WEBVTT - How the 1% Build Wealth in Layers While You Stay Broke 0:00:00.480 --> 0:00:03.080 The rich don't work harder than you. They just use 0:00:03.160 --> 0:00:06.680 money differently. Now, most people invest once, but the one 0:00:06.760 --> 0:00:10.360 percent they use the same dollar three, five, and even 0:00:10.480 --> 0:00:13.480 ten times without working more. I know because I've been 0:00:13.520 --> 0:00:16.959 on both sides. I built multiple businesses, sold them, and 0:00:17.000 --> 0:00:19.480 put everything into real estate at twenty eight years old, 0:00:19.520 --> 0:00:21.880 thinking I was set for life. But when the two 0:00:21.920 --> 0:00:26.079 thousand and eight Great Financial Crash happened, I lost almost everything. 0:00:26.400 --> 0:00:29.000 That's when I learned the hard way how the wealthy 0:00:29.080 --> 0:00:32.600 actually used money. And once I applied their strategies, my 0:00:32.680 --> 0:00:35.920 wealth grew five times even ten times faster. So today 0:00:36.120 --> 0:00:38.479 I want to show you exactly how they do it 0:00:38.680 --> 0:00:41.440 so you can start stacking your wealth just like the 0:00:41.479 --> 0:00:44.040 top one percent. I'm going to break down the math. 0:00:44.159 --> 0:00:46.680 I'm going to show you real world examples that you 0:00:46.720 --> 0:00:50.120 could do this year to make five hundred percent more 0:00:50.159 --> 0:00:53.279 on your money with just three simple moves, and by 0:00:53.320 --> 0:00:55.840 the end you're going to see exactly why most people 0:00:56.120 --> 0:00:59.600 stay broke while the top one percent keep getting richer. 0:00:59.840 --> 0:01:02.600 This is not about working harder, it's about using your 0:01:02.600 --> 0:01:05.600 money differently. But before I show you the system, you 0:01:05.680 --> 0:01:09.560 need to understand the three money mindsets. Because if you 0:01:09.600 --> 0:01:13.199 don't get this part right, you'll never build lasting wealth. 0:01:13.360 --> 0:01:17.959 So let's go Okay, most people follow the same broken 0:01:18.000 --> 0:01:21.199 formula for money, because we've all been taught the same 0:01:21.400 --> 0:01:24.600 wrong things. You know, go to school, get a good job, 0:01:24.880 --> 0:01:27.880 save for retirement, you know, for forty years, and then 0:01:28.160 --> 0:01:31.000 hope that there's enough money to retire one day. Well, 0:01:31.080 --> 0:01:35.120 unfortunately we can see that this doesn't work because today 0:01:35.480 --> 0:01:38.039 half of the baby boomers that are facing retirement have 0:01:38.480 --> 0:01:42.160 no savings, and of those that do, the average balance 0:01:42.480 --> 0:01:45.560 is just about one hundred thousand dollars. Now, one hundred 0:01:45.560 --> 0:01:48.000 thousand dollars is not going to be enough to retire. 0:01:48.480 --> 0:01:51.720 The problem, that's not how the one percent build wealth. 0:01:52.200 --> 0:01:54.720 The traditional model tells you, you know, to work hard, 0:01:55.080 --> 0:01:57.480 save money, invest in in your four to one k, 0:01:57.760 --> 0:02:01.280 you know, invest in your house, which it sounds smart, right, 0:02:01.440 --> 0:02:04.120 that's what Dave Ramsey tells us. But here's the problem. 0:02:04.400 --> 0:02:07.920 Your money only does one job. You put a dollar 0:02:07.960 --> 0:02:11.520 into the stock market, it's locked up. You buy real estate, 0:02:11.880 --> 0:02:14.480 the money is tied down until you sell the house. 