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The majority of us are taught to work to get a job and climb that corporate ladder, but wealthy people are doing something completely different.
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They re working to... Welcome to the School of Greatness.
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My name is Lewis Howes, a former pro athlete turned lifestyle entrepreneur.
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And each week we bring you an inspiring person or message to help you discover how to unlock your inner greatness.
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Thanks for spending some time with me today.
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Now let the class begin.
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Welcome to this special masterclass.
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We brought some of the top experts in the world to help you unlock the power of your life through this specific theme today.
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It s going to be powerful.
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So let s go ahead and dive in.
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What do you wish we taught everyone from the ages of 10 to 20, five different things around money?
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First thing would be, what is money?
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Because money as we know it is fake.
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Our dollars are just pieces of paper.
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I grew up thinking that our paper dollars are like the holy grail.
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You want to save this money because it is the most valuable thing there is.
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As I became older, I started to realize that that s not the case.
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Our paper dollars are just pieces of paper.
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It s fiat currency, which means it s issued by the government and the value is backed through the strength of the government.
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Now, we re lucky here that the United States is the world s superpower.
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We have the world s strongest military.
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We have the world s strongest economy.
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But we can t stay on top forever.
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And inflation is when the value of a dollar goes down.
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So these dollars, which many of us think that if we hoard this, we ll become wealthy, saving money to wealth, is actually keeping you poor.
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And it s making you poor each and every day.
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So the first thing you have to understand is, what is money?
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Secondly, you have to understand is, what do wealthy people work for?
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And most of us, the majority of us are taught to work to get a job and climb that corporate ladder.
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But wealthy people are doing something completely different.
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They re working to own the corporate ladder.
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They re working for something called equity.
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And this thing really blew my mind because wealthy people are not working for that paycheck.
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They re working to own a piece of the company.
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That way they can get a piece of the profits.
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So the best way to understand this is a lot of times people complain about how much money I m making.
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I wish my boss paid me more.
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And this is where if you start to understand the system, you ll start to ask the right questions.
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See, a big company, you have to ask the question, who are they working for?
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Are they working to take care of their employees?
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Are they working to take care of their customers?
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Neither.
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They re working to take care of one person, their shareholders.
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It s this concept called fiduciary duty.
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I learned this in law school.
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The executives of a company have a fiduciary duty not towards the employees, not towards the customers, but towards the shareholders, the owners of the company.
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Now what that means, an easy example of this, is you re going out to dinner with your girlfriend or your wife and you re on a date.
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and you get a text from one of your good friends saying, hey, let s go play Fortnite right now.
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Your fiduciary duty at the moment is to be with your girlfriend, to be with your wife, to be with your partner, to spend time with him or her.
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If you go out and leave, you re going to get in trouble, right?
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So it s who is your alliance to?
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And the shareholders
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the executives, the CEO and the executives company, their fiduciary duty is to the shareholders, the owners of the company.
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So what are they trying to do?
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They re working to drive up the valuation of the company.
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So once you start to understand that, you ll realize why there s this big discrepancy between what people are paid and what people want to be paid.
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And when you start to understand that, you re going to change what you do with your money.
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That s why I said a minute ago or a little bit ago, wealthy people are working to climb, not climb the corporate ladder, but own the corporate ladder.
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So how do you get that equity, that ownership?
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You have to own a piece of the corporate ladder.
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Now, if you work for a public company, that means that you can take some of your income and you can buy stock in the company.
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Maybe they pay you with equity.
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Maybe they give you some sort of revenue share.
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That s what we do in my companies.
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Or if your company doesn t do that,
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then you have to start taking this money that you re earning and you have to start investing it into a place where you re getting equity.
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Maybe that means stocks, maybe that means real estate, it could be a number of different investments, but you have to work towards that equity.
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The third thing is that you have to think bigger.
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I know I grew up
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thinking that somebody who looks like me, somebody who s brown, somebody who wears a turban, somebody who didn t have entrepreneur investor parents could go out and do this.
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Because you think that somebody like me can t do this.
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My parents also told me that I couldn t do it.
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I didn t know anybody doing it.
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I didn t know any investors.
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But you have to be the one to take that first step.
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And once you start to take that first step, you re going to learn and see the second step.
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And you take the second step and you re like, oh, I can start a $100 investment here.
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You don t have to start with hundreds of thousands or millions of dollars.
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Start with $100.
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Apps on the internet make it so much more accessible.
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But anything is possible.
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If you live in America, you speak English, you have more opportunities than really anybody else in the world.
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People would literally risk their lives, risk their lives to come to this country because there s opportunity here.
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And so if you re here, you have the ability to understand what you and I are saying, and you have that technology to do it, you re blessed.
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What do you do with this?
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You have to go out and start learning.
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You have to go out and start doing.
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and then the next thing that you have to do number four is you have to understand the concept of debt because we live in this consumer culture and it s interesting where we want to live
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this flex lifestyle, right?
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I want to show off on Instagram.
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I want to show off my new car, my new Chanel, Gucci purse.
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And we kind of get caught up where I need to live a certain lifestyle that way people can think that I m rich.
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But what you re doing now is you re living broke, making everybody else rich so people think you re rich.
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You re product rich.
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You have a lot of nice stuff, but you re broke.
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And so when you live that type of lifestyle,
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You are the reason why Gucci, Louis Vuitton, Chanel are making so much money, but it s keeping you broke.
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The richest person in the world, sometimes he s the second, sometimes he s the third, is the CEO of Louis Vuitton.
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No way, really?
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Yeah, Bernard Arnault.
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And why?
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How did he get there?
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Because everybody wants to look rich.
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Everybody wants the Louis Vuitton.
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You know, I saw this in the pandemic especially.
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We were in a recession in 2021, but luxury sale products were breaking new records.
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Come on, really?
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They re breaking records in 2021.
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Why is that?
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Stimulus checks went out, people had cash, and some people used that money to save, some people used that money to pay down debt, some people invested that money, but a big chunk of people took that money to places like Gucci, Louis Vuitton, and now you go and spend it.
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You would think when the economy is, well, I guess when people are losing their jobs and there s financial uncertainty of the future, you d think people would be saving or investing, not spending on luxury goods, especially if you can t even go outside to flex it.
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You can only do it on social media in the comfort of your home.
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You don t need to go outside anymore.
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You can just do it on social media.
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I know.
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And so if you don t have the cash to do it, people are going into debt to buy it.
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And it s becoming easier and easier because of now things like buy now pay later.
