Monica
💫 Summary
The video discusses the 75/15/10 rule for managing money like the wealthy, emphasizing the importance of earning money as an entrepreneur, investing in assets to generate cash flow, and utilizing low-cost index funds or ETFs for investing in the stock market. It also highlights the significance of cash flow and the potential risks and rewards of investing in real estate.
✨ Highlights📊 Transcript
To build wealth like the 1%, you need to earn more money as an entrepreneur, use that money to buy assets, generate cash flow from those assets, and then use the cash flow to fund your lifestyle.
00:00
Average people use the money they earn to fund their lifestyle.
To build wealth, you need to earn more money as an entrepreneur.
Use the money you earn to buy assets, which will generate cash flow.
The cash flow from assets should be used to fund your lifestyle.
The key to wealth is owning assets, not just having a high-paying job.
07:51
Wealthy people make money from their assets, not just their jobs.
The economic system emphasizes earning money from a job, but the real wealth comes from owning assets.
Building equity through investing in assets is crucial for long-term wealth.
The speaker personally receives commission-based income rather than a fixed salary.
To be in the top 1%, you need to start building equity by owning assets that can pay you through appreciation or cash flow.
15:44
Appreciation is when the value of investments goes up.
Cash flow is when you receive regular payments from owning an asset.
Wealthy people invest in real estate, which inspired the speaker to invest in it as well.
The speaker's parents, immigrants from Punjab, didn't have financial education and believed in working hard to earn money.
The average person should invest in low-cost index funds or ETFs rather than trying to pick individual companies in the stock market.
23:36
The average person doesn't have the psychology, education, and interest to manage a real investment portfolio.
Investing in low-cost index funds or ETFs provides exposure to a broad basket of companies.
Investing in a fund reduces the risk of losing all your money if one company goes bankrupt.
To increase passive income, one can invest in riskier places or invest more money.
31:29
Investing in high cash flowing areas typically yields 7-10% returns.
Investing $100,000 may generate $10,000 in cash flow per year.
Investing $1 million may generate $100,000 in cash flow per year.
To make more money, you need to start by creating something and learning various processes along the way.
39:22
You need to determine your goal, whether it's cash flow or something else.
Calculate how much cash flow you need and how much money you need to invest to achieve it.
If you can't reach your goal with your current income, you may need to earn more money through your job or by creating something of value.
Bed Bath and Beyond used cash and debt to buy back their stock, inflating the stock price and making shareholders richer, but now they are facing issues with their business and financials due to the large amount of money used for stock buybacks.
47:14
Bed Bath and Beyond issued a $325 million stock buyback in 2021, causing the stock to rally.
They increased the stock buyback to $625 million, which caused the stock to rally again.
The company used a significant amount of cash, profits, and future earnings from debts for stock buybacks instead of investing in their e-commerce store or new technologies.
Now, Bed Bath and Beyond is facing financial difficulties due to the large amount of money used for stock buybacks.
Rising interest rates and increasing corporate debts may lead to challenges in raising rents and servicing debts for office landlords and corporations.
55:06
Office landlords may struggle to raise rents by 50% if tenants are remote or hybrid workers.
Rising interest rates are necessary to bring down inflation, but it may impact the cost of servicing corporate debts.
Corporations that have raised significant debt may face higher expenses in servicing the debt, requiring them to increase revenues.
Slowing economy and inability to generate enough revenue may result in layoffs and cost-cutting measures for companies.
00:00I just hired a new team member for
00:01briefs media and he told me that our
00:03onboarding process blew his mind not
00:06because of the work product or the
00:07process that we have at our company but
00:09because of the money strategies that he
00:12saw let me show you this is what the
00:13average person does the average person
00:15makes money and then they use this money
00:18that they earned to fund their lifestyle
00:21now this money that you earned can be
00:24from your job it could be from a
00:25business that you run it could be from
00:27your YouTube channel you're going out
00:29and making money somehow and then you're
00:31using this money to fund your lifestyle
00:32now what I said is if you want to build
00:35wealth you're going to have to flip this
00:36up if you want to be a part of the one
00:38percent or the 0.1 percent first you got
00:40to earn more money and you're going to
00:42do that here by being an entrepreneur
00:44entrepreneur meaning you are working as
00:47an innovator and as a leader within the
00:49construct and confines of our business
00:51compare that to an entrepreneur right
00:53now you're going out and taking all the
00:54risk so now you're working as an
00:56entrepreneur to earn money and then you
00:58want to take the money that you earned
00:59you use this money to then buy assets
01:03and then use the assets to generate cash
01:07flow and then when these assets generate
01:10your cash flow use this cash flow to
01:12then fund your lifestyle it's a
01:15completely different way of using your
01:17money because now when you make money
01:18you're making money with the goal of
01:20buying assets I'll talk about which
01:22assets to buy and how to do this in just
01:24a bit but you're making money to buy
01:25assets and then you use your assets
01:27generate cash flow there's cash flows
01:29and funding a lifestyle compared to
01:31everybody else who's making money to buy
01:33their lifestyle and the reason why this
01:35is so important is because eventually
01:37you're not going to have the same
01:39ability to work and you're going to need
01:41equity in something because Equity what
01:44these assets are this Equity can pay you
01:46long after you stop working and so what
01:48happens to so many people is you work
01:50work work work from 21 to 65 and then
01:53you retire and now you no longer have
01:55that stream of income because your only
01:56stream of income before was the work
01:58that your body could do you you worked
02:00at a hospital as a doctor you worked as
02:02an attorney you worked as a cashier you
02:05did something to generate an income but
02:07when you turned 65 or 67 or 70 however
02:09old you are and you stopped working now
02:11the equity in your skill set is gone and
02:14now you have no more income coming in
02:15but if you own an asset and now this
02:19asset continues to pay you well now this
02:21asset can pay you even when you're not
02:23working but then I took it one step
02:24further by explaining my financial
02:25situation because what I said was I'm
02:28working to earn money from a minority
02:29mindset brand that's from places like my
02:31YouTube channel our website my speaking
02:33gigs that I do I work to earn my money
02:35now what I used to do for a number of
02:38years was I would work to earn more
02:39money and then I would take this money
02:41and buy primarily real estate rental
02:44properties so I've been buying assets
02:46like real estate some of the money will
02:47go into stocks but then this real estate
02:49would then generate me around a seven
02:51percent return on my money annually not
02:55bad but then I started to realize that
02:57okay if I could get a seven percent
02:59return on my money it's fine but what if
03:02I could do something bigger and that's
03:04when I started to realize that I need to
03:05invest into my entrepreneurial Ventures
03:08so that was when I created briefs media
03:12my newsletter company and so now what
03:14I'm doing is I'm working here in the
03:16minority mindset brand to generate money
03:18that way I can then use this money to
03:20fund the briefs Media company that we
03:22can grow the company because my goal is
03:24to grow briefs media by way more than
03:26seven percent a year so now if I take a
03:28hundred thousand dollars from here and
03:29put into real estate that might make me
03:31seven thousand dollars a year but if I
03:33take that same one hundred thousand
03:34dollars from here into here my goal is
03:36to get a bigger than a seven percent
03:38return however it comes with more risk
03:40because if things don't go well if the
03:42economy goes south and our company
03:44cannot sustain it I could lose
03:46everything but my goal is now to grow
03:48this significantly faster that way now
03:51we can take the briefs media brand even
03:53further and then when I went to show
03:54this team member around I drove him in
03:56my car and that's when he saw it in
03:58actual action because I wasn't dragged
03:59driving a fancy car I drove around in my
04:02500 Toyota with no bumper that way he
04:04could see that I'm living the same
04:06lifestyle that I'm teaching him I'm
04:07making money here not so I can fund my
04:09lifestyle I'm making money here that way
04:12I can buy more of this yeah I own rental
04:13properties yeah I own stocks and I still
04:15have money going there from some of my
04:17income but I'm actively working here
04:20that way I can grow this because this
04:23then builds Equity there's equity in the
04:26company which you can realize either by
04:28selling the company you can realize by
04:30pulling cash out of the company through
04:32debt or other methods but I'm working to
04:34build this Equity but the equity that
04:36most people are doing is completely
04:38wrong because most people are working to
04:40earn money whether it be through their
04:41own brand through the YouTube channel
04:42through their job through their business
04:44whatever it might be and then they use
04:45this income to go out and buy a car or
04:48to buy clothes or to buy vacations and
04:50that's what everybody else is doing so
04:52you assume it's normal but there's no
04:53wealth in anything that you're buying
04:55and this is where now if you want to be
04:57a part of the one percent the 0.1
04:59percent the 0.01 percent or the 0.001
05:02percent you have to start doing
05:03something completely different and that
05:05means now you've got to use the money
05:07that you earn to buy assets or create
05:10assets that way now you have real wealth
