- What makes Warren Buffett a great investor?
Upgrading your skills, that could never go wrong.
- Like if you have extra cash,
you want to also put in the emergency fund.
- Yes.
- Like how much are we talking about?
- when you're more at ease around money,
money comes to you faster and easier.
- Yep, the one lesson that I learned from Dan.
- What should be the best advice to manage extra cash?
Do advised to invest in stock, real estate,
or invest in your own business?
- Goes back to the wealth triangle.
When you have extra cash.
Now let's define what extra cash means, right?
For some extra cash means,
a few thousand more per month.
Or does it mean that you have extra hundred thousand a year?
Does that mean you have an extra million dollars a year?
That all, that would affect what you want to do, right?
But I operate based on very simple principles.
I don't believe investing should be very complicated.
First of all,
you only invest something you're understanding
If you don't understand in something,
you don't invest in it.
Nothing wrong with cryptocurrency.
If that's what you study and you understand.
- Yeah.
- Nothing wrong with the stock market,
if you study and understand and use technology,
to manage a portfolio.
What is wrong, is people go in with the Vegas mentality.
- Yeah.
- Speculation. Hey guys, I got this stock,
I got this thing.
It's pretty cool.
You should put some money into it
and you put your money into it
and you haven't done your due diligence.
- Yeah.
- That's not smart.
So it has to do with a lot about your passion.
I like businesses because I like businesses, right?
It's that.
So I enjoy running them and growing them and using my
creativity intelligence to make something good.
So I enjoy that.
And for some, maybe they're like,
I don't like to do that work.
I prefer something more passive, not passive income,
but something a little bit more hands off.
Then maybe just an index fund over, invest in long term.
That's fine.
Or some kind of stock that pays dividends.
That's fine.
Or you don't mind doing a little bit of work
and you buy a property.
You don't mind managing it and get some cashflow.
That's fine.
So it has a lot to do with that.
Not just do it for the money,
but do it for what type of an investing vehicle
that you like.
I would say that's very, very key.
Now for extra cash.
If we're talking about a few thousand dollars more,
my recommendation as always is to invest in the best
investment in the world,
this to increase your earning ability,
your ability to earn your ability to learn, right?
So buy that book, invest in that course,
go through that event or virtual or whatever it might be.
Get smatter.
Upgrading your skills that could never go wrong.
Once you get to a certain level,
then you can say, okay, now as I'm doing that,
but also I want to have my money work for me.
Then you can put into something else.
I personally don't believe
that when you have only a few thousand dollars,
you know, or even tens of thousands of dollars,
you go buy some kind of investment.
Because you will not get a better return
than investing in this.
You just won't, right.
- Yeah. Infinitely you can take that knowledge and apply it
- You can apply it. You can, you can get more.
You can do a lot, right?
Once you do that, then if your business is your thing,
then you invest in business.
Its in investment, that determines an investment.
What kind of return you get is your ability
to manage that investment.
So for some, they could buy a piece of property
and they could lose money.
For they'll buy a piece piece of property would get 4%.
For some they would fix it up.
They would do their thing
and they buy it right they would get 20% return.
What's the difference is this.
So this has a direct impact on the return that you get.
Its not just the thing.
So someone could invest in stock market and lose a shirt.
Some people can invest in stock market
and make very good money.
That's a lot to do with this.
So it goes back to invest in something you understand
and continuously to invest
in your own abilities, capabilities, and skills,
- Dan, would you then also say, it's not just the investing
but it's the implementing of the skill you learn.
- Correct.
- To actually get a return on investment?
- Correct.
Any investment that you do, the more, you know it,
the better we turn you'll get.
Because you would see things,
you would see trends, you would see investments,
you'll see opportunities that untrained eyes will not see
What Warren Buffet, a great investor?
The stock that he buys,
you and I can go buy.
He owns Apple shares.
He owns different companies.
You and I can go buy those shares too.
It's not like those investments are not available,
but how much you buy when you buy
that's the trick. - He has the know how.
- That's the trick.
That's what makes him one of the richest people
in the world versus everybody else.
It's not that the product is not available.
It's not that.
Oh, also he has the ability to raise money.
- But he's able to raise the money
because he's got the demand
because people see that he's got the skill.
- Yeah. Its easy. Its easy.
- One of the things that I learned from Dan
in the event that you have on top of investing,
there's also other, like if you have extra cash,
you want to also put in an emergency fund.
- Yes, yes.
- Like how much are we talking about saving.
- A lot more, well,
- We did a video.
- We made a video on that and I say, at least.
Some people said like three months
of rainy day fund of your expenses,
Are your expenses, five K at least puts your thing 15K away.
Some say six months.
I think one year of emergency fund is very good.
But I'll explain to you something I learned psychologically.
That's not a number thing. It's a psychological thing.
People who are needy, people who are desperate,
they don't attract wealth.
By putting money aside,
not just in a rainy day,
it shifts you in some way,
because you're not like, Oh my God, fuck.
I'm going to pay my bill next month, right?
But when you put that money aside,
suddenly you're like more at ease.