0:02:14.720 --> 0:02:18.440 But the rich, they don't let their money sit. They 0:02:18.440 --> 0:02:22.600 put it to work in multiple places at the same time. 0:02:23.040 --> 0:02:26.680 That's why they get rich faster and they stay rich longer. Now, 0:02:26.680 --> 0:02:29.640 if you're only using your money once, you're already going 0:02:29.720 --> 0:02:32.160 to be behind. It's why most people spend their entire 0:02:32.200 --> 0:02:35.919 lives working only to end up broke. Anyway, Now, let 0:02:35.919 --> 0:02:38.520 me show you why that happens and how the one 0:02:38.520 --> 0:02:40.959 percent do it differently. Okay, so here's what most people 0:02:41.040 --> 0:02:44.639 don't realize. It's not how much money you make that matters, 0:02:45.000 --> 0:02:47.600 it's how you use the money. Now you can make 0:02:47.760 --> 0:02:50.600 ten dollars an hour, you can make ten thousand an hour, 0:02:50.919 --> 0:02:53.760 and if you have the wrong money mindset, you're still 0:02:53.760 --> 0:02:55.839 gonna end up broke. Because at the end of the day, 0:02:56.280 --> 0:02:59.400 there are really just three types of people, and only 0:02:59.480 --> 0:03:02.600 one of them builds lasting wealth. Now, the first group 0:03:02.880 --> 0:03:06.320 is the poor mindset group, and they see money as 0:03:06.320 --> 0:03:09.680 something that they need just to survive. Right, they work, 0:03:10.080 --> 0:03:13.080 they get paid, and then every dollar they make just 0:03:13.200 --> 0:03:16.880 disappears immediately, and that's just to cover their rent, their food, 0:03:17.000 --> 0:03:20.000 and their basic expenses. And then the way they use 0:03:20.080 --> 0:03:22.720 credits differently, because when they don't make enough money, then 0:03:22.760 --> 0:03:26.280 they rely on credit just to survive. Now, the problem 0:03:26.360 --> 0:03:29.520 with this is it creates a permanent cycle, because every 0:03:29.520 --> 0:03:33.000 month they're starting at zero or worse, they're falling further 0:03:33.040 --> 0:03:36.600 into debt. Now, this isn't an income problem, it's a 0:03:36.680 --> 0:03:40.400 money mindset problem, because even if they suddenly make more money, 0:03:40.560 --> 0:03:43.440 they'd still be in the same trap, spending every dollar 0:03:43.720 --> 0:03:46.120 as soon as they get it. Now, the second group, 0:03:46.480 --> 0:03:48.960 this is what I call them middle class mindset, and 0:03:49.000 --> 0:03:52.320 it's different, right, but it's just as dangerous. Now. They 0:03:52.360 --> 0:03:55.600 don't think about wealth. They think about comfort. And here's 0:03:55.640 --> 0:03:58.080 why this is dangerous. No matter how much they make, 0:03:58.400 --> 0:04:02.680 they're still stuck because every time their income increases, they're 0:04:02.760 --> 0:04:05.760 spending increases with it. This is why sixty percent of 0:04:05.760 --> 0:04:09.240 those making one hundred thousand dollars salary report still living 0:04:09.360 --> 0:04:13.200 paycheck to paycheck. They look rich, but they have no 0:04:13.400 --> 0:04:16.640 real wealth. All right. Now, the way they use credit 0:04:16.720 --> 0:04:19.960 is also different as well. So they use credit to 0:04:20.360 --> 0:04:24.760 increase their lifestyle by the bigger houses, by the bigger cars. 0:04:24.960 --> 0:04:26.880 All right. Now that we understand that, let's talk about 0:04:26.880 --> 0:04:29.920 the third group. All right, This is the wealthy mindset. Now, 0:04:29.960 --> 0:04:32.200 these are the people who actually build wealth instead of 0:04:32.240 --> 0:04:35.560 just looking like they have it. The biggest difference they 0:04:35.560 --> 0:04:38.839 don't work for money. They make their money work for them. 0:04:39.120 --> 0:04:41.800 How do they do that, Well, they don't make money 0:04:41.839 --> 0:04:45.080 to pay for their living expenses. Instead, they make money 0:04:45.839 --> 0:04:49.320 to pay for assets and they use the assets to 0:04:49.440 --> 0:04:52.320 then pay for their life. Right, So it's a different 0:04:52.320 --> 0:04:54.560 way to do that. Now, what happens is these assets 0:04:54.560 --> 0:04:57.680 appreciate over time and they can be leveraged into more 0:04:57.720 --> 0:05:01.080 wealth and allows those investments to pay for their lifestyle. 