If You Have Less Than $10,000 Saved. Please Watch This Video...

If you're broke and you don't want to be anymore, I'm going to read you some stats. I'm going to blow your mind, and then I'm going to give you 6 steps so you don't have to be anymore. The average American has a literal negative net worth. Means that babies are richer than people who are not babies because babies haven't gone into debt. Number 2, the average US minimum wage employee will make over $1 million in their entire lifetime in earnings. And if you were the median of US income, you would earn $3 million over the course of your life. So the reason staying poor is the decision is because, you know, as long as you continue to work, you are going to make $1 million, millions of dollars. And most of the time it's going in places that don't make sense. So challenge number 1 is the buy nothing challenge. It's very simple. You just buy nothing. So disconnect your credit card from Amazon, leave your wallet at home when you go to work, have no way to pay for stuff. Leave your gas, leave your insurance, rent, car payment. If you buy food at discount grocery stores, you pack your lunch. That's all. If you buy nothing, that is as austere or hardcore as my recommendations may appear, I do not ask people to do things that I haven't done. And so like when I was taking in $20,000 a month, me personally, I was in a house with 6 roommates and I split my bedroom with one roommate. And so like, yeah, 2 beds, 2 dudes looking at each other every night. When I was making $1 million a month, I was living on less than $15,000. And so the key takeaway that shifted how I thought about making money and more importantly keeping money is that Wealth is actually a ratio between what you earn and what you need. And the number one rule of money is spend less than you make. And so I always like being super, super conservative with my expenses relative to what I make because I don't like spending money that I feel like I don't need. For those of you, the 3 YouTube odd commenters who think that this is a prop set, you can just look out the window. It's all AI. The first thing you have to do to become wealthy is that you have to decide to become wealthy, and you have to decide that it's under your control. You have to switch from victim to victor. So as much as you may have had a disadvantage, or maybe you got into debt, or you made poor decisions, you have to be the person who's most powerful in your life around money. Now the third thing, and this is the one that really kills me, is that in the US, 35% of every paycheck goes towards paying one thing. You wanna know what it is? Banks. Lenders for debt. 35%. That's because people don't think about their mortgage as debt. They don't think think about their car payment as debt. They don't think about their credit cards as debt. There's a reason that banks are 100+ years old, because they don't go out of business. They make so much money on money. Money is their product, and you keep buying their money from them at a bad price and at a compounding price that goes up every single year. And most people don't do the math on compounding. But like right now, so many people are trying to get 10%, 9% returns in the stock market with credit cards 24% against them. And so the easiest thing you can do to do right at the beginning. Pay off the things that are guaranteed 24% negative returns. They're guaranteed. It's amazing. They're guaranteed returns against you being wealthy. Compound interest is the 8th wonder of the world, according to Charlie Munger. And you want to face off head-to-head against the 8th wonder of the world against your goals? Bad idea. So the thing is that if you're earning enough money and then you have the right habits, being broke is a temporary status. So step 1, save for an emergency fund. And so these steps are similar to Dave Ramsey's Baby Steps because I think he's proven it 100 times over and it's worth modeling success. So number 1, save for your emergency fund, which is basically between $1,000 and $5,000. So the reason that so many people don't hit their savings goals is because something happens, right? And so it's like having a emergency fund for when your AC breaks or when your carburetor needs to be replaced. The thing is, is that things that are unexpected, you can expect them to happen. You just don't know which one it's going to be. Because if you look at a year, it's like about once a month you'll have something unexpected occur and you know I know it's going to cost it. And so it's just preparing for the expense, not which expense it is. Well, what about like debt? Should I pay that off first? No. Learn to save money first and just watch the amount go up. Get to that later. Well, I say this because I'm not trying to make your life difficult. I'm trying to tell you what I did to get here. And for those of you who find that useful, you can model whatever you want. That habit has stuck with me. So even when I was making $1 million a month earlier on in my career, our rent was $1,200 a month. So then we'd go out and get appetizers and we get the big, big shrimp at Bonefish. So, you know, shout out to Bonefish. I tipped like $100, felt like a rich guy. So I say this because some people just immediately change how they live when they make more money. Even the fact that I was able to start at 23 was because I saved every dollar I made so that I could have a $50,000 saved up. It wasn't like I was making crazy money. I think I made $55,000 or $60,000 I think my first year out of college and then I want to say $70,000 or $80,000, something like that the next year. And I say $50,000 after taxes. So I'm going to show you something really quick. If you have a $200 pair of Jordans that you really want to buy, now you might want to buy them today. And let's say you're 25 years old and you're like, I deserve these, I worked really hard for them. Okay, fine. But that $200 invested just in the S&P 500, we're not even getting to S&P 500, I'll talk about that later. Between now and the time you retire. Do you want to know what that actually is? A $200 pair of shoes. And we're going to give it 40 years. We're going to make our return 9%. Additional contribution, zero. Instead of buying that $200 pair of shoes when you were 65, it could be over $6,000 if you just invest in the S&P. So if you wouldn't buy those shoes for $6,000, then maybe don't buy them today for $200. When you buy buy Jordans, it's not— there's no upside. That money is gone. It's just $6,000 that it could have been something that's just going to be zero. And that's a big loss when you do it over and over and over again, right? Like $6,000, $7,000, don't take a lot of those to add up to a million dollars. 