These Rules Made Me So Rich I Questioned the Meaning of Money

Summary

This video shares 14 financial rules for wealth accumulation, emphasizing the importance of spending less than you earn, reinvesting in yourself, and paying yourself first. It discusses the significance of focusing on your strengths, planning for both success and failure, and the power of giving. The speaker advises minimizing borrowing, understanding risk-return ratios, and avoiding lifestyle inflation. The script also touches on viewing money as a tool, leveraging your network, and defining your 'why' for true fulfillment.

Takeaways

• 💲 To achieve wealth, spend less than you earn and live within your means.
• 💲 Prioritize saving by paying yourself first and reinvesting in yourself or your business.
• 💲 Assign clear priorities to your financial goals to avoid spreading yourself too thin.
• 💲 Create a 'rip cord' budget to plan for both success and worst-case scenarios.
• 💲 Embrace the concept of 'give to get' to increase opportunities and create value for others.
• 💲 Minimize borrowing and ensure any debt is used to generate a return on investment.
• 💲 Analyze risk and return ratios carefully to ensure smart investment decisions.
• 💲 Overcome fears and negative beliefs about money to attract wealth.
• 💲 Avoid lifestyle creep by maintaining a modest lifestyle and reinvesting your earnings.
• 💲 Build a personal profit and loss statement to manage your finances effectively.
• 💲 Recognize that a strong team can elevate your financial success - 'high tides rise all boats'.
• 💲 Money is a tool to be used for achieving life goals, not an end in itself.
• 💲 Your network can significantly impact your financial success, so choose it wisely.
• 💲 Define a clear 'why' for your financial pursuits to maintain motivation and direction.

Q & A

What is the first rule of money mentioned in the script?

The first rule of money is to spend less than you make.

How did the speaker's father influence his financial habits?

The speaker's father influenced him by emphasizing that it's not what you make, but what you keep that makes you rich.

What was the turning point for the speaker in terms of managing his finances?

The turning point was when the speaker started living off a salary of $60,000 a year and putting the rest into savings, as suggested by his accountant Norm.

What is the concept of 'paying yourself first' as described in the script?

'Paying yourself first' means allocating a portion of your income to savings or investments before covering other expenses.

Why did the speaker's business partner Ethan not come to the office to solve a major issue?

Ethan did not come to the office because he was too busy doing laundry, illustrating that he wasn't paying himself enough to afford services that would save him time.

How does the speaker suggest using the money saved by paying yourself first?

The speaker suggests using the saved money to invest in yourself, your business, or your future to grow wealth.

What does the speaker mean by 'assign your priorities'?

The speaker means that one should focus on what is most important and not try to do everything at once, aligning with the idea that you can have it all, just not all at once.

Why does the speaker emphasize not diversifying when starting out?

The speaker emphasizes not diversifying to avoid spreading oneself too thin and to become the best ('tip of the spear') in a specific area, which increases chances of success and recognition.

What is the importance of having a 'rip cord budget' as per the speaker?

A 'rip cord budget' is important because it provides a financial safety net in case of unexpected events, allowing one to recover quickly without panic.

What is the concept of 'money velocity' mentioned in the script?

'Money velocity' refers to the idea that the more money you spend or circulate, the more opportunities, learning, and returns it can generate.

Why does the speaker advise minimizing borrowing?

The speaker advises minimizing borrowing because it often leads to paying more in the long run and should be used only when it can generate a return on investment.

What is the significance of analyzing risk-return ratios when making financial decisions?

Analyzing risk-return ratios helps in making informed decisions about investments, ensuring that the potential returns outweigh the risks taken.

How does the speaker view money in terms of mindset?

The speaker views money as a reflection of one's mindset, suggesting that negative beliefs about money can hinder wealth accumulation.

What is 'lifestyle creep' and why should one avoid it?

'Lifestyle creep' is the tendency to increase one's lifestyle expenses as income grows. It should be avoided to ensure that one continues to reinvest and save, rather than becoming wasteful.

Why is building a personal P&L important according to the speaker?

Building a personal P&L is important for managing personal finances like a business, which can lead to better financial discipline and growth.

How does the speaker define the role of money in life?

The speaker defines money as a tool, not the goal of life, suggesting that it should be used to create a richer and more fulfilling life.

What does the speaker mean by 'your network is your net worth'?

The speaker means that the people you surround yourself with can significantly impact your financial success and should be people who inspire and support your growth.

What is the importance of defining your 'why' for financial success?

Defining your 'why' provides a purpose and motivation for financial success, ensuring that wealth accumulation aligns with personal values and goals.

Outlines

00:00

💰 The Path to Wealth

The speaker shares the financial rules that transformed him from a broke 22-year-old into a multi-millionaire. He emphasizes the importance of spending less than you make, acting your wage, and prioritizing saving over spending. The speaker recounts his early struggles with spending and how an accountant helped him manage his finances better. He advises living off a small percentage of your income and reinvesting the rest into your business or future.

