← Tom Bilyeu's Impact Theory
Tom Bilyeu's Impact Theory
This Is Your LAST CHANCE To Get Rich In Upcoming RECESSION! | Jaspreet Singh (Fan Fav)
02:01:21
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- [00:01]
Tom Bilyeu
Oh, the car from Carvana's here. Well, will you look at that. It's exactly what I ordered.
- [00:07]
Jaspreet Singh
Like precisely.
- [00:09]
Tom Bilyeu
It would be crazy if there were any catches. But there aren't, right?
- [00:14]
Jaspreet Singh
Right. Because that's how car buying should be with Carvana. You get the car you want, choose delivery or pickup and a week to love it or return it.
- [00:22]
Tom Bilyeu
Buy your car today with Carvana Delivery.
- [00:26]
Jaspreet Singh
Or pickup fees may apply. Limitations and exclusions may apply. See our seven day return policy@carvana.com when the holidays start to feel a bit repetitive, reach for a Sprite Winter Spiced Cranberry and put your twist on tradition. A bold cranberry and winter spice flavor. Fusion Sprite Winter Spice Cranberry is a refreshing way to shake things up this sipping season and only for a limited time. Sprite obey your thirst.
- [00:55]
Tom Bilyeu
Jasper Singh. There are more millionaires made in a recession than any other time. But my question is how and what can the average person do to take advantage of that moment? Or since I know the punchline, really any moment. And guys, make sure that you stay till the end because I'm going to give you the eight things that I have learned from amazing answers from Jespreet, like you're about to hear.
- [01:18]
Jaspreet Singh
So let me start with the simple answer and then we'll kind of break it down into more complex answers. Recessions create more millionaires than any other time, like you said, because when you have a recession, a market crash, people get scared and then they sell their assets. What's an asset? Stocks, real estate, crypto gold. It can be any type of investment depending on what the crash is, what the recession is about. And that then creates a buying opportunity for somebody who has access to cash or capital and somebody who is financially educated. So if you have the cash, you're prepared and you have the education of knowing what to buy. But now a crash creates a discount for you to come in and buy an investment on sale. You could think of it like Black Friday for investors. You get to go shopping at a discounted price because now people are selling because they're scared. And what you want to look for now is good investments that are being hurt not because their investment is on the verge of bankruptcy, but because the economy is pushing the price of good investments down. So that's kind of on a, in a nutshell, to answer your question, what that means. But now if we dive a little bit deeper, we go a little bit higher level. How do you do this? What does it mean? Well, if you ask the majority of people or if you just ask anybody, is a recession a good thing or a bad thing? Most people are going to say it's a bad thing, but it's really relative, depending on which side of the equation that you're on. See, it's bad for so many people because recession means I might lose my job, I might lose my home, I might lose my savings. So it's bad in that sense where if you're not prepared, you might not be able to weather the storm and you might get financially hurt. We've seen this happen for forever now that anytime you see a bubble burst, the people who are not financially educated, the people who are not prepared, the people, the people who don't understand what's going on in the economy get burned.
- [03:12]
Tom Bilyeu
I remember the first time it occurred to me, I was like, wait a second, if I don't lose my job, then a recession doesn't impact me. Now, that was before I had any money invested. So now I have a better understanding of if you're counting on income or whatever from your investments, then it can still be a dicey period. But that was one of those things. Like a recession was a boogeyman. It was like something to be afraid of, but I didn't really understand why, why I was supposed to be afraid. And so my question is, why do people get scared in a recession? What is it that makes them sell? I'll give you a very specific thing. So in crypto, I haven't, Even though the prices plummeted, I haven't sold a single eth, not a single satoshi. I've just been holding, not tense about it. So why do so many people get scared in a recession?
- [04:02]
Jaspreet Singh
So there's two reasons why someone sells. Either it's a forceful sale or it's a voluntary sale. The voluntary sale is a little bit easier to understand, so I'll explain that first. So when the 2020 pandemic hit, we saw the stock market crash. Now, I think most of us understand.
- [04:19]
Tom Bilyeu
Crash is a definition, by the way.
- [04:21]
Jaspreet Singh
Well, yeah, crash, bear market is when you see the market fall by 20% or more. Now, the stock market, when the economy shut down In March of 2020, we saw the fastest stock market crash in the history of time. Now, naturally, people got scared faster than Great Depression, people got scared. And I think most of us understand that. Your 401k, for example, is a retirement plan that you don't want to touch until you are near retirement. What happened? Well, we saw a massive amount of people sell out of their 401ks near the bottom of the 2020 stock market.
- [04:59]
Tom Bilyeu
Crash because they're convinced it's just going to keep going lower. And it's like, I got to get out now.
- [05:02]
Jaspreet Singh
You just see your portfolio in the red. You lose 10, 20, 30, 40, 50%. You get scared and you're like, I want to save whatever money that I can because you don't understand what's going to happen. I mean, if you look at it from the last hundred years chart, you'll see that crashes happen. But then each time they happen, our economy is stronger, rebounds, and the market moves higher. But we get this, like, narrow vision where we're looking at today, tomorrow, the day after next week. And now we want to pull out as fast as we can to save, quote, unquote, save our money. And so you sell. So this is a voluntary sell, where now you get scared, you panic. People talk about how the world is ending. I mean, the media is in the business of selling hype, okay? It's as unfortunate as it is. You have to understand this. Things are typically never as bad as they seem. And. And things are typically never as good as they make it seem. So it's typically somewhere in the middle. And so now when you know that, you'll understand that, okay, the stock market is a liquid investment, meaning you can buy and sell a stock with the click of a button. I can buy and sell a share of a company literally within two seconds. And so what does that mean? Well, if I start reading headlines, I see the market going down and start getting this anxiety, I start getting this fear year, I might just want to sell. I mean, I can do it in two buttons. And if all my friends talk about how they're selling, how they're losing money, and the media keeps talking about how the market's collapsing, the world is going to end. Because the media is either going to say the world is ending or nothing bad will ever happen.
- [06:25]
Commercial/Ad Voice
Right?
- [06:26]
Jaspreet Singh
It's typically one of these two extremes because that's what drives them.
- [06:29]
Tom Bilyeu
And I want to get to that. That's one of the things I'm going to push you on later is like, I've heard you talk about this.
- [06:34]
Jaspreet Singh
People lie a lot. They do.
- [06:36]
Tom Bilyeu
And then they come out and admit, yeah, we were lying, but we had a reason. But I won't derail us now. But like, that kind of stuff freaks me out.
- [06:42]
Jaspreet Singh
And that's. And that's the reality of life. And we'll talk about that. So now if you understand that, what does that do? It manipulates people's emotions. Emotions then drive our actions. And what are these actions? We sell at the bottom and then we buy at the top. Because at the top is the same thing. People say, oh, everyone's making money on the stock. You can't believe how much money these 17 year old kids from high school are making. You can't believe how much this hedge fund made. You can't believe how much money, whatever your neighbor made. And now you get jealous, you get this fomo. You don't want to miss out, you come in and buy. Then at the bottom is the opposite emotion. So that's the voluntary sale. Because most of us don't have the psychology which is a part of the financial education of how to manage our investments. The second is the forceful sale. Now the simplest example that I can give you of this will be if we backtrack. Look Back to the 2008 real estate crash. Now, if you bought a home for $400,000 and you had a adjustable rate mortgage, which was very common back then.
- [07:38]
Tom Bilyeu
And it's getting common again now, it.
- [07:40]
Jaspreet Singh
Is getting very common again, which is very bad news. But they were very common. And another thing that was very common back then was a 0% down payment. But let's assume you put a little bit of money down because you were, you wanted to put some skin in the game. So you put a little bit of money down, you put 3 to 5%, maybe 10% down. Well, what happened was a few years after you bought the home, it was interest rates went up. And now you realize really fast, I.
- [08:04]
Tom Bilyeu
Want to walk people through what an ARM is. So an adjustable rate mortgage, I had one. If I had known how dicey it was, I would not have done it. So an adjustable rate mortgage, you're basically betting that the future is going to be better than the current moment. So you take something with a certain interest rate and you're like, okay, I'm going to be able to refinance. Either the value of my home is going to go up or interest rates are going to come down, whatever. But I'm going to be able to refinance my home, so the story goes, or I'm going to be able to pay it off, whatever, before that huge increase. And you are betting literally your house that you're going to be able to either make enough money to cover the increase or that you'll be able to sell your house at a price that you like or be able to refinance it before that happens.
- [08:51]
Jaspreet Singh
Exactly.
- [08:52]
Tom Bilyeu
It's so dicey. So people end up Getting in these insane situations that tends to go along with when people are getting pretty loose and fast about not expecting as much money up front. So now you don't have any equity in the property. You get upside down, meaning that the house is worth less than you owe. So even if you sold it, you're going to be selling it for a loss. And so now you're in this really dark spot where you can't sell it. The interest rate just jumps, sometimes dramatically. And so now you owe significantly more. I mean, it could be 50% more, 100% more, and you're just in a really. But you can't get out from under it unless you just let them foreclose on you or you have to find a way to pay that money. And it is speaking from experience. I was so convinced that my life would be in a fundamentally different place than it was when I took it. So I put a five year bet on myself and dude, it ended up working. But, oh my God, in the intervening five years, I became so much more financially literate that I was like, what was I doing? Like, that was the most dangerous thing I could have possibly done.
- [09:57]
Jaspreet Singh
It's a very dangerous vehicle when it's given with no financial education. And the problem is it's not given with any financial education because, see a banker. So I'm going to just explain this for a second. A banker is in the business of making money. How do they make money? By selling you money. So they're trying to sell you as many loans as possible. And now if you're looking at this $400,000 home, and let's just assume for rough numbers that the mortgage on this $400,000 home is $2,000 a month. And you might say I'm kind of stretching myself a little thin, but I want to own this home. The banker doesn't want you to not buy the home because if you don't buy the home, they don't get paid. So now what they can do is say, well, how about you buy this $400,000 home? You don't pay two grand a month, but instead you just pay $900 a month. Are you telling me I can buy this $400,000 home for $900 a month with nothing down? Yeah, how about you have this free TV as well? Because there was promotions back then where they would give you a free tv. You literally put no money down. Now you can buy this home. And so what was happening is people were buying these types of homes with these types of deals, thinking they have this amazing price, $900 a month, and it was given with zero to extremely little financial education. Because then what would happen is after a number of years, your interest rate would readjust because you were given this low teaser rate for the first few years. And the pitch was, well, don't worry about it. Home prices always go up. So if home prices continue to go up or not, if, when home prices go up in a few years, if you can't make the payments, don't worry about it. Just refinance out or sell the home, and then you have cash in your pocket. So what could go wrong? And this was the pitch. Now, again, many people are not financially educated, not taught about money in school. So that was the first aspect. The second aspect was these loan officers. Banks are incentivized very heavily to sell as many mortgages as possible, because the more mortgages you can sell in a month, the bigger your bonuses. And so you had these two aspects happening. So now you bought this $400,000 home, you pay $900 a month, and things are great. Then a few years go by, you get this letter in the mail saying your payment's going to go from $900 a month to, let's just say, $2,000 a month. Now, if you don't have the ability to pay this extra $1,100 a month, you're going to say, oh, that's quite a bit. Oh, well, no big deal. Let me call up my banker and tell him the situation, and he'll tell me what my best options are, because my banker is a good financial advisor, right? Call up the banker, say, hey, banker, I can't afford this $2,000 a month. What are my options? He says, well, you can refinance or you can sell. This is what was happening now getting closer to 2008. And so you said, okay, well, let's get an appraisal, or let's look at the value of the home. You, you bought it at $400,000. Now you maybe owe $380,000 over the first few years because the first few years of your mortgage are interest heavy, meaning the majority of your monthly payment is going towards interest not paying down your balance. And so now they look at it and they say, so the value of your home is now 350,000. You owe 370, 380, meaning you're underwater. So now if you owe 380,000 on a $350,000 home, no bank is going to want to refinance because now you're underwater. They're not going to want to re lend you any more money. Otherwise you're going to have to bring cash to the table. You can't sell the home because if you sell your home for $350,000, you need to still pay the bank the other 380. So you need the $30,000 coming out of your pocket. And if you don't have $30,000 you need, you can't sell. So what's the next option? Well, if you can't make the monthly payment, either you're going to walk away or the bank is going to force you to walk away through a foreclosure. This is now a forced sale. So now the bank comes in, they take the home from you, and now the bank wants to liquidate because they want to not own properties. They want to just lend money. That's their business. They don't want to own homes. And so that was what happened. And so many more homes hit the market. You see the same thing happen in the stock market when you buy stocks on margin. And now what does that mean? It means you're using debt to buy stocks. And when you use debt to buy stocks, your lender, your brokerage doesn't want to see your portfolio fall by a certain amount. If it falls by a certain amount, they're going to ask you now to cover, meaning put some money in. And if you don't have this extra cash, the reserves to put more money in because you thought your investment was going to go up, so you went all in. Well, now they're going to force you to sell and that is now again a forced sale. So now markets are going down. What causes people to sell either voluntary because you get panicky, you get scared, you get worried, or you think you have a bad investment so you want to exit as fast as possible. Or on the flip side, it's a forced sale, where now you used debt and you were over leveraged and now you're underwater and now you're being forced to sell. So what does this do? This increases the supply of this asset. Now again, what is an asset? Stocks, real estate, crypto. It can be any asset out there, an investment. So now when you increase the supply of this asset, well, that can now bring the price of things down because the price of anything really, whether it's an asset or something else, depends on supply and demand. When you have a lot of supply of something with no demand or very little demand, the price of this thing is going to fall. Because now all the sellers are Fighting against each other to get somebody to buy it. On the flip side, when you have a lot of demand but no supply, the price of this is going to go up. This has been the real estate market for the last two years or so. We have had this massive demand of people wanting to buy homes. Why? Well, for one, the pandemic changed our workforce where now you can work from home. So people want a home with an office in the home. Second, people want to move out of the big cities because they realize, like, if I can work from home, I don't got to pay this $5,000 a month in Manhattan. I can go live in a suburb and pay a fourth of that and have a bigger home. And then third, mortgage rates were the lowest that we have ever seen ever. In the history of American modern history, we've never seen mortgage rates this low. So this created a massive demand, meaning people wanting to buy buy homes. So you had this flood of people wanting to buy homes while the supply of homes was extremely low. So some people didn't want to sell because they were worried about the pandemic. They don't want people to come in their homes who could have potentially been sick. Second, builders couldn't build homes because we had a labor shortage. We had and still are facing supply chain issues. So what does that mean, you want to build a home? Well, do you remember there was a period where there was a huge spike in lumber costs? Builders could not get access to certain materials. Certain materials were backed up. It was harder to find labor to find workers to help build the home. And then on top of that, the cost kept going up because now workers wanted more money. The cost of materials kept going up. So it was this big dilemma in the building side. So the inventory of homes was artificially low. You could not build more homes. So for the last 18 months or so, two years, we saw the situation where demand was through the roof, literally, and supply was very low. Some of the lowest supply levels have you ever seen that pushed home prices up at the fastest rates essentially ever. And now we're starting to see that slow down, where now demand is starting to go down because mortgage rates have gone up so significantly. People are looking at the higher prices of homes, saying, I don't want to pay this higher price. So that is starting to flip with this is where, you know, understanding how supply and demand works. And you now, as a financially educated person, as an investor, what you want to be looking for now, when you see market slowdowns, a recession, a crash, what you want to Be looking for is not the emotion. But now cutting through the noise, cutting through the media, but now looking for the actual financial fundamental investments where you have a good asset, a good investment that that's being hurt by the economy that would not. You can come and buy it at a discounted price. And that's what you want to be doing. And that's. I don't want to keep going on this same topic, but after the 2008 crash happened, that's when I first started buying real estate. And I think we talked about this before. I didn't understand what was going on. I was 19. I had some cash saved up because I was running some entrepreneurial ventures. Detroit, which is kind of my home home base, Metro Detroit. Ford, GM and Chrysler were the main drivers of our economy. GM and bankrupt Chrysler went bankrupt. Ford was on the verge of bankruptcy. So the Michigan real estate market was hit exceptionally hard, and real estate prices had fallen by 90 to 92% in some instances.
