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Gary Keller Quantum Leap Transcript Excerpts
Funding the Life You Desire
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Contents How will you know when you have enough money? ................................................................................... 2
IT’S ALL ABOUT ABUNDANCE ........................................................................................................................ 5
STORY: Pursuing Money ............................................................................................................................ 5
WEALTH IS A STATE OF MIND ....................................................................................................................... 8
Wealth is a State of Mind.......................................................................................................................... 8
SUCCESSFUL PERSONAL MONEY MANAGEMENT ......................................................................................... 9
The 11 Key Money Mistakes Most People Make ...................................................................................... 9
REALITY CHECK ............................................................................................................................................ 15
Reality Check ........................................................................................................................................... 15
THE PATH OF MONEY .................................................................................................................................. 16
The Path of Money .................................................................................................................................. 16
AN INVESTMENT PATH................................................................................................................................ 21
$100 Invested Every Month .................................................................................................................... 21
The 8 Mythunderstanding Between You and Financial Wealth ............................................................. 24
THE TRUTH ABOUT MONEY ........................................................................................................................ 30
The Six Truths About Money ................................................................................................................... 30
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How will you know when you have enough money?
Be real clear about this. The last hour of our time together we’re going to talk about
money. And in one hour I’m going to slay every myth you have about being rich, okay. Money is
simple. Here’s one of the things you need to understand. Your career is not your financial
wealth. Be real careful about that. Go look at the Forbes 1000 and show me any of them who
got rich with their job. Did Bill Gates become the richest man on the planet because of the job
or the fact that he owned the stock in Microsoft? Stock, right? Okay, there you go.
Warren Buffett, your second richest man. Sam Walton by the way, definitely the richest
family to ever walk the planet, right? Bill Gates has only been the richest man because Sam
Walton decided to divide his estate up from the very beginning among he, his wife and his four
kids. So if you looked at the Forbes rich, top ten for like 20 years, something like that,
somewhere in that category, it said Gates, Buffet, Michael Dell, Walton, Walton, Walton,
Walton, Walton, Walton, Walton. And when you added up all their wealth and then compared
that back to Gates, how did it compare? Oh Sam Walton without a doubt is the richest man on
the planet, by far. Why was he not ever recognized? Because he had the greatest transfer of
wealth without paying inheritance taxes ever seen. Because from the time that he started Wal-
Mart it was owned by six, he and his wife and his four kids. So the four Walton kids never had
to pay inheritance tax on their billions of dollars. There you go. That’s a good one, isn’t it? Okay.
What you’ll find out is not one of those people on the list of the top 1000 richest people
on the planet are rich because of their job. I don’t think you pursue a job because you want to
be rich, because you will not. And one of the reasons, and I don’t mean this as a criticism, this is
just an observation, that there are more than who would admit, who have chosen jobs in law,
in medicine, banking, accounting. Because when we look at careers who pay the highest job,
money, what would they be?
Average real estate agent makes $9000 a year? Yeah, I don’t think that’s very
impressive, right? You go to college. What are you majoring in? I’m going to be a real estate
person. Really, what do they make? Oh about nine grand. Right? The legal professional doesn’t
average nine grand. Okay. You with me? Yeah, the medical profession does not average nine
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grand. Isn’t it odd though? What profession dies earlier than any other profession on the
planet? What’s the job that’s likely to kill you? Doctors. If that little fact doesn’t send a shiver
down your spine about the medical profession and the disconnect between saving people and
killing yourself, I don’t know what does. That’s just odd, isn’t it? Don’t you find that odd? Freaky
odd.
Do you know why? Because the medical profession is into curing, not prevention and
they create massive stress, right? When you hear about the hours they work and they’re always
on call and blah, blah, blah. You can’t live in that kind of stress pool. You cannot do it. Just
interesting. So your job is not your wealth.
If you want money, go get it. A lot of people go pursue a job, love it so much, have a
wonderful personal life. They never pursue money. Is that good or bad? It’s fine. It doesn’t
matter. I don’t think you should walk in this room and say that guy’s got a lot of money. Man,
wow. If you say that, you’re an idiot. I have a lot of money because I’m good at business and I
decided to play the game and I got better and better and better at it, right? It would be no
different than me mastering how to play backgammon and challenging you to backgammon
and kicking your butt every day so I can do that too by the way. You with me? Okay.
So let’s be real clear about that. Anyone who has a lot of money has it because they
decided they wanted it. We clear about that? Okay. And that will be a choice that you make.
My son, you know, he and I talk about this. We were on the top of a mountain having
dinner in a private club that only 400 people get into. And we’re looking out and he had this
epiphany in that moment. He’s a landscape architect major at University of Georgia. And he
says, how am I ever going to have enough money to live this lifestyle once I graduate? I thought
that was awesome you know, because that’s a fact. I mean that’s just the way that goes, right?
And I turned to him and said, “I love that question”. He’s looking at what landscape
architects make. And I’m saying, ignore that. That’s irrelevant. I mean that’s what you’re going
to do because you love it and you enjoy that. If you want money, I’ll show you how to do that.
That’s not complicated, right? I’ve made millions in the stock market. I’ve made millions buying
and selling real estate. I’ve made millions in my businesses. You with me? Do you want to make
money? Let’s go make money? You don’t want to make money, don’t worry about it. It’s not to
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be respected or disrespected. We clear on that? And anybody who tells you otherwise is a fool.
Now remember, breathe. This is just my opinion, okay? This is my self-talk, okay?
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IT’S ALL ABOUT ABUNDANCE
STORY: PURSUING MONEY
The richest people in my family were an aunt and uncle that I had who were barbers. I
don’t believe they finished high school. They did not go to college. They went to barber school.
They ran a barbershop in Houston, Texas. How did they get rich? Real easy. They never paid
insurance on anything. This was when you could get away with that by the way. And they self-
insured and they put all the money aside. And in the ‘80s they invested in real estate in Austin,
Texas. About seven or eight years later, they were rich and then they kept getting richer and
richer.
My dad went to the same meeting that my aunt and uncle did and my dad made more
money than them. We lived in a nicer home. He was a business administrator for a school
district. My dad was a great businessman. Money never mattered to my father. Making money
just didn’t. So whatever he made, he had. Then one day he woke up and he had to quit his job. I
won’t tell you the circumstances but he had to quit and he should have. And all of a sudden he
looked up and he didn’t have anything to do and his money wasn’t quite enough for what he
wanted. In that moment, he realized he’d made a mistake.