05:13coming in that isn't just dependent on
05:15you going to work the simplest way for
05:17you to start doing this is to follow
05:18something like a 75 15 10 plan which
05:21says for every dollar that you earn from
05:22here on out you cannot spend all of this
05:25money in fact you want to go out and
05:27create three different bank accounts
05:28that went out you can separate your
05:30spending money your investing money and
05:32your savings money that way now for
05:33every dollar that you earned 75 cents is
05:36the maximum that you can spend 15 cents
05:39is the minimum you should be investing
05:41and 10 cents is the minimum that you're
05:43saving this way now no matter how much
05:45money you earn you're always paying
05:48yourself first and when I say paying
05:49yourself first I don't mean going out to
05:51the Gucci store and buying yourself a
05:52new bag I mean paying yourself first
05:54meaning building your wealth first the
05:57way you build your wealth is by
05:58investing your money into the ass sets
06:00that I was talking about this is where
06:02the wealth is built your savings aren't
06:03there to make you wealthy sorry to all
06:05your parents who told you that your
06:06savings are there to make you wealthy
06:07that's what I was told too your savings
06:10are not going to make you wealthy
06:11they're just there to protect you
06:12against an emergency so now anytime you
06:14earn a dollar you want to be able to
06:16separate the dollar out right now 75
06:19cents can stay in that check-ins account
06:21that's the money that you can spend on
06:23your home your vacations your cars your
06:24food all that other stuff 15 cents
06:27should go into a separate bank account
06:28this is money that you're going to
06:29invest 10 cents should go into a third
06:31bank account which is the money you are
06:33saving for an emergency now a quick
06:35point on the savings money you don't
06:37want to always just save your money
06:38forever you want to save somewhere
06:40between three months and 12 months worth
06:41of expenses that way now in case you
06:43lose your job in case your kid breaks
06:45their arm in case a window breaks in
06:47case the AC goes out you have cash to
06:49pay for these expenses without having to
06:51go into debt but once you hit that 3 to
06:5312 months worth of expenses that's when
06:55you can stop saving and take that money
06:57and put it here that way you have 25
06:58percent of your income being invested
07:00because well this is where your wealth
07:03is going to be built now to decide how
07:05much money you should save this is going
07:06to depend on you and where you are in
07:08your life if you're single if you don't
07:10have a lot of expenses you don't have a
07:12lot of liabilities hey you can take on
07:13more risk maybe you don't need 12 months
07:15or nine months or even six months worth
07:17of savings right now hey you know what
07:18you could put more of your emphasis on
07:20investing your money into something and
07:21I'll talk about the different places
07:22that you can invest your money but you
07:24can invest your money into something
07:25that way you can get a better return on
07:27your money because you don't need to
07:29save it right now but if you're older
07:30you have kids you have a spouse you have
07:32more financial responsibilities you
07:33don't have a big risk tolerance then
07:35maybe you need six months nine months or
07:36a Year's worth of savings depending on
07:38where you are in your life but then this
07:40is the money this is what a topic is
07:42going to be today this is where now you
07:44want to put this money to work that way
07:45you can build that Equity that way you
07:48can build the wealth because real wealth
07:50in this economic system in this
07:51financial system in America is built by
07:54owning assets wealthy people are rich
07:57because they own assets not because they
07:59have a high paying job you can be broke
08:01with a high paying job but if you have
08:03assets you can spend all your money
08:05today and still be rich next month and
08:08that's where the real wealth is built
08:09and this is one of those things that our
08:11economic system never teaches us this I
08:13never learned this in school our parents
08:15didn't teach me this I had to go out of
08:17my way to learn and this is one of those
08:19things that once you learn it you can't
08:20unlearn it but if you don't learn it you
08:23might never learn it and if you don't
08:25learn it you're never going to be able
08:26to capitalize on the way that our
08:28economic system works and in this
08:30capitalist system there are two ways
08:32that you can make money you can make
08:33money from your labor the money that you
08:35work to earn from your job or you can
08:37make money from your Capital we're
08:38always taught about how to make money
08:40from our labor that's what school
08:41teaches us how can you get a high paying
08:43job but the wealthiest people in this
08:46country don't make their money from
08:48their job they make their money from
08:51their assets our entire system is
08:53designed on earning more money from a
08:55job but the richest people are earning
08:57their money from what they own and this
08:59is where you have to start thinking a
09:00little bit differently it's not just how
09:02much money you earn from your job it's
09:03what assets you own how many assets you
09:06own and how you're investing into these
09:07assets that way you can build that
09:09equity which will continue paying you
09:11long after you stop working now I can't
09:13tell you what to do with your money but
09:14I'll tell you exactly what I do with
09:16mine because I am an employee of the
09:18minority mindset companies but I don't
09:20get paid a fixed dollar amount salary I
09:22get paid a commission and I'm on 20
09:25commission meaning if I go out and I
09:28earn a hundred thousand dollars I don't
09:30pay myself a hundred thousand dollars I
09:32pay myself 20 and out of the money that
09:35I generate for myself the twenty
09:36thousand dollars well most of that money
09:39almost all of that many gets passively
09:42invested that other eighty thousand
09:44dollars that I didn't pay myself goes
09:46back into the brand that goes back into
09:48briefs media to help grow that company
09:50even bigger now you might be wondering
09:52well just put it if you're paying
09:54yourself that 20 and you're not using
09:56that to pay for your lifestyle how are
09:58you paying for your lifestyle again I
10:00have other passive Investments that I'm
10:02using to help fund my lifestyle not to
10:05mention that I don't live very large
10:07yeah I have some nice things but I'm not
10:10spending a ton of money right now
10:11because right now my focus is on growth
10:13my goal is to grow the company so I pay
10:16myself 20 of the money that I generate
10:19out of the money that I pay myself then
10:21that 20 most of that is passively
10:23invested then out of the 80 percent that
10:25I didn't pay myself that's going back
10:27into the company that way I can grow the
10:29company now I could take all the hundred
10:31thousand dollars out right now go buy a
10:32nice car live much bigger and have a
10:34bunch of nice things
10:36but that doesn't align with my goals
10:39right now because right now my goal is
10:40to build equity now I could go out and
10:42build equity in things like my rental
10:43properties I could go out and build more
10:45equity in the stock market I can invest
10:47in other startups and I am investing in
10:49stocks passively I do have real estate
10:52Investments and I occasionally buy more
10:53real estate and I do occasionally invest
10:55in stocks but right now my primary goal
10:58is building the company briefs media and
11:01it's a risk it could fail it could go
11:03bankrupt it could go to zero I could
11:05lose every dollar that I invested that's
11:07a risk that's the risk that you take for
11:09investing in yourself like that but my
11:12goal is to build it into something much
11:13bigger I don't know where it's going to
11:15go but I know that I'm going to work
11:16hard to make it go somewhere and that's
11:18the investment risk and you have to
11:21decide where it is that you want to
11:22build this Equity when most people hear
11:24about this term Equity they think of
11:27paying down the mortgage on my home and
11:29that is the type of equity that most
11:31people think is what's going to build
11:33generational wealth and I hate to break
11:35it to you but that's one of the worst
11:37kinds of equity that you can build
11:40because when you spend all of your money
11:43to pay down your home the benefit that
11:45you get is you get a paid off home but
11:47it doesn't generate you any cash flow
11:49and this is where everybody says but you
11:51can always pull cash out of the home
11:53because you can refinance out of the
11:54home
11:55sure but if you do a Cash out refinance
11:58and you pull cash out of the home you
12:00still got to pay that money back and how
12:02are you going to pay that money back not
12:04to mention you still got expenses you
12:06have to pay you might have a pay down
12:07home but you still got to pay the
12:08property taxes you still got to pay the
12:10water bill you still got to pay the
12:11utility bills you still got to pay for
12:13the maintenance you still got to pay for
12:14the upgrades and so you're still paying
12:16out of pocket to own this home and maybe
12:18it's going up in value maybe it's not
12:20but you still have to fund this Equity
12:23that you own compare that to something
12:25like say having equity in a rental
12:27property now this rental property will
12:30be generating you cash flow that's the
12:32cash flow you can use to pay for rent
12:34for a place where you live as casually
12:35can use to buy vacations that's cash
12:38flow that you can use to pay for your
12:39car not to mention that the cash flow
12:42can be used to fund your property taxes
12:44on your rental property you can use the
12:45cash flow to pay for the maintenance and
12:47the upgrades on the property it's a very
12:49different way of looking at Equity now
12:51if you're an entrepreneur you are that I
12:54want to build something type that I
12:55don't want to for somebody else then you
12:57can build equity in your own company and
12:59then the equity can be realized by
13:01either selling the business or by using
13:04debt to pull out cash from the business
13:06or you can if you grow big enough hire a
13:09new CEO to then run the company so
13:11there's different types of equity you
13:13have equity in your own home the worst
13:14kinds of equity you can build equity in
13:16your passive Investments things like
