The 7 Ways To PREPARE For An Upcoming RECESSION | Lewis Howes

Listen, I know these times are tough and all the talk about the economic recession probably has been stressful for you. The best way to make yourself recession proof is to, I think you gotta have a dream.

The School of Greatness.

Really?

Yeah. Please welcome Lewis Howes. I want you to take a moment to imagine what it would feel like to have the ability, the confidence, and the belief that no matter what life throws at you, you'd be okay. How much less stressful and how much more enjoyable would your day-to-day life be? How much more empowered and at peace would you feel in your life? I know there's a lot of stress about the current state of the economy and the anxiety around all the uncertainty of it. And I get it, there's a good reason for the worry. According to studies, a dozen countries around the world are on the verge of debt default. inflation is through the roof and the stock market is reflecting all of this. But here's another thing I want you to keep in mind. More millionaires are made during recessions than any other time in history. Despite all the negativity and the stress, despite all the noise, there's a ton of opportunity for you, for your business and your career during these difficult times. And that's why I wanted to take today's episode to walk you through seven ways to not only survive, but thrive during an economic recession. And I hope this episode gives you tools to empower you to make it happen, and more importantly, the courage to believe that you can. So get out a piece of paper and a pen, and let's jump in right now. The number one thing I want you to think about is learning the language of money. So get this, according to a 2020 study, only 47% of Americans use a budget to keep track of their spending habits. So less than half of us know where our money is going right now. And now this isn't entirely our fault. We weren't taught anything about personal finances in school, really. That said, not having a budget is like going on a road trip without knowing how much gas is in your tank. Without at least having a general pulse of your budget, you'll always be guessing and coming up from a place of uncertainty when it comes to money. And I want you to be there. I know this firsthand because I used to be terrified of money growing up. I didn't know the first thing about it and as a result, it really scared me. Money in general scared me. And after my college football career came to an end, I was struggling. I was trying to figure it all out. I was broke on my sister's couch, living off credit cards that I really couldn't afford to and became even more terrified of money, debt, investing, saving, all these things. and the root cause of all of this is the fact that I didn't really know anything about it. I wasn't educated about money. And fear comes from not knowing, lacking the information, the knowledge and the skills. It wasn't until I began educating myself with the right books and podcasts and courses, surrounding myself with money minded mentors, which is huge, that I really began to become familiar with the language of money. They say the best way to learn a new language, whether it's Spanish, French, English, Mandarin, is to immerse yourself with people who speak it. The same goes for money. So be sure to start learning the vocabulary around money. And so many of us are afraid of money and budgeting because we're coming at it from a negative space, a fear-based place. We're afraid we'll have to face the reality of needing to spend less or sacrifice all the things we enjoy in our life. because of the numbers, right? But what if this is not the case? What if budgeting means you'll actually have more to spend than you thought you had in the beginning? Instead of being worried and stressed out every time you swipe your credit card, budgeting allows you to approach these situations with confidence and more certainty. Number two, get crystal clear on your why. This is a big one for me. Getting clear on the purpose and the mission for your life will unlock so many things for you and thriving through a recession can be one of them. The reason might seem simple on the surface, but I've seen so many people across all different tax brackets fall victim to not having one time and time again. So it's worth us going over. First, I want you to ask yourself what big time purchases you've made or you're planning to make and why they are important to you. Do you really want that expensive three-story home or are you just obsessed with the status it will give you in your social circle? Do you really want that convertible or do you just want heads to turn when you drive by? Do you really want that new pair of $1,000 jeans or do you just want to show off the logo to a bunch of strangers? You just got to ask yourself and reflect about this. And look, maybe you do actually want those things and that's fine for you. Maybe you've always had a dream of owning a certain type of car and to you buying one is a symbol of how hard you've worked over the years. It's fine. But for most people, the material possessions they choose to invest in almost always come from a place of insecurity. I'm not saying it's all the time or everyone, but that's sometimes. And not fully loving themselves and not knowing what they truly want out of life. So I'm telling you, when you get crystal clear on your why, You'll find most material desires start to fall away. You don't need them as much. You're more confident in who you are. For instance, if the mission you have for your life is to provide help to first time startup founders, then it makes it easy to prioritize how, where and what you spend your money on. We all deserve to be rewarded for the hard work we put in, but I see so much unnecessary debt that people find themselves in that could have been clearly solved by getting clearer on their purpose. And in times of economic uncertainty, avoiding overspending becomes even more essential. And I'm not going to sugarcoat it, the stakes are high right now when it comes to your finances. There's a lot of uncertainty that's happening in the world. That's why now is a powerful time to dig into your why, your mission, and really your mindset around money, this understanding. To get you started, I've actually created a money mindset quiz. It's totally free and an easy way to better understand your unique perspective about money, abundance, and financial freedom. I'd love for you to take it. Just go to lewishouse.com/quiz or click the link in the description below to get started. It'll tell you what really your personality type is around money. So the next thing is, thing number three is to network and really build quality relationships. Now that we've laid the foundation and established the mindset shifts that need to take place when it comes to preparing for the recession, Let's dive a little deeper about the details. Now, research shows that 70% of jobs aren't published on any job sites, and as much as 80% of jobs are filled through personal and professional connections. The reality is that who you know matters, especially in uncertain times, and more importantly, who knows you and who has a good relationship about your personal brand. Businesses come and go, markets are red hot, then cool off, the economy is in full swing one minute and then drops the next. But your network can last as long as you're alive. Investing time, energy and strategy into developing a world-class network, it'll help you weather the storm in any economy. So to begin, I want to go over the main thing people get wrong when it comes to building relationships in an authentic way and networking. Most of the time, they make it about themselves. And that's not what you should do. How many times have you been approached on LinkedIn or received some cold email or phone call that didn't provide you with any value? When it comes to networking and building quality relationships, people are so quick to ask for favors, but so slow and often unwilling to give favors themselves. It only gets worse the more successful you become in your field. To avoid this common mistake, keep these three points in mind whenever you're reaching out or trying to grow your network. Number one, make it all about the other person. Lead with as much value as possible. Be genuinely curious about whatever the person is up to. What projects are they working on that excite them? What plans do they have for the next stage of their careers? What about their industry do they love and what do they think needs to change? Really think about adding as much value to them first. Number two, keep in touch between your asks. You know, it's unfortunate, but we all have those people in our lives who only reach out to us when they need something, and it never really feels good. The same goes for any relationship, even a professional one. Instead of only reaching out to someone when you have a book to promote or you're looking for a new job, make sure you keep in touch between those times as well. Build an intimate quality relationship. wish them a happy birthday, check in on them and see how they're doing, what's up in their lives, their families, their careers. Cheer them on in social media when they have something exciting that they're announcing. These little touch points go a long way. And then by the time you ask for a favor, it'll feel more well intentioned and earned because it is more well intentioned and that's the key. Number three is to lead with emotion. In business, we hear a lot about keeping our emotions out of everything and not letting them cloud our judgment. Now, that's true and important to remember, but people too often take this robotic approach and apply it to relationship building. The truth is, it just doesn't work that way. Maybe it's social media or the virtual world that we're living in right now, but never forget that you're connecting with another human being on the other end of every relationship. Don't make the relationship transactional. Again, I love to lead with as much love and appreciation and communicate with them in a way that you wish someone would communicate with you. Now with all this in mind, there are a lot of different platforms out there for you to meet high quality connections, both virtually and in person. You can join different sites like meetup.com or get active on LinkedIn and Facebook groups that are connected to your industry. and invest in conferences, live events, and so much more. Another thing when it comes to networking is what we'll call industry adjacent networking. So for example, let's say you're a graphic designer living in London. Naturally, when you think about networking with others in your line of work, your mind probably goes straight to the nearest design conference or mixer. These are great, but oftentimes connecting there can feel a little forced. Everyone knows why people are attending and things can feel a bit inauthentic if you aren't careful. So instead of only going to graphic design meetups around London, make sure to check out art shows, painting class, or a film event. Chances are there are people who attend those sorts of events who are also graphic designers or maybe need graphic design work. So begin to get creative and put industry adjacent networking to good use. But remember, it always comes back to being genuine in your relationship building. So, a rock-solid network can help you thrive through any economy, any recession, so be sure that you invest in yours at all times. Number four, never neglect your emergency fund. Everyone's economic situation is different. I get it. So I know you might be thinking that you don't have enough money to set aside for emergency funds, right? I totally understand and I know what it's like to be scraping pennies together. But the most important thing here is building a positive habit. And whether you can set aside $1,000 every paycheck or $10, the act of making an emergency fund a non-negotiable will give you the practice that you need to build long-term recession-proof wealth. However, before you automatically assume that you don't have enough money to save, I want you to take inventory of your spending habits. In a recent survey that studied people making over $20,000 per year, here are the most common places they were overspending. 39% of respondents said dining out was their number one place they overspent. 32% of respondents said they overspend on groceries. And 22% said they overspend on entertainment. Now, I don't know about you, but do any of these sound familiar for yourself? I know it can be tough, but taking a good look in the mirror will help give you the clarity and motivation to take care of your finances like you do with the other areas of your life. And luckily, there are tools today to make building an emergency fund easier than ever. There are apps that give you a quick snapshot of exactly where you're spending your money to allow you to budget more effectively. There are platforms that allow you to automatically transfer money from one account to another. So you don't even need to think about where your money is going. And remember, it isn't necessarily about the amount you put into your emergency fund. It's about building the habit so you'll have peace of mind during the good economic times and the challenging ones. Number five is to level up your personal brand. I cannot emphasize this enough. There aren't many certainties when it comes to business or career opportunities. But this is one that I've come to know as a fact, at least for me. The best way to make yourself recession proof is to level up your personal brand. Investing in yourself personally will allow you to improve the quality of your network, improve your earning potential, and improve the quality of opportunities that are available to you. And to get you started, I recommend getting clear on what we'll call your personal brand elevator pitch. So take a minute to write down your answers to these three questions. Okay, personal brand elevator pitch. Question number one, who do you serve? Now, again, who do you serve? This is the audience you're trying to reach out to. For instance, if you're a wedding photographer, this would be couples who recently got engaged. And if you're a marketing consultant for startup companies, then yours would be tech entrepreneurs potentially. Question number two, why is this important to you? This is where soul searching and introspection comes in. Why is the thing you're doing in your career aligned with the purpose you're created for your life for this season of life? Maybe you've always had a passion for whatever it is that you're doing or maybe something happened to you that changed your life forever causing you to dictate your career to helping others in a similar position. Question number three, why are you the person to do it? What skills, what talents or unique gifts make you the right person for the job that you're positioning yourself for? Maybe you've driven incredible results for past clients or customers or maybe you've spent a decade learning the skills of your trade. Whatever makes you stand out, be sure to communicate it clearly. And once you have your personal brand elevator pitch down, the most important next step is making sure you're doing everything you can to be visible to the people you're trying to reach and get in front of. Get active on LinkedIn, attend meetups and events related to your industry, make a beautiful website to showcase your work and anything else you can think of to put your brand out there. The more proactive you are when it comes to your personal brand, the more you'll be able to thrive when economic times are tough. Remember, especially in the beginning, it's not about making money, it's about adding value and the money is sure to follow. Number six, increase your ability to earn. Now this comes from one of the most important books on wealth ever written, the Richest Man in Babylon by George Samuel Clason. So increasing your ability to earn more will help you be prepared in case of an emergency during a recession. and one of the best ways to take your financial freedom into your own hands is by launching a side hustle or some type of side business, right? Now, I know not everyone listening right now has a business that they're running. So I've divided this section into two parts. Those who want to launch a new side hustle and those who already have one or a full-time business on their own. So for those without a side hustle, I'm going to take you through an exercise I created called the Sweet Spot Diagram, which will help you discover what your perfect side hustle will be. So first, I want you to draw three large circles on a piece of paper. Okay? Three large circles. Label one, love, another, skill, and the last one, income. Love, skill, and income. Inside the love circle, I want you to list out your top five to ten things that you absolutely love to do. These can be hobbies, anything that you do in your spare time or your lifelong passions. This goes out inside the circle. Inside the skill circle, write down again five to 10 skills that you're best at. And you have to get creative here sometimes because there might be skills you do that you don't think you can monetize, but just focus on this. Whether that's photography, computer programming, guitar, maybe you like salsa dancing like myself, whatever it is, write down that. And in the last circle, the income circle, write down the many different ways someone could make money online or in person. This usually includes sales, coaching, consulting, events, freelancing, sponsorships, design or creating products, both digital and physical. And now we're going to find the sweet spot. where all three come together. So for example, maybe you have surfing in your love circle and coaching in your skill circle. And with these in mind, maybe you can start selling online courses or in-person coaching to teach beginners how to surf. And what I love about the sweet spot diagram exercise is that it's quick, it's easy, and it takes you through a series of self-reflection to help make the decision a no brainer. So next, let's apply this principle to those who already have part-time or full-time businesses they're operating. Over the years, I've come to learn that there are five primary ways to increase your ability to earn as an entrepreneur. So let's stick with the surfing coach example by applying them to his business. So here they are. You can increase your rates or your prices. Maybe when you're first starting your business, you charge $100 for private surfing lessons. If you begin charging $150 per lesson, the amount you make will go up as a result. provided you keep bookings consistent. You can increase the number of leads or prospects that your business has. You start experimenting with local ads on Instagram, YouTube, Google, maybe somewhere else online as well. And maybe you'll host a webinar titled the Ultimate Essentials for a Surfing Beginner and collect all the emails of the registrants to that webinar as prospects. You can improve your business's processes and workflows. This is another area. and as entrepreneurs, there are so many things going on that it's easy to have blind spots in your business. So no matter who you are and what business you have, hiring an outside expert to come in and help you streamline and optimize your workflows is a great investment. More than likely, you're leaving money on the table or overspending in a number of areas. Next, you can increase the number of products that you sell. So for this example, you could start selling online courses, publishing affiliate content after partnering with surfboard brands or launching a new group surfing package. The list goes on and on how to create new offerings. What if I told you there's one thing you can do today to line yourself up for massive success and that you are in complete control of it? It doesn't cost a lot of money and it's available to anyone. You owe this one thing to your future self and that is optimizing your morning routine. It all boils down to your morning routine in life. After interviewing some of the most sought after coaches, athletes, entertainers and leading researchers on the School of Greatness, I know without a doubt that your morning routine is a powerful predictor of your future. You can rewrite the story of your past to propel you forward into a brighter future rather than getting stuck in old patterns, limiting beliefs and self-doubt. You don't need to do it all alone either. Join me, Team Greatness, and our incredible community and click the link to sign up right now. And last, you can improve the quality of people on your team. This might be a little down the road for someone who's just starting out in the business world, but nothing will take your company to the next level faster than investing in the right people for your team. Smart, driven, kind, passionate people will enable you to focus more on the things you're best at and less on the things pulling you away from your talents. Now, I know this might seem a little bit overwhelming to start from scratch, but the fact is that launching a business or a side hustle is one of the fastest ways to increase your earning potential. I know it's not easy. I know it takes time, it takes energy, but it's something you can do. And that remains true during a recession when times are great. and everything in between. And always to add to that, you want to find the pain. Where is the biggest challenge for someone right now in their life and how can your talents really support people in overcoming those challenges? Number seven, this is a big one, a big mistake that a lot of people get wrong. And number seven is avoid shiny objects. We've made it to the final point and again, this is where most people get distracted in life. they take on so many different shiny things. And one of the best ways to thrive during the recession is to be realistic with yourself and honest with yourself about how much risk you're willing to take. There's going to be a ton of temptations that come your way during an economic downturn. Every investment under the sun, every good opportunity is going to show up. Upfront prices for homes and cars will likely decrease. Scammers will be using people's vulnerability to prey on others. New businesses with bad intentions will probably come up and a lot more. This is why it's so important to set a budget and stick to it. Be relentless and vigilant when it comes to where your money is going. And now this doesn't mean that you shouldn't take any calculated risks. That's how a lot of millionaires are made during recessions. But what it means is that you should always be focusing on the essentials first. and know exactly what you're getting into when it comes to investments and know how big of a risk that you're taking. Which brings us to another point that's critical to remember. If you are in a position to do so, please start paying off your debts. Interest rates are likely to go up during a recession. So if you can afford to pay some of them down, it's probably better to do so sooner rather than later when it's too late. Financial publication Investopedia has an easy way to approach paying off your debts. It says there are two strategies to pay it off: the debt snowball where you can pay off the smallest debt first to build momentum and confidence or the debt avalanche where you tackle the biggest debts first and pay them off in one fell swoop. No matter how you decide to tackle your debt and expenses, remember that there will be people and companies trying to take advantage of you and others during the recession. So be careful where you put your money during these tough financial times. And there you have it. These are the seven ways that you can not only survive but thrive during an economic recession. I hope you found value in the strategies we shared over this episode and that you'll put at least a few to the test during this period of financial uncertainty. Also, let me know which one that you found the most valuable. Leave a comment below. Subscribe to this video like this and leave us a review. We'd love to hear what else you want from this type of content. And now, I want to leave you with this final thought. So listen, I know these times are tough and all the talk about the economic recession probably has been stressful for you. But I want you to take a moment to think of the last time that you felt like you hit absolute rock bottom. When was this in your life? The time you felt like your life would never be the same. Really think about and visualize that moment and how it made you feel. I know what that was like for my life. It wasn't fun. No matter what the circumstances were, no matter what the aftermath was, if you're listening to this episode, if you're watching this right now, if you're listening, it means that you're here. It means that you overcame, that you persevered. It means that you made it through the challenging time. And I don't know what the next six months or year or two years will hold for you or the world, but I do know one thing. and I hope you do too, that you will make it on the other side and you'll be better for it at some point. Wherever you are, thank you again for watching, for listening, thank you for being here, thank you for being you, and I'll see you in the next episode. If you got value from that, then go ahead and stick around for more coming up right now. What would you say if you saw someone now, say they're 20 or maybe they're 30 or whatever age doesn't matter, but They don't have a lot of money right now. Let's say they're just making a normal amount of money, right? But they have certain habits and behaviors and beliefs and thought processes that you witness. And you could say, Wow, if you follow these things, you have the ability to make a lot of money one day. What would be those behaviors or habits that would determine if someone has the ability to be rich?