- [18:37]
Tom Bilyeu
Oh, my God.
- [18:38]
Jaspreet Singh
And so that was where I was able to come in. I didn't know all this. Like, I look back and I understand this now, but I was 19. I had a little bit of cash saved up, and that was when I bought my first rental property. Because I didn't have any real estate mentors or guidance or people. I didn't. I didn't know any real estate investors. My first real estate Property was a $8,000 condo. I bought it out of foreclosure from the bank. And it previous to me buying it, it had sold for $150,000 just a few years prior to. And that was just the market where there was nobody there to buy it. People thought that I was the crazy one, the dumb one for wanting to go and buy real estate when the world was ending, when real estate was collapsing, when nobody wanted to own real estate. Everybody told me that I had lost my mind. But that was the situation. And you have to understand the psychology. I've said this before. I'm gonna say it again. History. While it does not repeat itself, it does rhyme.
- [19:35]
Tom Bilyeu
Yeah, I want to talk about that psychology and I want everybody make sure you guys stay tuned to the end. I'm actually going to go through the eight things that I've learned from you. Jas Breit, from this is now our second time together. So I have, I think, a pretty good lock on some of the core things you talk about. I'm going to give you guys those eight things at the end, so hang tight. But I want to talk about the psychology this is where I think people really get themselves in trouble. I've talked about this in entrepreneurship a lot. The entrepreneurs that do well are the ones that can self soothe. And what I mean by that is, so in the context of the economy, the price starts dropping. If you didn't anticipate that going into it. Like when I bought into cryptocurrency, I was like, this is a highly volatile asset, so I cannot be panicking when the price starts dropping. I have to know that that's a part of this. And Michael Saylor had said, look, when you're dealing with Bitcoin, he was talking specifically, any time frame less than four years is just noise. So I was like, word. Anything less than four years is just noise. So when it started dropping like a rock, I was like, has it been four years? No, it has not. So then I shouldn't be freaking out. And the reason that I've had success in business is I can self soothe very well. So if I fail up, I can self soothe. I don't lose a lot of time worrying about the fact that I made a mistake or whatever. And the same is true now for me in the financial world. Now, had I been taking the kinds of risks, I guess I'm relatively risk averse, meaning I don't do anything on debt and I don't invest more than I can afford to lose. So that's always been my operating principle. But you hear the advice, buy low, sell high, and it sounds like a joke. It sounds like somebody's toying with you, they're trying to troll you, but that really is the best advice that you can offer somebody. But what people don't understand is if it's hard as hell to do. Because in moments of euphoria, which I had never paid attention, I've lived through them, but I wasn't paying attention to the market. I never lived through a moment of euphoria. We've just come out of that. So I'd say we're about nine months out of euphoria right now. And I'd never gone through that, so I didn't know what it felt like, I didn't know what it looked like. And I remember, and I won't rat the person out that said this, but this is a big influencer. And they were like, maybe the economy now has gotten to the point where it's so global, it's so interconnected that there could never be a recession again. And I remember when he said, I was like, oh, that doesn't sound right. I'M not sure that's how this is going to play.
- [22:04]
Jaspreet Singh
This time is different.
- [22:05]
Tom Bilyeu
Yeah, exactly. And so there was. Everybody just was like, man, this time is different. And so I was like, I don't know about that. So I was like, okay, I need to make sure that I am detaching my emotion, realizing this is why I was obsessed with Ray Dalio. I'm realizing that history is going to rhyme, that this time isn't going to be different. This is going to be another one of those, as Ray says. And so what does that look like? What's going to happen when this goes down? Do I buy more? Am I trying to sell? And watching everybody one that people buy and leverage terrifies me. And man, like, you've really got to know what you're doing if it isn't your full time job. My ignorant, uninformed advice is to not use debt because you can get into a forced liquidation, which is terrifying. In fact, remind me, I want to talk about covenants. I'm going to write that down because that is. I don't know if they use the same language in investing, but that's what you talk about in business or covenants in anyway. We'll get to that in a minute.
- [23:10]
Commercial/Ad Voice
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- [26:36]
Tom Bilyeu
If people can go, all right, this is volatile. Stock market is volatile, Crypto's volatile. Housing markets can even be volatile. I'm not going to panic in a down moment. I'm going to set myself up where I'm not investing more than I can afford to lose. I'm not doing this on debt. You have to keep your income going. So whatever it is, whether it's a job or whatever, you have to be very thoughtful about that. But setting yourself up well, knowing that there's going to be a downturn, that it's about time in the market instead of time in the market and then you can just ride this out.
- [27:13]
Jaspreet Singh
Exactly. And I think for the majority people, the vast, vast, vast majority of people, that is the best advice that you can give them. Don't invest with debt, don't invest more that you can lose. And I'm going to take it one step further because I think for 90% of people out there, regular retail traders, investors, you don't need to be buying individual companies, just put your money into a low cost etf, into a low cost index fund and that's it.
- [27:39]
Tom Bilyeu
Facts what are those though? Josh Breit. Most people don't know what that means.
- [27:43]
Jaspreet Singh
So let's break that down. So an ETF is an exchange traded fund and it is literally a group of companies, a basket of stocks. So instead of you going out and investing in, let's just say McDonald's, the corporation. And now all your eggs are in McDonald's, meaning all of your money is in the investment in McDonald's. So if McDonald's goes up, you can make a lot of money. If McDonald's goes down now you're going to be panicking because your whole portfolio is down. Well, the issue is you have the most upside but also the most risk. Because if the executives at McDonald's run their company into the ground and they go bankrupt, your whole investment's gone. Now if you invest into something like an ETF or an index fund, which are very similar to each other, now you have a group of companies where now it might be McDonald's and 499 other companies. So now what happens? You lower your risk, you lower some of your upside, but you also lower some of your downside. Because now if you run through that same scenario where the McDonald's executives run the corporation into the ground and they go bankrupt, well, you have 499 other companies in the portfolio, so you're okay. And so then what can happen in a low cost ETF or an index fund is they have computers and this is automated where they will kick out McDonald's because now they're no longer fits within this 500 companies. And then they'll put in another company to take the place of McDonald's. So now it's passive on your end because if you're not willing to put in the work to do that active investing to do that sort of fundamental analysis, meaning listen to the earnings calls, study the revenue, study the profits, study what the corporation is doing. If you don't care about doing that, if you don't want to do that, and if you're not willing to do that, don't invest in individual companies. Because now you're taking on all the risk, hoping for some upside versus you can mitigate a lot of that risk by just investing in ETFs or index funds. And you can do this right off of really any stock brokerage app out there. And now you can buy them. Now how do you buy them? Well, two strategies. Passively or actively. Passively, which is a great strategy, is now ideally every week or anytime you get paid, you put a little bit of money automatically into this ETF or index.
- [29:52]
Tom Bilyeu
What system do you use for that?
- [29:53]
Jaspreet Singh
So I use a platform called M1 Finance. M1 Finance, M1 Finance. There's tons of brokerages out there. You can find whatever one you want. Where now it is completely passive. Money is automatically pulled out of my checking account on Wednesdays. You pick the day, doesn't matter, and it's automatically invested dollar cost averaging, dollar cost averaging into my portfolio of ETFs. So I have a number of different ETFs in there. Happens every week whether the market's up, whether the market's down. And I don't touch, just does its thing. The active side would be now you're looking for a good price point. And this is where it gets a little bit more advanced with where if you're willing to do the research, you know, you could. You can pick ETFs or index funds where if you see a big crash, you see prices go down, you can put more money in. Or now you can start looking for good companies that you believe are undervalued. But again, this now gets a little bit more advanced where you have to.
- [30:46]
Tom Bilyeu
Be a really blunt and interesting question.
- [30:49]
Jaspreet Singh
Yeah.
- [30:50]
Tom Bilyeu
The average person, they're not financially literate. Would you rather if they had a thousand dollars, would you rather they play blackjack or try to actively trade that money?
- [30:59]
Jaspreet Singh
Play blackjack or actively trade that money? Don't trade. I think trading unless you want to do it, to learn. I trade it. I'll give you my personal experience.
- [31:06]
Tom Bilyeu
I know you would trade because you know what you're doing.
- [31:08]
Jaspreet Singh
Well, I wouldn't trade. I wouldn't even.
- [31:10]
Tom Bilyeu
You wouldn't trade? Would you trade your only options, blackjack, active trading.
- [31:14]
Jaspreet Singh
So explain that for me because I'm not a casino person. So blackjack is the one where you go to 21.
- [31:18]
Tom Bilyeu
Oh, you're going to lose either way.
- [31:19]
Jaspreet Singh
Oh, you're going to lose either way.
- [31:20]
Tom Bilyeu
The reason I bring this up is I really think that the average person would be better off taking their thousand dollars to Vegas and playing blackjack because it will be fun. If you try to actively trade, you're going to lose your money. Now, is that 100% of the time? No, of course not. But Ray Dalio, for people that don't know, runs the largest hedge fund in the world. When he explains this, I'm like, oh, my God, I'm never going to try to active trade. He said, you're going up against people like me. I spend whatever $200 million a year on research and I have AI which is making trades in milliseconds.
- [31:57]
Jaspreet Singh
Right.
- [31:58]
Tom Bilyeu
We know how fast the fiber optic cable is to make sure that our trades go through slightly faster than the other person, which can be the difference between, you know, a percentage point, which could be millions of dollars. He was like, you're going to lose. And he was like, it's hard for us. And we've got whatever, 1500 employees, like I said, AI that they've been building for the last 25 years. Fiber optic cable, measuring things in milliseconds. He's like, the odds of you finding something that we haven't already traded on is basically zero. Yeah. Every person that I know. This is a very small sample size. I'm well aware of that. Every person that I know has lost money on a long enough timeline. Actively trading.
- [32:43]
Jaspreet Singh
Yeah.
- [32:43]
Tom Bilyeu
The only people that make money are people that are that. And I will use my language. This is how I think about myself. I am too stupid to beat the market. I'm too stupid to be Ray Dalio, that's for sure. And Ray Dalio's entire team and AI and all that. So actively trading is off the table. Just because I know it would be like me trying to play professional soccer.
