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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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110 min read · 22,135 words- 0:00 – 1:56
The Wealth Formula: Income Minus Expenses
- SPSpeaker
So this is where you wanna create a financial system and start investing your money because your savings will never make you wealthy. You cannot save your way to wealth. You have to-
- LHLewis Howes
I think you gotta have a dream
- SPSpeaker
The School of Greatness.
- LHLewis Howes
Really? [laughs] Yeah.
- SPSpeaker
Please welcome Lewis Howes.
- LHLewis Howes
So if someone wants to become financially free, to be able to retire within 15 years-
- SPSpeaker
Yeah
- LHLewis Howes
... I wanna talk about that.
- SPSpeaker
Sure.
- LHLewis Howes
I wanna talk about it at different stages of life. If you're in your 20s to your 30s, if you're in your 30s to your 40s, I wanna talk about that. What would be, like, a step-by-step approach from first the mindset s- standpoint-
- SPSpeaker
Yeah
- LHLewis Howes
... which is your thing.
- SPSpeaker
Yeah.
- LHLewis Howes
Thinking of the mindset, "Okay, I wanna retire in 15 years," how to think, to then the actual actions that people need to take-
- SPSpeaker
Sure
- LHLewis Howes
... in order to get there, and what does retirement actually look like?
- SPSpeaker
Oh, that's a good question. Uh, so let me... I'm gonna give you a quick formula, and then I'm gonna-
- LHLewis Howes
Yes
- SPSpeaker
... break it down because-
- LHLewis Howes
Give me the formula
- SPSpeaker
... I have created... It's not very complex, but I created this wealth formula-
- LHLewis Howes
Ooh
- SPSpeaker
... which breaks it down into a very simple, almost mathematical thing, where it's, you take your income, you subtract your expenses, and that equals your investments plus your savings.
- LHLewis Howes
Income-
- SPSpeaker
Plus... Income minus expenses equals your investments plus your savings. So if you wanna become wealthy, it ultimately comes down to having more investments. Your savings are not there to make you wealthy. They're there to protect you against an emergency. Your investments are what make you wealthy. So if you wanna become wealthy sooner or if you wanna become a wealthier-
- LHLewis Howes
You need more investments
- SPSpeaker
... you need more investments. How do you do that? Well, if it's your income minus your expenses, it's basic math. Either increase your income, decrease your expenses, or do both.
- LHLewis Howes
Right.
- SPSpeaker
So that's the ultimate formula. So now if we talk about let's break it down step by step on how do you actually do it, six steps. And this is no matter what age you are, these are the six steps that you wanna follow.
- LHLewis Howes
Before you get into the six steps-
- 1:56 – 5:50
Step 1: Build the Right Mindset
- SPSpeaker
Well, step number one is build the mindset.
- LHLewis Howes
Oh, my bad. [laughs]
- SPSpeaker
[laughs]
- LHLewis Howes
Okay.
- SPSpeaker
So step number one is you need to have the right mindset.
- LHLewis Howes
Okay.
- SPSpeaker
And so this is why I call myself the Minority Mindset and, you know, the brand Minority Mindset, because it's all about thinking differently than the majority of people. Because if you follow what the majority of people do, in 80 to 90% of the situations, you're probably doing something wrong.
- LHLewis Howes
And you'll be in debt-
- SPSpeaker
Mm
- LHLewis Howes
... and you'll be paying off debts and loans for the rest of your life.
- SPSpeaker
The majority of people are broke. The majority of people are living paycheck to paycheck. The majority of people are drowning in debt. The majority of people have zero to no investments. The majority of people are unhappy. The majority of people are miserable, and the majority of people do not like their jobs. This is not me exaggerating. These are all statistical numbers where more than a 50% of people feel this way.
- LHLewis Howes
Mm.
- SPSpeaker
And so if now you keep doing what everybody else does, you're going to end up like everybody else. And so this is where now you wanna think a little bit different and try to find what's right for you and try to get educated yourself. Because when it comes to the mindset, the first thing you have to understand is that it is possible. Because if you're sitting there saying, "It's not possible for someone like me, somebody who has my background, my parents, my whatever, I can't become successful," I 100% guarantee that you will not be able to become successful. You cannot change your outcome without changing your mindset.
- LHLewis Howes
Oh, that's big.
- SPSpeaker
And in the previous interview we had, we talked about mindset versus toolset, where most of the times we assume that the reason why we can't become successful is because we lack the toolset, when in reality, for 90% of people, it's lacking the right mindset. Because when you have the right mindset, you'll discover that the toolset is right around you. So it's first believing that you can do it, because once you know and believe that you can do it, that belief is gonna then impact your decisions. Because now you can say, "You know what? Yeah, maybe I can become successful." What are you gonna do? You're gonna go onto YouTube, watch videos. How do I become successful? Now you start watching videos. Maybe you start binging bichi- videos, and now you start to realize, "Oh, okay, I can start to do this. I can change this about my life. I need to change the way I think. I need to change my actions. I need to do more things in my day. I need to stop watching so much Netflix. I need to do this." Then maybe you start reading books, and now you start reading business books because I have read a lot of business books, and there's so much wealth in a $20 business book.
- LHLewis Howes
Right.
- SPSpeaker
Just go onto Audible, look at some of the top business books, and just start reading them, and you will learn so much. Now you start reading them. Maybe you start doing a little bit. Maybe you don't succeed too much, but you start taking some action, and you start to learn even more because your experiences are some of the best teaches, teachers in the world, even if you make mistakes. I have learned from my mistakes. I didn't have a mentor. I didn't have guidance. I didn't have investor family members. I didn't have people telling me how entrepreneurship works. I screwed up a ton, just like you. We made a ton of mistakes-
- LHLewis Howes
Yeah
- SPSpeaker
... and that's how we learned. And then maybe you go and take a class. Now you're like, "Okay, I wanna learn how to do this. I'm trying to build this business. I'm doing something wrong," or, "I'm trying to get a better job," or, "I'm trying to get a raise. I keep doing something wrong." You've read books. Now maybe you find a class. You invest some money in this class, and now you have more education. Now you try more, and now you start to see over time, "Oh my God, 12 months ago, I had no idea. I didn't even believe that I can do it. Now that I believe that I can do it, I started watching YouTube videos. I started reading books. I started taking classes. I started taking action." And then you keep doing it. Maybe you hire a coach. Maybe you hire a consultant. I mean-
- LHLewis Howes
Yeah
- SPSpeaker
... the list goes on and on and on of what you can do, but it all first starts with the mindset because if you tell yourself you can't, your mind shuts, shuts down, and you're never gonna find an opportunity. You're never gonna look for the opportunity. So that's where the mindset is the most important thing. And if you don't have the right mindset, this is where the first thing you wanna do is start learning how do I build self-esteem? How do I build my confidence? How do I believe in myself? And there's... I don't have a ton of videos on this. I know you have a ton of videos on this. Watch Lewis to start.