13:18your stock market Investments things
13:19like your real estate Investments or you
13:21can build equity in a company into a
13:23business that you create but you really
13:25want to make sure if you do that that
13:26you want to build a real business not
13:28something that just relies on you and if
13:30you're looking for a resource to learn
13:31more about what that means there's a
13:32book called built to sell which I highly
13:34recommend you read that way you learn
13:36how to actually build a real business
13:37instead of a business that just creates
13:40a job for you now if we go back to the
13:4275 1510 method of Now using your money
13:44because now this is a system that can
13:46allow you to build wealth and skill with
13:48how much money you earn the reason why I
13:49like this type of method is because now
13:51whether you make ten thousand dollars a
13:53year a hundred thousand dollars a year
13:55or 10 million dollars a year it doesn't
13:57change no matter how much money you earn
14:00you always have a percentage of your
14:02income being invested and you always
14:04have a percentage of income being saved
14:06this way now when you earn more money
14:07you can spend more money but you're also
14:09investing more money and you're also
14:11saving more money now again when it
14:13comes to your savings your savings are
14:15going to scale depending on how your
14:17savings cushion looks when you have your
14:19savings fund completely full you don't
14:21have to save more money but when you
14:23don't have any savings then you will
14:24continue to save until you build up the
14:25savings cushion 3 to 12 months but your
14:27Investments are now where you can build
14:29your wealth and if you can invest more
14:31than fifteen percent even better that is
14:33the minimum but you want to make sure
14:35you're always paying yourself first
14:37because what the average American what
14:40most people are doing is they make money
14:42to spend it they make money to buy nice
14:44things and guess what when you make
14:45money to go to the Gucci store you make
14:48money to buy some Lululemon you make
14:50money to buy Apple you make money into
14:51go shop
14:53you are making everybody else rich and
14:55the expense is you keep yourself poor
14:58and this is where well it's profitable
15:01to keep you financially stupid and
15:02ignorant because if you don't realize
15:04this you're going to keep spending all
15:05of your money and going into debt to buy
15:07all these nice things which make you
15:08look rich and it has all your friends
15:10saying oh wow nice car that must have
15:12been a fun vacation I really like your
15:13clothes nice belt
15:15but that's never going to allow you to
15:17build wealth because you have no real
15:19Equity once you retire what are you
15:22going to do your only Equity was in your
15:24skill set you worked to earn more money
15:26to earn more money from your job but
15:28that is not sellable that isn't
15:30something that can continue to pay you
15:32when you're not working that's why you
15:33need an external asset that can continue
15:36to pay you even when you're not working
15:37and this is where now you need to know
15:39how to use your money as a tool that way
15:42you can build wealth because if you want
15:44to be like the top one percent point one
15:45percent or 0.01 percent you have to
15:47start building that Equity that way now
15:49you can own these assets that can pay
15:52you now there's two different ways that
15:53these assets can pay you you can get
15:55paid through appreciation or it can get
15:57paid through cash flow appreciation is
16:00when the value of Investments go up you
16:03bought a stock for a hundred dollars now
16:04it's worth two hundred dollars and you
16:06sold it that's appreciation cash flow is
16:08you buy the stock for a hundred dollars
16:10and now it's giving you three dollars of
16:13cash flow a dividend every year just for
16:15you doing nothing except owning it now
16:18this pros and cons for both because
16:20personally I like cash flow I like
16:22owning something and getting paid
16:24without having to sell it because now my
16:26goal is to stack cash flow when I first
16:28started getting involved into Financial
16:30education I was in college I was making
16:33money because I was working in the event
16:34planning business I started this party
16:37promotion company and started making a
16:38little bit of money and this was at the
16:41tail end of the 2008 crash when real
16:44estate properties were selling for dirt
16:46cheap but at the same time everybody was
16:48very scared of real estate everybody was
16:50running away from Real Estate but I had
16:52read a few books about money management
16:54and investing and Building Wealth and
16:56every book said that wealthy people
16:57invested in real estate I had no idea
16:59what that meant I didn't know any Real
17:01Estate Investors I don't have investor
17:04family members this was something that I
17:05read in books and I said okay I'm gonna
17:07go invest in real estate so I told my
17:09dad dad I want to go invest in real
17:11estate and he said you're stupid go
17:13study focus on becoming a doctor that
17:16way you can have a real career now he
17:18didn't say this out of hate but that was
17:21just what he thought was right
17:23my parents are immigrants from a state
17:25in India called Punjab they didn't grow
17:27up with financial education they worked
17:29hard because that's what they thought
17:31was right to earn money and working hard
17:33is extremely important if you're not
17:34willing to work hard nothing I say is
17:36really going to apply to you but that's
17:37what they knew they didn't know that
17:39investing is a thing that you could do
17:41but that's what I decided to do I kind
17:43of went around my parents back and I
17:46secretly started getting involved in
17:47real estate I secretly started investing
17:49in real estate and I was very fortunate
17:51because this was at the bottom of the
17:522008 crash and so I was buying
17:55properties that were originally selling
17:57for 150 Grand prior to the pandemic and
18:00then I was purchasing them for under ten
18:02thousand dollars because there was so
18:05much excess debt so many foreclosures
18:08that Banks just needed to liquidate
18:10their assets meaning these Banks were
18:13selling properties for literally Pennies
18:15on the dollar I didn't know this was
18:17going on to me this seemed normal
18:18because I didn't know anything else but
18:19I was very fortunate that when I started
18:21doing that I started generating a little
18:23bit of cash flow because I was buying
18:24these properties for very cheap
18:27then I was renting it out my first
18:29property that I bought was a small condo
18:30out of foreclosure I bought it for eight
18:33thousand dollars put in a few thousand
18:35dollars worth of work and I rented it
18:37out for 600 a month now that's 600 that
18:41I got wasn't all profit I profited about
18:44half of that 250 to 350 a month
18:46depending on the month and it wasn't
18:48completely passive actually it wasn't
18:50passive at all in the beginning I had no
18:52idea what I was doing it made every
18:53mistake possible so my time was
18:55completely sucked up by this deal
18:57because I was just so involved trying to
19:01figure out how to manage my real estate
19:02properties the right way eventually I
19:04figured it out and it became much more
19:05passive but in the beginning it was a
19:07huge huge huge time commitment on my end
19:09but I started making some money from
19:12this property that I wasn't technically
19:14working at and that blew my mind because
19:16I had no idea that I could own this
19:19thing that would pay me before that I
19:21ran an event planning company and the
19:23reason why I call it a company is
19:25because I wasn't really really building
19:28a real business if I wasn't hosting a
19:30party or if I wasn't working at a
19:31wedding I wasn't getting paid all I did
19:33was create a job for myself that's very
19:36different than owning an asset or
19:37building a company that can continue to
19:39generate income even when you're not
19:40working and when I saw that my mindset
19:43completely shifted because now I went
19:45from thinking I'm just gonna do more
19:47things to make more money to I want to
19:48own assets to pay me with cash flow and
19:51then my mindset shifted to okay
19:54if I need assets to pay me with cash
19:56flow how many assets do I need and now
19:59the game was stack cash flow own real
20:02estate stack cash flow and all I did was
20:04try to earn money from any place
20:06possible that would like about my real
20:08estate because now I knew that every
20:10unit that I bought that I could put
20:12another 300 a month into my pocket so
20:16now if I can get 10 units that's three
20:17grand a month if I can get 20 units
20:20that's six grand a month and this is net
20:22profit after expenses and that was the
20:24game that I was playing just making
20:26money from anywhere that I could find it
20:29whether it was through this event
20:30planning company whether it was from
20:32Real Estate because that became a real
20:33estate broker I started wholesaling real
20:35estate I started selling on Amazon I
20:37started creating other e-commerce
20:38businesses I was doing a bunch of
20:39different things to earn money not so I
20:41can go out and buy a fancy car but so I
20:43could go out and stack assets that was
20:46the only game that I was playing this is
20:48why I called it a decade of sacrifice
20:49because if you really want to become
20:50wealthy
20:51and you want to Achieve Financial
20:53Freedom you are going to have to put in
20:55what I call that decade of sacrifice
20:57where now you're spending less money and
20:59you're working to earn more money that
21:01way now you can take this income this
21:02margin that you have the money that
21:04you're not spending and use this money
21:06aggressively to buy assets and if you're
21:09aggressively buying assets for a decade
21:11you are going to surprise yourself
21:12because now you can build a whole asset
21:16portfolio that can continue to pay you
21:18and fund your lifestyle that way now you
21:20can go to work wherever you want and not
21:21have to worry about the money and this
21:23is a completely different game that most
21:26people are playing most people are
21:28working for a raise so they can drive a
21:29faster car I want you to work for a
21:32raise that way you can have a bigger
21:34investment when you have bigger
21:35Investments you get bigger cash flow
21:37when you get bigger cash flow well now
21:39you can have a bigger car and it's a
21:41different way of looking at money
