Wealth Building

TWS 5 | Fallacies On Becoming Wealthy

Facts And Fallacies On Becoming Wealthy with Dr. Greg S. Reid

June 6, 2019 Patrick Donohoe Podcast 00:26:52 Comments Off on Facts And Fallacies On Becoming Wealthy with Dr. Greg S. Reid

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TWS 5 | Fallacies On Becoming Wealthy

 

Dr. Greg S. Reid, the author of Wealth Made Easy, questions a lot of the ways in which he was taught about wealth and pursuing your purpose and dreams. Dr. Reid says that many of those are actually fallacies on becoming wealthy. He shares his understandings on wealth and success throughout the decade which he highlights in his book and reveals how he mastered his own business by seeing things from a different viewpoint. As he explains why he was not bought into network marketing, he stresses how people need to understand the value of things that are already considered invaluable and capitalize on them.

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Facts And Fallacies On Becoming Wealthy with Dr. Greg S. Reid

In this season where we are talking about entrepreneurship, I have no one better to talk about that subject than Dr. Greg S Reid. He is our guest. He is the author of the Think and Grow Rich series and the Founder of the Secret Knock event. He is the New York Times best-selling author of Three Feet from Gold, which he wrote with Sharon Lechter and also Thoughts Are Things, which he wrote with Bob Proctor and Stickability: The Power of Perseverance. His new book, Wealth Made Easy, is a big paradigm shift for Greg. I enjoyed the interview and you are going to as well. There are lots of counterintuitive ideas that we bring up in some of the discoveries that he made. He calls into question a lot of the ways in which he’s taught about wealth, pursuing your purpose and pursuing your dreams that may not be as true as you think. I’m going to provide some commentary, in addition to the interview itself, on some thoughts and things that I learned from the interviews. Make you head over to YouTube and search for The Wealth Standard Podcast. You should see our channel come up.

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Greg, thank you for taking the time. You’ve got a lot of stuff going on. We’re blessed and grateful to have you on. I was thinking we start off with talking about your book but why don’t you to tell us about the movie you have coming out?

For people that don’t know me, I’ve been publishing about 78 books in 45 different languages. I did one a few years ago called Think and Grow Rich “Stickability”: The Power of Perseverance. I went to a café, I sat down and there was Frank Shankwitz. He started a nonprofit called Make-A-Wish. At the end of the interview, I go, “Frank, I got to know. What did you ask for?” He goes, “No one ever asked me.” I said, “I want to be the guy who grants your wish. What do you want?” He said, “I want my story to be told so my grandkids will know I did something.” It took several years and millions of dollars from a knucklehead that knows nothing about movies and we launch nationwide in theaters called Wish Man.

What’s the URL for that, so people can learn where it’s playing near them?

You can Google it anywhere. It’ll pop up. It’s WishManMovie.com.

My niece had cancer a few years ago. They did a whole thing. She went to Europe with my brother and his other kids because of Make-A-Wish. That’s an incredible foundation so to hear that story, that’s exciting. You being on the front lines to hear it all was a huge blessing.

It’s always the stories behind the story. You’re talking about the end result. People don’t know his story when he was twelve years old and abandoned and all the different stuff he has gone through his life. The whole moral of this movie is that everyone can be a hero. If a Florida cop with no money could do one act of kindness and have a ripple effect, we can give a homeless guy a pair of socks. We can do something to be a value to other people.

It’s interesting how life sometimes starts out with us being interested in ourselves. After self-interest and after what’s in it for us, it completely shifts to the true fulfillment and achievement comes from making the most difference in other people.

Where would we get a better kick from, getting a dollar an hour raise at work or watching your kid accomplish some great feat? We always get more energy and exhilaration from other people’s success. For some reason, we’re selfish animals. Some people get selfish behavior, like myself making this movie by granting other people’s wishes and doing stuff. It’s like a two-edged sword. I know we’re talking about one of my books, Wealth Made Easy.

TWS 5 | Fallacies On Becoming Wealthy

Wealth Made Easy: Millionaires and Billionaires Help You Crack the Code to Getting Rich

The most recent one and obviously, 78 is quite the feat. I had a question that may be transitioned from the movie to the book. I know the book is taking a different spin because the title is Wealth Made Easy. You can assume what it would be about. However, from what you discovered, there’s a lot of counter-intuitiveness to what wealthy is, what rich is and what those people think and do. That’s my first question is what is your understanding of wealth and success relative to what you’ve learned from this most recent project?

Out of all the books, I’ve written and every time I ever talked about wealth and money, 100% I was wrong. I’m going to be very clear. What this book did was it gave me a new paradigm where I saw things from a different perspective. What I did is I sat down with people who are $100 million to billions. I said, “How did you do it? I don’t care about what you’ve read or what you ate. What did you do?” I realized that I could sit with people for three hours and three days. At the end of it, I go, “What you’re saying is you did this.” I reduced it down to one page. They go back exactly it. I went, “Great.” I went to the next person and the next person. Everybody’s wealth path is one page long. If you want to know how oil works or the internet or something treasure to goldmine, this book delves into each category so the regular person would go, “That’s how it works,” and that’s what we did.

