Preparing for a financially secure future

Summary

The speaker emphasizes the importance of financial literacy in the face of economic challenges such as crashing stock markets, rising interest rates, and inflation. They discuss the impact of these trends on affordability, consumer spending, and job security, highlighting the surge in layoffs across various sectors. The script urges individuals to prepare for economic downturns by understanding financial trends, managing expenses, and developing income-generating assets to secure their financial future.

Takeaways

• 📉 Stock markets are crashing, and interest rates are rising, making homes bought recently unaffordable.
• 💸 Prices for consumer goods, gas, milk, and travel have increased significantly, making everything more expensive.
• 🏠 Housing has become unaffordable, and refinancing at current rates is difficult for recent homebuyers.
• 🔄 Layoffs are happening across all sectors, including tech, media, and entertainment, due to high business costs.
• 📊 Inflation has reached its highest levels in decades, leading to increased interest rates and decreased consumer spending.
• 🛒 The Consumer Price Index has skyrocketed, reducing consumer confidence and spending power.
• 💳 Consumer debt has more than doubled over the last 20 years, especially for age groups 30 to 60.
• 💡 Financial education is crucial, and real education starts after school. People need to understand current economic trends.
• 📉 Recessions occur periodically, and it is essential to prepare for future economic downturns.
• 📈 Developing income-generating assets is vital for long-term financial security and managing liabilities.

Q & A

What is the main focus of the discussion in the transcript?

The main focus of the discussion is financial literacy and understanding the importance of being prepared for economic uncertainties.

What are some of the current economic trends mentioned in the script?

The script mentions crashing stock markets, rising interest rates, increased prices for consumer goods, unaffordability of housing, and layoffs across various sectors.

Why do companies resort to layoffs when facing high inflation and increased cost of business?

Companies resort to layoffs to manage their expenses when their income is low and costs are high, as part of their strategy to maintain operations during economic downturns.

What does the speaker suggest is the real education for financial trends?

The speaker suggests that real education for financial trends begins after leaving school and involves continuous learning and understanding of economic changes.

How does the speaker describe the typical income growth curve and its relation to expenses?

The speaker describes the income growth curve as initially rising fast and then tapering off, while expenses continue to increase due to life events like marriage and having children.

What is the potential danger of not having a financial plan according to the transcript?

The potential danger is that without a financial plan, individuals may find themselves unprepared for economic downturns, layoffs, or other financial shocks, leading to serious financial instability.

What is the importance of creating income-generating assets as mentioned in the script?

Creating income-generating assets is crucial for long-term financial stability and provides a passive income stream that can support individuals beyond their working years.

Why does the speaker emphasize the need for financial education?

The speaker emphasizes financial education because it empowers individuals to understand and navigate economic trends, make informed decisions, and prepare for financial uncertainties.

What are some of the checkpoints the speaker suggests for individuals to evaluate their financial health?

The checkpoints include having emergency funds, a monthly budget, positive cash flow, life insurance, and a plan for paying off debt, owning a home, children's education, and retirement.

What is the connection between financial planning and peace of mind as discussed in the script?

The connection is that financial planning helps individuals achieve financial security, which in turn provides peace of mind by reducing the stress and uncertainty associated with financial instability.

What does the speaker mean by 'sleeping on a financial railway track'?

The phrase 'sleeping on a financial railway track' is a metaphor for being unaware or unprepared for the potential financial dangers that could arise from not managing one's finances properly.

Outlines

00:00

📉 Economic Trends and Financial Preparedness

The speaker emphasizes the importance of financial literacy in understanding the current economic trends, such as crashing stock markets, rising interest rates, inflation, and layoffs across various sectors. They highlight the unaffordability of housing and the general increase in the cost of living. The discussion is centered around the need for individuals to prepare for potential economic downturns and the steps they can take to safeguard their financial future.