21:42because now if you were to die you still
21:45got the assets that will continue to pay
21:46your family way after you're gone this
21:49is true generational wealth that most of
21:51us have never been exposed to or taught
21:53I never learned about this before but
21:55this is one of those things that can
21:57change you and your family's life once
21:59you understand this and that's one of
22:01the reasons why now I'm working to build
22:02briefs media my financial newsletter
22:04company because I want to build
22:06something different I did the real
22:08estate thing I love it but I want to now
22:10work to create something and change the
22:13way that media is consumed now if you're
22:16unfamiliar with briefs media we have a
22:17free newsletter called Market briefs it
22:20is a newsletter you can read in five
22:22minutes or less every morning it's a
22:24breakdown of what's happening on things
22:25like the housing market the stock market
22:26the crypto Market the global economy and
22:28their own economy it's a super fun read
22:31and I promise you you're going to be a
22:32lot smarter after reading it with just
22:34five minutes every morning and it's
22:35completely free so if you haven't joined
22:37Market briefs yet I got the link to how
22:38you can join down in the description
22:40below but this is where if we come back
22:42to the concept of money so many people
22:43are over complicating the concept of
22:45money creating all these super complex
22:48spreadsheets talking about how difficult
22:50it is to invest their money talking
22:52about how difficult it is to analyze
22:54expense ratios talking about how
22:55difficult it is to find a good money
22:56manager talking about how difficult it
22:58is to create this perfect budget when in
23:01reality it's a lot simpler than that
23:03what you need to do is you got to spend
23:05less money than what you make that's
23:07rule number one number two when you
23:09spend less money than what you make you
23:10got to save some money number three you
23:12gotta invest that money the biggest
23:14investment mistake that so many people
23:15make isn't that they invest their money
23:17into a fund with a high expense ratio it
23:20isn't that they invest their money into
23:21the wrong assets is that they never
23:23invest their money that's the biggest
23:26mistake that so many people make because
23:27you get into this
23:29analysis paralysis where you just don't
23:32make a move because now you get so
23:33confused should you invest your money in
23:34stocks if so should you invest in index
23:36funds or ETFs what about mutual funds or
23:39should you invest in individual
23:40companies but what about Blue Chip
23:42companies or growth companies or what
23:44about health care companies or what
23:45about International companies or what
23:48about dividends or non-dividends and
23:49this is where now you gotta just take a
23:51deep breath and remember the main thing
23:54is you have to be investing your money
23:56now if you want my thoughts on where you
23:59should be investing your money in the
24:00stock market
24:02I don't think the average person should
24:04be out trying to pick individual
24:05companies because the average person
24:06doesn't have the psychology to manage a
24:09real Investment Portfolio they don't
24:10have the education to understand a
24:12company's financials and they don't have
24:14the interest to keep up with the company
24:16and listen to the earnings calls and so
24:18the average person if you ask me should
24:21be investing their money into low-cost
24:22index funds or ETFs they give you
24:25exposure to a broad basket now what that
24:28means is you can invest in companies
24:30like Amazon and if Amazon takes over the
24:32world you make a lot of money if Amazon
24:35goes bankrupt you lose on your money but
24:37the alternative to investing in
24:38individual companies is you can invest
24:40in a fund and these funds now can give
24:43you exposure to a large group of
24:45companies for example you can go to
24:47Google and search SNP 500 ETFs if you do
24:52that you will see ETFs like spy that's
24:55one example that will give you exposure
24:57to the 500 largest companies in the
24:59stock market now again I can't tell you
25:01what to invest in and that's that's not
25:02my goal here I'm trying to get you to
25:04think a little bit differently and learn
25:05about how the system works because now
25:06if you invest in that one symbol spy
25:09you are going to indirectly be investing
25:12into the 500 largest companies on the
25:14stock market why does this matter
25:15because now if one of the companies you
25:17investing goes bankrupt your entire
25:19portfolio doesn't go down to zero you're
25:21still invested in 499 other companies
25:23and then the fund will kick out the
25:25backup company and put in a new company
25:27so it makes your investing life much
25:30easier you also have funds that give
25:32exposure to the total stock market you
25:34have funds that give exposure to the Dow
25:36Jones that's one of the most commonly
25:37tracked indexes or funds on the stock
25:40market you have ETFs to give you
25:42exposure to the NASDAQ so now you can
25:44just look into
25:46ETFs into whatever sector that you want
25:48whether it's the total stock market the
25:50500 largest companies in the stock
25:51market or an industry like real estate
25:53or health care or technology you can
25:56find ETFs to give exposure to what it is
25:58that you want and just invest into the
26:00ETF and now instead of trying to find
26:02the perfect company trying to keep up
26:03with the company and research the
26:04company and manage that company in your
26:07portfolio if you just put your money
26:08into that fund and you don't have to
26:10worry about it and you know what else
26:12technology has made this type of
26:13investing so much easier because now
26:16there are platforms out there
26:19where you can set up an automatic system
26:21for every week or every two weeks or
26:23every month cash will automatically be
26:26pulled out of a checking's account and
26:28it will go into your Investment
26:30Portfolio of ETFs or index funds and
26:33it'll automatically invest for you and
26:35you don't have to touch it this way now
26:37you have money that's automatically
26:38invested your money is automatically
26:40saved because many banks nowadays will
26:43for free create the system where some
26:45money can be pulled out of your
26:46checkings account and go into a separate
26:48savings account that way now you have
26:50separate money for your savings your
26:51separate money for Investments you have
26:53separate money where you're spending
26:54money this way you don't accidentally
26:56spend your investment money on a brand
26:58new TV
27:00so
27:01when it comes to investing your money
27:03it's not that Perfection of you
27:06investing it's you getting started
27:08because you're not going to be perfect
27:09you're going to screw up you're going to
27:11make mistakes and you're going to lose
27:12money at some point that's a part of
27:14investing everybody does even the most
27:16successful investors in the world even
27:18Warren Buffett has lost money he talks
27:20about it openly he actually has to talk
27:22about it openly because well he has that
27:24public company Berkshire Hathaway and
27:26they have to openly talk about their
27:27losses and so every single person in the
27:29world has lost money the goal is for you
27:31to earn way more money than you lose but
27:33you can never earn money if you're not
27:34willing to lose money and you have to
27:36get started that way you can go through
27:38the process you can make mistakes and so
27:39you can learn I haven't made a video on
27:41YouTube where I talked about my worst
27:43real estate deal ever it was the most
27:45stressful deal that it ever had to deal
27:47with and I lost a lot of money on that
27:49deal but it's for me to show you that
27:51yeah you were going to make mistakes
27:52you're going to screw up it's a part of
27:54the process but the goal is to make way
27:55more money than you lose and this is
27:58where now you have to get started don't
28:01try to be perfect be willing to lose
28:03when you lose figure out why you lost
28:06that way then you can make smarter
28:08decisions be a smarter investor and then
28:10get better Returns on your Investments
28:12but you can't do that if you get stuck
28:14in this whole analysis of trying to make
28:16the perfect investment not everybody is
28:18going to be an entrepreneur not
28:19everybody should be an entrepreneur
28:21but you can still be a business owner
28:24without being an entrepreneur if you go
28:26and you invest in the stock market you
28:28are now a business owner if you bought
28:29one share of Amazon you're one of the
28:31owners of Amazon now you can benefit
28:33from when Amazon makes more money
28:36by owning a piece of the profits
28:38normally what everybody does is they
28:40just go to Amazon and buy something on
28:42Amazon Prime you are contributing to the
28:44Amazon profits when you're spending
28:46money on Amazon but when you buy one of
28:48the shares of Amazon now you're getting
28:50a piece of the Amazon profits and again
28:52you don't have to go out and buy the
28:53Amazon company but you can invest in
28:55funds they give you exposure to the
28:56stock market or to our United States
28:58economy that when people spend money or
29:00when you spend money you own a piece of
29:03the profits that's what Equity is and
29:06real Equity isn't by just paying down
29:08your home it's by building equity in
29:11companies like on the stock market it's
29:13by building equity in real estate
29:15Investments not the home that you live
29:17in these are types of equity that will
29:19continue to pay you and build wealth
29:20long after you're gone that way now you
29:23can build true generational wealth that
29:26most people in this country have never
29:28experienced but in order for you to do
29:30that you have to be the first one to
29:31break out of the cycle of earning money
29:33just to spend it but I do want to give
29:34you a little warning on this depending
29:36on what you your financial goals are I
29:37was in the gym yesterday getting a solid
29:39bicep pump and a guy came up to me
29:41asking me if I was just putting this
29:43thing for minority mindset I said yes we
29:45started talking really cool young guy he
29:47was telling me that his family's
29:48involved in the real estate business
29:49they own a bunch of commercial buildings
29:51around the area and he got involved with
29:54the vending machine business and he's
29:55trying to figure out what to do and I
29:57said what's your goal like what do you