0:05:01.360 --> 0:05:04.200 And the way they use credit is completely different as well. 0:05:04.800 --> 0:05:07.320 They don't use credit because they don't have the money 0:05:07.400 --> 0:05:11.000 or they can't afford things. They use credit because it's 0:05:11.080 --> 0:05:14.920 cheaper to use somebody else's money than their own. Now 0:05:14.920 --> 0:05:16.640 you can see that the way that they use money 0:05:16.760 --> 0:05:17.960 and the way they think about money and the way 0:05:17.960 --> 0:05:20.800 they use credit is completely different, which is why they 0:05:20.880 --> 0:05:23.280 end up in a different place. Now. I tell you 0:05:23.360 --> 0:05:25.840 all this because if you want to build wealth in 0:05:25.960 --> 0:05:29.320 layers like the one percent, then you have to understand 0:05:29.320 --> 0:05:32.240 one thing. Because we're going to be using debt. We're 0:05:32.240 --> 0:05:34.640 going to be using leverage to build wealth, and that 0:05:34.680 --> 0:05:37.640 means that you have to have the right mindset. If 0:05:37.680 --> 0:05:40.520 you're still thinking about credit the way a poor or 0:05:40.600 --> 0:05:44.360 middle class mindset does is something to avoid. Then you're 0:05:44.440 --> 0:05:46.680 never going to be able to use money the way 0:05:46.720 --> 0:05:49.640 the wealthy do. But if you start thinking like an investor, 0:05:49.880 --> 0:05:53.120 if you start seeing credit as a tool, not a trap, 0:05:53.480 --> 0:05:55.680 then you'll finally be able to unlock the true power 0:05:55.680 --> 0:05:58.240 of wealth building. All right, Now, let me tell you 0:05:58.279 --> 0:06:00.320 how I learned this the hard way first, and then 0:06:00.320 --> 0:06:03.040 I'm going to break down the math. Now, I had 0:06:03.040 --> 0:06:05.000 to learn this the hard way, and I don't want 0:06:05.040 --> 0:06:07.960 you to because I didn't even I didn't always understand this. 0:06:08.040 --> 0:06:11.719 In fact, I learned the really hard way. Now. Back 0:06:11.760 --> 0:06:13.400 in two thousand and eight, I thought I had it 0:06:13.440 --> 0:06:15.839 all figured out. I'd built up a couple of businesses. 0:06:15.920 --> 0:06:18.360 I had sold a couple of businesses. I made a 0:06:18.400 --> 0:06:21.080 lot of money. I had just turned twenty eight years old. 0:06:21.279 --> 0:06:23.760 I thought I was set for life. So I did 0:06:23.800 --> 0:06:25.960 what I thought the wealthy did, right. I took all 0:06:26.000 --> 0:06:27.640 the money and I poured it all into real estate. 0:06:28.000 --> 0:06:30.919 Now I was in southern California. I was fully invested 0:06:30.920 --> 0:06:32.880 into the market, and I thought I was pretty smart. 0:06:32.920 --> 0:06:35.520 I had like a sixty five percent loan to value ratio, 0:06:35.560 --> 0:06:38.680 which I thought was pretty safe. I had the properties, 0:06:39.040 --> 0:06:41.840 I had the leverage. I had the plan, and then 0:06:42.880 --> 0:06:45.200 the market collapsed. So Mike Tyson said, everyone has a 0:06:45.200 --> 0:06:47.120 plan to they get punched in the face. And I 0:06:47.200 --> 0:06:50.680 got punched in the face. Overnight. My property values collapsed. 0:06:50.920 --> 0:06:52.800 I had a few big developments that were going on 0:06:52.839 --> 0:06:55.800 at the time. I was trying to sell those and 0:06:55.880 --> 0:06:59.000 they fell through, and I had mortgages to pay. But 0:06:59.520 --> 0:07:02.680 here's the kicker. I had sold my businesses, so I 0:07:02.680 --> 0:07:05.520 had no active income. So that same leverage that had 0:07:05.520 --> 0:07:08.640 made me feel rich was now squashing me. Now. I 0:07:08.680 --> 0:07:11.960 remember sitting there. I remember staring at my numbers, realizing 0:07:13.040 --> 0:07:15.440 I can't afford this. But I was stuck. I had 0:07:15.520 --> 0:07:17.920 tens of millions of dollars in real estate, but I 0:07:18.000 --> 0:07:21.360 was broke. Everything I had worked for was slipping away. 0:07:21.600 --> 0:07:24.560 And it took years to unwind