05:02

📈 The Impact of Inflation and Consumer Spending

This paragraph delves into the effects of inflation on consumer spending and the cost of running a business. The speaker discusses the historical context of inflation rates and their current spike, leading to higher interest rates aimed at curbing spending. The impact of this economic climate is evident in the form of layoffs and reduced consumer confidence, which in turn affects the overall economy. The speaker also touches on the significant job losses in the tech sector and the broader implications for various industries.

10:02

💡 The Necessity of Financial Education and Planning

The speaker stresses the importance of financial education, especially after leaving formal education, and the need to be aware of financial trends. They discuss the typical income growth curve and how it often fails to keep pace with increasing expenses, leading to debt. The speaker warns of the dangers of being unprepared for economic changes and encourages proactive financial planning to avoid potential financial ruin.

15:05

🔄 Recession Cycles and the Importance of Preparedness

This section discusses the cyclical nature of economic recessions, noting that they have occurred regularly since 1945. The speaker points out that while the economy may recover, the effects of recessions can be severe, including significant drops in asset values. They challenge the audience to consider their preparedness for the next recession and the importance of not only planning for the short term but also securing their financial future.

20:06

🏠 Creating Assets for Long-Term Financial Stability

The speaker introduces the concept of creating income-generating assets as a strategy for long-term financial stability. They advise against relying solely on active income and emphasize the importance of passive income from assets. The paragraph discusses the dangers of liabilities and the need to manage them effectively. The speaker encourages the audience to educate themselves on how to develop assets that can generate income beyond their working years.

25:08

🤔 Self-Reflection on Financial Health and Goals

In this paragraph, the speaker prompts the audience to reflect on their financial health by asking a series of critical questions about emergency funds, budgeting, savings, debt, and long-term financial planning. They highlight the importance of having a clear financial plan, including insurance, education funding for children, and retirement planning, and the need to take action towards achieving these financial goals.

30:08

🛑 Taking Action for Financial Empowerment

The speaker concludes by urging the audience to take action towards financial empowerment. They emphasize the importance of education, seeking guidance from experienced individuals, and making conscious decisions to improve one's financial situation. The speaker encourages the audience to move beyond passive knowledge and to actively work towards creating a secure financial future.

Keywords

💡Financial literacy

Financial literacy refers to the understanding of various financial principles and skills, including personal financial management, budgeting, and investing. In the video, the speaker emphasizes the importance of being financially literate to prepare for economic uncertainties and manage personal finances effectively.

💡Economic trends

Economic trends are patterns or movements observed in the economy over a period, such as changes in interest rates, inflation, and employment rates. The video discusses current economic trends like rising interest rates, high inflation, and increasing layoffs, which impact personal financial stability.

💡Inflation

Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. The video highlights the recent high levels of inflation and its effects, such as increased costs for consumer goods and services, making it crucial for individuals to understand and prepare for its impacts.

💡Interest rates

Interest rates are the cost of borrowing money, typically expressed as an annual percentage of the loan amount. The video mentions that rising interest rates are a response to high inflation and affect various financial aspects, including mortgage affordability and consumer spending.

💡Layoffs

Layoffs refer to the termination of employees from their jobs, often due to economic downturns or company cost-cutting measures. The video discusses widespread layoffs across various sectors, underscoring the importance of financial preparedness for job loss scenarios.

💡Recession

A recession is a period of temporary economic decline during which trade and industrial activity are reduced, typically identified by a fall in GDP in two successive quarters. The video warns of a potential upcoming recession and stresses the need for individuals to prepare financially for such downturns.

💡Consumer debt

Consumer debt includes all the loans and credit card debt that individuals owe, reflecting their borrowing habits. The video shows the alarming rise in consumer debt across different age groups, illustrating the financial strain on households and the necessity of prudent financial management.

💡Passive income

Passive income is earnings derived from sources other than direct employment, such as investments, rental properties, or other ventures that do not require active involvement. The video advocates for the creation of passive income streams to ensure financial stability and security beyond active employment.