05:00

💼 Prioritizing and Staying Focused

The speaker discusses the importance of assigning priorities to one's financial goals, drawing inspiration from Oprah Winfrey's philosophy of not having everything at once. He shares his own career journey, emphasizing the importance of focusing on a single industry and becoming the best in that field. The speaker also introduces the concept of 'luck' in relation to skill and effort, and advises against diversification unless it's for global investments.

10:00

🛡️ The Rip Cord Budget

The speaker talks about the necessity of having a financial safety net, or a 'rip cord budget', to prepare for both best and worst-case scenarios. He shares his philosophy of planning for disaster to eliminate fear and worry. The speaker suggests having 3-6 months of operating expenses for business and 6 months of personal overhead as a liquid cash reserve.

15:03

💹 Giving to Receive

The speaker discusses the concept of 'give to get', suggesting that generosity can lead to wealth. He shares a personal anecdote about hoarding credit card points and how he decided to spend them all to increase 'money velocity'. The speaker argues that spending money wisely creates opportunities and value, and encourages investing in oneself and circulating money in the economy.

20:05

🚫 Minimizing Borrowing

The speaker advises on minimizing borrowing and using leverage wisely. He shares a personal experience of buying furniture on credit and how it ended up costing him much more in the long run. The speaker emphasizes the importance of borrowing for investments that increase earning potential, rather than for lifestyle expenses, and suggests taking small risks to learn before making large investments.

25:05

📈 Analyzing Risk and Return

The speaker discusses the importance of understanding risk and return when making investments. He uses the example of an investor who turned $27 million into $2.7 billion through a well-informed investment. The speaker advises looking for opportunities with asymmetrical risk, where the downside is low and the upside is high, and warns against investing in high-risk, low-return scenarios.

🌱 Overcoming Money Fears

The speaker talks about the importance of having a positive mindset towards money. He shares his own journey of overcoming negative beliefs about wealth and encourages viewers to adopt an abundance mindset. The speaker suggests that fear of money can prevent financial success and that a shift in mindset can lead to wealth.

🏡 Avoiding Lifestyle Creep

The speaker warns against 'lifestyle creep', where an increase in income leads to an increase in spending and a lack of savings. He shares a story of a friend who quickly amassed wealth but ended up in bankruptcy due to excessive spending. The speaker advises living off a small percentage of one's income to enable reinvestment and wealth creation.

📊 Building a Personal P&L

The speaker introduces the concept of creating a personal profit and loss statement to manage one's finances effectively. He shares how he has a house manager who oversees his personal finances, similar to a CEO. The speaker encourages viewers to manage their money rigorously to grow their personal net worth.

🚀 High Tides Rise All Boats

The speaker discusses the importance of surrounding oneself with a team that can help elevate one's financial success. He shares his philosophy of investing in one's team and people to raise the tide for everyone. The speaker suggests that helping others achieve their goals can lead to one's own success.

🛠️ Money as a Tool

The speaker emphasizes that money is a tool to be used, not an end goal. He shares his own experience of becoming a multi-millionaire and realizing that financial freedom is not the ultimate goal. The speaker suggests using money as a means to create a richer life and to buy time and options.

💼 Your Network is Your Net Worth

The speaker discusses the importance of one's network in achieving financial success. He shares advice on surrounding oneself with people who can lift one higher and how to evaluate and upgrade one's relationships to align with personal goals.

🌟 Defining Your 'Why'

The speaker talks about the importance of defining one's 'why' or purpose in life. He shares his own 'why' and how it has driven his success. The speaker encourages viewers to find their own 'why' to pull them towards success rather than using negative energy to push them.

Keywords

💡Spending Habits

Spending habits refer to the regular tendencies in how an individual spends money. In the video, the importance of spending less than one earns is emphasized as a foundational habit for accumulating wealth. The speaker shares a personal anecdote about how he initially struggled with spending excessively, which led to financial lessons about the necessity of controlling spending habits to build wealth.

💡Reinvest

To reinvest means to plow back earnings or profits into a business or venture. The video underscores the concept of reinvesting in oneself or one's business as a strategy for future growth and wealth creation. The speaker recounts how he decided to live off a fraction of his income, thereby freeing up capital to invest back into his business, which eventually led to his becoming a multi-millionaire.

💡Pay Yourself First

This concept encourages individuals to allocate a portion of their income to savings or investments before covering other expenses. The video stresses the idea that one should prioritize saving and investing over immediate consumption, which is a strategy that can lead to long-term financial security and wealth accumulation.

