There are certain things in life that you didn’t need to know, like all fruit loop colors taste
the same or the apples you buy at the grocery stores can be more than a year old. However,
there are some things you need to know that people are keeping from you which
is why in this video, I will share with you 7 money rules the rich don’t want
you to know that will have you looking at money in a totally different light.
Also, if you are interested,
you can download my free passive income guide using the link in the descriptions.
Now, let’s get into it.
Rule #1: The rule of utility
When you think of having money, what comes to mind? Do you think about buying a new car, putting
food on the table or buying a new outfit to wear to the club this weekend? If any of these items
come to mind then that’s good because it shows that you understand what money truly is, which
is a tool we can use to acquire the things we want or need. Unfortunately though, the real utility
that money provides is not often completely understood and this is where many people go wrong.
For instance, if right now you are making a rather low income, chances are that you think that making
more money will resolve most of your issues. However, while money can solve money issues,
it can also propagate a host of others. For instance, now you’re making double what you
used to yet you’re working twice as much, which your partner isn’t in love with and as
such you’re now facing relationship issues. Plus, because of your busy schedule, you haven’t gone to
the gym in a month and your normal fitting pants are starting to get a little tight.
Now, this isn’t to say that you shouldn’t strive to make more
money. As long as you are resolving more issues than you’re creating,
you should be slowly improving your overall quality of life. However, it’s important to
keep in mind that there isn’t a single person on earth who doesn’t have any problems whatsoever.
For example, if you’re a millionaire, you may not have to worry about bills, but you could
have family members asking you for money all the time. Alternatively, you may struggle with
the worry that one day you could lose all the wealth you’ve worked so hard to amass.
Therefore, while you can strive to make as much money as possible,
never let it fool you into thinking that with more money will come a problem-free life.
Rule #2: The rule of time
Ask any rich person and they will tell you that time is by far and away the
most valuable resource we have. Sadly, most people fail to appreciate how time factors
into building wealth and it’s for this reason that most people will live their entire lives
in a state of financial mediocrity. However, those who do master time tend to master money
and they do this by understanding the two core ideas I want to share with you now.
First, it’s nearly impossible to trade time for money - that is when it’s just your time that
you’re trading. You and I only have so many hours in the day and unless you are making
an ungodly amount of money per hour, generating a six-figure income on your own can be tough - that
is assuming you are striving to make good money and get rich before you’re in adult diapers.
The other problem with time is that as we age, we tend to have less of it to commit to making
money. For instance, when I was young and single, I could work 14 hours a day no problem. However,
when you start having homeowner and relationship responsibilities or add kids into the mix,
time isn’t a resource you can maximize in order to get rich. This is why the
richest people among us look beyond their own 24 hours when trying to build wealth.
If you look at the richest people on the Forbes list, they are all business owners who have
leveraged other people’s time, capital and expertise. This isn’t a coincidence.
Now, does this mean that you’ve got the concept of
time all wrong? Not at all. This is all to say that becoming rich requires you
to appreciate how your time factors into your wealth building journey.
For instance, it takes time to build career experience that will allow you to climb the
corporate ladder. It takes time to learn how to start up your first business and
scale it to the revenue figures you want, and it definitely takes time to leverage the power
of the stock market and compound interest to become rich! - Just ask Warren Buffett!
Once you wrap your head around how to capitalize on time,
both your own and others, building wealth becomes ten times easier.
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do me a huge favor and give this video a thumbs up!
Thank you!
Rule #3: The rule of protection
Have you ever asked yourself why you work? Chances are it’s not because you love listening to your
co-workers telling you about their family drama or like working late in order to meet
an unrealistic deadline. For most people, the answer is simple, you work to pay your
bills and eventually retire. Sadly, while most people have the skill of accumulation,
in that they work for years to generate the income they need to meet these goals,
they lack the skill of protection and extend their path to financial freedom more than they have to.
So, what does the skill of protection entail? It’s fending off foes that want
to take your money and we face them every single day. It’s the vacation your wife’s
been begging you to go on that will set you back 3 years of savings. It’s the oversized
home that your parents expect you to buy to uphold the family name. It’s
the $60,000 car that you hope will add some excitement back into your life. Each one of
these are financial foes, separating you from your main goal of financial freedom.
You see, anyone can go out and make money. What separates those who get and stay rich
and those who struggle financially is how they manage the resources they have. This
is important to internalize because just like you can’t out exercise a bad diet,
you can’t out earn a spending problem so the more protective you are of your money, the better.
Rule #4: The rule of minimal savings
For the entirety of your life, you’ve been told to save your money. Your parents told
you to save for a rainy day, the news tells you to stash your cash and of course banks are more
than happy to take your money. However, should you actually be saving your money? Not always.
You see, saving money isn’t the path to wealth and prosperity that people make it out to be. In fact,
when you save your money, the only person you’re making rich is the bank. You may not know this
but banks generate a large amount of their incomes using your money. They take your deposits and lend
it out to others at lucrative interest rates while paying you a pittance in the process.
Now, does this mean you should avoid saving money all together? Of course not. It just
means that you need to be more strategic in how much money you stash in the bank.
