The 8 Laws of Money to GET RICH (Apply them NOW)

Summary

This video explores the eight essential laws of money to achieve financial freedom. It emphasizes the importance of understanding money's growth potential, spending wisely, and recognizing that wealth building is a lifelong journey. The script dispels the myth that money solves insecurities and advises maintaining financial discretion. It highlights the opportunities for wealth transfer during crises and the necessity of increasing income to offset rising expenses. The power of early and consistent investing is underscored, with examples of billionaires like Warren Buffett, illustrating the potential for significant wealth accumulation over time.

Takeaways

• 📚 **Understanding Money Rules**: The video emphasizes the importance of knowing the rules of money management to achieve financial freedom.
• 🌳 **Money Grows on Trees**: It's possible to create passive income sources that generate wealth over time, similar to planting trees that bear fruit.
• 💸 **No Limit to Spending**: As income increases, so can expenses. It's crucial to maintain discipline and keep spending below income.
• 💼 **Long-Term Game**: Wealth creation is a lifelong process that requires continuous management and cannot be achieved with a one-time effort.
• 🚗 **Money and Insecurities**: Material possessions won't resolve personal insecurities; instead, focus on emotional regulation and self-confidence.
• 🤐 **Discretion with Wealth**: Avoid flaunting wealth to prevent attracting unwanted attention and potential legal issues.
• 🌪️ **Wealth Transfers in Crises**: Crises often present opportunities for wealth transfer; being prepared can allow one to capitalize on such situations.
• 👵 **Increasing Expenses with Age**: Expenses tend to rise with age, necessitating proactive planning to ensure income outpaces costs.
• 🌱 **Wealth Accumulation Over Time**: Wealth, like a tree, grows slowly. Early and consistent investment can lead to significant wealth over time.
• 💰 **Compounding Power**: The power of compounding can turn small investments into substantial wealth, highlighting the importance of starting early.

Q & A

What is the main theme of the video?

The main theme of the video is to educate viewers on the eight laws of money to achieve financial freedom and success in the money game.

Who is the fastest self-made billionaire mentioned in the script?

Jay Walker is mentioned as the fastest self-made billionaire, who achieved billionaire status in less than a year through his company, priceline.com.

Why did Jay Walker's wealth not sustain after becoming a billionaire?

Jay Walker's wealth did not sustain because it was tied to the .com bubble, and when the bubble burst, his net worth crashed as well.

What is the first law of money presented in the video?

The first law of money is that money grows on trees, which means one should not spend their entire life exchanging time for money but instead create passive income sources.

What is the significance of planting trees in the context of the first law of money?

Planting trees symbolizes the need to invest in assets or businesses that will provide income over time without constant active work, similar to how trees produce fruit.

What does the second law of money suggest about spending habits?

The second law of money suggests that there's no limit to what one can spend, and as income increases, so can expenses. It advises maintaining a budget lower than one's income.

Why is it important to manage money as a lifelong game according to the third law?

The third law emphasizes that managing money is a lifelong game because income sources require continuous management, and wealth can be lost if not actively maintained.

How does the fourth law of money address the issue of insecurities?

The fourth law states that money won't solve insecurities. It suggests that material possessions provide temporary happiness but do not address underlying emotional needs and can lead to a cycle of spending to seek validation.

What is the advice given in the fifth law regarding displaying one's wealth?

The fifth law advises not to let anyone know that you have money, as it can attract negative attention and people who may try to take advantage of your wealth.

What opportunities does the sixth law suggest can arise during financial crises?

The sixth law suggests that the greatest wealth transfers happen during crises, and those who are prepared can seize opportunities to become wealthier during such times.

How does the seventh law relate to the increasing expenses as one gets older?

The seventh law states that as one gets older, expenses will grow, and it's important to ensure that income also increases to avoid falling into a paycheck-to-paycheck cycle.

What is the key takeaway from the eighth law of money regarding wealth accumulation?

The eighth law emphasizes that wealth accumulates over time, and the sooner one starts investing, the better, due to the power of compounding.

