How to think like a bank

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Transcript

SPEAKER_00 0:00

Warren Buffett's number one rule of money is not to make more money. It's do not lose it. Being able to not lose money is a skill, and it's something that most people don't realize they're doing every single day. Wall Street, the banking system, all of the financial vehicles that you know of that most of America contributes to is designed to cause you to lose money over time, making more money for the major bankers and the politicians over time. In this video, I'm gonna teach you the few things that you can do with your money to guarantee that you will never lose money ever again. Most people think that the game is about making more money, but that's not true. The game is about keeping it. Most people are focused on how do I make more, how do I make more, and they constantly just grow their income little by little. And over the course of an entire lifetime, they only earn three to five million dollars. That's what the average person earns over an entire lifetime is three to five million dollars. And then they retire broke and they die broke, and that's our life. We work our butts off every single day so that we can have a couple million dollars and we retire and then bleed it for the rest of our life until we die and leave our family nothing. This is designed because of inflation, volatility, taxes, all of these situations with the market volatility. These are the problems that cause us to not have enough money in retirement. If you want to do some more research, go research sequence of returns risk, and you'll understand how being able to have money in the market and grow six or eight percent every single year, it does not actually do that every single year consistently. And so it shows that over time, no matter depending on when you retire, depending on when you live, depending on your life, and which is not designed by us, it's designed by your parents or God or whatever you believe in. We don't have a choice over that. And so whether you retire in 2007, right before 2008 crashes, or you retire in 2012, right before everything starts to go up, matters a lot. And so, really, most people are duped into believing that if you just keep doing what they always tell you to do, go to school, get good grades, go to college, get good grades, go beg somebody to hire you, get a job, then just ask for a raise every single year that over the course of time you'll be fine because you're gonna make a little more every single year. You'll go from making 70 to 80 to 90 to 100 to 150 and $200,000. And then by the time you retire, you'll be making a couple hundred thousand dollars a year for a couple of years. You'll have a couple million dollars in the bank and you'll be fine. And the reality is that as time goes on, the cost of living continues to rise because inflation is rising because they're printing more and more money. If you don't believe me, just go to usdetclock.org and you'll see how much they're printing money and how much this is causing a problem in America. This is why countries go broke. This is why people go broke, this is why families don't have any generational wealth. And this is exactly why you need to pay attention to this. The old belief is that if you have more money, you'll have more freedom. The reality is that's not accurate. The new belief is that if you have more money and you protect that money, you can leverage against that money. Because this is how old money is truly made. This is what the Rockefellers have done for generations after generations is build wealth and then leverage against it. Wealthy people do not use their money, they use OPM, which is other people's money, and then they leverage against that money to go create more money and buy assets that are cash flowing so that they can increase and appreciate their assets. This is what wealthy people do, and this is why you don't need to make more money. Of course, you do need to increase your income. But when you have more income, you have to stop leaking it in other places. You have to stop worrying, you have to stop paying so much in taxes. You gotta stop letting it get giving all your money to Wall Street and letting them do whatever the heck they want with it, and then paying fees and taxes and even more fees to the bankers and and the Wall Streeters that are taking your money. And then when the market drops, you lose 40% of your money. This is something that we've been duped into believing over the last 75 to 120 years. And this is what has caused our country to go like this over the course of the last 100 years, ever since the Federal Reserve was created in 1913. But wealthy people don't worry about getting rich. They fought, they focus on building wealth and they follow one basic rule, which is don't lose your money. Warren Buffett's number two rule of money is read number one again. Don't lose your money, don't lose your money, don't lose your money, and then leverage against it. Except the word leverage in the bank means debt, and we get taught that debt is bad. And so we have this world where we're taught to go get a job, ask for a raise so we've slowly increased our income, pay taxes as a W-2 employee, then buy stuff that Wall Street produces that has more taxes called capital gains tax any time that you make more money, and then pay income tax in your state because you live in a state that has high income tax, and then continue to pay taxes when you pass on money to your family all the time because you always have to cash everything out. And then you end up dying broke and your family gets nothing. Imagine if this world was created where everybody was passing on generational wealth. Everybody was leveraging against money. And we changed the concept of debt being bad and stop consumer debtism, where we take credit cards and student loans and doing stupid stuff with money and learn how to use debt to grow your assets. Learn how to leverage your money so that instead of using your own money, you put your money somewhere where it's able to be leveraged into a real asset and then be able to borrow against it and use other people's money to actually live your life. This is what every billionaire that I know does. Not millionaire, billionaire. Millionaires are going out of style. Being a billionaire is where it's at. And this is when everything starts to