The first thing is mindset. That's what I call, you know, my channel, Mimi, the Minority Mindset. You have to believe it's possible for you, because if you don't believe it's possible for you, you can have all the resources, you can have all the drive, but you'll never be able to because your mind is gonna stop you. Your mind dictates your actions. And so you first have to believe that somebody like you can do it from your position and know that, hey, I will do whatever it takes. Now, if you have the mindset, then you have that, I will do whatever it takes, that discipline, and then they're willing to learn, nothing can stop you. So the discipline means that you're willing to put in work. You know, a lot of people say, don't work hard, work smart. And I think this is a whole bunch of crap. You know, like you can work as smart as you want, but if you're not willing to work hard, you're gonna very much limit your success and limit everything in your life. You have to be willing to work hard.

I don't know anyone that didn't put in a lot of hard work for a period of time until they learned how to manage and delegate and optimize with resources and skills and time to work smarter.

100%.

But they had to work hard at something.

In order to get there. Once you get there, now you can scale back and now you can reap the fruits of your labor, but you have to be willing to put in the work. The hard work.

You got to make the flywheel turn.

You got to. And your hard work makes your smart work even more effective. And then your discipline then is just like anything else. It's being willing to stick with it when things go wrong and when things get hard, because things will go wrong, Things will get hard. I made a video on my YouTube channel talking about my worst real estate deal ever. I had this running joke with my friends that anytime I start something new, I get scammed and I get screwed over. And it is extremely difficult every time it happens because from the event planning business, I guess screwed over multiple times, and then the beginning, it was just a complete flop. I mean, it just things, everything went wrong that could potentially go. I was supposed to host my party at a venue, planned it for months, the night before the event, it got shut down by the cops because they were apparently serving to underage people. It just lost.

Oh, man.

And this is my first event. Oh, and everything just goes wrong. Then, you know, I started my sock company. I got scammed by a fake marketing company as soon as I started, which is why I started minority mindset. When I started my, I started for a little bit, I was trying to hustle and I was selling stuff on ebay and amazon. Me and my buddy, we found this supplier in china was sending us authentic items that we were going to sell online. We were young and we were selling it, we were making decent money and then we get a letter saying you're not selling authentic stuff, we will potentially sue you for $7 million. Oh man, that's crazy. I'm not even 20 years old. You know, I don't even like $7 million. I can't even count that many digits. Yeah, yeah. You know what I mean? So it's like, and I had to shut that down. So it's tough. Yes. You talked about last time getting punched in the mouth. You have to be willing to get back up and you know, how do you prepare for that? Maybe go and get punched. Go to a boxing class. Get uncomfortable. Do something that puts you out of your comfort zone, even if it's not directly correlated. I try to do that. I've joined a boxing gym here in California. I'm not the best boss, just to get in shape, but you get uncomfortable. I joined my acting class. That was really uncomfortable for me because I'm like this kind of nerd. I went to school, I was supposed to study hard in school and do all this stuff. And now here I am trying to figure things out, edit and fit in. But I made friends, everybody's so friendly and you get to meet more people and you put yourself out of that comfort zone and I think that will help you in other places as well. So it's not always, you know, finances. We talk about this where we live a human life, right? It's not just my bank account, it's I'm a human first. A bank account is one aspect of my life. And you have to be able to live as a human that way you can actually enjoy your bank account. Absolutely, man. Right, I mean, you can have a.

Million dollars, $10 million if you're miserable, who cares? Exactly. So you talked about the right mindset, the right discipline.

The third thing was... The right mindset, the right discipline, and the right work ethic. So the willingness to learn, you have to be willing to learn. Willing to learn. And if you're not willing to learn, you're not going to be willing to grow because you have to be willing to challenge your beliefs. And I think that became significantly easier for me once I started learning about money because I realized everything I was told was wrong about money from, you know, loans to banks, to schools, to your job, to investing. When I realized everything that I was told was wrong, that's when I started, well, I was like, man, I don't think I know anything right. So it was very easy for me to start learning and listening to contradictory points of view, but you really have to be willing to listen to things that don't agree with one another. And that's in the middle is where you find intellect. That's where you find where your best education comes. And so, like, you know, if you listen, like, my, I listen to audiobooks. I'm not a very good reader. English is my second language, right? So I'm not the best reader, but I listen to audiobooks. And it's funny because I have, like, books that will completely contradict one another just so I can learn from different points of view. Like, I, I read Donald Trump's book. And then I read Barack Obama's book. I read the Communist Manifesto. I read the Capitalist Manifesto. You read books that are completely opposite. That way you can explore different points of view and understand and solidify your thoughts and just be more educated.

Because otherwise, if we grow up with just one belief the entire time and we don't see another side of something or another extreme potentially, then we're always gonna think life is that specific way as opposed to being open to seeing what other people think about whether we agree with it or not, just learn it.

And it's so much more important now because of social media. And I know you know this, but you go on Facebook, Instagram, YouTube, anything. If you start watching one type of content, what are they gonna do? They're gonna feed you more and more of that exact same thing. And then all of a sudden you go down this rabbit hole where you think everybody thinks like you. Anybody who doesn't think like you is wrong, they must be dumb, they have no idea what they're talking about. But you have to. I mean, it's so much harder now, which is why it's so much more important, but you have to be willing to break out of this hole and start learning something else and be willing to challenge your own beliefs. And that's where you will become smarter and you'll find more opportunity and you'll solidify your own beliefs on whatever it is that you do.

Absolutely. Those are good habits. What would you say are the three biggest myths about money that you've debunked over your time of learning about money? That maybe you grew up thinking it was one way, like you were talking about loans and banks and all these different things. What are three myths about money that you've found out were not true.

The first thing that I would say, I don't know if it's a myth, but I would say that the first thing everyone has to understand is what money is. And I don't mean in terms of like, in terms of wealth, but like money is just paper. It doesn't make you a good person. It doesn't make you a bad person. It just, it's paper. And we talk about all these insecurities people have with money. I grew up being told, don't talk about money. Don't worry about money. Don't stress about money. Yeah, here I am seeing my parents.

Work their butt off every single day.

Trying to make money. Trying to make money. And it doesn't make sense. How am I supposed to not worry about money? And you want me to become a doctor because you read those, if you go to those career fairs, they show you the different careers, right? And doctor is always number one, the highest income. So why am I doing this if it's because of the income instead of.

Because I love it or do something that I love? Why not become a doctor?

Because I want to help people.

Yeah.