What’s the counter-intuitiveness of it? It sounds like everything’s changed for you. Your understanding of what success was and wealth was throughout a couple of decades now makes a massive shift in one book. How would you summarize that in a page?

I will do it in a little bit longer because you’re getting to the end of the story. If you’re watching a movie and you’ve got to sit for an hour and a half and you get to the end of it, that’s what we’re getting to right now. What’s interesting is I sat down with one multibillionaire. I asked him, “Why are you a billionaire and I’m not? I’m just as smart as you. I take as much action.” He looked at me and said, “That’s easy. The problem is that you believe all the lies that you spread to the world. You are the person who brings people down. You are the person who keeps everyone broke and we appreciate it. Would you do us a favor and continue that message? You’re the purveyor of the greatest lie that was ever told, ‘Go find your passion and the money will follow.’ Keep making more bumper stickers and t-shirts. We love when you tell people that.”

I looked at him and said, “What do you mean?” He pulled out a phone that had a meme on it. The one of mine says, “Follow your passion and not a paycheck.” He goes, “That’s why you’re broke. Here’s your problem. You’ll find a welder who works their whole life. They’re admirable. They retire with some money. They go to a Tony Robbins seminar. They get fired up and open a yogurt shop because it’s their passion. 95% of businesses that fail the first year isn’t because they’re not passionate or taking action. He’s a welder, not a yogurt guy. What’s cool? When they go under, it’s their baby. They’re passionate. They hold on so much, so long, they don’t let go. They pull their house, their car, and their boat. We come in and buy that for pennies on the dollar. God bless. Keep that momentum going.” I go, “What are you talking about?”

He goes, “We’re a game of Frogger. We ride a log. As soon as it dips, we jump to the next log. We can never go down with the ship. We don’t care. It’s business. We capitalize on all these opportunities and we get so much wealth, we use that money to finance our passion. You guys do it in reverse. We own the coliseums and the football teams that everyone following their passion have given their lives for a couple of million dollars out in the field. It’s such a different thing. The sheiks in the desert, the Getty’s, they have no passion for crude oil. Waste management has no passion for dirty diapers and rotten cheese. They aggregate dealers have no passion for building the freeways but they built every university, the ballet, the art and everything that you know and love. Stop your thinking and change the way you look at things.”

How have you identified their forte? Maybe you don’t call it passions, but strengths or their experiences because that makes sense.

The rabbit hole that you’re about to go down to is what I used to teach and that is incorrect. It is not that. Almost everyone fell into something, ask backward and they capitalize on it. What happens is this, “What if God in the universe was very generous? What if everything we ever asked for, everything we ever prayed for, was given to us but we didn’t like the packaging so we send it away?” The only thing billionaires do differently is they don’t mind the way it comes to them. Let me give an example. If I said to God, “I need $100, please. I’ll do anything for $100.” A pickup truck pulls up in front of my car and says, “I’m running late. Do me a favor. Get all these aluminum cans out off the back. You can take them and cash them in.” It’s worth $100. You go get those stinky things out. I prayed. I asked. It was delivered. I didn’t like the packaging. I send it on its way.

Successful people have reticular activator. They say, “Be careful what you ask for because you might get it.” They’re not so particular of how those are brought. How much passion did the guy who created the cardboard box or the trash bag have? All the things that the richest people in the world did, they didn’t have passion and talents but they saw an opportunity, a desire and a need that was gone unfulfilled. They stepped in and did something about it and they’re the people that we tell the stories about.

Start looking at what other people are doing and add your own spin to it rather than reinventing the wheel. Click To Tweet

Looking at their ability to see the world that way, wouldn’t you consider that a strength that is coming from the experience? It’s capitalizing on understanding what human behavior is. People are looking for solutions but also, people pursue their passions. They’re driven by their emotions. They don’t have those in check. Experiencing what made them successful, how have you taken that and started to master your own businesses?

My entire life has changed. It’s almost incomprehensible how much it has changed in that part. It’s interesting because I started seeing things from a different viewpoint. I’ve sat down with this other billionaire guy. I said the same thing, “Why are you building on that?” He goes, “It’s because you’ll see the same situation as we do, but you don’t have the wealth mindset.” I said, “Give me an example.” He says, “Here’s a guy that wants to buy a plane. There’s another that wants to sell a plane. If you’re such a nice guy, you’re going to put the two together.” I go, “Yeah.” H goes, “You’re an idiot. Here’s what we do. We are very clear in our intention. We go to the guy and say, ‘I understand you want to sell your plane. I don’t know anyone that wants to buy one but if I find someone, will you give me a 20% commission?’ He goes back, “Yeah. Get rid of this plane.” You go to the other person and say, “I don’t know anyone that wants to sell the plane but if I find you that, will you give me free airline tickets to Hawaii once a year?” He goes, “Yeah.” It’s the exact same action except one has a wealth mind and the other doesn’t.”