everything, to get everything 0:07:24.600 --> 0:07:26.880 dealt with with the banks. And then I swore that 0:07:26.880 --> 0:07:30.200 I would never touch credit again, and maybe I don't know. 0:07:30.280 --> 0:07:33.920 Five six years I did everything in cash. I refused 0:07:33.920 --> 0:07:36.840 to borrow. I told myself, you know, leverage is too risky, 0:07:37.240 --> 0:07:40.120 and for a while it felt safe, right. But here's 0:07:40.160 --> 0:07:42.720 what I didn't realize at the time. I wasn't actually 0:07:42.760 --> 0:07:46.320 building wealth. I was just avoiding risk. Now, my business, 0:07:46.560 --> 0:07:48.960 luckily was making plenty of money, but I was still 0:07:49.000 --> 0:07:51.560 stuck in that scarcity mindset. So instead of making my 0:07:51.640 --> 0:07:54.600 money work for me, I was playing defense. But then, 0:07:54.680 --> 0:07:57.680 one day, as I was always invested into my own education, 0:07:57.720 --> 0:07:59.680 I joined a high level master my group. I met 0:07:59.680 --> 0:08:03.360 someone who completely changed the way that I thought about money, 0:08:03.360 --> 0:08:06.320 and he showed me how the wealthy actually used leverage. 0:08:06.520 --> 0:08:08.640 And that's when I saw it. I'd been doing it 0:08:08.720 --> 0:08:11.120 all wrong. I had thought about it all wrong. See, 0:08:11.200 --> 0:08:13.880 I wasn't supposed to take on debt to buy assets. 0:08:14.240 --> 0:08:17.560 I needed to structure my wealth in layers. I needed 0:08:17.560 --> 0:08:20.080 to build cash flow, I needed to learn how to 0:08:20.160 --> 0:08:22.520 leverage it correctly, and then I had to learn how 0:08:22.520 --> 0:08:25.360 to make every dollar do multiple jobs. Now, look, I 0:08:25.400 --> 0:08:27.680 don't look back with any regrets of that today, all right, 0:08:27.760 --> 0:08:31.000 because I believe that, unfortunately, we only learn from our 0:08:31.040 --> 0:08:34.520 defeats and our mistakes. And it's because of that experience, 0:08:34.760 --> 0:08:37.800 the pain of two thousand and eight, the crash, that's 0:08:37.800 --> 0:08:40.120 why I make these videos today. Now. During that time, 0:08:40.120 --> 0:08:42.520 I vowed to myself, I vowed to my wife that 0:08:42.559 --> 0:08:45.000 we are never going to get caught off sides again. 0:08:45.280 --> 0:08:49.480 So I spent the next decade studying financial system, macroeconomics, 0:08:49.520 --> 0:08:52.000 and how the wealthy actually build and protect their wealth. 0:08:52.360 --> 0:08:55.199 I invested hundreds of thousands of dollars into my own education, 0:08:55.320 --> 0:08:58.280 my mentors, the masterminds, because I was never going to 0:08:58.400 --> 0:09:00.520 let that happen to us again. And that's why I 0:09:00.520 --> 0:09:03.160 started making these videos to help you learn from my 0:09:03.280 --> 0:09:05.320 mistakes and avoid the same pain I went through. So 0:09:05.400 --> 0:09:08.199 now let me show you what I learned and how 0:09:08.240 --> 0:09:11.720 you can structure your wealth just like the one percent. Right, 0:09:12.600 --> 0:09:15.560 So you know why the traditional system is broken, you 0:09:15.600 --> 0:09:18.880 know why most people stay stuck, and you know the 0:09:18.920 --> 0:09:21.760 wealthy use money differently, So let me show you exactly 0:09:21.840 --> 0:09:24.320 how they do it. Now, Remember we talked about the 0:09:24.360 --> 0:09:28.040 wealthy mindset and how they use their income to buy assets, 0:09:28.320 --> 0:09:31.640 and then they leverage credit strategically instead of fearing it. 0:09:31.800 --> 0:09:34.839 Right now, that's important because this entire system that we're 0:09:34.840 --> 0:09:37.640 going to break down is built on that mindset. So 0:09:37.679 --> 0:09:39.800 if you think about credit like the poor or the 0:09:39.800 --> 0:09:43.280 middle class does, as something to avoid, then you're never 0:09:43.320 --> 0:09:44.800 going to be able to build wealth the way the 0:09:44.840 --> 0:09:47.600 one percent do. But when you learn to control, leverage. 