Your money goals are too small and I will prove it to you.
So in this video I'm gonna explain how you need to rethink your income, your investments and savings goals and timelines.
And so here's the problem.
A lot of financial gurus, even people on this platform, right and I have no shade right will tell you to save 100 a month.
And they'll tell you that if you do that from the time you're 18 until the time you retire at 67, you'll retire with a million bucks at a 9 compounding rate.
And that all sounds great until you realize that when you're 67, that 1 million is going to only be worth 170000.
So why is that just 1 in 1975, right 50 years ago, has today's equivalent purchasing power of 602?
That's a 6x difference in 50 years.
The main reason, inflation, the dollar.
They don't make them like they used to, right?
Or rather, they make too many of them.
And if you push back on that, then I'd like to ask you to think and study late-stage capitalism.
So like Look if in late-stage capitalism and countries that are in it, which I would say America is in late-stage capitalism.
Look if inflation goes up or down.
And I'll give you a hint.
It goes up.
So this measurement is conservative.
This is based on the last 50 years, not necessarily the next 50.
And so if that's the problem, how do we solve it?
So this is kind of the new way I think about your goal.
Let's say that you had the goal to have a million dollars.
Obviously, add or remove zeros as it suits you.
Some of you might be 10 or 100 or a billion or whatever you want.
Let your heart go wild.
But let's say that you wanted a million dollars when you retire so you could live passively on 50000 bucks a year from investing it in bonds or something that's relatively low risk.
Well, you have to realize that in 50 years that million dollars will only buy you 170000 worth of stuff.
And that 50000 of passive income.
Oh yeah, that's only going to get you about 8000 worth of stuff.
Tough to live on that per year.
So let's say that you were a little more ambitious and you said you wanted $4 million.
Well, just to be clear, that was my lifetime goal when I was in high school, because I figured if I could do that, I could live passively on like 160 to 200000 a year, which is four to 5 of that, which means that I could live indefinitely.
I could keep the principle and just kind of live on that four or 5% interest.
And if that was your goal, Like it was for me, you might want to adjust it and take into account the inflationary reality.
So if you want that $4 million when you retire, you probably need $24 million.
If you wanted 200000 in dividends that you could live passively on from interest, you probably need closer to like 12 million per year in distributions.
I know, that's a big difference.
Again, that's just because you're thinking in today's dollars, not future dollars.
Now, before you lose your mind and just throw in the towel and say that you'll never make it, I want to give you some good news.
Compounding is still a thing and it still matters.
You probably just need to do more of it and do four important things.
So think of this as your strategy to mitigate that, so that you can actually get where you want in terms of your savings, your investment and ultimately, the freedom that you're looking for.
So consider this the new strategy.
I'll give you the quick and obvious ones that you've probably heard, but in a new way, and then I'll wrap up with what I've actually done to achieve it.
Number one is you have to increase your income.
A lot of people think about this in terms of savings.
I think it's much more powerful to think about in terms of income, because if you're not making a lot right now, there's not a lot of room between zero and you.
There's an infinite amount above that.
You can only get your spending down to zero.
That delta is not going to be that big, but you can totally increase the upside.
Let me put this in real-world terms.
Even if you don't think that extra thousand bucks a month from flipping stuff online or making content and just getting some AdSense revenue or promoting school and online platform to help people start communities and getting commissions from that, it won't matter, right.
If you don't do anything with it, right?
But if you take that extra thousand bucks a month, which might not seem like a lot depending on where you're at that work might not seem worth it.
You'd be like, oh, that's a lot of hustle.
I got an Uber more.
I got a DoorDash or whatever, right?
If you invest that extra thousand dollars a month in that same equation, you get 10 million by the time you retire.
So $1,000 today, hold, like, you ready for this?
This is going to be juicy.
1000 today, if you're 18 years old, is 80000 in 50 years, So the money that you make and spend now counts 80x.
Why?
Because 9% compounding, right?
It's bigger than inflation compounding.
Over 50 years, 9% over 50 years is 80x.
But we can't be one-sided.
We also need to realize that 80k in 50 years is only worth $13,000 today.
So in reality, every $1 you save today is worth $13 when you retire.
So for me, this makes making that extra $200 for a gig where you do a DJ thing, right?
Or helping your buddy move or whatever is actually a $2,600 investment.
And it makes it far more worth it for me or at least when I was thinking through my saving stuff when I was starting out that made saving a hundred bucks, 500 bucks, a thousand bucks when it was 13, grand way more worth it.