It’s like the broker of opportunity.

I can keep going back. 100% of every billionaire I met did not go into a passion-filled industry. They found an opportunity and they capitalize on it. The founder of Chick-fil-A, $1.4 billion, Truett Cathy. Before he died he goes, “I had those little tiny restaurant called The Dwarf. I had two seats on the thing. I have no idea of that making this chicken sandwich would go on.” It’s the same thing for the next person and the next person. No one sat there and said, “I’m the great mobile home park guru because I have so much passion for mobile homes.” These are the people that are truly the wealthy people that have changed our environment and our surroundings. I say we put our guns down and start on what is possible around us. I’ll give you an example.

I have always turned down an industry called network marketing. I was probably the biggest anti-network marketing guy in my whole life. I was 54 and I was anti. I finally got a product. I started doing it. I crushed it. They send me whole barrels of money. I tell my friends. Now, I found a new organization and I became the president of it. I’m going to get behind it full force because I see an opportunity of something I was shooing away before. I also look back and go, “How many millions of dollars have I walked away from because I didn’t like the packaging in which it came?”

Why were you so afraid of that industry? What was the mental thing going on where you are not necessarily in or bought into network marketing?

I kept seeing the same result. People would start something and build it. The companies would have a sketch and they would shift it out. People have to go back and start over. I saw the way that the industry was run. It’s interesting, even in the movie industry. When I went into it, I go look, “I cannot change Hollywood. I know nothing about Hollywood nor can I change it, but I can change the distribution.” It’s the most powerful part, but no one’s even paying attention to it. My movie is the first one in the history of the world that I know of that closed the distribution that no one ever did. When we did books, it’s the same thing. Sharon Lechter and I took Three Feet from Gold. We did a joint venture deal with a company called Barnes & Noble bookstores where they published our book, the first one in history. We did a JV deal with them. Who’s got a bigger email list, Barnes & Noble or me? I realized that by using these leverage points, amazing things and opportunities would start coming our way.

What are some other actual things that readers would gain by understanding your new perspective or paradigm?

I’ll give an example. It’s the power of dirt. It’s interesting talking to Steiner, the guy who started Steiner Sports, all those sports memorabilia. They were selling shoes like Derek Jeter for $300 because everyone wanted an autograph. They realized when there was dirt on them and they were game-used, they could see it for $3,000. When they started tearing down the stadium, he would go and buy the dirt and all of a sudden, package it with pens and keychains and made I can’t even tell you how much money. While everyone else was throwing away and taking to the dump, one other person saw millions of dollars.

TWS 5 | Fallacies On Becoming Wealthy

Fallacies On Becoming Wealthy: Using accessible leverage points brings in more amazing opportunities.

 

That billionaire I interviewed, I said, “How did you make your billion dollars in the dirt?” He says, “Time plus land is money.” I go, “What do you mean?” All I do is look for a town that’s growing 25% a year. Go on Google maps. You can find it anywhere. I look for Broadway, Main Street. I draw a line out eight miles and I buy the dirt. I rent that dirt to farmers who pay the lease, so it’s free. I get vegetables. As the town continues to grow, it ends up on my plot. If I’m on Main Street, that’s what I sold to the big-box stores for 800 times what I paid the billion dollars.” Every one of these wealth hacks, you read and go like, “That’s how it works.”

Seeing the future, it is a skill set that has made a lot of people a lot of money. Where does that start?

You cannot see in the future, “I’m not going to buy into that. I’m sorry.” That’s for some of these people. Other people see an opportunity and they go for it. They have no idea. If this was true, it means my space should be the greatest success story of all time. That’s not true. What we do differently from visionaries is we’re like a quarterback. We never throw the football where the wide receiver is standing. We throw it downfield and let the wide receiver run to it. We call it being kind to your future self. What we do is an actionable step now that, down the road will have the success blueprint. If you go on my stuff, I would like the most popular kid in town and that’s awesome but people don’t see that a few years ago, I started winding up and throwing the football and now it’s all coming to me. The whole idea is that I’ve been throwing a football in the field for years. Coincidentally, they’re all coming down at the same time. It looks cool, but the real realities are there was a lot of preparation behind it.

Are you saying that a visionary is important? There are those that have those type of ideas that can see things that others don’t. Yet, if it was only them executing those ideas, you’d ultimately have different results than if you had others that were part of the team helping to execute.

Being first to market is an old brand type concept from the horse and buggy days. It’s not true. Right now, no one wants to be the first to market. That’s the kiss of death. If you look at even Amazon, how great it turned out when Alibaba came, it instantly is a success. They, being second to market, put all the working things that worked for them and put right to the jump to the front of the line. When you start seeing this being first to market, if you’re smart, you should start looking at what other people are doing in having some success or failure and adding your own spin to it, rather than reinvent the wheel.