29:58want to see he says I want to go out and
30:00start generating passive income and I
30:02said why do you want passive income and
30:04he said I want to have this type of
30:06Financial Freedom that's when I went
30:07down to ask him his age I said how old
30:09are you he said I'm 23. I said you know
30:12that's a great goal to generate passive
30:13income but I want you to really think
30:17about what it is that you want because
30:18if you go out and you start working to
30:20generate passive income right now
30:22meaning you work to earn money to buy
30:24these assets you might get a seven maybe
30:27a eight maybe a 10 return on your money
30:30if you're lucky
30:31but if you work right now to go out and
30:34generate more money if you go out right
30:36now and you work to build income
30:39well then you could take the income that
30:40you build and go out and generate the
30:42passive income in the future because if
30:44you focus on your income right now if
30:46you focus on earning more money if you
30:48can build something that's worth a
30:49million dollars five million dollars ten
30:52million dollars a hundred million
30:53dollars
30:54well now you can take this money that
30:56you earned because you work to build the
30:58income first and then use the income to
31:00buy the passive income because right now
31:02if you're making fifty thousand dollars
31:04a year and your goal is passive income
31:06well there's a limit to how much passive
31:08income that you get because remember
31:09passive income this cash flow that
31:12people like to call passive income
31:13that's a byproduct of how much income
31:15you put in if you put in ten thousand
31:17dollars and you get a ten percent return
31:18that's one thousand dollars and by ten
31:21percent return I mean ten percent cash
31:22flow if you put in a hundred thousand
31:24dollars that's ten thousand dollars of
31:26cash flow but if you put in a million
31:28dollars that's a hundred thousand
31:29dollars worth of cash flow if you want
31:31to increase how much passive income you
31:32get you can do one of two things one you
31:34can invest in riskier places to get a
31:36higher cash flow or number two you can
31:38invest more money to get more cash flow
31:40now even if you invest in riskier places
31:42there's going to be a cap on how much
31:43cash flow that you can get in the real
31:45estate game if you're investing in high
31:48cash flowing areas seven to ten percent
31:50is pretty fair I mean ten percent is
31:52definitely on the higher end but seven
31:53to ten percent is fair so if you invest
31:56a hundred thousand dollars you might be
31:58able to get ten thousand dollars a year
32:00in cash flow that's not a lot of cash
32:02flow Freight to be able to fund your
32:03life you're gonna have to invest a
32:05million dollars to to generate that one
32:08hundred thousand dollars with the cash
32:09flow with a ten percent return and again
32:11now I'm talking about the higher ends of
32:12returns if you can only get a five
32:14percent return you're getting only fifty
32:16thousand dollars with the cash flow from
32:17your million dollar investment now that
32:19doesn't mean that you shouldn't be
32:20Investing For Cash Flow because if you
32:23don't want to go out and create
32:24something build an income and you just
32:26want to work your job and slowly build
32:28the cash flow inside that's fine for the
32:31average person that is the best way to
32:34build wealth earn money from your job
32:37take a piece of that income put it into
32:39something like a dividend paying ETF
32:41that is a great way to generate cash
32:44flow for the average person and most
32:46people will never get that far but if
32:48you really really want to build wealth
32:51and I'm saying this because the guy that
32:52I was talking to was a real Hustler I
32:53mean he was like really involved with a
32:55lot of different businesses he's trying
32:56to build companies he wants to be an
32:58entrepreneur because he said that he
32:59wants to generate passive income and
33:01that's when I really started questioning
33:02him what does he really want to do
33:04because if you really want that
33:05Financial Freedom and you want a lot of
33:08passive income because he made it seem
33:10like he wants to have all the nice
33:11things I mean you're going to need a lot
33:12of passive income you're gonna need a
33:15lot of money
33:16and if you need a lot of money you're
33:19gonna have to go out and create
33:20something that means go out and build
33:22something see the saying is it takes
33:24money to make money but that's kind of a
33:27misconception because the reality is it
33:29doesn't take money to make money it
33:31takes hustle to make money it takes
33:33money to grow your money which means if
33:35you want to generate cash flow or
33:37passive income it takes money to do that
33:39it takes money to go out and buy rental
33:40properties it takes money to go out and
33:42buy dividend paying stocks or dividend
33:44paying ETFs it takes money to do that
33:46but if you want to go out and create
33:49something if you want to go out and
33:51start a business if you want to go out
33:52and build an income it doesn't take
33:55money to do that it takes hustle it
33:58takes drive it takes commitment it takes
34:00risk and then as you start generating
34:02money that's when you can take that
34:04money that you're earning and reinvest
34:05it back into the company now what is
34:07this business that you can create well I
34:08don't know anybody can have a good
34:10business idea there was somebody who
34:12made a lot of money creating mugs there
34:14was somebody who made a lot of money
34:15creating microphones like there's
34:16somebody who made a lot of money
34:18creating pens there's somebody that made
34:19a lot of money creating notebooks
34:21there's people that made a lot of money
34:22doing a lot of different things you just
34:24have to figure out what's the right
34:25business model for you is it selling
34:27something on the Internet is it selling
34:29a service is it selling education is it
34:31selling some sort of physical product
34:34what is the value that you can create
34:37and if you can work to create this thing
34:40that can generate you more income now
34:43you can take this more income that you
34:45have and use it to generate that cash
34:48flow that passive income and this is
34:50where you have to get it beat through
34:52your head that if you want to generate
34:53more passive income if you want to
34:55generate more cash flow you need more
34:56money to invest where do you get this
34:58more money but this is where it's going
35:00to really depend on you and if you
35:01really really really want to make more
35:03money you are going to have to create
35:04something there's a limit to how much
35:06money you can make
35:07by working for somebody else
35:10period
35:12but not everybody has it in them to go
35:14out and create something so if you're
35:16working for somebody else and you're not
35:18happy with how much money you're making
35:19you got to ask yourself is there a way
35:22for you to earn more money in the career
35:24in the position that you're in right now
35:25if yes then go pursue that if no and
35:29you're still unhappy with how much money
35:30you're earning what can you do to earn
35:33more money now there are ways to do this
35:35through a job you get a career change go
35:38and get a certificate go and get better
35:40experiences that way you can earn more
35:41money
35:42but there's always going to be a cap
35:44unless you're getting paid with Equity
35:46or you're getting paid with stock
35:47options I mean that's a whole different
35:48thing but now you're not getting paid a
35:49salary you're getting paid in ownership
35:51right Equity is different than salary
35:54salary is a check that you get for doing
35:56something if salary is a check that you
35:58get for going to your work Equity is now
36:01you're getting a piece of the profits
36:02that's where wealth is built and this
36:04Equity is something that you can either
36:05go out and create because you went out
36:07and built a business or something that
36:09you can purchase you can go out and buy
36:11equity in a company you can buy equity
36:13in the Amazon Company by buying shares
36:15in that company or you can earn that
36:17company if you work for a company that's
36:18paying out Equity but that's a whole
36:20different risk because now if you work
36:22for a company that's giving you equity
36:24and the company never sells and never
36:26gets acquired or goes bankrupt well now
36:28not only didn't June get your full
36:30salary but now you lost the ability to
36:32earn more money so you take on a lot of
36:34risk if you're getting paid with Equity
36:35not that it's necessarily A Bad Thing
36:37some people have made a ton of money
36:38doing that but some people have also
36:40lost a lot by betting on their company
36:43becoming a whole lot more valuable so
36:46if your goal is cash flow which I like
36:49cash flow
36:51the more money you invest the more cash
36:53flow that you can get if you want a lot
36:55of cash flow if you want a lot of
36:56passive income that way you have a lot
36:58of cash flow coming in to fund your
36:59lifestyle you need a lot of money to
37:01invest if you need a lot of money to
37:03invest right now is the time for you to
37:05go out and earn more money especially if
37:08you're young especially if that's what
37:10you want to achieve especially if you
37:12have the risk tolerance especially if
37:14you have the drive then you have to
37:16focus on earning more money now where do
37:18you start there's a ton of resources for
37:20free on YouTube start reading books
37:22about how to build a business start
37:23reading books about how to innovate
37:25start reading books about how to manage
37:27employees and start creating something
37:29you don't have to have the perfect
37:30business idea first I started a lot of
37:32different businesses
37:34which some of them made money some of
37:36them didn't do so well
37:38you have to be willing to start each
37:41thing that you do is going to teach you
37:43something whether it's good or bad but
37:46in order for you to learn something you
37:47have to actually do something and this
37:49is where so many people get caught up
37:50just like how when you try to pick the
37:52perfect investment people get stuck and
37:54they don't make an investment people who
37:55want to make a lot of money get stuck in
37:57this idea of I don't know what to do and
37:59so they don't do anything now you should
38:00not go out and start a business with the
38:02goal of just making money making money
38:04is a byproduct and the reason why so
38:06many people