And this again, this is my self-talk. But pursuing the maximum amount of money that
you can make is a good thing in life. However much you’ll make you’ll make. That’s your
journey. So be very careful. Don’t be pulling out bank accounts and measuring your self-worth
against somebody else’s based upon how much money they have or don’t have. You with me?
Now the good news about life is it’s not like football where at the end of the season we
say one team won and everybody else didn’t. Could you imagine your life being defined that
way? I mean, it’s got to be tough. It’s got to be tough, you know, to get up as a professional
athlete male or female and spend 20 years to be a gymnast only to have your leg break and
never win anything. How do you define winning in that moment?
So what’s interesting is that my dad had the same opportunity. He was at the same
meeting that my aunt and uncle were at. He walked away from that meeting and said I’m not
doing it. My aunt and uncle chose to bet everything. They took all their savings and they put it
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on black 21 if you will. By the way, they happened to invest in what became the growth corridor
of Austin, Texas.
Here’s a fun story just to whet your appetite about our next session. The two guys that
came to Houston to make the presentation had worked for the phone company. They had a
job. Their job was to research where Austin was going to grow and then go back to the phone
company and tell them so the phone company could get ahead of the growth by putting in the
phone lines and all that. Yeah, you know where the story’s going. After they got all the research
and saw where the growth was going, they quit their jobs. And what did they do? They formed
a commercial investment real estate company and started going out raising capital. They
bought all the land along the growth corridor all the way out of Austin. All the way out. It was
those two guys that showed up at that church in Houston, Texas that night that my aunt and
uncle invested in. My dad actually invested in other stuff and lost all his money. Lost it all,
actually, and he had his teacher’s retirement.
I’ll make one other comment. This is my self-talk. Do not feel judgment when I say this.
But I do believe that you’re negotiating somewhat on faith that you don’t have a right to have
when you say I don’t need to pursue money. Remember money is simply good for the good it
can do and money is simply a bartering power.
So I’ll use my life as an example. In my family I’m the only individual who pursued
money. In other words, actively making my money make money. Does that make sense? In
other words, I’ve treated money as a commodity. I set aside a certain amount and I go and I
invest it and I’ve been doing that since my 20s, early 20s. I’m the only one in my family who
actively aggressively did that.
My dad passes away 11 years ago. He has teacher’s retirement. That’s good. My mom
gets it. She’s 85 years old by the way. My mom looks up. She’s in her 70s and that’s all she has
to live on. Well that’s fine, but the second she got sick, there wasn’t enough money. The best
my mom’s income could provide her was a 10 x 12 space in a nursing home, with a shared
bathroom. And it looks like the worse dorm room you’ve ever seen. Now that’s what my
mother’s income would provide her.
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Oh by the way, my mom still lives in a home that I own that she pays almost nothing to
live in. And I own that with my little sister. We bought that. My mom has 24-hour care that lives
with her. My mother has the biggest big screen TV money can buy that has the NBA channel
and everything you ever wanted on it. She’s got her iPad; she’s got her cell phone; she’s got her
computer. She also has a personal trainer that comes three days a week. She has a masseuse
that comes every Wednesday. Do I need to go on?
My mom looks phenomenal. My mom was diagnosed with cancer a year ago. Today
she’s cancer free. And I’ll guarantee you one of the reasons is because she has a nutritionist. My
mother is living like the emperor. She is on a nutritional diet. We manage exactly what she eats.
She was in the hospital five times like in eight weeks. It is a disaster, and it all has to do with her
diabetes. But when we put in these people that live there 24 hours a day with my mother,
before she takes a bite they literally take the blood and they check and see what it is. My
mother hasn’t had an episode since. Do you get that?
Now my oldest sister who’s a phenomenal individual, and I say this lovingly, never
pursued money. She doesn’t have the money to contribute. She’s a high school administrator
just like my father and they do phenomenally well. There’s not one dime that they have
available to help my mother. I don’t say that with judgment by the way. I say that as a fact. I am
the person. Okay? And my mother spends over $100,000 a year more than she has. Do you
hear that? You’re going to get there. And if you don’t think you are, you’re a fool.
Now breathe. This is my self-talk. Just breathe. But you’re an idiot if you don’t think
you’ll get there. Now if you go, well that’s just so off in the future that doesn’t even exist, well,
the future comes faster than you think. One day I looked up and my hair was gray. I went how
did that happen? You will say the same thing. And if you’re smart, you’ll realize if you’re lucky
you will say it. You will live long enough to say that. You with me? Okay.
So listen to someone who’s lived before you about that. So I believe that pursing
money’s a good thing. However much you get is how much you get. We’re not going to judge
our self-worth based on net worth. At the same time we’re going to pursue it because we don’t
know when we’re going to need it.
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WEALTH IS A STATE OF MIND
WEALTH IS A STATE OF MIND
Wealth is a state of mind. The most common mistake we make in life is looking outside
of ourselves for what we should find inside. Success is no exception. Just as the source of true
happiness lies within each of us, success also comes from within. Success is a result of a very
specific mental attitude. So call it what you like. The mentality of the rich and attitude of
success or the prosperity consciousness. Financial wealth is the outward manifestation of an
inner focus. It’s the result of steering your thoughts towards a specific financial target. In other
words, if you want money, then you have to think the way you have to think to get it. In other
words, it has a very specific thought. You want money? You can dream about it and that’s very
different than wanting it and going and getting it. Okay? Let’s be real clear about that.
So the bottom line is genuine wealth is above all a state of mind. A mental state that has
taken a physical form in the lives of the wealthy. You must begin by being rich and wealthy in
your mind before you’re going to do that in your life. And I’ve witnessed that over and over
again. It’s just an amazing truth.
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SUCCESSFUL PERSONAL MONEY MANAGEMENT
THE 11 KEY MONEY MISTAKES MOST PEOPLE MAKE
So the 11 key money mistakes most people make. See the number one thing I need you
to hear is, you want money to finance your purpose. If you don’t have a purpose, you’ll never
have enough money. You just won’t. Okay? Number two, money has rules. Learn the rules.
Number three, be an all-day everyday investor. Walk out every day looking for opportunity. Just
look for it. Now some, you’ll make good decisions and bad decisions. It’s going to average out.
Let me tell you something. I never lost a dollar in any business or real estate I ever
bought. Now the reason why is because I’m selective. I don’t take risk. And I’m investor not a
speculator. So if I make a bad decision, I can wait until time fixes it. You hear that? In other
words, I don’t have to flip it tomorrow. I don’t need the money.