So number one, we got to increase income.
Number two, and it kind of naturally leads to is that you got to stop spending so much money.
Now, On the other hand right, if you think you know the 500 belt that you wanted to splurge on doesn't matter, just remember that it's 40 grand in 50 years, right?
That $500 belt with compounding reversed back to the present is 6,500 bucks.
That makes it hurt a lot more, right?
And so here's something that's even worse.
A $500 a month car payment, that's a lease.
That three-year lease is 18 grand.
That 18 grand in today's dollars when you retire is $234,000, right?
And if you want to say it in future dollars, it's $1.4 million in future dollars.
Wild.
50 years, obviously.
And that's just one lease.
So even if you make less, it doesn't, it doesn't mean less when you're young.
And this is the point that I think really discourages a lot of younger people is they're like I'm not making as much money as I want.
You know, I wish I could make more bubble.
They want to like.
They want to flex the small amount of money that they've got, because they like.
First off, never flex when you're young, because everybody who's older has way more money.
It's just like, you just have more time to accumulate.
You just do.
Number one, you have more time to accumulate.
Number two, you earn more when you're older because you have more skills.
So don't, Don't like, don't get weird about this.
But the thing that really matters that people who are older don't have is you have time.
And so the value of the money that you make, even if it's half as much, the difference of that last 10 years of compounding, when you start at 18 versus starting at 28, is the difference between a 30X, 33X and an 80X.
Think about that for a second. a 33X and an 80X in terms of that 10-year difference.
And so just because you make half as much or a third as much as you want to make right now, it doesn't mean that those dollars aren't worth more to you.
And so I say this to encourage you to make the extra few bucks here and there.
Don't spend as much.
You go out to the club, just pregame a little harder and get a soda with lime.
You don't have to go crazy with it.
And anyways, any girl that's going to just like you because of the money you're spending is not the girl you want to be with anyways.
All right.
So number one, increase income.
Number two, stop spending as much.
And then putting it in future dollars relative to today's dollars, hopefully should soften that blow for you.
The third is try and make it and save it faster, right?
Because the money you make now versus the money you make when you're 10 years older hits harder.
So there's obviously a time value to money.
So three quick strategies.
One, set a watermark.
Invest the rest.
So it's like, I need to have $5,000 in my bank account.
Everything above $5,000, I invest, period.
Or an alternative way of doing it is saying I have to invest 2000 every month, no matter what, and I got to make it happen and then I'll live on the rest.
I will tell you that the richest people I know think in terms of the second way more than the first way, which is like I'm going to go make that money to get that thing or to make that investment, rather than I'm gonna take it out what I got.
Just something that I've noticed.
Now, either way, just pick a strategy.
And the thing is, is you can always change it.
So don't have this idea that it has to be perfect.
You can change the strategy over time.
As long as you're still always investing more than you're spending, you're on the right path.
We're talking about $1,000 a month in the example.
You can always make that number go up.
Like you can always start investing $2,000 when you're 30 and $4,000 when you're 40, whatever.
Now the next one is that my example is assumed 1000 per month didn't go up by 3 a year to adjust for inflation and an increase in earning power.
So you can absolutely run a separate model for that with your own Excel sheet or your own, you know, whatever AI you use to run a model on that.
So if you're like $1,000 a month, if I do that from 18 until I am 67, I'll have 10 million bucks.
It's like yeah, but if you actually increased it by 3 it'd be a significantly larger number at the end.
And so you could probably hit your goal or beyond that with just that tiny piece.
Now I said I had four strategies.
So I just gave you three, right?
Invest the rest.
Invest first and spend the rest, or invest the same amount every single month and then increase it over time.
All three of those are fine, totally fine.
And honestly, I see entrepreneurs.
I see people all the time like people wanna know if they're gonna be successful.
Watching these videos and actually taking action, 99% of the time, that's all that actually matters.
The fact that you care enough to actually change your behavior is the big green flag indicator.
You're going to tweak over time.
You're going to learn other stuff.
But actually doing something about it is what will separate you from everyone else.
Let me give you the fourth strategy, which is what I actually did.
So I'm obviously not 67, and I have more than $10 million.
I made my living expenses as small as humanly possible.
All right.
So protein shakes, Chipotle, I split a bedroom.
All right.
So I lived in a house and I had six roommates.
And then, within one of the rooms, I split the room like college style, like dorm style, with another guy.