38:07who just chase money
38:09don't get it or don't feel any sort of
38:11fulfillment is because they did it all
38:12for the wrong reasons and I can tell you
38:14this from experience because when I was
38:15doing the event planning company I did
38:17it just to chase money and I can tell
38:20you that because I didn't know any
38:21better at the time I was fresh into
38:23college
38:25I was working in the event planning
38:26company when I was in high school that
38:29was an opportunity for me when I got
38:30into college I wasn't into partying I
38:33wasn't into drinking I don't drink I
38:35never drink I don't smoke that's not
38:37what I do
38:38but I became one of the biggest party
38:39promoters on campus because that was
38:41what was accessible by the end of my
38:43college career even though I had built
38:44such a good name I had contracts with
38:47the biggest clubs on campus to do every
38:49week parties I shut it down because I
38:52hated it I hated being around that
38:54environment
38:55and so you can chase money and you'll
38:58get money but you're gonna feel no
38:59fulfillment and you're going to have no
39:01drive to want to take it further
39:03and so if you really want to achieve
39:05that success you got to chase the value
39:06what value can you provide that nobody
39:09else can that would now you can one
39:11change the world through your product
39:13but then also as a byproduct of the
39:15value that you provide you can make some
39:17money because money is a byproduct of
39:19value the more people you can help the
39:22more people you can impact the more
39:24services that you can provide the bigger
39:25the service that you can provide the
39:27more money that you're going to be able
39:28to make but it starts with you doing
39:31something and creating something and
39:32then you're going to learn about so many
39:34different processes along the way you're
39:35going to learn how to sell you're going
39:37to learn how to Market you're going to
39:38learn how to manage people you're going
39:40to learn how to email people and use
39:41Technologies there's a lot of things
39:43that you're going to learn and you can't
39:44know all of it going into it but you
39:46have to start
39:48and this is where now go it goes back to
39:50that question what is your goal if your
39:52goal is cash flow fine
39:55how much cash flow do you need now you
39:57can run the numbers if you can generate
39:58a seven percent return on your money how
40:00much cash do you need if it's seventy
40:03thousand dollars a year you need a
40:04million dollars invested okay you can do
40:07that over the course of your career but
40:08if you want to do that by the time
40:09you're 30 or by the time you're 40 or by
40:11the time you're 50 now you got to work
40:13backwards how many years do you have
40:15until you hit that age how much money do
40:17you have to invest every single year can
40:19you do it with the income that you have
40:20right now maybe you got to spend this
40:22money if you can't do it by spending
40:24less money and you need to earn more
40:25money now how do you earn more money can
40:28you do it through your job or are you
40:30going to have to create something how
40:32much value can you provide and again
40:34some people have that entrepreneurial
40:37bug where you cannot work for somebody
40:38else that you have to create something
40:40some people don't some people have to
40:43work for somebody else because they
40:45don't have the risk tolerance they don't
40:46have the discipline they don't have the
40:47interest they don't have the ability or
40:49whatever else to go out and create
40:50something
40:52there's nothing wrong with working for a
40:54company there's nothing wrong with being
40:55an entrepreneur they're just different
40:57skill sets and you have to find the
40:59right skill set for you that way you can
41:01work to earn money for the right reasons
41:03because if your goal is Financial
41:05Freedom what kind of Financial Freedom
41:07do you want it's a cash flow or is it
41:09asset values now there's three different
41:11aspects of money that we just talked
41:12about we talked about managing money we
41:14talked about making money and we talked
41:16about saving money now this is where a
41:18lot of people get the order of
41:20operations wrong most people think that
41:22the first thing you have to be able to
41:23do is know how to make money and then
41:25once you know how to make money you got
41:26to know how to save money then once you
41:27know how to save money you have to know
41:28how to manage money when in reality the
41:30first thing that you need to know how to
41:32do is you need to know how to manage the
41:35money that you earn and the reason why I
41:37say this is that there are so many
41:38people in America that are earning their
41:40six figure salaries that are broke
41:42people that are earning a hundred
41:43thousand dollars a year broke people
41:44that are earning 250 000 a year that are
41:47broke actually statistically the
41:49majority of people that are earning six
41:51figures a year are still broke it's not
41:53because they're not earning enough money
41:55it's because they don't know how to
41:56manage the money and most people assume
41:58that the solution to their financial
41:59problems is just earning more money
42:02but statistically when the majority of
42:04people earn more money they dig
42:05themselves into a bigger Financial hole
42:07because when you earn more money Banks
42:09look at you and say oh you're even more
42:11credit worthy here's a bigger line of
42:13credit to buy a car here's a bigger
42:15credit card line of credit that way now
42:17you have the ability to spend more money
42:19that's what the first thing you have to
42:20do is you got to know how to manage your
42:22money then you need to know how to make
42:25more money because now once you know the
42:27system of how do you spend money how do
42:29you invest money and how do you save
42:31money this is where now knowing how to
42:34grow that income becomes so important
42:36goes back to the 75 1510 plan that I
42:39talk about where for every dollar that
42:40you earn 75 cents is the maximum that
42:44you spend 15 cents is the minimum that
42:47you invest 10 cents is the minimum that
42:49you save if you want to amplify how much
42:52money you're investing that way you can
42:53buy more cash flow that way you can own
42:55more assets you have to know how to earn
42:57more money and now it's important to
42:59understand you're earning more money
43:00after you know how to manage money
43:02because now when you earn more money you
43:04have more money to invest you have more
43:06money to save and you have more money to
43:07spend and that's for now knowing how to
43:10save your money strategically comes into
43:11place because people get worried about
43:12saving their money before they even have
43:14any money before they have any assets
43:16but you have to know how to earn the
43:18money and then you have to know how to
43:19manage the money these are things you
43:21have to know that way you can actually
43:23take care of your wealth and focus on
43:26the right things when it comes to
43:27building your money and going back to
43:29that topic of building something
43:30creating something on your own
43:32if you go out and build something create
43:35something on your own the risk is again
43:37that you can lose it all and so high
43:40risk high potential return and you have
43:42to remember that with high risk that
43:44also means that you can lose everything
43:46and that's what happens to a lot of
43:48people and right now we're seeing the
43:50economy slow down and as the economy
43:52slows down we see more bankruptcies
43:54happen that means people who were
43:57building something creating something
43:59invested their life savings into
44:01something invest all their time into
44:03something lose not only the job but
44:05every dollar that they invested into
44:07this asset that they hoped would have
44:09been worth a whole lot more money which
44:11is where understanding that not
44:14everybody is cut out to take that risk
44:16because when the tide goes out you see
44:18who's been swimming naked and it's very
44:21easy to then lose it all when you don't
44:23know how to manage or create or sustain
44:26what it is that you're building here's a
44:28quick recap of what's happened recently
44:30First Republic Bank collapsed that Bed
44:32Bath and Beyond filed bankruptcy Vice
44:35news is going bankrupt not to mention
44:37all the layoffs that we're seeing in
44:40every single sector of our economy but
44:44what's even more important than the
44:45bankruptcies that we're seeing happen is
44:47the acceleration of the number of
44:49bankruptcies that are happening the
44:51trends are showing us that bankruptcies
44:53are happening but we're also seeing an
44:54acceleration in the number of
44:56bankruptcies happening now the question
44:58is why do bankruptcies happen and
45:01there's two reasons why we see a company
45:02go bankrupt first it has to do with the
45:04business second it has to do with the
45:07money the best example that I can give
45:09you of this based off of current events
45:10is Bed Bath and Beyond back in the 80s
45:13the 90s Bed Bath and Beyond was
45:16considered a category killer they were
45:19putting mom-and-pop companies that were
45:21selling household appliances household
45:23goods out of business because they
45:25created an Innovative and a new way and
45:28a fresh way to sell these types of
45:30products and they were growing very
45:32quickly they were generating market
45:33share which meant mom and pop companies
45:35were going out of business they were a
45:37category killer and everybody thought
45:39that they were taking over the world
45:40because of how fast they were growing
45:42and how much market share they were
45:43generating and how much money they were
45:45making let me read you this title from
45:47an article that I found from a Forbes
45:49article in 2020 the title is Bed Bath
45:53and Beyond happy together and it goes on
45:55to say that over the past 28 years Bed
45:58Bath and Beyond built one of the fastest
46:00and largest home furnishings and
46:02housewares retailers in the world sales
46:04will pass 1.8 billion dollars this year
46:07which is up 30 percent from the last
46:09year and sales have been doubling every
46:11three years since the company went
46:12public back in 1992. Bed Bath and Beyond
46:15was a prime example of everything done
46:18right they were innovating they were
46:20creating they were leading they were
46:22making money and they were taking market
46:24share meaning they were putting other
46:25companies out of business primarily mom