change in your life. This is when you actually start building real wealth. And you gotta switch the mindset from the millionaire next door, which is a famous book that dupes you into believing that if you just work a really good job for a really long period of time, you'll become a millionaire, which is true, but being a millionaire doesn't mean shit if you don't have any income. And being a millionaire doesn't matter if you don't have assets and you have liabilities. You have to be more than that. You have to have in your assets producing revenue. So owning a house worth a million dollars and having no debt also makes you a millionaire, but that's not doing anything for you. You need to have tens of millions of dollars of assets, giving you little drips of cash flow every single year so that you can live off of the passive income. Not passive income selling online and selling stuff uh th from your laptop in Bali is not passive income. Passive income is having real assets, that cash flow that pay you a little bit every single month so that you can live off of that and continue using the rest of your money to grow your assets even more and build more and more wealth for yourself and for your future generations to come. I'm gonna break down Warren Buffett's rule of money right now. Again, first rule, don't lose your money. Second rule, read number one again. This is really, really important for you to understand not to lose your money. And why does it actually work this way? And in simple terms, it's that when you lose money, you have to make up for it later. This is what sequence of returns risk is, but I'm gonna break it down very simply. Is that if you have a hundred dollars and the market goes down 50%, how much money do you have? You have 50 bucks. If the market goes back up 50%, how much money do you have? What'd you say? Most people are gonna say 100 bucks again, and that's not accurate. It's not accurate because when the market goes back up 50% now from 50 to add 1.5 multiply it times 1.5, you actually have $75. And so you're actually down 25% what you originally had. And this happens all the time in the stock market. Now, over the course of time, yes, the SP 500 goes up an average of 8% or 10% or whatever the heck they teach you about. The reality is you have to track what your real returns are over a given period of time. And if you go through any of the most recent periods of time and you don't start at 2012 when the market just started booming, you're gonna have major challenges when it comes to actually growing your money, and you're not actually gonna return eight to 10%, but you're actually gonna have more like a 3.5% return after fees because that's what's gonna happen. And you have to cash it out, so you're gonna pay taxes on it. Otherwise, it's just a number on an app. And so you have to realize that when you lose money, you have to make up for it later. You don't just magically come back, you have to go back to where you were. And just to go back to where you were means that you have to drop and then continue gaining more and more returns than you ever would have had to worry about in the first place. If you could slow and steady increase your money every single year, three, I know this sounds crazy because you're like three. I don't know why you start with a three. Yes, three. Three to seven percent above inflation. If you can do this every single year, you will become a multimillionaire and you'll be able to grow your assets and you'll have enough money where you never have to worry about it as long as you're keeping it over there. Now, if that's what you're doing, you're gambling. This is another mindset that we got into recently, is that we gamble our money away. And this isn't the way that you should do either. You shouldn't even think about downloading Robin Hood until you have set money that's cash flowing you, that you store over here, that you have a warehouse of wealth, that you have keeping your money in a safe, guaranteed vehicle that you can leverage against, and then go gamble in the stock market with that money, because that's other people's money. That way you keep every single dollar that you work so hard for. So the key here is never go backwards when you're earning on income. Don't go backwards. Stop investing in things that can cause you to go down and follow Warren Buffett's number one rule, which is never lose your money. Here are the three ways that most people end up losing their money. First is with inflation in the banks. Most people save their money over and over again and then never grow more money than inflation is. The average savings account is only 0.04%. That ain't gonna get you anywhere. Second is with taxes and poor planning. High income earners typically give away 40 to 50% of their income when you include federal and state taxes, and then they're gonna pay capital gains tax on top of that. And third is chasing high ROI without any liquidity or control. This is something that we've grown up in this world now where crypto and stocks and bonds and all of these situations, trading ETFs and all of this situation online has caused us to be chasing ROI all the time. Except chasing ROI is all about short-term gratification. You ever hear high risk, high return? Well, every time that you try to get a high return, it goes along with high risk. And if you can be slow and steady every single time, then you'll be successful. Remember that story of the tortoise and the hair? The hair ends up losing because he tried so hard to go so fast from the beginning. Whereas the tortoise won because he was slow and steady over time. And if you look at what Warren Buffett actually did over the course of his life, you'll see that he's not gambling on the stock market. He's buying large shares of companies that he believes in on the way up that are blue chip stocks that become multi, multi-billion dollar companies in multi-trillion dollar industries. And so when you're reading a news article or talking to your friend or seeing some hot new stock or hot new thing pop up, and you're like, I'm gonna go invest in that and take my chances, you might be able to make some money. If you invested in NVIDIA 10 years ago, it would have been a great idea. But you're also not gonna be able to predict that situation. And you have to make make do with what is due for you, which is being able to figure out whether that high risk, high