130 of those purchases is a million dollars. You probably do that in a couple of years. And so that's personal risk. You have business risk. If you take good business risk, there's upside there. And the thing is, is that sometimes you can't take this business risk because personal risk was too high. And so for me, my whole life I've tried to jam this risk as low as I possibly could so that I could go on the offensive on the business side. I saved as much as I could when I had my job so I could start a gym. That was a big risk, but I had— I lived on almost nothing in Baltimore so that I could take that swing. And if I hadn't had the basics there, I would not have been able to take that shot. And I sold those businesses and then lost everything 2 more times. If I had had to go into debt just to live, then I would have never been able to take those second and third shots. And so the whole point The point is, is like, you will increase your shots on goal by living risk-free or low-risk in your personal life. You'll be able to fail more. Like, I failed more times than you, I'm telling you. I had 9 failed businesses, I had 7 failed partnerships. Like, I have many failures, but the only reason I can get back up is because I don't have this big thing that I have to take care of. It's like, I know that I can live on peanut butter sandwiches and egg whites, mixing protein powder from the gas station with water. I can do that because I have, I've already done it. And I've lived— I should have holes in them right now. Like, I've had these, like, I like them, they're fine, they're perfect. And so I can live with almost nothing and it doesn't bother me because I know how I was pretty content when I was poor. I'm pretty content now, right? Like, like, you gain more now. So I'm bringing all these points up because saving money won't make you money, but it will allow you to think further out and make bigger bets, which absolutely will make you more money. If I had not done that, I wouldn't have a gym. If I hadn't had the gym, I wouldn't have done the gym tour. I was— if I I wouldn't have done Gym Launch. Did you Gym Launch? I wouldn't have been able to do Prestige Labs. Prestige Labs, I would have been able to sell those to Allen. From there, I wouldn't have been able to do Acquisition.com. So like, it sounds small, but it's a tiny domino that you can control. All right, step 2, which is you can begin paying off debt. There's 2 ways of thinking about paying off debt. There's a logical way and a psychological way. I would recommend the psychological way. So let's say that you've got 3 different, you know, cards that you owe. You've got one that's 20%, one that's 15%, one that's 10%. Okay, logic would state that you should go after the 20% one. Psychology would state that you should go after the one that you can pay off fastest. So my recommendation, despite the fact that the math would say, oh, I should pay off the bigger— the one that cost me the most first— you're gonna pay them all off eventually, and you've been dealing with all three of them for like years now. So chill, maybe just follow the process, which is get a win faster. That's the whole point. And so pay them off in reverse order of speed of paying them off. So it's like, boom, I knock one out, boom, I knock one out. So you want to have those little like jackpots, but organize them so you have more of them sooner in your process, if the one that you have the highest interest rate on is also the fastest way to pay off, then definitely that's a double win. Like you can have like 3 quick wins and you're just waiting like 9 months to do that because you have to pay this big debt off. It's like, just get the win. And to be clear, when I'm talking about pay off debt, I'm talking primarily on consumer debt and credit cards and things like that. Debt that we're not going to deal with yet is going to be like house debt, like your mortgage debt. If you have a car, I would recommend getting rid of that and trading it down. The easiest way to pay off your car is to buy a cheaper car and trade in the one that you have. Just, just You're living beyond your means. It's just that you thought your means were higher than they are. That's okay. That's why you're watching this. I want to give you one mental image that should hopefully drag through why this is so important. So you got to save about $10 a day for you to get $1 million in 40 years. So the math is $250 a month that you would put away, compounds at 9%, and you can be at $1 million in 40 years. That feels so easy to do. The only thing easier is not doing well. And if you were to just put $500 a month away, at $500 a month, you'd be at $2.1 million in 40 years. Now, to be clear, most people can live on about 4-ish percent, and that's with never touching the principal. At some point, you can start unwinding it and spending the money, right? But at 4%, which is a very safe amount that you can spend off that, you can live on $80,000 a year. This is the gamification that I would want you to think