- LHLewis Howes
Right, right.
- SPSpeaker
Right? So start there. Then we go a little bit deeper now for focusing on-
- LHLewis Howes
Okay
- SPSpeaker
... the finances.
- LHLewis Howes
The mindset's number one.
- 5:50 – 10:32
Step 2: Build Your Financial Base and Cut the Bleeding
- SPSpeaker
Mindset is number one. The second thing now, once you build the right mindset, is you wanna create your financial base. And the best way to understand this is just to think if you wanted to build a house, what do you do first? Well, you gotta-
- LHLewis Howes
Foundation
- SPSpeaker
... you gotta build the foundation. If you wanna big a bigger house... If you wanna build a bigger house, you wanna dig a deeper foundation. You wanna build a tall building, you need an even deeper foundation. So you have to start by building your financial base, and what that means financially is first- You want to save $2,000 at the very least. You want to put aside some cash for savings as fast as possible because right now it's something like 40 to 70% of Americans don't have... Well, 40% of Americans don't have a- $1,000 to put aside, and something close to 70% of Americans don't even have 400%, $400-
- LHLewis Howes
Wow
- SPSpeaker
... put aside to protect them against an emergency. So the... You know, most Americans don't have $1,000 to put aside.
- LHLewis Howes
Get a $2,000 base.
- SPSpeaker
Start with two grand, grand as fast as possible.
- LHLewis Howes
Yeah. Yep.
- SPSpeaker
And then you need to cut the financial bleeding. That means your high interest debts, your credit card debts, your hard money loans, your 0% APR loans, which are now charging you 20 to 25%. These need to be paid off as fast as possible because these are loans that are skinning you alive financially, and-
- LHLewis Howes
So I mean, it seems like credit cards are one of the biggest things that hold people back.
- SPSpeaker
Look, credit cards-
- LHLewis Howes
From... Right
- SPSpeaker
... credit cards are a tool. They are a tool.
- LHLewis Howes
If you're not educated with them, you could get stuck.
- SPSpeaker
If you have this tool without the education, it will burn you.
- LHLewis Howes
Mm.
- SPSpeaker
I only spend with a credit card. I spend a lot on my credit card-
- LHLewis Howes
But you know how to use the tool
- SPSpeaker
... because I know how to use the tool, and now because I know how to use my credit card, what happens? Well, I don't spend more than I would otherwise because I use my credit card just as a medium of exchange. I'm gonna spend this money anyways, might as well use my credit card. When my credit card gives me-
- LHLewis Howes
And get the benefits
- SPSpeaker
... gives me perks, it gives me cash back, it gives me fraud protection.
- LHLewis Howes
Mm.
- SPSpeaker
It gives me free insurance.
- LHLewis Howes
Flights.
- SPSpeaker
It gives me hotel upgrades.
- LHLewis Howes
Yeah.
- SPSpeaker
It gives me all these things just because I use my credit card instead of paying with cash. And so now again, it's the financial education because now some people will say, "Oh my God, these credit card companies are scams." Well, the reason why they're looked at as scams is because we don't have the right education on how to use them, right? It's a tool without the education on how to use it, and this is where now you have to build that financial education, and many times you're gonna have to go out and do it yourself because your credit card company is not incentivized to give you the financial education because they're gonna make less money.
- LHLewis Howes
That's...
- SPSpeaker
Right? It's profitable to keep people poor. It's profitable to keep people financially uneducated because now if you just keep spending money on your credit card because you have no idea what you're doing, now your credit card company's gonna get rich. The average household in America has $6,200 worth of credit card debt, so if you have credit card debt in America, you probably have an average of $6,200.
- LHLewis Howes
Wow.
- 10:32 – 11:55
Debt Payoff Strategies: Snowball vs. Avalanche
- LHLewis Howes
What's the strategy if you got three credit cards? What's the strategy to, to getting rid of that debt?
- SPSpeaker
So Dave Ramsey's gonna tell you to do something called the snowball method.
- LHLewis Howes
The smallest first, or the-
- SPSpeaker
Smallest first-
- LHLewis Howes
And then-
- SPSpeaker
... to the biggest
- LHLewis Howes
... because you're building momentum, right?
- SPSpeaker
Right. A financial advisor may tell you the opposite. Do the debt avalanche, which is now pay the highest interest rate first and then go down because now you're gonna pay off the most interest first, so it costs you the most money in the long term. The reason why Dave Ramsey recommends the snowball method is because psychologically when you get those small wins of paying something off, you feel like you're winning, and you can pay it off faster.
- LHLewis Howes
Yeah.
- SPSpeaker
A advisor's gonna look at the math and say, "Hey, look, these numbers are telling me that pay off the higher interest rate first because it's gonna save you the most money over the long term." Which one's right? Again, I'm not gonna say which one. Do what's best for you because I know if I was in a situation, I'm not, I like the idea of paying down the heavy interest rate first because that's how my brain works. I don't need the small wins like that. I can work for the long term. I think, you know, the entrepreneurial mindset-
- LHLewis Howes
Right
- SPSpeaker
... where you know I know how my mind works, so I understand myself, and this is just honestly being open and honest with yourself. If you can't stay true with it, then do the snowball.
- LHLewis Howes
Yes.
- SPSpeaker
It does not matter.
- LHLewis Howes
Mm-hmm.
- SPSpeaker
Screw paying it off a few months early. Just get it away and pay it off as fast as possible.
- LHLewis Howes
But cut out, cut the financial bleeding and have a $2,000 base.
- SPSpeaker
At the very least, yeah.
- LHLewis Howes
That's, that's step two. Okay.
- SPSpeaker
Step, that's step two.
- 11:55 – 17:04
Step 3: Lead Your Money and the 75-15-10 Plan
- SPSpeaker
Now, the next thing you want to do is what I call lead your money, so this is where you want to create a financial system and start investing your money because your savings will never make you wealthy.
- LHLewis Howes
Wow.
- SPSpeaker
You cannot save your way to wealth. You have to invest your money. Your savings won't make you wealthy because of what we've talked about in previous interviews, inflation.
- LHLewis Howes
You're losing money in the savings.