- [33:05]
Jaspreet Singh
Right.
- [33:05]
Tom Bilyeu
I'm going to get my ass handed to me my. By Messi. The difference between me as a footballer. Yeah. And Messi is the same as me as an active trader and Ray Dalio. Right. The gap is so catastrophically large that at least playing blackjack, I would have a good time.
- [33:23]
Jaspreet Singh
I think the difference is now differentiating active trading versus active investing. Because trading. I tried trading one summer in college and I spent every day staring at charts. Candles, which are these little ways that you can make a stock chart. And you get glued to the screen. You get glued to the emotion. And it is very difficult.
- [33:43]
Tom Bilyeu
Watching candles is emotionally addicting.
- [33:47]
Jaspreet Singh
And so I stopped it because I realized I was never going to make any real money doing this. Active investing. What I mean by that now is you're looking at companies and when you see this company fall, because the whole world is getting scared. Scared. The whole market is tanking. Well, now this is an opportunity for you to come in, buy a great company at a discounted price, and then you just hold on to it.
- [34:07]
Tom Bilyeu
Now, would you do that at the company level or at the ETF index?
- [34:11]
Jaspreet Singh
Now, again, who is the person? For me, I would do it at the company level. For the average person, do it at the ETF level. Because again, you have to be willing to put in the work to research companies. Keep up with the earnings statements if you want to buy and hold for the long term.
- [34:25]
Tom Bilyeu
I am doing active trading right now.
- [34:27]
Jaspreet Singh
Not right now, active investing. I am not actively investing my money into the market. I'm passively investing. The reason why, for one, active investing means I'm putting my money into the market when I see a great buying point. Second thing is, it's now going into my personal life. What is the best use for my money? Right. Investment money in five places, my own business. I put my money into real estate, into stocks, into crypto, into physical gold, in this order. Right now, I see the most opportunity in my own business, market briefs. And so instead of actively putting my money into the market, now my favorite thing you read every morning, it's a great newsletter. Right. So it's where we break down what's happening in the financial markets into a fun, really easy to read email. But for me, I see the opportunity there. It is the biggest problem purpose for me. Bet on yourself and the most excitement for me. So instead of me putting my money into the market, instead of me putting my money into real estate, which I love doing, I've been stopping these active investments and putting my money back into market briefs. That way we can build the company, build the infrastructure, build it into something bigger. And so that's obviously I knew the.
- [35:36]
Tom Bilyeu
Punchline, which is why I asked the question. But I want people to understand that you make a living researching this stuff, knowing about it. And even you aren't doing the active investing, you're doing passive for sure. Very wise. Set that up. But for the average person, the average person, the odds that they will do better by trying to go in and saying, oh, I know where this is going well enough to know that now's a good time to buy McDonald's, whatever. They're going to have heard headlines about Tesla and things like that. And I'm not saying that there aren't moments of precision themselves, but like, if you watch Wall street bets. Do you watch Wall street bets? I don't read it at all. It's scary. You get these kids committing suicide because they don't understand. Like, they'll do something where I forget if it's calls or puts or whatever. I am so not good at this. I want people to be. I know my limits, but whatever it is, where there's an unlimited downside.
- [36:33]
Jaspreet Singh
Yeah.
- [36:34]
Tom Bilyeu
And so they end up owing like $75,000 all of a sudden, and they're like, what do I do? And so now they're just absolutely devastated.
- [36:43]
Jaspreet Singh
Yeah. So Anyway, so let's put trading out the window, people. Don't be trading. Don't trade your money. And now when you're investing your money, don't invest with debt. Don't invest more than you would lose.
- [36:53]
Tom Bilyeu
I want to go back to recession.
- [36:55]
Jaspreet Singh
Yeah.
- [36:55]
Tom Bilyeu
I think this is a huge moment of opportunity. Even though I'm warning people as vociferously as I can about trying to beat Ray Dalio, I do think that, understanding that if you're playing your cards right and you're not overextended and you've done what you're talking about, you've got your five buckets of investment we're going to get into. Remember to hang till the end, because I'm going to give you the eight things that Jaspreet teaches a lot. But if they're doing it well, this is Black Friday for assets. And if people think of it that way, like, don't get yourself in trouble, don't be overextended, don't have debt. But if you think of this as Black Friday, there's huge opportunities. And this really is a moment where I want people to pay attention and take advantage of this moment. I am so hungry for the average person to get educated on this stuff, because I am. I have lived the American dream. And I mean, not that, like, it's your house and all that, but. But that you can change classes. I grew up lower middle class and now I'm wealthy. And so I'm like, no, no, no. This is a set of ideas. If you get your head around the right ideas, like, you can really win. But you have to simplify, simplify, simplify. And because of the Internet, because of meme culture, people get so caught up in the emotion, it's the one thing you can't do. And you have to be like, stone cold logical.
- [38:20]
Jaspreet Singh
You have to get that emotion out, out. And it's hard because everywhere you look on the Internet, YouTube included, there's a lot of emotion. Now, I'm going to be completely blunt, completely honest here, because I'm going to talk about how the YouTube algorithm works, because I think we've talked about this before. I see this on my own platform, where sometimes YouTube is going to promote certain video titles over the other. So let's talk about the market going down. If I say one YouTube title is, the market goes down 3%, and here's what you need to know. Be prepared for market crash. What's going to get more clicks.
- [38:52]
Tom Bilyeu
Be prepared for market crash.
- [38:53]
Jaspreet Singh
Be prepared for market crash. Now I hate that because I hate these titles. Now you're going to say Jaspreet, but you and every major YouTuber has titles that sound like this.
- [39:04]
Tom Bilyeu
Oh, someone got to this video through a clickbait title.
- [39:07]
Jaspreet Singh
Someone got through this, right? And so now let's, let's dissect this because I have a team and for a very long time they kept saying, jaspreet, make these types of titles. And I refused. And what happened? Views went down like this. Now I had a heart to heart with a couple people on my team where they were like, jaspreet, listen, your videos are. I'm saying what they said. I don't want to sound like a super narcissist, but they're like, your videos have real financial education that people need to hear, and it's better than what a lot of people are putting out. I was like, okay, if this title is what it takes to get people to learn what you're saying within the video, why not make it? And so it was one of those things where I was like, oh my God, I hate this. But it's the only way to provide the financial education to get people to click it. Because if I need you to click that video and now I can provide you real education without saying, oh my God, I need to panic and sell. No, understand the opportunities, be calm, look for the options. That's my goal. So it's one of those things where I see it because I'm in it. And you know, I'm gonna talk about market briefs for another second because that's another driving reason for me wanting to create market briefs. Because the Internet is full of sensationalism, especially in the titles, because they need to get you to click. That's how just the Internet works. It's the reality, okay? I mean, it is what it is. I have fought it for a long time. I hate it, but it's the reality. Now. The reason why I like Market Briefs and the reason why I'm so passionate about it is because we can completely separate ourselves from that. Because now we are one email. We are, you know, you know, when it's coming into your inbox every day, it doesn't matter what the title is because it's in the email. Once you open the email, everything is right there. And so now we can give you the actual news without any of that, you know, that hypiness. And so that's the way, you know, you and I operate. But there's a lot of people now take it one step further that even the news, then the actual content of the news becomes just super crazy, sensationalist, that doesn't make any sense, that sometimes an outright lie, which then takes it one step further. Where now you have to be able to dissect the crap, dissect the good. Because the reality is if it doesn't have a quote, unquote, clickbaity title, you're never going to see it. It's never even going to cross your phone, your screen. It will be hidden into the depths of the Internet. So now if you see it and it has a clickbaity title, the question is, what's inside that content? And that's where you have to be able to dissect and dig a little bit deeper, understand if this is good and if this is not. And the general rule of thumb is that generally when times are good, they're typically not as good as the media makes it seem. And when times are bad, it's typically not as bad as the media makes it seem. It seem. It's usually somewhere in the middle. And this is where now you have to really be able to understand and do that financial education for yourself now as an investor. But the best thing is, you know, just, just keep investing your money, looking for those opportunities, but then also be able to understand what's happening, which is taking some of your emotions out of the equation. And so this is now kind of, you know, building that financial education where it's difficult to do, but it's so important, especially in this day, this age where the Internet is our means of education, where accessibility is so much more, where anybody can invest and put their money into the markets. Anybody has access to these tools. Like one thing that I want to mention is when we talk about building wealth, whether we're in a recession, not a recession, the majority of people, I think, assume that it's a lack of tool set that's stopping them from getting to where they want to go. When in reality, for the majority of people, it's a lack of mindset. Most of us have access to the tool set. It's just our mindset that's lacking. You don't need a ton of money.
- [42:56]
Tom Bilyeu
What's the mindset problem?
- [42:57]
Jaspreet Singh
The mindset is one believing I don't have enough money, I don't have access enough tools, I don't have access to enough things to go and do it. That if I want to go and build a business, I need this, this, this, and this. I need $10,000, I need $100,000 to go out and do that. I need to have this type of degree, I need to have this type of parent. I need to have access to these types of people in order to go out and build a successful business. If I want to go out and invest my Money, I need $10,000 before I can invest for it to be worthwhile. Why would I want to start investing with $10? What is that going to do when in reality these small investments do build up? If you are 21 years old today and you start by investing just $100 a month, which is just over $3 a day, and you do this consistently until you retire, until you're 65 years old, 66 years old, and you can get an average 10% return on your money. That doesn't mean it's a 10% return every single year. It's an average 10% return over the course of investment, which is the average stock market return. You will retire a millionaire on that $100 investment, assuming you never increase the amount of money investing. And we're talking about less than $4 a day.
- [44:05]
Tom Bilyeu
That's a hundred dollars a month, not a one time hundred dollars.
- [44:08]
Jaspreet Singh
$100 a month. Yeah. Less than $4 a day. You put $100 a month for the rest of your life. And so even if you get a raise and you never put another penny into your investments, you will be able to retire a millionaire on the $4 a day that you're putting aside.
- [44:24]
Tom Bilyeu
Yeah, see that's why I want people to get stoked on that. Like look, there is an entrepreneurial side and we can talk, talk about that later. That's exciting and high risk and pour yourself into it. You will get kicked in the face over and over and over. But if you care about the thing that you're doing and you have a strong enough, why even losing can be incredibly fulfilling. But that's a separate bucket when it comes to investing and thinking about retirement. It is a totally different ball game that it really does boil down to buy low and sell high. Now how do you get to that point? You can do what you just talked about, which is you put a little bit of money in doing dollar cost averaging. And you may be dollar cost averaging simply because you don't have the capital saved up to do it any other way. By the way, capital is just a fancy word for money. So you don't have the money saved up to do it any other way. So you're just. Every paycheck, it's pulling out. You say you do it on Wednesdays, whatever, just at some Increment, it's pulling some amount of money which can be very small to your point, $100 a month, but doing it consistently and not selling in moments where everybody else is freaking out. And then like as advanced as you need to get is if we're in a downturn and you're doing your ETF or your index and you know that we're in the middle of a difficult time, maybe instead of $100 that month, it's 150 or $200.
- [45:51]
Jaspreet Singh
Right. It's.
- [45:51]
Tom Bilyeu
You're not going crazy. You're still just dollar cost averaging. But now you know that when it's Black Friday for assets that you're going to spend a little bit more just because you know it's going to go farther. But it isn't sexy, man. And this is why, like having now witnessed euphoria, I'm like, people act a fool. And I had the impulse to act a fool. I was like, no, no, go more.
- [46:14]
Commercial/Ad Voice
You're so smart.
- [46:14]
Tom Bilyeu
Like you get this, this is. And I was like, aha. I know better than that. I am a fool. The only thing I can hope for is that by staying rational and calm and not overextending that I can stay in this long enough to sort of wash out my ignorance. Just through time.
- [46:35]
Jaspreet Singh
Exactly. I think it was Wall Street Journal that used to do this thing back in the day where they used to bet against a monkey. Where a monkey would throw darts at a stock.
- [46:46]
Tom Bilyeu
I love this already.
- [46:47]
Jaspreet Singh
And they would compare what the monkey picked against traders.
- [46:51]
Tom Bilyeu
This really happened.
- [46:52]
Jaspreet Singh
This really happened. Look it up on Google. And so the monkey obviously had no financial education. It just literally threw dots at these companies would hold on to it. But I think it was a 10 year span or it was long term thing. Compared it against these massive traders. Guess who won? Not the traders, the monkey.
- [47:08]
Tom Bilyeu
Oh my God.
- [47:09]
Jaspreet Singh
And it just shows.
- [47:11]
Tom Bilyeu
We turn that into a T shirt. That feels like a T shirt. This is so hilarious.
- [47:16]
Jaspreet Singh
It's reality.
- [47:17]
Tom Bilyeu
Really important for people to understand. A monkey outperform professional traders.
- [47:22]
Jaspreet Singh
Professional traders.
- [47:23]
Tom Bilyeu
I'm gonna have to look this up. It's way too important.
