have my $500 car.

That's great.

I still drive. And it's one of those things where, you know, because I fell into this trap where the first time I started making money, You know, in my culture, cars are a big thing. The Punjabi culture, people really want to put money in their cars. They want to look cool, right? So when I was 17, 16-17, I started making a little bit of money because I was doing my side hustles. The first thing I did was I put new rims on my car. Then I put tints on my car. Then I put HID lights on my car. I had two 12-inch subwoofers in my trunk, right? I put the tints on, I put a new sound system in there.

Lights around, glow in the dark.

Yeah. I had a Toyota, right? And then the next thing I was gonna do is I called up my cousin. I said, I guess what? I got three grand in the bank. I'm about to put Lamborghini doors on my Toyota. That's crazy, man. And he's like, Just mean, you're stupid. Don't do that. And so he sat on the phone with me for like 20 minutes convincing me not to do it. Luckily I didn't. I'm really glad I didn't. But that's where all my money was going. I looked cool. My car was cool. And that's where all my money was going. I had $1,000 in my bank and I went out and I bought a $1,000 watch. I was like 18 years old, right? I was in that industry, the entertainment industry. I wanted to look cool. And then, you know, I start to read these money books and my mindset starts to shift. And now all of a sudden, it's the comp, like I went from one polar extreme to the other polar extreme. I don't want to spend a penny.

On anything.

On anything. Unless it's making me money. Exactly. I don't want to spend anything unless it's making money. So now I'm saving as much money as I can. I'm investing my money as much as I can. I'm trying to build my business. And I mean, I'm talking like, I'm running my shoes into the ground. They have holes in them. I put a piece of tape, wrap it up, I'm going to school. I got rental properties, but I got my shoes that are taped up, right? And it's like, I realized that I'm going to go, I'm not going to make the same mistakes again. And you have to break out of that mindset. The first time I made 100 grand a year, I was in school, and I was living in an apartment paying $400 a month, including my my water, my electricity, my cable, my gas, my internet, everything. And the reason was, is because I didn't have a room. I slept on the living room floor. I had a little mattress. I used to pull that into the living room, put that down, go to sleep at night, wake up, fold up the sheets, put them away, drag the mattress back into the hallway because I'm like, you know, I realized that the power of compounding your money, I realized the power of putting your money into the right assets. And I'm like, this is my time to build. I've been blowing this money that I'm earning on things that are making everybody else rich.

Right.

I'll spend money on that. a little bit later, right now I want to make myself rich. And so you have to just first understand what it is that's worth spending money on and what's not. And then if you do have that debt, you've got to come up with a strategy to pay it down as fast as possible. First thing you can do, if you have a lot of credit card debt, call up the companies, see if they're going to be willing to just give you a lower amount, see if they're willing to work with you, say, look, I got $10,000 worth of debt, I'm never going to pay this off. It's not gonna happen. How about you work with me and give me $5,000 and I will work to pay that off. You start to work with them, see if you can do something. Then you can consider moving some of that money to a 0% APR card if you have 12 to 18 months to do that. That way now you can aggressively, you gotta do the smart, 'cause if you're just gonna keep doing the same things you were before, don't do it. But you have to start aggressively paying it down. You stop spending money. That way now you can pay down this debt as fast as possible and then you work to earn more money. and the money has to go somewhere as you're earning more money. You live the same lifestyle, if not smaller, and you take all this extra money and you use it to pay down your debt. That way now you can start building, right? You got to lay that foundation. You got to start working to grow upwards, but you have to get aggressive.

Is there ever a time where people should go into debt, the right type of debt? The credit card debt, student loan debt, you know, buying a car and going in debt on that. those things I'm understanding is not helping your financial future. When isn't the right time or is there a right time in your mind to take money out and spend interest on that money?

Depends, right? If it's something that's gonna make you income and you can manage the debt, then yes. But it's not for everybody. Some people don't have it in them to manage the debt. Some people don't have it in them to manage investments. Some people don't have it in them to run a business. If you're not the entrepreneurial investor type and you don't like looking at numbers, you don't like managing money, you don't like trying to grow this, stay away from it. Now you go up, maybe you can get debt to buy a home, but that's it. But if you are more of the entrepreneurial type, you have it in you that you want to grow. Now, if you're using debt, you should only be using debt to buy something.

That'S paying you with income, something that's.

Going to make you more money. Do you have any debt out right now? Right now, I do not. I have people paying me loans, but I personally don't have any debt right now. And I kind of went through this phase where I have all this real estate, but I have no debt on it. And the reason is because I'm waiting for the right opportunity. I will, I will have more debt.

Really?

Yeah, I'm just waiting for the right opportunity because right now all my real estate is paid off.

You paid off all the real estate? How many properties do you have?

Units in the dozens, a number of units, but now I'm just waiting for the right opportunity.

And it's all paid off. All paid off.

So now it's just cash coming in.

It's cash coming in.

And you know, you still have that. I still got that.

That's rented for 850 a month. That eight thousand dollar place.

Eight thousand dollar place.

That's just bringing in 800 bucks a month.

850 a month. Clear and free.

Just.

Yeah. You got to pay your expenses, your property taxes, insurance, your maintenance, your management fees. But right now I have no debt on it. And so now what I'm waiting for is. And how much could you sell that for now? Probably a hundred thousand, hundred twenty. I mean, I don't know the exact. It's not bad. Yeah. I mean, it's, it's. Crazy because I never, when I buy real estate, I never look at what can I sell this property for? I'm looking for one thing, cash flow.

Cash flow, yeah.