- SPSpeaker
If inflation is higher than the interest rate you're getting at the bank, then your savings are effectively making you poorer each and every day. Because now your savings are losing value to inflation. Now, does this mean you should not save any money? No. It means you need to save your money strategically. So you wanna save your money for three reasons, and three reasons only. Save your money for an emergency, save your money for a big purchase, if you want to buy a car, you want to buy a house, you want to buy a nice watch, whatever you want to buy, you need cash in order to do that. And then three, save your money for an investment. If you're not saving your money for one of these three reasons, you're saving your money the wrong way, and it is making you poorer by saving that money. So now we're focusing on the first aspect of saving your money for an emergency. How much do you save? This is now, again, going to depend on your risk tolerance. You want to save somewhere between 3 to 12 months' worth of your expenses, and the amount of money you save is gonna depend on where you are in life and how much risk you're willing to take on. If you're like, "Hey, dude, I'm, I'm 25 years old. I don't have any financial responsibilities. I don't need that much savings," fine. Save a few months' worth of savings, and that's it. Invest more aggressively. If you're like, "Hey, I have a family, I have kids, I have a spouse, I, I don't want to take on all this risk," then save six months, nine months, a year's worth- Right ... of savings, because now it will give you the peace of mind that you have some extra cash put aside. So it's gonna depend on your risk tolerance and, and what you want. But this, in this lead your money step, this is where you want to understand that there's more to putting your money aside than just saving your money. You also want to be putting your money to work. And the best way to do this is to create a system where no matter how much money you're making, you are going to proportionately continually invest and save based on your income. So what does that mean? Well, one of the simplest things you can do is follow something like- It's a percentage ... my 75, 15, 10 plan. Mm-hmm. Which means for every dollar that you earn, 75 cents is the maximum that you can spend, 15 cents is the minimum that you invest, and 10 cents is the minimum that you save. And this never changes with your income. The only thing that you would ever change is after you hit that savings goal for your emergency savings, you don't keep saving your money for the emergency because you built that. Whatever- Mm-hmm ... months you want, you put that towards your investments. Yes. And now, whether you're making 40 grand, 400 grand, 4 million, 40 million, you just keep following the same thing, and you're living below your means, and now you're constantly putting monies aside for your investments. Now, again, we talked about this before. This investment money can either be passively invested, all of it, or you can put this money aside to be invested. Mm-hmm. So you could put this money into a bank account, you're looking for a rental property, you're looking for a business to buy, you're looking for a cheap stock to buy. This now depends on, know your investment goals, right? Where do you want to be invested? How do you want to invest your money? And this is that financial education now of, you know, what do you want to do, and your personal goals. If you don't want to be involved with your money, you don't want to be, hey, day-to-day investing or paying attention to the markets, you hate that idea, just passively invest it. Right. Put it into low-cost ETFs, index funds, and don't even worry about it and let it do its thing. You don't change it whether the market's up or down. So this is where now you're putting your money to work, leading your money, because real wealth is built through your investments, not through your savings. Mm-hmm. Uh, because you don't want to be spending all your money either. Because if you're spending all your money on the, the Gucci, the Louis Vuitton, the Beamers, and the extra guac, well, guess what? [laughs] Gucci's making money. Louis Vuitton's making money. Chipotle is making money. Beamers, BMW is making money. But you're the one that's making all them rich. Yes, if you say, "I want to become wealthy," but you have no savings, and yet you have all this nice stuff, you'll look rich, but the stuff that's looking rich is making you broke. Making you broke, yeah. So, you know, y- you're paying the price to look rich, which there's nothing wrong with that, but you just have to understand what your goals are. If you say, "Hey, I don't really care about building wealth, I just want to have nice stuff," it's a free country. It's your choice. But if you say, "I want to have wealth," and you have no investments and you're spending money on all this stuff, this is where you want to rethink what you're doing and understand what it is that you want, and make sure that your actions are aligning with your goals- Mm-hmm ... and your lifestyle is aligning with what you want to do. I mean, you can't keep lying to yourself. That's why you should put your money not in buying the bag, but in buying the stock every month. [laughs] Exactly. Exactly. Right? Own the company. Own the places- Yeah ... where you're spending your money. And, you know, again, there's nothing wrong with having nice stuff. Right. What I'm trying to say- Priorities, yeah ... and what I'm trying to... Just, just be able to afford it. Yeah. You know what? If you- Don't go on a credit card with it, yeah ... don't go into a credit card with it. If you- Yeah ... you want a nice watch, you want a nice house, you want a nice car, fine. Just make sure you can afford it first. Right, right.
- 17:04 – 25:29
Step 4: Interest-Free Living, Buy Now Pay Later, and Mortgage vs. Investing
- SPSpeaker
And this brings me now to the next step, which I call interest-free living. And now this is where we're gonna go a little bit deeper of, how do you actually spend your money? Because in the American culture, it is very normal to be in debt. Mm-hmm. It's very normal to buy things that you can't afford. And before it was with credit cards, now it's with this new thing called buy now, pay later. I'm an- Yeah ... I'm an entrepreneur. I'm very much involved in the financial space. I'm very much involved in the fintech space. Buy now, pay later, over the last couple of years, is arguably the fastest growing sector in fintech. They're crushing it, right? They're crushing it. I have not invested any money into buy now, pay later apps because I don't believe in it. However- It's putting more people in the debt, kind of ... the way that they work is [laughs] you can buy something now and worry about the price later. Now, the pitch to consumers, to people, is, "Well, you don't have to pay any interest." It's kind of like the housing market back in the day. [laughs] Right? It rhymes, you know? [laughs] It rhymes. History rhymes, right? But the whole idea that they say is, "You don't got to pay any interest, just pay it off over, say, 12 months or 6 months," which doesn't seem like a bad idea. Why would I want to pay $1,000 for a laptop today if I could just pay it off in installments and not pay- Mm-hmm ... any interest for the next- Interesting ... 12 months? Yeah. Well, if that's the case- Why is it such a fast-growing industry? I mean, no one's gonna invest billions of dollars into something if they're not gonna see any sort of financial return. I mean, they've gotta... The most expensive kind of money is free money. So if they're giving you money for free, how are they gonna make money from it? Well, let's really dig a little bit deeper. What happens-
- LHLewis Howes
If you don't get past your t- if you don't pay it in your 12 months, then what?
- SPSpeaker
So that's the first part. If you don't pay it off, now you get slapped with a very, very hefty, hefty fine-
- LHLewis Howes
Mm-hmm
- SPSpeaker
... a very, very hefty fee, where now you're paying a massive interest rate, essentially like a credit card.
- LHLewis Howes
And they're just acting like a credit card.
- SPSpeaker
It's, it's, it's the same concept-
- LHLewis Howes
Wow
- SPSpeaker
... where you get a little bit of a grace period. But the second aspect is if you wanna buy a laptop for $1,000, and you need $1,000 to buy it, well, you gotta have $1,000. But if you don't have to pay for it now and pay for my laptop-
- LHLewis Howes
You pay $100 a month. Yeah
- SPSpeaker
... you still have the $1,000 in a bank account, maybe 900. And now what happens?
- LHLewis Howes
I can go buy more stuff-
- SPSpeaker
I can buy more stuff
- LHLewis Howes
... for 100 bucks a month.
