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Lewis HowesThe 6-Step Formula To Become A MILLIONAIRE In 2023 (How To Build Wealth) | Jaspreet Singh
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CHAPTERS
- 0:00 – 1:56
The Wealth Formula: Income Minus Expenses
Lewis asks for a step-by-step approach to financial freedom within 15 years, and Jaspreet presents his wealth formula: income minus expenses equals investments plus savings. He explains that savings protect against emergencies while investments build wealth.
- •Wealth formula: income minus expenses equals investments plus savings
- •Savings are for emergencies; investments are what make you wealthy
- •Wealth grows by raising income, cutting expenses, or both
- •He frames the approach as six steps that apply at any age
- 1:56 – 5:50
Step 1: Build the Right Mindset
Jaspreet explains that mindset comes first, tying it to his Minority Mindset brand and the idea of not following the majority. He argues belief leads to learning through videos, books, classes, action and coaches.
- •Most people are broke, in debt, or unhappy, so copying them gives the same outcome
- •You cannot change your outcome without changing your mindset
- •Mindset versus toolset: most people lack mindset, not tools
- •Learning path: YouTube, business books, classes, action, coaches
- •Build self-esteem and confidence first
- 5:50 – 10:32
Step 2: Build Your Financial Base and Cut the Bleeding
Using a house-foundation analogy, Jaspreet says to save at least $2,000 and pay off high-interest debt quickly. He discusses credit cards as a tool that burns those without education.
- •Save at least $2,000 as fast as possible
- •Pay off credit card and other high-interest debt, which is skinning people alive
- •Credit cards are a tool; he uses his for perks and cash back
- •Average household credit card debt is $6,200 at 15 to 28% variable interest
- •$6,200 invested at 21 at 20% could become $20 million, which is what card companies earn
- 10:32 – 11:55
Debt Payoff Strategies: Snowball vs. Avalanche
Lewis asks how to attack multiple credit cards. Jaspreet contrasts Dave Ramsey's snowball method with the avalanche method and says to choose whichever you will stick with.
- •Snowball pays the smallest balance first for psychological wins
- •Avalanche pays the highest interest rate first and saves the most money
- •He prefers avalanche because of how his brain works
- •If you can't stay true to avalanche, do the snowball
- •The goal is to pay it off as fast as possible
- 11:55 – 17:04
Step 3: Lead Your Money and the 75-15-10 Plan
Jaspreet explains that you cannot save your way to wealth because of inflation, and that savings should serve three purposes. He introduces his 75-15-10 plan and the difference between passive and active investing.
- •Save only for an emergency, a big purchase, or an investment
- •Keep 3 to 12 months of expenses depending on risk tolerance
- •75-15-10: spend at most 75 cents, invest at least 15, save at least 10
- •Passive investing in low-cost ETFs and index funds, or active options like rentals and businesses
- •Buy the stock, not the bag
- 17:04 – 25:29
Step 4: Interest-Free Living, Buy Now Pay Later, and Mortgage vs. Investing
Jaspreet covers how buy now, pay later apps encourage overspending and hit people with fees. They discuss the post-pandemic swing in credit card debt, paying down a mortgage versus investing, and his rule of five.
- •Buy now, pay later lets people stack up purchases and penalizes missed payments
- •Credit card debt fell fastest in 2020, then grew fastest as inflation and reopening hit
- •Paying off a mortgage gives a guaranteed return; investing offers more but carries risk
- •The right choice depends on the life you want
- •Rule of five: if you can't buy five, you can't afford one; houses are the exception
- 25:29 – 33:42
Step 5: Multiplier Income Through Jobs, Side Hustles and Businesses
Jaspreet says raising income fuels the wealth formula as long as lifestyle doesn't rise to match it. He covers getting raises, freelancing, side hustles, and starting a business cheaply, with stories of his sock company and an expensive blog failure.
- •Increase income and investments, not lifestyle
- •Employees can seek raises, promotions, or bring value to the business
- •Side hustles like freelancing on Upwork are more accessible than ever
- •His sock company cost $3,500 versus the typical $100,000 plus
- •Too much money can be a disease; his blog spending of over $200,000 yielded nothing
- •The hustle mentality can't be learned from books
- 33:42 – 42:32
Step 6: Be Great by Protecting Yourself
Lewis shares an Oprah story about people with hands out, and Jaspreet talks about giving to family without expecting repayment. He then describes how insurance, an LLC, and a property manager protected him in a frivolous slip-and-fall lawsuit.