46:28and pop companies but then over the
46:30years they started to become more
46:32complex
46:32decided to become fat because they just
46:35kept making these big profits and they
46:37assumed that because they had all this
46:39market share that they were going to
46:40continue to be the leaders they were
46:42going to continue to be the market
46:44dominators and over the years technology
46:47started to change and companies started
46:49to change we saw the Amazon effect where
46:52people wanted to shop online people
46:54wanted to buy things online people
46:55started to spend more time online
46:57instead of going into the traditional
46:59brick and mortar store and we saw
47:01companies like Bed Bath and Beyond tried
47:04to innovate but kind of just sit back on
47:07their Throne because they were still
47:08making a lot of money
47:10so it started with the business where
47:12they weren't innovating in their
47:13business they weren't changing their
47:14business they weren't updating the
47:15business and then it ends with the
47:18financials because people started to get
47:20concerned about the company and they
47:23were still doing okay
47:24and that was when they decided that they
47:27want to reward their shareholders
47:29because they want to make sure that if
47:31you've been investing into this long
47:32time successful company Bed Bath and
47:34Beyond you keep making the money so what
47:36do they do the board of Bed Bath and
47:38Beyond issued a 325 million dollar stock
47:43buy back back in the year 2021 and as
47:45soon as they announced this their stock
47:47rallied meaning if you were an investor
47:49in Bed Bath and Beyond you just made
47:52some money because the board finally
47:53came to their senses and said our stock
47:55is too low it has nothing to do with the
47:57business that we're operating has
47:59nothing to do with the products not
48:00being sold it's just the stock
48:03that's trading too low and so to fix
48:05that they use their cash in their bank
48:08and debt to buy back the stock to
48:11inflate the stock price and that made
48:13shareholders richer and it made the
48:14investors happy because then the stock
48:16rallied and then the board said you know
48:18what 325 million dollars is not enough
48:20so let me read you a press statement by
48:23Bed Bath and Beyond back from 2021. Bed
48:25Bath and Beyond increase their stock
48:27buyback from 325 million dollars to
48:31625 million dollars when they announced
48:35this guess what the stock rallied again
48:36because now this means that the board is
48:39coming to their senses to make the stock
48:40go up to make the investors richer and
48:43now they used an even bigger chunk of
48:45their cash their profits and future
48:47earnings from debts to now make the
48:50stock rally and that's exactly what
48:52happened but now they had issues with
48:55the business and now they're having
48:56issues with the financials because
48:58they're digging themselves into a
48:59financial Hole by using hundreds of
49:01millions of dollars over 600 million the
49:03dollars not to go out and build their
49:05e-commerce store not to invest in new
49:07technologies not to grow their market
49:08share
49:09but just to make the stock price go up
49:12and then
49:13that came to bite them back because they
49:16weren't able to turn the company around
49:18why because they didn't have any money
49:19to turn their company around and they
49:21didn't necessarily know what to do they
49:23tried they tried to invest in the
49:24e-commerce store the type to build
49:25Partnerships but they weren't able to
49:27turn it around fast enough and couple
49:29that with the changing economic
49:31environment and now you have this
49:34category killer Bed Bath and Beyond was
49:37a category killer that was putting
49:38companies out of business which was then
49:40put out of business because of other
49:42category Killers companies like Amazon
49:44and other e-commerce stores effectively
49:46put Bed Bath and Beyond out of business
49:48and this is where everybody points
49:49fingers no it's because of the higher
49:50interest rates no it's because of the
49:52debt levels no it's because of this or
49:55that when in reality if people kept
49:57spending money at Bed Bath and Beyond
49:59did continue running the way that they
50:01were before and the reason why people
50:03weren't spending there was because the
50:05business model wasn't keeping up with
50:07the times and then they weren't able to
50:10save the company because they had no
50:12more money left because they spent all
50:14their money on other things including
50:16stock BuyBacks so a company goes
50:18bankrupt first because of the business
50:19second because of the financials and
50:22this is where now if we go back to the
50:24broader economy where we are right now
50:26this is where it's very important to
50:27understand what's happening that way now
50:29you can position yourself the right way
50:31that way you can take care of yourself
50:33your family and your community because
50:34we're seeing a lot of big changes in the
50:36economy we just talked about Bed Bath
50:38and Beyond you can see the same things
50:39happening in the banking sector
50:41recently we saw the biggest bank failure
50:44since the 2008 crisis when first the
50:46public Bank collapsed now again why did
50:49First Republic Bank collapse because of
50:52two things number one they were sitting
50:54on a lot of underwater assets First
50:56Republic Bank had a lot of bonds meaning
50:59loans that were underwater meaning these
51:01loans were worth less than what they
51:03paid for them so they weren't able to
51:05sell out these loans to raise money in
51:06case they needed it
51:08second when people found out that First
51:11Republic Bank was sitting underwater on
51:13these loans people started to panic
51:14social media makes it very easy to learn
51:16about these things and panic so people
51:18pulled their money out of First Republic
51:20Bank a lot of money was pulled out of
51:22First Republic Bank very quickly third
51:25when investors heard of people pulling
51:29their money out of First Republic Bank
51:31the stock of first the public Bank
51:33crashed hard and that made it nearly
51:36impossible for them to go out and raise
51:39more money which then led to their
51:41collapse because they were had no way of
51:43continuing their operations they had no
51:45more money to go out and lend to other
51:47people because Banks make money by
51:49lending money and when people pull their
51:51money out of the bank through their
51:52savings accounts or checking's accounts
51:54they don't have money to lend and so now
51:56First Republic Bank couldn't make money
51:58and they also couldn't raise money
52:01because they were underwater on their
52:02assets and that was when first the
52:04public Bank collapsed
52:06now look at where we are right now we
52:09are in an environment where interest
52:10rates are rising the better Reserve Bank
52:12is working to raise interest rates to
52:14bring inflation down we're also in an
52:16environment where the economy is slowing
52:18the last GDP report said that our
52:20economy slowed faster than expected so
52:23we have interest rates that are rising
52:24which makes borrowing money more
52:26expensive we have the economy just
52:28slowing and we still have a high
52:30inflation which also hurts the economy
52:32because High inflation means you have to
52:35spend more money on your rent your
52:36groceries your vacations which means you
52:38have less money to spend on other things
52:40so we have all three of these things
52:42happening at the same time while debt
52:45servicing costs are rising and this is
52:48such an important point that I don't
52:50think enough people realize the
52:52significance of this because it hasn't
52:53hit yet
52:55but now as interest rates are rising
52:57what you have to remember
52:58is for the average person what does that
53:01mean well that means a few things number
53:03one if you want to go out and buy a home
53:04you might be paying more money on your
53:06mortgage that's pretty obvious if you
53:08want to buy a car your car payment might
53:10be a little bit more again pretty
53:11obvious but you as a consumer
53:15have the decision of whether or not you
53:17want to buy a home if you don't want to
53:18go out and pay seven percent for your
53:20mortgage you don't buy a home you
53:21continue renting or you continue living
53:23in the home that you're in right now you
53:25have that choice
53:26but the choice isn't there if you have
53:29something like say credit card debt
53:30which is a variable interest rate debt
53:32meaning now as interest rates rise your
53:35credit card debt also becomes more
53:37expensive not because you have more
53:39credit card debt necessarily but because
53:41the interest rate the interest payment
53:43on your credit card goes up as interest
53:45rates go up is variable interest rate
53:47debt
53:48that is
53:49most of what consumers have to deal with
53:52when it comes to variable interest rate
53:54debt but when it comes to businesses
53:56it's completely different corporations
53:59commercial landlords don't get 30-year
54:03fixed rate mortgages they get adjustable
54:06rate mortgages which means now as
54:08interest rates rise their cost of
54:11servicing debt also rise and there's a
54:15big thing going on that around 2025 by
54:19the end of 2025 we're going to see a
54:21huge chunk some people are estimating up
54:22to 50 percent of these types of debts
54:26are going to start readjusting meaning
54:28if you are a commercial landlord
54:30you own a let's just say 10 million
54:33dollar office building
54:34and now
54:35you might have gotten a four percent
54:38loan a number of years ago
54:40but if interest rates continue to stay
54:42high and that loan comes due in a couple
54:45years
54:47now you're going to have to readjust
54:50and that means your payments might go up
54:52by 20 30 40 50 percent
54:56your expenses can rise significantly if
54:59your interest payments go up and if your
55:01incomes are not Rising fast enough to
55:03support the higher expenses that's when
55:05you get in trouble
55:06and now if you're an office landlord and
55:10you're building us half vacant because
55:11your tenants are remote workers or
55:14they're hybrid workers and they're not
55:15willing to renew their leases you're
55:17going to have a tough time raising your
55:19rents by 50 percent
55:21and that's where we're going to see a
55:22lot of changes happen if interest rates
55:25continue to rise or if they continue to
55:26stay high and interest rates will have
55:29to continue to stay high or rise in
55:31order to bring inflation down