Talk about your role with the movie. I’m assuming you haven’t made a movie before, but yet you had the idea. How did you pull that off?

I didn’t have an idea. Frank, the Founder of Make-A-Wish had the idea. That’s his dream. I sat there and said, “I will grant your wish.” That’s it.

Is it safe to say that you extracted the idea from him?

It was his idea. I asked him what his wish was. His wish was to have his story to be told into a movie. I granted that wish. What I did was I said, “Sign over your life rights. The only challenge is I have never made a movie, but I will make it happen.” I had no idea what I was doing. I got on the internet. I Googled people that won Oscars and people that make movies. I went and met with everyone. I ask, “How does the game work?” I duplicated those actions and here we are. Everyone lives in this. This is my one thing. When I want to be a best-selling author, I didn’t go to people who wrote great books. I don’t want to be a great writing author. I went to Barnes & Noble. I bought every best-selling book. I called those people and said, “How did you do that?” That’s who I sought counsel from.

The only thing billionaires do differently is they don't mind the way things they ask for comes to them. Click To Tweet

When I went to Africa and climbed the summit, Mount Kilimanjaro, I did not ask a dope-smoking surfer down here to take me up to the mountain. I found a surfer that had climbed it 900 times. Wherever they put their blueprint, I put my blueprint. I follow their successful actions. Compared to these guys, I’m insignificant. In my world, I had gone and 10X it in this last year by simply taking these same actions that they’ve taught me, but doing something crazy and applying it.

Let’s add in a couple of things. I know you have a ton going on. I appreciate your valuable time. What would you say regarding the idea that very wealthy and successful people are book readers? That they are always reading and always trying to get an idea. Is there any truth to that?

It’s an absolute and utter lie. If you’re back in the horse and buggy days and you lit your house with candles, it was probably true. You see all these lying memes too. These lying memes say, “Wealthy people have big libraries and poor people have big TVs.” It’s all lies. The whole thing it comes down to is people that consume information, there are the people that are the trendsetters and the successful people. For example, I’ve written more books than I’ve probably read. I read the information every day on my phone. I get news updates. I’m pretty knowledgeable and hanging out with scientists and all these amazing people. I realize that it’s the consumers of information that are successful. It doesn’t make a difference with the modality or the medium in which you get them.

What are you looking for in that information?

One of the people I interviewed was the Founder of Priceline. We do something called info-sponging. He was reading an article one time. It’s arbitrary information. He was talking about how fruits and vegetables go bad. Once they’re done, it’s a useless product. He was reading another one about the way of travel. When the airline closes the doors, you can’t fill that seat anymore. He says, “I got something here.” He put those two together. He took two completely different things, info-sponge and put them together. That’s what we do. We’re all buying Ebony magazine. Over here, I’ll buy a Latina Light. Over here, I’ll buy Science Today and over here is Discovery Magazine. I put all this information to my head, especially stuff I’m not knowledgeable about because now I have a little bit of it and maybe I can start seeing things a little bit different. All we know is all we know. If all we do is put the same content and information, then that’s all we’ll have access to.

What are you up to next? You have your movie. You said you had a few more books that were coming.

I did a book release. It’s called The Tokens, an international bestseller. The Wealth Made Easy is crushing it. Wealth Made Easy is my favorite book. If I could recommend one book, it would be that. After that, it’s Three Feet From Gold.

You told us that all the other books were lies. This one was the one that had your paradigm shift.

It’s when it comes to wealth. The other parts were talking about passion, success and a little bit of purposeful life. That part of it is true. What I thought it was important to make money is you follow your passion to a paycheck. That’s what I wrote. It’s not true. The passion part is still there. The purpose part is still there. The wealth part isn’t there. You might get rich but you won’t be wealthy. It’s two different things. I’ve got a book coming out with Sharon Lechter. She and I wrote a book called Three Feet from Gold. We got our follow up. It’s called Success and Something Greater.

TWS 5 | Fallacies On Becoming Wealthy

Fallacies On Becoming Wealthy: The medium of how information is acquired does not make any difference in attaining success. What matters are the consumers of information.

 

Napoleon Hill, right before he died, was going to write a book called Success and Something Greater and never got it done. He passed away. The foundation and the family gave Karen and me that title. We have Think and Grow Rich Success and Something Greater coming out, where we sat down with amazing humans. They would give their secret sauce towards a life of sustained abundance. That comes out on September 14th in Vegas for the event. On the 15th, I get a star on the Walk of Fame in Las Vegas in front of the Paris Hotel on the sidewalk. We got a book called The Mastermind Association and it’s at MastermindAssociation.com, where we’ll teach you how to run a Mastermind group. If I went down the list, it would be too much. Google Greg Reid, you’ll love it. You’ll laugh and you’ll cry. You’ll tell your friends.

Thank you again for all of your time. Hopefully, it’s intrigued and piqued the interest of our readers. Are there any final words?

You didn’t see this coming, did you?