💡Invest Time for Skills

Investing time for skills involves dedicating time to learn and acquire new abilities that can increase one's earning potential. The video suggests that instead of merely trading time for money, one should focus on developing skills that can command higher earnings. This approach can lead to a cycle of skill acquisition, higher income, and more time freed up to learn further skills.

💡Priorities

Priorities in the context of the video refer to the order or focus an individual assigns to various aspects of their life and financial goals. The speaker advises assigning priorities to manage one's financial life effectively, suggesting that one should not attempt to do everything at once but focus on what is most important to achieve financial success.

💡Diversification

Diversification typically means spreading investments across various financial instruments to reduce risk. However, the video encourages the opposite approach, advocating for specialization and mastery in a specific field. The speaker shares his experience of focusing on software to become highly successful, suggesting that becoming an expert in a niche can lead to greater financial rewards than spreading efforts too thinly.

💡Luck

In the video, luck is discussed in the context of the 'four levels of luck,' which range from dumb luck to others' luck. The speaker explains how skill and focus can increase the likelihood of 'luck' by positioning oneself to recognize and capitalize on opportunities. This concept challenges the idea of luck as purely random, suggesting that it can be cultivated through hard work and expertise.

💡Rip Cord Budget

A rip cord budget refers to having a financial plan in place for worst-case scenarios. The video emphasizes the importance of planning for both success and failure to ensure that one is prepared for any eventuality. The speaker shares his philosophy of having a disaster recovery plan, akin to having a financial safety net, to handle unexpected financial challenges.

💡Give to Get

The concept of 'give to get' suggests that by giving value to others, one can receive more in return. The video speaker shares his belief in the power of generosity, stating that giving creates opportunities and value. He contrasts hoarding resources, which can limit one's potential, with actively circulating money and resources to stimulate growth and attract more wealth.

💡Minimize Borrowing

Minimizing borrowing is advised in the video as a strategy to avoid unnecessary debt and the associated interest payments. The speaker shares a personal story about the high cost of borrowing to buy furniture, illustrating how borrowing for non-productive assets can lead to significant financial losses. The video encourages borrowing only when it can generate a return, such as investing in a business or education.

💡Risk-Return Ratio

The risk-return ratio is the balance between the potential downside risk of an investment and the potential upside return. The video discusses the importance of analyzing this ratio when making investment decisions. The speaker uses the example of Bill Ackman's investment in credit default swaps to illustrate how understanding risk and return can lead to significant financial gains.

Highlights

The first rule of money is to spend less than you make.

Wealth is not determined by your salary but by your spending habits.

It's not what you make, it's what you keep that makes you rich.

Live off as little as possible and reinvest in yourself or your business.

Pay yourself first; allocate money to yourself before other expenses.

Invest time for skills to get paid more and buy more time.

Assign your priorities and understand you can't do everything at once.

Focus on your unfair advantage in the market and don't diversify too early.

Stick to what you're good at and become the best in your field.

Understand the four levels of luck and how they can impact your success.

Have a rip cord budget to plan for both success and worst-case scenarios.

Give to get; creating value for others can lead to more opportunities.

Minimize borrowing and understand the difference between good and bad debt.

Analyze risk-return ratios to make informed investment decisions.

Wealth is a product of one's capacity to think; change your mindset towards money.

Avoid lifestyle creep and continue to live below your means.

Build a personal P&L to manage your finances like a business.

Money is a tool to help you achieve your goals, not the goal itself.

Your network can significantly impact your net worth.

Define your 'why' to guide your financial and life decisions.