- SPSpeaker
And you keep buying more-
- LHLewis Howes
That's $1,000
- SPSpeaker
... and more and more. So it allows people to spend even more-
- LHLewis Howes
Jeez
- SPSpeaker
... to lock in all the stuff. So you have a whole bunch of stuff, and now all your money is going out to pay for the stuff that you bought yesterday-
- LHLewis Howes
A year ago now
- SPSpeaker
... a year ago. And then if you can't pay it off in time, because that's ultimately-
- LHLewis Howes
Oh, man
- SPSpeaker
... you know, their goal. If you can't pay it off in time, now you get slapped with all that interest-
- LHLewis Howes
Ah
- SPSpeaker
... all these fees, and now you're the one that's gotta pay it off. So this is where-
- LHLewis Howes
Yeah
- SPSpeaker
... you have to understand the spending aspect of how do you spend your money, because again, these things are tools.
- LHLewis Howes
I wonder how many people, you know, this is going into our previous interview. I wonder how many people signed up for more credit cards since 2020 and also signed up for more, bought more things with this buy now, pay later. I wonder if there's data out there on this-
- SPSpeaker
I, I don't know
- LHLewis Howes
... which will give us a more indication, hey, 12 to 24 months from now, man, people either, either make double the money or they're gonna be going into a lot more debt.
- 25:29 – 33:42
Step 5: Multiplier Income Through Jobs, Side Hustles and Businesses
- SPSpeaker
And then this brings me now to the next part, which is what I call multiplier income, where, you know, going back to the wealth formula, where it's income minus expenses equal your investments plus your savings. We talked about how to save your money. We talked about how to invest your money. We talked about how to manage your expenses. But now let's talk about the income. Because if now you understand how to live below your means, you understand how to put your money to work, if you wanna put fuel on the fire, you just gotta earn more money. Now, if you earn $100,000, or you earn a million dollars, you earn whatever, you earn more money, now you know how to put this money through your f- system, through your funnel, whether it's 75, 15, 10, or whatever else. You know how to take this extra money, put it to work. That way, you have more money to invest, more money to save, more money to live your life. But the key is you don't wanna 100% increase your lifestyle to match your income. You wanna increase your income with your investments.
- LHLewis Howes
Mm-hmm.
- SPSpeaker
That is the key.
- LHLewis Howes
And keep expenses the same, if you can.
- SPSpeaker
Keep it... Ideally. Now, you can, you know, marginally increase your expenses.
- LHLewis Howes
Yeah, yeah.
- SPSpeaker
But the key is you wanna be increasing your income and your investments way more.
- LHLewis Howes
Yes.
- SPSpeaker
So the question is, how do you do that? Well, this is where, again, understand you. If you are an employee, you don't wanna start a business, you don't wanna start a side hustle, fine. Nothing wrong with that. There's nothing wrong with being an employee. [laughs] You just have to understand you. But that means now, how can you earn more money? If you like your job, look for ways to get a raise, to get a promotion. See how you can get a bonus. Just be open with your boss. Say, "Hey, look, I want to be able to contribute more. I want to earn more money."
- LHLewis Howes
Right.
- SPSpeaker
"What can I do?" Most people are gonna be very open and honest and say, "Hey, I would like you to tack on this, this, and this. Do this, and then we will help raise your salary."
- LHLewis Howes
Yeah.
- SPSpeaker
Maybe if you don't like your job, you go and get a certificate. You go and do something else. You need to figure out now how you can earn your... increase your income, maybe get a second job.
- LHLewis Howes
What value can you bring to the business to bring in more money for the business, or save more time, or create some systems-
- SPSpeaker
Exactly
- LHLewis Howes
... so that the business can say, "Okay, cool, let's give you more opportunities for growth"?
- SPSpeaker
Exactly. I mean, if you can bring in an extra $10,000 a year to the business of profit, they're not gonna have a problem paying you $5,000-
- LHLewis Howes
Mm
- SPSpeaker
... or whatever it might be, right?
- LHLewis Howes
Right, right.
- SPSpeaker
And this is where you just wanna be open because every business is different.
- LHLewis Howes
Right.
- SPSpeaker
Maybe you take on a second job, and, you know, it's just figuring out-
- LHLewis Howes
Right
- SPSpeaker
... how can you earn more money there? Now, if you say, "Well, I wanna do something outside of my job," fine. Well, the first thing you can do is start a side hustle. So much more accessible now than ever before.
- LHLewis Howes
Yeah.
- SPSpeaker
I mean, you can go onto the internet, become a virtual assistant. You can become a copywriter. You can become a, a designer. You can become a video editor. I have paid... So Upwork, they're not paying me. Upwork is a platform that I use-
- LHLewis Howes
Yeah
- SPSpeaker
... to hire freelancers, and I did a video on this, so I looked this up. In the last two years or three years, I have spent more than a quarter million dollars on Upwork alone-
- LHLewis Howes
Wow
- 33:42 – 42:32
Step 6: Be Great by Protecting Yourself
- SPSpeaker
The last part. Now, right now-
- LHLewis Howes
I like it
- SPSpeaker
... you've-
- LHLewis Howes
Speaking my language.
- SPSpeaker
Exactly, right. Exactly, greatness. So you've built the base. You're putting some money to work. You're leading your money. You are either paying off your home or you're understanding how to-
- LHLewis Howes
Mm-hmm
- SPSpeaker
... use your extra cash the right way. You're increasing income, that way you can build your wealth even faster. Now it's all about being great, and there's two aspects to this. The first aspect that I wanna talk about is protecting yourself because the reality is when people realize that you have money, they're gonna try to take their hand-
- LHLewis Howes
Man
- SPSpeaker
... put it in your pocket, and keep some of it for themselves.
- LHLewis Howes
You know what I heard... To, to pause on you there, I remember hearing Oprah talk about this one time. Years ago, I heard her on a, some podcast or somewhere, she said something like as she started to rise to fame, um, with her talk show and started to make a lot more money, what do you think happened?
- SPSpeaker
Everybody wants some money.
- LHLewis Howes
Everyone's reaching out with a hand out, right? "Oh, you've got money now. Can you help me with $1,000? Here, can you help me with this? Well, you've made the money. Can you help me?"
- SPSpeaker
Yeah.
- LHLewis Howes
She said, I'm paraphrasing this, but after, like, I don't know, a decade of this or something, it just felt like everyone was using her-
- SPSpeaker
Yeah
- LHLewis Howes
... as opposed to just being in a relationship with her and having, like, an actual friendship or relationship. And she said that she decided after a period of time she was tired of just giving, giving, giving, giving to people who had a hand out.
- SPSpeaker
Mm-hmm.
- LHLewis Howes
And so she said, "I'm gonna do a big dinner, and I'm gonna invite everyone."
- SPSpeaker
Yeah.
- LHLewis Howes
"Friends, family, everyone, you know, third cousins, you know-
- SPSpeaker
Yeah
- LHLewis Howes
... twice removed. Everyone who's been asking for a handout, I'm gonna invite them all." And she said, like, she, she gave out... She had this massive dinner for everyone, like, all of the... everything you could eat, and she started giving out envelopes and gifts and cars and cash and just like-
- SPSpeaker
Wow
- LHLewis Howes
... she gave out gifts based on what she wanted to give to each person.