💡Emergency fund

An emergency fund is a reserve of money set aside to cover unexpected expenses or financial emergencies. The video advises having an emergency fund that can cover six months to a year of living expenses to safeguard against unforeseen financial challenges like job loss.

💡Budgeting

Budgeting involves creating a plan to manage one's income, expenses, and savings to achieve financial goals. The video emphasizes the importance of maintaining a budget to ensure positive cash flow and financial discipline, which are critical for long-term financial health.

Highlights

The importance of financial literacy and being prepared for economic uncertainties.

Current economic trends indicating stock market crashes, rising interest rates, and unaffordability of homes.

Inflation rates from 1990 to 2022 and the government's response to curb it through interest rate hikes.

The impact of inflation on consumer goods and the increase in the cost of living.

Layoffs across various sectors as a response to increased business costs and reduced consumer demand.

Tech industry job cuts and the potential for a 'bloodbath' in the job market as stated by Sundar Pichai.

The significance of understanding financial trends and the need for continuous education post-school.

The typical income growth curve and the challenges of managing increasing expenses.

The dangers of living on a financial railway track without understanding the potential for economic downturns.

The cyclical nature of economic recessions and the importance of being prepared for the next one.

The importance of financial planning and the common excuse of lack of time as a barrier.

The concept of lifestyle being derived from having both time and money, and the pursuit of financial security.

The necessity to increase income beyond active income through the development of income-generating assets.

The four quadrants of financial stability as discussed by Robert Kiyosaki and the focus on passive income.

The need for a strategy to increase income, including managing liabilities and leveraging assets.

The importance of education and self-improvement in financial matters to avoid economic vulnerability.

Actionable steps for financial preparedness including creating an emergency fund and following a zero-based budget.

The value of surrounding oneself with a community that values excellence, integrity, and personal growth.