- [47:25]
Jaspreet Singh
This is the reality where it's, it's just the value of owning an investment for the long term. And it like you said, that short richness is loud, it's flashy. Everyone talks about, oh my God, I double my money in this meme stock. Oh my God, I made so much money here. It's loud and splashy, but that's also fleeting. It's the first to Come lose money.
- [47:49]
Tom Bilyeu
Where it's like, yeah, you gained all that money, but then you lost it.
- [47:52]
Jaspreet Singh
Exactly. But that other, the real wealth, real true sustainable wealth, is built in silence. It's quiet because it just keeps happening in slow increments over time. And now you start to build this. You know, there's that snowball analogy where from Michigan, right? We have snow there. You start by building a small snowball like this. You put it on the ground and you start rolling it. In the beginning, you got to roll it a lot because you have this much surface area to pick up as much snow as you can. As it gets bigger, it grows faster because now you have all the surface area that could pick up more snow. So you roll it and it picks up more snow and gets faster and bigger and faster and bigger and faster and bigger. And before you know it, now you can have a massive pile of snow. But the initial one is the hardest because you're starting with $100 and you're like, what's $100 going to do? But if you stay consistent with the $100 and if you make more money, you keep putting more money in and you just stay consistent, letting the hundred dollars grow, then you put in another hundred dollars. Now the first hundred dollars is growing, and then you add another hundred dollars, and then you add in another $100. Now the first $100 has grown, hopefully. The second dollar has grown, hopefully. Now you add another hundred dollars to grow. And you just keep doing that month after month after month after month. Now you're really starting to build a snowball that's growing and growing. And if you look at this, not month after month, but year over year, that's when you really start to see the returns. But the problem is, who wants to wait that long? Nobody wants to wait 10 years, 20 years, 30, 30 years. Because we're thinking about, when can I buy my Lamborghini tomorrow? How can I buy my Lamborghini next year? How can I have the nice stuff now? And this then becomes a different question. We're turning to these investment long term investment vehicles to make us rich next month, as opposed to actually doing what it's supposed to do, which is make us rich over the long term. We're trying to do it the wrong way. So now we got to flip the question. If these types of investments are there to make us rich for the long term, how can we make more money today? And so this is where people turn to things like trading. Oh, I can flip these stocks, I can flip these houses. I can do whatever to try to make a lot of money right now. And for some, it might work in the short term, but it is very difficult over the long term. And this goes back to what you were saying regarding something like entrepreneurship. This is more of an income issue because now we're trying to create an income through trading. Now, if you are a full time trader, you have the systems, you have the tools, this is all you do. Maybe it works for you, but for the vast majority of regular people, it is not going to work. And this is where now something like, you know, just like entrepreneurship, it's not going to work for the majority of people. Majority of people are not meant to be entrepreneurs. But you have to start asking the question of how can you increase your income if you want to have that better lifestyle? But now I want to caution that a little bit more too, because, you know, we talked in our previous interview about building systems, how to become financially smart. This is where now one of the simplest, not easiest, but simplest ways to become wealthier faster is when you increase your income to not increase your expenses. And so the best way for me to give an example of this is if you ask the majority of people what's caused your financial issues. The majority of people are going to say it's an income problem. If I just made an extra $10,000, I'd be able to put money aside from my investments. I'll be able to do this, I'll be able to do that, I'll be able to do so many other things. But what data has showed us is for the vast majority of these people is when you make that extra money, what happens? Your expenses go up right with your income. Now you got to buy a new car that matches your new income. You got to go on a vacation, you got to celebrate, you got to go out, you got to, you got to live this lifestyle that matches your income. So instead of doing that, create a system that flows no matter how much money you're making. And one of the simplest things that you can do is follow something like a 75, 15, 10 plan, which means that for every dollar that you earn from now on, 75 cents is the maximum you can spend. 15 cents is the minimum that you're investing, putting aside for investments. 10 cents is the minimum that you're putting aside for your savings. So now Whether you're making 40 grand a year or $4 million a year, it doesn't matter. You're still following the same system where it's just a percentage based on how much money you're earning. And the only thing that you're going to change is your savings. Because you don't want to save your money forever. You want to save your money for three reasons. Save your money for an emergency, save your money for a big purchase, like you want to buy a whole a home or a car, or save your money for an investment. If you're not saving your money for one of these three reasons, don't be saving your money. Now when we talk about saving your money for them, that's a bold statement.
- [52:28]
Tom Bilyeu
Yeah, that's a bold statement.
- [52:29]
Jaspreet Singh
There's no other reason to save your money because now you're just saving your money.
- [52:32]
Tom Bilyeu
We're gonna have to get into inflation, otherwise people are gonna derail. But I also, let's start there. So why, why not save? That's all I was taught as a kid, save, save, save.
- [52:41]
Jaspreet Singh
Me too. So I grew up in a traditional Indian house where the whole idea of plan and becoming wealth, this is for me was become a doctor. Why? Because doctors have a big status and doctors have a big salary. Now when you make this big salary, what is the plan to become wealthy? Not by investing, not by doing some fancy stuff. It's by saving your money. Have a big bank account. So live small, live off of ideally 20 to 30% of your income, save the other 70%. And that might sound extreme, but this is the reality of what a healthy financial household looks like for a Indian doctor.
- [53:20]
Tom Bilyeu
Was it for emergencies? Like what, what is the purpose of saving in that particular mindset?
- [53:25]
Jaspreet Singh
So it's not for emergencies. It's literally just to build up a big savings account to pass on to your kids, to pass on to build wealth.
- [53:33]
Tom Bilyeu
So to be wealthy and live in a shoebox, like what is the, is there, like, are they ever articulating why you're doing it? Like for my, if my mom, if I had pressed her, what would she have said? You never know when you're going to need it. That's the only way to get rich. She would have said something like that. But if I had then pushed farther and said, okay, what's the point of being rich? Well then you can do this, that and the other. Well, not if I'm saving forever, I can't.
- [54:00]
Jaspreet Singh
So I think it has to do with the times somebody grew up in. So this save heavy culture is a big byproduct of my parents culture. People who grew up were born in the 60s, especially in India. So now if you look at that time frame, where you look at before 1970 in India, it was a very tough time where poverty was very common. Most people were poor.
- [54:27]
Tom Bilyeu
See, that I get that's a particular protection against. I don't ever want to be hungry.
- [54:31]
Jaspreet Singh
I don't want my kids to be hungry. But that mindset hasn't gone away. And so it just kind of trickles down, right? You, you see what, you know, because I personally, many of my friends are doctors, many of my friends make a lot of money. Many of these people also have zero investments and have huge bank accounts. Because then you're beaten away from this idea of doing something risky like investing your money. Investing your money is dangerous. It's bad. Like when I, I mean, I. When I wanted to invest in real estate, nobody in my family had ever heard of this concept of real estate investing. Neither had I. Nobody I knew was an investor. So I told my dad, dad, I want to invest in real estate. I found this condo for $8,000. I want to rent it out. Blah, blah, blah, blah, blah. My dad's response was, you are stupid. Go become a doctor. Go do something worthwhile. And, you know, he said it on love. I love my dad, but did he really say worthwhile? Yeah, yeah. Now I could. The reason why my dad said was that extreme about it is, you know, Indian parents have this thing where they like to create stories to scare someone away from doing something. And so, you know, his whole thing was, oh, what happens if your tenant doesn't pay you? What happens if you go to your tenant's door and then they shoot you because they don't want to pay you?
- [55:48]
Tom Bilyeu
That escalated quickly.
- [55:49]
Jaspreet Singh
I mean, this, this was the example that he gave me. And so it's just, it. It's just you start creating all these fears where it's like, if you invest in real estate, you might die. And that's supposed to scare you from not doing it. It's one of those things where it's this lack of financial education, lack of ever experiencing it because you don't know that it's possible. You don't know anybody doing it. You don't know anybody that looks like you doing it. You, you're still new in this country. How are you supposed to go and do it? It's just very scary. Where this is the safe thing is just saving money. If you save 100 grand today and you look at your bank account, a year from now, it's still going to be 100 grand, maybe a couple extra pennies if your bank is giving you some interest, but that's it. If you Invest?
- [56:33]
Tom Bilyeu
Why isn't that the best idea ever?
- [56:35]
Jaspreet Singh
Well, going back to what you said, inflation. Inflation by definition is diluting the buying power of your dollar. So what?
- [56:47]
Tom Bilyeu
I thought this was a fundamental law of nature.
- [56:50]
Jaspreet Singh
Let's.
- [56:50]
Tom Bilyeu
It's really human intervention.
- [56:52]
Jaspreet Singh
Yeah, it really is. Inflation comes from the word inflate. What are you inflating when you have inflation? And it's funny, if you've been watching some of your content or my content, you know that it's. You're inflating, inflating the monetary supply. When you increase the amount of dollars out there without increasing the amount of wealth, the value of each individual dollar goes down.
- [57:12]
Tom Bilyeu
Broke brains. How do you increase money without increasing wealth?
- [57:15]
Jaspreet Singh
So if I just print money, the Federal Reserve bank, which is the central banking system of the United States, they have the ability to print money. They can increase the amount of physical dollars out there or increase the amount of currency through digital things. So the amount of money in circulation, they can increase this. And so if we go to a very basic example, if we live on a hypothetical world where there's me, you, and three other people, and each one of us, us five have $20 each and that's it. We're each equally owners of 20% of this world's wealth. But what happens now if this new alien government comes in and then they magically gave us $20 more each?
- [58:00]
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- [58:39]
Tom Bilyeu
Where you left it for a limited.
- [58:41]
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- [59:47]
Jaspreet Singh
Health.
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- [61:55]
Jaspreet Singh
20, you know, double as wealthy as you were before? You might feel like you are for a minute because you see, oh my God, I have $40. There's only $100 in this world. I have 40 now. And then you go and talk to your friends and you go shopping and you realize, oh, everybody has $40. So now all of a sudden the price of anything you want to buy is going to be double because you've increased the amount of currency in this case without increasing the actual wealth. And so this is where you kind of have to Differentiate currency from money because you have to kind of define what money is. Because money can, can have a couple different definitions. It can be a store of value or it can be a means of exchange. And what I mean by that is money as a store of value. If you look at physical gold, for example, gold is your traditional store of value because it takes time, effort and labor to mine physical gold. So that time, effort and labor is represented through a physical gold bar. And that is the value, the physical gold. Now if we compare that to something like our paper dollars, it's very easy to transact with. It's a very good means of exchange. Exchange gold is difficult to transact with. If I wanted to go to McDonald's and buy something with some gold, it's going to be very hard to do that. Versus with dollars. It's very easy to exchange. However, it can be easily manipulated because the Federal Reserve bank can print money essentially on command, so they can increase the amount of dollars out there, which decreases the value of each individual dollar. So while our dollars serve as a very good means of exchange, it's not a very good store of value. This is where now what wealthy people do is they want real money. They want something that's not only going to store their value, but also hopefully increase in value. This is what assets do. If you look at hope, we hope, right, you invest in assets for the purpose of making money. How does it make money? By increasing the amount of value that it provides. When you invest in a company or an ETF or anything, you want to invest in something that you believe will be more valuable in the future. If you didn't believe that, you wouldn't put your money in there. How is it going to become more valuable? How is McDonald's or Amazon going to become more valuable? Their goal is to produce more value, to create something new that will provide more value to more customers. And then their value is represented through revenue, through profits, through money. So you're investing in something that you believe will produce more value. Same with real estate. You want to invest in an area that you believe will be a more desirable area. Because if you invest in an area where businesses are moving to, where people are moving to, where jobs are moving to, you own that land, you own that property, you own that building that is now more valuable because more people want to be here. And now that is represented through money, through this currency, where now more people want to be there. So now rents are higher, property values are higher.
- [64:47]
Tom Bilyeu
This is why this stuff gets complicated and why people turn their brains off. Because for instance, if you pick the wrong neighborhood, you can lose your ass.
- [64:55]
Jaspreet Singh
Right.
- [64:55]
Tom Bilyeu
And this is where ETFs, index funds become very interesting to use real estate as an example. I personally, because I recognize how ignorant I am, I would much rather be investing in a whole bunch of neighborhoods across not only this country, other countries, because I don't know which one's going to pop off.
- [65:14]
Jaspreet Singh
Yeah, right.
- [65:14]
Tom Bilyeu
So because there is so much uncertainty, it's like as you spread that out now, but to your point, you're limiting your upside, but you're limiting your downside.
- [65:24]
Jaspreet Singh
Right.
- [65:25]
Tom Bilyeu
That to me is far wiser. You're never gonna, you don't become the next Ray Dalio by doing that. So you're not going to turn into a billionaire. But when you think like when Ray Dalio was pressed, like, what would you do? Like if you could only leave a set of instructions to your kids about what to do with their money, you couldn't actively manage it for them. You couldn't have your company do it. You just had to give them instructions. And he came up with what he called the All Weather fund. And so it's just like, I don't know what's going to happen. So here is like the diversification that you should put it across and you're not going to make as much money, but you're not going to lose a bunch of money either. And so all of this stuff is so freakishly complicated that even better, it is so easy to be wrong and so hard to be right that your odds of getting it right consistently enough, because it's to your point about the monkey. If you looked at it in six months, monkey probably loses. You look at in 12 months, monkey probably loses, 18 months, probably loses two years, maybe loses three years. Though it starts to be like all bets are off. And by the time you get to 10 years, it's like the monkey's winning just because you just left it alone.