Like we're staring at each other at night across beds like like that.
All right.
Because it was cheaper.
Right.
And I was never there anyways.
I was working all the time.
I owned a used car that I paid for outright.
So the only thing I had was my car insurance.
That was it.
I haven't had car payments in a very long time.
Like buy a used car that's 10 years old, that's in good condition, pay 10 grand for it and then just like never have a car payment again.
And then I invested my money, pause, in learning to make more money.
So I said the first thing was that the very very, very first point I made today was that you want to increase your income, right?
But how do you really do that?
Because when you factor in that it's, one of the only things strong enough to break the cycle is that you just have to make more.
So think about it.
Like if you spend 2000 having someone help you learn how to sell ideally a place with some sort of you know placement assistance.
And if you can't find one, you're never going to make it anyways.
Just look on the internet.
All right.
I remember for me I spent 750 per hour which was like all the money to me at the time for eight hours to have a guy who really knew how to do ads at a higher level.
Because remember, this is a guy who was going to charge $750, not your buddy.
You might be able to just buy him Chipotle and he'll do it for you.
But to have somebody who actually taught me how to run ads at a high level.
Those eight hours that tutoring, that skill that I was able to learn from that one-on-one tutoring, made me hundreds of millions.
Not just hundreds of millions.
Literally.
And so these are where you can get absurd returns that counteract the leak of that 3 compounding inflation.
And so part of the reason for that, there's twofold.
The first is that skills will always trade in today's nominations.
So whether we're trading dollars or Bitcoins or seashells, it doesn't matter.
Because if you have something valuable to exchange, you will be able to exchange it at the present value, in whatever denomination exists.
And so that's why skills are always the ultimate hedge against inflation.
Now, let's take the other example I had a little further.
Let's say you invest that $2,000. in learning that skill.
And that 2000 takes you from a 30000 a year income to a 90000 a year income, which is probably about what an average-ish salesperson makes.
Not like a supreme one, just like an average-ish salesperson.
And post-taxes, at least in the US.
That's about 75000 a year, assuming you live on, let's say, 2500 a month because you're living lean.
That's 35000 per year after taxes, after expenses that you can invest on for the rest of your life.
So that $2,000 one time gave you a permanent $35,000 per year increase in investable income.
That is how you get the absurd returns that can get you out of the cycle.
And so put this in perspective.
That alone would like just that one change alone.
If you did nothing else and you invested the 3000 a month roughly,
That alone would get you to $31 million in 50 years.
And that's with zero raises, zero new skills, and zero increase in opportunity.
You literally just doing the exact same thing for 50 years.
So the idea here is like you want to use compounding to your advantage, but the biggest thing is how much you can invest over time.
And the way to increase how much you can invest is to make more, spend less.
And in the short term where you will get the highest returns actually over the long term.
Where you get the highest returns in the short term is in skills.
But people are so afraid of investing money in skills.
And I really want to dive into this because I really, I truly want to help.
So yes, you can absolutely achieve financial freedom.
If you live under your means, you invest the difference into increasing your income and then, once you have the amount that you need to compound to your number, you can just let the compounding work.
And if you're a maniac my preference, my people you'll realize quickly that you get higher return on learning skills than anything else.
So then you put as much as you possibly can into it.
And so for many of you haven't had that reinforcing cycle, that one time where you spent money and you made more money back.
I was very fortunate that the first thing I ever spent money on, I made more back.
And the next thing I spent money on, I made more back.
And so I got very addicted to buying money, basically trading money for skills that I would immediately be able to make more money and increase my income.
And so as much as alternative education has its share of scummy people because it does, don't get me wrong.
I mean, in a lot of places, it's successful.
It's still a cheaper alternative to learning realistic, real-world skills than higher education.
So if you were to spend 100000 on courses in coaching, for example, or tutoring, which is how I prefer to do it, by the way, after doing some research, as in like, look online, make sure people have good reputations, make sure they have testimonials that are people like you, and they have many, many of them.
They don't promise too much, right.
I'm convinced that your life would change far more than $100,000 of higher education.
And I do think you can learn a lot of stuff your own, to be very clear.
YouTube didn't really exist the way it does now when I was coming up.
But the thing is that, like this is me trying to provide whatever value i can in terms of like, my path is that i was just always willing to pay for speed.
Right speed and the time value of money is something that i think people just wildly underestimate.
Right like, if you can increase your income for like, you get your five-year increase in income in one year.