Transcripts

so what is the first and most important

thing in the premise of what our

discussion today is right it's about

financial literacy right most important

thing that we all have to do as

professionals as whoever we are is to

understand are you prepared for tomorrow

right

and it starts with what are the current

economic Trends what is happening around

us okay uh well stock markets are down

I won't say down they are crashing okay

uh interest rates are rising okay uh the

homes we bought yesterday are not

affordable anymore if you bought a home

in the last six months you probably

cannot go by the same home again because

interest rates have almost doubled

prices are rising for consumer goods

okay and you know everything is

expensive you eat gas be it milk be it

anything right uh flight tickets travel

everything is expensive right housing

has practically become unaffordable okay

uh most people like I said if you bought

a home in the last year you probably

cannot even refinance and buy it at the

new rate

right uh layoffs are happening across

all sectors right these are some

realities of what is happening around us

today right and I want you to kind of

think about some of these things and see

how all of this affects you and how you

should take a few basic steps to prepare

yourself for that right

this graph just kind of shows the

inflation okay now if you look at this

is the inflation rate from 1990 to 2022

right and we used to have high inflation

in the 90s but in the last 20 years from

literally no inflation to look at we

have right now at one of the highest

inflation levels now when that happens

what happens

uh the the

government has to raise the interest

rates to curb that inflation so so they

can curb the spending right and and it's

uh you know we're talking about oh

economy is heading into a recession

right I don't know if it's going to

happen not happen right those are some

big things that some probably I and you

don't control but you have to understand

that what does that increasing

increasing inflation do just increasing

inflation basically raises the price for

everything

right for consumers

for companies for businesses right now

what happens when cost of business goes

up for companies right

it is what happens there is layoffs

right because these companies have to

operate they cannot have low income and

high expense they have to manage it

right these are some news articles you

are hearing every day today right uh you

know Twitter you know this was the first

company to say you can have permanent

work from home now they are like you can

have permanent work from home with no

pay

okay uh you look at Facebook large skill

layoffs you look at Amazon you know they

initially said they're going to lay off

10 000 people now they said no no it's

going to be 20 000 people right uh you

look at Google they said you know Sundar

pichai had made a statement there's

going to be bloodbath on the streets if

things keep going like this and just two

days back he made a statement that he

cannot say if we are not going to have

layoffs in Google in 2023 right and this

is just a report which says significant

job loss is expected in 2023. now if you

look at what is already happening in

2022 this is a graph of all the tech

layoffs from January to November 2022

right in January it was 600 layoffs in

November it is 59

000 layoffs

right this probably does not include

every little company but includes a lot

of big names I you know it's crazy right

now layoffs are not just happening in

Tech sector they are happening in every

sector you know you would think oh Pepsi

everybody would want to drink Pepsi

whether it is recession inflation I want

my Pepsi canadi right

but she's laying off people right uh

uh EV everybody thinks electric car

salinitis is having a layoff right uh

they are there again you know you look

at naughty track everybody you would

think oh it's everybody understands

importance of exercising so at least

they will continue to exercise but not a

track is which makes exercise machines

as having earlier now this is a very

interesting one 300 jobs in fifth round

so what happened in first round second

round third round fourth round let me

tell you not your track

is right now 50 percent of where they

started as employees just less than a

year back they have cut down 50 percent

okay uh you look at Twitter means

janitors are striking after being laid

off with no warning because I know

software Engineers are expensive deals

so it makes sense to lay off software

Engineers because they are making good

six figure incomes but when companies

come down to laying of janitors

you realize where what they are dealing

with okay major layoffs hit the media

and entertain an entertainment industry

right so if you look at its happening

across the board right and guys why is

it all happening because

interest rates inflation is very high

cost of running business is high uh it's

crazy right now what is happening and

then the consumer demand has reduced

what is consumer spending consumer

spending is how it's it's an index that

tracks okay

how much confidence do I have in making

in investing in in uh buying things and

if the Consumer Price Index goes up then

my confidence in buying goes down right

now this chart here is for last 20 last

30 years 1992 to 2021

as you see prices have been increasing

right so people are you know but then

what happened in just last one year

it shot up from 275 to almost 300. if I

extrapolate this this data is only till

2021. if I extrapolate this data to 2022

here is what this graph would look like

you're like climbing Mount Everest

no wonder economy is thinking and people

are like hey can I afford this because

everything is becoming more and more

unaffordable right Consumer Debt

right if you look at these are different

graphs for different age groups from age

groups 18 to 29 to 50 to 60. guys you

look at these three graphs here

age group 30 to 39 50 to 59 40 to 49

40 years back the debt was in the range

of 1 to 1.5 trillion dollars

today that debt has jumped

to more than three trillion dollars so

in the age group across age group 30 to

60.