- [66:34]
Jaspreet Singh
Yeah.
- [66:34]
Tom Bilyeu
Instead of thinking that you could outsmart the scenario.
- [66:38]
Jaspreet Singh
And Warren Buffett did a very similar bet against some major hedge funds on Wall Street. And what he bet, it was a $1 million bet that the winner would give a million dollars and then they would go to charity. And his bet was that the average person would be better off by investing their money into a low cost index fund as opposed to actively managing their money, actively trading their money like the hedge funds were doing over the long term over a 10 year period. And what happened was exactly what you said in the beginning, the hedge funds were Crushing the index fund. The index fund was down. Hedge funds were going up because they were able to find these trades and make all this money in the short term. And the media was asking Warren Buffett, how do you feel about it? He said, the 10 years are not up yet. And then come year 10, well, then we had some swings on the market. Some hedge funds had some losses. You took out their fees, which is also a big chunk of it. After factoring in the fees and all that other stuff, the index fund. And what did he do? He just put his money into it, set back, and didn't do anything. Versus the hedge funds are spending all their time managing the money, trying to beat the markets. And they did for a little bit, but then over the long term, they didn't. And then when you factor in their fees for spending all that time trying to beat the market, now your returns are less than if you just put your money into the market and didn't have to do a thing. And so this is that basic financial education where it's not as attractive. People want to be able to show off. Like, it's just like, people would rather look rich than actually be rich. And you say, oh, no, I would rather be rich. Well, people's actions speak louder than the words. Because if that's true, you should not have a Gucci belt. If you don't have the same amount of money and the market, you should not own a BMW if you do not own any investment portfolio. Right? I mean, it's just a matter of looking at what you do. Does it match with what you actually want? If you want to become wealthy, answer is yes. Okay, what are you willing to sacrifice? You have a BMW in the driveway. You got the Gucci belt, You have the Louis Vuitton. If you have this nice stuff, but you don't have the nice assets, your priorities are in the wrong place. And this is just a matter of you looking at yourself, yourself in the mirror and being honest with yourself and understanding what do you want? And for a lot of people, you know, maybe this is a matter of financial education, maybe this is a matter of preference, but many people would rather look rich than be rich. We just look at, you know, what it is now, if we dive a little bit deeper, are the people that want to actually be rich. We want to be rich today, we want to be rich tomorrow, not be rich in five, 10 years. And so what then? What does that do? It then drives our actions. So it's very difficult now to understand that, hey, I'm willing To sacrifice not only the nice stuff today, but then also not do the attractive, the sexy, the things that are hot, that are making people so much money today because I believe in this long term investment that has been time tested because it's so boring. But the reality is that boring is where the real wealth is built.
- [69:33]
Tom Bilyeu
I always tell people boredom kills more entrepreneurs, entrepreneurs kills more dreams than fear or failure. It's, it's the daily grind. Like when to your point about watching candles when crypto was really popping off, I had to stop myself from watching it because it was so fun and so exciting and I was like, you can't spend time there because I'm not going to want to watch it when it's down. So it's like you want a system, you want to set it, you want to forget it. And if I could get people to understand the psychology of how money impacts you, like oh my God, to your point about people would rather look rich than actually be rich. When you think about what money really does for you, you have to understand peak emotion. There's only so much emotional amplitude that you can have. In fact, do you, do you have an image in your mind of the highest emotional amplitude moment of your life.
- [70:35]
Jaspreet Singh
As where I felt the most emotion?
- [70:37]
Tom Bilyeu
Yeah. The highest positive emotion you've ever felt?
- [70:40]
Jaspreet Singh
Positive emotion. Yeah, positive for sure. You know, it's funny, my wife used to get really upset at me because I never showed emotion. And she was like, what's wrong with you? Like you never, like, you never get excited. You never said. I'm like, look, the only real emotion that I feel is hunger. I get hungry. I've changed this.
- [71:01]
Tom Bilyeu
That's what a woman wants to hear. By the way, if you said hungry for you baby, that's the only thing I ever feel. You might have a shot.
- [71:06]
Jaspreet Singh
Yeah, I've evolved since then where I'm working on that, you know. But I think, you know, the happiest is really for me being around my family and the people closest to me and just laughing. Yes, that is my favorite thing in the world. Like what do I want? I literally want my friends and my family in one room and us just joking around because I, you know, we, we make fun of each other and it's not enough mean way. It's just the, you know, our personalities and we laugh and have fun. That is if I could think of my favorite thing to do would be that maybe if I take it one step further, maybe do it on the beach. But you know, it's, it's honestly it doesn't matter where we are. If you're in my basement, it's eating some whatever, pizza, some Indian food and just laughing.
- [71:50]
Commercial/Ad Voice
Yes.
- [71:51]
Tom Bilyeu
So now I believe that to be true of what you're saying. It's certainly true of what I know in my life. So I have had the fascinating experience of I spend Christmas with my family and my wife's family together and it's amazing. And I've done Christmases in middle class home and had an absolute ball. And I've done Christmases in a big fancy mansion and had an absolute ball. And while doing it in the big fancy mansion is fun, especially because other people, they don't get to do it very often. So like, oh my God, this is so cool. The peak emotion is not higher. In fact, the highest amplitude emotion I've ever had is when I was in high school, I got cast in a professional play.
- [72:39]
Jaspreet Singh
Play. Oh, wow.
- [72:40]
Tom Bilyeu
And that meant that I got to skip calculus and dude, I was over the moon. I got paid to be in a play. It was like the craziest thing ever. I was like, I can't believe this is really happening. Now I have had millions of dollars show up in my account like that. And I'm telling you, it was cool, it was neat, but it wasn't as neat as getting cast in a professional play where I made $75 a week in high school. There's only so much amplitude of emotion you're ever going to experience. And I know no matter what I say to people, they're not going to believe me. They're going to have to go through the same fucking rigmarole. I'm not saying money isn't powerful. Money's incredible. I want to make more money because you can do incredible, incredible things with it. I'm just saying that it doesn't touch fulfillment. It doesn't do the things for people that they want it to do. And so the reason I say that is, okay, you're going to be bored doing it the right way. It isn't going to be sexy. You're not necessarily going to be able to flex. It's going to take decades, but it will work. And it actually addresses the thing that money is good for, which is money problems. And so there are really two paths before you if you want to be an entrepreneur. Like that is high risk, high potential reward, high place potential failure. If you optimize your entrepreneurial journey for failure mode and you're like, even in failure, I'm having a good time, you're going to hate failing don't get me wrong, but like, that I'm pursuing something that really matters to me. I'm getting better every day. I'm serving other people and myself. I'm increasing my skill set. Even if you're losing, that's going to be amazing. If you're thoughtful about your mindset, 100%. But if you're making all the money in the world and you're not able to laugh and play and have a good time and feel like you're doing something that matters, it won't matter. This is where I want to grab the camera and start biting it to get people to understand, dude, set it and forget it. Make an income. Work at something that matters. If you want to be an entrepreneur, I love that I can even help you do that that well. But the money isn't going to change how you feel about yourself 100%. It is not going to make laughter more joyful. It isn't going to make human connection better. It will get you on the occasional beach. But if people could internalize that, I think that they would make very different choices. They wouldn't be so worried about making all the money right now. In fact, let me ask you another question. What do you spend the most money on?
- [75:22]
Jaspreet Singh
My business.
- [75:23]
Tom Bilyeu
100%. What do I spend the most money on? My business. So it's like, it's not like I'm out bawling on, you know, the beach. I could. I know, but that doesn't give you fulfillment.
- [75:36]
Jaspreet Singh
You know, I did a show. I was in New York last week. I did a show there, and they were asking about the first time I made a million dollars. And I went through that. I was like, you're not going to like my answer, because the first time I made a million dollars in a year, I think I took home 20,000. Yeah. Which is what I shoved off right back into everything, back into the business. Because, you know, I was like, I'm fine driving a $500 car. Like, I'm getting from point A to point B. I'm getting by just frying. Like, this is my. This is my fun passion. And on your point of, you know, the fulfillment, this is what I call my quadrufit theory, where there's four aspects.
- [76:09]
Tom Bilyeu
Quadra fit.
- [76:10]
Jaspreet Singh
Quadra fit. So what I say, my theory is, if you want to live a happy, fulfilled life, you have to be fit in four aspects of life. And think of it like a triangle. We're on the bottom of the triangle. You have to be physically fit, then mentally fit, then spiritually. Fit and on the top, financially fit. If you want to live a fully fit life, physically fit. Because if you're on your deathbed, it doesn't matter if you have $10 million in past the bank. The only thing you care about is being healthy again, to be able to breathe again. You want to be physically healthy because if you are morbidly obese, you can't move, you're, you're just. The only thing on your mind is to be healthy again. You know, we all know the feeling where you're sick, you don't feel good, where you can't do anything. The only thing you want to do is feel better. Then it's mental fitness, being around people that you love. Not be miserable if you're struggling with anxiety, depression. If you're not happy, more money is going to make you more miserable. And we all, I mean, I'm so passionate about this because I've seen this firsthand. I used to not believe in this, but I've seen this so many times where I try to bang this into people's heads. If you think that making a million dollars is going to suddenly make you happy, it's going to make people like you, it's going to make people want to be your friends, it's going to make you find the love of your life. You are so wrong and you are so far from the truth that it's going to be extremely painful for you to learn it. Because you have to work on this mental health as its own aspect of life. Learn how to build self esteem, how to be happy, how to manage anxiety, how to manage and fight depression. Learn about these things. It's its own part of this. You have to be mentally fit, then spiritually fit. Now this doesn't have to mean religion spiritually fit, I mean finding yourself purpose. What are you waking up for every single day? Like you said, you've had millions of dollars in your bank account. You don't got to go to work every single day. You don't got to go and hustle. Yet you do. Why? Because you see a bigger purpose for yourself. You have a reason for you to get out of bed. Because if you don't have a reason to get out of bed, more money is not going to do anything. You need to have a reason to get up, want to thrive. Whether you have $10 or $10 million to want to hustle. And then at the top, this is where financial fitness has the most impact, the most power and the most ability to allow you to live a more Fulfilling life because. Because more money is just putting fuel on the fire. It gives you the ability to do more of the things that you love, to do more things that make you feel more fulfilled, to do more things that you want to do, to give back more, to do more of that. But having more money is not going to solve your physical fitness. Maybe it'll buy you better food or better gym, but it's not going to give you the mindset to go to the gym. It's not going to make you feel okay when you're drinking something healthy. You're going to say, man, screw the smoothie, give me something nasty, give me some unhealthy food. Right. I mean it's mental fitness. More money is not going to fix that. More money is not going to give you a purpose in life. It is its own aspect of life. And this is where you have to understand that. Yeah, work on all four of these. Each one of these requires its own attention, its own nurturing, its own thing. Like I focus on the financial side because I feel like I understood that. But that's not the only aspect of life. And this is what I really try to hammer into, you know, on my channel to the people that watch my videos is yeah, look, money's great. Understand it, conquer it, understand how to master your money. But also understand that it's not the only aspect of your life. You got three other huge aspects where if you don't have money, yeah, it's going to ruin everything else because if you don't have money, you're struggling about your bills, you're struggling how you're going to pay for anything. You don't know how you're going to take your spouse on the vacation that he or she wants. You're not going to be able to pay for your kids education, you're not going to be to able to do the things that you want. But if you have money and you don't have these other three things, you're gonna feel miserable. And then what's the point of having money if you're not happy? Yeah. Just go back to the middle class home and laugh. Yep.
- [79:48]
Tom Bilyeu
Yeah. It's really interesting because of course when you're in that. So all of this, everything we've been talking about today, you're up against the nature of the human mind from Clickbait. Titles are necessary because that's how the human mind works. Euphoria in the market, human mind, Fear in the market, the human mind, the fact that you're not trolling somebody to Say buy low, sell high, because it's one of the hardest things you're going to do. It's the human mind at work, right. Like really getting to understand what the psychological aspect of all this is. So I know somebody and even myself. When I was in a lower middle class existence, I was obsessed with getting rich. And that was just like all that I wanted to do. Now, getting rich. The thing that surprised me is that it didn't dull my ambition. It can't quench your need for fulfillment and feeling like you're doing something that matters. And so I just found myself right back in the game wanting to build something and create and have a great time. And thankfully I had learned that you really have to optimize for the failure scenario because despite being successful, I fail a lot. So it's like really understanding the nature of that, what I call the physics of progress, that failing is just a part of the thing. But so I get it. I get that people that are on the come up are not going to believe the following statement, but I promise that it's true. The most fun you're ever going to have, the pinnacle of existence, is that moment where you're working really hard at something that could pay off tremendously and you believe it's going to work. There's nothing better than that moment, oh my God, I'm working really hard at this. I think it's going to work. And if it works, oh my God, like the world is going to be mine. That's way more fun than actually winning and getting the thing.