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It is one of the fastest growing industries in fintech.
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I love
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financial technology, but it breaks my heart.
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I mean, it just, it rips my heartstrings when I see the growth of this buy now pay later, because what does that mean?
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I can go out and buy anything I want, not pay for it today, pay it off over three months,
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And then if I don t, I get slapped with 25% interest.
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And if you are 18, or let s just say 21, I give you $6,500.
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You never invested another penny, but you invested those $6,500, and you could get an 18% return on that money, and you retired 65, and you look at this investment portfolio, you would have over $11 million.
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Wow.
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Now, everyone watching this saying, where the heck am I gonna get 18% on my money?
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But your credit card company is doing it every single day.
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$6,500 is what the average American household has in credit card debt right now.
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And you re turning around paying these companies 18, 20, 25% a year, and they re the ones that are getting rich, not you.
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So what s happening?
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You re going into debt to buy liabilities, which are things that lose your money, and then you re paying interest on top of that, which is making everybody else rich, which leaves no money in your pocket to make yourself rich.
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And you have to break out of that mindset.
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So what do we need to know about debt then?
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How do people get comfortable understanding about debt, either using it in the right ways and eliminating the debts that don t support our financial growth?
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Yeah, so the first thing is never finance anything that isn t going
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to pay you.
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Give me an example.
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Gucci, your vacations, your car, stop financing these things that aren t paying you.
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And people are going to get upset when I say your car because they re going to say, wait, how am I supposed to buy a car without a car payment?
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Don t buy a $100,000 car unless you ve got the money in the bank to buy it.
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And plus more.
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Buy a used car for six grand.
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Exactly.
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Go buy a used car, good working condition car with cash.
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Ride it for 10 years.
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Exactly.
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The first time I made a million dollars in a year, my car was 500 bucks.
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Dude.
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My employees had better cars than I did.
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I had a $4,000 car for the first five years living in Los Angeles.
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$4,000 car, used car, 1997.
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I love it.
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Was the car when it was made.
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And that thing was great.
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It was comfortable, got me from A to B. Yeah.
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It didn t break down.
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Exactly.
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I didn t need to be flashy.
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Exactly.
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I still have my $500 car.
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I still drive it.
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And it s one of those things where
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You know, because I fell into this trap where the first time I started making money, you know, in my culture, cars are a big thing.
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And the Punjabi culture, people really want to put money in their cars.
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They want to look cool.
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Right.
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So when I was 17, 16, 17, I started making a little bit of money because I was doing my side hustles.
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The first thing I did.
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was I putting new rims on my car.
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Then I put tints on my car.
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Then I put HIDs on.
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Oh, I had two 12-inch subwoofers in my trunk, right?
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I put the tints on.
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I put a new sound system in there.
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Lights around, glow in the dark, yeah.
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I had a Toyota, right?
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And then the next thing I was going to do is I called up my cousin.
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I said, guess what?
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I got three grand in the bank.
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I m about to put Lamborghini doors on my Toyota.
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You re crazy, man.
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And he s like, just wait, you re stupid.
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Don t do that.
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And so he sat on the phone with me for like 20 minutes, convincing me not to do it.
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Luckily I didn t.
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I m really glad that I didn t.
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But that s where all my money was going.
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I looked cool.
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My car was cool.
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And that s where all my money was going.
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I had $1,000 in my bank and I went out and I bought a $1,000 watch.
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I was like 18 years old, right?
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It was like I was in that industry, the entertainment industry.
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I wanted to look cool.
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And then, you know, I start to read these money books and my mindset starts to shift.
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And now all of a sudden it s like I went from one polar extreme to the other polar extreme.
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I don t want to spend a penny.
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On anything?
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On anything.
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Unless it s making me money.
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Exactly.
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I don t want to spend anything unless it s making money.
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So now I m saving as much money as I can.
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I m investing my money as much as I can.
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I m trying to build my business.
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And I mean, I m talking like I m running my shoes into the ground.
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They have holes in them.
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I put a piece of tape, wrap it up.
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I m going to school.
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I got rental properties, but I got my shoes that are taped up.
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Right.
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And it s like,
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I realized that I m not going to make the same mistakes again.
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And you have to break out of that mindset.
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The first time I made 100 grand a year, I was in school.
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And I was living in an apartment paying $400 a month, including my water, my electricity, my cable, my gas, my internet, everything.
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And the reason was because I didn t have a room.
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I slept on the living room floor.
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I had a little mattress.
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I used to pull that into the living room, put that down, go to sleep at night, wake up, fold up the sheets, put them away, drag the mattress back into the hallway because I m like, you know, I realized that the power of compounding your money, I realized the power of putting your money into the right assets and I m like, this is my time to build.
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I ve been blowing this money that I m earning on things that are making everybody else rich.
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I ll spend money on that stuff a little bit later.
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Right now, I wanna make myself rich.
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And so you have to just first understand what it is that s worth spending money on and what s not.
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And then if you do have that debt, you ve got to come up with a strategy to pay it down as fast as possible.
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First thing you can do, if you have a lot of credit card debt, call up the companies.
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See if they re going to be willing to just give you a lower amount.
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See if they re willing to work with you.
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Say, look, I got $10,000 worth of debt.
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I m never going to pay this off.
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It s not going to happen.
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How about you work with me and give me $5,000 and I will work to pay that off.
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You start to work with them, see if you can do something.
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Then you can consider moving some of that money to a 0% APR card if you have 12 to 18 months to do that.
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That way now you can aggressively, you got to do the smart because if you re just going to keep doing the same things you were before,
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Don t do it.
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But you have to start aggressively paying it down.
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You stop spending money.
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That way now you can pay down this debt as fast as possible and then you work to earn more money.
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And the money has to go somewhere as you re earning more money.
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You live the same lifestyle, if not smaller, and you take all this extra money and you use it to pay down your debt.
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That way now you can start building, right?
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You got to lay that foundation.
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You got to start working to grow upwards.
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But you have to get aggressive.
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Is there ever a time where people should go into debt, the right type of debt?
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The credit card debt, student loan debt, buying a car and going in debt on that, those things I m understanding is not helping your financial future.
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When isn t the right time or is there a right time in your mind to take money out and spend interest on that money?
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Depends, right?
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If it s something that s gonna make you income and you can manage the debt, then yes.
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But it s not for everybody.
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Some people don t have it in them to manage the debt.
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Some people don t have it in them to manage investments.