Transcripts

I'm going to share with you the rules

that made me so rich that I questioned

the meaning of making money these rules

are what allowed me to go from a broke

22-year-old to a multi-millionaire today

some of these rules I picked up on my

own during my 26e career as an

entrepreneur and others I learned from

some of the highest net worth

individuals you probably know so without

any further explanation these are the 14

rules of money the first rule is kind of

obvious but it's to spend less than you

make you know Dave Ramsey likes to say

act your way age and I love that think

about it it's what you make but you got

to act proportionate to what it is it's

not your salary that makes you rich it's

your spending habits you know my dad

used to say it's not what you make it's

what you keep that'll make you rich when

I started off I was a horrible spender I

remember I was just trying to kind of

live life I never thought I'd ever have

money so when I started making money it

was a bit carpedm you know sees the day

YOLO remember at 21 I got a check for

almost $20,000 for working a month I was

a consultant I was on contract and it

all showed up in my bank account and my

little brother Mo showed up and I said

hey man let's go on a ski trip it's

right around Christmas time when we

decided to splurge over a 10day period

that he was visiting I spent

$133,000 on snowboard gear and paying

for drinks for friends and crazy hotel

rooms and eating like a king it was one

of the most ridiculous weeks ever there

was like everything was an option we

kept spending the money and at the end

of it I talked to my dad and said Dan

did you do you put any money aside for

taxes and I said nope and that was the

day that I got introduced to Norm and

Norm was my accountant and what he said

is how about we put you on a salary but

what do you need to live and I was like

well my expenses are covered let's do

60,000 a year and everything else will

put in the bank account and that one

decision allowed me to save the seed

money I needed to eventually start the

company that made me a multi-millionaire

so at the start the most important thing

is to live off as little as possible and

reinvest in yourself re invest in your

business reinvest in your future so most

people would say that you want to put

50% towards needs you know you got to

live you got to eat you got 30% towards

wants right so that brings you 80% and

then 20% towards savings high level

think about it so all consuming and

living you want to be at 80% save the

rest which brings us to the second rule

which is to pay yourself first this

one's tough some people feel like all

their money's got to go out first I got

to help other people before I ever help

myself here's what I know you are

actually the most important asset not a

house a car a watch an investment it is

you I remember back in 2009 I was

talking to my business partner Ethan and

we had a major issu we had to solve in

the business and I asked him to meet me

at the office and he said he couldn't

now we had just raised a million dollars

from some of the top investors in San

Francisco and we're building up the team

and we ran into an issue with our

product and I said why can't you meet

he's like hey man I've got to get some

laundry done okay I know it's Sunday

dude but you can do your laundry on any

other day and he said yeah but if I

don't do it this I got a plan and d d

and I'm like man on your way to work

there are literally three different

laundromats that do Wash and Fold like

they'll do it for like 35 bucks it's

like yeah man I'm not really paying

myself enough I'm I'm barely making rent

so here's a situation where we just

raised a million dollars to build the

business and he can't come work on the

business cuz he's too busy doing laundry

the issue he wasn't paying himself

enough to essentially invest in things

that would buy back his time so him and

I could actually go Jam to solve the

problem see most people stay broke

because they're trading time for money

what I'm going to encourage you to

consider is invest time for skills to

get paid more then buy more time to

reinvest in learning new skills that

make you more money see most people

spend time to save money I like to spend

money to save time once I've got that

time then I invested in acquiring new

skills that allows me to become more

valuable then I get to make more money

to then buy time to invest in more

skills that is the equation I remember

one time I was talking to one of my

coaching clients Brad reading he had an

incredible company and he was kind of

burnt out and he wanted to sell it I

said you could and you know the price

and people will buy it from you today or

you take some of the profit you're

making instead of reinvesting in more

software developers and marketing teams

and all that stuff just pay yourself

more so you can enjoy life a little bit

better I said just make a list of things

that you would love to do and he put on

there you know I'd like a gym in my

house I'd love to be able to hire

somebody to take care of the kids we can

get date nights so we were only talking

a few thousand bucks a month and I said

if you could invest in you to give you

more time to build the business business

bigger that dollar amount today is going

to turn into millions of dollars in a

few years and that's exactly what

happened so the way Brad bought back his

time and his energy is that not only did

he have time to work on key things spend

time with his wife but he got the energy

back by not having to worry about not

spending enough time with his family not

going on date nights taking care of his

health I mean he's literally transformed

his body from where he was to where he

is today because he made an investment

in himself if you pay yourself

you force yourself to find resources to

cover other expenses which brings us to

number three which is to assign your

priorities Oprah Winfrey once said you

can have it all just not all at once I

mean it's kind of like you can do

anything you just can't do everything

when people see me today they go wow Dan

you do so many things but if you

actually look over the last 25 years of

my career I've only done one thing and

that's software I started off as a

programmer then I went to Consulting

then I built companies and now I deploy

Capital the four coding Consulting

companies and capital into technology

into software essentially I started off

and I wrote code and I learned how to

build apps and then I ended up starting

a company and I sold people the

applications that I was building and

