So, I was cruising through YouTube University the other day. And I came
across this video that said all the financial advice you could ever need on
a single index card. And I'm like, "Hey, that's interesting. Let's check that out."
It is kind of stores a small little piece of real estate. And I started watching the
video. And I was like, "No... No! No! No! No! Nooo! I can't believe you're teaching this." I'm
like I'm making a video today on what should and should not be on your index
card. And friends, it's a small little piece of paper but everything that you
need to know for building wealth and becoming financially free.
So, here is my recreation of the business card with the dumbest financial advice. I
think it was PBS hosted. And it was an older individual that was teaching... You
know, what you should do with money. And I've got my index card and I can fit all
of my wealth rules right there that I'm going to give you right now. I'm just going to
tell you that it's crazy the advice that is going on in the world today. So, before
I share with you like the financial advice on a single index card that will
literally help you become super wealthy, let me share with you 3 things from
this other video that was just like, "I just like, you have got to be kidding me."
Here's number 1. Maxed out your 401k. Could be the dumbest advice that I've
ever heard for anyone that wants to take financial control of their future. Why?
"But Kris, it's free money. you do max contribution and the company
matches you. It's awesome. like, are you kidding me?" First of all, I give you my
money and I'm never going to see it for decades. Like, why would I give that to
you even if you're matching it? It's not real. Its fake, funny money. I can't use it,
I can't invest it, I can't do anything with it. And it's on the rollercoaster of
the stock market. Which means that I'm going to be averaging 3 4 % on the money. ANd
by the way, just so you know, when inflation is 3% which is what the
the value of your dollar is losing every year. And you're gaining 4%. 4
minus 3 means that you're netting 1%. Let that compound over you know, the next 30
years and you're going to be happy with it turning into a pile of nothing.
Poof! So, I don't know why people do this. It's stupid. It's like you want me to take
my excess little money I got that I need to invest and you want me to sock it
into something that doesn't pay me. A 401k? So, dumb advice number 1. Dumb advice
number 2, put your money in mutual funds. Did you know that 95% of mutual funds
cannot keep up with inflation? Mutual funds are this idea of like, "Oh, yeah. Take
all the blue chip. Companies out there on the stock market and you put your money
in a mutual fund that will spread your risk out in all of these companies." Dude, I
got news for you. The majority of those mutual funds suck. And if you're just
trying to produce 3, 4, 7 percent, I Got News for you.
You're never going to get where you want to be in life. And then number 3,
pay off your house. Like, are you freaking kidding me?
Pay off my house? That is a really great plan for someone that has no plan. That's
a really great plan for someone that doesn't know what they're doing. It's not
that it's bad. It's that society wants you to soak up whatever little excess
you got and put it in investments that give you such tiny return that it's
minuscule or nothing. I've got a different index card for you today. So,
all the financial advice that you can fit on this index card is going to be
quite a bit different than what I was just covering right there. Here's the
first thing. And I'm going to start with the not fun part. In the beginning, when you
don't have a lot of money, you have got to go through a period of your life
called delay gratification. That means yes you've got a budget but there's a
reason. So, it means instead of trying to find a way to keep up with the Jones or
have the nice car now or upgrade the flat-screen TV, listen it is a slippery
slope my friend. If you start spending money on luxury items versus necessities
in the beginning of your journey, you're not going to be able to follow rule number
2 on here which is P-Y-F pay yourself first. Reality is when you work and trade
your time for money, you need to know that the purpose of doing that is to
make sure there's something there for you to invest with. If you spend 100% of
what you make, you're screwed. You'll never be financially secure. I'm not
talking about being financially free. I'm not even talking about being independent.
I'm just talking about basic securities out the window. So, how do you maximize?