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Some people don t have it in them to run a business.
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If you re not the entrepreneurial investor type and you don t like looking at numbers, you don t like managing money, you don t like trying to grow this, stay away from it.
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Now, you go up, maybe you can get debt to buy a home, but that s it.
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But if you are more the entrepreneurial type, you have it in you that you want to grow.
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Now, if you re using debt, you should only be using debt to buy something that s paying you with income, something that s going to make you more money.
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Do you have any debt out right now?
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Right now, I do not.
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I have people paying me loans.
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But I personally don t have any debt right now.
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And I kind of went through this phase where I have all this real estate, but I have no debt on it.
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And the reason is, is because I m waiting for the right opportunity.
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I will, I will have more debt.
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Really?
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Yeah.
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I m just waiting for the right opportunity because right now all my real estate is paid off.
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You ve paid off all the real estate.
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How many properties do you have?
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Units in the dozens, a number of units.
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But now I m just waiting for the right opportunity.
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And it s all paid off.
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All paid off.
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So now there s just cash coming in.
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There s cash coming in.
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And you know, you still have that $6,000.
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I still got that one.
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That s rented for $850 a month.
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That $8,000 place.
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$8,000 place.
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That s just bringing in 800 bucks a month.
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$850 a month.
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Clear and free, just.
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Yeah, you got to pay your expenses, your property taxes, your insurance, your maintenance, your management fees.
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But right now I have no debt on it.
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And so now what I m waiting for is.
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And how much could you sell that for now?
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probably 100,000, 120,000.
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I mean, I don t know the exact, but something in that range.
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It s not bad.
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Yeah, I mean, it s crazy because I never, when I buy real estate, I never look at what can I sell this property for?
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I m looking for one thing, cash flow.
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Cash flow, yeah.
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And so this is a big mistake that leads people into a lot of problems in real estate because when you start buying real estate, hoping that you ll be able to sell it for a higher price in the future and things don t go as planned,
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Then what?
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Now you re screwed.
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So for me, I look at one thing, cash flow, and will I be able to see more growth in this area?
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So I look where businesses are moving.
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Where is money moving to?
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And then that s where I want to invest because I know if property prices go up, it s icing.
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Property prices go down, it s okay.
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I still got my rent, which is covering my costs.
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So what s your goal, right?
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With the dozens of units for the opportunity for something bigger or what s the plan?
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Yeah, it can be anything.
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Something bigger in real estate and I m looking for the right opportunity.
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But again, my focus now isn t in real estate like it was before.
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A few years ago, I was heavy in real estate and I was doing everything that I can there and a lot more opportunities were there.
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I bought a property in 2021, haven t bought anything in 2022 yet.
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But my focus now is building my business because I see a bigger opportunity there for me.
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than real estate.
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That s why I ve been kind of, I m still involved in real estate, but not the way that I was a few years ago.
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Because you can earn more with your business if you put the attention and the energy and the money into building the team and the resources and the technology and those things.
1
SPEAKER_01
And it s more fun because it s a lot more active for me.
1
SPEAKER_01
And then, you know, once this gets bigger, then I ll go back to real estate.
1
SPEAKER_01
But right now, like for the last few years, I ve been kind of phasing slowly away from real estate as I can transition more into the business because, you know, it s just more fun for me.
1
SPEAKER_00
Okay, so understanding debt was the fourth thing.
1
SPEAKER_00
What was the fifth thing you wish people learned from 10 to 20 years old about money?
1
SPEAKER_01
You have to be willing to make mistakes, take risks, and start.
1
SPEAKER_01
And this one is hard, and it sounds simple, but a lot of people that I know, a lot of people, they are so hesitant to making their first investment because what if I do something wrong?
1
SPEAKER_01
What if I make a mistake?
1
SPEAKER_01
What if my investment goes down?
1
SPEAKER_00
And so the simple thing... That s happened to me multiple times.
1
SPEAKER_01
Yeah, but you learn every time, right?
1
SPEAKER_01
It s your tuition.
1
SPEAKER_01
It s your real tuition.
1
SPEAKER_01
And you have to be willing to try things because if you don t, you re going to get stuck in the game of what if.
1
SPEAKER_01
What if I lose money?
1
SPEAKER_01
What if it doesn t work out?
1
SPEAKER_01
Or what if it goes up?
1
SPEAKER_01
What if you learn?
1
SPEAKER_01
I have made a lot of mistakes.
1
SPEAKER_01
I made a video on my YouTube channel where I went through my worst real estate deal ever.
1
SPEAKER_01
It was my third property that I ever bought.
1
SPEAKER_01
It was a home in the city of Detroit.
1
SPEAKER_01
And I made every mistake possible.
1
SPEAKER_01
Now, I m still in college, right?
1
SPEAKER_01
I don t know what s going on exactly with real estate investing.
1
SPEAKER_01
And I mean, I bought the property, and I bought it because my contractor at the time told me that we can make a lot of money on this deal.
1
SPEAKER_01
We ll be able to rent it out.
1
SPEAKER_01
We could flip it if I wanted.
2
SPEAKER_01
to and he was like don t even worry about getting a home inspection now when i buy a property now the first thing i do is i get a property inspection where somebody walks through the deal make sure a third party an independent person and they tell me anything wrong with the property in the foundation in the plumbing in really anything with the property so i know what i m getting myself into and so
2
SPEAKER_01
He told me don t do that.
2
SPEAKER_01
He said, don t worry, I already walked through.
2
SPEAKER_01
He s a contractor, so I figured he knows what he s talking about.
2
SPEAKER_01
All you have to do is spend $5,500 and I will make sure this property is ready to go.
2
SPEAKER_01
So I said, okay, let s do it.
2
SPEAKER_01
So I bought the home, I gave him a check for half, maybe 2,500 or something around there, 3,000.
2
SPEAKER_01
And a week goes by, nothing starts.
2
SPEAKER_01
Two weeks go by, nothing starts.
2
SPEAKER_01
And I called him and said, hey man, what s going on?
2
SPEAKER_01
I thought we were going to have this done in two weeks.
2
SPEAKER_01
Here we are two weeks later and you haven t even brought your materials here.
2
SPEAKER_01
So I got caught up with something, something s going wrong.
2
SPEAKER_01
And so now two more weeks go by, he brought some materials there, he started painting one wall and that was it.
2
SPEAKER_01
And so I m getting upset because now it s like every day that this property is not leased out, it s costing money.
2
SPEAKER_01
And still nothing s getting done.