So if I buy it, I can sit here and wait. My first real estate investment, I paid $65,000 and I
watched it drop to $19,000. That was my first investment. Right? If you were giving me a test, I
would have failed, right? What a loser, right? But I didn’t need the money so I held it and
ultimately sold it for $94,000. I rented it in between, it never lost money. It made money all the
time.
I have a book called the Millionaire Real Estate Investor. Read the book. In that book, I
tell a story and here was the story that changed my life and I’ll tell it to you real quick. My wife
and I were down…every summer we went to South Padre for a week and so we were there and
we’d been going there for I don’t know how long. But we had been going there for long enough
that we understood value. Because when we were there, we’d go look at the other condos to
make sure we were staying in the coolest nicest one, right, for the money. So we knew value. I
knew the pricing. I’m in that business. So I knew the pricing just because I paid attention and I
knew value.
One day we got on the elevator going up to where we were and there was a lady who
had a Coldwell Banker badge on. And my wife who’s highly social goes hey, how’s the market?
The woman says great. She says, well do y’all have any good deals? I don’t even know why she
asked that question. The woman said, well yeah actually we just had a listing that’s not on the
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market yet and it’s over here. It’s on the corner, it’s on the second floor and you know, it’s
owned by a couple that don’t live here and they hired a realtor that doesn’t work here and
they’ve underpriced it. And my wife goes, that’d be interesting. Let’s go look at it.
So we looked at it and then we went back and we talked about it. We drove home and
talked about it and then went, you know what? That’s a steal. We could sell it tomorrow and
make $100,000 to $150,000 minimum just by giving it away. And I said, I’m going to call that
woman.
I still remember sitting in this chair in my den with the phone calling this woman and
saying, hey, my wife and I talked about it and we’d like to buy it. And the woman laughed at
me. True story. She laughed. I mean she didn’t laugh ha, ha, ha. She went sir, we sold that the
next day. I felt like such an idiot.
I put the phone down, I went thank you, and I put the phone down and went well of
course they did. It was a steal. Any investor or anybody who understood value and was an
investor would have gotten out their checkbook and said I’m not leaving this spot. I’m buying
this before I leave this spot. And I went, man. Because I wasn’t an investor at that time in my
life, right? I mean I was a put a dollar, not a put a dollar. Put a dollar, right? I’ll bet on black one
time and then I’ll come back next year. And that cured me. I went holy cow, I’m not an investor.
I do it, I don’t do it. I do it, I don’t do it. I should have been prepared when I saw it to do it.
Yeah. I never missed out again from that moment on.
Not that I ran around rashly looking, but I’m just saying that when I saw value from that
moment on, like the guy calls me about the lot and says hey, I need to sell this lot. It was
actually a corner lot. There’s a bank on it now on BK Road further down and the guy calls me
and says look, I got a payment to he bank. I don’t have enough money so I have to sell a piece
of my development and the smallest piece I can sell for the most value is the corner lot here
and so here’s what I’m asking. And I went, I’ll buy it and I went over and gave him cash and
closed in two weeks and he paid it off and did the rest of his development.
I flipped that piece of real estate for $900,000 profit in about 18 months. All I did was
change the zoning and sold it to a bank. Okay? You get it. It wasn’t complicated and any one of
you could have done that deal. If you knew real estate and you put yourself in a position that
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the world knew that you would buy and you were ready to take action when it showed up. Did
that make sense?
So here are the 11 key money mistakes. Number one, have a consumptive lifestyle with
little emphasis on investing. You hear that? In other words, you spend all your money. Stop
that. Don’t do that. Right now you probably are doing that. That’s okay. Stop that. Don’t do
that. If that means you have to move to a smaller house or to a smaller apartment so you have
spare money, do it. Just do it. Whatever it takes, live that way.
Number two, no financial goals.
Number three, no personal budget, no personal future budget. So you have no sense of
what you’re going to spend now or spend later. Right? I got that so I had my current budget and
then I have my future budget so I understood how much, when I was going to get money, I
knew how much cash flow I needed that I wanted to finance the lifestyle I wanted. Okay?
Number four, buying new cars and new houses too soon. What I mean by new cars and
new houses is I mean brand new. If you’re going to go buy a house, I want you to go buy the
dog. I want you to buy the cheapest dog in the neighborhood. And I immediately want you to
clean the yard up and I want you to plant as many trees as you can for a dollar a tree or
whatever. Do not want you buying new cars. Because when you get out in the parking lot,
what’s it worth? Exactly. Don’t buy a new car when it, only buy a new car when it doesn’t
matter. Anybody that tells you buying a new car is smart, is not. It just means you have the
money to lose. It’s what it means.
It’s like buying a new boat. Don’t buy a new boat unless you can afford to lose money
because you’ll pay $100,000 to $140,000. Exactly, and it’s going to be about $16,000 in about
three years. So be sure when you buy it you can afford to lose the money, otherwise don’t do
that. Buy a used boat. Okay. They’re cheap. Right?
Number five is not tithing. It’s a mistake. And let me be clear about tithing. Just from
again, this is a, you do what you want but I’m going to share my view of it. I don’t give much to
the church just so you know. Okay? I did that for years and I watched how they spent the
money. And I went, you know what? I can have more fun by giving my money away to exactly
who I want to have it instead of to their mission program. So I reduced how much I gave the
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church for its mission program and I started my own mission programs. Does that make sense?
Yeah. So I tithed but I tithed directly. So if I see someone who needs help, I give them help.
Right?
My old college roommate from Baylor just had a stroke at 57 and can’t work for three
months and he’s had some financial difficulties and he doesn’t have the money. And I was on
the phone with him two weeks ago. I said well how much money do you need so you’re not
stressed out, so you can get your blood pressure down? He stated an amount of money and I
overnighted the money to him. Isn’t that tithing? Say yes. Thank you. It’s tithing.
And by the way, his blood pressure’s down. He’s doing great. So this is all good news.
And he said, well hey can I do something for the money? Yeah. If you want to do something, I’ll
come up with something. You do it, we’ll call that equal. I don’t care. It’s awesome. It’s great.
Number six, over focus on tax reduction is the reason for investing. Don’t do that. Make
the investment or the return it gives you, not the tax reduction it gives you. That is a mistake.
Why? The biggest reason is they can change the tax laws. So be real careful about that.
Number seven, saving is the same thing as investing. You ask people you invest? Yeah I
got $5,000 saved. No saving is saving. Investing is investing. Okay? Saving is for a rainy day.
Investing is investing for a rate of return. They’re not the same thing. Savings you do not want
to lose the money, right? Savings is like putting it in a mattress. It better be there when I go get
it. Right? Whatever that is.