The difference is the value of that learning, and i just i don't know why people don't get this.
I mean, i i'm Like I think Charlie Munger, you know, and Warren Buffett had a little moment where he was like, you know, it's really not that complicated.
And I think Munger was like. if people weren't wrong so much, we wouldn't be so rich.
And I think, so I'm trying to like, I've never really understood it.
And so maybe you guys can help me understand it.
I think the big reason is that people are afraid of spending money and not getting anything back.
I think that's the big fear.
But I think another part of it is ego saying, I don't need anyone's help.
I can figure it out on my own.
And here's the reality.
It's like, you can figure it out on your own.
The question is whether you want to figure it out in the amount of time it would take to figure out.
Like, I don't need to try and derive calculus like Sir Isaac Newton.
I'd rather just have somebody who already derived or deriven, dervoted or deroded deroded, deridden.
Who knows right?
Who had already derived calculus to just teach me how to do it, right?
And the thing is, is that with good feedback, you can get to your goal significantly faster, right?
We already know tutoring.
This is just in education research in general.
Tutoring speeds up the assimilation of any subject significantly faster.
Like huge differences, like talking like 8x differences in speeds, monster differences.
And so it's not even like saying, oh, I can't do this on my own.
Of course you do it on your own, just like you can just do it faster.
And do you value the difference in speed for me?
I always pay for speed and so pay for tutors.
Join free and paid communities on school to learn stuff right.
Some people won't be good teachers, just like you had bad teachers when you were in high school, middle school and lower school.
It doesn't mean that teachers are bad or that the subject is bad.
It just means that you had a bad shake.
It happens.
Move on right like you will always lose until you learn.
Then you win.
That's how winning works.
But you have to be willing to lose in order to win.
And so I have a relatively extreme stance on this, which is that I will spend When I was coming up.
I lived on basically nothing.
And I spent all of my money...
And it essentially meant like almost had no savings for like years and years and years, because all my excess cash I just gave to people.
And for sure, I had people who I was like, that wasn't worth it.
That wasn't worth it.
But I tend to always come from the perspective of like, how can this make me better?
How can I get an ROI on this?
And so some of the best lessons I learned were from bad teachers of like, do the opposite of that.
And so this is like, I really like want to drive this now.
I want to be clear, like you will make mistakes and you will buy things that don't immediately work.
But I think of skill acquisition. like a bridge.
So let's say that you're, you know you're on this side and you're sad, because that's how bridges work.
You're always sad on one side.
And then on this side you have dollar signs for eyes, which means you're happy, because money brings happiness, obviously.
All right.
And so, and so here you're sad.
Maybe we'll cross your arms because you're super sad, right?
Um, Most people will look at this bridge and say well, I bought this one and I know how to do this one already.
And this one, why can't I get across?
It's because you got missing links.
And so let's say you buy something else and you get some tutoring and then it adds this brick.
Was it a waste of money?
Well, you still can't get across.
It's a waste of money.
No, just like your arithmetic teacher, wasn't a waste of time before you learned calculus or before you learned algebra?
You need one in order to get there.
They are prerequisites.
There's a reason prerequisites exist.
You need their stepping stones.
And so what happens is is that you get this other one from the sixth thing you buy, and then the seventh, and then the eighth, and then the ninth.
And then what happens is you say oh, this guy who taught me this ninth thing, that guy is the truth.
But the reality is that the reason that some people get outcomes and some people don't by going through the same thing is that the skill gaps that exist in someone's skill set are what create different outcomes with the same education.
And so the problem with an inexperienced teacher and this is very common in the alternative education world is that they will accept money no matter what.
But if I were to teach you Spanish six and I'm very good at Spanish, but you've never taken Spanish one through five am I a bad Spanish teacher?
Or are you just not good at Spanish one through five?
What should have happened is I should have said to buy Spanish 6, you got to go through Spanish 1 through 5.
But the thing is, is many of these alternative education businesses only know Spanish 6.
They don't even know how to teach Spanish 1 through 5, or they never had before, never thought about it.
Because they get one out of five people get a result.
So they say, this is good enough.
Everyone else didn't try.
And to be clear, there's definitely people who don't try.
I don't want to say that's not true. for sure.
But there are also people who do try, but just didn't have the missing links.
And so part of the process of going through the alternative education world is having the perspective of a collector of skills.
And so I don't know if I'm going to be able to use this today, but I know I will be able to use this eventually.
And as long as I see myself as the asset, I'm always going up.