Outlines

00:00

💰 Introduction to the Eight Laws of Money

The video introduces the concept of the eight laws of money, which are essential for achieving financial freedom. It emphasizes the importance of understanding these rules to master the money game. The video contrasts the wealth-building strategies of Warren Buffett and Jay Walker, highlighting the importance of sustainable wealth creation. It stresses the need to plant 'trees' that provide income without constant effort, like a business or smart investments, and the importance of nurturing these 'trees' for long-term growth and income.

05:00

🌳 The Long-Term Growth and Care of Wealth

This paragraph discusses the importance of treating money as a long-term game, rather than a short-term pursuit. It explains that wealth requires continuous management and that even successful businesses face daily competition. The paragraph also addresses the misconception that money can solve insecurities, suggesting that material possessions only provide temporary happiness and that true acceptance and confidence come from within. It advises viewers to focus on improving social skills and self-confidence rather than seeking external validation through expensive purchases.

Keywords

💡Financial Freedom

Financial freedom refers to the state of having sufficient personal wealth to live without having to work actively for basic necessities. In the video, achieving financial freedom is presented as the ultimate goal, which requires understanding and mastering the 'money game'. The script emphasizes that financial freedom is not just about accumulating wealth but also about managing it wisely over time.

💡Money Rules

The 'Money Rules' mentioned in the video script are the fundamental principles or guidelines that govern financial success. These rules are likened to an 'accelerated course on money management', suggesting that they are essential knowledge for anyone looking to excel in the financial realm. The video outlines eight specific laws that are crucial for winning the 'money game'.

💡Self-made Billionaire

A self-made billionaire is an individual who has amassed a net worth of at least one billion dollars through their own efforts and investments, rather than inheriting wealth. The video uses Jay Walker and Warren Buffett as examples. Walker became a billionaire quickly through his company Priceline.com, while Buffett built his wealth over a much longer period, illustrating different paths to financial success.

💡Wealth Sustainability

Wealth sustainability in the context of the video refers to the ability to maintain and grow one's wealth over time. It contrasts the temporary wealth of Jay Walker, whose fortune was tied to a market bubble, with the enduring wealth of Warren Buffett, who continues to be successful due to his understanding of the 'money game' and adherence to its rules.

💡Passive Income

Passive income is income earned with little to no effort by the recipient, such as rental income or earnings from investments. The video script uses the metaphor of planting trees that provide fruit over time to illustrate the concept of creating passive income streams. This is a key strategy for achieving financial freedom, as it allows one's wealth to grow without continuous active work.

💡Budgeting

Budgeting is the process of planning and controlling one's income and expenses. The video emphasizes the importance of maintaining a budget even as income increases, to avoid overspending and to ensure that one's financial health is not jeopardized by lifestyle inflation. It suggests that discipline in budgeting is a critical component of the 'money game'.

💡Insecurities and Consumption

The video discusses how personal insecurities can drive consumption, leading individuals to make purchases to gain social acceptance or admiration. It warns against using money to compensate for insecurities, as this can lead to a cycle of spending that does not ultimately satisfy. Instead, the video suggests focusing on building self-confidence and social skills.

💡Wealth Display

Wealth display refers to the act of openly showing one's wealth, often through material possessions or lifestyle. The video advises against this practice, suggesting that it can attract unwanted attention and attempts to acquire one's wealth, either through social manipulation or legal means. It encourages humility and discretion in handling one's financial status.

💡Wealth Transfers

Wealth transfers, as discussed in the video, are significant shifts in financial assets that can occur during economic crises. The video points out that while crises can lead to widespread financial hardship, they also present opportunities for those who are prepared and willing to invest during market downturns, as exemplified by Jay Walker and Mark Cuban.

💡Compounding

Compounding is the process by which an investment's earnings are reinvested to generate additional earnings over time. The video uses the power of compounding to illustrate the potential for wealth accumulation over time, even from small initial investments. It emphasizes the importance of starting to invest early to take advantage of this effect.