- SPSpeaker
Yeah.
- LHLewis Howes
Everyone got something.
- SPSpeaker
Mm-hmm.
- LHLewis Howes
And she said... She gave a speech at the end and said, "This is all I'm gonna give you. Don't ask for anything else from it-
- SPSpeaker
[laughs]
- LHLewis Howes
... after this." And she said still people were complaining, "Oh, you gave this person 10 grand."
- 42:32 – 48:11
Taxes, Estate Planning and Being Great for the World
- SPSpeaker
100%, and, you know, this, it's just one of the realities of being an investor and entrepreneur where, you know, understanding the aspects and there are gonna be some things that are not fun. Like I talked about in our previous podcast, the tax issue.
- LHLewis Howes
Oh, no.
- SPSpeaker
It was, uh, uh, where my accountant calls me up saying that, "Hey, Jaspreet." This is 9:00 in the morning. "You owe $100,000-
- LHLewis Howes
Ugh
- SPSpeaker
... by the end of the day."
- LHLewis Howes
Sucks.
- SPSpeaker
"Send it in to the IRS."
- LHLewis Howes
That sucks.
- SPSpeaker
And now I have to go figure out how to do this, send it in, and then he tells me that I also have to pay a penalty on this-
- LHLewis Howes
Ugh
- SPSpeaker
... because he did something wrong. So it's one of those things that's not fun. It's a, a problem. But then as an entrepreneur, it's how do you find the opportunity? Well, first I fired the accountant. I go on the hunt for a new accountant-
- LHLewis Howes
Yeah
- SPSpeaker
... a new tax advisor I start working with this new tax advisor, and I see the difference between a bad accountant and a good accountant. I start learning, wow, you're telling me that every month we can meet, and you can advise me on what I can do with my money. That way I can legally limit my tax liability, and you're gonna do all this work in advance, and I don't have to worry about this ever? I love that. Now, with my entrepreneurial brain, I'm like, let's start working together because there's so many small businesses that need this.
- LHLewis Howes
Yeah.
- SPSpeaker
It is a real problem because there's a lot of bad accountants out there, and we need more good accountants. We need more good, uh, tax advisors who's gonna help people, especially in this new age where we have more IRS agents joining the workforce. We have a lot of things changing. We're probably gonna see a change in tax laws-
- LHLewis Howes
Right
- SPSpeaker
... so you wanna make sure that you're taking care of yourself. So this is one of the things that I'm working on with him is to, to fix that. We don't have a website or anything, so if you wanna learn more, shoot me a DM on Instagram at Minority Mindset or email me at team@theminoritymindset.com. But this is just one of those things where you wanna make sure you have the right resources there to first be great to protect yourself, for your family, and I'm gonna take that one step further. Because as an attorney, you also wanna make sure you have the right estate planning in place.
- LHLewis Howes
Mm-hmm.
- SPSpeaker
Because this is one of those things that is really not fun, but so crucial. If you build any sort of wealth, you want to tell the world and-
- LHLewis Howes
When I die, where does it go?
- SPSpeaker
Where's it gonna go? Because if you don't, your family's gonna fight over it.
- LHLewis Howes
Oh, man.
- SPSpeaker
And it's not fun because no one wants to think about what happens after I die, but it is so, so, so important because when you die, you don't want your family fighting at your funeral. And so create a will, create a trust, have an estate planning attorney that can help guide you there because you never wanna have to worry about that. Then the second aspect of being great is being great for the world, where the more you have, the more you can do. You can give back more. You can do more things, whether it's your money, whether it's your time, whether it's your education. Because when you can light a candle... Well, you can light one candle, but that one candle can also light a million other candles.
- LHLewis Howes
Yeah.
- SPSpeaker
And this is where now, as you're on this journey to build wealth, you have lit your own candle. Now you can help light someone else. You can help give someone a, a helping hand, whether you help someone financially, whether you help them with your time, whether you help them through your expertise because now you've learned the process. Because information is meant to be shared. I talk about this stuff on YouTube not because I wanted to get rich but because I was so frustrated by the system.
- LHLewis Howes
Mm-hmm. Mm-hmm.
- SPSpeaker
Right? I never knew that I could even make money on YouTube. I started making videos-
- LHLewis Howes
For free
- SPSpeaker
... without even turning-
- LHLewis Howes
Yeah
- 48:11 – 57:45
Where Jaspreet Invests and the Inflation Reduction Act's IRS Funding
- LHLewis Howes
What do you recommend someone, um, to do, whether they're an employee or maybe they have some extra cash?
- SPSpeaker
Sure. So I would say, you know, this is a lot gonna depend on you, 'cause I'll be very personal with what I'm doing. Because I'm an entrepreneur, so I look for different types of opportunities than somebody else might. So if you are an employee, there's gonna be different opportunities for you. If you're a business owner, there's gonna be different opportunities for you. If you're an entrepreneur, there's different opportunities for you. So I invest my money in five places. I invest my money into my own business. I talked about Market Briefs. I invest my money into real estate. I invest my money into stocks. I invest my money into crypto. Then I invest my money into physical gold. This is the order that I invest my money into. This is my type of diversification. Now, I understand what's going on, and I do have some cash. I always have some cash put aside for, like, you know, things going wrong investments. I always have some cash putting aside there. And what I've been doing is I passively invest my money. Meaning no matter what's happening in the markets, whether the market is up, whether the market's down, it's automatically passively, consistently going in.
- LHLewis Howes
Every month you have a certain amount going in there, yeah.
- SPSpeaker
And this is happening into stocks ... into crypto and into physical gold. That does not change. That never changes. So I get paid, money is automatically invested no matter what. Then, in the past, I've had my more active strategy where I would take money and actively go out and buy real estate, actively go out and buy stocks, and in this situation I am looking for good deals, meaning a good price. So I haven't been doing that as much recently, not because of what's happening in the market, but because I see more opportunities for me in the entrepreneurial business side. So I've been investing money into Market Briefs, like I talked about, and-
- LHLewis Howes
Hiring more people on your team and investing, yeah
- SPSpeaker
... hiring more people, building infrastructure. And then I'm also working on, um, a tax firm. So I'm gonna talk about tax for one second if that's okay.
- LHLewis Howes
Sure.
- SPSpeaker
Because there's a very interesting thing happening right now because going off of inflation, President Biden just signed something called the Inflation Reduction Act.
- LHLewis Howes
Was that 80 billion or something, or like-
- SPSpeaker
It is huge. It, it is a huge, huge... I think it's even bigger than that. 80 billion is just the IRS side.
- LHLewis Howes
The IRS.
- SPSpeaker
So the tax side.