Number eight, asking should I invest versus where should I invest. Notice the language,
right? An investor would never ask should I, right? What would they ask? Where? Exactly.
They’re going to ask where.
Number nine, investing without understanding whether you were an accumulating or
preserving mode. When you’re young, you’re in what mode? You betcha, absolutely. You’re
going to cross a line in your life and it’s an invisible line where from that moment on, you might
want to make sure you preserve it. Interesting, there was a study done where I don’t remember
who did this study. I read it in the paper. In fact, it’s in my briefcase that it’s called the four
percent rule. That means that when you reach retirement age, there was a research project
done and the guy stress tested it and said if you want to have enough money to live, you can
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only take four percent of the money out each year. And then they researched and they found
out that people take six to eight percent on average.
All he’s pointing out is if you have a fixed amount of capital that’s supposed to last you
the rest of your life, the four percent rule assumes that you’ve invested the money and it’s
going to make you above six percent, meaning you’ve got it in the stock market or mutual funds
and in any eight or nine year period, it will make that. You just can’t predict when, is the
problem. So it’s going to go up and down.
Over a 30 year period it’s going to average that and with inflation, the cost of living
going up but only taking four percent, you’re good for 30 years. Whatever money that gives
you, it’ll be there for 30 years on average. Okay? Takes six to eight percent. Not even going to
come close. You’re going to lose it so fast. It’s ridiculous. That’s what most people do.
Number ten, failure to follow the proper sequential investment strategy. Number one,
get out of debt. Okay? When you have debt, you do understand what that means is you can’t
afford your lifestyle. That’s what debt means. That means you borrowed money. You should
only borrow money for appreciating assets. You should never borrow money for depreciating
assets. Right? You with me on that? Now most people violate this and the first place they
violate it is in a car. Right? If you can’t pay, if you can’t pay cash for that new car, I’m going to
tell you don’t buy it. Buy the car you can pay cash for. And it’s going to suck. You know, but
here’s the cool thing. Go buy used luxury cars. They don’t hold their value. Right now, you can
go buy, with probably 10,000 miles on it, a classic Jaguar convertible for about $8000 to
$10,000. Dude, go buy that and look cool in the process. You see what I’m saying? You can go
buy an umpteen year old Mercedes that will last you another ten years for five grand. Drive an
old Mercedes instead of the new Hyundai. I’m just telling you. This is where people get all
messed up because they’re not investors. Right? They’re not investors. All right. Get out of
debt. Next, put emergency money aside. Save for major purchases. Invest for financial
independence.
Number 11, making mistakes involving debt. Debt is essentially overextending yourself
in order to satisfy a short term desire. When you commit to stay out of debt, you’re probably
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committing to…listen to this…having less than what the world says you’re entitled to. You hear
that?
The world wants you to buy stuff, right? The government wants you to buy stuff. If
you’re buying stuff, they’re going to give you tax rebates. They’re going to do something to put
money in your pocket, right? Because they want you to spend.
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REALITY CHECK
REALITY CHECK
Reality check. I want you to look at something. If your goal is $100,000 a year in passive
income, after taxes. Look at how it works. A million dollars at four percent tax free equals
$40,000 a year, right? Okay? So a million a year only gives you $40,000 after taxes. Two and a
half million at four percent tax free will give you $100,000. So if you had two and a half million
dollars…now today it’s only going to pay you about 2.1% so it wouldn’t get you there. But it’s
going to average above 3%. So just as an example, if you had two and a half million three years
ago in a tax free mutual fund municipal bond, you’d be making $100,000 a year. Okay. Tax free.
Now, I want you to understand, at $100,000 annual income, you pay $30,000 in taxes.
Let’s just guess. That equals $70,000. You invest $30,000 and only live on $40,000. Now how
many people do that? No they live on $70,000 and go whoo hoo. But let’s say you lived on
$40,000 and invested $30,000. $30,000 at ten years equals $300,000. You can’t save your way,
right?
Remember, how much money do we need? Exactly. Yeah. $30,000 at 20 years is
$600,000. $30,000 at 20 years is $600,000. $30,000 invested a year at 40 years $1.2 million.
Remember I need to get to what number? Minimum two and a half million. How long would it
take me? It would take 80 years if I set aside $30,000 a year at no rate of return to get to 2.4
million. You hear that? There’s the reality for you.
Now if I put $60,000 at 40 years it’s $2.4 million. What’s your ah ha? You better invest.
You cannot save your way there. You’re not going to get there by saving money. You cannot get
there. You can’t get to big money. You with me on that? It will never happen. And that’s okay.
I created this chart for myself years ago. It comes out of my book The Millionaire Real
Estate Investor. I put it in there. But this is my chart. This is the one chart I want you to
memorize about money. I want you to internalize this in a huge way, okay?
So there’s three sheets of paper. Everything I gave you before this, you can now ignore. I
don’t care. These next three sheet of paper, I want you to internalize. And they will change your
life if you internalize them.
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THE PATH OF MONEY
THE PATH OF MONEY
So there’s three sheets of paper. Everything I gave you before this, you can now ignore. I
don’t care. These next three sheet of paper, I want you to internalize. And they will change your
life if you internalize them.
So here’s the first one. I call it the path of money. Path of money is real simple. You have
two kinds of capital on the planet. You have human capital, meaning you work for money; and
then you have capital assets, where your money works for you. Now either way, you work for
money or you have money that pays you money. You end up with what? Cash flow. You have
money. Okay?
Now when you have money, you have four things you can do with it broadly. You could
eat it, but I didn’t count that one, okay? You can spend it. You can donate it. You can hold it.
You can invest it.
So you can spend it, you can charity work, you can save it or you could invest it, right?
So you can pick your percentages. You could look at your life and say this is the way I’m going to
live my life. Most people investing is the last thing, right? They spend it first. They’ll give a little
to charity. They’ll save a little and there’s nothing left to invest. That’s what they do. Okay? Big
mistake. Do not do that.
So two basic investment choices. Now the other three, do what you want. But if you set
aside a dollar to invest, I want you to understand you have two basic choices. You only have
two. When you go to invest money, you can either lend it or own it. Did you hear that? You only
have two choices when you invest. You can either lend it or you can buy something with it.
Those are your only two choices. Not complicated, you guys.
Now if you lend it…and there’s always two basic positions with money. You can
passively lend and passively buy and you can actively lend and actively buy. Do you understand
that? There’s passive where you give someone else the money and they lend it or buy for you.