about, which is that for every $250 that you save every month, it's a million dollars for vehicles. Just basically just use that as your math. And you're like, wait, so if I save $1,000, you're like, right, that's $4 million. You're like, and I'll save $2,000. You're like, that's $8 million, right? And so the thing is, is that's where you're going to get into this game where you're going to be like Fiji water. You're like, screw Fiji water, right? You're like, I'll use the spigot in the back. Now if you're watching this, you're like, well then didn't you spend all this money on this? Yeah, there's levels, right? But we got to get from level 1 first, which is we got to spend less than we make. We gotta, we gotta see what we're keeping. Okay, step 3 is you're actually going to kind of like double down on Step 1, which is this, is that you expand your emergency savings. $1,000 to $5,000 is not real emergency savings. That's like just to prove to yourself that you've learned how to save money. The real emergency savings is really having like 3 to 6 months of living expenses saved up. So you can just like leave it in an interest-bearing account, which there's plenty of places that'll give you 5 or 6%, at least today, the making of this video, on the money you put in there. The magic of this is that when you put that cash there, your level of anxiety around everything else in life will go down and This will then snowball in being able to actually take your eyes from paycheck to paycheck and look up. Then this is where saving money makes you money, is that it allows you to see the opportunities around you because you actually can go on the offense. And be clear, we're not going to invest this money. This money is just your brick of safety that you always have because you don't know what's going to happen next. So that leads the way to step 4, which is eliminate risky spending. So if you have a car lease, turn it in, all right? And then buy a $5,000 clunker. All right, so $5,000, $10,000 in cash. Again, we're at step 4 now. All right, so you've already saved some money, you've learned how to save, you've paid off some debt. Now trade that thing in. My dad owned every car we had in cash, all we had bought used. I think my first few cars all had over 100,000 miles on them. That was just how I thought everyone bought cars. Go negotiate, look for a car that's under 1,000 years old, look at Carfax, try to have something that has low insurance and low repairs. And a lot of that stuff you can look at average cost to repair by different vehicles. Next thing is if you have multiple cars, downgrade to one. I mean, Layla and I have lived with one car for years. I do have a great story about— I haven't told this story forever. So the first time I drove up to a gym launch event, so we had, I think like 30 or 40, but most of the time we had an event for all the gym owners to come out to. It was just in Albuquerque, New Mexico. That's where Leila and I were living at the time. And as I pulled up, I pulled up in Leila's car. It was our car. There was no other car. And it had a crack in the windshield and a dent in the door. A group of gym owners see me and one of the ladies who's in the group was like, dang, I thought you were supposed to be rich. I was like, oh, you should see my bank account. I know what game I'm playing. The game you're judging me on is a stupid game. Now, if you have kids, maybe there's considerations there, but even then, like, is there a way that you can just use foresight and say, how will we share one car? Because there are many families that do have kids and just share one car. And so if they can do it, so can you. And what you're doing is you're paying for convenience, but that convenience is costing, remember, $500 a month. What's that? That's $2 million. That's what that convenience is. Is it, is it $2 million worth it? Probably not. And so what I want to push on is like, what's your, what's your vice? Some people like, they love going out to eat. People love shoes. That's guys and girls, right? Uh, some people love clothes, some people love vacations, some people just like live in a neighborhood that shouldn't be in. You've got to look at how that translates into time, it translates into future money. So those are the two big measuring sticks I want you to use, is if you can translate all the stuff you have. So like that car is a $600 a month lease that you have, right? That means that let's say that you make $100 a day, right? So that's $1,250 an hour. Okay, let's say, and that's, let's say that's post-tax, so you're at $1,500 or something like Okay, that means that if you work 4 weeks a month, 22 days of workdays in a month, you're working 6 of your 22 days for the car that you drive to work with. Okay, and people aren't translating the money into the time. And let's say that you spend, you know, $1,200 a month on your lease, maybe, you know, you're out wherever you live, right? Okay, well, now you got 12 days. So we got 6 and 12, right? 