0:09:47.679 --> 0:09:51.520 Every dollar you earn can do multiple jobs like the wealthy. 0:09:51.800 --> 0:09:55.600 And here's how they do it. They don't just invest randomly. Again, 0:09:55.640 --> 0:10:00.440 they build it in layers by stacking assets strategically. Stir 0:10:00.520 --> 0:10:04.400 money moves, it multiplies, and it never sits idle. Now, 0:10:04.440 --> 0:10:07.520 before I break all this down, understand this. This is 0:10:07.640 --> 0:10:10.760 not a one size fits all system. Right. You don't 0:10:10.800 --> 0:10:13.560 need to use every single layer right away. Some of 0:10:13.559 --> 0:10:15.800 you might already have, you know, one or two of 0:10:15.840 --> 0:10:18.600 these in place. Others might be starting, you know, completely 0:10:18.640 --> 0:10:20.240 from scratch. Some of you may not even like the 0:10:20.280 --> 0:10:22.480 layers I suggest, and you can make your own. But 0:10:22.520 --> 0:10:25.680 the goal here is simple, make every dollar work multiple 0:10:25.679 --> 0:10:28.840 times in different ways. Right. So these are the layers 0:10:28.840 --> 0:10:32.280 that I personally use and I recommend, But again, don't 0:10:32.360 --> 0:10:34.839 use these, use whatever, mix and match them however you want. 0:10:34.960 --> 0:10:36.800 But this is what I do. Okay, So we start 0:10:36.880 --> 0:10:40.240 number one with layer number one, which is the foundation, 0:10:40.520 --> 0:10:43.680 which is liquidity. Now, this is where most people get stuck. 0:10:44.000 --> 0:10:47.000 They don't have a system for stacking their money. Right. 0:10:47.200 --> 0:10:49.679 That's actually why I built the Wealth Engine assessment to 0:10:49.679 --> 0:10:52.439 help you see exactly how many jobs your dollars are doing. 0:10:52.840 --> 0:10:54.840 And where you can optimize, because if your money is 0:10:54.840 --> 0:10:58.280 only doing more job right now, you're already behind. Now, 0:10:58.280 --> 0:10:59.839 if you want this wealth assessment, you can grab it 0:10:59.840 --> 0:11:01.520 for free. I'll put a link down to the description 0:11:01.600 --> 0:11:04.280 down below. Just use it, do a test. It'll show 0:11:04.280 --> 0:11:07.560 you exactly how to map this out. But let me 0:11:07.600 --> 0:11:09.679 show you how I do this. Let's start with the 0:11:09.720 --> 0:11:13.680 base layer. So for me, layer number one is life insurance. 0:11:13.720 --> 0:11:16.360 So let me just go ahead and lay that out here. Now, 0:11:16.400 --> 0:11:19.160 the first thing the wealthy do differently is they don't 0:11:19.280 --> 0:11:22.760 keep cash in a bank. Why because it does two 0:11:22.960 --> 0:11:26.640 things your bank never will. First, it compounds tax free 0:11:26.640 --> 0:11:30.320 over time. Second, you can borrow against it without stopping 0:11:30.360 --> 0:11:33.120 the growth. Now most people don't realize this, but when 0:11:33.160 --> 0:11:35.880 you put money in a bank, that make immediately lends 0:11:35.880 --> 0:11:37.760 it out to make money off of you. Meanwhile, they 0:11:37.760 --> 0:11:40.280 pay almost nothing. But the wealthy, of course, they flip 0:11:40.320 --> 0:11:43.320 the script and they store their cash in a properly 0:11:43.400 --> 0:11:46.680 structured life insurance policy where it earns interest and they 0:11:46.720 --> 0:11:48.240 can borrow against it. Now, let me give you an 0:11:48.240 --> 0:11:51.000 example of how the one percent do this. So let's 0:11:51.040 --> 0:11:53.840 say that you have this life insurance policy and you 0:11:53.880 --> 0:11:57.480 put let's say one hundred thousand dollars into this account. Okay, 0:11:58.360 --> 0:12:01.120 there's a high cash value life insurance and it's let's 0:12:01.120 --> 0:12:04.920 say it's compounding at five percent per year, So I'm 0:12:04.920 --> 0:12:06.680 