And so this is a big mistake that leads people into a lot of problems in real estate because when you start buying real estate, hoping that you'll be able to sell it for a higher price in the future and things don't go as planned, then what? Yeah, you're screwed. Now you're screwed. So, you know, for me, I look at one thing, cash flow. and will I be able to see more growth in this area? So I look where businesses are moving, where is money moving to, and then that's where I want to invest because I know if property prices go up, hey, it's icing. Property prices go down, it's okay. I still got my rent, which is covering my costs.

So what's your goal, right? With the dozens of units for the opportunity for something bigger or what's the plan?

Something, yeah, it can be anything. Something bigger in real estate and I'm looking for the right opportunity. But again, my focus now isn't in real estate like it was before. A few years ago, I was heavy in real estate. Now I was doing everything that I can there and a lot of opportunities were there. I bought a property in 2021. Haven't bought anything in 2022 yet. But my focus now is building my business because I see a bigger opportunity there for me than real estate. That's why I've been kind of, I'm still involved in real estate, but not.

The way that I was a few years ago. Because you can earn more with your business if you put the attention and the energy and the money into building the team and the resources and the technology and those things.

And it's more fun because it's a lot more active for me. And then, you know, once this gets bigger, then I'll go back to real estate. But right now, like for the last few years, I've been kind of phasing slowly away from real estate as I can transition more into the business because, you know, it's just more fun for me.

Yeah.

Okay, so understanding debt was the fourth thing. What was the fifth thing you wish people learned from 10 to 20 years old about money?

You have to be willing to make mistakes, take risks and start. And this one is hard and it sounds simple, but a lot of people that I know, a lot of people, they are so hesitant to making that first investment because what if I do something wrong? What if I make a mistake? What if my investment goes down? And so the simple thing is- that's.

Happened to me multiple times.

Yeah, but you learn every time, right? It's your tuition, it's your real tuition. And you have to be willing to try things because if you don't, you're gonna get stuck in the game of what if. what if I lose money? What if it doesn't work out? But what if it goes up?

What if you learn?

I have made a lot of mistakes. I made a video on my YouTube channel where I went through my worst real estate deal ever. It was my third property that I ever bought. It was a home in the city of Detroit, and I made every mistake possible. Now, I'm still in college, right? I don't know what's going on exactly with real estate investing. And, I mean, I bought the property and. I bought it because my contractor at the time told me that we can make a lot of money on this deal. We'll be able to rent it out. We could flip it if I wanted to. And he was like, don't even worry about getting a home inspection. Now, when I buy a property now, the first thing I do is I get a property inspection where somebody walks through the deal, makes sure a third party, an independent person, and they tell me anything wrong with the property in the foundation, in the plumbing, in really anything with the property so I know what I'm getting myself into. And so he told me, don't do that. He said, don't worry, I already walked through. He's a contractor, so I figured he knows what he's talking about. All you have to do is spend $5,500 and I will make sure this property is ready to go. So I said, okay, let's do it. So I bought the home. I gave him a check for half, maybe 2,500 or something around there, 3,000. And a week goes by, nothing starts. Two weeks go by, nothing starts and I call him, I said, Hey man, what's going on? Like, I thought we were gonna have this done in two weeks. Here we are two weeks later and you haven't even brought your materials here. So I got caught up with something, something's going wrong. And so now two more weeks go by, he brought some materials there, he started painting one wall and that was it. And so, you know, I'm getting upset because now it's like, you know, every day that this property is now leased out, it's costing you money. It's costing you money. And still nothing's getting done. Another two weeks go by and now I'm like, okay, look, what's going on? We gotta get this taken care of 'cause now we're six weeks into this deal. You haven't done a single thing. You keep putting me off. You took my money and nothing's happened. And so long story short on that, he ran away. He was having financial difficulties. That's why he wanted me to close on this deal because he needed some cash and now he's gone. So now I have another property that somebody was working on, a manager, and he was having some issues at my property. He was causing some problems. So I figured he's causing problems there. How about you come work at this property and you need a home. You can live in this home for free. Fix it up. Just fix it up.

And so he said, okay.