then I did that three times in a row and

then I decided Well now I'm going to

start investing in other companies and I

did that and now I buy companies but

they're all in the software space so I

want to teach a big idea that a lot of

people get wrong when they start to try

to make their first million dollars

which is is don't diversify except for

globally or Investments don't get

distracted most people end up saying yes

to things they should be saying no to

and know the things they should being

yes to because they don't know what is

their primary aim and focus and if you

do this right then you become the tip of

the spear at what you do tip of the

spear means Best in Class I like to say

world class I think you should be top

five in what you do which sounds crazy I

know if you're an editor or a logo

designer or even a singer you're like

that's just not me and I'm like yeah it

is it just takes a decision and if you

go all in you say I'm going to be one of

the best programmers I'm going to be one

of the best designers I'm going to be

one of the best editors what you do is

you start getting better and better and

better and then you get this thing

called the four levels of luck that one

of my mentors nval rant talks about all

the time first level is just dumb lock

you know just random moments and

opportunities show up in your life and

those are just like dumb lock the second

level is grit luck this is by doing the

work the luckier you get right people

talk about this all the time the third

is skilled luck meaning that you're

getting so skilled at what you do people

know you for that so they ask you for

opportunities that otherwise it looks

lucky to everybody else but to you

you're like no it's just because I'm

really skillful at this thing and then

you end up getting to others luck which

is the tip of the spear you know like

the Warren buffets and the opras and the

Elon Musk where they brought

opportunities that is other people's

skilled luck meaning that people get

lucky in Opportunities and they're like

I like Warren so much I want to partner

with him to do this deal that's when

things get really crazy those are the

four levels of luck that most people

never understand the key for this step

is you got to stick to what is your

unfair advantage in the market invest in

something you know don't get distracted

some of you are really great at building

houses and you're like I want to go into

software I would argue you go make a lot

of money in houses first or some of you

guys are into software and you're like

hey I should get into real estate how

about you stick to software and get

really good at it and trust me you will

find Real Estate Investors that will

partner to build out a massive portfolio

with you if you go get rich I understand

that it's fun to do new things and

there's excitement but don't make those

where you make your money call those

hobbies and go have fun and explore and

don't put the pressure around it having

to perform see a lot of people get

distracted because they take their money

they saved up and they go put it on new

things and then they're freaking out

when the thing's not working out so

they're sacrificing both their current

business and the new business and both

suffer which brings us to number four

which is to have a rip cord budget Jim

rone wants said never begin the day

until you finish it on paper same in

life you should plan for success and you

should plan for worst case so that way

you build a plan around both and you

never have to think about it and when

they're going great or there's an issue

you can go back to the plan you could

lose it all you could find out they

change some law you could get hit by a

bus and My Philosophy is that you have

to plan for it have a disaster recovery

plan I learned this back when we were

building data centers with my software

company if the power went down in the

room you had to backup generators kick

in and it took over the challenge is you

had to have the checklist already

designed so that when it happened you

got to stay cool calm and collected

nobody was running around freaking out

like oh did anybody put the diesel in

the generator you tested it every once

in a while and you made sure you had the

checklist ready to go why is this

important because it allows you to move

incredibly fast and even harder knowing

that if at any point of moving fast in a

direction Something Happens you've

already made the decision on how you're

going to react there's no wasted brain

Cycles around fear concern challenges

worry my business coach Ed milet has

this great saying he says worry is a

wasted use of your imagination I think

most times cuz we haven't built the plan

we're always worrying about what could

happen how about you just decide to do

if it does and you get back to building

your life so there's two categories you

want to look at there's the business

side and the personal side most people

will say in business you want to have at

least 3 months of operating expenses

some will say 6 months but honestly I've

never seen a scenario where you need

that much as long as you're fast to

respond to ISS then yeah you might need

6 months or more on the personal side 6

months of overhead is what you want to

have ready liquid in cash so that if

anything happens to you you lose your

job your business goes to zero the

family won't be impacted and there's no

scenario of seen where an individual

couldn't rebound within 6 months if they

had the fortitude and the mental focus

to just get back in there and find an

opportunity you need to save to weather

the storm because on every economic

downside that's ever happened there's

this crazy upswing on the back end it's

like like a slingshot so you want to be

ready to go through tough times cuz you

built the plan so that you can come out

like a rocket ship which brings us to

number five which is give to get and

Frank one said no one ever became poor

by giving I love this so much literally

it's like my ethos in life I wake up

every day asking myself how can I create

more value for other people than anybody

else in their life that is just a fun

place to get to where you wake up and

you're just giving giving giving so

here's a funny story to give you a

little bit more color a couple years ago

I realized I had been hoarding credit

card points I don't know why I just

became this fun game that I play with

myself I put credit cards in all my

companies for all the ads they run and

all these other scenarios and I was

collecting millions of points per year

but I never use them I've done this with

you know Starbucks points as well at the