it is the debt has almost more than

doubled from 1 trillion to almost three

four trillions in the last 20 years

right who's going to pay this debt now

that debt is a you know it's mortgage

there's cars credit cards and guys I'll

tell you

but that's what is happening right why

guys you know all of this is happening

and we got to be prepared for all of

this right now here is something Robert

Kiyosaki said your education begins when

you leave a school

see when I see all these economic trends

I forget all the things I learned in

computer science I am more worried about

and guys you've got to be educated more

about these Financial Trends that's why

we are talking to you here tonight

for you to understand it's not about

what should I do not do you've got to

understand where you are headed

some people are so simple so clueless

about where things are that they don't

even realize you got to educate yourself

financially because your real education

starts

as you get out of school not when you're

in school right because it's a real

world right now this is your typical

income growth curve right if you work

for first few years your income goes up

very fast but then it tapers off

income is simple making 100K 150k is

easy but whatever you are making to add

an extra 50k to it is not easy now here

is your expenses your expenses hey you

get married you've got kids you got a

bigger car you need a bigger apartment

you need a bigger home you need and your

expenses keep going up now some people

this is a disaster in America these

expenses for most people are up here way

above the income line that's why there

is debt and I showed you that debt

Rising like crazy

but even if you are the best you would

say you know what I'm not going to spend

anything I don't have you can manage

your finances but now you're trying to

run this

Financial track where you're trying to

keep the two lines like a railway track

I'll tell you something a very scary

thing guys

a lot of people given their finances and

their lack of financial understanding

are actually sleeping on a financial

Railway track

they don't realize there's a train that

is going to come

and they will get wiped out

you are trying to balance this economic

Trend but this is not enough because you

know what can happen tomorrow you heard

all those layoffs and everything else

this is real now I don't wish upon that

to happen for anybody I hope none of you

are affected by any of that that's great

but you know what you could lose your

source of income tomorrow

because something happened your income

could drop

now when your income drops unfortunately

your expenses don't drop now if your

expenses don't drop what are you going

to do

how are you going to manage it

what are you gonna do

you're gonna move from a big apartment

to a small apartment you're going to

tell your kids not we're not going to go

eat out as much you're going to tell

your kids we can't go for a vacation

you're going to tell your wife we need

to sell our car what are you going to do

guys you gotta wake up right but that's

the reality right this is what is

possible and this is what is happening

because that could happen right now you

may say oh pankaj is talking about all

of these things and he's trying to scare

us

no no I'm not trying to scare you guys

let me tell you the good news all these

layoffs and everything will all go away

in two three years everything is going

to be absolutely fine

okay so don't worry about all this but

you know

here is the bad news

economic recession

happens every few years

this chart shows

all the recession since 1945 and this

number in the blue shows when a

recession happened how long it lasted

where a recession happened how long it

lasted and in every recession it stocks

assets dropped in value to 20 30 40

right you look at every two three years

five years something is happening 1969

17 73 after 75 it happened in 80 after

80 it happened in 90 after 19 happened

into so 10 years Gap now we are in last

recession happened in 2007-2009

you know what it has been 13 years

in this chart above there is no gap of

13 years

so I'm not saying things will not go

over right it will be all fixed but it

will happen again

and when that happens again

where will you be

the question is are you prepared for the

next one

right are you prepared for it

because if you don't take care of your

family's financial future no one else

will

an unfortunate fact is a lot of people

spend a lot more time planning on a

vacation planning on a trip planning on

a skiing trip planning on a barbecue

planning on a family get together then

they actually sit down to do it

to even do their financial planning

right now you know why people don't do

financial planning

because they they know it's not easy

it's very difficult

it's like some of us right you have a

coroner in your house where you know you

keep dumping a lot of stuff like it's a

storage room kind of thing and you know

when you think about cleaning that

storage room it shakes you up because

you know man there's too much mess there

it's not going to be an easy task

right here

you know there is no solution to the

task right so what do you do you ignore

that discussion financial planning you

ignore that discussion and my purpose

today is to help you think about that

guys because it's very important right

because

nothing else may change in next 10 years

but you know what one thing will is

guaranteed for sure

ten years later when this happens again

for five years later when this happens

again you will be five years more older

you'll be 10 years more older you'll

have a little more financial

responsibility and I hope you are

prepared for it right because if you're

not prepared for it you're going to mess

up your son right now now you

know you some people they don't have

time but they have money why do you

think I'm a high flying corporate

professional