- [81:45]
Jaspreet Singh
Yeah.
- [81:46]
Tom Bilyeu
And so enjoying that ride. Yeah, like that's, that's the juice. And so I found myself wanting to re. Get back into that position of like, oh my God, I'm building something. And if we pull this up, it's like, so I know that it's not about the money, it's really about fulfillment. I don't want to harp on that too much, but like just getting people to understand you're in a battle against your mind. If you can get to the point where you realize that being around the people that I love is going to be huge. Emotional amplitude doesn't matter if we're on the beach or if we're in a hut, as long as we have our basic needs met. Because for sure that matters, but we have that emotional amplitude isn't going to go any higher by having a ton of money. But that moment of like, I'm building something that matters, I think this really might work. And if it works, like, you know, like We've got some big victory. That's the juice. And you're going to constantly want to be in that. Now, given that all of that is true, make sure that you're taking some percentage of what you're doing and just put it in the set and forget that way as you get older and it gets harder to be sort of peak energy, all that stuff that you've got money, it's going to be doing its thing, and then. And maybe it's just taking that. Like you said, you can spend 75%.
- [83:05]
Jaspreet Singh
Okay, cool.
- [83:06]
Tom Bilyeu
So if we know that we have to save some and we know that we're going to buy assets with some, then why don't we take some of what we're gonna spend and spend it on building something, starting a side hustle, whatever, seeing if that works for you. I mean, we're going through a period now where it's like, everybody wants to start their own thing. Try it, like, see if it's your bag. I think people will. I heard you quote, you have to be willing to get punched in the throat. I always say, kicked in the face.
- [83:32]
Jaspreet Singh
But, like, it's the same thing. Maybe both.
- [83:34]
Tom Bilyeu
Very, very.
- [83:35]
Jaspreet Singh
Yes.
- [83:37]
Tom Bilyeu
If you like it and that's something that you enjoy, then that's a tremendous outlet. And that can be the thing where you're really gambling on. Big upside.
- [83:45]
Jaspreet Singh
Yeah.
- [83:46]
Tom Bilyeu
But, man, if I could just get people to internalize this idea of emotional amplitude. Like, life's peak joys are available to everybody, regardless of money. Like, I think Warren Buffett underplays wealth a little bit. Like, he said, look, I'm eating at the same restaurants that you're eating at. I'm staying at the same hotels you're staying at. I'm living in the same place. Look, money can do some pretty interesting things, but it can't change the amount of emotion that you feel 100%.
- [84:17]
Jaspreet Singh
And if I can tie this back into what we talked about in the beginning of this video, where we talked about. We talked about the real estate market, we talk about everything going on with it. And I think the best way to explain that now, because you're putting some money aside, what are we looking to buy? Because I've talked about this recently a lot on my channel, where the American dream, because you mentioned this, the traditional American dream, was being able to buy a home, pay it off, and now you own a home. The reason why this was the American dream for anyone in the world is because when you paid on your home, what are you building in your home? Home Equity. It's this concept of equity. And we assume, or for lack of, better, we don't have the financial education to know that equity, which we think is going to make generational wealth, because equity is where real wealth is built, can only be found in the home that we live in. But that's not true. And this is where so many people get things wrong because they now stretch themselves to too thin. They do risky things, take out adjustable rate mortgages, use too much debt to buy a home because they think that it's an investment that's going to make them wealthy. Because now you can pay it down, build equity, and have something to pass down. However, there are many other ways to build equity, to build real wealth that you can then pass down. This goes back into the assets that we talked about, right? When you invest your money into stocks, you are building equity in these companies. When you go and invest in real estate as an investment, not where you live in yourself, as a rental property, you're building equity in your real estate portfolio. And this is different than your home, because when you buy a rental property, you're buying it for one purpose. You're buying it for the purpose of making money. You buy your home for the purpose of making memories. So if you're buying something for the purpose of making money, you're probably going to make more money because you're going to do a different type of analysis than in the home that you live in. And you know, one way is you can go and actually buy it. And the second way, like you've been talking with entrepreneurship, is you can build the equity. So when you build a company, you're building equity in the company. Like if you go and start a company, you are the 100% owner of the company. Well, if your company can make $100,000 of profit a year, your equity might be worth 200,000, half a million, a million dollars, depending on, you know, whatever type of company it is. But you're building equity in a company so you can build this equity, you can buy this equity. And the whole idea of a recession is now this type of equity, these investments, these assets can go on sale. And this is where now you can come in and buy more equity at a discounted price. And this is one of those things I'm going to go back to. We keep mentioning what we talked about before in a previous interview. We are never taught this because school, school teaches us to become an employee. What do you do when you're an employee? You get a salary? Do you get any Equity with a salary? No. Maybe your company gives you separate equity as a compensation package or something, but your salary is payment for hours that you work. And that is nice today. But once you spend your salary, you have nothing left. Real wealth in this country, in this system, is built through owning equity. We're never taught this. This is what gets me really heated up, because we're never taught about this. And so if our whole system is taught around building and earning a salary, how come we're never taught about building equity? Because now what we should be teaching is, hey, go to school, get educated, but understand that wealth is built through equity. So earn a salary doing whatever you want, whether you're a doctor or you're working at a factory, doesn't matter. Take some of your salary, go out and build some equity. We're always taught and think and told that the way you do that is to follow the American dream of just buying a home. Because now you can pay down your home, build some equity. But that is honestly one of the worst ways to build equity. You never talk about wealthy people becoming the richest people or wealthy people because I paid off my home. No, you become wealthy because you own a company. You built a company, you invested in stocks, you invested in real estate, you invested in equity somewhere else in your home is honestly like one of the last things that wealthy people think about. Yet for the majority of people, when they come up becoming wealthy and building this type of generational wealth, what are they thinking about? Buying and paying off my home? And there's so much more to that, but it requires that financial education. Yeah.
- [88:36]
Tom Bilyeu
I want to go back to something we were talking about earlier, debt covenants. So you were talking about at the time that there's two kinds of selling. There's selling because you choose to, but oftentimes people are doing it out of panic. And then there's selling because you're forced to. In business, when you're taking out a loan, they put covenants on it, meaning the following things must be true for you to have a loan in good standing. So even if you're making your payments, if the ratio of, like, your accounts receivable, so the amount of money that you, you know, that you have coming in, if it drops below a certain level, if that's one of the covenants, or you have to have a certain amount of savings in the bank, or your profit margin has to be 13% or higher, whatever they put these covenants on, that is, that's what happening when somebody is getting overextended with either, sort of.
- [89:34]
Jaspreet Singh
So if we talk about real estate first, when you go now, there's a couple of different levels of real estate investing and loans. That's something you're buying with debt. Now, in the beginner level, they're going to look at your income very heavily, your income to debt ratio. Just like when you go and buy a home, they're going to look at all the things, same things to go and buy a rental property. Then as you get a little bit bigger, they're not even going to really care about your personal financial statement situation. What they're going to be looking at is primarily just like you were saying, the actual investment itself. Because now you're buying essentially a business. If you're buying an apartment complex, well, now you're buying essentially a business. And then what they want to see is, okay, what's the price of this? How much rent are you generating every month, every year? What are your expenses? What is the margin? Because they know that this property is going to continue to generate rent, rental income, and the rental income is going to then pay for the mortgage, the loan on the building. And so that's what they're looking at. And of course, they're going to want to see your personal financial situation because they want to see, okay, if things go bad, what can you do? Do you have any access to excess cash? Do you have any other access to capital? Do you have any other wealth? Do you have any other experience? But the primary thing as you get bigger and bigger is just going to be the property itself in the stock market. Oh, man.
- [91:00]
Tom Bilyeu
Well, let's say on property for a second. So are they going to call the loan? Like, there will be a predefined set of things. I imagine that if they stop being true, they'll call the loan. So, for instance, as long as you have 20% equity in the building, we're fine. But the second the value of the property drops, like if you put out, let's say, $5 million to buy it, if the property ceases to be worth $5 million, then we're gonna basically call it. Because I know that's what ends up happening to somebody in the crypto market.
- [91:33]
Jaspreet Singh
Yeah, it doesn't work.
- [91:34]
Tom Bilyeu
If your crypto is worth a million dollars and you've got a million dollars borrowed, the second that that's worth a million, they're gonna do a margin call.
- [91:45]
Jaspreet Singh
Sure.
- [91:46]
Tom Bilyeu
Because now it's like if it goes down anymore, then they're out money. So they literally, the second it drops to the amount that you owe Boom, it's gone.
- [91:53]
Jaspreet Singh
It works similar to that in the stock market, but in the real estate market, no, they're not paying attention to the valuation of the property day to day, because that's also kind of ambiguous. A property is worth really what someone's willing to pay for it. You can run an appraisal, you can do comps, but at the end of the day, it's what someone else is willing to pay for it. So instead of them looking at the valuation of the property or what they think it's worth, what they're looking at is, are you making the payments? Because if you're making the payments, they're not going to ask you questions. If you stop making payments, that's when they start asking questions, and that's when they start trying to figure out what to do. And then they might force you to sell. Now, forcing you to sell in crypto is very different than forcing you to sell in real estate, because forcing you to sell in real estate is not going to depend state to state what the foreclosure process looks like, how intense that process is and how long that process is versus crypto, from my understanding, is it can be pretty instant. You get that margin call, they can take your crypto back pretty quickly. Real estate, it can be a year. And then there's a lot of different tools that can be done. Like in the 2008 real estate crash, one thing that was very popular was a short sale. This is separate from a foreclosure. A short sale is now where there's three parties working together. The seller, the bank and the buyer are working to now come to an agreement on a price where the bank agrees, hey, we're going to lose money on this deal. We're willing to lose X amount of money on this deal. The seller says, yeah, I'm going to walk away from this deal and not make any money, but at least I won't get foreclosed on. And the buyer says, fine, I'll pay this money. I was involved in multiple short sales. And one of the short sales that I was involved in, they also had an additional provision where, okay, the bank's going to agree to lose however much money. I don't remember the exact numbers. The seller agreed to walk away and not get a penny from the home. And then they also wanted me to write a separate check at closing to the seller's contractor because he had done some work on the property, never got paid, and had put a lien on the property, meaning he essentially made a claim against the seller, backed by the value of the home, that, hey, I need to get paid. So I then had to also work out a deal with the contractor where all these parties where the contractor had to agree to a certain amount of money. This was a long time ago, so I don't remember the exact numbers, but so it was two separate checks that had to go. One was to the contractor to make him happy and whole, and then one was to the bank, where the bank now was okay with losing a certain amount of money. And they're willing to do this, the bank in that situation, because if they had gone through foreclosure, they would have to spend way more money on legal fees, they'd have to spend way more money on administrative fees, and then they'd probably even sell the home for less money when it came to the actual foreclosure process. And the seller would prefer a short. Close a short sale in this situation, because if you don't do a short sale and you go into foreclosure, then your credit score gets hit. You have to go through the entire foreclosure proceeds. So you don't take a hit if.
- [94:48]
Tom Bilyeu
You do a short sale.
- [94:49]
Jaspreet Singh
If you do it right, you typically don't have to get the same sort of credit score hit because you're just selling the home versus a foreclosure. I mean, so there are, again, the reason why I said you have to do it right, because there's provisions, there's certain contracts that you want to make with the lender saying that they're not going to come after you for the previous money and they're not going to file some other things. So there's specific contracts. So it gets very complex where you want to make sure you have a good account attorney because it could affect your credit score and it could also not affect your credit score as much depending on how good your representation is and how well you draft these agreements. So it becomes very complex versus, you know, we talk about with crypto or with the stock market, if the value of your investments fall to a certain amount and you don't put in certain amount of money, it just sells. There's nothing else. Like they're either going to say, give us $10,000 right now, or we're going to sell your investments for you. And there's really no other if, ands or buts. It's like almost automated in that sense. So it's a very different situation.
- [95:47]
Tom Bilyeu
How do people get into the stock market with debt?
- [95:52]
Jaspreet Singh
It's actually very simple. Most brokerages make their money through margin, meaning debt. Because if we what, backtrack?
- [96:05]
Tom Bilyeu
So you're saying if I go somewhere like Vanguard, I can buy on debt.
- [96:10]
Jaspreet Singh
So let's, let's talk more about the mainstream Robin Hoods and the more of the mainstream brokerages in that sense, where.
- [96:17]
Tom Bilyeu
Robinhood now is mainstream.
- [96:19]
Jaspreet Singh
Huh.
- [96:20]
Tom Bilyeu
How long have they been around for?
- [96:22]
Jaspreet Singh
I don't know the exact number of years.
- [96:23]
Tom Bilyeu
Not that long.
- [96:24]
Jaspreet Singh
Right. They're, they're, I mean, they're, you know, one of those startup brokerages. I don't know what year they started.
- [96:28]
Commercial/Ad Voice
Wow.
- [96:29]
Jaspreet Singh
Well, let's start about 100 years ago and then we'll kind of take this little time lapse. 100 years ago, if you wanted to.
- [96:35]
Tom Bilyeu
Buy just, just a couple days back.