55:33so we can also look at corporate debts
55:35because now if you're a corporation like
55:37many did in the last few years who
55:41raised billions of dollars worth of debt
55:43yeah it allowed the company to Boom in
55:462020 2021 even into 2022 because you
55:49could borrow money so cheap
55:51but now over the next few years as more
55:54and more of this debt starts to readjust
55:57that means your cost of servicing this
55:59debt your expenses to run the company
56:02not because the cost of the company go
56:04up but because the debts of the company
56:05become more expenses as your debt become
56:08more expensive
56:10now you're gonna have to pay more money
56:11to service the debt and sure it's not a
56:14big deal if you can make more money so
56:16now if you're a corporation and your
56:18expenses are going up because your debt
56:20servicing costs are going up that means
56:22you're going to need to increase your
56:23revenues by 10 20 30 maybe even 50
56:25percent depending on how much debt you
56:27raised
56:28which might not be a problem except
56:31we're seeing a slowing economy and it's
56:34not interesting a slowing economy and
56:35companies aren't able to make enough
56:36money that's what can then push
56:38companies to do more layoffs cut costs
56:41reduce divisions cut sizes because now
56:44you have to be able to continue
56:46maintaining the debt now the alternative
56:48is interest rates start to fall
56:52but that has its own consequences and
56:55this is where a lot of people are
56:56debating on what the Federal Reserve
56:58Bank should do you have a lot of people
57:00saying the FED needs to start cutting
57:01interest rates that the FED needs to
57:03start stimulating
57:04but let's talk about that what does that
57:06mean if the FED were to start cutting
57:08interest rates
57:09that would encourage borrowing that's
57:11what interest rates do people borrow
57:13based off of how much interest rates are
57:15when mortgage rates come down to three
57:17percent what do people do they go out
57:19and buy a home they buy cars because the
57:20debt is cheap when mortgage rates go up
57:22to eight nine ten percent what do people
57:24do they don't buy as many homes and cars
57:26because it's a lot more expensive and
57:29it's the same thing with corporate debt
57:30and business debt
57:32so when interest rates if interest rates
57:35go down because the FED decides to start
57:37cutting interest rates
57:38well that could definitely stimulate the
57:41economy because people would start
57:42spending money businesses would be able
57:44to spend more money and that would
57:46encourage more economic growth which is
57:48good on one hand
57:49but that would also then make the
57:51inflation problem worse because
57:53inflation is when you have more money in
57:55the economic system because more money
57:57then creates more demand
57:59because now if people are now able to go
58:01and borrow more money
58:03then get more buyers buying the things
58:05that we have like if mortgage rates went
58:06down to three percent tomorrow because
58:08the FED started cutting rates what would
58:09happen more people are going to want to
58:11go out and buy a home and if you see
58:13this whole new flood of borrowers or
58:15buyers out there trying to buy homes
58:16where our home price is going to go
58:18higher what's that going to do to
58:19inflation it's going to go higher and
58:22this is where now I've been saying this
58:24but the FED is really getting between
58:27That Rock And the hard place because on
58:29one hand they're trying to not break the
58:32economy on the other hand they're trying
58:34to break inflation inflation hasn't
58:36really broke yeah it's come down off of
58:38its Highs but it's really far from where
58:40it needs to be the economy is starting
58:42to feel the pain we're seeing the pain
58:44in the banking sector we're seeing that
58:46pain with Bed Bath and Beyond other
58:48companies that are doing layoffs or
58:49declaring bankruptcy
58:51so we're seeing some pain in the economy
58:53while inflation is still high which is
58:56where now you want to keep your eye on
58:59what the Federal Reserve Bank is doing
59:00you want to keep your eye on interest
59:02rates you want to keep your eye on
59:04inflation because this is where now it
59:07is going to play a huge effect on what's
59:10going to happen in the economy and now a
59:12lot of people are either
59:14scared about this or they're completely
59:16oblivious to it and both of those are
59:18the wrong emotion to feel because for
59:20one recessions happen they have happened
59:23pretty much every decade for the last
59:24century
59:26but
59:27these types of economic downturns also
59:31create more opportunity than any other
59:34time there's a reason why recessions
59:36create more millionaires than any other
59:37time and it's because when you see
59:39economic downturns or recessions you see
59:42good assets go on sale
59:45like when Macy's puts on a sale for
59:47their clothes you'll see a line wrapping
59:49around the block because everybody wants
59:50to get the newest sweater or whatever
59:52they want to get but when you see assets
59:54go on sale whether it's stocks
59:56businesses real estate
59:59people get scared and they panic and
01:00:01they sell but that can create one of the
01:00:03best buying opportunities if you know
01:00:05where to look and if you're prepared
01:00:07with access to cash and this is where
01:00:10now understanding we have a lot of red
01:00:12flags out there with the economy we have
01:00:14a lot of red flags with inflation
01:00:16interest rates are also a big pain Point
01:00:19all these things are simmering and
01:00:22brewing and now we're seeing more side
01:00:23effects of this
01:00:25and this is where now you need to be
01:00:27financially educated and you want to be
01:00:29prepared prepared meaning have cash put
01:00:31aside that we can capitalize on
01:00:33opportunities and also protect yourself
01:00:34because if you see a great investment
01:00:36opportunity but you have no money to do
01:00:37anything about it it doesn't do any good
01:00:39this is where right now you need to be
01:00:41preparing working to earn more spend
01:00:43less so you have that money put aside
01:00:46that's why I keep saying 2023 is not the
01:00:49year for you to go out and Finance in
01:00:51your truck 2023 is the year for you to
01:00:54get financially smart because now you
01:00:57want to be preparing in order to be able
01:01:00to capitalize on opportunities that
01:01:01might come your way now what if
01:01:04nothing bad happens that there's no
01:01:06economic pain that comes
01:01:08well that means all you did was prepare
01:01:10and you have a big bank account and I
01:01:11can go to Disney World or go out and
01:01:13invest this money there's no harm or
01:01:15cost to Preparing but there's a lot of
01:01:17harm and a lot of cost if you don't
01:01:19prepare and this is where now you want
01:01:20to be financially smart that way you
01:01:22don't get blindsided by what happens let
01:01:24me read you this title from an s p
01:01:25Global article we did Cover the story in
01:01:28Market briefs my free financial
01:01:29newsletter where we keep you up to date
01:01:31on what's happening in the top Finance
01:01:32of business news in five minutes or less
01:01:34every morning which is why we haven't
01:01:36joined Market briefs yet I got the link
01:01:37to hiking join down in the description
01:01:39below but what this said is pandemic era
01:01:42debt overhang will add to finding
01:01:44pressure in the coming years and what
01:01:46this article goes on to talk about
01:01:48is that all this corporate debt that I
01:01:50was talking about the corporations
01:01:52loaded up on in 2020 2021 and even into
01:01:562022
01:01:57once this debt starts to readjust it is
01:02:00going to be a big burden on corporations
01:02:03and if corporations do not have the
01:02:05ability to continue making the payments
01:02:07on their debt because they're not
01:02:09growing their revenues fast enough
01:02:11it's going to pose a lot of problems and
01:02:13it's going to cause corporations to need
01:02:15to downsize because they will have to
01:02:18find a way to either cut costs or earn
01:02:20more money and it's hard to earn more
01:02:22money when you're in a recession and so
01:02:24the next best thing is to cut the costs
01:02:26and what are those costs employees this
01:02:29is where again you want to stay up to
01:02:31date on what's Happening that way you
01:02:33can be aware of what's happening but
01:02:34also be prepared that way you can
01:02:36capitalize on opportunities that come
01:02:37your way retirement used to be known as
01:02:39a three-legged stool where one leg was
01:02:42your pension you got from your company a
01:02:44second leg was a social security you got
01:02:46from the government and the third leg
01:02:48was your own personal savings for your
01:02:50Investments well now what we're seeing
01:02:52happen is that pensions have become a
01:02:54thing of the past because companies
01:02:56don't offer pensions anymore social
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FAQs about This YouTube Video

1. What is the 75/15/10 rule for managing money like the wealthy?

The 75/15/10 rule is a financial management principle followed by the wealthy, which emphasizes allocating 75% of income for living expenses, 15% for investments and savings, and 10% for lifestyle choices.

2. Why is it important to focus on earning money as an entrepreneur?

Focusing on earning money as an entrepreneur allows for greater control over income potential, the ability to leverage skills and passion into profitable ventures, and the opportunity to build scalable and sustainable income streams.

3. How can investing in assets generate cash flow?

Investing in assets such as real estate, stocks, or businesses can generate cash flow through rental income, dividends, or profits from selling appreciating assets, providing a consistent source of passive income.

4. What are the benefits of utilizing low-cost index funds or ETFs for investing in the stock market?

Low-cost index funds or ETFs offer diversification, lower fees, and the opportunity to passively invest in a broad range of stocks, providing potential long-term growth and minimizing the impact of individual stock performance.

5. What are the potential risks and rewards of investing in real estate?

Investing in real estate presents the potential rewards of rental income, property appreciation, and tax benefits. However, it also carries risks such as market fluctuations, property management challenges, and economic downturns.

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