Or you’re active. You lend it or you buy. We clear on our choices? Okay.
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So I’ve made a decision. I’m going to invest money. I realize I have two choices. I can
lend or own and I can recognize that I can either be passive or active. So look at the positions. If
I’m passive and I lend money, they call that money market, CDs, bonds and T-bills. Because
essentially….and this is why they pay less money. Why do they pay less money? What are they
going to do with your money? Relend it. Remember, when you lend them money like this, what
are they doing with your money? They’re going to put it back out there.
That’s why I’m not going to pay you much money. That’s why a bank doesn’t give you
much money. Why? Because you’re the source of their capital for them to go lend. Yeah. You’re
not the bank. Right? Yeah. If you want to passively own, that would be the stock market, real
estate investment trust, mutual funds. That’s it. Those are your big passive choices. If you want
to invest, own something. You’re going to own stock, you’re going to own real estate or you’re
going to own a portfolio of stock which is what a mutual fund is. Those are your choices. Those
are your big choices.
You cannot get rich on the passive side of the equation. Why? What’s the average rate
of return on those? They range from less than one percent to maybe three percent tops? Now,
the stock market however, in any seven to eight year period, averages about eight to nine
percent. Now we’ve had periods that have done better than that, so you’ll hear different
statistics that during this seven year period it was 15%, during this period it was 12%. But
during the great depression it’s below ten percent. Just so you’re aware of that, right? And that
would be the number I would kind of hold in my head. Actually I would think more like eight
percent just to be safe, and that’s what a financial planner would tell you, okay? So we just
can’t get rich there.
How do we know that? Okay? Turn the next page. You need to learn this page (An
Investment Path). This is the magic of compound interest. This is what people at Warren Buffet
mastered early in their life. The power of compounding.
Look back at your chart again. Look. Active. Lending doesn’t make you a lot of money
but you can do pretty well. I’ve done well on it because there’s some people that will pay you
15% to 20% interest, okay? Because they need money. And by the way, that makes them
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money. You’re not cheating them. No one else will lend them money so you’re taking “risk” on
that. But I’ve never lost money lending to people. But the guy wants in. Here’s a good example.
First loan I ever did, young man comes in. He actually ran the snow cone stand in Zilker
Park and now works at Keller Williams, by the way. But I met him because we used to walk
through the park every day and he was a cool kid. Really liked him and one day we became
friends. We came to him and he said look Mr. Keller, I need to borrow money. It wasn’t a lot of
money. It was like $25,000. I need to borrow the money. I’m going to start my own glass cutting
company and I found a used machine. It’s $25,000. It’s used. New they go for $50,000 so it’s
agood value. I’ll put it up as collateral and I’ll make you payments and I’ll pay you 20% interest. I
went okay. He never missed a payment. Never missed a payment. I never had anyone not pay
me.
I ran into a guy in Wimberley, Texas years ago selling vintage guitars and he wanted to
build up his business and ultimately came to me and he said would you loan me the money? I
loaned him the money. Well he went out of business. He now lives in Chicago in the advertising
business. I had all the guitars as collateral so I can’t lose my money but he decided that he
would keep the guitars because they were worth more than what he owed me and he still
makes his payments. Kevin still pays me. Five years ago. He’s still paying me. I looked, he
doesn’t owe me about 70 grand. He’s only about two years away. And by the way, the guitars
will continue to sell and five years from that he’ll have all his money back. He will not have lost
any money. He’s not a stupid guy, he just made some decisions. But he’ll have all his money
back before it’s over. Okay?
So one of your options is when you go to work, pick a company that if you excel at it
they’re going to give you money. Get really good at it. You don’t have to be the key person in
the company, just be amazing at what you do. Maximize your earnings. Maximize it. You’re
going to a public company, then maybe you can get stock in that company, right?
FEMALE: So would that be a good starting point for anyone at our age, the passive side?
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Well passive will never get you wealthy so we have no question about that. Tomorrow
morning you absolutely should go put your money in a mutual fund somewhere and have a nice
day. Because you don’t have to think about it, just go to a highly rated fund. Give them the
money. But remember, you can’t pull it out when you want it because the value will change,
right? I mean if you had needed your money in 2007, you were in big trouble. We watched
everyone’s retirement accounts, just go up in smoke, right? I mean I watched mine. Because I
have my 401 Ks and all that are in the stock market. That’s just where they put it. And I looked
at it and I went wow. If I needed that money today that would be a problem.
By the way it came back and then some. It just roared back over five years and it is more
than it ever was. But that’s the stock market. So you put it in there, just remember you can’t
get it out. But that’s true with almost any investing, right? I mean timing has to be there. You
can’t just flip a piece of real estate or sell a business. The timing will determine that. So yes,
tomorrow morning, I’d go get a job and if I could put another $100 a month and go put it into a
stock market fund, I’d do it just to begin the stock market process. And learn to live off of less.
This is the biggest challenge that people have. At this point in your life, it’s fun to lead the
bohemian lifestyle.
In 1983 I went to a garage sale and I bought a red couch and two red leather chairs. If
you go to my office today, you will see the red leather couch and two leather chairs. They still
sit there. Right? By the way, there’s a sidebar to this. They were worth a lot more. The sidebar
is the way that rich get richer is that they understand money and past consumables, almost
everything they buy, they buy it right. You with me? In other words, see my flip chart there.
That’s actually a 200 year old French easel that I just had a guy put a fit in, make me a little
cheap stand. But I can undo that and sell it tomorrow. Now, I could have bought a cheap stand
but I like that one. By the way, I’m making money on that. Do you get my point? And since I had
the money to buy the good one, I bought the good one. Do you hear the point? Yeah. You buy
right. You don’t buy the cheapest thing, you buy the thing that holds value or grows in value.
Does that make sense? And that’s how, unfortunately the rich get richer and the poor get
poorer because once people understand money and they understand how to buy things, what
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they buy naturally holds value or makes them money because they don’t waste it. They
understand rates of return. They’re real clear.
The game is to beat ten or twelve percent. That’s the minimum game you want to play
as an investor. Can I beat it? To preserve it, you’re going to need six percent, eight percent to
preserve so that you’re not broke but you can’t get financially wealthy. Okay? Anything above
ten percent you’re good. Fourteen percent is very realistic. You can do that.
By the way, a business blows all that out doesn’t it? I mean if you bought a business for
$500,000 and it was only making $100,000 a year, I mean that alone is a good rate of return,
right?
If I gave you $500,000 and you got $100,000. Isn’t it like a 20% rate of return? Say yes.