- [96:38]
Jaspreet Singh
If you wanted to buy stocks a long time ago, you would have to have access to a actual stock broker. You would probably have a financial adviser. It'd be a very difficult process and a very long process where if you wanted to buy a stock, you would call somebody who would call somebody who would then make a transaction, maybe multiple people to make that transaction. So it was a very long process. Then in the 2000s, early 2000s started coming. These digital brokerages, this is where Charles Schwab E Trade TD Ameritrade, they really became bigger. But the way that they would make money was they would charge you a fee, a commission to make a trade. So it was somewhere between $5, $7 to $15, even $20 to make one transaction to buy a stock or sell a stock. Then after the 2000 and tens came things like Robinhood. And Robinhood then shook things up even more where they said, we're a commission free brokerage. You can come trade stocks on our platform and we're not going to charge you a single trading fee. Now if you're not charging a fee, how are you going to make money? Well, the first way that they made money was this whole concept of you would buy a stock on Robinhood and then Robinhood would then make that trans transaction a little bit later and they would sell these trades. It was a very complex process where they would sell it to another entity. So you were kind of doing an indirect trade. For you as the trader, it made no difference or negligible difference. You wouldn't even know the difference versus Robinhood is then selling these trades on the back end. But then the second way that they would make money is through margin, meaning that Robinhood and these platforms would then lend you money based off of how much money you have in the platform. And then you can trade not just with the $100 that you have in your, in your Robinhood account, but now with the extra 20, 50, maybe $100 that Robinhood is giving you that you can now trade on margin. And the amount of money they're going to give you is going to depend on a number of different factors. But then they literally will just extend you this line of credit. And now you can trade. And I know this from first hand experience not with Robinhood, but with a different brokerage. Because when it first got started and then we talked about with trading, this was when I was, forget if it was my first year in college, I spent a summer doing trading and I was using a platform and they told me that hey, I could, I can, I started trading and then they said, let's upgrade your account to a trader's account. And I said, okay, cool. And then they said, hey, we will also give you more money to trade with margin. I didn't. This shows you how naive I was with the lack of financial education that I had. I thought it was free money. I didn't know that this money had strings attached to it. I didn't know how to pay the money back. I didn't know that I was being charged interest. So what happened was I traded money.
- [99:21]
Tom Bilyeu
I, I don't know if you've heard there's a guy named Jaspreet Singh and he says the most expensive money is.
- [99:27]
Jaspreet Singh
Free money is free money. I learned that lesson a very painful way. So I was trading money with the brokerages account where I just thought that because now I'm making, making more trades that they're going to make more commissions, that this is going to, you know, that's how they made their money. Well, long story short, I had lost money on some of these trades that were on margin and they said, hey, you need to put more money in the account. I was like, what do you mean? Okay, I got to make up this, whatever margin. So then I, you know, I had fortunately some money. I covered it and then I decided I'm no longer going to be a trader. I'm done with this.
- [100:01]
Tom Bilyeu
So we loaned you money to make the trade.
- [100:02]
Commercial/Ad Voice
You lost.
- [100:03]
Jaspreet Singh
Lost.
- [100:03]
Tom Bilyeu
Pay us back.
- [100:04]
Jaspreet Singh
I paid that money back. So now how long do they give.
- [100:06]
Tom Bilyeu
You to pay back?
- [100:08]
Jaspreet Singh
I don't remember. I paid it. I had the money. So I just paid it because I understood that I had lost their money. So that part made sense to me. And then I was done trading. I realized that this is not for me. I don't want to spend this time.
- [100:19]
Tom Bilyeu
You can't pay it back.
- [100:21]
Jaspreet Singh
Well, I don't know exactly what they do, but they're going to come after you. I'm sure they will file a loss. Because I'm thinking about this. I'm an attorney, right? From legal perspective, it depends on how much, how much money you owe and what you're going to be doing. Because now they can very easily file a claim against you. They can, you know, run a lawsuit against you if you're not paying. There's a lot of different things they can do. And the more dollars that you owe, there's more things that they can do, just like with anything else. But then, you know, I'm done trading and then a number of months go by and I start seeing this like, deduction from my account. I'm like, what am I being charged for? So I call them up and they're like, it's your margin. Like, what are you talking about? I'm not doing anything. Well, we gave you money. It's in your account. You have to pay interest on the money that we gave you. And that's when I realized there's a cost to money, right? And so that's when I said, turn this off, take your money back. I don't want this. I paid interest on it. And that was the last time that I did that. But this is, you know, there's. I was, I don't know, 18 years old. 17. 18. I had no way, probably 18. I had no idea what I was doing. And this is where a lot of people get in trouble because you think, oh, I can double my money pretty quickly. But if I use their money in addition to my money now, I can quadruple my money because I only got to pay you a little bit of percentage if you know that you got to pay them.
- [101:46]
Tom Bilyeu
I. So I don't know a lot about Robinhood. I am super stoked that the average person can now get into the equities market. But that's how people get into trouble.
- [101:57]
Jaspreet Singh
When they're using the financial education along with everything else. Accessibility is great, but the accessibility without financial education can be dangerous. Now if you start using these tools because if you don't know the cost of some of these tools, it can be very bad. For example, think of a credit card. Is a credit card a bad thing or a good thing? It depends who you ask, right? You know, there are so many people have thousands of dollars worth of credit card debt that is skinning them alive. I only transact with the credit card. Why? Because I get my points, I get my cash back, I get my fraud protection, I get free insurance on my car rentals. I get all these things that I wouldn't get if I paid with cash. Even if I debit card, I don't get all these things. So now when I'm spending, I spend a lot of money. Especially in my business. If I spend $100,000 a year or half a million dollars a year, I'm going to get a big cash back check that I could put right back into the business. I can spend it, I can use it on a vacation, I can get free perks. I mean, I get so many different things, but that's only because I know I'm not going to change my speed spending because of my medium. I'm not changing my spending because I have a credit card. I'm just using a credit card to facilitate my transactions as opposed to using it as a free money printer. And again, what is it? It's that financial education along with the tool. It's not the tool that's inherently evil. It's when you use a tool without that financial education that now you can get screwed over, that you get in trouble, that you start hating the system. Oh, they're out to get you. They're not giving you the financial education because it's not in their best interest to give you that financial education. But this is where if you have the financial education, you can use the system to advantage. But the problem is we are never taught this, right? And it's so. It's just like it. For me, it pulls on these strings in my brain because it's like, oh my God, it just screws so many people over because it's profitable to keep people poor. If you don't understand this, you're going to spend more money on your credit card. You're going to spend all your money.
- [103:59]
Tom Bilyeu
Making everybody else terrifying statement that you just rush past. It's profitable to keep people poor.
- [104:04]
Jaspreet Singh
It is profitable to keep people poor.
- [104:06]
Tom Bilyeu
Is it profitable to keep them poor or to keep them ignorant?
- [104:09]
Jaspreet Singh
It's a mix of both. When you're ignorant, you stay poor. They go hand in hand. Because if you don't have the financial education, what are you going to do? You're going to go spend your money at Gucci, Louis Vuitton? You're going to be buying the extra guac because, hey, you got that money, then how are you going to buy it? You're going to buy it. You're going to Buy the extra goalk lifestyle. You're going to buy it with your credit card and you're not going to wait until you can afford it. You're going to buy it now because you can. And nowadays it's not just a credit card, it's buy now, pay later. And everybody talks about how buy now, Pay later is 0% APR. There's no cost to this money. You can buy it now, pay later. But again, like you said what I said, the most expensive kind of money is free. Free money. They got to make money somehow. There's a reason why there's billions of dollars pouring into the buy now, pay later industry, one of the fastest growing fintech industries ever. Because when you spend on buy now, pay later, what happens? One, you're spending way more money than you would have if you didn't buy now, pay later. Because if you wanted to buy a thousand dollar sofa, you have to have a thousand dollars in your pocket. Well, now you can buy it now and pay it later. So, so now you can spend $1,000 on something else. Second, what happens to so many people is you don't pay it off in time. Now when you don't pay it off in time, it's no longer 0% APR. Now you get slapped with a very hefty, very expensive fine. So now it's okay. The tool plus the education. The tool plus the education. Going back to inflation, inflation, you know, is it a good thing or bad thing? I think you asked me that last time. Or are you talking about, you know, the way the system works? Again, just depends. Depends on if you understand it or not. If for wealthy people, they, they love the inflation, hey, keep paying more for my assets, keep driving up the value of my assets, keep making me wealthier, versus for the average person, you keep getting screwed over because now your groceries are more expensive, your gas is more expensive, your rent is more expensive, expensive everything is more expensive. Everything, you know, it's understanding the tool and the education the tool. I'm going to give one more example because this is the stuff you can see. It gets me so, keeps me up at night. It gets me really upset because I understand both sides because I never had that financial education and now I see the benefit of it and I'm like, please learn this. Even if there's a clickbaity title, because I need you to watch it. Please learn this. We talk about how the government, many times they might have good intentions, but the people in government aren't economists. They're not always the best decisions with Their money. Because sometimes their goal might just be to create jobs. And creating jobs is different than being efficient. And so if you look at, for example, the college education system, where back in the day it was not easy to get a student loan, and back then, college was also a lot cheaper. And back then, a lot of people were not getting a college degree. So if you had a college degree, what happened? You stuck out, you were different, you had something. Well, what happened later, you know, this was in the 70s. Now, the United States government, maybe the 70s, 80s. Around that time, the United States government passed a law that said that if you want a student loan, we'll guarantee it. Anybody can get access to college education. The government will guarantee a student loan. Now this sounds like great news. Hey, everybody can get educated. How can that be bad? But colleges heard this and it was music to their ears. You're telling me that I can charge any amount that I want and the government is going to guarantee to give that to our students? Sign me up. Now we can hike up our tuition rates and people keep paying. Now everybody can go to college because we think that we need to go to college in order to become successful. And now where we are today, everybody has a college degree. If you go and apply for a job with a college degree, you don't stick out. You're just like everybody else.
- [108:08]
Tom Bilyeu
Dude, this makes me really sad. So this is human nature, so I'm not going to waste a lot of time complaining about it. But take the PPP loans. Oh my God.
- [108:19]
Jaspreet Singh
The biggest financial fraud in the history of America.
- [108:22]
Commercial/Ad Voice
Yeah.
- [108:22]
Tom Bilyeu
That's terrifying. And I remember when it was all happening, dude, when it's going to be really easy for people, especially young people, to forget what Covid was like when it first popped off and it was, is everyone going to die? Like, is this. Is this a 1918 type flu where 50 million people die? Like, it was just really, really unknown. And so when businesses were just closing, closing, closing, and the government came in and said, hey, we got you, like, we're going to cover this. I was actually stoked. As a free market capitalist guy, I was still like, word. Their government has a role. This is amazing. I'm super stoked now. I didn't take like you, I did not take a dime of PPP money. I thought, I want to leave it. Every dollar I take and I can afford this moment. Every dollar I take is a dollar somebody else doesn't get.
- [109:16]
Jaspreet Singh
Right?
- [109:16]
Tom Bilyeu
But I should have, though. I did not predict this will get abused to the extreme. I've Done so many contracts in my life. I was just reading one yesterday and the lawyer put a provision in it. And I was like, why? Like it was a provision that's good for me. But at first I was like, why did they put this. So I started making a note like, hey, don't do this. Like there's. And then I was like, oh my God, they're protecting against XYZ scenario. And I was like, holy hell. Like, yes, people would do that. I was like, I hate that you have to protect against that. But thousand percent, like there is a percentage of the population, like here's one thing that winds me up the we don't prosecute theft under a thousand dollars.
- [110:05]
Commercial/Ad Voice
Or whatever it is.
- [110:06]
Jaspreet Singh
Welcome to California. Yeah.
- [110:07]
Tom Bilyeu
$999. You've got people running into stores for grocery bags. Into the bags and out the store, dude.
- [110:16]
Jaspreet Singh
Welcome to California.
- [110:17]
Tom Bilyeu
Yeah. Welcome to humans.
- [110:19]
Jaspreet Singh
Yeah.
- [110:19]
Tom Bilyeu
It's like it's gonna.
- [110:21]
Jaspreet Singh
Now we're spending more money to go after through the back. Bad stuff. On the PPP. On the PPP.
- [110:27]
Tom Bilyeu
87,000 new IRS agents being hired.
- [110:31]
Jaspreet Singh
Yes. Oh my God. So the Inflation Reduction act has just been signed by President Biden and one of that provision is billions of dollars going to beef up the irs. Now, I do want to clarify one thing about the 87,000 agent thing because I think there's a lot of misinformation out there.
- [110:47]
Tom Bilyeu
That's a real number.