You want to save lives. Exactly. And what's crazy is if you, understand money, you become financially educated, you're willing to talk about it, well now you can be financially stable doing whatever you want and you can follow something you love and still be financially okay because we assume that you have to have this in order to make money, you have to have this job in order to make good money, you have to have this career if you want to be financially stable but that's a complete lie. But that goes down to not us being willing to talk about money and I talked about this in our last interview. But, you know, money is one part of our lives. And the reason why people are scared to talk about it is because we're insecure about it. And that's because we don't understand how money plays a part in our lives. It's one aspect. I say that there's four. You have to be physically healthy, mentally healthy, spiritually healthy, and then financially healthy. If you're not financially healthy, well, it can make everything else much more miserable because you can't pay your bills. But if you're financially healthy, you're rich, but you have nothing else. More money just makes you more miserable. So you need to live a holistic life and understand how money plays a part in your life. That way the finances can have the biggest power. And then you understand that more money just amplifies who you are. It's like fire. It's like fuel. It fuels your fire. If you're a good person and you have more money, you have a tool to do more good. If you're a bad person, you have more money, you have a tool to do more bad. Which is why we need more good people with money. Exactly.

Why do we do that? Get educated. A lot of people just say that money exposes who you really are. Exactly. It amplifies who you are so people can see whether you're that good person or bad person or whatever it might be in between. But first off, understanding what money is is what you had to learn. It's kind of like this thing. What else around understanding it would you say? Maybe you thought it was one thing, but then you realized it was something else.

Exactly. So now that's money. The second thing is how do you use money and value money? I'm gonna say this in the nicest way possible, but traditionally Indian people can be very cheap. And, you know, I grew up seeing this. And what does that mean? It means that Indian, the traditional Indian house is a save heavy culture. And I can say that because I've seen this and I grew up in that where you, you make a dollar to spend 20 cents. And the traditional American culture is you make a dollar to spend two dollars.

Right.

And so to save heavy culture, so you're spending as little money as possible. possible to save it. Now, obviously we talked about inflation, so I'm not going to mention what that means with savings, but what I'm talking about here is you can use your money as a tool. And this is what wealthy people do because now what do they do with their money? You use your money to buy your time back. Because what so many of us do is we're exchanging our hours for dollars. You go to work every single day and you get paid, but what are wealthy people doing? They're not working just to use their money as a way to buy hours. They're using the money to buy their time back. Because now you can build things and build processes and invest your money because now you can use your money as a tool instead of as a fool. That's what I like to say. But this is where it's how do you now use your money to make your life better? And you don't want to be now just buying a whole bunch of Gucci and Louis Vuitton, it's now actually improving your life.

Not to make your life look better, but to actually improve it from the inside out.

Yeah, so the simplest example would be you start a YouTube channel, we talked about buying a camera. Well, one thing that you could do is you can hire a video editor. You go on a freelance site, hire a freelance video editor, and now what are you doing? You can spend more time making more videos instead of spending all of your time editing the content so you can focus on your time. You can hire someone to mow the lawn, you bought your time back, you hire somebody to help get you your groceries, you buy your time back. It costs money, you have to spend to spend money in order to do that. But you're getting something in an exchange and now you're buying your time back so you can use your money as a tool and you can use your money as a tool to buy your time back or you can use your money as a tool to make you and attract you more money. That's what wealthy people do and so you want to be able to use money in that way. The third thing would be now to really, I mean, I know I talk about this a lot, but you have to understand the difference between something that makes you money and something that loses you money.

That's a liability, yeah.

A liability.

What are the main liabilities that people spend on today?

The way you look, man. We have this Instagram flex culture, right? And it is very toxic if you do not know how to use it.

And unless you're investing your money wisely and you've got excess money and you're like, okay, I want to buy some stuff to flex, cool. But There's nothing-- if you're not investing your money-- yeah. And you're just spending it on clothes and watches and shoes. Yeah.

If you got the name brand stuff, but you got no savings, you got no investments, you're doing something wrong. Your priorities are in the wrong place. What are you doing? You're making Gucci rich, you're making Louis Vuitton rich, you're making all these companies rich, but you're keeping yourself broke. I talked about my watch. I spent a grand on a watch. I had no investments. I didn't even know what an investment was at the time. I didn't realize I could have taken that grand and invested it into a watch company and get a share of the profits. But that's what wealthy people are doing and they understand that. And there's nothing wrong with spending money. There's nothing wrong with having luxuries. There's nothing wrong with having the nice things. Yes. But it's a matter of when can you actually afford it. You have to know when the right time is for you to have it because you want to first make yourself.

Rich and then, hey, blow if you can afford it, do whatever you want. Grant Cardone is always talking about how he doesn't spend money on the cash he makes to buy watches or things. He only spends money on the watches and clothes and things, on the passive income.

That's great.

From his investments.

You take the earned income, you're working every single day, you take this income and you use as much of that as possible to invest into assets. The assets pay you, live off of the assets. Because now those assets don't need you to go to work every single day to get paid. So if you break your leg and you can't get paid, you're not getting that earned income, but that passive income from your assets it's still coming in and now if that's the money you're living off of, you are free. Your earned income is just buying you more assets. And so how do you start that? And so this is where you have to kind of build some sort of system for yourself. And the rule that I would always say is follow something like my rule of five. If you can't buy five of them, you can't afford one of them. So it's, you know, you want to buy a thousand dollar phone, you want to buy a thousand dollar watch, okay fine, can you buy five of them? and if you don't have the ability to buy five of them, if you can't afford to do that, then you can't afford one. If you can't buy five, you can't afford one. And then you want to create a system, like a system that automates your finances where now you have something going on with your money that is putting your money to work no matter what. And so one of the easiest things you can create your own is to follow something like a 75-1510 plan, which means that for every dollar you earn from now on, 75 cents is the maximum you can spend. 15 cents is the minimum you're investing and 10 cents is the minimum that you're saving. Now the savings is you want to build somewhere between three and 12 months worth of savings if you want to have that protection. Three months if you don't have a lot of liability, a lot of responsibilities, you don't have all that going on and you have a high risk tolerance. 12 months if you want to play it safe. you figure out what's right for you after you filled your savings, you fill up the savings, you don't want to put any more money into it because now you're just being eaten away by inflation. The savings is not there to make you wealthy, it's there just to protect you against an emergency. Then what you do is you take the money, put it into your investments. And now you just keep investing money. Now, what happens is as you grow your income, you don't change this ratio. So if you go from $40,000 a year to $400,000 a year, you keep the same ratio. and you're still investing first, and then you keep saving your money, and then you know how much you can spend. Because now what you're doing, which is what wealthy people do, is you invest before you spend. The way that the finances will look for the majority of people is you make money, you pay taxes, you spend your money, and then you wonder where your money went. Well, wealthy people do, right? Wealthy people are, you make money-- Especially in California. Yeah. $7 gas and high taxes. But wealthy people are doing is you make money and then depending on how you make it, either you pay taxes first or after, ideally after, because there are ways to do that legally, but you make money and then you want to invest as much as possible and then you spend whatever's left. So wealthy people invest and spend what's left while the majority of people spend and invest whatever's left.

Here's one that I think a lot of people do and I think it hurts them in a big way. How does someone not make their net worth attached to their self-worth?

That's a good one.

Meaning how do they believe in themselves, have confidence, have love for themselves when they're not making that much? Maybe they're in a transition, maybe they lost their job, maybe they're just starting out. And how do they also, when they start making some cash, not tie their bank account number to their self-worth?

So when you fail at something, you don't become a failure as a person. You failed at a task. And in order to become successful at something, you have to fail at a lot of tasks. And so the first thing you have to understand that about yourself is that just because something didn't work, just because you failed at something does not mean that you are a failure. Maybe you failed at a task. I failed at a ton of things. I'm sure you have to. You have to screw up a lot. And that's how you find the good. So now when it comes to net worth, if you want to be completely honest, your net worth is pretty useless. It's a worthless number. It means nothing. It means less than nothing because what is net worth? It's a paper number. If I have a million dollars net worth in the stock market today, tomorrow it could be worth 400,000. If you are valuing your life and even worse, if you are spending based off your net worth, you're living a very dangerous life. And some people do do this because they say, oh, I'm worth a million dollars. So I'm going to go out and live a million dollar lifestyle. You don't have a million dollars, you're just worth a million dollars. You don't have income coming in, you're just worth this amount of money and so you go and borrow a ton of money and you start living this million dollar lifestyle and then things go down and now you're the first one to lose your shirt. So the thing that I want you to remember is first regarding the failure. You're not a failure. Just because you failed at a task does not mean you're a failure. It's actually a good thing you failed because that means you're one step closer to finding that success. And then second, regarding the actual net worth number, look, this is just temporary. Everything is temporary and you have the opportunity to build something a lot bigger. You have to have the right mindset. And if you are here in America, you're in a first world country, you have the opportunity to do that, but you have to be willing to learn and be willing to give it time. So you have to be patient, but also impatient at the same time. Patient in the sense that you have to understand that get rich quick is majority of time a big scam. It doesn't work. It makes the people selling to get rich quick, rich, and you broke. So the first thing you got to understand is that. But then second is you want to be impatient where you gotta, it's gonna fuel that drive, fuel that work ethic, fuel that discipline, and you have to be willing to keep going. You know, I don't, if you would have told me 15 years ago or 10 years ago, hey, man, you're going to be interviewing with Lewis. on this show, I would never thought that's possible. Like, you know, I grew up being told somebody like me can't do this. Somebody like, you know, I remember talking to my own family members that you can never be a CEO of a company. Somebody like you can't do that. You have no business background. You couldn't even get into business school. And it's funny. Nowadays, I'm like, well, there's a lot more value to be the owner of a company than the CEO of a company because the CEO is working for the owner. but anything is possible. And, you know, even if you just ignore the financial side, you can do anything you want. But you want to be a singer, you want to be an actor, you want to be an entrepreneur, you want to be a CEO, you want to be whatever you want to do. It is possible, but you have to believe it and you have to be willing to put in that work. You know, hard work beats talent. When talent doesn't work hard, that is the truest saying that you can make because I have so, you know, I work in the event planning space. I still know a lot of people in this space. I know a lot of people that manage singers, big time singers, especially in the Indian space. And some of these people are incredibly talented with no drive, no work ethic. And where are they going with their careers? They had this spike and then going down. I know these other people that are average singers, but they're putting out songs day after day after day. I mean, if you heard them singing, it's like, you know, it's whatever, but.

You can produce it well. You can make the hooks. You can write cool lyrics.

They're improving. And they keep putting out content and they keep improving every week. And it's like, dang, you got millions and millions and millions of views.

It's funny, man. I got a friend of mine I've had on the show, Andy Grammer, who was literally in Santa Monica busking for four years, five days a week, four years playing songs for just tips. on the streets.

They hustle, right?

But he, I think he said he did like, he wrote like over a thousand songs or something crazy like this in this four year period. He would sing the covers to try to get like people to come around and be like, oh, I like that song. Let me give you a dollar. And then he would throw in one of his own original songs to try to get people like, oh, he's got his own stuff. But he did this for four years before he actually got something that was on the radio and then touring and all these other things. four years on the streets, just working really hard. Now he's got momentum, but he's got all these skills now developing over those years to write his own songs.

And I don't think people realize what four years means because you share four years. Oh, you know, college is four years, high school is four years. But you got to remember, during those four years, that's a long time. You go from January, February, March, April.

May, do it again, every day, again.

And again and again. Steve Harvey, I love his story because he went through the same thing. He homeless because he was like, I'm a janitor right now. I want to be a comedian. My friend, who I grew up with, is now on TV. We both had the same dreams. I didn't want to say it. He got laughed at for his dreams, and now he's the one on TV living my dream, and I'm working as a janitor, quit his job, moved into his car, and spent three years just trying to make it. Look at him. He's on shows after shows after shows.

He's crushing it.

That discipline, being willing to put in the work and just sticking with it is so hard and that can help you in any, you know, forget the financial side, doing something you love, living a purposeful life, because what's important to you is not what's necessarily important to me and what's important to someone listening to this is going to be different than me. And we all have a different passion, a different purpose, and a different mission. And so someone's going to care about climate change, someone's going to care about world hunger, someone's going to care about cancer in kids, someone's going to care about breast cancer, someone's going to care about financial education. And so we all come at this world with different experiences, different pains, and each one of those pains are gonna drive our motivations, but you have to be willing to work towards it because if you don't, who else is going to? And you have to be willing to do that if you wanna make that impact.