2
SPEAKER_01
Another two weeks go by and now I m like, okay, look, what s going on?
2
SPEAKER_01
We got to get this taken care of because now we re six weeks into this deal.
2
SPEAKER_01
You haven t done a single thing.
2
SPEAKER_01
You keep putting me off.
2
SPEAKER_01
You took my money and nothing s happened.
2
SPEAKER_01
and so long story short on that he ran away he was having financial difficulties that s why he wanted me to close on this deal because he needed some cash and now he s gone so now i have another property that uh somebody was working on a manager and he was having some issues at my property he was causing some problems so i figured he s causing problems there how about you come work at this property
2
SPEAKER_01
and you need a home you can live in this home for free fix it up just fix it up yeah and so he he said okay so now i thought all right you know i i found a good deal here i got somebody who ll fix it up he ll live there take care of it and it s going to cost me less money and so now he s living in this property
2
SPEAKER_01
And he s like, how about this?
2
SPEAKER_01
How about you just open up a charge account at Home Depot and I ll just go buy stuff and take care of it at the home.
2
SPEAKER_01
I said, okay.
2
SPEAKER_01
So I go open up this charge account.
2
SPEAKER_01
He starts buying materials not to work in my home, but to work on other people s properties.
2
SPEAKER_02
Oh my gosh.
2
SPEAKER_01
So now I m like, dude, like you re spending my money to go work on other people s property so you can make double profits over there.
2
SPEAKER_01
You haven t started any work on my home.
2
SPEAKER_01
You re not paying me rent.
2
SPEAKER_01
You have a dog that you re not taking care of who s pooping everywhere in the property and it s not being taken care of.
2
SPEAKER_01
And so now how do I get somebody out of this home?
2
SPEAKER_01
I got evicted out of my own property.
2
SPEAKER_01
There s no lease in place.
2
SPEAKER_01
So now it s regarding to all these legal issues of how do we get this person out of the home?
2
SPEAKER_01
we get him out of the home it took me months to get him out the property now is destroyed oh man there s crap little crap all over the home he damaged the place did not take care of it and now it s like we have to start all over from negative to start fixing this property up so now we start fixing i got a licensed and insured contract they were months into the deal
2
SPEAKER_01
And he wants, I don t know, like a lot more money, at least 10 grand, if not more, to start doing the renovations.
2
SPEAKER_01
And we start digging deep and we start to see problem after problem after problem.
2
SPEAKER_01
So now, you know, every cost keeps adding up.
2
SPEAKER_01
Now the home is ready to go.
2
SPEAKER_01
And I m like, all right, fine.
2
SPEAKER_01
And everybody told me, Jaspreet, don t license this home with the city of Detroit as a rental, because nobody does it.
2
SPEAKER_01
And this is, you know, again, after the 2008 crash, Detroit went through this bankruptcy.
2
SPEAKER_01
They were having their own issues.
2
SPEAKER_01
But I don t like to play games.
2
SPEAKER_01
I want to play by the rules.
2
SPEAKER_01
So I said, I m going to get a license for rental.
2
SPEAKER_01
When you get a license for rental, they re gonna send their own property inspectors out to the property and they re gonna inspect it and make sure that it s okay.
2
SPEAKER_01
So now the property inspectors come out and they say, I need to lift up the home.
2
SPEAKER_01
So what do you mean lift up the home?
2
SPEAKER_01
They re like, yeah, we need to raise the home.
2
SPEAKER_01
I don t even know that you could do that.
2
SPEAKER_01
Apparently you can and it s very expensive.
2
SPEAKER_01
So I lift up the home and then we start running the water in the property and it turns out that the water is not draining to the main city line.
2
SPEAKER_01
Apparently somebody previously living in this property had poured cement down the main drain.
2
SPEAKER_01
Now in order to get this property working, we have to bust out the cement in the basement
2
SPEAKER_01
take out this pipe, put in a new pipe, re-pour the cement, and then these property inspectors start disagreeing with one another.
2
SPEAKER_01
One person says that you need a 10-foot electrical riser, so we make it 10 feet.
2
SPEAKER_01
The next one comes, says, why is it 10 feet?
2
SPEAKER_01
It needs to be 13 feet.
2
SPEAKER_01
I m like, your first person said 10, and now they start fighting with each other, and we have to keep paying for these inspectors to come back.
2
SPEAKER_01
They keep charging me permit fees for everything.
2
SPEAKER_01
If I want to paint the windowsills, it s $100 permit fee.
2
SPEAKER_01
Change the smoke detectors, $75 permit fee.
2
SPEAKER_01
So this goes on and on and on and on for months.
2
SPEAKER_01
Finally now we re approved for rental.
2
SPEAKER_01
I was like, Oh my God, like this is the biggest headache of my life.
2
SPEAKER_01
We get a tenant in the property, we get licensed, a tenant s in the property, and now we have the license, and the property inspector just decides to go back to the property.
2
SPEAKER_01
They don t tell us.
2
SPEAKER_01
They just go back there.
2
SPEAKER_01
Even though we re fully licensed, they had no reason to go there.
2
SPEAKER_01
They knock on the door, and apparently, we didn t know this, the tenant was having a babysitting operation in a property.
2
SPEAKER_01
So now, the inspector sees this, that this tenant is running an illegal babysitting operation.
2
SPEAKER_01
He tells us, he fines us, tells us we need to evict the tenant,
2
SPEAKER_01
And now we have to start this process all over again.
2
SPEAKER_01
So after that point, I was like, you know what?
2
SPEAKER_01
Just sell this property.
2
SPEAKER_01
Wow.
2
SPEAKER_01
Because this is the biggest headache.
2
SPEAKER_01
And I was the only deal I ever lost money on.
2
SPEAKER_01
But I learned a lot.
2
SPEAKER_01
It was my tuition.
2
SPEAKER_01
So you have to be willing to learn, be willing to make mistakes, and then be willing to grow from those mistakes.
2
SPEAKER_01
Go on and, you know, keep willing to go.
2
SPEAKER_02
What have you found are the top places that people should be investing?
2
SPEAKER_00
First,
2
SPEAKER_00
calculate how many days, weeks, months, or years you can live on your saving.
2
SPEAKER_00
Because when you do that, you ll start to, you ll gain security, you ll gain that, okay?
2
SPEAKER_00
So look at how much you re spending, okay?
2
SPEAKER_00
And then say, how much do I need?
2
SPEAKER_00
And whatever that number is, you re gonna need more than that.