- LHLewis Howes
Me- so they're hiring... they're, they're investing 80 billion in the IRS to start auditing more people, essentially, right?
- SPSpeaker
Exactly.
- LHLewis Howes
To start trying to get more money from people.
- SPSpeaker
And that's only one part of the Inflation Reduction Act. So let's go big to go small-
- LHLewis Howes
Man
- SPSpeaker
... because the Inflation Reduction Act is supposed to reduce inflation. That's what the name says. [laughs] I'm fun is I'm laughing 'cause it's kind of silly because-
- LHLewis Howes
Right
- SPSpeaker
... how do you reduce inflation? You spend less money, uh, because the government has spent so much money they didn't have, which caused money printing-
- LHLewis Howes
And you, and you tax more people, bro
- SPSpeaker
... which created inflation. You tax more people.
- LHLewis Howes
You, you collect more.
- SPSpeaker
Exactly. So that's how do you now pay off all this debt? Remember, the government doesn't make money. They tax you, they tax me. They, they collect taxes and then that's what they use to pay off their expenses. Now, it's not surprising that the government is running into an issue because they have 31 almost trillion dollars of national debt that they need to pay off. This is not fixed rate debt, so as interest rates go up-
- LHLewis Howes
Jeez
- SPSpeaker
... their payments on this debt go up as well. So we talked about what happened in the housing market. Imagine that on a $30 trillion level now. So the payments are getting bigger. So what does that mean? Well, if they have this pool of money, either they're gonna need to inject more money into the government, the Fed has to print more money, but they can't do that anymore because of inflation.
- LHLewis Howes
Mm.
- SPSpeaker
Or they're gonna need more tax dollars. So that's one of the reasons why through this Inflation Reduction Act, one of the things they wanna do, which is one of the most, like, financially interesting topics, is they want to invest very heavily billions of dollars into the IRS to help them beef up and collect more tax dollars and past tax dollars. Now, I do wanna clear up some of the false information out there because the act is working to hire 87,000 more IRS workers.
- LHLewis Howes
That's crazy.
- SPSpeaker
It is crazy, especially considering that today there are about 80,000 IRS workers.
- 57:45 – 1:02:48
His Tax Advisor Story and Starting a Tax Firm
- SPSpeaker
So I had a really bad tax advisor. He was really just an accountant who filed my taxes and was never on time, and I got this call.
- LHLewis Howes
[laughs]
- SPSpeaker
It's horrible. It was just a mess.
- LHLewis Howes
Yes.
- SPSpeaker
I got a call from my accountant one day. I'm in the office. This is right before my morning huddle. So we have a 9:30 AM morning huddle. Calls me, I think it was like 8:45 in the morning. I'm in the office. Says, "Hey, Jaspreet, how are you?" I said, "Good. How you doing?" He's like, "Hey, listen, I need you to do me something. Uh, can you wire or send the IRS $100,000 by the end of the day today, and can you also send about $15,000 to the state government by the end of the day today?" I was like, "What?" He says, "Sorry, we had some miscalculations. We did something wrong-"
- LHLewis Howes
Holy cow
- SPSpeaker
... "but we missed this, and you need to send this by tonight." And I was like-
- LHLewis Howes
Jeez
- SPSpeaker
... "Are you serious?"
- LHLewis Howes
Fuck.
- SPSpeaker
He's like, "Oh, yeah, one more thing. You're probably gonna have to pay a penalty on this as well."
- LHLewis Howes
Oh, my gosh.
- SPSpeaker
And this is a completely true story. Like-
- LHLewis Howes
When was this?
- SPSpeaker
This is not... I mean, this is less than a year ago.
- LHLewis Howes
Oh, my gosh.
- SPSpeaker
Okay? And so it's... I mean, it's-
- LHLewis Howes
That's painful
- SPSpeaker
... it's very painful. And so I'm like, "Okay." Like, I was very frustrated because I'm like, "What did I do wrong? Like, what are you talking about?" He's like, "You didn't do anything wrong." And I was like, "Well, if I'm the one that has to pay this, and I'm the one who has to pay the penalty, something's not right here." And so I paid it, and then I fired him [laughs] pretty quickly.
- LHLewis Howes
Right. Right.
- SPSpeaker
Because I, you know, that's, that's not the way I like to do business. I like... I want, I want everything to be clean, but I also want people who care about what they do, and he was a, a cheaper accountant.
- LHLewis Howes
Yeah.
- SPSpeaker
I got what I paid for. And so I went on the hunt-
- LHLewis Howes
For a top accountant
- SPSpeaker
... to find a good top of the line accountant, and I pay a lot more than what I used to. However, the situation scenario is extremely different because he has a very different personality about, a different persona, and the way it works now is, one, he manages all my books on time and ahead of schedule. So every month he meets with me and he shows me, "Hey, Jaspreet, here's your profit." Or sorry, we'll start from the top. "Here's your revenue. Here's your expenses. Here's what your expenses look like. Here's how they changed. Here's your profit. Here's your tax liability, and here are the things that you can do to limit your tax liability."
- LHLewis Howes
That's cool.
- SPSpeaker
"Here are, you know, three recommendations or whatever that we believe based off of what's happening right now to legally-"
- LHLewis Howes
Wow
- SPSpeaker
... "limit your tax liability."
- LHLewis Howes
That's great.
- 1:02:48 – 1:08:56
Buying a Home: Affordability, Rates and Adjustable-Rate Mortgages
- LHLewis Howes
In your opinion, would you buy a home, uh, when interest rates is over... Or I mean, uh, yeah, when interest rates is over 10%? Or you feel like even though you're getting at a massive discount, you're paying more every month. Would you consider that, or you just wait until interest rates go down?
- SPSpeaker
So I look at home buying very differently than the majority of people. I look at buying a home the way I buy a shirt.
- LHLewis Howes
Mm.
- SPSpeaker
For me, a home is not an asset. It's a liability.
- LHLewis Howes
Mm-hmm.
- SPSpeaker
So what does that mean? I want to buy a home because I want to create memories.
- LHLewis Howes
Yes.
- SPSpeaker
I want to buy an investment property or an investment because I want to make money. So if you're buying a home because you think, "Oh, I want to get rich because of my home," I think you're looking at it the wrong way.
- LHLewis Howes
Mm-hmm.
- SPSpeaker
Because you should be looking at your home as I want to make memories here, I want to live here, and I want to grow my family here, and I want to spend time here. If that's the reason why you want to buy a home, what you should be paying attention to is not what's going on in the markets, not what's going on with interest rates, but instead what you should do is say, "Can I afford it?"
- LHLewis Howes
Right.
- SPSpeaker
And what does that mean? Can I afford the down payment? Can I afford the monthly payment?
- LHLewis Howes
Property taxes.
- SPSpeaker
Can I afford the property tax?
- LHLewis Howes
The fix-ups.
- SPSpeaker
The fix-ups.