So now I thought, all right, you know, I found a good deal here. I've got somebody who'll fix it up. He'll live there, take care of it, and it's going to cost me less money. And so now he's living in this property. And he's like, how about this? How about you just open up a charge account at Home Depot and I'll just go buy stuff and take care of it at the home? I said, okay. So I go open up this charge account. He starts buying materials not to work in my home, but to work on other people's properties. Oh my gosh. So now I'm like, dude, like you're spending my money to go work on other people's properties so you can make double profits over there. You haven't started any work on my home. You're not paying me rent. you have a dog that you're not taking care of who's pooping everywhere in the property and it's not being taken care of. And so now how do I get somebody out of this home? I got a victim out of my own property. There's no lease in place. So now we're going into all these legal issues of how do we get this person out of the home? We get him out of the home. It took me months to get him out. The property now is destroyed. There's crap, little crap all over the home. He damaged the place, did not take care of it, and now it's like, we have to start all over from negative to start fixing this property up. So now we start fixing it. I got a licensed and insured contractor. We're months into the deal and he wants, I don't know, like a lot more money, at least 10 grand, if not more, to start doing the renovations. And we start digging deep and we start to see problem after problem after problem. So now it, you know, every cost keeps adding up. Now the home is ready to go. And I'm like, all right, fine. And everybody told me, Joseph, don't license this home with the city of Detroit as a rental because nobody does it. And this is, you know, again, after the 2008 crash, Detroit went through his bankruptcy. They were having their own issues. But I don't like to play games. I want to play by the rules. So I said, I'm going to get a rent. I'm going to get a license for rental. When you get a license for rental, they're going to send their own property inspectors out to the property, and they're going to inspect it and make sure that it's okay. So now the property inspectors come out and they say, I need to lift up the home. I was like, what do you mean, lift up the home? They're like, oh yeah, we need to raise the home. I don't even know that you could do that. Apparently you can, and it's very expensive. So I lift up the home, and then we start running the water in the property, and it turns out that the water is not draining to the main city line. Apparently somebody previously living in this property had poured cement down the main drain. Now, in order to get this property working, we have to bust out the cement in the basement, take out this pipe, put in a new pipe, repour the cement, and then these property inspectors start disagreeing with one another. One person says that you need a 10-foot electrical riser. So we make it 10 feet. The next one comes, says, why is it 10 feet? It needs to be 13 feet. I'm like, your first person said 10, and now they start fighting with each other, and we have to keep paying for these inspectors to come back. They keep charging me permit fees for everything. If I want to paint the window sills, it's a $100 permit fee. change the smoke detectors, $75 permanent fee. So this goes on and on and on and on for months. Finally now we're approved for rental. I was like, oh my God, like this is the biggest headache of my life. We get a tenant in the property, we get licensed, tenants in the property, and now we have the license and the property inspectors just decides to go back to the property. They don't tell us. They just go back there. Even though we're fully licensed, they had no reason to go there. They knock on the door and apparently we didn't know this, the tenant was having a babysitting operation in a property. So now the inspector sees this that the tenant is running an illegal babysitting operation. He tells us, he finds us, tells us we need to evict the tenant. And now we have to start this process all over again. So after that point, I was like, you know what? Just sell this property. Wow. Because this is the biggest headache and that was the only deal I ever lost money on. But I learned a lot.

It was my tuition.

So you have to be willing to learn, be willing to make mistakes and then be willing to grow from those mistakes, go on and keep willing to go.

I would assume a lot of your viewers are business owners or are getting started in business. No matter how good you are in business, think about this. The one universal rule that idiots in finance know is diversification. It's the only free lunch. You've got to diversify because if you put all your eggs in one basket, no matter how good the basket is, one day that real estate market, that stock market, that bond market, that collectibles market, whatever you invest in, Ray Dalio showed me statistically, it'll drop 50 to 70% on a day. Now, if you're later in life when that happens, it's over for you. So you have to diversify, and yet most people, they know real estate so they do it, or they know stocks so they do it, or they grew up with their parents flipping things, and it's the wrong thing to do. So you've got to diversify in order for you to be able to truly succeed, and that's why when you own a business, if you put all your money in your business, which is what most of us do naturally, you're taking.

A lot of risk.

You put all your eggs in one basket and there's things that can happen. I mean, you know, you're, let's say you spent 20 years and you figured out how to put together the ultimate map, you know, and you remember Garmin came out with this thing called the TomTom. I don't know if you remember, used to put on your, are you old enough to remember that? Used to put on your phone? Or you put on your dash? Cost a hundred bucks.

It was a breakthrough.

They were making like a hundred million or something or yeah.

They were.

Yeah, yeah. Six months later, what happened? The iPhone came out with Google Maps. These little bastards, excuse my French, came out with it, put Google Maps, put their own map on here, and cost how much?

Zero.

What are they gonna do to your business when someone takes your product or service and gives it away for free? So I always tell people, competition happens, technology happens, what you must do is have a second business with no moving parts, no people, no time. Maybe it takes you two, three days a year for two or three hours after you've read the book, you put it in place and you measure it two or three times a year. That's it. go on with your life. Now, if there's a trouble in your business, you're financially set. I, in my life, have 31 companies now. We have, you know, what do we have? 1200 employees, seven different Industries. We do 5 billion in sales. I mean, I, that used to be, you know, me and my seminar business, it's grown geometrically. But with all those moving Parts, the only way I've been able to succeed is because I've taken every one of those businesses and I've Diversified my assets so that when things were in trouble, I still have enough economics to take care of myself and keep the business going. So everybody needs to create a money machine that works while you sleep that doesn't have moving parts and that's what this is really about.

You have a great cartoon in the book where there's a kid asking his father, something about how do you invest your money or how does the stock market work? And he says, you put your money in at the peak, it starts to go down and lose money and so you get scared and you take it out and then someone smarter than you makes all the money, something like that. So how do we, and I've done that in the past where I put my money in somewhere, hi, it went down and I was like, oh, I just lost a bunch of money. Let me take it out. And then I put it back in another time and I'm like, what am I doing? So how do we invest without fear of, oh, it's going down, I need to take it out or like trying to time it. How do we do that?

Great question. It's one of the main reasons I wrote the book. I always tell people, if you just read the second chapter of the book and nothing else, it'll change your life. You can do that with multiple chapters, but that chapter is really about teaching people that winter is coming. We all know winter's coming, right? To coin a phrase. But that winter is the best time on earth. And I know that's counterintuitive, and I don't mean like being a positive thinker, I mean pure facts. So, in the book I take you through 10 facts. I'll give you a couple of them right now. The first fact I give people is why do people not invest? They're afraid of failing. You're a millennial, right? So you grew up witnessing 2008 when you were still relatively young. How old are you now?

33.

Okay, so you were what, 27?

2008? Yeah, 27.

Yeah, 27, 28 years old. So you're a young man and you're watching the world melting down in front of you. For most millennials, they are the first generation since the generation that went through the depression that is not investing at the ratio they need to even close. They have a little more debt than everyone probably, right? With all the- They have more college debt than everyone, absolutely true.