2
SPEAKER_00
because it may go down rather than go up.
2
SPEAKER_00
So, okay, now do I have a year spending?
2
SPEAKER_00
Okay, so I think you start there.
2
SPEAKER_00
Then you start to think, what are the things that are most important for me?
2
SPEAKER_00
like and then you start with your business or your residents that have a symbiotic relationship and that you know well.
2
SPEAKER_00
Let s say if you d start with your business
2
SPEAKER_00
Okay.
2
SPEAKER_00
You re closer to that investing in yourself with whatever that may end up being, that may be your best investment.
2
SPEAKER_02
Not, not real estate, not stocks, not the market.
2
SPEAKER_00
Well, it depends if you re, if you re not, you know, if you re doing something where you can do it yourself and that s the thing, but if you re in a job and that that s not the thing, right.
2
SPEAKER_00
Cause you, cause you re in a different position.
2
SPEAKER_00
Okay.
2
SPEAKER_00
But anyway, if you,
2
SPEAKER_00
And then I really think there s something good about your home, a basic thing about your home, because it s nice forced savings.
2
SPEAKER_00
And it also means that you fix it up, you re saving, you find out there s, oh, well, if I add this thing or that thing, and you re enjoying it.
2
SPEAKER_00
So when you re enjoying it, and you re controlling it, and it s yours, and so on, that s pretty good.
2
SPEAKER_00
mortgage tax deductions and so on, there might be some benefits to it also.
2
SPEAKER_00
But that s not a black and white answer.
2
SPEAKER_00
So you could take a sharp pencil and say, is it better to rent or buy?
2
SPEAKER_00
Okay, that s a different question.
2
SPEAKER_00
Maybe I said, but by and large, am I gonna move?
2
SPEAKER_00
All of those other questions.
2
SPEAKER_00
So when you start with, okay, what is it that s close to home and how much?
2
SPEAKER_00
You need a certain amount that s liquid.
2
SPEAKER_00
In other words, you got it in your house, you got to make a mortgage payment or something and all of a sudden you re, you know, it s not liquid and you lose your job.
2
SPEAKER_00
Well, that can cause you trouble.
2
SPEAKER_00
So how much do I have that s liquid?
2
SPEAKER_00
How much do I have that s not liquid?
2
SPEAKER_00
Okay.
2
SPEAKER_00
And you start to get those things, right?
2
SPEAKER_00
Okay.
2
SPEAKER_00
Ah, I ve got enough liquid.
2
SPEAKER_00
I got enough.
2
SPEAKER_00
Okay.
2
SPEAKER_00
Not liquid in those other things.
2
SPEAKER_00
Okay.
2
SPEAKER_00
Pretty soon you re, you re getting yourself in good shape.
2
SPEAKER_02
Yeah.
2
SPEAKER_00
You do those things, you know, you re pretty much in good shape.
2
SPEAKER_00
And then you re also having some experiences and then you go beyond that, you know, and then so you start to, okay, what, you know, okay, what s a stock, what s a bond.
2
SPEAKER_00
And then, you know, you learn through experiences.
2
SPEAKER_00
I learned through my, my experiences.
2
SPEAKER_00
I started when I was a kid, 12, I used to caddy.
3
SPEAKER_00
And I took my caddying money and I put it in the stock market.
3
SPEAKER_00
And I was lucky.
3
SPEAKER_00
What happened to me, by the way, is I took my caddying money and I bought the only company that I ever heard of that was selling for less than $5 a share.
3
SPEAKER_00
And I thought that that, you know, well, I was really dumb.
3
SPEAKER_00
I thought I ll buy more shares.
3
SPEAKER_00
So if it goes up, I ll make more money.
3
SPEAKER_00
Uh, and it was the only company and it was a company that was about to go broke, but somebody, some other company acquired it and it tripled.
3
SPEAKER_00
And I thought, ah, there s an easy game and I like it easy money.
3
SPEAKER_00
So, but you know, you experiment and you learn.
3
SPEAKER_01
You re a very philanthropic individual, you and your wife, uh, your foundation, your company, you give back in a lot of ways.
3
SPEAKER_01
Some might be through donations, like computers.
3
SPEAKER_01
Some might be through financial.
3
SPEAKER_01
Some might be through just your work and your content on LinkedIn, which is amazing.
3
SPEAKER_01
I recommend everyone subscribe to our LinkedIn, the content there is amazing.
3
SPEAKER_01
You re giving back in lots of ways.
3
SPEAKER_01
I m curious, what s the greatest gift a rich person or someone with money can give someone who doesn t have money?
3
SPEAKER_00
To give the knowledge, teach a man how to fish is better than to give him a fish.
3
SPEAKER_00
I mean, I think you can give them both.
3
SPEAKER_00
You can give education and you can show, but ability, the capacity to be productive, because, you know, if I can give you the capacity to go out in the world, it s like going to a jungle.
3
SPEAKER_00
I give you a knife and can you live in the jungle?
3
SPEAKER_00
Okay.
3
SPEAKER_00
If I give you that capacity, that s the best thing I can give you.
3
SPEAKER_00
That s why I wrote the book.
3
SPEAKER_00
and pass it on.
3
SPEAKER_00
I wrote those principles over years and I wrote them down and that s what I wanna pass along.
3
SPEAKER_00
That s the most important thing.
3
SPEAKER_00
But if you ve got money, you can help people a lot in a lot of different ways, which is thrilling.
3
SPEAKER_01
What would you say then are the three greatest skills that people that aren t financially abundant or that are struggling financially should learn to master in order to be in a better position financially?
3
SPEAKER_01
three skills, what would you say they should learn?
3
SPEAKER_00
Well, as I said before, I remember watching the movie when I was young, David Copperfield with W.C.
3
SPEAKER_00
Fields, and he speaks to David Copperfield, and he says, he said something like, and I ll put it in dollar terms, you earn $100, and you spend $105,
3
SPEAKER_00
That s misery.
3
SPEAKER_00
If you earn $100 and you spend $95, you ll have a good life.
3
SPEAKER_00
I mean, it wasn t exactly like that, but basically, I know so many people who don t earn much.
3
SPEAKER_00
but are there.
3
SPEAKER_00
Because if you start to think about what it is that it costs you to live in terms of, let s say, the basics, you know, give me a bed to sleep in, give me the food, let me be educated and so on and so forth.
3
SPEAKER_00
I think most people can get themselves in a position where, you know, they re net positive.