I always look at life as a paradox. There are so many paradoxes in life where we think a certain way but it turned out to be the opposite.

That seems to be life’s journey right now is to keep going on this thing. I want to unlearn because there’s this thing called facts of fiction. We’re taught so many things as truth, but there’s no such thing as truth. This is what we believe to be true at the given time. At one time, the world was flat. That was a truth and a fact. There was a time when you can’t catch AIDS from a toilet seat and people believe that. There was a time that Pluto was a planet. It’s the stuff that we’ve been taught over the years. Just because it’s put into our head doesn’t mean it’s true. What I like to do is unlearn and learn from myself from truth and reality.

It sounds like there was a lot of unlearning in writing this book. It will be cool to see how that influences the other stuff that you’re doing.

Thanks for having me on.

Thanks, Greg.

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About Dr. Greg Reid

TWS 5 | Fallacies On Becoming WealthyDr. Greg Reid is a nationally renowned wealth and business expert, CEO and author of Wealth Made Easy. Dr. Reid is a world-renowned speaker, filmmaker, and entrepreneur known for his giving spirit and knack for translating complicated situations into simple, digestible concepts. He has published, coauthored, and been featured in more than 50 books, 28 bestsellers in 45 countries, five motion pictures, and featured in countless magazines. Dr. Reid demonstrates that the most valuable lessons we learn are also the easiest ones to apply. He is the Founder and CEO of the – Secret Knock, an exclusive event and professional collaboration community focused on partnership, networking, and business development. Secret Knock is strictly invite-only and includes well-known executives, entrepreneurs, artists, and professional athletes. It was named a “Can’t-Miss Conference for Entrepreneurs” by Forbes and Inc. Recently, Reid was hand-selected by The Napoleon Hill Foundation to help carry on the teaching found in the bible of personal achievement: Think and Grow Rich.

 

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TWS FF 7 | Financial Certainty

The Pursuit Of Financial Certainty And Happiness with Will Street – Part 2

March 1, 2019 Patrick Donohoe Podcast 00:26:18 Comments Off on The Pursuit Of Financial Certainty And Happiness with Will Street – Part 2

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TWS FF 7 | Financial Certainty

 

In this second part of Financial Friday, we are still with wealth strategist Will Street as we move on to talking about the pursuit of financial certainty and happiness. We examine a scintillating article published by the Business Insider, detailing a woman’s insight by studying 600 millionaires on the effects of where you choose to live to building wealth. We discuss the importance of putting one’s happiness and where they find meaning in life to the equation of wealth-building. Learn how to balance financial certainty and security with real life, taking into account friendships, family, and environment. Know that we don’t have to give up the enjoyment of right now to the mirage of the good life in the future.

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The Pursuit Of Financial Certainty And Happiness with Will Street – Part 2

Financial Friday

We are in part two. We started with part one last episode. We’re going to continue with a scintillating article. I’m here with my friend, Will Street. It’s an interesting article from Business Insider. It is the insight a woman had by studying 600 millionaires and she discovered where you choose to live has two effects on your ability to build wealth. First off, we’ll recap the last episode. What did you think of the last episode? How did you like that discussion?

To recap it a little bit, it was good because we talked quite a bit about building wealth in the right way and building it from the base up and talking about uncertainty. Where a lot of people go wrong is they thirst after this uncertainty, but they seek it out without having the proper foundation in place. Not every financial decision is going to pan out. If you’re out and about in search of success or financial freedom or whatever that means to you and when you come across one of those scenarios where it doesn’t pan out. If you don’t have the right foundation to fall back to, that’s when things become difficult for people. You shared a couple of examples of some of those failures, the Puerto Rican fish farm. You got to do the due diligence. Things aren’t always going to work out. In fact, often things don’t work out exactly according to plan. The best that you can do is put yourself in a position to weather the storm and to have the right type of foundation, the right base and to keep moving forward.

You should always try to live within the possibilities, not the limitations – Will Street Click To Tweet

The other point that you made that I thought was super compelling was this idea about tier two. We used as examples a couple of tier two assets, real estate investments, starting a business. The investment in ourselves and finding something that drives us. Finding something that gives us purpose and meaning and the value that it brings as we feel that sense of drive to get out of bed and make it happen. If that’s what is driving us, more often than not, we’re going to have a whole lot more in the tank to be able to push forward and be successful.

It’s the distinction between escaping. Most people are pursuing retirement, which is the escape of what they’re doing because they wouldn’t choose to spend all of their time working in what they’re doing. They’d rather spend their time somewhere else. They’re trying to escape from that. We advocate the discovery of doing meaningful things. I referenced some Tony Robbins material that says that the most fulfilling life comes from discovering that meaning and then spending 50% to 60% of your time doing that, not all of it. That’s where you look at people that retire and are miserable or people that achieve tremendous wealth and then decide to take their own life.