coffee shop I don't know why I just got

into this hoarding mentality and I

realized that this hoarding Behavior was

holding me back so this year I woke up

I'm remember tell my assistant I said we

are going to spend all of it I'm going

to use all the the coffee points going

use all the travel points any points

that I've been hoarding is going to get

spent and here's why I call this money

velocity see the more you spend the more

opportunities you create the more you

spend the more you learn the more you

spend the more you can get in returns

because you're making good investment

see I use the word spend but don't get

it confused it's about putting money in

the market being part of the economy the

more time and money exchanges hands the

more value is created in the world see

money is energy and if you hoard it it

will find its way away from you if you

spend it it creates more energy comes

back to you and allows you to do bigger

things with it most people think I'm

going supposed to save but they don't

invest I know I did that for a long time

I looked at my bank account and I just

kept saving saving saving saving it was

in a savings account but it wasn't doing

anything at one point I had millions of

dollars my banker is like hey do you

want to do anything with this and I'm

like leave me alone don't touch it and

they're like we could put it in a GIC

I'm like don't talk to me I don't trust

you it's cuz I didn't know any better

then I realized that if I take the money

I put it in the market I put it into

Investments I invest in myself I invest

in my team I use it I circulate it it's

a resource and the more I use it the

more it's going to come back because I'm

telling the world that I believe that

it's a flow it's an energy it comes out

it comes back it's just like the more

you give the more you get that's how it

works if you hoard it it will find its

way away from you if you hoard it you're

essentially telling the world it's a

scarce resource don't give me more cuz

all I'm going to do is put it in a

bucket but if I say hey there's an

unlimited amount of money out there and

I'm going to put it out it's going to

come back then I'm kind of learning I'm

earning I'm creating opportunities and

getting resources to do bigger things

which brings us to number six which is

to minimize borrowing Robert kosaki

author of Rich Dad Poor Dad once said

the only difference between rich person

and a poor person is how they use their

time in debt I would actually change the

word debt to leverage when I got my

first apartment I had to buy furniture

for the place so I went down to my local

furniture shop I sat down I tested a

bunch of different couches I'm kind of a

tall dude so I need like a deep seat and

I finally found the set that I wanted

and the sales gu is like hey good news

we can offer financing and I'm like what

does that look like and he tells me this

magical thing where I don't have to make

a payment for like 4 years or something

like that anyways I decided to take it

because there was no interest blah blah

blah and it just sounded awesome the

problem is is by the time I had to start

making payments when you actually looked

at the fine print and the interest rate

kicked in I ended up paying four times

more for the furniture than if I would

have just paid for it and the truth was

is I was borrowing money to buy things

that didn't make me money so this is

what I've learned about borrowing money

see the banks make their money on the

majority of the collecting of the debt

and paying of Interest what I want you

to consider is how do you borrow money

to make a return for yourself it's to

increase your earning potential right so

in the short term if you make an

investment in your business I want you

to monitor the ROI cuz you're still

learning how to do it you got to take

shots on goal small bullets little tiny

bullets take shots you're like hey I'm

going to spend some money see if I get a

return these are ways to learn then if

you figure it out you want to shoot a

cannonball see most people when they

start off they like make these big

investments in themselves borrow money

to go to a very expensive Mastermind or

invest in education or go to university

they don't get the return that they

thought they would get borrow to invest

in yourself don't borrow to invest in

your lifestyle that's where you're going

to get yourself in trouble I could have

easily bought used furniture I did not

need new stuff I was trying to show

everybody how cool I was so my rule is

if you can't afford it go make more

money to get it you don't need new you

can buy old which brings us to number

seven which is to analyze the risk

return ratios Warren Buffett said risk

comes from not knowing what you're doing

let me tell you about this crazy story

there's this investor named Bill acman

back in the day he took $27 million and

he invested in a CDS credit default Swap

and that investment and I think a

12-month period turned into $2.7 billion

let me tell you why this applies to you

see he knew there was a chance that that

27 could go down not necessarily to zero

Real Estate Investors do this all day

long they find a property they get it

under contract they borrow money for the

deposit they borrow private money to buy

the place they then they renovate it

they add the value and then they go and

they sell it to somebody else and they

take the difference I mean they pay off

the investors they refinance it with the

bank essentially they have no personal

guarantee no money out of pocket so the

upside is unlimited from a cash on cash

return because had very little of their

own money in the deal so we're always

looking for deals where we have

asymmetrical risk low downside unlimited

upside but let me tell you about the

risk quadrant so on the left side you

have risk and on the bottom you have

returns then place your opportunity that

you're looking at to make an investment

and say hey Bitcoin would be a highrisk

high return index funds would be lowrisk

low returns and something that's a low

return high risk well that's a trick

question as you wouldn't want to do that

one buying a business or for some real

estate and improving the business or the

real estate that's called value ad that

deal would look like a lowrisk high

return scenario which brings us to

number eight which is to not fear money

an ran once said wealth is the product

of a man's capacity to think I love that

see we all have these money stories

these money beliefs my buddy RIT said he

calls them money scripts they're

blueprints there's a way we think about