3
SPEAKER_00
So if you can be net positive,
3
SPEAKER_00
And you could do that, that, you know, that s number one, you know, as I carry that.
3
SPEAKER_00
So that s, you know, that s number one.
3
SPEAKER_00
Then I guess it was the list that we went to, you know, the second is, you know, what do you do next in terms of what do you need, what do you invest in, you know, and then, and then, you know, going beyond it.
3
SPEAKER_00
And then there avoid the following mistake, the most common mistake of investing.
3
SPEAKER_00
thinking that the investment that did good is a good investment.
3
SPEAKER_00
People rather more expensive.
3
SPEAKER_00
The things that quite often, those markets that did really, really well became more expensive and everybody, smart money is all the time comparing them and competing.
3
SPEAKER_00
So what happens is the naive money buys the thing that was hot or is hot.
3
SPEAKER_00
The thing that has been terrible, which might be the thing that s beaten down.
3
SPEAKER_00
So I would say also an important element.
3
SPEAKER_00
Okay, so here s another one that s really important.
3
SPEAKER_00
Diversify.
3
SPEAKER_00
So don t put all your eggs in one basket.
3
SPEAKER_00
Right, because what I learned about this
3
SPEAKER_00
is that, first of all, all investments
3
SPEAKER_00
And it s not easy to tell whether one investment is better than the other, because if people could do that, life would be easy and everybody would make a ton of money.
3
SPEAKER_00
And this is a competitive game that s very difficult to compete in.
3
SPEAKER_00
So it s very difficult to say which one s better or worse.
3
SPEAKER_00
You could take experts and do all sorts of tests, and you ll find out that they can pick that and you can t tell whether the worst ones are gonna be better.
3
SPEAKER_00
So because of that,
3
SPEAKER_00
you understand that even picking the best ones is difficult.
3
SPEAKER_00
And particularly if you re naive, like we spend hundreds of millions of dollars each year on research to try to give us an edge.
3
SPEAKER_00
Now you ve got to compete with us.
3
SPEAKER_00
So competing in the markets is more difficult than competing in the Olympics.
3
SPEAKER_00
You wouldn t think I m going to compete in the Olympics, but there are more people who try harder
3
SPEAKER_00
in order to do that.
3
SPEAKER_00
So it s a zero-sum game.
3
SPEAKER_00
But diversification, that they re different, will reduce your risk without reducing your return.
3
SPEAKER_00
So if you know how to diversify well, that s critical.
3
SPEAKER_00
So I would say, again,
3
SPEAKER_00
Get your savings right, and the reasons I say, I would say, have great humility about what you don t know.
3
SPEAKER_00
Don t buy the thing that was hot, just because you think it s hot.
3
SPEAKER_04
Why is it such a taboo topic in general?
3
SPEAKER_04
Yes.
3
SPEAKER_04
I think for all classes, all individuals.
3
SPEAKER_05
I totally agree.
3
SPEAKER_05
It s like you have, it s so funny because, and I wrote about this in my book, like for women, we have shame if we don t have enough money, but we also have shame if we have quote unquote too much.
3
SPEAKER_05
Really?
3
SPEAKER_05
Yes.
3
SPEAKER_04
Why?
3
SPEAKER_05
Because it s like, you know, oh, I have more than them and let me hide it because people are going to think I m showing off or they have imposter syndrome, right?
3
SPEAKER_05
Am I worthy of having this much money?
3
SPEAKER_05
I ve experienced that myself at different times, right?
3
SPEAKER_05
Like you ve worked hard for it, but you think that you don t deserve it for some reason.
3
SPEAKER_05
And I think that we just have.
3
SPEAKER_05
I think society was sort of designed so that we wouldn t talk about money.
3
SPEAKER_05
Why?
3
SPEAKER_05
Because I think it s designed so that we have a few people at the top and a lot of people at the bottom.
3
SPEAKER_05
And so now, you know, then, of course, the middle class emerged.
3
SPEAKER_05
And we ve gone through different things as a middle class, as a collective.
3
SPEAKER_05
Right.
3
SPEAKER_05
But I think it s I think that s part of the reason why it s like, don t tell, you know, employers saying, don t tell your coworkers how much you re making, because I m paying you more than I m paying this one.
3
SPEAKER_05
And I don t want
3
SPEAKER_05
Y all to know right so it s like it comes from those places, but it s reinforced everywhere, you know, right?
3
SPEAKER_05
Everyone s reinforcing exactly and I think just corporations or yes, and because there s so much mystery It s like I don t I don t know how much you make right you you don t know maybe you know how much I make because I talk about all the time, but
3
SPEAKER_05
But you know what I mean?
3
SPEAKER_05
So we don t know.
3
SPEAKER_05
And we re scared to make assumptions.
3
SPEAKER_05
And we re sort of guessing.
3
SPEAKER_05
And we re like, well, if I put mine out there, I might be embarrassed because I discovered that I m actually either making too much related to my peers or too little.
3
SPEAKER_05
And I think it goes back to belonging.
3
SPEAKER_05
We just want to belong to a community, to a group.
3
SPEAKER_05
You know what I mean?
3
SPEAKER_00
Sure.
3
SPEAKER_05
Because of that, it s like we don t want to do anything that s going to make us not belong.
3
SPEAKER_05
It s such an inherent human need to belong.
3
SPEAKER_05
And so I think that we don t talk about money because we think it s going to affect our ability to belong, whether it means we re too broke or we have too much, you know, or somewhere in the middle.
3
SPEAKER_03
So what conversations should we be having around money?
3
SPEAKER_03
How consistently should we be having them and with who?
3
SPEAKER_05
Yes.
3
SPEAKER_05
Okay.
3
SPEAKER_05
So in terms of the conversations I m having, I m telling people like, if I get a speaking gig, here s how much they paid me.
3
SPEAKER_05
Right.
3
SPEAKER_05
And I asked them more and they gave it to me.
3
SPEAKER_05
So make sure you do that too.
3
SPEAKER_05
Right.
3
SPEAKER_05
Or, I negotiated for higher pay, or I negotiated for profit sharing, or I asked for more vacation days, right?
3
SPEAKER_05
Like, we need to share our money-earning strategies with each other, especially with, you know, women and people of color, right?
3
SPEAKER_05
Like, putting more money, like, that s what allyship is, in my opinion, is putting money in the pockets of the groups who need them, right?
3
SPEAKER_05
And who you know, we have this huge wealth chasm in this country.