💡Long-term Perspective

A long-term perspective in finance involves planning and investing with a focus on the future, rather than seeking immediate returns. The video encourages viewers to adopt this perspective, highlighting how wealth accumulation is a gradual process that requires patience and foresight. It uses the example of Warren Buffett's wealth accumulation to demonstrate the benefits of a long-term approach.

Highlights

Understanding the rules of money is crucial for financial success.

Jay Walker's rapid wealth accumulation and subsequent loss illustrates the volatility of unsustainable wealth.

The importance of building wealth that is sustainable over time, as demonstrated by Warren Buffett's enduring success.

Money should be seen as something that grows, similar to a tree, requiring nurturing and time to bear fruit.

The necessity of planting 'financial trees' that generate income passively.

The myth that there's a limit to what one can spend is debunked; costs rise with income.

The importance of maintaining a budget below your income to avoid financial strain.

Money is a lifelong game that requires continuous management and cannot be retired from.

Wealthy individuals often continue to work not out of necessity but by choice.

Material possessions do not alleviate insecurities and can lead to a cycle of spending.

The recommendation to focus on emotional regulation and social skills rather than materialistic solutions.

The advice against openly displaying wealth to avoid attracting negative attention and potential legal issues.

Wealth transfers are most significant during economic crises, presenting opportunities for those prepared.

The potential for rapid wealth accumulation during times of crisis, as seen with Jay Walker and Mark Cuban.

As one ages, expenses naturally increase, necessitating a strategy for growing income.

The power of compounding and the importance of starting to invest early in life.

The example of how a small investment can grow exponentially over time due to compound interest.

Warren Buffett's experience of earning his first billion over 55 years and the rapid accumulation of wealth thereafter.

Transcripts

hello everyone today we will see

together the eight laws of money to win

the money game and Achieve Financial

Freedom First you need to know the rules

there are several Money Rules but for

this video we chose the most important

ones and put them all in one video it's

like an accelerated course on money

management if you want to master the

money game this video will teach you

everything you need to know about money

if you're ready grab a drink and some

snacks and enjoy the video

who is the fastest self-made billionaire

ever while it took Warren Buffett 55

years to join the billionaires Club Jay

Walker literally did it in less than a

year he launched priceline.com during

the.com bubble and his net worth

instantly jumped from zero to billions

but that wasn't sustainable because when

the bubble burst his net worth crashed

as well while Buffett is still on the

top of the list and he doesn't seem to

go anywhere anytime soon and that's the

kind of wealth you want to build the

money game is not easy it's tough

competitive and ruthless if you don't

know the rules you're doomed to failure

some work hard all their lives but end

up poor because they don't understand

how the game works so if you want to be

on the opposite side study the rules

first allow me to present the eight laws

of money let's start with number one

money grows on trees

I'm sure many of you have been taught

otherwise but the fact is that if you

don't act in this manner you'll be

impoverished for the rest of your life

you can't spend your entire life

exchanging time for money you must plant

trees that will provide income even when

you're not around however it is not as

simple as it seems you're aware of how

difficult it is to plant a tree it is

ineffective unless planted in

nutrient-rich soil and the tree will not

develop on its own

you have to water and care for it and it

won't grow overnight

some trees can take 10 20 or even 30

years to mature but once they do they

will continue to produce fruit with

little work

the same is true for acids when you

develop a business or save enough for a

smart investment it will continue to

provide money even when you are not

there

rule number two there's no limit to what

you can spend

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I remember when I lived paycheck to

paycheck I had an extremely limited

budget I figured if I made a bit more

money I'd start investing

however when my income increased I began

to spend more

as you expand your costs will rise so

discipline yourself to keep to a lower

budget

Elon Musk survived on one dollar A Day

in the United States surely you can

survive on a few hundred euros

enjoy the money you make from your hard

work travel and do anything you want but

keep your budget below your income

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rule number three money is a lifelong