some people they're the time but they

don't have the money

you may think I'm a student or I don't

I'm supposed to make money but I have

time man

but then there are professionals who

have neither time nor money

now you may think you are in category

one or category two but here's the fact

guys

most people if you have a job and you're

trading time for money to make money you

will neither have time you will neither

have money

that's where most professionals are and

it's not a pretty picture

now lifestyle comes from having time and

money

and Financial Security right all these

things you say anything whether it's

travel whether it's buying a nice car

whether it's spending time with loved

ones whether it is taking vacations

whether it's just enjoying an evening

everything needs peace of mind and peace

of mind only comes when you have both

time and both money right like lifestyle

has two words life comes from time style

comes from money

if you don't have either of them you

will never have a lifestyle

right and a lot of people they are

thinking about peace of mind but all

they have is when they don't have time

and they don't have money they don't

have Financial Security you don't have

peace of mind you have pieces of mind

right and I want you to think about it

right how are you going to manage this

right right what is your really what is

your real goal in life what do you want

to accomplish are you going to

compromise everything or are you going

to figure out a way to increase your

income you've got to figure out right

you you can either be in a compromised

state or you can be in an accomplishment

state

right but it's not an easy Journey but

you've got to ask that question to

yourself

you have to ask yourself where you are

versus where you want to be

right A lot of people they know where

they are they know they cannot be

anywhere else and they accept that as

their fate

but you know what

guys have you ever entered a airplane

and you see there's some people sitting

in the business class some people

sitting in the economy class

right have you seen some people driving

nice cars some people driving living in

big homes some people traveling in

vacations not having to husband and wife

both not having to go to a job not

having to send kids to a daycare you

know what what is special about you you

think everybody else got lucky no these

people did something different

financially

they did something otherwise they would

not be there

right it is hopefully they're not taking

vacations on credit cards okay hopefully

not right right but there is people who

have created financial success but it

happens by first you knowing where you

are versus where you want it right now

here's some checkpoints don't get scared

now a lot of us these are brutal

questions and you've got to ask yourself

understand is I am sound financially

do you have emergency funds for six

months to a year if no money comes

do you have money to run your expenses

if you lose your active source of income

and if your husband and wife and both of

you are working if one of the job

can you maintain your lifestyle

right

you know there's a yes and no answer to

everything

right and and I want you to mentally

think about that right do you have a

monthly budget a lot of people again do

not budget because they know there is a

negative cash flow

and its area to budget right so you

don't budget it's at least one less

headache right but that one less

headache leaves you on that Railway

track

financially where something happens

tomorrow you will get run over right so

I this is what I'm talking to you all

guys I want you to really think about

your finances and figure out how you're

going to change some things right do you

have a positive cash flow and regular

savings now the best way to find out

savings is

if you've been working for 10 years look

at your bank balance and see how much

you have in your savings account

if in the last 10 years you saved this

much or very little

then what makes you think without making

any change you will suddenly save a

whole lot in the next 10 years you gotta

think about these things I'm not saying

any of this to scare you but I want you

to think these are real problems this is

more important problem than where should

I go for skiing this winter

this is a more important problem than

you thinking about when should I go to

India

I need to visit my friend this is a more

important problem than you thinking

about should I take a vacation right

do you have debt have you already paid

for things you bought

do you rent or own now if you don't own

then you have to think about

when will I buy a home and when will I

pay off that 30-year mortgage

if you already bought a home

then you have to think is it an asset or

a liability

right

because it's you know an asset is an

asset only when it's creating income to

a positive cash flow

if you're if if you have rented if you

have a house and you are living in that

and you're paying a mortgage payment

and your job goes away

you can't make mortgage payment right in

2008 2009 you saw so many house

foreclosures

why because people were living in homes

they couldn't afford

their home was a liability right

kids education what is your plan for

kids education well that may not be

immediate problem but five years ten

years if you have kids they'll go to

college

education is not simple game we have two

kids who just finished College

but you know it took

two hundred three hundred thousand

dollars each kid just in their education

and ten years from now it would not be

300 000 it'll be five hundred thousand

dollars

do you have a plan or you're planning

that your kids will start with a student

loan right saving an investment that's

not even a question when you think about

all these problems right

retirement planning guys even if you

want to work till 65 chances are you

live till 85.