money yeah I had a weird one that I used

to think that I needed to go bankrupt to

be successful I know it's crazy and it

push money away from me for years cuz

I'd read books on Dave Ramsey who went

bankrupt Walt Disney bankrupt Henry Ford

bankrupt and it made me think oh my gosh

what if I push really hard and I lose

all this money so it made me question

decisions and almost fold in my

businesses some of us have stories

around thinking being rich is bad and

it's only for the greedy well if you

thought that and you're a good person

would you want to race to be rich or

would you slow yourself down yes there's

bad and there's greedy people but most

rich people I know are incredibly

generous and good people the more you

judge people and fear money the more

you'll push it away a lot of people

self-sabotage themselves to being rich

and I'll tell you why let's say your

goal is to be rich I'm just curious if

we just played a game and said what are

some of the negative beliefs people

might have around being rich well they

might say well rich people don't pay

taxes and rich people steal from people

and rich people are greedy and rich

people are self-centered and you can

just list all these beliefs in order and

just ask yourself have I ever thought

that because what I've discovered is

that if we don't work through all the

negative beliefs we have about being

rich then we'll fear money and we'll

push it away so you don't actually have

money problems you have a mindset

problem that just happens to be

reflected in your bank account I want

you to invite more money into your life

by believing you deserve to be rich and

that rich people are great people and

create from a place of abundance and

literally watch your life transform that

is the key which brings us to number

nine which is to avoid lifestyle creep I

once had this buddy I met him at an

event and I watched him make aot lot of

money very quick and as he was playing

this game of trying to keep up with the

Joneses his lifestyle just kept growing

he bought a new car he upgraded his

house watches pretty much everything and

eventually everything backfired on him

and his business really suffered and

unfortunately he was overleveraged and

he didn't have the money to cover all of

his payments so he had to file for

bankruptcy you see once you start making

money the game is here to try and live

off as little as possible for as long

long as possible not to suffocate your

ability to reinvest in yourself to make

more money but to just not be wasteful

instead of buying the new BMW invest in

yourself or another business vehicle

that could buy you 10 BMWs in the future

some people think that compound interest

is the most powerful force in the

universe but delayed gratification is

even stronger and that's why this money

rule will make you rich if you're able

to delay trying to reap the rewards too

soon you should get used to play playing

this game of spending as little as

possible for as long as possible like

all the the Gucci and the fancy stuff

and look I know a lot of people see me

today with the jet and the cars and the

house and all that stuff but even today

I live off about 10% of my income

because I'm reinvesting and other things

that are going to make me money in the

long term and then over time I just I

live off of that cash flow and I think

everybody has the opportunity to do that

if they learn how to play this money

game which brings us to number 10 which

is build a personal p&l so I was talking

to one of my friends once and he was

telling me how he wanted a simple life

and this guy was wealthy he didn't want

too much stuff too many things to manage

but here's the secret and this is why I

told them the wealthiest people aren't

managing their own Estates dude you can

invest in having somebody to help you

out so I explained to him when you have

two or three or four homes like I do

then you have somebody manages it I have

a house manager named Betty She is the

CEO of everything in my personal life

like any money that comes in manages the

income she manages the expenses that go

out and she manages the forecast and the

budgets for all those so if anything

gets out of whack she's the first one to

say like hey why is the landscaping for

you know the properties more expensive

than it should be so I want to teach you

this cool idea that most people have

never heard when it comes to money just

like in a business your personal life

should have its own profit and loss

statement I know I know this is some

people are like what are you talking

about if you think about it your life is

a business you have a salary you have

income and you have expenses and I know

most businesses have a CEO a CFO a COO

to manage all this and financial

projections and planning and most people

with money would maybe call this a

financial planner or a family office but

I like to think it at a high level I

actually have my personal family Affairs

in my accounting software I know crazy

idea but why wouldn't you it just makes

it so much easier to manage I want you

to consider if you get really good at

managing money you'll be able to make

more money most people that are Loosey

Goosey on their financials they will

never have the rigor and the maturity to

be able to grow their personal netw

worth which brings us to number 11 which

is high tides rise all boats when it

comes to making money it requires a team

and I used to have a belief that if I

trained a team that eventually they

would leave you know I have my buddy

Cameron Harold incredible author you

know people would say to him like what

if you hire a bunch of people and you

train them and then they leave and he

would joke well what if you don't and

they stay so what most people do is they

hire less competent people because it

feels more secure because they're

insecure about people leaving them the

challenge with that is this B's and C's

risk your a so think about anybody on

your team today that might be great if

you hire somebody that makes them work

harder they're going to get frustrated

and they'll eventually leave so if

you're trying to rise the tide if you're

trying to increase the average of the

people on your team then you have to

invest in your people I mean I know when

things are good it's easy to invest in

them the economy is good I invest in my

people but honestly even when they're

not doing so well just don't stop it

could be you training them buying some

training making sure they feel supported

so the best way to keep people is to

understand what their dreams and goals

are and my rule is your dreams and goals