game

when I first became serious about money

and investing I had this idea in my head

that if I start making so and so I won't

have to stay to a strict budget and I'll

be able to retire and enjoy the rewards

of my labor

but when I started making that much I

realized it wasn't enough and that I

needed to produce more in fact if you

stop managing it it will stop generating

income

just because you purchased a house you

instantly won't find tenants if you

don't take care of it it may potentially

become a liability

the concept of creating an asset and

then doing nothing is absurd even if you

build a successful business you will

have competitors who will try to take

you down every single day

so forget about retiring one day of

course you may automate some of your

tasks and reduce your working hours but

in general this game will continue as

long as you live

the world's wealthiest people are a

clear illustration of those who work

even when they don't have to

rule number four money won't solve your

insecurities

we all have insecurities and a lot of

times we buy that expensive car or move

to a bigger house or buy a newer phone

because we want to be accepted or

admired by Society

that pricey automobile will make you

happy for a week or two but it will soon

become normal

but your insecurity won't go away so you

would want a better and more expensive

car it's a never-ending Loop that

maintains wealthy people in power

if you want to find acceptance learn how

to better regulate your emotions

the truth is that your insecurities will

drain down your bank account but will

still stay there instead work on

improving your social skills and

learning how to build your confidence

I'm not suggesting you buy an expensive

automobile or a private plane buy

anything you want but don't do it to

compensate for your discomfort there are

better and less expensive ways to

accomplish this

rule number five don't let anyone know

that you have money

we love to brag about how much money we

make

at the end of the day that's what

determines your social position in the

age of capitalism also most people

believe

but the trouble is that money attracts

it people will suddenly be friendly to

you and everyone will want a piece of it

of course it will make you feel good and

respected but that will come at a price

that's not worth it and if they won't be

able to get it nicely they will sue you

and get it the hard way

that is the reality in which we live

even if you make a million dollars every

year don't tell anyone stay humble don't

brag about it and keep making more

rule number six

greatest wealth transfers happen during

crises

when the economy crashed in 2008 the

unemployment rate skyrocketed because

the companies couldn't keep paying the

bills millions of individuals become

unemployed homeless or impoverished

however because the greatest transfers

of wealth occurred during crises some

people actively began investing and were

substantially wealthier following the

crises

you may become an overnight success if

you are willing to seize the chance

remember Jay Walker from the beginning

of the video who became a millionaire in

less than a year by capitalizing on

the.com Bubble despite the fact that his

fortune was not sustainable he was able

to keep hundreds of millions of dollars

Mark Cuban is another case in point

he even mentioned you were fortunate to

become a billionaire since he would not

be a billionaire if it hadn't been for

the 1998 financial crisis instead of

looking at Financial crises as a hoax

created by the government or the one

percent to rip off the poor take

advantage of it as they do

understand how the system works research

previous crises to learn how and why

they occur and be prepared to be on the

receiving end when the next one occurs

rule number seven as you get older your

expenses will grow have you noticed that

you spend more and more money every year

in one way or another

when you routine a hundred dollars was a

lot of money now it barely covers your

gas payment

and as you become older your expenses

will only rise that's the way our lives

are especially when you start a family

most individuals are unconcerned about

the future since they are earning a nice

living now when their costs exceed their

income people begin to complain that

they do not have enough money to invest

so if you do not make sure that your

income is increasing every year soon you

will trap yourself in a paycheck to

paycheck cycle that will keep you poor

for the rest of your life

that is why you must take the following

guideline very carefully

rule number eight

wealth accumulates over time

as you can't grow a tree overnight you

can't grow wealth overnight

remember that the sooner you invest the

better

with the power of compounding you may

become wealthy with as little as dollar

one hundred it's no surprise that the

world's best investor began investing at

the age of 11.

what were you doing when you were 11

years old

here's an interesting fact you may make

your grandchild a billionaire by

investing eleven sixty dollars which is

the cost of a new smartphone because it

will rise to over a million dollars in a

hundred years without any extra

investment you won't live that long but

I'm sure your grandchild will be

grateful if he is not greedy and keeps

it for his grandchild for another

hundred years it will rise to about a

billion dollars of course it's futile to

wait so long but the sooner you start

the sooner you'll be able to earn enough

money to stop worrying about your bills

Warren Buffett made his first billion in

55 years and his second billion in just

three years in fact he made 98 of his

fortune after his 55th birthday

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