gonna put it in there, and they're gonna pay me 0:12:06.840 --> 0:12:09.480 five percent a year. Now it's compounding at five percent 0:12:09.520 --> 0:12:12.720 a year, and that is tax free, all right. Now, 0:12:12.920 --> 0:12:16.440 then what can happen is I can borrow. I can 0:12:16.480 --> 0:12:19.480 take that one hundred thousand dollars out and I would borrow, 0:12:19.520 --> 0:12:23.720 and I would pay five percent to borrow it. Now 0:12:23.880 --> 0:12:27.320 you might go, wait a minute, if I borrow, if 0:12:27.320 --> 0:12:30.720 I'm earning five percent, but then I borrow at five percent, Like, 0:12:30.880 --> 0:12:34.160 isn't that a wash? Well, no, not even close. Because 0:12:34.240 --> 0:12:37.280 let's say let's say I borrowed this a for a car, 0:12:37.320 --> 0:12:39.840 one hundred thousand dollars car. So let's say over a 0:12:39.880 --> 0:12:43.880 six year loan, let's say time six years or seventy 0:12:43.920 --> 0:12:47.199 two months. Let's say, well, let's let's do the math 0:12:47.240 --> 0:12:49.599 and see what actually happens during this time. What I 0:12:49.600 --> 0:12:52.480 would pay interest this five percent on one hundred thousand 0:12:52.880 --> 0:12:56.600 is about fifteen thousand, nine hundred and fifty five dollars. 0:12:56.640 --> 0:12:59.000 So let's call it sixteen thousand dollars. All right, But 0:12:59.440 --> 0:13:03.439 during that same time period, this earning five percent compounding 0:13:03.480 --> 0:13:08.440 on one hundred thousand is thirty four thousand nine. A 0:13:08.559 --> 0:13:11.760 small business owner, are you buried in all types of 0:13:11.800 --> 0:13:14.360 work keeping you from the real thing that makes you money? 0:13:14.400 --> 0:13:16.800 Well that's where just Works comes in. They're the all 0:13:16.840 --> 0:13:19.880 in one platform that supports small business growth. You can 0:13:19.920 --> 0:13:22.960 get all their tools that help with benefits like payroll 0:13:23.160 --> 0:13:27.240 and HR and compliance with transparent pricing. Now they help 0:13:27.320 --> 0:13:31.520 you hire top talent internationally, internew markets, quickly scale international 0:13:31.600 --> 0:13:35.679 operations without the workload and forevery how do I do it? Question? 0:13:35.880 --> 0:13:38.200 You can reach out to their expert staff from sole 0:13:38.280 --> 0:13:42.160 proprietor or a team of twenty. Just Works empowers all 0:13:42.280 --> 0:13:46.040 kinds of small businesses with real human support. So visit 0:13:46.200 --> 0:13:49.760 justworks dot com slash podcast to join the thousands of 0:13:49.800 --> 0:13:53.719 small businesses that trust just Works to take care of payroll, benefits, 0:13:53.880 --> 0:13:58.760 compliance and more. Again, that's justworks dot com slash podcasts. 0:14:00.240 --> 0:14:02.360 So you can see that's quite a bit difference. As 0:14:02.400 --> 0:14:05.720 a matter of fact, the difference is my positive difference 0:14:05.720 --> 0:14:10.280 here is about eighteen thousand dollars that I'm making positive 0:14:10.559 --> 0:14:13.480 during this time even though I'm earning five percent and 0:14:13.520 --> 0:14:16.040 I'm barring five percent. And the reason why is because 0:14:16.080 --> 0:14:19.760 of the law of compounding. So the one hundred thousands 0:14:19.760 --> 0:14:22.920 compounding every year while the loan is getting paid down. 0:14:23.040 --> 0:14:25.440 And while that sounds cool, that's not even the crazy 0:14:25.480 --> 0:14:28.640 part yet. Right. If you had this extra eighteen thousand 0:14:28.680 --> 0:14:31.280 dollars now over the life of the loan, and you 0:14:31.360 --> 0:14:33.640 put it into an account and it continues to compound 0:14:33.680 --> 0:14:37.680 at five percent, let's say over twenty years, that turns 0:14:37.840 --> 0:14:39.840 some real money. As a matter of fact, that turns 0:14:39.880 --> 0:14:44.440 into forty seven thousand, nine hundred and two dollars, almost 0:14:44.480 --> 0:14:47.760 fifty thousand dollars, which is more than some people saved. 