And once I have all the pieces together, guess what follows?
The dollars start walking across the bridge and they keep going into your pocket.
And so to me, this is what I mean when I say like invest your money into income earning skills.
If you can trade the skill for money and you can learn it, Can you imagine something that's more valuable?
We just did the math on like getting $3,000 a month extra from one skill.
Imagine adding 10 skills.
Imagine that sales guy says you know what?
That 3000 a month extra.
Instead of saying I'm gonna invest that three, I'm gonna spend six, my next two months of it, and I'm gonna spend it on learning how to run ads.
And you know what?
I learned how to run ads, but I don't know how to make offers or make landing pages and stuff.
And so I'm going to spend another two months on learning how to do that.
I just always saw the money that was left over every month as like what skills at the store do I need to go buy?
And then I would just go buy them.
And so...
I think that in the early days now I went through the brass tacks, the very simple version of this that you can use if you just have fixed income or you have a job and you choose not to make more than that.
That's up to you.
But one of the big unlocks that I had in my career was that I went to an event and there was a guy who was there.
The event was for everybody who was doing over eight figures is what it was for.
So everybody's 10 million and up.
And at the time, Layla and I had just started making money.
I'm talking like within the last 12 weeks and everything just started taking off, right?
I finally got the last piece of the Kinect.
And so we were doing $300,000 or $400,000 a month.
I can't remember, but it was almost all take-home because it was just me Layla, and I had one assistant over at Kitchen Table.
Like that was the business.
So I was, and we had just gotten married.
I was like living large.
And when I say living large, like I spent no money but I just felt not poor anymore, which was great.
Um, so as I go to this thing, I was like, I don't even know if I should be here.
I'm definitely not making that.
They're like, Oh no, you're going to, you're going to be way past that.
And I was like, I'm glad one of us believes that.
Um, I was just, you know, trying to ride this rocket with both hands.
And so anyways, um everyone goes.
You know, it goes through their presentation.
And the first guy who got up um cause, I remember he was like busy.
And so he like, I can't, he either want to go first or last doesn't matter.
And he gets up there and he starts by saying, like, so we did $35 million in revenue last year.
And I was like, what?
$35 million?
Like, I was like, one is dope.
I was three months in to make it, you know, pacing higher than that.
But I never actually, like, really had it happen, at least from an income perspective.
And so...
Anyways, he gets up there and after he gives this whole presentation, he was in the e-commerce world.
Someone asked him, so where you're at now, what are you doing to invest in your education?
What are you doing to invest in learning?
And he said, I made a decision a long time ago that I would have a learning budget.
And so every month, whatever percentage you're comfortable with maybe it's 1, maybe it's 5, maybe it's 10 of my income, he said I force myself to spend it.
And I spend it in a way that's testing something that I think is cool.
And so that might mean, like he's like, I'll test a new ad strategy, knowing that it probably won't work, but I'm willing to lose that money to continue to experiment and stay ahead.
And what's crazy is that I took, I went to that thing, I heard him.
And then for me, I was like, okay, well, I'm going to go experiment with my income.
And so remember I wasn't spending much money and I had a lot of income.
Um, and so I took like, you know, um, 10%.
So I think it was like 300,000 a month.
So 10% would be 30,000.
And so I was like, I'm going to increase our ad spend by a thousand dollars a day.
And we were spending like 400 at the time.
So I went from like 400 to like 1400 a day in ad spend.
And that is when gym launch went from 300 to 480 to 780 to a million, to 12, to 15, to 17 something to 2 million 22.
That was months.
Because as soon as I saw that happen, it was like, oh my God.
And so part of me literally just being willing to lose the money unlocked my ability to spend more money, which scaled the company.
And so once I had that obviously a very reinforcing event for me I was like where else can I spend money like this?
Like, where can I, can I, can I buy access to a room?
Can I, can I pay for somebody's time one-on-one?
Can I, can I go to the event?
Like I did everything because every time I went, I made more and that's what I want for you.
That's really it.
Is that like, you're going to need to make more money than you think.
It's going to take longer than you think, but you can make it happen significantly faster if you learn skills that pay today.
And I'm willing to pull cash from my future forward.
And even though I know that 1000 is worth 13000 in 50 years, I know that that 2000, if it can make me an extra 2000 a month, will be worth something like well, let's just say a lot.
A lot of zeros.
A lot more than 13X in 50 years.
And so that is my final takeaway.
Be fruitful and multiply.