If someone wasn't raised around the language of money and they weren't in an environment or a household that spoke about it in a good way, maybe they said money, you know, rich people are mean or bad people or their parents always got angry when they saw someone who had money on TV and associated wealth with a bad person.

Yes.

How do they break that mindset that not all wealthy people are bad people?

Yeah, well challenge that belief, right? The way that we change our thinking is to challenge those beliefs. So like literally write down the thing that you believe and then you know, write down all the evidence that you can collect that tells you the opposite. Like that's how we change our mindset, right? You know, so if I'm telling myself I'm not smart, I can collect all the evidence. Well, I graduated from law school. I graduated from undergrad, summa cum laude, right? Like, actually there's evidence that I am smart. You know what I mean? Let me point that out. So I think it's so it's being.

A lawyer of your life. Yeah. Of that belief system.

Exactly.

Which is something you understand.

Collect evidence to prove what you want to believe, right? And see if you can find out that it's true. Maybe it won't be, but you probably will find that it is. Because a lot of our thinking, it's just like, it's just something, it's a thought that was planted there in childhood or from whatever interactions we had that are memorable moment that are kind of stuck, right? And it's creating this like this neural pathway that we just keep walking every day, we just keep saying that to ourselves. And so, the way we create a new pathway is we got to start digging that path, right, to go a different direction. And the way you dig that path is start collecting evidence of the opposite. So look for examples of wealthy people who aren't, you know, trash humans, right? I hope that I'm an example, right? And that there are plenty of others out there. So, you know, try to challenge those, you know, just, and I think it's just societal views. It's things that we tell ourselves. I don't know why. Maybe to make ourselves feel better for not trying. to go after what we want. I don't know why we do it, but we do it. And I think we can change it. And I also think there's a different pathway, right? Like I think there are issues that we experience as people of color, as queer people, as people living with a disability or chronic illness that other people don't have to deal with. And so we might get advice that's like, oh, just do these steps. It's so easy, right? When it's like, oh, but we're dealing with, I gotta take care of my mother as well. Like when I make it, I also have to take care of all the family members. who didn't make it, right? Who need help now that they're approaching retirement, right? Like there's issues that we have that typically straight white guys don't have, right? And so that's why I focus on this audience. And it's also just who is attracted to my work as well. Right.

I think it's to know your worth in general.

Yes.

And that's applied to everything in life, like know your worth with your friends, with your family, in your partnership, in your relationship. Exactly. Don't sell yourself short. in any area of your life. And you've got to learn to believe in yourself to do that, which goes back to step one for you. Exactly. Surround yourself with people who've done it.

And then learn to believe in yourself. Exactly. And that's what I was getting at, is the worthiness and the confidence. I think sometimes when, you know, when, like, there is probably not a black woman in America that hasn't worked in a workplace where she felt undervalued. And when you do that for a couple of years, you start to believe that your value is less. And so I think that it's important that we have confidence. It's important that we ask for the money, right? When we put ourselves out there, when we create work that we charge for it, right? And demand that people recognize our value. What if someone doesn't want to pay it?

They say, okay, I recognize the value, but that's not the value I'm willing to pay for. Because I don't want that value, or it's not a need in my business.

Or whatever it might be. So goodbye to that person. And find next. Exactly. Find who your audience is. And I think, you know, you gotta put it out there to get those nos to be like, oh, these aren't my people. Let me actually write my copy or present my offer in a way that makes them go away.

Exactly.

And only attracts the people that are really my people, right?

That makes sense.

Yeah.

And how does someone learn to feel worthy when they're broke?

Yes. Well, you have to recognize that you are inherently worthy. I was just as valuable as I am today, you know, 15 years ago.

How do you believe that?

20 years ago.

When in the bank account, And the relationship accounts don't show that value.

Yes. Well, I think again, it's environment, right? Like the way that I became a badass woman was surrounding myself with other badass women, right? Like starting to spend time with people who have confidence and believed in themselves and starting to, and what they saw in me, right? Like realizing what other people see in me that I don't see in myself. And you need that reflection back and that's why you got to surround yourself. I mean, I have to tell you, like I've been I've been spending time in LA this week with, you know, black women entrepreneurs that I talk to on Twitter all the time. And like, listen, the way that they will hype you up, you know? You got this, girl. Exactly. Let's go. We hype each other up, and that's so important. You need that. And I've had that since I was a kid. Like, I had friends who would hype me up, you know? So I think we need that in our lives and we gotta put ourselves out there, be a friend first, right? And then you'll find that squad and you'll start to, create that community around yourself. And then there's no way you can't believe it when you're surrounded by people.

Who are constantly reflecting it back to you. I love that approach of surrounding yourself with people that will hype you up or that inspire you that have already done that. And I've also heard people say, when I'm in those rooms, I feel like an imposter.

Yes.

I feel like all these incredible women, you know, if I was a woman in these rooms of women, for this example, but these women have done incredible things. How am I going to be able why should I, I shouldn't be in this room because they're all amazing, you know, starting to downplay my talents because they're all at a different level or have more experience or have their careers or financially successful. How does someone get over the imposter syndrome of being in the room when they are the whatever label they want to call it, the least successful financially, the least intelligent, the least experienced, whatever they want to say to themselves.

Yes.

I shouldn't be here.

Yeah.

Because I don't have X. How can they overcome the imposter syndrome?

Well, I think it's a process, right? It doesn't happen overnight. I think sometimes we think like, just think better thoughts. And it's like, that's lovely, but that's not working for me. You know, I think, first of all, challenge that belief when it comes into your head, when you have that thought, oh, I'm going into this room and I'm excited about it, but I'm intimidated because I don't know that I belong there. And really just check the receipts. Are you sure you don't belong there? Like, think about, who you are as a person, what do you have to offer the world? What is the value that you bring? What do people ask you to do that is valuable? What do they ask you advice on? You really just start to check your own receipts to see, really, is that true? Because usually the people who have imposter syndrome are people who have a very long and impressive resume. And I wrote about it in my book, How Maya Angelou and Michelle Obama, these are people who have imposter syndrome. like way far into their career, they felt like they didn't belong in certain rooms, right? Really? Exactly. It's like, what? That makes no sense. And it's true for us as well. Like we'll think that we're not valuable or we'll have that same imposter syndrome and other people are like, are you crazy? Like you're amazing, you know? Like you're bugging. So I think, if someone's in the.

Room and they're gonna remember this conversation that you share here, and they're about to be in a room with a bunch of powerhouse, whatever, individuals that they want to be around. And they're like, this is the first time I've been around this group of people. I'm terrified, I'm nervous. What can they remind themselves in that moment when the Oprah of their industry is talking to them and they are potentially a nobody in that space? They're on their way up or whatever. What can they remind themselves?

I would say like, they should ask themselves, what do I love about myself? Right? Like, I'm funny, you know? I'm smart, I'm strategic, you know? I have great fashion sense, right? Like, whatever it is, what is something that you love about yourself? And think about how you're bringing that energy to that room, right? And just recognize that that is a lie. And it is a practice. I used to be such a mean girl to myself in my head every single day.

What did you say?

I said that I was not smart, stupid, You know, I said that like, I can't figure this out. I'm bad at business. I'm not good at making money. I'm not good at practicing law, which is what I did before, you know, my current business. Like, I would, I'm a bad mother. Like, I mean, I said every cruel thing that I could possibly say.

What did that do for you?

I mean, it made me feel bad, right? Like, it made me feel bad and it made me want to go get under the covers for three days. And sometimes I did, right? And then I would get my ass back up and go back to work because I had to, because I had kids to support, but I would do that too. And what helped is meeting women who believe in themselves and just being around that energy. They it's just like that energy is going to bring you along because I think sometimes we think like, oh, I have to do all of this in my head. And once I fix it in my head, then I can go be around people. No, no, no. You need to go be around people because that's what's going to fix it, you know, being in that environment, our community, our environment, it affects us so much. It does. So it's so crucially important to be surrounded by positive people who believe in possibility, you know? So that's what I would say. And when I'm going to enter rooms, like, I go into intimidating rooms all the time. And I think now I just think, like, I'm just gonna be myself. And if myself isn't good enough in this room, then I don't want to be in this room. Right. Next, you know, next room.

And do you think money buys us happiness?

No, I think. But I think it buys a roof over your head, which is happiness. Right? Like, so, you know. Sometimes people, when people talk about like money doesn't matter or whatever, I'm not beholden to money or they think it's a moral high ground to act like, I don't care about money, right? So like you feel better about yourself because you don't care about money and your nose is in the air because you don't care about money. I'm just like, this is a person who has never been poor. You know? Like this is a person who is not aware of the real economic situation for so many people. and I think if you are aware of that, then you recognize that money is a powerful tool that enables you to take care of and feed your children, that enables you to house yourself, right? Like, just like the baseline, I have been in a place for many years, my family was, and then I was as a young adult, where like, I, you know, my, like, electric went out, right? And we didn't have lights for a week until my mom got paid again, or where, you know, we didn't have food, or we were on food stamps, and I'd be embarrassed to use it, and there's only certain things we could buy with with it, right? Like, I've had that real financial insecurity, and I think anybody who has had that understands that money is very important. The idea that it's not important is complete nonsense, you know? And it's like, that's the reason you're telling yourself that I would love to coach that person and dig into why are you telling yourself, why do you have that story? What is it doing for you? Right? Because the reality is, is that money is an important tool in the way that our society is organized today. And so we need it. and we need to learn how to get it. And that's exactly why I do what I do, to teach people how to get it and show them that it is possible for you to create it on your own. But yes, this idea that money's not important or whatever, money is for bad people, I'm like, look, money pays the bills. Okay? Let's get back to basics here. All right? I think y'all are forgetting something. And then once you have that baseline level of security, you can decide, do I want more? And if I do, how much more? and here's what I say all the time, you know, when people are like, well, how much is enough, right? You're a millionaire or your business is making X amount of money. Like, isn't that enough? Why do you still strive for more? And I tell them, because I am black, because there is a huge wealth chasm in this country. And as long as my people need money, I'm going, and I'm good at earning it. I'm gonna keep earning it and then put it where I think it belongs.

Right?

So there's a certain amount of security I want for myself and my children. And frankly, I feel like I have that at this stage. so I've done that part. So it's like check. And so now the next thing to do is how can I spread it around?

Yeah.

You know, like, how can I have it be making change for people and change people's lives? Because I recognize money changes lives. And so I think it's important to just recognize money isn't, is neutral. It's not positive or negative. It's a tool. And it's how we use that tool that determines whether something bad happens or something evil happens or if you have a positive goal with it.

Yeah.

Have you met a lot of millionaires who are unhappy?

I've met millionaires who are unhappy. And I know plenty of happy ones. You know what I mean? I think there's both. And I think it's like, I mean, here's the benefit, right? If you're a millionaire and you're unhappy, you could probably go purchase some therapy. You can maybe go to a retreat, right? Like, you can spend some money. Take some time off. Right.

Yeah.

You can spend some money on figuring out how to solve that problem. I don't think it's money in itself that's making them miserable. Maybe it could be, but maybe it's just because they're choosing to make it their master instead of really leading their own lives and directing their own lives. Like you were saying, right? Like living in LA, right? Everybody's got a Ferrari or a Lamborghini.

Or something, and you got a scooter. I'm driving a scooter. Scoot down the street with a smile.

On my face, waving at the guys in the Ferrari.

I want that guy has it. It's like.

Yes, but see, that's where we get into trouble, is if we're like, oh, because somebody else has it, I have to have it. It's like, do you want it?

Is that something that you even care about? You know, you want something because you want it, not because you're trying to impress someone else or show off or.

You think you should want it.

Yeah. Or, or because your friends have it, you're supposed to buy it. Yes. Do it. Because I was, I was with a friend recently, and he bought this, like, I don't know, 40 or 50, 000 souped up, like ATV type of thing, like a four-wheeler thing with, like, the music, the front. But it's like 40, 000 ATV thing. He's like, I got it because a friend had one and I thought it'd be cool. I was doing it to, like, celebrate a big launch I had. Yeah. So I wanted to buy myself something. I bought this, and I've used it three times in a year. It's like, it wore off after the first couple times, and I just sits on my garage, so I think. So if you're gonna celebrate and buy something, that's one thing. But if you're gonna buy things to try to impress or keep up with your friends, just know what you're doing it for. You may not use that thing. And that money could have been invested.

In something else or someone else.

Someone else or whatever.