Where that true, that core meaning wasn’t discovered. Money or success or something else they thought was going to help them to discover it, where it’s the other way around where you can discover it without achieving wealth. This is something that’s not talked about when it comes to financial planning or financial advice or what you should do with your money and I think that it’s a tragedy. Most typical retirement planning solves for a specific end, which I don’t think is the end that people are seeking. Let’s get into some typical financial advice by a woman who studied 600 millionaires and she discovered where you choose to live has two effects on your ability to build wealth.

Here are a couple of her claims. She says the key to wealth building is to live in a home that one can easily afford. If you live in a pricey home and neighborhood, you will act and buy like your neighbors. The more affluent the neighborhood, the more the residents spend on almost every conceivable product and service. If you’re high income-producing, high-consuming neighbors roll up to the driveway in a BMW or a Mercedes-Benz, it’s likely you’ll feel the urge to do the same. The pressure to keep up with the Joneses can also be affected by lifestyle creep. The tendency to spend more whenever one earns more. First off, let’s take her perspective. What is she saying? What is she trying to allude to when it comes to a person’s ability to build wealth?

One of the natural tendencies we have as humans is we value community. Click To Tweet

The common expression that you hear is somebody who’s house-poor. She’s saying, “Don’t be house-poor. Don’t spend or don’t buy a house that uses up more than a certain percentage of your disposable income. That’s a term that is somewhat familiar is this idea being house-poor. That’s the first piece, the size of your mortgage relative to your income. The second is if you live in this neighborhood and you see the neighbor across the street rolled up in a new 7 Series BMW, my 3 Series is not adequate anymore. I need the 7 Series. I need the S-Class Mercedes. I can’t resist that urge. If I see that my neighbor has something that I don’t, I’ve got to keep up with him or her. We’ve got home automation, swimming pool in the backyard, we’ve got it all. Pickleball court is the latest. “My neighbor’s got the pickleball court. I need the ball court. I’m going to spend it, even if it means I’m spending now what I would otherwise save.”

One of the natural tendencies we have as humans is we value community. We value friendships. We value relationships. If you live in a certain neighborhood, you want to be a part of that. I don’t think there’s anything wrong with it. She categorized that the wrong neighborhood, then you are most likely going to spend more than you make and you’re going to get into financial trouble. That’s what she’s alluding to. You’re not going to save and then you’re going to affect your future or ruin it, or both. Consider billionaire investor Warren Buffett. He lives in a modest house worth 0.001% of his total wealth. This is a commonly held perspective. I understand the accumulation of wealth. If you spend less, you’re going to accumulate more. It’s hitting on the financial principle, not the lifestyle and the meaning behind where you live and the memories and the experiences. It approaches it from a purely economic standpoint.

TWS FF 7 | Financial Certainty

Financial Certainty: Your home is not an asset because it does not produce cashflow.

 

The thing with economics is it doesn’t take into consideration human behavior. She’s saying that human behavior, you’re going to spend less and you’re going to have more to accumulate. Is there anything that’s lost? This is where we’ll pivot to the other side of the coin when it comes to home ownership, the home that you live in. I’ve heard it as your home is not an asset. Robert Kiyosaki talks a lot about that because your home doesn’t produce cashflow. Someone else isn’t paying your mortgage, you are. You’re putting money into the maintenance and you’re putting money into upgrading this and upgrading that. You have to have Mercedes-Benz and BMWs. I look at the value of living in a nice neighborhood, the value of living in a nice home and what value that provides you when it comes to lifestyle, meaning, memories, family, etc. What do you think of the other side of the coin? How could you say, “I see what you’re saying, but here’s another opinion?”

I see what you’re saying is this idea. It’s the Dave Ramsey budgeting. Is budgeting generally a good idea? To tip our cap to her a little bit, it would be generally should you not spend every disposable dime that you have on a mortgage? The flip side of that coin is that also doesn’t mean that you should live in a studio apartment if you don’t have to. You don’t need to live in a trailer park if you don’t have to. There’s something to be said about a good safe neighborhood with good schools and a good community feel where it’s safe to walk on the sidewalks at night and spend time together as a family. The other flip side to this hyper-focus on budgeting and saving and as most people probably do, you probably have met people in the past who are hyper-focused on saving a nickel. They drive 30 miles to save a nickel on gas. The rational person would be like, “What did you do? Why did you do that?”

Your environment has more to do with your experience of life than you think. Click To Tweet

The flip side there is you can take it to the extreme, where generally, are there some good core principles there? The flip side to that is the happiness piece, the safety piece, the security, the peace of mind. Especially when you consider how much time you spend at home with your family and the experiences all of us want to have with our families. Your house is the key component of that. You can do all that without obsessing over the neighbor’s car and making sure that you put in the pickleball court that’s slightly bigger than your neighbors.