I have a friend that has $400,000.

Of debt, dental school. President Obama just paid off his debt five years ago while he was still president.

What?

No.

I swear to God. It's mind boggling. And he had a bunch of scholarships, but the last bit it took him that long. So what I tell them is, listen, debt, paying off your debt's not enough. You've got to become an owner or you're always gonna be in that place. So yes, pay off your debt, but here's what you need to know. You got to become an owner. You got to get in the game, but you got to understand the rules of the game. You don't know the rules of the game, the old phrase is, when a person with experience meets a person with money, we know the phrase. The person with money ends up with the experience. The person with experience ends up with your money, right? So I teach people the rules of the game so they don't get screwed. But the most important thing is this. Winter's coming, but people react. So let's take last year, last January 2016. We had the worst stock market opening in the history of the stock market. First, I think it was 10 days. There was a drop of $2.3 trillion with a T. Crazy. Everybody's freaking thinking the bear market's here, the market's over, the crash is here. I think the market dropped 800 points one day. And on that day, all the richest people in the world were in Davos, Switzerland, for the big conference that they do every year. And they went there, MSNBC went there, and everybody's freaking, what's happening? What are we going to do? And they said, let's go I'll ask Ray Dalio. Now, your listeners may or may not know Ray Dalio as if you're not in the financial business, probably never heard of him. You probably heard of Warren Buffett, but Ray Dalio has been more. You have to have a $5 billion net worth and $100 million to give him or he wouldn't talk to you 10 years ago. Now he doesn't care for shit how much money you have, he won't talk to you because he's got a closed fund. But they go and they put Dalio on television, CNBC, he's the king. What do we do? And he says, well, you don't need to panic. Corrections happen all the time, but you need a strategy that when markets go up and down, you don't go up and down. And he said, I spent 15 years of my life to perfect such a strategy. All of my money's in that plan. And he said, it's called All Seasons, and I've never revealed it before, but I gave it to Tony Robbins. He extracted from me and it's his book. So you gotta go read his book. This is what he says on national television, the data markets are crashing. And that day they gave me an idea, which is the beginning of February. I think it was nine days in February. The market was down 9% in the first five weeks of the year. His strategy, which he gave me, which is made money 85% of the time for the last 75 years. It's averaged a 10% return just under, and the average loss, when it 15% loss, was 1.6. So if you go to Vegas and you could spend 85% of time make money, and when you made money was 10%, you lost is 1.6, you go forever. His plan made 2% while the market was down 9. So it was up 11% difference. Now, I'm not suggesting that's the only strategy to do. There's many. His is the smoothest ride with the least risk. But what it did was combination of that, and then right after that, I interviewed Fed Chair Alan Greenspan. He was the head of our economy, the most powerful man in finance for 19 years, four presidents, he was there and ran it. I was just with President Clinton this last week. He was the Fed Chair for him. and I interviewed him for like two hours, you know, or three hours off stage, two hours in front. And then I asked him, in the very beginning of this thing, I said to him, I said, look, if you could put the Fed today, what would you do? And he looks at me and as I said, he leans forward and he says, resign. So I look at that and go, oh my God, I need to write a book that'll free people. So here's what will free you. Everyone's afraid of the crash. So here's what we need to know, two terms you should understand, correction versus crash. Anytime the market drops from its high by 10% or more up to 20, it's called a correction. If it drops 20% or more up to 80%, like in the Great Depression, then it's called a crash or called a bear market. So how often does a correction happen? How often do we have to be prepared for it? Since 1900, we've had a correction on average every year for 116 years. So when is winter coming? This year on average. It's like how often does winter come? You wouldn't be surprised if it stormed and rained. Now some winters are long, some are short, some are harsh, some are light, but winter always comes. So I wasn't panicked when this happened last year. I'm not panicked whenever it happens because I know it's supposed to be. How long does it last? Average, 56 days. Okay, so just under two months. What's the average drop during that time? 14% over the last 30 years, 13.5 of the last 100 years. So I use the more recent one. 14% gets your attention, right? 14% you get a little gut check. But here's what you need to know. 80% of all corrections never become a bear market. 80%. So all this fear and what people do is what you said you did is they see it, it's freaking out, I'm losing money, I'm the hell out of here and they get out. The stock market never took a dime from anybody, only you can take it from you. you sold, that's why you lost. So if you look back and say, what was it like in 2008? I can remember vividly being with my platinum partners and saying, you see these $80 stocks? This is six months before the crash. I told them in April, I brought them to Dubai and I said, these stocks are going to go to eight and some are going to go to a buck. And by October, and I told them what to do. So they were able to get out. October, I go on the Today Show in October of 2008 and they go, Tony, there's been $3 trillion meltdown. Pump the country up. You got four minutes. Ready, go. That's not what I do, first of all. And I said, I'd be a liar. I'm not gonna put a bomb. At that point, the $80 stocks were eight. I said, some of those, I said, I'm not a market forecaster, but I worked with Paul Tudor Jones, one of the greatest investors in the history of the world. In the biggest market crash in history, you know, 1987, he made 200% when everybody else was losing their entire life. I've been coaching him continuously now for 24 years, every single day. So I said, I work with the best in the world, and they're telling me based on history in the 30s and history in the 70s, this $8 stock, some are gonna be a buck. And I remember the day in March of 2009, Citibank, which had been, I think, $70, sold for 97 cents. You could go and take your money out of the ATM, it cost you more to take your money out than to own the bank, right? and then I told people it'll jump from 99 cents to 6, 10, 12 dollars in a month or two, and it's exactly what it did, right? So what you got to know is corrections happen every year. You got another couple months, got to know it's 14% and you won't lose because 80% of time it doesn't go to a bear. Now, what about the bear? The bear market, it happens to give you an idea in the last 100 years, every three to five years, you've gone eight without one. were way overdue. In modern years, last 30 years is about every five years. The average length of a bear is one year. The average drop is 33%. A third of those drops go 40% or above. That, I don't care how well prepared you are, that's a scary thing. But it is the greatest opportunity in your lifetime to go from wherever you are financially to where you want to be. I hope your audience is listening right now. Hear me. If you want a leapfrog and you're a millennial and you think there's no future or you're, you know, a baby boomer and you think you're too old and it's too late, the greatest gift you have is coming. I know it doesn't sound like it. This is not positive thinking bullshit.