0:14:47.800 --> 0:14:49.440 As a matter of fact, As I said, most baby 0:14:49.480 --> 0:14:52.440 boomers today don't even have any money saved. And you 0:14:52.440 --> 0:14:54.600 can do that just by one simple trick of putting 0:14:54.600 --> 0:14:58.040 the money in first, taking it back out, buying whatever 0:14:58.080 --> 0:15:01.160 you're going to buy. That alone could get you fifty 0:15:01.240 --> 0:15:04.600 thousand dollars. Now what would you do with this money, Well, 0:15:04.720 --> 0:15:06.640 you can do all types of things. You could invest 0:15:06.680 --> 0:15:11.040 it into real estate, you could invest it into bitcoin, 0:15:11.560 --> 0:15:15.400 you could invest it into businesses or whatever. We're going 0:15:15.480 --> 0:15:17.760 to talk about how you can layer that next. Okay, 0:15:17.800 --> 0:15:20.040 so now that we've got layer one taken care of, 0:15:20.240 --> 0:15:22.560 and now that we have liquidity, let's talk about the 0:15:22.600 --> 0:15:25.640 next wealth layer. And for me, that's real estate. So 0:15:25.720 --> 0:15:27.760 let's go ahead and put that out here. So now 0:15:27.800 --> 0:15:32.320 we have layer to real estate, and let's break down 0:15:32.360 --> 0:15:34.520 the math of how this works for a second, because 0:15:34.680 --> 0:15:37.160 most people don't understand this. Now, of course, the wealthy 0:15:37.280 --> 0:15:40.200 love real estate, but it's not for the reasons that 0:15:40.280 --> 0:15:43.680 most people think. They don't just buy houses. They use 0:15:43.720 --> 0:15:47.080 real estate as a financial tool to build wealth through 0:15:47.160 --> 0:15:50.960 leverage and most importantly, tax efficiency. Now why is real 0:15:51.040 --> 0:15:53.960 estate so powerful Because it builds wealth in multiple ways 0:15:53.960 --> 0:15:57.000 at once. So the first way is we get cash flow, 0:15:57.160 --> 0:15:59.240 so we buy the piece of real estate and it 0:15:59.280 --> 0:16:02.520 generates cash rental income. Number two, we get the appreciation, 0:16:02.640 --> 0:16:04.320 so the property is going to go up over a 0:16:04.320 --> 0:16:08.160 long period of time. Number three, we get leverage. We 0:16:08.200 --> 0:16:10.840 get loan leverage, so we can buy a property for 0:16:10.920 --> 0:16:14.280 ten percent down or twenty percent down. But my favorite 0:16:14.280 --> 0:16:16.960 one the wealthy is favorite one most people don't even 0:16:17.000 --> 0:16:20.600 think about, they don't even understand, is the tax advantages, depreciation. 0:16:20.760 --> 0:16:23.160 It's the ride us. This is why the wealthy get 0:16:23.200 --> 0:16:25.880 richer because their money is working in multiple ways at 0:16:25.880 --> 0:16:28.440 the same time. And this is where leverage becomes a 0:16:28.520 --> 0:16:32.160 game change, because this is where the layered stacking begins. 0:16:32.320 --> 0:16:34.480 So let me give you an example of how the 0:16:34.520 --> 0:16:37.240 wealthy use leverage in real estate. So let's break it down. Okay, 0:16:37.400 --> 0:16:39.520 So we first started with one hundred thousand dollars in 0:16:39.600 --> 0:16:42.040 layer one, and we put that into our high cash 0:16:42.120 --> 0:16:45.360 value life insurance policy, right, and we're getting compounding in 0:16:45.400 --> 0:16:48.720 a five percent. Then we take that one hundred thousand 0:16:48.800 --> 0:16:50.960 back out. We don't let us sit there. We borrow 0:16:51.000 --> 0:16:53.320 against it and we use that money. Now, let's say 0:16:53.320 --> 0:16:56.200 one hundred thousand has a down payment on five hundred 0:16:56.280 --> 0:16:59.240 thousand dollars worth of real estate, so that's two hundred dow. 0:16:59.320 --> 0:17:01.240 So we take the h hundred k that we got 0:17:01.280 --> 0:17:04.719 from our life insurance and we put