If You Want To Become Rich, Understand THIS | Jaspreet Singh EP 925

0:00There are two big things happening at one time that I've never done before. I'm going on a book tour for my new book, Make Money Easy, and I'm doing a podcast tour at the same time. It is going to be big, and I'm going to seven cities in 10 days. Get your friends, get your family, bring everyone you know to these cities. I'm coming to Austin, Texas, New York, Boston. We're going to Nashville. Then we're going to Los Angeles, San Diego, and San Francisco. Make sure to get your tickets right now. Go to lewishouse.com slash tour. Again, bring everyone you know if you're looking to create more financial freedom and abundance in your life and you wanna see a massive guest live on the School of Greatness show.

0:45Get your tickets. I can't wait to see you there. Hi, my name is Lewis Howes and welcome to the Daily Motivation Show.

0:59First thing everyone has to understand is what money is. and I don't mean in terms of like in terms of wealth but like money is just paper 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 want to be financially stable but that's a complete lie and that's because we don't understand how money plays a part in our lives It's one aspect.

1:33I say that there's four. You have to be physically healthy, mentally healthy, spiritually healthy, and then financially healthy. If you're not financially healthy, well, it 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. So you need to live a holistic life and understand how money plays a part in your life. That way, 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.

2:01It fuels your fire. If you're a good person and you have more money, you have a tool to do more good. Second thing is, how do you use money and value money? Because you can use your money as a tool. And this is what wealthy people do because not what do they do with their money. You use your money to buy your time back. Because what so many of us do is we're exchanging our hours for dollars. You go to work every single day and you get paid. But what are wealthy people doing? They're not working just to use their money as a way to buy hours. They're using the money to buy their time back. Because now you can build things and build processes and invest your money because now you can use your money as a tool instead of as a fool.

2:40That's what I like to say. But this is where it's how do you now use your money to make your life better? And you don't want to be now just buying a whole bunch of Gucci and Louis Vuitton. It's now actually improving your life. Not to make your life look better, but to actually improve it from the inside out. Yeah. So the simplest example would be you start a YouTube channel. We talked about buying a camera. Well, one thing that you could do is you can hire a video editor. You go on a freelance site, hire a freelance video editor. And now what are you doing? You can spend more time making more videos instead of spending all your time editing the content.

3:16So you can focus on your time. You can hire someone to mow the lawn. You bought your time back. You can hire somebody to help get you your groceries. You buy your time back. It costs money. You have to spend money in order to do that. But you're getting something in an exchange. and now you're buying your time back so you can use your money as a tool and you can use your money as a tool to buy your time back or you can use your money as a tool to make you and attract you more money. That's what wealthy people do and so you want to be able to use money in that way. The third thing would be now to really, I mean, I know I talk about this a lot, but you have to understand the difference between something that makes you money and something that loses you money.

3:52That's a liability, yeah. And there's nothing wrong with spending money. There's nothing wrong with having luxuries. There's nothing wrong with having the nice things. But it's a matter of when can you actually afford it. You have to know when the right time is for you to have it because you want to first make yourself rich. And then, hey, if you can afford it, do whatever you want. You take the earned income, you're working every single day. You take this income and you use as much of that as possible to invest into assets. The assets pay you, live off the assets. Because now those assets don't need you to go to work every single day to get paid.

4:23So if you break your leg and you can't get paid, you're not getting that earned income. but that active, the passive income from your assets still coming in. And now if that's the money you're living off of, you are free. Your earned income is just buying you more assets. And so how do you start that, right? And so this is where you have to kind of build some sort of system for yourself. And the rule that I would always say is follow something like my rule of five. If you can't buy five of them, you can't afford one of them. So it's, you know, you want to buy a$1 ,000 phone. You want to buy a$1 ,000 watch.

4:53Okay, fine. Can you buy five? and if you don't have the ability to buy five of them, you can't afford to do that, then you can't afford one. If you can't buy five, you can't afford one. And then you want to create a system, like a system that automates your finances where now you have something going on with your money that is putting your money to work no matter what. And so one of the easiest things you can create your own is to follow something like a 75-15-10 plan, which means that for every dollar you earn from now on, $0.75 is the maximum you can spend. $0.15 is the minimum you're investing.

5:28And$0.10 is the minimum that you're saving. Now, the savings is you want to build somewhere between 3 and 12 months worth of savings if you want to have that protection. Three months if you don't have a lot of responsibilities, you don't have all that going on, and you have a high risk tolerance. 12 months if you want to play it safe. You figure out what's right for you. After you filled your savings, you fill up the savings. You don't want to put any more money into it because now you're just being eaten away by inflation. The savings is not there to make you wealthy. It's there just to protect you against an emergency.

5:59Then what you do is you take the money and put it into your investments. And now you just keep investing money. Now what happens is as you grow your income, you don't change this ratio. So if you go from$40 ,000 a year to$400 ,000 a year, you keep the same ratio and you're still investing first. And then you keep saving your money and then you know how much you can spend. because now what you're doing, which is what wealthy people do, is you invest before you spend. So when you fail at something, you don't become a failure as a person. You fail at a task. And in order to become successful at something, you have to fail at a lot of tasks.

6:33And so the first thing 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. Maybe you failed at a task. I failed at a ton of things. I'm sure 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 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.

7:03If you are valuing your life, and even worse, if you are spending based off 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 going to 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 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 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.

7:42And 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 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. impatient in the sense that you have to understand that get rich quick is a majority of the time a big scam. It doesn't work. It makes the people selling the get rich quick rich.

8:15And you broke. So the first thing you have to understand is that. But then second is you want to be impatient where you got to, it's going to fuel that drive, fuel that work ethic, fuel that discipline. You have to be willing to keep going. Forget the financial side, doing something you love, living a purposeful life because what's important to you is not what's necessarily important to me. And what's important to someone listening to this is going to be different than me. And we all have a different passion, a different purpose, and a different mission.

8:47Thank you so much for listening to today's episode of The Daily Motivation, and I hope you have an amazing rest of your day. If you enjoyed this episode, make sure to click the link in the description. That will take you to the full episode of our main podcast on The School of greatness. And if you are loving the daily motivation, please follow us over on Apple podcast and Spotify and leave us a review over on Apple podcast right now. And if you want more exclusive content and ad free listening experience, make sure to subscribe to our greatness plus channel on Apple podcast right now. And if you want to get even more inspiration from our world class guests and learn how to improve your life and take it to the next level, then make sure to sign up for the Greatness newsletter and get it delivered right to your inbox over at greatness.com slash newsletter.

9:37Again, have an amazing day and I'll see you tomorrow with another episode of the Daily Motivation Show.