This is the truth.

Wall Street, the stock market is the only place that when things go on sale, people freak out. If I said, you, like Ferraris?

Sure.

If I said to you, Ferraris go on sale for 50% off.

Awesome.

But when I tell you Apple's on sale for 50% off, you go, oh, what am I gonna do here? What's wrong? The whole world's coming to an end. If you think about it, how old are you?

33.

33. So let's assume if you were 35 and you lived to 85, you got 50-52 years ahead of you. That means you have 52 more corrections to live through. That means you're probably in those 50 years gonna have 10 more bear markets to live through. If you're gonna have a gut checks every time or you're gonna leave out of it, Right. If you didn't participate because you thought, oh, the market's too volatile, I can't trust it, all that stuff, you missed 250% return in the last eight years. I mean, you've missed out on everything while you're waiting for things to be better. And if you won't do it when it's like this, when it crashes, you're not going to get in. So here's the good news about the bear. Good news about the bear, average ones a year. Could be longer, but that's the average. Could be shorter. But here's what's cool. Every single bear market in the history of the United States has led to a bull market. meaning right afterwards. So 2008, this plummeting, what happened in 2009? Up 67% in a year. I can show you every single bear market and the next year when it comes out, it's this explosion. Now, that's not true in every market in the world. It's true for two centuries in the United States. So that's why Warren Buffett says, I want to be greedy when people are afraid. And I want to be afraid when people are greedy. If you remember 2008, he was telling everybody, Buy. He was having the time of his life. buy, buy, buy, everything's on sale. So what you have to do to become unshakable is turn, when I, the metaphor I use is turn the snake into the rope. Meaning we all know the story, it's the middle of the night, you're walking through the yard or someplace and you see a snake and you're freaked out, you pull back, you come in the morning and it's a rope. Once you know it's a rope, you're never afraid again. I want to take for people investing and show them how to turn that snake into the rope it really is. And I'll tell you one final stat on all this. People always say, and you started to bring it up, timing. How do I time it? Right now, things are too expensive. I want to wait. People have been saying that for eight years. Is there going to be a correction? Yes. But when it corrects, you want to invest again. You'll get dollar cost averaging. If you paid a little too much here, you'll pay paying less here. It'll bring the average price to a reasonable place.

It's going to allow you to succeed.

But here's what people need to know about timing. if you are not in the market, it's the most dangerous thing. This is so counterintuitive, so I hope your audience is listening. Let me show you. There's two different research projects. One was done by JP Morgan. I just spoke for them the other day at their alternative investments conference. And to be in the room, there are 400 people, you have to have a billion dollar network to get in the room. Crazy. It was mind boggling, right? So JP Morgan did a study and also Schwab did a separate study. 20 year studies. In the last 20 years, to give you an idea, the average S&P 500, that index has produced 8.2%. Over 30 years, it was 10.28. But in the last 20 years, a little bit less. Still great. You double your money, you know, roughly, you're in a position where you double the money a little more than every, you know, what is it now, 7.2, so it'd be like a little more than 10 years. But here's what they found out. If you missed the 10 best trading days in 20 years, 'cause you're trying to time the market and you're not in it, during one of those days, you went from 8.2% return over that period per annum per year, it dropped down almost half 4.5. What are the chances of you knowing the past 10 days to trade in 20 years? None. Warren Buffett said, Market timers and market forecasters are only there to make fortune tellers look good because no one can do it successfully. Even if they do it for a while, it doesn't last. It's luck. Jack Bogle told me, he started Vanguard, $3 trillion company, He said, we took gorillas a thousand in a room and had them flip coins. And we said, how many times they got heads, how many they got tails? Just gorillas flipping them randomly. And he said, one gorilla in that set of those turns flipped heads 21.

Times in a row.

Now, when you look at that, see all these gorillas doing it, you look on and say, what a lucky gorilla. He said, but in the hedge fund industry, in the mutual fund industry, when somebody does 10 in a row, you go, what a brilliant investor.

What a genius.

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

The guy trying to time them or no?

Cash.

The cash.

You get nothing for cash. The guy who was the best had the best timing. The guy that was the worst, the guy that dollar cost average and the one that was on the worst day were almost identical. But after seven years, there was only a $20,000 difference in accumulated assets between the worst day and the best day. the worst was not being in the market. See, you've got to be there. And I'm not saying put everything in stocks. We teach in the book all these different assets for diversification. But stocks in the last two centuries have provided the highest returns. So you have to have significant exposure to that if you want to get the highest return.

Got it. And what I love in the book, you say that 80% of financial success is psychological, 20% is mechanical. So it's not about timing and trying to figure all these things out. when's the best thing or the best fund or best investment?