Yes. And I think we're gonna have starts and stops like that where we think we want something and then you get it and you're like, actually, I've learned that I don't care about this. My husband loves cars. I don't really care about cars. I just want to be comfortable and get where I'm going. Me too.

Me too.

But my husband loves cars and like he lights up and he gets so excited. He loves to tinker with them and all of that. And so I'm like, awesome, have cars because you love cars, right? And like, what I love is, you know, we have horses, which, you know, if you want to lose a lot of money, buy a horse.

Man, the upkeep every month on that is probably five grand a month just to maintain a horse.

Yes. I mean, we have a full-time person who takes care of our horses. But when I see like my Black children in an equestrian world where like it's literally 98% white, wealthy white. Yes. You know? And so like watching my Black children ride their horses on their ranch, I'm like, I will pay. It's cool. I'm happy to pay it.

Yeah.

It brings me great joy and it brings them joy, you know? And they also are learning, one of my favorite things about it is that they have to groom them. That's good. The barn manager, they makes them go up there twice a week and they've gotta muck the stalls and take care of the horses and I feel like it's hopefully teaching them not to be spoiled. I didn't have that problem when I was a kid because we had money. My parents couldn't spoil me. Yeah, yeah.

But I do have that problem with them. Yeah. Well, any kids with horses are spoiled already.

Exactly.

So you have to teach them hard work in that process.

Yes, exactly. And so I like them doing manual labor. And I like when they're like, I don't want to do it today. I'm like, guess what? That horse still needs to get taken care of today. So you got to get up there and go do it, whether you want to or not.

That's good.

So it's good. It teaches them good lessons. It brings a lot of joy to us. And it's the horses provide an experience to us every day. That is so valuable. So, you know, but it's also possible I could have bought a horse because I thought I wanted one and then realized I don't. And then that's okay. Sell it and figure out what you do want. You know? Don't just build a big house because other people have a big house. Like build a house.

Because you want it.

Right.

Like, I do have a large house and I have it because I love having people over. So we invite people all the time and have big parties and it's amazing. And it's like that being together is how I celebrate, you know?

Yeah, I think you'll regret decisions more often than not when you do something because you think you're supposed to do it.

Oh yeah.

Like I live in an apartment still. I've never bought a home. I've invested in real estate, but I've never bought a home because for me that doesn't excite me. Yes. Having a property and then spending 1500 a month on the pool and the landscaping and the management and the taxes and all these things. and the roof leaking, I'm like, that doesn't excite me. That idea. Investing in real estate where someone else manages it excites me.

Right.

Because I'm not doing that work. I'd rather put my effort on serving humanity and doing the things that I'm skilled at and not 10 hours a week on a house that, you know, obviously I'd hire someone to manage it, but it's still I'm thinking about it. Yes. And I'm 38 and I don't have a house and most people might be thinking, what are you doing? What are you doing with your life, Louis? You should be owning a house. Like, why are you not doing this? And I just see it differently. And maybe in the next year or two, I'll say, you know what? I want a yard, I want a space, and I'm down for this, for this season of my life. But I haven't been up until now. And I don't wanna make decisions because other people are telling me to do it. Unless I feel called to do something. Exactly. And so, you know, I may be right or wrong, but at least I feel at peace.

Totally. You know what I mean? You gotta be willing to, like, separate from the pack and figure out what your path is. and it's cool because when you do that too, you inspire other people to be themselves. You know, like I was talking earlier about Arlan Hamilton and you know, she's like this amazing VC, obviously a millionaire, and she wears like hoodies and like everywhere she goes and she's like, I refuse to get dressed because she doesn't want to. And like just being around her in her hoodie frees me to be like, I do want to get dressed up. So like I am. I'm not gonna ask what's the dress code, I'm just gonna wear what I want to wear, right? I think it's so important when you are living the way that you want to live and doing things differently, it frees other people.

Yeah.

You know, to do the same.

What about you have four kids, right?

Yes.

Four kids. What are the age ranges?

I have a 21-year-old.

Okay.

And then a nine-year-old she's gonna be 10 later this week. So she's about to be 10.

Right.

Eight-year-old and a three-year-old.

Get a new horse for their birthday. 10-year-old get a new horse.

She is having an equestrian birthday party, but she's not getting a new.

You'Re. What are the main themes that you teach your kids about money from all these different age ranges? You know, if you could share three things that you teach them consistently at home.

Yes.

Whether it be a simple or, you know, profound principle, what are those three things that you talk about on a consistent basis with all of them?

Well, I like to teach them about consistency, which I think is about money.

It's huge.

Yeah. you got to show up and you got to do this every day. And it's like you did it for five days and they're like, well, I did it for five days. Why can't I get credit for that? And it's like, that's great, but this is the kind of thing where you got to show up. So teaching them really about habits and about like having a work ethic. If you want something, are you willing to put some sweat equity into it.

So you can have it?

Yeah. And so teaching them that, I think, is a core money principle. Yes. And then I also teach them about business. I teach them about entrepreneurship that you can create a business. and sell anything and, you know, make money from your own creative ideas. So I want them to learn that. So my daughter is always like making books or she's making like little gifts for people for their birthdays. And she's an artist and I want to teach her to value her art. This beautiful thing that you created, we can hang it on the wall and that adds value to people's lives. So you can charge for that. So just having those conversations and showing them even things that they're creating now, have value. Absolutely. Or things that they're willing to do. Like my son is like very techie, so I'm like, oh, the remote's not working. My eight-year-old and he's been doing this since he was six. He's like, Mom, just give it to me. And he like fixes it all. So, you know, he has that natural skill. Like it's obviously a natural skill. Who taught him? I didn't teach him nothing. I don't even know how to do it. Maybe he learned by watching my husband. I don't know. But, you know, I want him to see that like, oh, your ability to come in and fix that for somebody who doesn't know how that that adds value. That's something you could charge for if you wanted to in the future. So like teaching them that and asking them to do things and telling them like, you know, if you do XYZ, I will pay you. So I negotiate a lot with them. So, you know, it's like we did this family photo shoot recently and my son absolutely hates taking photos. He hates getting dressed up. He hates the whole production of it. And so I'm like, okay, so you did this for mommy and you make sure you smile in all of the pictures and you have to like, not like untuck your shirt and do all those things. And if you do all of that, then I'm going to allow you to play video games tonight for two hours on a weekday.

Wow.

So like, that's big time. And then we shake hands. And then there are times where he tries to go back on the deal, you know? And he makes deals with his sister, too. And like, he'll try to go back on it. I'm like, no, no, no, no, no. If you make a deal, you have to stick to it, you know? So making sure that he understands that if you say, if you give your word on you have to back that up.

Yes.

So teaching them that, I guess, is another part of the money story. And I like them to just, it's so funny. My husband and I will go for walks or whatever, and we'll be talking about business. My husband's a CFO, and so we're having business conversations, and my daughter's hanging out with us listening in, and my husband's like, yep, you stay right there and listen to all of this, you know, soak it in. So teaching her just about, like, the different strategies that we we try and marketing moves are making or whatever, different investments that we're making and why we're doing it, and explaining that to her, willing to have that conversation. We bought a beach house. Let's talk about how we're only going to use it for the summer, but we're going to rent it out during the other parts of the year, and that's going to cover the cost of what we're paying for the summer, or what we're paying for it all year long. So this is the strategy and explaining it to her so she can start to see. And it's like, It's repetition, right? It's us having those conversations over and over again over time. And there's something about the eldest daughter. I don't know what it is, but she's going to be running this whole empire.

That's great.

You can already tell. That's great.

That's fun. What do you think is the difference between a rich mindset and a poor mindset?

Yeah. Well, I think it's just about seeing opportunity and feeling expansive and seeing abundance versus seeing everything as small and not possible. And like, does it cut off your opportunities or does it create opportunity for you? You know? So I think that's the difference, right? And just making decisions that are going to create more abundance in your life. And sometimes it's the opposite of what personal finance people say, right? Like personal finance people are always like, budget, budget, budget. Budget is king, budget is ruler, right? Like you are beholden to the budget, nothing else rules. Never go outside the budget, blah, blah, blah.

Right?

And it's, I think it's more than that. I don't think it's just about, money is about, yes, you have a balance sheet, you do math. Money is math as well, but it's also feeling, right? So like the advice that's always given to women about like, don't stop buying lattes, stop buying shoes, cut coupons. It's like, That doesn't make me feel rich. That doesn't make me feel abundant or feel wealthy. It makes me feel broke if I can't afford to buy a coffee when I have a good job and I work hard every day, you know?

Sure.

So what does make me feel, but if I buy a latte every day and that makes me feel fabulous as I sit and drink my latte and think about whatever it is that I'm thinking about, when I have that feeling, I'm more likely to create things that will add value to the world and get me paid.

You know, you're more excited, passionate, abundant, feeling energetic, and that energy attracts opportunities.

That's right.

So do the things that bring you joy.

Yes.

And I'm not saying like, oh, go buy a Lamborghini, you know, if you don't have Lamborghini money, right? I'm not saying do that, but like, how can you find ways to feel abundant every day? And it's not just that, it's like, you know, I was staying at a place, it was not an expensive place in Laguna a couple of weeks ago, I'm sorry, a couple days ago and you know, it's like not a fancy room at all, but it had this gorgeous ocean view and I listened to the ocean as I fell asleep like that is abundance, right? And I went for a run like along the beach. That was amazing and it cost me nothing to go for that run, you know what I mean? So it's like sometimes it's just sitting outside and petting your cat and being in the sun and taking a few minutes for yourself makes you feel abundant. So it's not always dollars, but finding that way to just sort of attract that and to feel like spaciousness, like I have time, I have the ability, right? I have creativity, you have a wealth of things. And the reality is, if you live in the US, you have a lot more than a lot of other people around the world, right? So you are rich, right? Whether you think you are or not, living in this country for most people. And so if that's the case, right, how can we start to think that way?

Why do we lack in perspective? You know, it's-- Yes.

I think it's, you know, all of the things that we're inundated with every day, like the different media, might be the shows that we watch, you know, like people joke about like watching a sitcom and like somebody, you know, she's a waitress, but she has this fabulous apartment in Manhattan. It's like, really? How does that work? So I think it's sometimes the things that we expose ourselves to, and we can just choose to expose ourselves to other things, right? We can be exposed to a lot of things that tell you, like, oh, you're not good enough or you're not smart enough or you're overweight or you're whatever. All kinds of messages that we get every day. And so you got to curate that. You know, curate your Instagram feed, right? Curate who's in your ear. If you have somebody who, you know, if your mom or your friend from childhood is always making you feel like you're broke, stop talking to them. Like, talk to them. I mean, I'm not saying cut them off, but, like, maybe don't be on group chat with them every day, you know? But be on group chat with people who have that abundant thinking. who are thinking expansively. And also, you know what makes me feel rich? Saying no makes me feel rich. Like we just talked about, right? Like having boundaries and somebody asking me, Do I want to do that thing? Whether it's a money thing or not, and just saying, no, I don't want to go to that party, or no, I don't want to do that thing, and just feeling like comfortable doing that. That feels abundant, you know? And that creates more space for abundance in your life.

You really show that there's three main things. that we should be paying attention to right now. And one of them is that the printing, the abundance of printing with money right now. And you talk about this concept that cash is trash. Can we start with kind of this first principle that you've been talking about and what we should be aware of that's coming?

Sure. To put that in context, before we get into the cash part, Yeah, I'm a global macro investor and economics, markets and politics and geopolitics all matter. And there were three things that are happening, you pointed them out, three things that are happening in our lifetimes that never happened in my lifetime or our lifetimes, and that I learned before I had to study past periods. And those three things, as you point out, are the creation, a lot of debt and money. The second is the amount of internal conflict that we're having over money and values and what that's like. And the third is the changing world order with countries like China and Russia competing with the United States in a way that didn't exist before. so back to the point that you're making about that money, it's a basic thing. Everybody agrees we need more money and we need more spending. But if you spend more than you earn, you have to borrow. And that creates debt. But at first it's credit, so it gives you buying power.

Right.

But you have to pay it back and that becomes depressing. And so in order to avoid that, central banks can print money and buy it back, right? But when they do that, that depreciates the value of money. So what we had was a lot of money and credit go out to a lot of people, a lot of buying power. Everybody, when they got it, they thought, oh, that's great. And somehow they seemed surprised that when they spend it, the prices of everything go up. Okay, but the truth is that if you divide the amount of money and credit that's used for spending by the quantity of goods produced, you can calculate, well, the prices will change. And so that's what's going on. And that's what went on in a giant wave, the Federal Reserve and the government together, a giant wave. And that produced a giant amount of inflation, a giant amount of inflation.