These are all good points. I’m going to continue on with this perspective, hitting on some different things. I understand this person’s point of view and she makes valid economical points. At the same time, if you look at what life is about according to me and it’s different for everybody. I’ve had lots of clients. There’s a period of time within a year that they had divorces, eight or nine people all got divorced and they were around the same age as me. One, in particular, hit home to me because he had made the statement, “All the work I’ve done, everything I’ve done has all been for my family and now they’re gone.” He built tremendous wealth. He worked all the time. I look at that and his intention was genuine. His actions didn’t necessarily correspond to that. You look at a home and where you live. It’s like, “That’s what gives life meaning is the memories and things you can do with your family.” I’d also say the friendships that you have.

TWS FF 7 | Financial Certainty

Financial Certainty: Your environment has a lot to do with the ideas that are in your mind, the expectations you have of yourself, and the questions you ask others.

 

If you look at living in an affluent neighborhood, it’s affluent for a reason. They may drive BMWs or Mercedes-Benz, but the conversations that I’ve had with people in my neighborhood, I would not have had in another neighborhood. I look at my neighbor next door. I’ve had some fascinating conversations with him. He runs a microfinance bank and he consults with countries. He does a lot of work in Myanmar, Asia and Africa. It’s fascinating to have these conversations with him. He’s a computer programmer by trade. Those are the conversations. Those are the things that you can learn and be inspired by people. I have a neighbor that lives across the street and he’s been a successful attorney. What he knows and the books that he’s read. I have incredible conversations with him and we’ve made other friendships as well. I look at what’s the price of those relationships? What’s the price of those friendships? What ideas have they given that would not have come by living in a neighborhood that was 0.001% of your income? I looked at that and there are many intangibles associated with it.

Getting to this person’s point, how can you have both? How can you be responsible? How can you have the experience of life right now, not waiting 30 years or 20 years down the road to retirement where you are able to have the permission slip to experience life? This comes down to your financial education. It’s understanding a financial statement, money in, money out. If you can’t afford the neighborhood, it isn’t, “We have to live in another neighborhood.” It’s asking the question, “How can I live in that neighborhood? How can I live in that home?” That starts to engage a part of your brain where you start to look for opportunities. You may not be able to live there at this point or this point, but at some point, you may be able to live there. It’s the pursuit of that because you figured out ways to make more money. I look at the home that we live in.

We’ve lived in the same neighborhood for many years. This is the third home in the neighborhood, but I lived on the outskirts for a number of years. We almost moved a few times, especially during the financial crisis but it’s because this neighborhood is somewhat affluent neighborhood and it’s because I had established relationships there. I had friendships there and I wanted to also have a nice house for my family and also a happy wife because happy wife equals happy life. It was one of those things where I could have taken the money that went into a house and invested it. I would have had more money, have more cashflow, at the same time, I wouldn’t have had the experiences with my family.

You look at what that does to your soul, what that does to your drive. It can affect many different things. That’s the conversation that’s not typically had with these types of articles. They give you this, “Step one is to make sure that your mortgage payment is less than 20% of your earned income,” which are always technical steps and there’s merit to some of those. It’s disempowering because it almost assumes that you’re at the income level you’re going to be for the rest of your life and you better deal with it. If you want to retire one day, you better scrimp and save and not enjoy life until you’re 65. I don’t think that’s the right mentality. They may not say that’s what they mean. That’s the feeling you get.

You're one idea away from a totally different life. Click To Tweet

That’s where the motivation comes from where in order to build wealth, you don’t figure out how to earn more and be more valuable, but you scrimp and save based on the money you are earning. That’s the only money you’re going to earn. That money there is going to somehow compound and grow and you have enough money to live for the rest of your life at 65. It’s a narrative that is disempowering. Looking at our perspective, it doesn’t mean that you need to go out and buy a beautiful home and BMWs and Mercedes, but you need to start asking different questions. There’s merit to her perspective. There’s also merit to the other perspective. Hopefully, you’re seeing that. You sit on the edge. It’s up to you to determine what’s right for you at this point.

I can resonate with a lot of what you said about the neighborhood that you live in. For us, we moved a few years ago. It wasn’t to try and get into some fancy neighborhood where we wanted to be surrounded by a bunch of gazillionaires or anything like that. For us, it was family. We live within about a mile or so of my wife’s two brothers. The result of that is we live in a neighborhood that we love, that we’re comfortable with, that’s a good neighborhood. The interaction with our kids among their cousins and holidays and things like that, it’s a completely different dynamic.

The thing that’s interesting is for me, I didn’t grow up like that. It’s one of those things where I would have been stuck in that old mentality. I would have imposed this artificial ceiling on myself that, “We can’t do that. We got to take where we are right now, assume that that’s our maximum and operate from that level and below. We can’t do that.” My wife helped me stretch a little bit and see opportunity, meaning and value. Now that we’re there, my kids are having a completely different experience as kids from what I had. The family is so much more critical, so much more part of their everyday lives than it was for me. I wouldn’t trade that for anything. It’s huge.