18 of our 22 opportunities. No shit, you don't have much left, right? It's like, how much of each of these days am I using up to just do my fixed costs? And these are the ones that you can completely jam down. The only thing that people hate is their ego. And when I said earlier that I'm not going to ask you to do something I haven't done, I was a white-collar consultant who saved $50,000 and I had a condo. And I then got rid of that and then basically moved into my car, drove across the country, did I didn't have a place to live. I had a guy basically allow me to rent my bedroom for $400 a month. And then I had my gym rent, which was $5,000 a month. And I was like, Jesus, I'm not taking any more rent on. So I lived in my gym. I lived on zero. I was homeless. I lived inside my gym. Like, it was fine. It was just not clean. I had a client say like, oh my God, you should be taking better care of this car. It was like dirty and I hadn't washed it or whatever. That tiny action was representative of hundreds and thousands of smaller actions that helped me get to where I'm at right now. So I'm very grateful for that man at that time who was willing to take that sacrifice for me to do what I can do now. So a great question that I have for you is, what are you willing to give up to be a millionaire? Rather than what are you willing to do? Because a lot of times in the beginning, it's about elimination, not addition. The people that you're going to get out of your life, it's the expenses that you're going to get out of your life, it's the posture, it's going to be the showing off. If you aren't willing to sacrifice anything to become a millionaire, you never will become. The doorman in my building started following some of these steps and he went from having a $600 month lease to buying a car in cash that he now owns. That's a big downgrade from what he had, but he's paying off his debt. And now he's like, just seeing every month my debt go down, it's like, it's so like reinforcing. And I was like, man. In my company, when I found out that some of the highest earners were living paycheck to paycheck, I only talked to more of them about this. I really wanted to figure out what it was. And so what was interesting about it was that the people who were the wealthiest, the ones who had the most saved up, the most invested, were not often the highest earners. Again, it's this misconception that people think people who make a lot of money have a lot of money. And oftentimes that's not the case at all. And I don't know about you, I would rather be underestimated for how much money I got. And so the real question is, do you want to look rich or do you want to be rich? And I think a lot of you guys, if you're being honest with yourself, want to look rich. You want people to give you dabs for being rich. You don't actually want to have the security. Me, I'm actually a very risky person. I I hate the feeling of needing money. I hate the feeling of needing money more than you do. That's why I did everything in my life so that I wouldn't have to feel that way. Real talk. Your tolerance for poverty is higher. You've accustomed to that feeling. You're willing to deal with that stress. I'm gonna be clear, if you've got a family, things like that, now it's just a spouse conversation. Like, hey, is this the neighborhood we need to be in? Is it weak? Carpool? Like, you have to be real about this. And if you're not gonna keep up with the Joneses today, but you will pass the dreams eventually. If you want to look rich long term, the best way to do that is to actually be rich because you will be stress-free. We're less stressed about money. And I think that does have material change in how your life feels. So I'll just read you a quote from Charlie Munger. He said, the first $100 grand is a bitch, but you got to do it. I don't care what you have to do. If it means walking everywhere, not eating anything that wasn't purchased with a coupon, find a way to get your hands on $100 grand. After that, you can ease off the gas a little bit. Now, mind you, he said this years ago. So it's probably close to $150,000, maybe $200,000 today. And so I say this because you want to make it fun. And so I give you my little story about the doormat earlier. Put it on an Excel sheet. If I save this much every month, if I save this much every month, and see how quickly you can knock it down, right? So the next one is around mortgages. If you're renting, you want to downgrade to something that's cheaper, as cheap as you possibly can. If you have a mortgage that you can afford, it's harder to get out of that. And so you can refinance if if the rates are lower. If they're not lower, then you want to try and get a 15-year fixed, and that way you can just try and pay it down as fast as possible. The idea is that you just want to pay the house off, and that way you don't have to worry about it unless the government comes after you for problem with taxes. Well, I can tell you that living in a cash-paid-for house is very chill. But you're like, okay, my car's paid for in cash, my house is paid for in cash. What happens is that your earning capacity starts snowballing, because if you don't have this car payment and you don't have a mortgage, all of a sudden you're like, whoa, I'm only working 2 days a month for my normal expenses and the other 20 I have now for going all in on investments, either myself or assets that'll go up over time. So step 5 is invest 15% of pre-tax income, pre-tax income into stuff that's gonna go up over time. Now, the way that I like to think about this is automate investments, frictionalize spending. So basically you'll make it hard to spend, easy to save, easy to invest. And so I like to take the things that have to get saved invested off the top before I begin everything else, right? Now, I still would have another bucket there. There would be education that I would invest in. If you're like, man, he's talking about the S&P 500. I don't know if I have the money for that, right? And to be able to do educational stuff, it's like, well, spend less. And if you're like, I can't spend less, you can always spend less, right? But you can still split it and say, okay, I'll put 15% pre-tax into investing. I'll put another 15% pre-tax into my education because that's going to increase your earning capacity. Because listen, As soon as you can replace what it costs you in education for that investment, everything else is gravy. It's like house money. And so like the whole goal of the first educational investment is to cover itself. Once that happens, like it's all doubling down after that. And that's my recommendation is like the day that you stop investing in your education and getting more skills is the day you decide that you don't want