- LHLewis Howes
[laughs]
- SPSpeaker
The move-in costs, and then, you know, your move-in, like, like, I mean, the furniture, the upgrades, all that.
- LHLewis Howes
The furniture, everything, man.
- SPSpeaker
So if you can afford it, then you buy. If you can't afford it, if you're stretching yourself too thin, you don't buy because what happens to so many people is you get sucked into trying to time the market. But again, if interest rates drop and you own a home, you can refinance.
- LHLewis Howes
Right.
- SPSpeaker
And so remember, it's understanding the business-
- LHLewis Howes
So it's almost, almost good to buy it when interest rates are high if you can get the house on discount. And then if in a year or two the interest rates drop in half, you can refinance.
- SPSpeaker
Just as... Make sure you can afford it.
- LHLewis Howes
Right, right, right.
- SPSpeaker
That's the biggest thing.
- LHLewis Howes
Sure.
- SPSpeaker
You have to be able to afford it because if you are stretching yourself too thin, going paycheck to paycheck-
- LHLewis Howes
Yeah, don't do it
- SPSpeaker
... to live in a home, you're hurting yourself because now what you're doing, you don't have the ability to invest in other places. You cannot invest your money and-
- 1:08:56 – 1:17:54
Turning $1,000 Into $100,000: Invest in Skills and Hustle
- LHLewis Howes
Here's a question, uh, we got from people on YouTube. If someone has between 1,000 and $10,000 today-
- SPSpeaker
Yeah
- LHLewis Howes
... to invest, they can spend it on whatever they want-
- SPSpeaker
Yeah
- LHLewis Howes
... and they had to turn it into 100,000 within three years-
- SPSpeaker
Ooh, okay
- LHLewis Howes
... what steps would they, should they take? And, and obviously this is a, you know, not a guarantee, but if you're like-
- SPSpeaker
Sure
- LHLewis Howes
... "I have to turn this 1,000 into 100,000 or 10,000 into 100,000," what would you invest in right now, and how would you manage it over the next couple of years?
- SPSpeaker
Sure. So I'm gonna give you kind of a, a longer answer than maybe you were hoping for on this one.
- LHLewis Howes
Give it to me.
- SPSpeaker
[laughs] I'm gonna start by telling you what you should not do.
- LHLewis Howes
Okay.
- SPSpeaker
Uh, because the first time I remember, um, I, I had $1,000 extra in my bank account. I was in high school. And what I did with that is I took the $1,000, and I went out, and I bought a watch.
- LHLewis Howes
Mm. No, don't do that.
- SPSpeaker
And... Yeah.
- LHLewis Howes
[laughs]
- SPSpeaker
A- and this watch was very studded up. It was all crystals, and I was like, "Ooh, it's a nice watch."
- LHLewis Howes
Clean.
- SPSpeaker
So what happened with... Yeah. [laughs]
- LHLewis Howes
[laughs]
- SPSpeaker
What happened with that watch? Well, I made that watch company richer. I made the jewelry store owner richer, and now that $1,000 watch today is may- worth maybe 50 bucks, right?
- LHLewis Howes
Ooh.
- SPSpeaker
It was just, it was just a show. So my value of my investment dropped like a rock, but now these companies made money, which now they could take that and invest in more products, more inventory, more marketing, more whatever. So the first thing is you gotta understand that you want to put it in something that's gonna help make you more money. So I'll give you my personal experience because I saw the biggest returns by investing in me, but that'll be more of an active investment. And then you have the opportunity for a passive investment-
- LHLewis Howes
Yes
- SPSpeaker
... which is why it's longer answer than what you were probably hoping for, but I'll try to get to all the answers there. So I feel like everybody, um, who, especially if you're had the entrepreneurial mindset, you go through these phases where you first go through this, like, I'm a hustler, side hustler phase-
- LHLewis Howes
Yeah
- SPSpeaker
... and then maybe you become, like, a solopreneur. And then you become an entrepreneur, and then you become a small business owner. And then you kind of go to that business owner route.
- LHLewis Howes
Yes.
- SPSpeaker
So you kind of go through these phases because initially when I first started as a side hustler, I didn't know what entrepreneurship was.
- 1:17:54 – 1:19:40
Family Roots, Refugee Grandparents and the Disease of Poorness
- SPSpeaker
Because I'm willing to... I never looked at the risk.
- LHLewis Howes
Right.
- SPSpeaker
And you call it stupidity, but for me is I just saw the opportunity as I know I want to achieve something bigger because I saw how hard my parents had.
- LHLewis Howes
Mm-hmm.
- SPSpeaker
I saw how hard my grandparents had.
- LHLewis Howes
Yeah.
- SPSpeaker
My grandparents were refugees.
- LHLewis Howes
Yeah.
- SPSpeaker
They lost their homes. They lost everything. They had to fight for their lives. And so I saw the things that my family had to go through. I, my, my grandparents raised me. They lived with me. So I lived with my grandparents, not my parents, so I heard their stories, talked about the struggles, and that was where I started to get my basis of financial education. 'Cause my grandfather would tell me, and he actually repeated this to me a, a couple weeks ago when I was on the phone with him, and he was like, "You know, the, the biggest and worst disease is poorness." Because-
- LHLewis Howes
Mm
- SPSpeaker
... he said, "I, I grew up and I saw extreme poverty." So my family's from a state in India-
- LHLewis Howes
Wow
- SPSpeaker
... called Punjab.
- LHLewis Howes
Yep.
- SPSpeaker
And in 1947, our home, the state of Punjab, was severed by the government. And if you were a Sikh, a member of the religion that I am, and you're on the west side of Punjab, you had to migrate east, otherwise you were gonna be killed. Uh, so my grandparents were on the west side. And you literally had to, like, run. Like, my grandfather, all he had was the clothes on his back and a sword in his hand, and as they were coming across, they, they got attacked by a mob. And he saw his, uh, uncle get his head chopped open right in front of him.
- LHLewis Howes
No way.
- SPSpeaker
They had to fight. And so he put his uncle on a horse, and that was the end, and so-
- LHLewis Howes
Holy cow
- SPSpeaker
... he got to the new side of India now, and he's there. He lost his shoes on the way. He has no home, no money, no anything. And so he says, "I saw extreme poorness." And when you're in that level of poorness, forget f- helping other people. You can't even feed yourself. How can you feed your family? If you can't feed your family, you can't feed another hungry person.
- 1:19:40 – 1:29:10
Three Money Myths: What Money Is, Using It as a Tool, and Liabilities
- LHLewis Howes
What would you say the, the three biggest myths about money that you've debunked over your time of learning about money, that maybe you grew up thinking it was One way, like you were talking about loans and banks and all these different things
- SPSpeaker
Yeah
- LHLewis Howes
... what are three myths about money that you've found out were not true?