even if you don't lose a job you will

make money till 65 but you got to pay

your bills till 85. what is your plan

from 65 to 85

do you have a plan

right these are scary questions but guys

I want you all to think about these

questions

before you think about your next

vacation next barbecue next potluck next

movie right now I'm not saying get these

are you know if you become cognizant of

this you can try to find a solution

right

you have to think what is your reference

point right right am I because everybody

else has a problem so I have a problem

it's like oh you know it's like me

jumping from an airplane and clapping

because somebody else jumped from

airplane without a parachute before I

did

well do you realize if you jumped

without a parachute when he hits the

ground he might hit the ground first he

may die before you but that doesn't make

it any safer for you

what is your reference point oh my

friends they all have the same situation

do you want to live your friend's life

right guys you are a product of your

environment what does your environment

look like right

what do you read who do you listen to he

got around people who are valuing

Excellence now Excellence not in terms

of making money excellence in terms of

relationships excellence in terms of

spirituality excellence in terms of

health excellence in terms of everything

right as a matter of fact when somebody

is stressed out about money those are

the marriages and relationships that end

up into divorce and financial struggles

right how many times have you heard of

stories where friends got into a fight

because they had a money problem

but if nobody has a money problem then

why would you mess up a relationship

right so Excellence right

growth mindset

are you just stuck in where you are or

you want to move forward you want to

create a bigger impact do you have a

purpose in life right uh personal

Integrity right these were the things we

valued in our community we were around

people who stood for personal Integrity

who had focus on giving not just giving

money but giving their time giving right

when I'm talking to you all hey I don't

get paid for talking to you okay

but I put a lot more energy in

everything that you are I'm sharing

right now because we will be value

giving somebody gave it to us

we saw that as an important value hey

you may not have a hundred thousand

dollars to give out but can you give out

five percent

can you give her twenty dollars to the

next homeless guy you meet

or you're like oh I got bigger things to

worry about guys giving right we saw

that in this community accountability

being good for your word

being a team player right you know hey

together everybody achieves more so we

work together to accomplish some goals

and dreams for each one of us

but at my job that was not the goal

there was a project if it happens it's

good if it doesn't happen you know you

and then fun right we like to have fun

right we when we got around this

community we liked

it was not just about money it was about

Excellence it was about integrity it was

about character it was about being a

team player having fun and building a

community of like-minded people who

respected excellence in every part of

life

right whether it's their marriages

whether it's their relationships whether

it's their spirituality whether it's

everything right now

if you're born poor

it's not your mistake right

but you've got to figure out guys you

cannot let a 30 40 year of Life go by

because you are comparing yourself to

the wrong people

right

so where do you start right I'm going to

give you some points on some basic

Common Sense things you gotta do sit

down if you're a husband and wife sit

down review your financial goals needs

where and and when will you need money

how will you get it where will it come

from what are your goals right create an

emergency savings account okay uh

understand and follow a zero based

budget

okay enforce a positive cash flow don't

buy things you don't need don't use

credit card everywhere understand how

you're going to manage your finances

okay uh have a good life insurance

policy

guys you know sometimes you're like oh

pankaj but I've been working

my boss loves me I

half the company gets laid off I'm not

going to get laid off

what happens what if something happens

to your health what if the unexpected

happens what will happen to your wife

and kid

was that when I looked at my family

picture if I crossed myself out what did

that picture look like

again I'm not saying you can solve that

problem at least have a good life

insurance policy

they say that don't put all your eggs in

one basket so think about doing

something to fix this right now this is

a good start but none of this

it will help you

not get into too much of a mess

but it doesn't solve the problem

you know why

because job is a short-term solution to

a long-term problem right like I said

job is

because it's 65 if you have a good job

and if nothing happens to you you're

going to live till 85 how do you bridge

the gap I'm sure all of you are thankful

for your job I'm very happy that none of

you hopefully are affected by everything

that's going on in the economy but at

some point you would not want to work

you may not be able to work what are you

going to do right so what is the

solution

right solution is very simple guys

you've got to rather than thinking about

anything else you got to think about

developing income generating assets not

taking loans not just throwing money

into stock Investments and Bitcoin and

things which you cannot predict but

develop income generating Assets Now

what is this asset what is an asset

okay

so everybody knows income

right income is what money comes to me