- [110:48]
Jaspreet Singh
87,000. It's a real number. It's over, but it's not today. They're hiring those 87,000 people over a course of 10 years. So though, let me go over both sides because I always like to balance this out so people understand what's really going on, that we can understand what might be coming. So the 87,000 people that they're hiring is going to be over a course of 10 years. They're anticipating that. I think around 50,000 of the current 80,000 agents. So there's 80,000 agents right now. They want to add on 87,000 more. About 50,000 of the current agents are expected to retire over the next 10 years. So the new 87,000 is one supposed to be replacing the people that are leaving and then stack on the workforce. What are they going to be doing? Well, not on paper. By word. They're saying that it's going to be only going after people making over $400,000 a year to audit those people. They want to go after the people who have taken fraudulent PPP money, fraudulent money from the government. Are they going to actually do that? Well, that's not what the bill says. The bill says is they're just going to be increasing the IRS workforce to do more. What they do. The next question is, what do they do? Well, how do we just look at history 20, 21, 50% of IRS audits run people making less than $75,000 a year. What does that tell us? Well, if they bring on more people, what they want to do, they want to increase tax audits, they want to go after more people for tax dollars. Now we can debate all day long what is ethical in taxes. You know, that's a whole different thing. Let's just look at the fact with the IRS thing, they want to go after people who owe a specific amount of money, which is what the taxes say that they're supposed to get. So that's what they said that they want to do. Well, if 50% of people who are being audited are making under $75,000 a year, what is probably going to happen with this additional IRS agents? Well, they're probably going to follow a similar percentage of people that they're auditing. They will probably try to go after bigger corporations. Part of the Inflation Reduction act, if I'm not misunderstood. This just happened. Like I'm reading this before, before this interview was they want to create a minimum tax for corporations. So they want to go after corporations like Amazon who use deductions to pay little to no money in taxes legally. So they want to close some of those loopholes. They want to go after people who potentially didn't pay enough in taxes. So they're going to be doing a lot of this stuff.
- [113:19]
Tom Bilyeu
I'm so worried about young people that were not thinking about taxes with crypto and just going ham.
- [113:26]
Jaspreet Singh
Like, it's crazy.
- [113:28]
Tom Bilyeu
Yeah, yeah.
- [113:29]
Jaspreet Singh
Small business owners. If you're a small business owner, if you're investing your money, because even if you're a side hustler, because, you know, in the last couple of years, we saw the new 600 rule. If you're getting money on Venmo 600 rule.
- [113:43]
Tom Bilyeu
Oh, you don't have to pay tax.
- [113:45]
Jaspreet Singh
Yeah. Well, in Venmo never really tracked or reported these transactions, rather versus now. If you're getting a lot of money in Venmo, you have to report it. Venmo will report it even if you don't report it. So, you know, doing side hustles become more difficult.
- [113:58]
Tom Bilyeu
I never even thought about that.
- [114:01]
Jaspreet Singh
So there's a lot of different things that. I mean, this. So this additional IRS agents isn't Something that just happened overnight. This has been something that's been kind of building up. I've been talking about this on YouTube where, I mean, this is kind of one of the downfalls of Digital dollar is everything gets tracked. Every transaction gets tacked, every purchase gets tracked, every spend gets tracked. Because if there's no cash, you know, everything is going to be taxed and tracked. So that's one of the, the downfalls in that sense. And this is where, you know, of course, I'm not saying break the law. I, I never advocate for that. You know, you got to pay what your taxes say you got to pay. You as a tax advisor to make sure you pay the least amount of money in taxes legally.
- [114:45]
Tom Bilyeu
Be tax efficient.
- [114:46]
Jaspreet Singh
Be tax efficient.
- [114:47]
Tom Bilyeu
Be tax efficient. There is a reason. Look, I'm not terribly tax efficient. I'll be honest, because I find that shit so boring. I'd almost rather just pay more money. But being tax efficient makes a huge difference. But if I could just PSA for a minute. Pay your taxes, please, like, I'm begging you. The people get in trouble, shout out to Mr. Beast. He gave that guy a million dollars. Guy won a million dollars. I forget what the hell, why, but he won a million dollars and he actually took him to a tax advisor and recorded it. They wouldn't let him show it on camera, but he was like, he walked through. Here was the advice. First of all, you're gonna have to pay. It's close to 50%. Like, you're gonna have to pay about $500,000 of your million. It's just gone, bro.
- [115:33]
Jaspreet Singh
Taxed, taxed.
- [115:34]
Tom Bilyeu
Government got you. But pay it, pay it. Because if you go spend that million dollars and then realize that you owe.
- [115:43]
Jaspreet Singh
$500,000, check, dude, you.
- [115:45]
Tom Bilyeu
You have no path to that $500,000. Your ass is going to jail. You're either paying or going to jail. That is some scary shit.
- [115:54]
Jaspreet Singh
Exactly.
- [115:55]
Tom Bilyeu
Pay your taxes. Be tax efficient. Pay your taxes.
- [115:59]
Jaspreet Singh
Exactly. So I've become much more passionate about this over the last while. Taxes.
- [116:04]
Tom Bilyeu
Pay them or be tax efficient?
- [116:06]
Jaspreet Singh
Both. Well, well, I've always had an accountant, but I've had good accountants and I've had bad accountants. And I will tell you, it is. It pays to pay for a good accountant. And the reason why is because I'm going to give you just a straight example. This is. I forgot what day this was. But I was in the office, in my office, get a call from my accountant. He says, hey, Jaspreet, how are you doing? I said, good. He said, hey, Listen, we made some miscalculations. I need you to do me a favor and send a hundred thousand dollars to the IRS by tonight and another $15,000 to the state by tonight. And I got a little upset. I was like, what are you talking about? How can you say that? And then he's like, well, one more thing I want to say before you say that, that you also are probably going to pay a penalty on this. And I was like, how can you say that this is my fault? He's like, it's no one's fault. It's just we made a mistake. And I said, if I'm the one that has to pay the fee and the penalty, you know, something's not adding up. I fired him. I pay a lot more money for a good advisor. And this blew my mind because one now when we, him and I meet, we are actually like going over. He records all my books. He goes through everything. He's like, here's your revenue, here's your expenses. Here's what they look like. Here's where you're spent. Here's how things have changed. Here's your profit, here's your tax liability. Here are things that you can do right now based on the tax law to limit your tax liability. Here's the things that we recommend. Here's what you may want to consider doing. And I'm like, wow, you're telling me that, like, I could have been paying this. So I'm paying way more than I was before, but I'm saving that money in taxes. And so that's. This is actually a very recent thing. This is the first time talking about this. I actually, over the last number of months, I talked to him. I said, look, man, this is a service many people need business owners, because most times we're not taught this type of stuff. So him and I are working together to actually build a proper tax firm. Tax advising firm for. We're going to start with small business owners to help you understand your cash flow, understand your tax liability, and understand how to legally manage this tax liability. Because the IRS tax code, I'm telling you from an attorney, I studied a lot of tax law. The tax code is over 2,000 pages long. You can't understand this versus this guy, my advisor, he has a whole team. He lives, breathes. This is all he does. Like, he wakes up and thinks about taxes, okay? Like, you know, it takes a special type of person to do that. And I was like, look, we need to get your mind into more people. So him and I are Working together to build something. So if you're a small business owner and you want the type of advice, I mean, I don't have any website or anything, but just email me. Maybe my, my assistant can send you over to him team at the minority mindset.com so like it is so important. Now 87,000 new agents come in. They're. They're going to want to raise taxes. Why? Goes back to inflation. Inflation Reduction act, kind of a funny name, a spending bill. Spend more money to reduce inflation. The goal is that they're going to reduce costs more than what they spend. My concern, without getting political, which has been happening many times, is that the government is not efficient with their money. They think that they're going to spend X. What ends up happening is they end up spending 10X and get a return smaller than what they expected. So I hope, I hope that the Inflation Reduction act will reduce inflation. My concern would be what happens if it increases inflation and the United States government is facing almost $31 trillion of national debt.
- [119:53]
Tom Bilyeu
Oh God.
- [119:54]
Jaspreet Singh
How do you pay that back? They need to make money. How does the government make money? They tax people. You earn money, you get taxed. Everything you do gets taxed. You spend money, you pay tax. You buy a home, you pay tax. You pay tax on your property, property taxes, you pay taxes when you sell an investment. I mean, you pay taxes everywhere. And if they want to pay down this national debt, they want to pay down some of this deficit, they're going to need more tax dollars because they keep increasing the amount of money that they're spending. Right. So if you're spending this much money, but you're bringing in this much money, you have to make up this cost somehow. And a very rudimentary diagram. So before it was print money, print money, print money. That's what the Federal Reserve bank did. That's how the Federal Reserve bank has built up a $9 trillion balance sheet, meaning they spent $9 trillion that they didn't have to help fund the government spending. Well, now what are we doing? We're facing the price, which is super high inflation, some of the highest inflation that we've seen in decades. And now we can't keep printing money. So now what is the alternative? We need to get more tax dollars because that's how the government can get more money. So either they're going to go after back tax dollars and trying to raise taxes. They're already talking about raising the taxes on corporations. Will they raise taxes on people? We'll see. Time will tell. But this is the reality. This is where you want to have a good tax advisor and you want to be filing your taxes, you want to be paying your taxes, and especially now, you want to be prudent because you can bet that they're going to be trying to ramp up audits. The best way to fight an audit is to not get into an audit. It is honestly the best thing to do, whether you're a person or a small business owner. That means one, filing your taxes. If you don't have a lot of money, like if you're making under a hundred thousand dollars a year and you just work a job, don't pay $10,000 a year for a tax advisor, use a free service online, Use something that's going to help you. You know, you show your W2 to whatever else you're doing is much simpler. Now if you're making more money, you have real estate investments, you have other investments, you have a business. Now you want to pay. And invest in a good tax advisor because they're going to help you document everything, they're going to help you understand everything, they're going to help you manage everything. And there's a huge night and day difference between a good tax advisor and a bad tax advisor. I can tell you this from personal experience. And so my goal with this will be to help bring good tax advisors to people who need it. But this is all about just understanding, because this is not going to slow down this whole tax stuff. It is probably going to be increasing not just because of who's in office, but because of our economic situation where inflation is so high, international debt is so high, and Social Security is drying up at its current rate. Like the government needs more tax time. And I'm not trying to get too confusing because it gets one more layer, one more layer bigger. It's like an onion, right? We keep peeling back layers. The government taxes you on your income and profits. Well, what happens when an economy is slowing down? Incomes go down, profits go down. So if they're taxing you based off of that, that would mean that they're generating less tax dollars per person or in total, because now the economy is shrinking. Couple that with the issue of the high national debt, the high deficit. Now you start to really see the issues where, hey, we need more tax dollars. So now if you can't get it from a bigger economy, what's the next alternative? We need to charge more money in taxes. So this is the things that you want to be aware of, because unless our national debt and our deficit Magically go away. This tax thing is going to be a bigger and bigger issue as time goes on.
- [123:41]
Tom Bilyeu
All right, you're going to tell people how they can follow you to get that. And after that, I'm going to tell everybody the eight things that I've learned by watching just unimaginable amount of your content.
- [123:54]
Jaspreet Singh
Sure. Well, I appreciate you watching. If you want to learn more about the tax advising service, send me a DM on Instagram Inority mindset. There's a bunch of scam accounts out there, but you can send me a DM inority mindset or email me or my team at teaminoritymindset.com t e a m theminoritymindset.com you can follow me. Minoritymindsetjaspreet Singh pretty much anywhere. YouTube, social media. Check it out. I love it.
- [124:20]
Tom Bilyeu
All right, dude, first of all, watching the content, you definitely don't have to. Thank you for that. Thank you for putting such amazing content out. Now I'm gonna say these things in my words. You'll tell us if I get pretty close here.
- [124:30]
Jaspreet Singh
All right, let's do it.
- [124:31]
Tom Bilyeu
But these, these are the eight concepts that I think are incredibly powerful. I hope everybody takes away from you and I think is extraordinarily good advice. Number one, keep your expenses low. Number two, save roughly six to 12 months worth of living expenses just in case. Remember that you can't save your way to wealth. I like coming on the heels of making sure that people do have reserves. Invest your money in a diverse portfolio. Again, that's my language. But you're very wise to talk about ETFs and index funds. Dollar cost average, so that you don't get burned trying to time the market. Invest in yourself. If you're interested in being an entrepreneur. Could be. You talk a lot about that for many people is the best investment you'll ever make. Don't confuse the house you live in for an asset. The house you live in is a liability. I think it's very wise. And then number eight, if you can't afford to buy it five times, you can't afford to buy it.
- [125:31]
Jaspreet Singh
Yes. The Myrtle of Five. That's one of my favorite ones, man.
- [125:34]
Tom Bilyeu
Awesome.
- [125:35]
Jaspreet Singh
I love that, brother.
- [125:36]
Tom Bilyeu
I think that's extraordinarily good advice. Speaking of good advice, if you haven't already, be sure to subscribe. And until next time, my friends, be legendary.
- [125:44]
Jaspreet Singh
Peace.
- [125:45]
Tom Bilyeu
New York City's becoming more dangerous.
- [125:48]
Jaspreet Singh
Chicago's becoming more dangerous places. San Francisco's becoming more dangerous. You're seeing people leave some places. For other places, the greatest danger for most people is failing to look at the things that could be harmful.
- [126:06]
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- [127:24]
Tom Bilyeu
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Jaspreet Singh
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Tom Bilyeu
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Jaspreet Singh
Not half the service. Mint is still premium unlimited wireless for a great price. So that means half day, you know.
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Tom Bilyeu
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Jaspreet Singh
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