3
SPEAKER_05
So like how can we start to change that?
3
SPEAKER_05
And so that s why I share how much I got paid for a book deal like all these things you re not supposed to share I m like, I m gonna tell you
4
SPEAKER_01
This is how much I got, this is how I got it, you know?
4
SPEAKER_01
And I think it s important.
4
SPEAKER_01
So I think sharing money-making strategies is very important.
4
SPEAKER_01
I also think one of the things that has been so valuable to me with some of my peers, especially I will say my white guy peers in particular, have showed me, like they have taught me things about like,
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you know, investing strategies, or, you know, like, oh, here s a strategy that I m doing with my money, or I m investing in real estate, or I m doing these different things.
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Like, what are people doing with money once you have some, right?
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Like, once you have a little bit more than you need to live off of, what do you do with the excess?
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And sharing those things, right?
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Sharing that information, because it s usually hidden.
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And it s like, there s a small group of people that know, and you don t know until you have peers who have done it, and then you find out, right?
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in those quiet conversations that aren t on Facebook, right?
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Should people be talking with their friends, their family members, their spouses about money?
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Yes.
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What if someone s really uncomfortable and says, you know what?
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I don t want to talk about the money I make and what we should be doing.
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SPEAKER_00
What what conversation can you have?
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Yeah, I ll break the wall down Well, I think you could say here s why I want to talk about money And here s why like we have to be I think if we re willing to be transparent people will be transparent with us That s what I found in the conversations that I ve had and that s how I ve learned a lot about money is by having conversations You know like the friend that I was spending time with last night.
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She s an investor and a financial advisor and so I was asking her like
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Okay, well, what are you investing in and how are you thinking about it?
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And what is an investment thesis?
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Like, I don t even know what that means, right?
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Like, you know, we were having conversations and she was teaching me all of this stuff, because I was willing to tell her like, okay, here s how much money I want to invest, but I don t know where to
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of where best to put it, you know, that kind of thing.
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So I think you just got to be willing to put yourself out there first.
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And I find that people want to talk about it.
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So when I bring it up and I start sharing, they immediately start sharing because it s like they were like waiting for an opportunity to talk about this is what I find.
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So I think we just got to start doing it and create more transparency around it.
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And then, yeah, it creates opportunity for all.
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And that s the other piece of it, is like, I recognize that, you know, even someone who would be considered a direct competitor, maybe they sell the same thing I sell, I don t believe in competition in that way.
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There s more than enough money to go around.
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I think there s more than enough opportunity to go around.
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And I choose to be friendly with and support my competitors, quote unquote, and vice versa.
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And that just means that we all get better at what we re doing.
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We all can serve our clients better, right?
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We all can make more money.
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There are times where I m too trusting, and someone, you know, I don t know, I guess you could, for lack of a better phrase, steals from me, right?
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Or takes an opportunity, or says one thing but does another behind my back, whatever.
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And that s gonna happen too, but I m like...
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But I don t want to be a person who s closed.
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So I m just going to I just got to be me and it is what it is, right?
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Like there s going to be some occupational hazards when you re being transparent.
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Absolutely.
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And you just got to navigate that as best you can.
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But I just choose to be who I want to be in the world instead of who I feel like I need to protect myself.
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You know, what was harder for you making your first hundred thousand dollars in a year or making your first million dollars in a year?
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$100,000 for sure.
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Why is making $100,000 harder than making a million in a year?
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Because it s like I think we re just figuring it out.
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I also think we re charging too little for our work at that point.
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Is this when you re working as a career or when you had your own business or freelancing?
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I never made a hundred grand prior to starting my business.
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You know, I went from a college to like, I had a job in between college and law school and then I went to law school and then I started my own practice.
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So you didn t work at a law firm after law school.
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So you started pretty much right away being an entrepreneur, which is really hard to do.
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Yes, my last salary before I became an entrepreneur was $41,000 a year and like really good health insurance.
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And I was thrilled.
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That was in between law school or in between school and law school.
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SPEAKER_00
Yes.
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No, in between.
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This was after law school because this was my clerkship.
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Okay, gotcha.
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SPEAKER_01
Yeah, so, you know, you kind of sign on for a year, your paycheck is not that big, but like, and you re a lawyer, right?
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You re wearing the ropes, you re getting reps, you re... Exactly.
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And that s kind of why I decided to start my business at that time, because I m like, I already don t have a lot, right?
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Like, I already know how to live off of this amount of money.
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Yeah, so I m like, if I can live off of this now, let me keep my expenses this way or lower them even more, like I sold my car and we owned a house and we rented it out, moved into a smaller place.
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SPEAKER_00
How many kids do you have at this time?
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I had none yet.
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Oh, actually, that s not true.
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I had my stepdaughter, but she didn t live with us full time.
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And so that s what I did at that stage is like I cut down my expenses as much as I could so that I could build this business.
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SPEAKER_00
How old were you then?
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I was 27, 2009.
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Yeah, 2009 to 2010.
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This was that year.
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And then I clerked for the judge and I started my practice.
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And I was like, you know, I made like, there were months where I made 500 bucks and months that I made $2,000.
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And that s why like linking together, you know, I was doing, my friend bought a salon.
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She was a hair stylist.
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She wanted to buy her first salon.
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I did the transaction.
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She was purchasing an existing business.
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And I charged her 500 bucks for that.
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I don t think I ve actually ever told anybody that.
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SPEAKER_01
That s cheap.
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Because I was ashamed.
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I was ashamed that I didn t know what to charge for that and that I undervalued my services so much that I literally have never told anybody that I charged 500 bucks for that.
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And she s still a good friend of mine.
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SPEAKER_01
That s not her fault.
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No, it s not her fault.
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She made bank with that salon and she s since now sold it.
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SPEAKER_00
But you also got experience doing that, you know, doing that transaction, that deal, which you d probably never done at that level.
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Yes.
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Seems like.
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SPEAKER_00
So you gained confidence from that.
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Yes.
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So there was a win there for you as well.
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There was a win.
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And, but when I saw how many hours of labor were involved.
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SPEAKER_00
You put like weeks probably, right?
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Yes.
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I m negotiating with the other side, dealing with like a difficult lawyer.
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That $500 is a steal.
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I mean, for the whole thing.
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Can I hire you for that?
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I should have charged $5,000 minimum, you know?
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But it was like, but I learned from that.
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Oh, I add value.
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I can figure it out and I have a skill in that.
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I m trained in knowing how to figure it out.