Yeah. So that’s a steal. Okay? What if I turned around five years later and it’s making a million
dollars a year and I paid $500,000. Now what’s my rate of return? Don’t need a calculator. We
don’t need the calculator. Do you see my point? Right. That’s why you’re in business school by
the way. And if you’re not, get in it. Because that’s where the money is.
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AN INVESTMENT PATH
$100 INVESTED EVERY MONTH
You need to learn this page. This is the magic of compound interest. This is what people
at Warren Buffet mastered early in their life. The power of compounding.
So I want you to look at this. On the top are interest rates. From zero, two percent, four
percent, all the way to 20. What we’re investing on an annual basis is $1,200. We’re investing
$100 a month, okay? So if I invest in the first box. If I invest $100 a month for one year at zero
interest, how much do I have at the end of the year? Yeah, $1,200. I have the same amount.
But if I invest $1,200 a year for two percent, I have $1,213. So I made $13 on two
percent. So let’s go back and look at savings. Let’s go back and look at the bank. What are they
going to pay you? There you go. Exactly. Four percent, I have a whopping $26 at the end of the
year. Six percent I have $40, eight percent I have $53, ten percent $67, twelve percent $81, and
fourteen percent $95. Going out at 20% I’ve got $138 at the end of one year. So by the way, you
learned two things here. Number one, one year is spit no matter what the rate of return is. And
number two, there’s a huge difference between two percent and twenty percent.
Now look at the second year. Look what happens. It got a little interesting, didn’t it? I
put in $2400 and I have $2970 at 20%. But look again at two percent and four percent. Just run
it on down. Run it down for ten years. At zero, of course I got $12,000. That’s why I invested. At
four percent I’ve made $2,774. At twenty percent I’ve made $26,236.
So the difference between me getting twenty percent and me getting two percent or
four percent or six percent or eight percent. Look at the difference. And here’s the sweet spot,
guys. Where it gets really powerful is around 12% to 14%. Twenty percent is an outrageous rate
of return.
Warren Buffet has averaged over 20% his entire life. Compound. That’s why he’s the
richest investor to ever walk the planet. So when you go study investment books, who do you
want to study? Thank you. Master Buffet before you buy any other books. Just study him. At
first it’s going to be boring. You’re going to hate it, trust me. I hate it. It sucks. It does. It’s
boring. It’s boring. Really it is. Best thing to do is to get a book club and get a couple of friends,
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read his books and then come and talk about it. It’s the only way you’re going to make it fun,
otherwise you’re just going to die a horrible death of boredom, okay? It’s just boring. It’s dry
and boring. Trust me, it is. It really is. I died 100 deaths reading it.
But look at the difference. You don’t have to be 20%, what you have to do is beat eight
percent. And a sweet spot would be anywhere around 10, 12, or 14. This is sweet. This is
unbelievable. You with me? Okay. You don’t have to be a genius. You have to get it above that.
Okay? 20 years. But look what happens at 20 years. Look at the difference between ten percent
at 10 and 20. At ten years it’s $20,655. At 20 years you’ve invested $24K and you have $76K. At
30 years you have $227K.
So here’s the ah ha for you. You better start now. If you just put $100 a month, even if it
gets you and put it in stock market. At eight percent you’re going to have $150,000. By the way
if you bought stock. You’re not going to beat that much, but real estate you could easily get to
12 to 14 if you buy right. And it’s why most small investors buy real estate over the stock
market. Does that make sense? That’s why they do it. They do it because you don’t have to be a
genius to get that 12% or 14%. Go study it.
I wrote a book called The Millionaire Real Estate Investor. Read the blessed book. It will
tell you what you need to know. I wrote it for my son in case I died young. Read it. Okay? But
look at the rates of return. Oh by the way, what if I got 20% just for the fun of it. So I invested
$36,000 and 30 years later I have $2.3 million. By the way, if I was only getting six percent I
have $100,000. Not $2.3 million. If I got eight percent, $150,000. You see why the stock market
is not going to make you rich? There you go. It’s not. It can’t do it. At best it will preserve your
income.
If you take 20% to 30% of your income right now and put it in the stock market, at the
time that you want to retire, you’ll retire off of what you currently make. Did you hear that
again? You’re making $40,000 a year and you take about 30% of that and you invest it at
average stock market rates, you’ll retire on $40,000 a year. That’s how much you’ll be able to
spend 40 years from now. You hear that? That’s why people ultimately have financial crisis.
They don’t understand it. They live way beyond their meals and then look up later and go holy
crap.
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By the way, this is a good reason why you start a business. Why do you start a business?
Well you could have bought a Keller Williams franchise. We’d charge you $25,000 you own that
real estate business. If it took you five years and it was making you $200,000 to $250,000 a
year, you could take the difference and do what with it? And here’s the thing is, you only
invested maybe $150,000 to $175,000 to launch it.
So you took $100,000 to $175,000 and you invested it in a business and five years later
it’s making you….How much did we need in our little chart? How much did we need? You didn’t
have to have $2.5 million to make that money. I invested $1,000 in Keller Williams in 1983.
Okay? Just the two real estate offices I started make between $1.5 and two million dollars a
year. For a thousand bucks. I didn’t need $2.5 million. In other words, by being in the business
department or being in the entrepreneurial department, you are studying where the money is.
It’s where all the wealth exists.
You could go buy a juice franchise. Oh by the way, it’s going to cost you about 30 grand
to set up and if you run it well you can make $80,000 to $100,000. So go own three of those
and borrow money from these guys who are stupid and will charge you only four percent
interest because they don’t study money and they’ll be happy with their four percent and you
will have invested none of your money. You’ll pay them back in five years. They’ll think you’re a
genius and you’ll be making $180,000 a year to $200,000 a year from your three juice
franchises.
That’s why people do it. They do it because you cannot get financially wealthy by saving
yourself there. You can get there through real estate because you can buy it undervalued and
then time and growth, right? You can literally go into the growth corridor, figure it out. Yeah.
I have a property outside of Austin, about 2000 acres, and I thought I was in the boonies
when I bought it. I’m right there almost at the corner of 150 and 1826 where all the growth is
headed and now they want to put the highway through one side or the other, right? And I’m
fighting them because I don’t want them to do it. But on the flip side I can probably make $200
million dollars by letting them do it and turning that into highway frontage and subdivisions on
the main. I’m now sitting right on the main outer loop of Austin, Texas. In the next ten years,
where are they going to put it? I’d rather hunt my deer and chase rabbits. Or I can make a
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couple hundred million dollars. I don’t need the money so I don’t care. I’m fine. I think it’s going
to work out. But at the end of the day. You get my point?