to make any more money than you currently are. By the way, this isn't investment advice. You can do whatever the hell you want. This is just me telling you what I told my team. So next one is a little money habit. Still underneath step 5 is you want to check your accounts daily. So this is something that I recommend for everybody who's basically before your savings goal. I stopped looking at my accounts every day once we crossed like $20 million. That was when I literally stopped checking every day because the volatility stopped making sense. It didn't make sense anymore. But you want to have a pulse for your money. And so you want to know, you want to, you want to know what's coming in, what's going out. Like you want to, you want to feel that. And when you're looking at expenditure, that's a lot for me because you know how much that hits your account. And like that, that was a good inflow. You're willing to, to, to spend more in some areas that you're like, I'm getting returns there. But like, you can't know that unless you're in the account every day. You have that flow. So if you want to know something wild, so if you were 20 years old right now and you do the thing that I'm about to tell you, it's going to sound insane, but you would have $50 million saved up at the end. So here's how it works. You take on an extra job, you work an extra shift, you make an extra $2,500 a month. That means you drive Uber, you say you go to your boss and say, I have more time. Can I do someone else's job or can I look at other jobs and take portions of that for more pay? And a lot of times if you offer to work more, businesses will pay you more because they have more work to do. And so you can make an extra $1,000, $2,000, $3,000 a month. But if you made an extra $2,500 a month and you put that every single month towards just investing into the S&P 500, again, not SME, just S&P, all the other stuff we said stays. We're just doing this on top, but we're not touching it. So then you would have 55 years of compounding at 9.7%. And let's say you're starting out with zero and you're going to put $2,500 a month away. If you did that for 55 years, you'd have $52 million at the end. Like you'd be ultra high net worth. And so I say this because wealth is a decision. It's something that you can control and it starts with spending less than what you make. It's about increasing your earning capacity. Segmenting and paying off the things that are, that are, that are dumb to be paying for, locking in the negative compounding against you and blocking those so that you can start the positive compounding, developing the simple habit of saving something, then paying off smaller ones, then saving up bigger ones, then getting a little bit more on the offensive, restructuring house debt so that you can pay it off faster. Once you're there, then it starts snowballing. Then you go more aggressively into— you work the extra shifts, you invest the 15% pretax, maybe invest another 15% pretax into yourself, divide between the two? Bar none, not even close. I'd invest in me because your ability to earn more using money is going to always be higher than what the S&P 500 would even do. So let's say that you put $10,000 into the S&P 500 and it grows 10%, you have $1,000. Great. Let's say instead you take the $10,000 and I said that working that extra shift, well, maybe instead of shoveling snow, you buy a snowblower and now the snowblower takes you from doing 3 driveways a day to doing 20. When you knock doors and say, hey, I'm gonna snowblow your driveway for you, well, it's 7x your turning capacity. Will that make you more than an extra $1,000 this year? Yes, by a lot, by a long shot. And so the key is not thinking about what you can do passively with the money, although I like having this understanding of it, especially in the beginning. It's about increasing your active income. So here's the craziest thing: that $52 million that you would have, that's being made by someone no matter what. Think about this for a second. If you didn't change your habits, you'd more or less make the same amount of money. But that 35% of the American paycheck is going to someone, and that someone is taking that money and putting into something that compounds, and they're doing it for the entirety of your life. And so the question just comes down to who do you want that $50 million to belong to? Do you want it to belong to the banks and their shareholders, or do you want it to belong to you? But either way, that money's being made. It's just whether it's going to be you who has it at the end. So the last step, just to be clear, is that you pay off your mortgage, then all of your basic living expenses are covered, your fixed costs are done, and now all of that unlocks even more investment into your long-term legacy. Now, this works really well when paired with the 30 by 12. All right, so 30 by 12 working challenge is basically you work 30 days straight, no weekends, 12 hours a day, and you don't take days off. Now, what happens is— now everyone's like, that's not sustainable. That's why I said 30 days, not the rest of your life. The point is, is that you'll realize at the end of 30 days that you can work harder than you thought you could. You can go a week or two without taking a day off and you're not gonna die. Because believe it or not, thousands of years we didn't have weekends. Weekends are a new concept that's happened as soon as factories were invented. And I think it was a way to get even more something out of people. I can't even remember what it was. The point is, is that if you stop spending all your money and then you take all the time when you normally would spend money and then make money, you get a double. Reduce the negative and add to the positive and see how much damage you can do in 30 days. And then, then you could say, is it worth it for me to get what I want?