Is it 8.5% right now? Is that what it is?

Yeah.

Well, it depends. I mean, if you, it depends which number you're using. It's between 7.5% if you use year over year, or if you take the core inflation rate, It's closer to 12, and it's rising. There's some temporary influence, but it's basically because of the amount of spending. You can measure the amount of spending, not because of the bottled eggs.

And for people that maybe are hearing this inflation and have been hearing this recently before we finished the first point, for a lot of people, when I grew up, I never understood what inflation even meant. They didn't teach this to me in school. They weren't teaching this to me in high school, college. It really wasn't a thing that I learned. I just heard it and knew that people were worried about the cost of things increasing. Can you explain what that actually means to us? For someone who's making $70,000 a year in the Midwest, what does that mean to them?

Well, buying power is what matters, right? And so what happens is when inflation goes up, faster than your other sources of income, you lose buying power.

Okay.

But what happens is somehow that seems more acceptable sometimes to people than if it was just taken out of your pocket. You see, if they, let's say, raise taxes or take it out of somebody's pocket, everybody complains whoever's had the pocket taken out of. But if it comes through printing of money and everybody gets checks, it's more acceptable. But what happens is those who are holding money, like money market funds and bond funds, lose the buying power of that. So think about those bond funds. Those bond funds are down about 10% and inflation is up over, let's call it 8%. So they lost 18% of the buying power. So it releases, it relieves debt. We think of it as meaning higher prices, but to some extent, that's a rich man's perspective because they say, oh, now I have to pay more. But the reality is you don't get more stuff. from that higher inflation. And so it bids it out of the hands of some people. And that hurts the people who don't get it, because it's really... So that's what's going on. You lose buying power. And so we're seeing a time now where you're going to lose buying power to inflation. And now you're going to see the Federal Reserve also tighten money, tighten money and credit and raise interest rates. And when they do that, that creates less buying power. Because when they, you know, they say, okay, now you can't spend as much money and the prices are going high, but they do that in their crude way of trying to reduce inflation. But you get it from both ends. the higher prices and then the higher interest rates you have to pay and also, and the higher debt service costs and also less availability of money. So it's a squeeze like the squeeze that happened in the 1970s.

So does that mean, I mean, if someone is hearing this and they're thinking, okay, inflation is going up, the buying power is going down, this is squeeze. Is this going to happen for five years, 10 years? Is it eventually going to level out? What should we be expecting, do you think?

These things go in paradigm shifts that quite often take a relatively long time because everybody's mindset is in a paradigm shift. Everybody's mindset is in a certain place and they're doing certain things. For example, investors think that cash is safe. and they don't pay much attention to inflation. And then what happens is they get inflation and they realize that if I'm holding cash, I'm losing buying power. So then they shift, they sell out their cash or they sell out their bonds and they put that into other things. And when they do that, that also contributes to inflation. Changes like that also happen in a lot of ways, like cost of living increases in compensation. Where in the past, when they don't worry about inflation, then they don't think about, do I have an inflation linked contract for my work? Or do I have enough inflation assets? oh, do I need to buy, I'm going to store my money in a house or I might store my things. And so that pendulum swing from one mindset and one positioning to another mindset and another positioning in the early stages tends to be self-reinforcing. Those actions produce more inflation and more inflation psychology until that goes to the opposite extreme. Like in the 1970s, people were surprised about what happened because they weren't used to inflation much. Then you had the inflation, and in the beginning, it swung. And then at the end of it, they said, Inflation will never end, and everybody's position for it never ending. And then, of course, what happens is it's so bad that then the central bank goes the opposite extreme. and then they get surprised. And so the '80s was a period which was the exact opposite of the '70s, where you have falling inflation, high real interest rates and so on. And so the worst assets to own in the '70s were bonds, and the best assets to own in the '80s were bonds. So you see these pendulum swings that way.

So what would you say are the best assets to own in this decade?

Well, the best assets to not own, that's the most important thing, I think, is cash, and I've quoted cash is trash. There will be a tightening here for the time being, and that tightening will have an effect. It'll hurt asset prices and so on. But cash is not the asset to hold. and bonds are not good to own in my opinion, because it's debt, it's owning somebody's debt. And you won't get a return, think of it, the interest rate will not reach the inflation rate. So that's the problem. So you'll have that or what? Then what you have to have, I think most importantly, is a well diversified portfolio of other assets. Diversification is a very powerful tool because it can reduce risks without reducing expected returns. Now, there's lots of ways of getting what you think good investments are. They might be things you know about and the local businesses and so on, or they might be stocks, or they could be maybe a little gold or maybe a little bit foreign investing. Diversification is very important to do that in a balanced way, so I would generally say that that would be what I would recommend.

And for most people that really don't have that much savings yet, maybe they're, again, at the early start of their career, they haven't really saved that much. Maybe they're in a little bit of debt even. Is now the time to start investing or is it more just save up some reserves for six months to have some cash to live your life before you start investing or Is it important to build the discipline and the habit of investing 50 bucks a month, 100 bucks a month in a diversified portfolio, no matter how much you're making?

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

When was this, right?

Oh, this was 1982-83. I had to borrow $4,000 from my dad to help to take care of my family bills. So, I remember thinking, how many weeks could I live if I lost my income? And I started counting in weeks and I would try to go out because if I got hit, so I think that's the way to do it. You start to count how many weeks, can it be a month, a year, can I get up to a year? I didn't like that because of the fact that there's an obligation and it's like, oh, if I get, then I'm going to be drowning. I'm trying to keep my head against water. This is just my own bias. But anyway, count how many you can, and then assume that it's buying power over the next number of years can fall by three or four percent a year. Or if, or if you put it in a risky investment, like stocks or something, it can go up. Why more? So cut that number maybe in half and have twice as much. Because you have to understand that that's your freedom, that is your safety. So that first band you must take care of, that first band, take care of that. once you get past that and you feel, okay, I could take care of my family and I could take care of mine in a worst case scenario, then you have the freedom to then take other kinds of risk. But when you're building that portfolio, it's the same thing as when you have a lot of portfolio past that, just you want to diversify well because you could see what happens to the, to the markets. Every Market stock market, bond market, most markets have had times where they've gone down over an extended period, 60 or 70% in buying power. So I think diversify, count that and build it and realize that's your saving. One thing I do for my.

For.

My kids and grandkids and always did, or as long as I could start to afford it, was for every holiday, like Christmas or their birthday, I would give them a gold coin. And I said, I never want you to sell that gold coin until there's an emergency, a real emergency. never because you want to buy things. And the reason I did that, and they'll build over a period of time, that'll build something. And I said, don't even sell it. You pass it to your kids unless there's an emergency. Okay? And so you're building that savings because I think we so easily spend so much money on junk. You know, so anything that I would give them, whatever it would be, I don't know, a piece of clothing, a thingamajig, a toy or something will probably be gone in a year. And so the power of staving.

And.

That resource, the relief it gives you and the power it gives you is so great. So yes, save it, diversify it.

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

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

I'm curious how you, from having some money to losing it, how you then went on a 40-year, four decade run of getting to where you're at now. Was there something in your mindset that allowed you to believe in yourself still? Yeah. That didn't say, oh, I've lost it all out. I don't believe in myself anymore because I just ruined my finances.

That extremely painful experience was probably the best experience of my life.

Really?

And it changed my way of thinking ways I'll describe. But let me say, before that, I didn't have much money. My dad was a jazz musician. My mom was a stay-at-home mom. And I felt, of course, rich. I had two parents who loved me. I went to a public school. And then when I was a kid, I did odd jobs and I caddied. And so when I put in the stock market when I was 12 and I got hooked on the game. So I never had much money, but then I built up some and then had that experience. And so that experience, which was also a very public experience, was very painful, but it changed my approach. to decision making in really a profound way. First, it gave me the humility and fear of being wrong that balanced my audacity to double check myself and in fact, try to find the smartest people I could who disagreed with me to have them stress test my thinking. So I'm never sure if I'm right. My track record of being right is probably 70 or 75% ish, somewhere in that 70%, let's say, something like that. And I'm used to being wrong sometimes. And it's painful. So the stress testing of my opinions gave me an open-mindedness to learn a lot.

And.

Also diversification. I learned how to diversify without reducing my risks. If I could take a lot of uncorrelated bets, the return will equal the average of those bets, but the risk can be up to 80% less. And it changed my, it really caused me to reflect because I remember thinking to myself, it felt like I was sitting next to a jungle and I could sit on the safe side. There's always risk in return. And what would I do? Would I have a less great upside and be safe? Or would I go through crossing this jungle in which things could kill me or whatever? in an attempt to have a great upside, a great life, a great upside. And so that puzzle led me to do the things I described, but also I knew that I had to go have the great upside and not be constrained by the risk. And so I did the two things that I've described, but going into the puzzle, I found that it was great that to find people who could see things that I couldn't see, and vice versa, so that we were on the mission together, because people see things differently. I learned how people see things differently. Somebody will spot this or that, and then that back and forth helps you make better decisions. And if you're on the same mission with them. So one of the things I wanted was this meaningful work and meaningful relationships. And I found that that was so good that when I, you know, sort of got to the other side, like, you know, I had enough money and upside or whatever, I still wanted to stay in the jungle and I still wanted to do this because the act of, of, of doing that with people that I was doing this meaningful work and meaningful relationships with was rewarding in and of itself, as well as success. So one of the things that you can learn is that you can see through other people's eyes. That doesn't mean you accept what they say blindly. It's that you think about their reasoning. And if you do that, that's good. It also gave me a principle, which is one of my fundamental principles, which is pain plus reflection equals progress. We have this pain, whatever it is. and okay, the reaction is a negative reaction and can almost be, why did that thing happen to me? And so on. If instead, when one calms down from the pain, there is a lesson there about how reality works. Okay? It happened. Reality works that way. And then there's a thought, how do I deal with it better to produce better? What's my lesson? And if you acquire that, I used to acquire, I would acquire that, I still acquire that. And then I wrote them down as principles in my books. That's why the collection of principles, it's like a journal. Pain plus reflection equals that. And then you write down the principle, like a. And that's what the collection of principles came from. That has. So that event, that painful event was the basis of going from, you know, where I was, which was broke, to, you know, where things, where I am and when I'm transpiring, which is trying to pass along my wealth and. And my advice to others now.

And your wisdom. Yeah, I'm curious, how long did it take for you to intrinsically not be afraid to take those actions again or, you know, build again?

I'm faced with the choice. Okay. Like, I mean, literally at the time, was I going to, you know, put on a suit and tie and get on the railroad and go down to Wall Street and do a job? or was I going to do something else? And would that job, what will that job be like? What would that mean? So as you face, we always face the choice, right? The choice is a puzzle. Okay? Like I said, you know, risk and return go together. I don't want to get punched in the face like this again. But I want the return. And how do I do that? So that's the reflection that taught me these other things, the diversification, finding the smartest people disagree with me, working on the mission with others who could see things that I can't see, and so on. And that's what worked. So you have to solve your puzzle.

Yeah, because a lot of people say, you know, no, If you want big rewards, you got to take big risks. But what I'm hearing you say is.

They'Re- that's not true.

Then what is the truth then?

The truth is that if you find individual bets that are diversifying, that your return will equal the average of those returns. But your risk can be cut by 80%.

Were you making individual, I guess, investments or individual bets back in the day?

Well, by a bet, I mean like if you say, I'm going to invest in the stock market.

Yes, yes.

You can see whatever the bet is, you can see, look back in history, it gives you a pretty good idea of how it goes up and down, what your risks are. do that by looking at it in inflation adjusted terms is the best way. But it goes up and down and you can see how your buying power is. And if you say, if the worst case happened, what would that look like? And I'm telling you, like I'm saying, that could be that the worst case is when you look at that is something like 60 or 70% in buying power, whether that's stocks or bonds. Okay. okay, that's what the risk looks like. However, if you do that with uncorrelated investments, when one goes up, like when commodities go up, bonds go down, or that kind of thing, and you balance things, then you find some part goes up and another part when the other part goes down. And by doing that, you can reduce the risk without reducing the return. You know, it's, it's, it's in my books. I explain it and I show it in my first book, principles. There's a chart that explained in a couple of pages, and I call it the Holy Grail of investing. Holy Grail means if you follow this path, this will be the key to your riches. And what that is is, is 10 to 15 good, uncorrelated return streams.