Your environment has more to do with your experience of life than you think. It’s the environment, whether it’s where you live, the culture of your office and the social networks that you’re in. Those are environments and that environment can make life miserable or it can totally empower you. It can also stretch you. I’m going to give you one example. This was a long time ago, but after my sophomore year of college, I went to a hockey camp in Minnesota. It was sponsored by the Anaheim Ducks. It was a humbling experience because I was in an environment of these Triple-A players. There are a couple of pros there, it was a camp where it was training but also spotlight. I remember getting out onto the ice the first time and the speed that they were warming up. For me, it’s the speed of a game where it was all out. What it did, it raised my level of play because I was in an environment that stretched me. I believe that anybody can be stretched. Anybody can make more of a difference tomorrow than they did now.

A lot of it depends on the environment that you’re in. Some of it depends on your internal drive and what you want for life, your vision, your mission. Your environment has a lot to do with the ideas that are in your mind, the expectations you have of yourself, the questions you ask yourself and the questions you ask others. You’re one idea away from a totally different life. You’re one decision away from a totally different life. Your environment influences a lot of that. That’s why I try to go to events. I try to participate in mastermind groups. I try to be around individuals who are inspiring, who are pushing the limits, that doesn’t settle for the status quo. That inspires me, it helps me stretch. If I didn’t have that, it would be more difficult for me to do that. What do you think of part two?

We dissected it pretty well. There’s always a second side or even a third.

Life needs to be valued and celebrated. Click To Tweet

It’s one of those things where I find it disheartening sometimes that people sacrifice the enjoyment of life right now for what I consider a mirage of the good life in the future. Sacrificing now, I don’t think you’re suddenly going to have an amazing life when you retire or you achieve success. Life needs to be valued and celebrated.

I think so much of those limitations are mental. I can remember as a kid growing up where I had some friends who were better off than we were financially. They came from amazing families. I got to see from the inside. I had friends whose families were awesome and who included me in a lot of what they did, vacations and stuff like that. I got to be able to see it from the inside. My parents were that limiting frame of mind. They would refer to my friend’s families. It was with some jealousy and with, “We could never afford to do that. It’s nice that they can do those types of things, but we can’t do any of those things.”

I was living in an environment where I was hearing all these limitations, but I was spending a significant amount of time within these other environments where I was seeing everything that was possible. It’s not like they were burning $100 bills for the fun of it because they had so much money. It wasn’t anything like that. They prioritized what was important to them and they lived within that framework. Early on in my teenage years, I consciously made the decision what I wanted. I wanted out of where I was, that mindset, those limitations. I wanted to gravitate toward what my friends’ families had. The number one reason why I went on to become an attorney was that my best friend’s dad was an attorney. I saw the family dynamic. I saw the lifestyle. I saw what they did together as a family and what I didn’t do. I bee-lined it straight for that.

The idea was nurtured over the course of time, but it may have come in one experience. Those ideas can come frequently if you’re in the right environment. That happened to be the circumstance at the time for you. You can intentionally be in certain environments that can inspire you, stretch you and push you beyond what you consider your limitations. Hopefully, this has been a valuable episode for you guys. It’s setting the stage for some future ones that we’re going to do when it comes to investment and also some other financial strategies. Thanks for joining us. Make sure you go and listen to our past episodes as well as our primary episodes. We’ve had some awesome ones, G. Edward Griffin, Lawrence Reed, it was fun interviewing those guys. The topic’s capitalism so learn about capitalism. We’ll see you on the next episode. Thanks.

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About Will Street

TWS FF 7 | Financial Certainty

Will earned his Bachelor of Arts degree from Brigham Young University in 2005. After graduating from BYU, Will attended the University of Iowa College of Law and received his Juris Doctor in May of 2008. Will began practicing law with the law firm of VanCott, Bagley, Cornwall & McCarthy the oldest and one of the most well-respected law firms in the State of Utah. Will’s practice focused primarily on consumer finance-related litigation, consumer finance transactions, sale and purchase agreements, NDA’s, RFP’s, teaming agreements, security agreements, creditor’s rights in bankruptcy, and estate planning. Working directly with clients to analyze a problem, develop a solution, and working to ensure a successful resolution are what Will enjoyed most about being an attorney. Will comes to Paradigm after nearly six years in the private practice of law.

After his exposure to the Infinite Banking concept and seeing that his legal training would be directly relevant to his role at Paradigm, Will made the decision to leave his practice. Paradigm allows Will to continue to do what he enjoys most – develop client relationships, dissect problems, create solutions and work collaboratively with the client towards a successful resolution. Originally from the Tri-Cities area of Eastern Washington, Will currently resides in Salt Lake City with his wife, Sunny, and their three children.

 

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About the host

Patrick Donohoe

Patrick Donohoe

CEO Paradigm Life

Patrick is the President and CEO and started Paradigm Life in 2007 after learning from his mentor Kim Butler about financial strategies outside of Wall Street.

With a background in economics and marketing, Patrick immediately realized the opportunity to teach investors, business owners, professionals and families on a large scale using modern digital media and communication technology. Since 2007 Paradigm Life has worked with thousands of individuals in all 50 states.