This is not about trading, it's about investing. Trading is trying to do that and most people lose money trading. Even the guys that tell you to make money, see how they're making money two or three years from now. They usually eat the dust, right? Exactly. So, yes, you've got to have the psychology and my best way of psychology is not to pump you up. If you want to be unshakable, you want to be educated and you want to know the facts. You want to know, look, every five years, I'm going to get a bear, maybe three years, I'm going to get a correction every year, but I'm going to be in the market and make money.

Do you know that?

Six of the 10 best trading days in the 20 years happened within two weeks of the worst trading day.

Why is it such a taboo topic in general? Yes. I think for all classes, all individuals, it's just a taboo topic.

I totally agree. It's like you have, it's so funny because, and I wrote about this in my book, like for women, we have shame if we don't have enough money, but we also have shame if we have quote unquote too much.

Really?

Yes. Why? Because it's like, you know, oh, I have more than them and let me hide it because people are gonna think I'm showing off. or they have imposter syndrome, right? Am I worthy of having this much money? I've experienced that myself at different times, right? Like, you've worked hard for it, but you think that you don't deserve it for some reason. And I think that we just have, I think society was sort of designed so that we wouldn't talk about money.

Why?

Because I think it's designed so that we have a few people at the top and a lot of people at the bottom. And so now, you know, then of course the middle class emerged. and we've gone through different things as a middle class, as a collective, right? But I think that's part of the reason why it's like, don't tell, you know, employers saying, don't tell your co-workers how much you're making, because I'm paying you more than I'm paying this one, and I don't want y'all to know, right? So it's like, it comes from those places, but it's reinforced everywhere, you know?

Right. Everyone's reinforcing it.

Exactly, and I think-- Not just corporations, Or yes, and because there's so much mystery, it's like, I don't know how much you make, right? You don't know, maybe you know how much I make 'cause I talk about it all the time. But I don't, you know what I mean? So like, we don't know and we're scared to make assumptions and we're sort of guessing and we're like, well, if I put mine out there, I might be embarrassed because I discovered that I'm actually either making too much related to my peers or too little. And I think it goes back to belonging. We just wanna belong. to a community, to a group, you know what I mean? And so because of that, it's like we don't want to do anything that's going to make us not belong. It's such an inherent human need to belong. And so I think that we don't talk about money because we think it's going to affect our ability to belong, whether it means we're too broke or we have too much, you know, or somewhere in the middle.

So what conversations should we be having around money? How consistently should we be having them and with who?

Yes. Okay. So in terms of the conversations I'm having, I'm telling people like, if I get a speaking gig, here's how much they paid me, right? And I asked some more and they gave it to me. So make sure you do that too, right? Or I negotiated for higher pay, or I negotiated for profit sharing, or I asked for more vacation days, right? We need to share our money earning strategies with each other, especially with women and people of color, right? putting more money, like that's what allyship is in my opinion, is putting money in the pockets of the groups who need them, right? And who, you know, we have this huge wealth chasm in this country. So like how can we start to change that? And so that's why I share how much I got paid for a book deal, like all these things you're not supposed to share. I'm like, I'm gonna tell y'all. This is how much I got, this is how I got it, you know? And I think it's important. So I think sharing money making strategies is very important. I also think one of the things that has been so valuable to me with some of my peers, especially, I will say, my white guy peers in particular, have showed me, they have taught me things about investing strategies or, oh, here's a strategy that I'm doing with my money, or I'm investing in real estate, or I'm doing these different things. What are people doing with money once you have some, right? Once you have a little bit more than you need to live off of, What do you do with the excess and sharing those things, right? Sharing that information, 'cause it's usually hidden. And it's like, there's a small group of people that know and you don't know until you have peers who have done it and then you find out, right? In those quiet conversations that aren't on Facebook, right? Sure, sure, sure.

Should people be talking with their friends, their family members, their spouses about money?

Yes.

What if someone's really uncomfortable and says, you, know what? I don't wanna talk about the money I make what we should be doing, what conversation can you have to break the wall down?

Well, I think you could say, here's why I want to talk about money, and here's why, like we have to be, I think if we're willing to be transparent, people will be transparent with us. That's what I found in the conversations that I've had, and that's how I've learned a lot about money is by having conversations. You know, like the friend that I was spending time with last night, she's an investor and a financial advisor, and so I was asking her like, okay, well what are you investing in and how are you thinking about it? And what is an investment thesis? Like, I don't even know what that means, right? Like, you know, we were having conversations and she was teaching me all of this stuff because I was willing to tell her like, okay, here's how much money I want to invest, but I don't know where to, where best to put it, you know, that kind of thing. So I think you just got to be willing to put yourself out there first. And I find that people want to talk about it. So when I bring it up and I start sharing, they immediately start sharing because it's like they were like waiting for an opportunity to talk about this.

Yes.

Is what I find. So I think we just got to start doing it and create more transparency around it. And then, yeah, it creates opportunity for all. And that's the other piece of it is like, I recognize that, you know, even someone who would be considered a direct competitor, they sell the same thing I sell. I don't believe in competition in that way. I think there's more than enough money to go around. I think there's more than enough opportunity to go around. And I choose to, like, be friendly with and support my competitors, quote unquote, and vice versa. And that just means that we all get better at what we're doing. We all can serve our clients better, right? We all can make more money. There are times where I'm too trusting and someone, you know, I don't know, I guess you could, for lack of a better phrase, steals from me, right? Or takes an opportunity or says one thing but does another behind my back, whatever. And that's gonna happen too, but I'm like, But I don't wanna be a person who's closed. So I'm just gonna, I just gotta be me and it is what it is, right? Like there's gonna be some occupational hazards when you're being transparent.

Absolutely.