- •Once you have money, people will try to take some of it
- •Jaspreet gives money to family and friends without asking for it back
- •Slip-and-fall lawsuit: property management documentation, insurance, and an LLC shield
- •The LLC limits claims to what the LLC owns, not personal assets
- •Getting sued is a reality of real estate investing
- 42:32 – 48:11
Taxes, Estate Planning and Being Great for the World
Jaspreet recounts a surprise $100,000 tax bill from a bad accountant and how it led him to a better advisor. He then stresses estate planning and giving back to the world.
- •A bad accountant demanded $100,000 and a penalty by end of day
- •He fired the accountant and found a better tax advisor
- •Create a will, a trust and work with an estate planning attorney
- •The more you have, the more you can give through money, time, and education
- •Lacking money can affect every aspect of life, though more money doesn't fix everything
- 48:11 – 57:45
Where Jaspreet Invests and the Inflation Reduction Act's IRS Funding
Jaspreet lists the five places he invests and explains his passive-versus-active approach. He then discusses the Inflation Reduction Act, national debt, the plan for 87,000 more IRS workers, and audit history.
- •He invests in his business, real estate, stocks, crypto, and physical gold
- •Passive investments go in automatically regardless of market conditions
- •The IRS is set to hire 87,000 people over ten years, partly replacing retirees
- •In 2021, 50% of audits were of people earning under $75,000
- •He points to Venmo reporting and crypto scrutiny as signs of more tax tracking
- 57:45 – 1:02:48
His Tax Advisor Story and Starting a Tax Firm
Jaspreet retells the call demanding $100,000 and how he fired the cheap accountant for a top one. He explains the monthly advising he now gets and why he's working with that advisor on a tax firm for small businesses.
- •The old accountant asked for $100,000 federal plus about $15,000 state by day's end
- •A good tax advisor reviews revenue, expenses, and tax-limiting steps monthly
- •The tax code is over 2,000 pages and keeps changing
- •He is partnering to build a tax firm for small businesses
- •$100 a month from age 21 at 10% could reach a million by 65
- 1:02:48 – 1:08:56
Buying a Home: Affordability, Rates and Adjustable-Rate Mortgages
Jaspreet views a home as a liability bought for memories and says to focus on affordability rather than timing the market. He discusses homeownership trends and warns against adjustable-rate mortgages.
- •A home is a liability; investment property is for making money
- •Ask if you can afford the down payment, monthly payment, taxes, repairs and move-in costs
- •If rates drop, you can refinance
- •Institutional buyers are buying many homes, possibly making the U.S. a renter nation
- •He advises against adjustable-rate mortgages for a primary residence
- 1:08:56 – 1:17:54
Turning $1,000 Into $100,000: Invest in Skills and Hustle
Answering a viewer question, Jaspreet starts with the watch he wasted $1,000 on and then walks through his path from event promoter to sock company to Market Briefs. Lewis summarizes that the best return is investing in a skill.
- •His $1,000 watch is now worth about $50
- •Early event-planning deals used revenue splits and VIP passes for flyer teams
- •He moved from side hustler to entrepreneur to small business owner
- •Invest in a skill, then reinvest earnings in equipment and help
- •Willingness to risk and try, such as taking an acting class, matters
- 1:17:54 – 1:19:40
Family Roots, Refugee Grandparents and the Disease of Poorness
Jaspreet explains he succeeded partly by not focusing on risk, driven by his family's struggles. He recounts his grandparents' flight during the 1947 partition of Punjab and his grandfather's saying that poorness is the worst disease.
- •He was told he was stupid and says he never looked at the risk
- •He was raised by his grandparents
- •His grandparents fled in 1947 with almost nothing
- •His grandfather says the worst disease is poorness
- •Extreme poverty leaves no ability to help others
- 1:19:40 – 1:29:10
Three Money Myths: What Money Is, Using It as a Tool, and Liabilities
Lewis asks for three money myths Jaspreet has debunked. He says money is just paper that amplifies who you are, wealthy people use it to buy back time, and assets should fund your lifestyle rather than flexing on earned income. He ends with the invest-first spending order.
- •Money is paper and amplifies who you are
- •Financial health is one of four areas alongside physical, mental and spiritual
- •Use money as a tool to buy your time back
- •Don't spend earned income on flex items; live off assets
- •Wealthy people invest first and spend what's left
- 1:29:10 – 1:36:05
Net Worth vs. Self-Worth, Failure and Persistence
Lewis asks how to keep net worth from becoming self-worth. Jaspreet says failing at a task doesn't make you a failure, that net worth is a paper number, and that patience, discipline and hard work matter, illustrated by Andy Grammer and Steve Harvey.
- •Failing at a task doesn't make you a failure
- •Net worth is a paper number and spending based on it is dangerous
- •Be patient about get-rich-quick schemes but impatient to drive work ethic
- •Hard work beats talent when talent doesn't work hard
- •Andy Grammer busked for four years and Steve Harvey lived in his car chasing comedy