What would you say are the three main skills for someone to want to have the potential of being a six or seven figure earner? Yeah. That they need to start learning now. So 2023, they have that potential.

In my opinion, there's three main skills in business in general. You gotta learn how to sell, gotta learn how to build, you gotta learn how to lead. So you got to learn how to get people to give you money for stuff. Gotta have the stuff to sell them. And then you gotta have people that work on your side to help deliver on those other two. If you can do those three things, you're unstoppable. And if you do one of those three things, you can make as much, like you can still make a ton of money, but if you can do all three, you're unbeatable.

So build, like building a team, building...

So that would be on the lead side. The building is like the product and services that you have. So you have to figure out a.

Way to deliver value to somebody. To develop a program, a product, a service that you can package and sell.

And people are like, well, how do I do that? All you have to do, there's, this is the perspective thing we were saying earlier. It's like, I don't know where the opportunity is and people who are entrepreneurs see opportunity everywhere. It's like, and my biggest regret in life is that I can't live multiple lives because there's so many things I want to do. But it's because all you have to do is look for problems. You look for things that people hate. You look for inefficiencies. You just look for things that are nuisances. Like, what are things that people do every day that they hate doing? Like, and a big one, a big misnomer I think is that people think they need to have a new thing. you can start a cleaning business, become a billionaire. You can start a lawn care business, become a billionaire. You can start a roofing business, become a billionaire. Like, there's clear problems. Like, all you have to do is just do what everyone else is doing.

Learn how to sell, learn how to deliver consistently and learn how to lead. If you do those three things, you can do just as well as everyone else and just do it better. I was in the elevator this morning coming here, and I have this cat sitter that used to watch my cats, right? And But he mostly works in a different building that I used to live in. Now I'm in a new building. He was in the new building 'cause he had some other dogs. He's a dog walker, right? But I asked him to watch my cats one time.

And.

He literally, for 30 seconds in the elevator, I was like, Hey man, good to see you. And I go, Dude, how much you making now? 'Cause I see him hustling. I see him walking around with all these dogs. I'm like, and his prices went up over the last few years. Like when I first had him watch my cats, it was like 25 bucks. Now it's like 40 bucks for a session. I'm like, I go, dude, what are you making like 5, 600 bucks a day? He goes, I go 1,000. I go 2,000. He goes, I go three. He has around 3K a day. I go, what? Walking dogs. And I go, he goes, now it's seven days a week. It's a grind. I've got three employees now who are like, walking dogs. But he's like the go-to guy in Beverly Hills. And he's like independent. He's not with, you know, big dog walking company or something, but three grand a day walking dogs. I go, you can, there's a need, especially in this community where people are busy, but they love their dogs and they have money to spend on their dogs. And he is providing a service. It's incredible. Three grand a day, man.

That's crazy. I love this.

I need to be walking dogs, you know?

I love this example because it's perfect because everyone can understand. It's like, what's the problem that they're solving? It's like, People don't have time to work their dogs. Whenever you're looking at any problems, time is one of the easiest ones to solve is that people don't want to take the time to do something. It takes too long, you want to do it faster. Jason Friedlin said the easiest business model in the world is find what someone else is doing, do it half the time. It's just you can do it, and you can look at any business that exists and do that. And so it's like, what did he have to do? He had to learn how to sell, which means he had to get people to give him money for the dogs, which part of that's marketing, but I'm just rapping that. Right, right.

Promotion, getting people to give you money. He had to learn how to deliver, which is like, okay, what are the.

Best routes to walk around. How do I manage 17 leashes at the same time? Like, you need to figure all that stuff out.

Right.

And then you don't learn how to lead.

So he has two employees or three employees.

Now he's got employees, but before he was, like, exhausted.

But now he's figuring out how to build and lead.

And what will happen is he'll stop walking dogs and then he'll have. He'll be managing it.

Yeah, right. Exactly. And so it's like, that's like such a, that's such a perfect microcosm of the three skills being put to use. Now it's taking him years to do it. It didn't happen overnight. He had to build his brand. He had to, you know, show that he could deliver. the value of the product consistently and all these different things. He had to be communicating and be reliable, all these things. And he was like, I'm doing it seven days a week. So he has no life, right? So it's like an extreme, but it's possible. And so the three skills I heard you say is sell, build and lead. You can never get enough training on how to lead yourself and how to lead others because there's so much of a world inside of each one of us. that has to learn how to overcome insecurities, fears, traumas, triggers that will make us poor leaders of ourselves and of others so that people respect and trust us. So leading skills is probably the hardest.

And it's also the one that's almost a meta skill in that it actually can layer on top of the other two. So if you think about it, like as a hypothetical example, imagine I know how to recruit and lead people, and I don't know anything about marketing. I don't think about sales. I don't know anything about delivery, but I have a vision for what I want to accomplish a problem that I want to solve that's meaningful to me and I think it'll be meaningful to other people. I can compel people. I can persuade them and influence them to want to work and help me solve this huge problem together, right? And so you don't even, like real talk, you don't even have to know how to sell and how to market. You don't have to know how to build a product, build a service team.

Because if you can lead, you can get all those other people to do that. And leading is also selling. in a sense. If you're a leader, your energy is an enrolling energy. Your way of being, how you show up, how you communicate is selling you in your vision. You don't need to know how to sell a product and get on stage and say, Buy my stuff. But you need to be able to enroll people into a vision that they are in alignment with. And I think that is one of the hardest skills because people don't have to believe in themselves. A lot of people don't believe in themselves. They don't love themselves enough to be enrolling, in my opinion. And so they discount and that doubt, people can feel that energy and that doubt.

Yeah.

You have to be certain, not confident.

You know what I mean? I think part of it. And so it's easy to say what, like, what we just said about the whole leading thing. And, like, as much as everyone's like, well, I'll just jump straight to leading. I feel like there's some sort of, like, and this is me. I could be speaking a limiting belief of my own over, so, you know. Disclaimer, right? But it is my belief that there's a certain amount of spiritual strength that you gain from having done stuff. Skill.

Developing skills. Developing the skills because you have confidence with these skills.

Yeah, because you have evidence. Results. Yeah, and so people, you can enroll someone, you can subscribe someone to your vision, and because the first question someone's gonna always ask is why should I listen to you? Or why should I follow you specifically? And unless you have a solid answer that's not you being crazy, Right? Being like, I have done these things. They give me evidence that I can move the goalpost further than what we have to done before because of what I have done behind me, right? Because the path I've already walked. And so I think like learning how to sell, learning how to build the first two skills, and then leading you learn consistently along the way for the rest of your life.

What would you say are the most important habits someone can develop for themselves on a daily basis to support their opportunities for earning more.

Most of the important lessons that I've learned in my life have come from doing and mentors. And so on a day-to-day basis, it's reducing the time between when you wake up and when you begin working. A lot of people lollygag and delay and procrastinate and things like that. And if you just think about there's only a certain amount of time in the day, I want to increase my output. per unit of time as much as possible. A lot of people have these superstitions that they have to do a certain thing, they must do X, Y, and Z, but all you have to do is talk to a single mom who has like five kids and still start businesses. They're not doing any of that stuff. They're waking up and they're working before their kids are up, and then once their kids go to bed, they work then too. And they're not doing all the lollygag stuff that you see trending all over social media. It's like they're working. And so the single greatest skill, in my opinion, is being able to find a place that you can shut out external stimuli and you can focus.

Yes.

Because for me, the single highest ROI habit that I have is that for me, between 5 a.m. and noon, I have nothing on my calendar. It is just work. No meetings. And then all my meetings happen after noon. This is for the entrepreneurs. Now, if you're in a job right now, then it's got to be in the morning before you go to work and in the evening after you come back from work. But like having that dedicated time. And if you're like, well, I'm not a morning person, fine. Then just work late. That's okay. I've got billionaire buddies who were like, oh, I wake up at 10. But they work really late. That's their special time that no one bothers them. It tends to be at the bookends of the day, though, just from my experience, because in the middle of the.

Day, you get pestered and it's hard to get into that deep focus, that deep learning that you get when you really pour yourself into something. Yeah, and I think I saw Layla mention this in a video clip. where she was like, I just wake up and I start working. She's not spending an hour morning routine or something like that. And I think you gotta figure out who you are. It's like if you wanna spend an hour or two in the morning and taking coffee and going for a walk and working out and kind of like preparing yourself great. I think for me, there is some importance to at some point in the day setting an intention either for the day or at night for the next day.

Agreed.

So if you wanna get up and work right away, at night, totally. What are the three most important things or what are the actions you're going to take that are going to get you closer to your vision that next day? So having some five, ten minutes to have an intention and then act on it, as opposed to just reacting to the world.

Yeah, 100%.

That's what I believe.

But there was this one to consolidate what we were saying earlier, because I like, this matters a lot to me. Give it to me. Most skills can be learned decently with about 20 hours of focused effort. 20 hours. Like the first 20 hours of you actually doing something, you learn the most you're gonna learn about the thing. If you just consider by percentage of learning from like you know nothing to 20 hours in you already have a really good understanding of the thing. The problem is that most people will take years to start the first hour. And so that habit that you're referencing is that my speed at least now as I've gotten better at this stuff, is that I try and detract the time from when I want to learn something or when I want to start doing something to starting it as soon as I can. Because I just want to start getting through those 20 hours as fast as I can. Yes. And so that's just been a very tangible, because it seems like this amorphous thing, but there was a study that was done. There was like, in the first 20 hours, you can learn almost any skill, playing guitar, running an ad, doing a call, like you will learn more in that first 20 hours than any other time. So it's like, then just get to that 20 hours and don't delay. Yes, and that's been one of the deepest lessons I've had because it took me four years to learn how to build a website and it took me one day to actually learn.

Crazy, because you decided to act on the learning.

Four years to delay and procrastinate and say, I'm not a tech guy, I'm not a tech person, this isn't my kind of thing. I'm a gym guy, I'm a local business owner, I should pay somebody to do this, I'm above this kind of thing.

Like all these stories, right? And then one day I sat down.

On a Sunday morning, I was like.

I'm gonna learn this thing. you just learned it. Step by step by step.

And you know what? I set the whole day aside.

It took me four hours. Crazy. It's amazing. You'll hear, I bet you've heard this so many times that people are like, I want to launch a podcast. I want to start a YouTube. I want to launch a book. And they've been saying it for years and years and years when you can literally go on Amazon and upload a book in an hour. If you just learn the steps, it might feel daunting and over like, I don't know how to do this and how do I link my payments and create a book and put it up there. But you can create a one-page book and launch it to at least say you did it and now you know the steps so it's not as scary. I think so many people are afraid to launch their thing because they don't understand how to do it and they think it's gonna take a lot more time than it actually is. You may not be good at it right away. Your website probably wasn't perfect, but you got the website up within four hours and then you can make it better over time.

And there's this, because that first hour is you paying down the fear of uncertainty. It's all these fears of like not being enough. What if I feel stupid? Because you have felt stupid when you try to figure something else out. But like if you remember how hard it was to learn how to tie your shoes when you were a kid, right? Because it's like I have to remember, and then this one and the two bunny ears, you know, the whole thing, right? But like now you can do it in your sleep. And it's just the emotions we have about beginning work because the judgments we're gonna put on ourselves about how we're doing. if we can remove the judgment of how we're going to do and say, I assume I'm going to suck. And all I'm doing is I'm going to start pulling the thread of this 20 hours. That's my only goal is to start sucking.

That's it. I just want to start sucking rather than nothing. Right. You gotta love embarrassing yourself the way I feel I get these skills that you're going to learn. They're going to bring you a lot of value long term. They're not easy to start with. They're not. And so you've got to be okay with accepting embarrassment of your own self. What's the belief that, why is it so hard for people that haven't made money? Let's talk about like the daunting number for a lot of people, which is seven figures. It was hard for me to get over the hump mentally and psychologically of like, how do I go from $5,000 a month to $10,000, then $10,000 to $20,000? And then how do you get a business, I'm talking about business owners, how do you get it to six figures and then to the seven figure as a business owner. Do we overcomplicate money in our minds if we've been taught stories as kids or been taught beliefs about it? And how do we get over the overcomplication of making seven figures as entrepreneurs?