then there's expenses right everybody

has to spend some money

then there is income you make active

income I go to work I make money I get a

paycheck and then because expenses so

income my active income brings the money

into income expenses gets the money out

right now your because you know your

income cannot change so your strategy is

keep the expenses less than income

remember I picked the picture I showed

you right but in that picture what if

your income goes away you've got a mess

right so what do you do right before you

do something else

be careful about this another dangerous

thing called liabilities

liability is an expense that cannot be

getting rid of easily

right

hey I buy a big home I cannot afford

right you created a liability

right a lot of two income families in

Bay Area have bought homes that they

cannot pay for if they lose one income

you've created a liability

but you're going to work all your life

right now liabilities

you're paying for liability so money is

going out so what do you do right you

got to start thinking about

a strategy

strategy of not just worrying about how

to keep expenses low that income but a

strategy

of how I'm going to increase my income

right some people the strategy of

increasing income is oh wife works

husband also works two incomes but that

strategy still doesn't take you too far

because taxation kills you

I'm not going to talk about taxation

here but taxation kills you okay so your

strategy is to increase income using

assets

okay now what do you do when you create

assets and they create income

you got a happy picture thanks to being

around people who were in life where we

wanted to be

we got some guidance we made some

changes we started focusing on

developing assets right now that asset

creates an income now what can you do

don't suddenly quit your job

strengthen that asset now you have that

extra money pay off the liabilities

remove the liabilities now you have

bigger assets your bigger assets

you have a good income

now you can take care of your expenses

through your income

you know what

you can get rid of active income

because you have income coming from

assets

that's what we developed

we developed assets that created an

income stream that would go beyond age

65. but you have to understand rice

again think of how you are going to

develop that asset because if you don't

develop that asset you got a very big

problem at hand okay I hope you're not

thinking uh of living on Social Security

because that gap of 65 to 85 is a very

dangerous Gap

right

again it's not me Warren Buffet says if

you don't find a way to make money while

you sleep you will work until you die

right

so you got to figure that out right now

we talk about

the four quadrants Robert Kiyosaki talks

about this all the time right and you

all know this very few right but you

guys you got to focus on how you are

going to create asset based income

because if you are on the active income

side there is no Leverage

100 of income comes from One Source if

that one source something happens

party is over

so you gotta think again I'm not saying

do this do that but you got to think

about something you gotta do something

it's a problem to be solved right the

first step I very strongly encourage all

of you guys I gave you some checkpoints

on

budgeting cash flow

paying off your debt Health life

insurance do those things but then

sit down

as husband and wife if you're a single

sit down yourself take somebody's help

find out how you are going to create a

passive source of income

because if you don't do that guys I'll

tell you

it will be a big problem okay

now how do you reach your financial

goals right

right the simplest way first of all is

once you create this how do you create

this passive source of income right how

do you get to that asset cash flow right

you got to educate yourself

what I'm talking to you is you are

sleeping on a financial

railroad track

if you're not going to educate yourself

and do something about it it's going to

be a disaster

start doing it something about it now

right how do you do it first thing is to

educate yourself about these things

right some people

they're like oh I don't know about all

this well too bad right study business

Trends what is happening around you guys

economies companies

uh jobs

is changing if you think I've got a safe

job economy could change

Concepts could change

things could change right so study

business Trends right get access to some

of these things take a lot of time to

get access to people who are in life

where you want to be right it could be

anybody you can find anybody who will

help you if you have an uncle or a aunt

who knows how to help you get financial

success please beg to them to guide you

but get somebody who has experience

who is in life where you want to be

who's willing to help you who has vested

interest in your success who's going to

help you take their help because you are

now going to figure this all out on

yourself

all right now you gotta but you gotta

get access to those people right and

you've got to be willing to make some

changes you got to be willing to do some

work

you've got to be willing to take some

action a lot of times

a lot of us we have heard of a lot of

things I just talked about here and

there but you have done nothing about it

and if you've done nothing about it

nothing's going to happen so you gotta

take a call to action

because if it's not then when you look

at that picture the moment the active

income stops you got a big problem right

so guys

I hope next time

when a pankaj or somebody else talks to

you and says ask you this question are

you prepared for tomorrow

you should be able to say yes I am

prepared for tomorrow