What I wanted you to walk away from is understand you cannot save your way to
financial success. You can’t do it. You cannot become financially wealthy saving money. Number
two, you cannot get financially wealthy in the stock market. You can preserve money, you can
retire. There’s nothing wrong with that. But if this class is on financial wealth, you can’t get
there form that.
But you could be a schoolteacher and you can buy real estate. You can be a
schoolteacher and you could buy a business and have someone else run it for you if you study
business. If you want to stay being a schoolteacher. See my argument is you don’t have to leave
your job whatever you love doing and be financially wealthy. Do you? Say no. You do not.
So if you don’t have the money it’s just because you don’t want it. The money’s there to
be had. You can have the money if you want the money. But you better study money and study
investing and study how businesses run because that’s the only place you can make the money
is you do your own real estate.
THE 8 MYTHUNDERSTANDING BETWEEN YOU AND FINANCIAL WEALTH
So the eight misunderstandings between you and financial wealth. First myth, I don’t
need to be an investor. My job will take care of my financial wealth. That’s not true. The truth is
you do need to be an investor. Your job is not financial wealth. Okay?
Myth number two is, I don’t want or need to be financially wealthy. I’m happy with what
I have. The truth is you need to open your eyes. You do need and want to be financially
wealthy. As wealthy as you can be. Why do I say that?
I’ll just use my life as an example. My dad did real well in terms of his job income and he
was in the school system so he has teachers’ retirement income which is really wealth, okay. So
my dad passes away and my mother has that. My mom is 85 and doing great, but if I wasn’t
supplementing my mother’s income by about $125,000 a year, my mother would be in a Rest
Home. She would be, she didn’t have a choice. There is enough for mom to live in a shared
room with someone else with a curtain between them and sharing a commode and eating at
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the cafeteria. Nothing wrong with that. And her sister, she’s got two sisters and that’s where
they live.
My mom lives in the same home she’s been in. She has 24-hour care where all they do is
paint her nails and give her you know, give her perms. Unbelievable. My mom is having so
much fun she can’t stand it, right? She has a trainer that comes three days a week. She gets a
massage every Wednesday. She just got back from a road trip to Bronson, you know. She has
the time. My mother looks amazing. We had lunch yesterday. I said man, you look good, you
know. Yeah. You get it?
My other two sisters don’t have the financial resources. And if you ask them, did you
study money and invest, they would say no. They have great job income. Don’t get me wrong.
They’re actually fabulous professionals. They make great income. They don’t have enough
money for unexpected needs.
So don’t kid yourself. It’s not that you have to have it but there’s no good reason to not
study money. There’s just no good reason.
Number three, it doesn’t matter if I want or need it. I just can’t do it. You just can’t
predict it. You don’t know. You can’t blame me.
So the interesting myths around money. Number one, investing’s complicated. It’s not.
It’s so simple.
Number two, the best investments require knowledge most people don’t have. The best
investments will be in areas that you learn and understand or already know. You should never
invest in something you don’t understand. It’s not complicated.
Myth number three, investing is risky. I’ll lose money. No, by definition, Warren Buffet
will tell you, investing is not risky. If it’s risky, it’s not investing. It’s speculating. You should
never put your money at risk. You should never feel that it’s at risk. If it’s at risk, you’re not
investing. Do you hear that? You make your money going in. You don’t make it coming out. And
that’s how you get rid of risk.
Myth number four, successful investors are able to time the market. Actually, successful
investing, the timing finds you. In other words, here’s the trick to being a successful investor
and that is, you wake up every day and this is the way I think about it, okay? So wake up every
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day and I have a dollar. Now the way a successful investor looks at this is they don’t have a
dollar. They have maybe 50 cents, maybe 20 cents to spend on themselves and they have at
least 50 cents or more to invest from the very first dollar they get. Does that make sense?
Now, what am I going to do with my 50 cents? An investor immediately puts them self
in a position of investing. So you’ve got a dollar in your pocket, I guarantee you, but you’re
thinking that’s living money. Investors don’t think that way. Investors live off of less.
I live off of… Do the math real quick. I live off of about four percent of my income. Okay?
Got it? What do I do with the rest of it? Invest or give it away. Yeah, exactly. When an investor
has money, they immediately realize that a portion of that is not theirs to spend. A portion of
that has to go to investing which immediately puts the pressure on them to do what? Go study.
Go study money.
I gave a young man, when he graduated, I gave him $5,000. He was really excited. He’s
like a second son to me and so anyway. I gave him the money. He immediately, he sets up an
appointment with me. He’s very kind. Writes me a nice note and all that. He says I want to
come talk to you Mr. Gary. That’s what he calls me. So he came over and we sat down and he
said now how do I invest this money. I went, oh my gosh, don’t invest it at all. Go put it in the
bank. You’re stupid. You don’t know anything about money. I guarantee you’re going to lose it.
Give it back, you know. Don’t do that, please. Don’t do that. He said, what do I do? I said read
this book. When you’re done with that, read this book. When you’re done with that, read this
book. When you’re done with that, read this book. I want you to spend the next couple years
just reading and studying and becoming financially literate. Then come back and let’s talk,
because right now, anything I tell you will make no sense to you because you’re just stupid. You
just don’t know anything. I mean it’s not that you’re a stupid person, you’re just stupid
financially and you need to admit that and understand that you don’t know anything about
money.
Who taught you about money? I mean let me ask you that question. I mean, how many
investing classes have you taken? How much time have you spent doing? Have you spent like a
semester, two semesters, five semesters, ten semesters, five years, ten years? How long have
you studied money? How long?
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Was that like senior in high school they taught you money? Baylor, do they have
investing to get rich 101, 102, 103, or 104? The realities of money? No. They’ll teach you how to
raise venture capital. They’re not going to teach you how to make money. Colleges don’t do
that. They don’t have the curriculum. Yeah. All you need to do is invite someone rich to come in
and they’ll immediately blow your mind on how to make money.
The last one is timing. My point is that an investor’s always in the market to invest or
not invest. In other words, when I get in my car and drive out of here, one of the things I invest
in is real estate, the other thing I invest in is businesses, right? And I invest in people. So when I
walk out of here, and I get in my car, I’m looking for three things, right? I’m going to pay
attention to real estate. I bought a piece of real estate.