I agree with you that I think it gets overcomplicated. And so we just have to boil it down to the first principles of the math, like what math is required to make a million dollars, right? Like we can either sell, you know, $110,000 things, we can sell $1,000,000 things, we can sell. And by when I say things, you don't have to price your product at $1,000, you're just lifetime value of a customer has to be $1,000, right? So just how much somebody's gonna spend with you over the period of time that they buy from you in general, right? Now if you sell those products, that might just be the lifetime value. But if you sell services like the dog guy, he probably has people who stay with him for years. and so he has to add up that total lifetime value as the number. And it's like, well, how many of those do I need to sell? And then you just divide it by, you know, to back into it. And so once you know the math, right? So the first is like, what is the math to get to the million? And you have to figure out how many units you're going to sell.

So let's just use something that's, let's.

Use $1,000 because it's an easy one. Okay. So a thousand sales of a thousand bucks. Exactly. So we have to do a thousand sales. Now, how are we going to break that down on an annual basis? Because thousands , sounds like a huge number. Well, it's about three a day, right? Like, okay, well three a day is all of a sudden a lot more manageable. And we're like, okay, well what creates a sale? So at some point to get set, I'm going to take one step before for six figures for anybody who's not there. It's like you have to sell, and this is again for business owners, entrepreneurs, if you have a job, then awesome. But like, if you're trying to, if you're trying to make money, it's, you have to sell something to someone. That's it. That's all you have to do to get to six figures to do that. So that's one avatar, one, one medium, one channel, right? One product, one channel. That's all that is. You add the fourth piece, which is consistency. That's what gets from six to seven. That's hard for people. And the consistency, yeah, 100% because then you can tackle all the emotional or whatever it is that why you're not being consistent. But from a math perspective, we just have to break down what are the primary actions that result in the output. And so if three sales means that I sell one out of three people who want to walk, or one out of two people who come for the dog walking, okay, well then I need six appointments a day. okay, how do I get six appointments a day? It's like, well, I have six ways that I can get appointments, right? I can get appointments from referrals. I get appointments from affiliates. So I make a deal with the.

Local grooming place for dogs or the.

Local vet for dogs or the flyers up or something. Or the urgent care for dogs or petco. Like, whatever. I mean, like, there's a million ways, right? Like, I get one of those guys, I figure out to deal with them, and I say, I'll give you the first two months of what they pay me to you if you just send them to me.

Yes.

More money for them. and it probably helps their customers because it's a need that they can't solve, but they have the same avatar. Cool. So you got referrals, you got affiliates, you could just reach out to people you know, just one-on-one, like, Hey, I've got my thing. Do you need help with your dog? You can reach out to people you don't know, which you can do through post-it notes, cold calls, emails, door knocking, flyers. Yeah, all of those things are ways that you can reach out to people you don't know one-on-one. You can make content about how dog walking amazing and ways to walk your dog better, ways to take care of a dog. And the whole point of that is to get people to feel comfortable with you specifically in your brand that you will do a better job taking care.

Of their dog than they will.

Exactly, right? You want people to feel guilty that they're not doing all this stuff for their dog. And then they would start, you know, then you start getting, you feel inbound, right? And then finally you have ads, right? You have run paid ads to get new appointments booked, right? And so those are the six primary things you can do. to get customers, right? And so it's like, okay, I need six appointments a day. I have those six different ways that I can get them. Which of them do I feel most comfortable with? Because you can win in all of them, right? It could be soliciting your customers for the referrals. It could be getting the affiliates of relationships set up. It could be the 101 DMS. It could be the ads. It could be the content. Any of those six would work, right? And so we just have to pick which one you want. And so then you just reverse engineer those actions. of, because even one step after, obviously.

This is something I do a lot.

So if you reverse engineer the affiliate thing, right? So how do you get affiliates? It's like, well, I need to reach out to 100 people a day. So you'd still use one of the other methods, so cold outbound, warm outbound, content or ads, right? To get those affiliates and say, okay, well, if I reach out to 100 affiliates a day that are in my local region to see if they will partner with me and I can create some sort of relationship, If I do that every day, maybe I'll get two of those referral partners a week. And if each of those referral partners a week can get me 10 appointments, then for me to get my six appointments a day, it's 180 appointments per month, I need 18 affiliates. So all I got to do is get 18 affiliates. But then if you're thinking right now, you're like, well, wait, but I would be able to get 18 affiliates in probably like a month or two. And the answer is you're right. But people just don't think through the math of how to do it because if we're being real, there's no reason you should cap your business at a million. And so to the same degree when we ask the question like, how do I make a million dollar business? You also think in increments that somebody who's trying to make a million dollars thinks in. Because I got asked on this TikTok. So they gave me this prompt. They said, Hey Alex, how would you make six figures a year? That was the question. And my immediate response was, I would sell something for 100 grand and then figure out what I would do for the rest of the year. And so it's like these people think about money differently. You know what I mean? And so if you think about how do I build this thing into like a hundred million, like, and you have to think of a number that's as high as you can fathom, right? If you can't fathom 100 million, then don't think that. But like, as high as you can mathematically fathom. So it might be $10 million. Okay. Think like, how many dogs would I need to walk? And you just reverse the math into what you need, right? And then people need to hire and how many. Exactly. And then you start, and then you start with the inputs because in the beginning, the The only inputs you have is going to be the content, it's going to be running the ads, it's going to be doing the warm, it's going to be doing the reach outs. That's it. Those are the inputs. And then everything else is going to stem from that. And then what will happen is if you have that advertising machine on the front end to bring people in, the bottleneck becomes your leading rather than the selling in the product. You're leading. Yes. And so then the focus then becomes, how do I use that same, if you really want to get deep on this, how do I use that same skill set of advertising and then shift it to my internal? Because I still have to do warm reach outs, I still have to run ads, I still have to make content, can have affiliates or get referrals from my employees to get more team. And so every business has two funnels. You have the front end funnel that gets your customers and the back end funnel that gets your team. And so as you crank this guy, you need to crank this one. And then that's how you can scale these things to the moon without stopping.

Right. Is it harder to get leads and sales or harder to build a powerful team with the right culture?

I think they're both hard and both easy for different people. You know what I mean? Like Layla naturally is very good at the backend. funnel. I mean, she's so good at building culture, but she has this thing that she's kind of spoken over me from a belief standpoint, which is if you are a really good marketer, a really good salesman, a lot of them are like, oh, I'm not a good, not a good leader. I'm not a good operator, not a good whatever. And she's like, if you can sell all those people and influence all those people, you can use that same skill set and just face internally to your team. It was a nice belief shift for me or belief breaker for me. I was like, she's totally right.

And so to the point that you were making earlier, like leading is selling and influencing, a lot of it really.

Comes down to being able to move people and being able to clearly communicate what you want.

Why do you think it's so hard for people to overcome their limiting beliefs around money in general?

A lot of people were told things about the world that were not true and they take them as fact. And so they're making their decision calculus off of something that is not true. And so they're making conclusions off of false data. And that's why they can't see it because what they're basing their assumptions on is false.

They've been believing it for so long. Yeah. So how do they change that belief when it's been baked in their psyche for decades?

Yeah, I think that the way that the biggest beliefs have been broken for me have been one of two ways. Reality proves me wrong or someone tells me a story and gives me evidence from their lives. Like I remember when I we went to a mastermind and we were just starting out. I was not making a ton of money. And the guy a guy got up there and he gave his little spiel and he's like, yeah, you know, we're making three or $400,000 a month. I don't know what I'm doing. I'm not really sure I like the business, blah, blah, blah.

And the guy did not seem smart.

You were like, how is he doing this? It's funny you say that because my actual first thought was, if he can do it, I can do it. And so that was like, he, through evidence, like, he reshaped my reality. It was one of the most momentous thing. I remember Layla and I both had the same takeaway because she was next to me. We both saw this guy do this. Like, we walked out, we're like, dude, if he can, like, we both immediately had the same conclusion, like, if he can do it, we can do it. we can do it. And so I think that that's like how do you, you either have reality prove you wrong or someone else is that reality for you where they tell their story about, Hey, I used to feel the same way. I used to think this thing. And then I will share my story so you don't have to have the scar.

Yes.

So you don't have to give up five years of your life to learn this lesson. I'll just give you the story so.

You don't have to have the scar. There's certain things I think we need to learn on our own and fail and, you know, and make mistakes on our own. But there's a lot of things we can from other people. Being the youngest of four kids, I watched, you know, my older siblings fail and succeed in their own ways as a model and say, okay, I don't want to make this same mistake. I made other stupid mistakes, but I didn't make certain mistakes that they had made and. And able to accelerate that time from the pain that I was going to feel by making the same mistakes. Yeah, I think you're going to make mistakes no matter what, but I think that's. seeing other people and learning. This is why it's so important to have coaches, mentors, people that can, can break the beliefs in you and tell you what you need to do. If you think about human, like, the.

Human race, just to zoom out, because I think it's a really interesting concept. I was talking to Caleb about Gary, and I'm a competitive person. Yes. I like, you know, thinking like, oh, by the time I'm that age, I'm going to be further. I'm gonna, you know what I mean? Like, and it's, it's, it's lovingly, right? and he said this thing back to me that, like, it hit me, right? And he was like, dude, Gary didn't have Gary, right?

He just had to do it his own. Right.

And all of these. And so the thing is, is like a lot of us and myself included, I get caught up in the, like, man, these kids have it so easy, you know, blah, blah, blah, blah, blah.

Right.

I did. YouTube wasn't even around when I, you know, like all this stuff. Yeah. But the thing is, if you ask most entrepreneurs what they want to do with their lives, they say they want to make an impact on the world. They want to make the world a better place. But, like, making the world a better place. what that looks like is it being easier for the next generation. And so rather than lamenting the fact that the guys who are younger have it easier, that was the point. That was the mission accomplished. And so it reframed how I thought about being the greatest of all time because I think a lot of people have that goal to be the greatest. I mean, a lot of people have that goal. But the more I thought about it, the more I was like, I can't have that goal because if I did my job, then I have to have made people who are after me get there faster than I got there. And so the mark of the success is that I'm not the greatest of all time, but that other people who come after me are even better. And so it really shifted my relationship with how I saw future generations or past generations. The guys who are older than me who are killing it. And I used to think, oh, I'm gonna.

I'm gonna.

I'm gonna beat them. And if I look at my. How much I'm worth at this. At this age versus them, like, I. Just doing the math, I should be further. longer than them by the time I'm their age. And it was this kind of like different competition rather than this gratitude for like, well, of course I'm gonna be bigger than they are at their age. I had them to help me. They didn't have them to help them. And so I'll age up and we'll be multibillionaire, whatever it is, right? And then there's gonna be a young whippersnapper who had me to help him out. Because I'm, you know, we have guys who apply for acquisition.com who are in their 20s to 200 million a year, right? And I'm like, and that wasn't possible 50 years ago. It just wasn't. And so we think about like the human race in general on a macro perspective, right? You have like, rather than seeing the people who are older than you as the old dogs that you have to kick off, right? And biomates play hard in the paint, don't get me wrong. And the people, the young whippersnappers behind you as you know, resenting them for the fact that they got it easier, it just flipped the script for me in terms of like, I'm so grateful for these guys who came before me because they didn't have them. And then if these guys do eventually beat me, or they're further along than I was at their age, rather than lamenting them to protect my ego, because what it really says is you're better than I am. Because if they're making more money at a younger age than me, that means they're better at business in some way than I was at that age. That's just the fact of business. They're better than me at that age. And to protect my ego, I want to say they have it easier. Right, but rather than what does that.

Do for you if you protect your ego as opposed to help others accelerate faster than you?

I think it just reframes it and so it takes the ego away from I need to crush these guys or I need to poke at why it's easier for them and instead say like it being easier for them is my purpose. How can I say that my mission is to document and show the best practices of building world-class companies and then not be pumped for someone to use the best practice of building world-class companies 10 years before I learned them to accelerate way past. And so anyways, that was a frame of reference that completely shifted the narrative for me in terms of competition. I still am pushing as hard as I possibly can to transform my potential into reality. But it feels different. It feels lighter. That's cool. And I like it. So anyways, I just want to share because it was a cool breakthrough that I had recently.

So you asked three things. I'd say the biggest one is figure out ways to strengthen relationships and take them deeper because you never know.

Just like everybody thinks you're, you know.

One sale away or one opportunity away.

You'Re one contact away from your life changing. If you start valuing your contact like a book of business, everything changes. That's true.