return is good. For me, I'm a young dude, but I'm all about conservative. I'm all about taking all my risk in my business and then being conservative in my money. Because I work too damn hard and so do you, to be able to take all of your earned income and throw it in the trash. I take all of my earned income and I store it over here in guaranteed safe vehicles, and then I leverage against it to grow my business. And then when I grow my business, it's at the risk of other companies, it's at the risk of insurance carriers, it's the risk of the bank, it's not at the risk of me. I work so hard to put all that money away and I have so much volatility in my life and my business. I don't need more volatility with my money. But every single day I'm faced out into the war zone of running a business and have to go through the ups and the downs of the life. And to actually add on to that, the ups and downs of money in the stock market blows my mind that people do that. And so this is what you're gonna be able to do to keep your money every single day. First, keep your contracts, keep your capital rather in private contracts. Keep your money in safe assets. One of those for me, my favorite is it's not it's not a surprise, is infinite banking concept of whole life insurance. Not IULs, VULs, or any other type of universal life, but guaranteed whole life contracts that have tax-free growth, never-ending compound interest, and guarantees for the last 200 years, and they'll have it for the next 500 years, too, because this is the way that they work. And you're a part owner in that company. You can collateralize against it, you can leverage against it, borrowing that money, not spending that money. This is where banks keep their tier one assets for a reason. And there's people online that say banks don't keep their money in life insurance. Yes, they do. Look at the balance sheets of all of the major banks. They have tens of billions of dollars of life insurance and they borrow against it so that they can lend other people's money, which is our premium dollars, into their banks so that they can lend that out to the bank, to the depositors at the bank. Second is to build around cash flow, not hype. Prioritize steady income over speculative returns. Prioritize you getting cash flow, you getting money every single day, not about some new hot thing. Now, it is definitely true that you can make good money in that new hot thing. I'm just not a new hot thing kind of guy. I want to make sure that what I'm doing is gonna produce what it says it's gonna do, and that I know that what I'm gonna do is I'm gonna make money from that thing. I don't invest in things I don't study, I don't invest in things I don't understand, and I don't have shiny object syndrome that a lot of other people have. And third is I prioritize control over ROI. I care about having control over my money. Again, I don't have any control over my destiny in life. What I do have control over is what I do with it every single day. And so when I'm out there driving the business, driving the people, driving the team, driving myself every single day from three o'clock in the morning to 10 o'clock at night when it's the time I go to bed. I know that I'm gonna go out there every single day and fight. And I wanna be able to control that which I have. I don't want to have control from a forceful state in my life and business. I want to be able to control my money, which is so what I work so hard for. That's what I produce is this money, this thing that we have that we created, this energy that we call money. And I want to make sure that I take that money and I go multiply it. You cannot multiply your income if you don't earn it and then keep it and then multiply it. You have to earn it, keep it, multiply it. But so many people try to earn it and multiply it, and they end up earning it and losing it. And then you're violating this number one rule of money from Warren Buffett, who's one of the wealthiest people in the world. And so many people say, Well, Josh, Warren Buffett got rich when he was 50. But dude, he's way richer than anybody else. Hey, way wealthier than everybody else. Why would you not be patient to wait till you're 50? Would you rather be a millionaire in your 30s and 40s and be able to be a millionaire for the rest of your life and live the life of the yachts and the clubs and the boats and the cars and the girls, or be able to pay the price for 20 years and become a billionaire when you're 50 and become one of the wealthiest people to ever walk on the earth? That's for you to decide, but I know which side I'm decided on. And so as you continue growing in your life and your business, you want to find assets that you can actually really use. This is something that I implement in my life every single day. Every single dollar that I earn, I keep. And I keep that money in a whole life insurance policy with mutual, true mutual life insurance carriers. I can talk to you guys about that if you want, but that's a video for another day. And I have other videos about that. But this is just about having your money in a safe place and being able to borrow against it. So I leverage against every single dollar that I make, and that's what I use to grow, go grow my business and buy assets and buy other things so that I can create more income, so that I can put more income over here and keep more income and then borrow against it and multiply my income. And this is the cycle you want to earn, keep, and multiply. And so many people don't do it that way. And this is the biggest reason why so many people in our generation and for generations before us that they end up retiring and dying with nothing. And so if you want to stop losing money and start playing the game like the 1%, start doing what wealthy people. I'm talking about real wealth, billionaire money, following them, what they do with their money, then reach out to me directly and I would love to connect with you. You can download our billionaire blueprint that we have, which is an ebook breaking down exactly what wealthy people do with their money, exactly what the Rockefellers have done, and what Warren Buffett does every single day, which is do not lose your money. Thank you so much. This is really the difference between being rich for a season and building wealth for generations. We'll be back with more valuable content for you every single day.