for your life have to be big enough for

everybody else's to fit inside of so

that you can raise the tide and it

brings them with you in they'll want to

stay with you you got to fix that

mindset and watch your life transform

which brings us to number 12 which is

money is a tool not the goal Henry Ford

once said money is like an arm or a leg

use it or lose it you know I once heard

that that money is a tool it's like a

fork it can either be used to nourish

you or it could be used to take

somebody's life but it is not the goal

of Life see I became a multi-millionaire

at 28 and then drifted for almost 2

years I thought I had made it you know I

sold my company I kind of retired and

then I realized that Financial Freedom

means nothing because the point of life

is not actually about making money it's

about having a richer life money is just

a tool that can do that it can also not

do that if you stress yourself out if

money is a primary reason that you make

any decision then you'll always make

money the master but if money is just a

consideration then you'll feel free at

the end of the day it doesn't matter if

you have a million dollar or $100

million money is a store of value and

needs to be put to work the work is to

buy you time so you have options about

how you want to spend it to become more

valuable ideally so you can reinvest it

in making more money to buy more time to

feel useful I mean at the end of the day

people talk about happiness I'm not

about being happy I think that's a

moment in time what I want to feel at

the end of the day is I want to feel

useful I want to feel like I created

something I want to feel fulfilled and

when I look back at the days where I

felt that way it's usually spent with

people I really admire creating

something really cool that was kind of

hard to do things that were going to

impct a lot of other people don't make

money the primary goal but a tool to get

to your goals which brings us to 13

which is your network is your net worth

Oprah famously said surround yourself

with only people who are going to lift

you higher if you think about it you got

to look around your peer group and ask

yourself are these people that are going

to lift me up to achieve higher levels

my friend jokingly asked me cuz I was

saying that you know I'm trying to

upgrade my network and he said how many

of your friends have private Jets or

gate cats and at the time I was like

none he's like look it's not about the

money but that's usually a good filter

cuz people that are kind of vibing at

that level typically have a lot of cool

stuff going on in your life and if you

want to get in a room where you're going

to feel like an impostor which is the

key then you got to make sure that those

people are doing really big things most

people make the mistake they say you

become the average of The Five People

You spend time with I would actually you

become the average of the five people

that you let influence you I upgrade my

relationships all the time I look at my

goals I look at where I spend my time

and I get to ask myself if these people

are going to help me and support me with

my goals if I feel like they'll slow me

down or they'll always talk down on me

or they're just not wanting to create a

life at that level unfortunately I have

to do a friend ventory I have to

evaluate where I'm at and find some new

people I can love people I just can just

figure out where I can spend time with

other folks that might get me to where

I'm going a lot faster so if you're fast

growing you need to look at who you're

spending time with and cut anchors

holding you back which brings us to

number 14 which is Define your why when

I started out I use a lot of dark energy

to build my life I a lot of people I

wanted to prove wrong like my buddy

Mike's mom who said I couldn't play

together to you know my dad who I didn't

think at the time he believed in me to

everybody that ever doubted my ability

to win and I didn't give him a lot to go

off of but that was the energy to prove

people wrong but then once I achieved

success and I became a multi-millionaire

this actually needed to shift to light

energy and the reason why is that dark

energy can work it's just heavy so to go

bigger you got to figure out your why

because that'll pull you forward not

push you forward using Dark Energy it's

more of a light energy pulling you

forward my why is huge it's very simple

I want to become the person I needed

most in my darkest days and I want to

teach everything I've learned that

worked for me along the way you know my

friend coach Bert says you know you

should go to bed tired wake up hungry a

lot of people see me get up at 400 in

the morning and go back back back back

and do everything with the kids the

family the workouts the the team

meetings the podcast tours the media

stuff flying around all this stuff what

they don't get is my work ethic is a

reflection of my gratitude my gratitude

for the opportunity my Creator giving me

this chance I just want to show up and

give as much as I can towards my why so

I'm going to ask you what are you

optimizing your life for essentially

what are you trying to do are you just

trying to get rich that could work if

everything you do is to make more money

you could become really great at that

some point you might ask yourself what's

the meaning of it all because I know if

that I found out that tomorrow at 5:00

was my last day I'm not rushing to the

office I'm not rushing to go

snowboarding I'm going to grab my family

members that I can grab I'm going to sit

down I'm going to hang with them I'm

going to pour into them and in the last

breath I got to leave this earth with a

smile because I spent the time with the

people I wanted to most so there's

opportunities all day to make more money

I get hundreds of investment

opportunities every day I could spend a

lot more time looking at them but I say

no to most opportunities speaking gigs

traveling the world free vacations

dinner request everything cuz the last

thing I want to do is get really excited

about a new opportunity actually be

successful climb this ladder of success

only to find out that that ladder that

future is leaning against the wrong wall

and look across the room and see the

ladder on a different wall which is

actually where I want to be so we have

to begin with the end in mind we have to

know what our why is what our purpose is

that's really cool having a Big Y just

makes the whole process easier and will

make you more money if you want to learn

how I would go from broke to millionaire

then click the link and I'll see you on

the other side