When you're more at ease around money,
money comes to you faster and easier.
Imagine, you don't know how you're
going to pay rent next month.
Verses and you are on your on a closing call,
but verses you have one year of overhead rainy day
fund, like emergency fund.
On the phone you're like, you know what?
- I don't care.
If I close its good.
If I don't close, not the end of the world.
You're not attached.
Guess what? When you're not attached to close better.
cause the prospect that sends it.
Trick is how do you close like that?
Maybe before you have the money?
How do you project the confidence?
How do you psych yourself up and say,
I'm not attached and then acting as if, not pretending,
but acting as if the conviction,
the confidence that you have.
When you make more money you put that aside.
- That's the tipping point I think for when closes,
get it that you taught me that,
when that aha moment happened then I start closing.
- That's I need that state of mind that I'm at ease.
That's when I'm closing up.
I'm operating an optimal level, right?
I'm the best closer that I could be.
But they're putting that money aside psychologically.
It's a very powerful exercise
because it tells yourself a few things.
Almost everybody else,
the majority of our population, everybody else,
they are horrible money managers.
- Yeah.
- Look at US.
Most people, they don't have.
They're one pay cheque away from bankruptcy, right?
I mean, they got just no money.
So thinking about when you can put some money aside,
what does that tell you about yourself?
I'm a person with discipline.
I'm a person that can manage money.
- Yes
- I'm a person, just like when you have cash in your wallet,
it tells yourself I've always have money in that wallet.
So it has a lot of psychological benefit.
And you see that money accumulating bit by bit, bit by bit.
I am not all about getting the maximum return.
Just there are things you can put in and get maximum return.
- Yes.
- I'm about how you feel about money
and relationship with money
and how you feel about wealth.
Well, teach wealth triggers.
- Yes.
Surround yourself, put yourself in an environment
where you feel wealthy, dress wealthy,
or have things and items that are artifacts
in your environment that makes you feel wealthy.
That works for me.
- So then as an update, just to be vulnerable.
Those watch that video,
the update from that video when we filmed it, right?
- Yes
You know, I felt what you just described probably
in the last six months.
I think a couple of maybe a week ago.
You and I talked as well too, but you know,
even my wife at one point was having
to contribute to the house fund.
I no longer touch her money anymore.
That money now goes into the 10%. Yeah.
- That's very good.
- I learned it from you. Yeah.
Backing up for some of you who may not be,
this may even seem like it's still too far away.
The one lesson that I learned from Dan,
four or five years ago put the 100 dollars in my wallet.
- That's it.
- So I have the a hundred dollars in my wallet.
That was a small one.
Then it went to...
we have a tenant that pays.
I stopped spending the tenant's money that cash gets saved.
Like, you know, it gets, it gets put into a safe,
like a safety deposit box.
it's cashed, but it had a compounding effect.
- It builds your self esteem.
- It started, it was very small, like 1,000 dollars.
And it became 4,000, 3000, 4,000 5,000.
Now it's in the five figures and wow.
The sense of security.
Like I'll text my wife a message.
I'll be like, Oh yeah, we have this much.
- Think about that and how many years
when you were running the restaurants,
how many years of conditioning?
All we just kind of day by day.
We don't know what's going to happen next month.
The kids, a lot of uncertainties
and like just fear around money.
Versus now. Oh, it's nice.
- We don't have the one year yet.
But once that, that snowball starts to happen,
I can feel the momentum picking up.
- It's like you are reconditioning your relationship
with money.
That's what it is.
And most people have a horrible relationship with money.
Money doesn't like them.
They don't like money
they scare of money.
They don't know how to handle money.
They don't know how to make money.
They cannot manage money.
They're just bad.
And they wonder why they've got no money coming
into their lives.
Because you picked out from your parents.
If your parents are not good with money,
chances are you're not good with money.
So we need to relearn a lot of these habits
and we defined our relationship with money.
It's not bad. It's not evil. It's just a tool.
But how're you going to use it?
And in fact, it's a very powerful tool, right?
It's a currency.
And that habit helps a lot.
Just little things like that.
- So maybe action item for those of you very keen on,
you know, you're putting your foot down,
you're drawing a line in the sand.
This is the day you make a decision to change that between
this dinner and the next dinner.
- Yeah.
- How about you just go back
and watch that bucket's video challenge you to find it.
- Don't say to yourself, don't lie to yourself
and say, Oh, once I make more money, I will put money.
that fucking never happens.
- Yeah. Okay
- You're putting away a dollar, two dollars, 10 dollars.
You're not putting away 10,000 dollars.
It's a habit that counts. So if you're making 5,000,
you're not putting away 50 bucks,
you think by making 10,000,
you're going to put away 100.
It's not going to happen.
- Actually, my kids just.
We just set up their bank accounts just last week.
- Yes its a habit thing.
- So training them.
- It's a habit that counts.
It's not the amount.
Because the amount would increase
But the habit.
You could have someone making a million
and still have not put money aside.
It makes... look at doctors,
look at a lot of like high paid professionals.
Its not that its the habit accounts.