For instance, I only put enough money in the bank to cover emergency expenses and my day-to-day
bills. Being on the more conservative side, I like having a year’s worth of expenses in the
bank but a good goal for anyone just starting out is to have anywhere from 3-6 months set aside.
Then, with the rest of my money, I use it to acquire real estate, index funds and the like.
This allows me to generate much greater returns than the bank would ever give me and it's for
this reason that you want to minimize how much you save while in turn maximizing how much you invest.
Rule #5: The rule of expectation
If you’re like most people, then you’ve probably told yourself that once you hit a certain salary
or net worth figure that you’ll be happy. I know that I’ve told myself this thousands
of times yet what I’ve come to realize over time, and you may have too, is that getting
to our stated goal never fully satisfies us, it simply causes us to push the goalpost further.
For me personally, I told myself that once I made $80,000 a year at my job,
I would be happy. However, once I got there,
I decided that making $100,000 would be better, then $120,000 and so on and so forth.
So, is this to say that you shouldn’t set financial goals for yourself? Not at all.
However, pushing off being happy into the future is a big mistake
and sadly most of us continue to make this mistake day after day.
Now, why is this important to realize? Because even though hearing me say this is probably
resonating with you, most of us don’t really internalize this thought and instead we keep
pushing the goalposts further and what I’ve come to learn over time is that when our
current state and expected state don’t align, this is when frustration and discontent arise.
For instance, let’s say that last year you got a brand new
job making $75,000 a year. This is the income you knew you deserved so
once those paychecks came rolling in, you were more than content.
However, after a year of great performance and the acquisition of more experience,
you’re still making $75,000 but believe you should be making $80,000. All of a sudden,
your expectation is that you should be making $5,000 more yet you’re not and
this is when resentment starts to set in. This $5,000 discrepancy is what’s known
as your expectation gap and as long as it exists, you’ll never be happy.
For instance, there are people making $150,000 a year who are unhappy because
they think they should be making $200,000. On the contrary, there are people making
$50,000 a year who are elated because they never expected to make more than $40,000.
Therefore, to be financially content, you need to close your expectation gap. You can do this
by striving for more or simply desiring less. Whichever you choose is up to you,
but chances are you won’t be happy until you do.
Rule #6: The rule of privacy
If you ask most people why they want to get rich, most will tell you all the things they
would buy if they had more money. However, is that really what being rich is all about?
In the book, The Psychology of Money, author Morgan Housel states that “wealth is what
you don’t see” and he’s totally right in saying this. Many of the richest people I
know drive average cars, own modest homes and are not flashy in any way. However,
if you saw their bank accounts, your eyes would probably roll back in your head.
However, if we dive a bit deeper into what this saying really means,
it actually leaves us clues as to how we should go about building wealth. Again,
as the saying goes “wealth is what you don’t see” meaning that part of
becoming wealthy is not showing off which is a friendly reminder that all of the material
goods we buy are directly opposed to our goal of becoming financially abundant.
Now, logically, we can all get behind the idea that the more you buy,
the less money you have but putting financial conservatism into practice is easier said than
done. There’s always that new car or vacation pulling at us and while life
isn’t all about saving and investing, the more of it you can do the quicker you’ll be rich.
Therefore, if you are presently working to get rich for all the things you can buy,
you may want to change course. Don’t attach your financial success to material goods
but the feeling of power and freedom it can provide. I say this because the more you need,
the harder it is to grow richer but the less you need, well, the opposite is true.
Rule #7: The rule of obligation
Do you know the best part about being a kid? No, it’s not going out for recess or having
your mom pick out your clothes. The best part about being a kid is having no responsibilities
and not a care in the world.
Sadly, we can’t remain in this state of complete bliss forever and have to eventually take on
some responsibilities. For instance, we take on responsibilities at our jobs,
within our families and more specifically in the assets and liabilities we acquire.
Now, when it comes to the things we buy, they do provide us more utility. For instance,
buying a house gives us a place to raise our family and hopefully an asset that
will appreciate over time. However, it takes as much as it gives. For example,
it prompts monthly mortgage payments, concerns over home repairs and keeps
us rooted in one city or town. The crazy part is that this is an example of productive debt.
When we look at other forms of debt like credit card debt, the upside is basically
zero. At best you gain a bit of convenience but become plagued by ongoing interest
charges and repayments, with each stealing a bit more of your financial flexibility.
Well, the rich understanding that being wealthy isn’t about how many things you
own but how little things own you. Put another way, your level of wealth is
tied to how free you are and while it’s great to have a fancy car or a big home,
when these items start restricting your day-to-day lifestyle, or have you living a certain way, all
of a sudden, they cut down your level of wealth regardless of how easily you can afford them.
Therefore, to feel richer regardless of how much you have, your goal should be to rid
yourself of financial attachments. Clear off your student and credit card debts. Aim to be
mortgage free and when you achieve these goals, you’ll feel much richer than you presently are.
Well guys, thank you so much for watching, let me know your thoughts down below, and as always,
give this video a like and subscribe if you haven’t. With that being said,
have a great night or day, and I’ll see you in the next one.