And you just gotta navigate that as best you can, but I just choose to be who I wanna be in the world instead of who I feel like I need to protect myself, you know?

What was harder for you, making your first $100,000 in a year or making your first million dollars in a year?

$100,000 for sure.

Why is making 100,000 harder than making a million in a year?

Because it's like, I think we're just figuring it out. I also think we're charging too little for our work at that point.

Is this when you were working as a career or when you had your own business? Or freelancing?

I never made a hundred grand prior to starting my business.

Got it.

You know, I went from college to, like, I had a job in between college and law school, and then I went to law school, and then I started my own practice.

So, so you didn't, work at a law firm after law school. So you started pretty much right away being an entrepreneur.

Right.

Which is really hard to do.

Yes, my last salary before I became an entrepreneur was $41,000 a year and like really good health insurance.

Yeah, yeah.

And I was thrilled.

That was in between law school or in between school and law school, is.

That what you said?

Yes, no, in between, this was after law school because this was my clerkship.

Okay, got you.

Yeah, so you kind of sign on for a year, you're paycheck is not that big. And you're a lawyer, right?

You're learning the ropes, you're getting reps, you're getting experience.

And that's kind of why I decided to start my business at that time, because I'm like, I already don't have a lot, right? I already know how to live off of this amount of money. Yeah, yeah. So I'm like, if I can live off of this now, let me keep my expenses this way or lower them even more. Like I sold my car and we owned a house and we rented it out, moved into a smaller place.

How many kids do you have at this time?

I had none, yeah.

Okay.

Oh, well actually, that's not true. I had my stepdaughter, but she didn't live with us full time.

Okay.

And so that's what I did at that stage is like I cut down my expenses as much as I could so that I could build this business.

How old were you then?

I was 27, I'm gonna say, 2009. Uh-huh. Or yeah, 2009 to 2010. Okay, cool. This was that year. And then I clerked for the judge and I started my, my practice and I was like, you know, I made, like, there were months where I made 500 bucks and months that I made $2,000. And that's why, like, linking together, you know, I was doing, my friend bought a salon. She was a style, a hairstylist. She wanted to buy her first salon. I did the transaction. She was purchasing an existing business and I charged her 500 bucks for that. I don't think I've actually ever told anybody that. That's true. And I, 'cause I was ashamed. I was ashamed that I didn't know what to charge for that. And that I undervalued my services so much that I like literally have never told anyone. I charged 500 bucks for that. And she's still a good friend of mine. That's not her fault. No, it's not her fault. She made bank with that salon and she's since now sold it.

But you also got experience doing that, you know, doing that transactional deal, which you've probably never done at that level. Seems like. So you gain confidence from that.

Yes.

So there was a win there for you as well?

There was a win. And, but when I saw how many hours of labor were involved, you put.

Like weeks probably, right?

Yes, I'm negotiating with the other side, dealing with like a difficult lawyer.

$500 is a steal.

I mean for the whole thing.

Can I hire you for that?

I should have charged $5,000 minimum, you know? But it was like, but I learned from that. Oh, I add value.

Of course.

I can figure it out and I have a skill in that I'm trained and knowing how to figure it out. Yeah.

You know what I mean? And that was kind of like working on the job experience. Like you weren't fully probably experienced for that yet, it sounds like, but you learned, okay, I didn't need to do these 10 hours of calls that I did here. I could have done this in an email, whatever. I don't know how this works, but whatever it was, you learned your process.

To simplify it, to maximize it, so. Exactly. And back to that 100 grand question, I think that's why it's like we're figuring it out. Usually we don't know exactly what we sell in those early stages of the business, so we're selling everything. Whatever people come to us with, we're like, yeah, we could do that. We just create a custom offer for that.

Whatever money we can bring in, we'll do it.

We will take it. And so you're very busy. I call this stage busy bee because you're very busy at this stage, but you're nothing's refined, nothing's efficient. Everything is just sort of like your massive labor towards whatever you can make happen. And so that first hundred grand, I think you are hustling for that. But in order to get to a million, or at least to do it in a way that feels sustainable, you need systems, you need process, you need team, right? And so now you're starting to build a sustainable business. You're not just, you know, by brute force making money. And you need to clarify your offering.

And your audience and your niche and what your specialty is. Exactly. I'm not just a lawyer that can do anything you want me to do, but here's what I really specialize in. Exactly. Here are my three packs. at these different levels and you go.

All in on marketing that. Yes, and there's money that you're saying no to. Absolutely. You learn that lesson that not all.

Money is good money.

Isn't that crazy? Yes.

I say this a lot to people, I go, it's weird that I'll turn down massive checks all the time. Yep. But I'm just like, that's not what I wanna do and it doesn't serve my mission. Yes. If it's not serving the mission and I don't need the money, then I.

Shouldn'T do something just to bring in more money.

Exactly. For me, it's a distraction. At different stages of my life, a different season, now to say yes to everything, you know, when I'm broke, You say yes to all these things.

Yes.

But then when you're like, okay, I'm here for a mission and to serve at the highest level of my skills and abilities that brings me the most joy and brings others the most joy and benefits the most number of people, then you start saying no to money, which is crazy. Yes.

It sounds crazy, doesn't it? It's delightful.

I love it.

I feel like, to me, it lets me know that I'm not, it's like I'm not made money my master.

Yes.

Right? Like it's very important, but it is a tool. That's good. You know what I mean? And I'm not beholden to it and I won't trade anything for it. There is plenty of things that I will not do and I don't care how much you pay me, you know? So I think that it's good to remember that and so when you're turning down opportunities, it's just an example of like, okay, I'm doing things right.