Here’s a good example for you. I bought a piece of real estate. Four years ago I was
going to move my business at the time before we moved in this business we were in another
building and just so happens that one of the Trammell Crow partners, they had a development
going on and they had this little piece of real estate that didn’t make any sense and they
couldn’t get zoned properly. And so they were willing to sell it to me for $220,000. I was just
offered 1.9 million for that and I’ve owned it for four years. That’s obscene isn’t it? I mean
actually just admit it. It’s obscene. Okay? Well how many times do you have to do that?
We just bought a warehouse for 4.1 million. They just offered us 7.1 million to sell it to
them. We haven’t even owned it six months. I think I just. I think I did pretty good. That’s just
driving around. But driving around is what? An investor and I look at it different. I look at it
completely different than a person who is not an investor. Right? And I don’t invest in what I
don’t understand. Right?
Look at Warren Buffet. Warren Buffet doesn’t invest in the stock market because that’s
a joke anyway, right? Honestly. You don’t get rich in the stock market, right? Say yes. You
cannot get rich. You do understand that, right? You cannot get rich in the stock market. The
people that get rich in the stock market are people that start companies and start companies
and sell it to the stock market. Taking a company public makes you rich and if you’re the
business that takes it public, you get rich.
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Now we have stories every now and then of people that bought Apple at ten dollars and
rode it to $500. We have those stories. But do you think they were geniuses or lucky? Thank
you. Did they know it would do that? If they did, do it again. Duplicate it again. Right? Anyone
who made money in the stock market and has that story of they invested $100 and made you
know, a million, great. Show me where you did it again. And what you’ll discover is they can’t
because they don’t know what they did. They can’t even do it.
Understand that Wall Street brokers made their money. Where did their riches come
from? Taking companies public and charging you a fee to make you eight percent. That’s how
they made money. So let’s be real careful about where rich comes from. Okay? All right. So
timing.
I want you to understand something. Timing finds you. You cannot be an occasional
investor. Does that make sense? You can’t say today I’m going to invest and tomorrow I’m not.
And the reason is because investment opportunities are like a merry-go-round, right?
So I want you to imagine that I’m standing here and the opportunity is here and it’s now
moving. You understand, I had to stay in the game because it’s going to pass me and it’s going
to be that moment in history where I get to go, I’ll buy that. If I happen to be at the bathroom
or I happen to reach down and look somewhere else and it goes by me, you get to buy it
instead of me. Does that make sense? So you have to be standing there at all times, walking
around with your dollar, saying I’m an investor, I’m willing to invest. Now you spend the rest of
your time studying what that opportunity can be.
But you got to realize something, investment income looks like this. Why? Because they
don’t exist on a regular basis. You cannot go out. You need to be very leery of the guy that is
always raising venture capital and always buying things. Because how could you. How could you
always be buying things at the right price? It’s difficult. It’s difficult.
What you notice is Warren Buffet made his money by buying companies. He doesn’t
invest in the stock market, he buys businesses and his great breakthrough was Geico. Because
what he discovered is insurance companies are like a bank. He didn’t know that. He didn’t
realize. He admits that he didn’t know it. So he invests in Geico and he immediately discovers
that what they do with the premiums is they try to outplay the mortality tables, right? In other
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words, they have the money and they only have to pay out a certain amount. The rest of it they
get to invest and all they have to do is have enough for reserves and the rest of it is theirs. So
what he discovered is by owning an insurance company what he had was the perfect vehicle.
The first company he bought was Berkshire Hathaway. Where did the name Berkshire
Hathaway come from? Study history. Textile company. So he buys it, thought he made a good
deal, only to discover it had no future. So what did he do? He bought ten more companies and
then they had a ceremony, had a ceremony and they officially shut down the mill. They shut
down the company and that was it. But they owned ten more companies. Yeah.
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THE TRUTH ABOUT MONEY
THE SIX TRUTHS ABOUT MONEY
So here are the six truths about money. Number one, the key to happiness is not more
money. Happiness is happiness. Money is money. We clear on that? Do not say if I have this
money I’ll be happy. It’s not true.
The conversation I have with my son all the time is look, the beach is free. The park is
free. Right? As you live your life and you think about the moments where you have the greatest
happiness, a lot of money was not usually attached to it to be honest. It was usually not what
you were doing but who you were doing it with that made the moment magical. It was the
relationships that you enjoyed with others. It was not how much money was being spent, right?
Truth number two, whatever your life is about, more money will amplify it. Money will
not change you, you guys. It will reveal you. It will reveal you. Elvis Presley had no taste. When
he got a lot of money, he built Graceland. Go look at it. It’s obscenely horrible. Because he had
no taste. Just go to the jungle room. Jeepers, man.
What you’ll discover is…because people who don’t understand money will go, man they
got money. It changed them. No, they were always like that. They just didn’t have the money to
display it. They said well money made them greedy. No, they were greedy. They were just
broke and greedy. The second they got money, they displayed it. They were miserly when they
got money. No, they were miserly before they had money. When they had enough money, then
you saw it. Real clear about that. Okay? Money and old age reveal you. You know. That’s just
the way it goes. Okay? It’s going to expose you.
Truth number three. Lifestyle is style over amount. Style is an art. Your personal art of
living. You can’t buy style with money, you guys. You can’t buy it. You can’t buy good taste or
good decisions with money. What you can guy with money is more of something. Bigger of
something. That’s what you can buy with money. It doesn’t take a whole lot of money to get a
cheap car. Now if you want at bigger car or more cars, yeah, you need more money. But you
can get the basics in life for a lot less money.
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Truth number four, the life quest is to have the best life in the time available to us. It’s
not the amount. It’s the value. Money doesn’t buy value. It doesn’t buy value as it pertains to
the best life. Trust me. All right?
Truth number five, money will come to you when you do the right things. Okay, so
money has its own rules. That’s number six. And it has its own disciplines and habits. If you
don’t learn them, you’re basically financially illiterate. Do you hear that?
I watched my father lose all his money. The good news is he had teachers’ retirement.
So after he lost all his nest egg and everything and went broke investing. But the thing that I
find fascinating and I don’t say this with judgment. I say it only as illumination for you is, I never
saw my dad pick up one book and study money. I never once saw him study investing or go to
an investment class. I never saw him study any of it. My dad was really good at managing the
money he had so that it got him what he needed and the family got and he was amazing at
taking a loaf of bread and feeding thousands. I mean he was good at managing what he had and
we never wanted for anything. But he never studied the art of making money and having
money make money. So when he went out and started doing it after he retired, he said well I’m
going to invest. It didn’t take him long to lose everything he had. Didn’t take him long. Don’t be
that person. Money has its own rules. Okay? They’re not complicated by the way.
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