How do you get to the point where you save 20% of what you make? Go
back to rule number 1. Delay gratification. This idea of delayed
gratification. I know that it's not sexy. But I'm telling you, you can get hooked
on frugality in the beginning of your game which is I'm going to save and scrip
everywhere I can. Not out of fear. Not out of scarcity. But because I want to amass
everything that I can in my investment pool, active dollars not trapped in a
401k. Money that I can use to put towards investments takes me to rule number
3. Invest in real estate and use 80% leverage. Now, it's very
specific and I want to help you understand why. If I save up $10,000,
If I take that $10,000 and I put it in real estate, I
can get a 5x borrow on that. I could buy $50,000 of real estate with
$10,000. If I had 40 grand, I could buy $200,000 worth of real estate for
$40,000. Which is really big because we know that 3,4,5,6 percent
returns aren't going to get us where we want to go. So what do we need to do? If
the stock market is struggling to make me my 3 or 4, 5 percent, if I
take those 401k dollars, you're like, "Kris, you want me to not... You want me to
pass up the free money just so I can have the money now instead of putting in
a 401k plan?" Here's why: If I put it in a piece of property and that piece of
property grows 10%, I only put 1/5 of the money in. So, it's like my
money actually growing 5 times bigger than that. Do you understand that? Let me
break down that math for you. If I put $40,000 into an investment property and
that property goes up 10% in value this year, that $200,000
property now became a 220,000-dollar property.
That's a 20,000-dollar gain. Remember I put 40 in. 20,000
is 50% of 40. That's half my money back in growth. Not to mention the cash flow
and the other benefits and the tax benefits. And the mortgage pay down which
accounts for another 4 or 5 percent a year. This is why I averaged
28% each year on my money on average over my last several
thousand deals. Some of them actually with YouTubers like you that watch me and
you're like, "Kris, dude. Let's take my 401k, IRA. And let's actually use your
system." That is actually a real possibility for you. So, you want to
invest it in real estate with leverage. Don't buy paid off real estate. The
fourth rule is where it gets sexy. This is bringing sexy back from delayed
gratification. Because trust me, a time will come where you can buy luxury items,
okay? This fourth one is you want to re leverage your real estate. If your real
estate is doing let's call it 25% a year, then you make 100% on your
money in how many years? 25, 25, 25, 25 is 100%. 25, 50, 75, 100. In four
years, if I double my money, then I want to get that money out and do what? Buy a
house and another. House just made babies. My house just multiplied. I went from one
house to 2 houses. Now, I'm not average in 25%. That same dollar sitting in 2
properties now I'm doing 50% a year on my money. Not boring 3, 4 % with inflation
producing 1. 50 - inflation is 47%. And 5 years
from now the same strategy could have me actually doing 100% a year
on my money. So, that's why that's the fourth rule. The fifth one is called have
fun. That's just really important in life. And have fun now goes back to that, "You
know, now I have money, now I don't have to delay as much gratification." Now,
Warren Buffett 84 billion dollars still lives in a very modest home and he still
drives his own car versus being chauffeured around. You get to decide
like what fun is for you what world travel looks like what kind of house do
you want to live in. But I do want to go back on that comment on on paying off a
house. Because I know some of you are wondering, "Well, Kris. Do I ever pay off
my real estate?" The answer is yes. But when? That's the question. It's a game of
timing. When you have enough residual income from your investments that you
can pay off everything and still have the income that you don't need to work,
then you can pay off your real estate. That's the right time to do it. If you do
it earlier than that, that's called premature payoff. If you pay it off
prematurely, it's going to financially bite you in the butt because your money's not
gonna Velocify. It's not going to build the way you want. So my friends, today
everything you need to know about money wealth and real estate is on a business
card or an index card. It's not on this one right here. It's on this one. Thank
you for watching this video. And hey, check it out. "Hey Kris, real estate? Can
you give me better instruction?" Yes. I wrote a manual. A how-to manual on how to
do it. It's my latest book The Straight Path To Real Estate Wealth. I'm going tO
grab it. I got a copy. This book. This is your manual on how to do real estate and
produce 25% annual returns. And I just had it updated for this economy. We've
moved 50,000 copies of it. And this book between the diagrams, it's a
quick read, it's an easy read. This book has made millionaires and it's your turn.
The cost of this book is free. If you just click on the link, all you got to do
is cover shipping and we will send this out to you. I look forward to getting it
in your hands. And if you want, it also comes with a consultation to talk to my
team and say, "Hey, I'm better a little bit just by phone having a coach walk me
through what I need to do." We can provide for you as well. Either way, get started,
you got your index card. Go crush it.