I think you got to understand that just because you turned down money over here doesn't mean it's not going to keep coming to you. Just because you turned down something that's not right for you doesn't mean abundance of something that is right will keep coming to you.

There's so much opportunity. There's always more where that came from. Absolutely, you know.

Absolutely. That's powerful. Okay, so the first 100,000, how long did it take you? How many years until you made 100,000 in one year?

Can you remember roughly? Yeah, so my first year in business, and it was like, I started September 1st, 2010. And so from that year till like September 2011, I made like 60 grand that first year. That's right. But I think the first full 12-month calendar year was like year two. So it wasn't, it didn't take too long.

And then how long until you made seven figures in one year?

Yeah, that took me seven years after that.

Yeah. From starting business.

From September 2010, I think it was, maybe it was six, it was like 2016, 2017.

Yeah.

Um, I think 2017 was my first seven figure year. And I had gotten close, but not, you know, like almost there, but not quite. And twice. And you know what, it was interesting. What happened is, like I had my business, my revenue was doubling in the beginning. It was like I made 100 grand, then I made two or 250. And then, you know, then I made 500. Then it's like I plateaued.

It's like, okay, 560 and 620.

I know it started making me mad, like from 500 to 700,000. I think I was there for like three years. And there was all kinds of stuff going on in my life. One, there was a lawsuit that I, one of my business partners. So, like, this is one of the things where too trusting too quickly, caused some issues. So that was a huge distraction for me at that time. I had two babies back to back.

Wow.

So, you know, I was busy with them. And then there were just a lot of lessons I needed to learn. Like I had all these people working for me, but I didn't have good boundaries and I didn't, I just kind of let them do whatever they wanted and didn't have, you know, like I was learning how to become a boss. I was learning how to become a leader and a manager.

So much more challenging than just doing your skill. Like, let me just be good at.

The law thing, which is what people wanted me for.

Yes. Now they want my business for that and me, but I've got to train the team and.

To deliver.

Right.

Exactly. It's a different skill.

It's totally different. And it's. It can be challenging. And I think that's why a lot of times we're like, well, I'm just gonna go back to doing it myself. And it's like, you can, but it's gonna keep you small. Yeah. You have to say yes to those challenges. and learn that new skill, right? And I think leadership skills are so valuable for everybody. So, yeah, I had to learn that and it took me a couple of years to like figure out how to have stronger boundaries, figure out how to stop letting people waste my time, figure out how to charge for what my services are worth, right? All of those things, those were lessons that I was learning in that time.

Who was wasting your time? Like clients or employees?

Clients were wasting my time. team were wasting my time. Even family members, right? Like, my desk was like right in the front door. So like, it's like the door is here, my desk is right here. My husband would like be coming in and out. He's a stay at home dad at the time, taking care of the kids. And he just ran a tight ship with our household. It was amazing. Like I had so much support in that way. But he would like, every time he came through the door, wanted to talk to me. I got a focus.

Yes, exactly.

Was like, I didn't know how to create boundaries around my work time.

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 see curious. Why would a guy like Lewis intentionally spend money on a business class ticket? And 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 know, 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. But I'm also always trying to to save.

Yeah.

I'm willing to spend, but I want to save a lot if it's going to be expensive. I'm like, how, I'm always telling my assistant, like, look for the deal, look for the deal. Like, even if it's a thousand bucks, try to get it half off.

Okay, so, so that's willing to spend. Yeah. But save me money, too. Okay, so that's, 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 gonna save and invest. And those numbers are aggressive. That's a lot of money.

You're going hard.

Yeah, 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.

Yeah, I might get myself some, I might go out to dinner, but the rest I'm just putting straight in investments. 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 you 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's 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 wanna be prepared, you never wanna have your back against the wall. So I just wanna 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 stuff 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. and 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 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 all legal tax breaks. So as you earn more, you do have more opportunities. You have not only your 401k, 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 going to max all of those out.

Yeah.

Okay. 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 at Vanguard or where I use Vanguard, whatever you want. and you just continue to invest. So that's one and that's going to keep making you money over the long term. It's just you're not going to get those tax breaks from a 401k and IRA, etc. The other thing is as you accumulate more and more assets, you're going to start to notice a lot of different people are going to come with opportunities. Dude, I get text messages from these crazy start like, 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. 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 now. 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. send it to me. But you know what? I like what you said. You took a little bit.

You had some fun.

Yeah, had some fun. Five to ten percent once you've got all your other stuff automated, you've got your index funds, locked down, HSA, your different accounts. I don't have any problem. I think you should take five to ten percent 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, et cetera, 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 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 in. I log in about once a month to my investments.

You see like, oh, yeah.

And really you should not be checking your investments.

Checked every 10 years.

Once a month is good and like, don't, you're not a day trader. Okay, 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. $100,000. 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, that'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 7 to 8% 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 10 grand a month going to your index funds, you've got, you've dabbled in the, the smaller investments and startups and you've kind of, you've done it all.

Yeah.

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. That moment, yeah. Yeah, for when, so I already planned, 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 X, Y, Z? Are you taking care of your parents when they get older? One thing 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 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?

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, 20 K a month, that money will turn into massive amounts. And 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 grows.

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. 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? 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 going to 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.

Yeah.

It might be a better move. 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 really thought about it.

It's 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 with the market rate. 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.

So a lot of people have a relationship with money based on either what they've been told or what they've experienced.

In their outer environment.

So then we gain information from our environment and the stronger the emotion we.

Feel from experiences in our lives, the.

More altered we feel inside of us.