- SPSpeaker
Well, the first thing that I, I would say, I don't know if it's a myth, but I would say that the first thing everyone has to understand is what money is. And I, I don't mean in terms of like, uh, in terms of wealth, but, like, money is just paper. It doesn't make you a good person. It doesn't make you a bad person. It just... It's paper. And we talk about all these, uh, insecurities people have with money. I grew up being told, "Don't talk about money. Don't worry about money. Don't stress about money." Yet here I am seeing my parents work their butt off every single day. So-
- LHLewis Howes
Trying to make money
- SPSpeaker
... trying to make money, and it doesn't make sense. How am I supposed to not worry about money, and you want me to become a doctor because, you know, you read those, uh-
- LHLewis Howes
[laughs]
- SPSpeaker
If you go to those, uh, career fairs, they show you the different careers, right? And doctor is always number one, the highest income. So why am I doing this if it's because of the income instead of because I love it or do something that I love? Why not go-
- LHLewis Howes
Or because I wanna help people
- SPSpeaker
... yeah.
- LHLewis Howes
Or, you wanna save lives.
- SPSpeaker
Exactly.
- LHLewis Howes
Yeah.
- SPSpeaker
And, and what's crazy is if you understand money, you become financially educated, you're willing to talk about it, well, now you can be financially stable doing whatever you want, and you can follow something you love and still be financially okay. Because we assume that you have to have this in order to make money, you have to have this job in order to make good money, you have to have this career if you wanna be financially stable, but that's a complete lie.
- LHLewis Howes
Yeah.
- SPSpeaker
But that goes down to n- us being willing to talk about money. And, you know, I talked about this in our last interview, but, you know, money is one part of our lives, and w- the reason why people are scared to talk about it is because we're insecure about it, and that's because we don't understand how money plays a part in our lives. It's one aspect. I say that there's four. You have to be physically healthy, mentally healthy, spiritually healthy, and then financially healthy.
- LHLewis Howes
Mm-hmm.
- SPSpeaker
If you're not financially healthy, well, that can make everything else much more miserable because you can't pay your bills. But if you're financially healthy, you're rich, but you have nothing else, more money just makes you more miserable.
- LHLewis Howes
Mm-hmm.
- SPSpeaker
So you need to live a holistic life and understand how money plays a part in your life. That way the, the finances can have the biggest power, and then you understand that more money just amplifies who you are. It's like fire. It's like fuel. It fuels your fire. If you're a good person and you have more money, you have a tool to do more good. If you're a bad person and you have more money, you have a tool to do more bad.
- LHLewis Howes
Yeah.
- SPSpeaker
Which is why we need more good people with money.
- LHLewis Howes
[laughs] Exactly.
- SPSpeaker
How do we do that?
- LHLewis Howes
Well, yeah, a lot-
- SPSpeaker
Get educated
- LHLewis Howes
... a lot of people just say that money exposes who you really are.
- SPSpeaker
Exactly.
- LHLewis Howes
It amplifies who you are-
- SPSpeaker
Right
- 1:29:10 – 1:36:04
Net Worth vs. Self-Worth, Failure and Persistence
- LHLewis Howes
Here's one that I think a lot of people do, and I think it hurts them in a big way. How does someone not make their net worth attached to their self-worth?
- SPSpeaker
[sighs] That's a good one. You know-
- LHLewis Howes
Meaning how do they believe in themselves, have confidence, uh, have, you know, love for themselves-
- SPSpeaker
Yeah
- LHLewis Howes
... when they're not making that much? Maybe they're in a transition.
- SPSpeaker
Yeah.
- LHLewis Howes
Maybe they lost their job.
- SPSpeaker
Yeah.
- LHLewis Howes
Maybe they're just starting out.
- SPSpeaker
Sure. So-
- LHLewis Howes
And how do they also, when they start making some cash, not tie their bank account number to their self-worth?
- SPSpeaker
So when you fail at something, you don't become a failure as a person. You failed at a task. And in order to become successful at something, you have to fail at a lot of tasks.
- LHLewis Howes
Mm-hmm.
- SPSpeaker
And so the first thing is you have to understand that about yourself is that just because something didn't work, just because you failed at something does not mean that you are a failure.
- LHLewis Howes
Mm-hmm.
- SPSpeaker
Maybe you failed at a task. I've failed at a ton of things.
- LHLewis Howes
Yes, yes.
- SPSpeaker
I'm sure you have too. You just, you have to screw up a lot, and that's how you find the good. So now when it comes to net worth, if you want me to be completely honest, your net worth is pretty useless. It's a worthless number. It means nothing. It means less than nothing because what is net worth? It's a paper number. If I have a million dollars net worth in the stock market today, tomorrow it could be worth 400,000.
- LHLewis Howes
Mm-hmm.
- SPSpeaker
It doesn't... If, if you are valuing your life, and even worse, if you are spending based off of your net worth, you're living a very dangerous life. And some people do do this because they say, "Oh, I'm worth a million dollars, so I'm gonna go out and live a million dollar lifestyle." You don't have a million dollars. You're just worth a million dollars. You don't have income coming in. You're just worth this amount of money, and so you go and borrow a, a ton of money, and you start living this million dollar lifestyle, and then things go down, and now you're the first one to lose your shirt.
- LHLewis Howes
Mm-hmm.
- SPSpeaker
So the thing that I want you to remember is first, regarding the failure, you're not a failure. Uh, just because you failed at a task does not mean you're a failure. It's actually a good thing you failed because that means you're one step closer to finding that success. And then second, regarding the actual net worth number, look, this is just temporary. Everything is temporary, and you have the opportunity to build something a lot bigger. You have to have the right mindset. And if you are here in America, you're in a first world country, you have the opportunity-
- LHLewis Howes
Mm-hmm
- SPSpeaker
... to do that, but you have to be willing to learn and be willing to give it time. So you have to be patient but also impatient at the same time. Patient in the sense that you have to understand that get rich quick is m- majority of the time a big scam.
- LHLewis Howes
Yes.
- SPSpeaker
It doesn't work. Um, it makes the people selling to get rich quick rich. [laughs]
- LHLewis Howes
And you broke. [laughs]
- SPSpeaker
And you, you broke. Uh, so the first thing you gotta understand is that. But then second is you wanna be impatient where you gotta, it's gonna fuel that drive, fuel that work ethic, fuel that discipline, and you have to be willing to keep going. You know, I don't... If you would've told me 15 years ago or 10 years ago, "Hey, man, you're gonna be interviewing with Lewis on this show," I, I would never thought that's possible. Like, you know, I grew up being told- Somebody like me can't do this. Somebody like... You know, I remember talking to my own family members, like, "You can never be a CEO of a company."
- LHLewis Howes
Hmm.
- SPSpeaker
Uh, y- somebody like you can't do that. You have no business background. You couldn't even-
Episode duration: 1:36:05
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Transcript of episode fQXrWhcomdY