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You know what I mean?
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And that was kind of like working on the job experience.
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Like you weren t fully probably experienced for that yet, it sounds like, but you learned, okay, I didn t need to do these 10 hours of calls that I did here.
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I could have done this in an email or whatever.
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I don t know how this works, but whatever it was, you learned your process to simplify it, to maximize it, so.
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Exactly, and back to that 100 grand question, I think that s why.
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It s like, we re figuring it out.
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Usually we don t know exactly what we sell in those early stages of the business, so we re selling everything.
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Whatever people come to us with, we re like, yeah, we could do that.
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We just create a custom offer for them.
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Whatever money we can bring in, we ll do it.
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We will take it.
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And so you re very busy.
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I call this stage Busy B because you re very busy at this stage, but nothing s refined, nothing s efficient.
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Everything is just sort of like your massive labor towards whatever you can make happen.
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And so that first hundred grand, I think you are hustling for that.
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But in order to get to a million, or at least to do it in a way that feels sustainable, you need systems, you need process, you need team, right?
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And so now you re starting to build a sustainable business.
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You re not just, you know, by brute force making money.
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And you need to clarify your offering and your audience and your niche and what your specialty is.
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SPEAKER_01
Exactly.
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I m not just a lawyer that can do anything you want me to do, but here s what I really specialize in.
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SPEAKER_01
Exactly.
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Here are my three packages at these different levels.
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Yes.
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And you go all in on marketing that.
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Yes, and there s money that you re saying no to.
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Absolutely.
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You learn that lesson that not all money is good money.
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Isn t that crazy?
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Yes.
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I say this a lot to people.
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I go, it s weird that I ll turn down massive checks all the time.
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Yep.
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But I m just like, that s not what I want to do and it doesn t serve my mission.
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Yes.
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If it s not serving the mission and I don t need the money, then I shouldn t do something just to bring in more money.
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For me.
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It s a distraction.
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At different stages of my life, a different season, now that I said yes to everything, you know, when I m broke, you say yes to all these things.
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Yes.
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But then when you re like, okay, I m here for a mission and to serve at the highest level of my skills and abilities that brings me the most joy and brings others the most joy and benefits the most number of people, then you start saying no to money, which is crazy.
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Yes.
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It sounds crazy, doesn t it?
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It s delightful.
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I love it.
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I feel like, to me, it lets me know that I m not, it s like I ve not made money my master, right?
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Like it s very important, but it is a tool.
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That s good.
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You know what I mean?
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And I m not beholden to it, and I won t trade anything for it.
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There is plenty of things that I will not do, and I don t care how much you pay me, you know?
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So I think that it s good to remember that.
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And so when you re turning down opportunities, it s just an example of like, okay, I m doing things right.
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I think you ve got to understand that just because you turned down money over here doesn t mean it s not going to keep coming to you.
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Just because you turned down something that s not right for you doesn t mean abundance of something that is right will keep coming to you.
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Keep coming to you.
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There s so much opportunity.
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There s always more where that came from.
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Absolutely.
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Absolutely.
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That s powerful.
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Okay.
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So the first hundred thousand, how long did it take you?
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How many years until you made a hundred thousand in one year?
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Can you remember?
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Um, so my first year in business and it was like, I started September 1st, 2010.
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And so from that year till like September, 2011, I made like 60 grand that first year.
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But I think the first full 12 month calendar year was like year two.
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So it wasn t, it didn t take too long.
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And then how long until you made seven figures in one year?
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Yeah, that took me seven years.
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After that, yeah.
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From starting business.
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From September 2010, I think it was, maybe it was six.
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It was like 2016, 2017.
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I think 2017 was my first seven figure year.
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And I had gotten close, but not, you know, like almost there, but not quite.
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Twice and you know what?
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It was interesting.
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What happened is like I had my business My revenue was doubling in the beginning It was like I made a hundred grand then I made two or 250 and then you know Then I made 500 then that s like I plateaued it s like okay 560 and right 620
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It started making me mad, like from 500 to 700,000.
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I think I was there for like three years.
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And there was all kinds of stuff going on in my life.
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One, there was a lawsuit that one of my business partners, so like this is one of the things where too trusting too quickly caused some issues.
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So that was a huge distraction for me at that time.
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I had had two babies back to back.
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Wow.
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So, you know, I was busy with them.
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And then there were just a lot of lessons I needed to learn.
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Like I had all these people working for me, but I didn t have good boundaries.
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And I didn t, I just kind of let them do whatever they wanted and didn t have, you know, like I was learning how to become a boss.
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I was learning how to become a leader and a manager.
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So much more challenging than just doing your skill.
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Like, let me just be good at the law thing.
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Which is what people wanted me for.
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Yes.
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Now they want my business for that and me, but I ve got to train the team and deliver.
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Right.
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Exactly.
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It s a different skill.
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It s totally different.
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And it s it can be challenging.
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And I think that s why a lot of times we re like, well, I m just going to go back to doing it myself.
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And it s like you can, but it s going to keep you small.
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SPEAKER_02
Yeah.
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You have to say yes to those challenges and learn that new skill.
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SPEAKER_02
Right.
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And I think leadership skills are so valuable for everybody.
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So.
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Yeah, I had to learn that and it took me a couple of years to figure out how to have stronger boundaries, figure out how to stop letting people waste my time, figure out how to charge for what my services are worth, right?
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All of those things, those were lessons that I was learning in that time.
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SPEAKER_01
Who was wasting your time?
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Like clients or employees?
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Everybody.
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Clients were wasting my time.
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Team were wasting my time.
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Even family members, right?
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SPEAKER_02
Like my desk was like right in the front door.
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So like it s like the door is here.
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SPEAKER_02
My desk is right here.
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My husband would like be coming in and out.
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He s a stay-at-home dad at the time taking care of the kids.
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And he just ran a tight ship with our household.
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It was amazing.
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Like, I had so much support in that way.
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But he would, like, every time he came through the door, wanted to talk to me, interrupt me.
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SPEAKER_00
Yeah, he d be like, I gotta focus.
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SPEAKER_02
Yes, exactly.
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SPEAKER_02
It was like, I didn t know how to create boundaries around my work time.
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I hope today s episode inspired you on your journey towards greatness.
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Make sure to check out the show notes in the description for a rundown of today s show with all the important links.
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SPEAKER_00
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And if no one has told you today, I want to remind you that you are loved, you are worthy, and you matter.
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And now it s time to go out there and do something great.