it into an 0:17:04.720 --> 0:17:08.040 apartment complex or a series of houses or whatever worth 0:17:08.080 --> 0:17:10.879 about five hundred k. Let's say, right, it's twenty percent 0:17:10.920 --> 0:17:13.200 down all right. So now we have the money doing 0:17:13.240 --> 0:17:16.240 two jobs. One job over here in life insurance, the 0:17:16.280 --> 0:17:18.960 second job over here in real estate. That's pretty good, right, 0:17:19.080 --> 0:17:21.760 This is the first one hundred thousand dollars. Now over 0:17:21.760 --> 0:17:26.000 here in life insurance layer one, it's still compounding. Right, 0:17:26.119 --> 0:17:28.320 So just during the time of this let's call it 0:17:28.400 --> 0:17:31.800 twenty years, during the life of this that money compounding 0:17:31.920 --> 0:17:35.760 is going to add forty seven K right here, just 0:17:35.800 --> 0:17:38.040 because I left it there in the meantime while I 0:17:38.080 --> 0:17:40.600 have also had the house. Now, think about that forty 0:17:40.640 --> 0:17:43.040 seven K on my one hundred thousand. That's almost a 0:17:43.119 --> 0:17:45.879 fifty percent return right there, just by having to do 0:17:45.880 --> 0:17:48.879 the second job. All right. Second, over here, we have 0:17:48.920 --> 0:17:51.600 this five hundred thousand dollars property, and the tenants are 0:17:51.680 --> 0:17:53.960 paying down the real estate loan for me, and it's 0:17:54.000 --> 0:17:56.919 giving me cash flow. It's given me equity growth. At 0:17:56.920 --> 0:18:00.879 the same time, also, the property is going up in time. Now, 0:18:01.000 --> 0:18:03.280 we don't always plan for appreciation, but of course it's 0:18:03.320 --> 0:18:06.960 going to appreciate. Let's call it super conservative. Let's say 0:18:06.960 --> 0:18:09.560 it's going up at three percent a year. Okay, so 0:18:09.720 --> 0:18:12.920 three percent a year. What happens is now at five 0:18:13.000 --> 0:18:16.720 hundred thousand, let's say times the three percent over the 0:18:16.800 --> 0:18:19.800 twenty years means that this property is now worth nine 0:18:19.880 --> 0:18:23.000 hundred and three thousand dollars. That means that if we 0:18:23.080 --> 0:18:25.760 take the new value nine hundred thousand divided by the 0:18:25.760 --> 0:18:29.200 five hundred thousand, means my equity is now four hundred 0:18:29.200 --> 0:18:33.600 and three thousand dollars on the original one hundred thousand 0:18:33.640 --> 0:18:36.359 I put in. That means I've now made a four 0:18:36.600 --> 0:18:40.560 hundred percent ROI. So over here, my one hundred thousand 0:18:40.560 --> 0:18:43.040 dollars is sitting here, and I've earned forty seven thousand 0:18:43.080 --> 0:18:45.200 over here. It's about a fifty percent return. And then 0:18:45.240 --> 0:18:46.639 I took that one hundred thousand, put it over here 0:18:46.680 --> 0:18:49.320 in this five hundred thousand dollars property growing at three percent, 0:18:49.880 --> 0:18:51.919 and it's made me a four hundred percent ROI, not 0:18:52.000 --> 0:18:54.879 to mention the cash flow I've made over time, not 0:18:55.000 --> 0:18:58.120 to mention the equity that I've gained over all time. 0:18:58.160 --> 0:19:01.560 But we are still not done because not on top 0:19:01.560 --> 0:19:04.520 of all this, you also get up to five hundred 0:19:04.560 --> 0:19:08.560 thousand in tax rideoffs even against W two income if 0:19:08.600 --> 0:19:11.959 you structure this correctly. So let's say that you're a 0:19:12.040 --> 0:19:16.000 thirty five percent tax bracket, that's about another one hundred 0:19:16.040 --> 0:19:20.000 and seventy five thousand dollars of tax savings. That you get. 0:19:20.640 --> 0:19:22.840 Let me total all this up for you. Let let's 0:19:22.840 --> 0:19:25.399 think about this real quickly. Okay, So let's total this 0:19:25.480 --> 0:19:28.240 up so we can compare. Let's compare two different people. 0:19:28.480 --> 0:19:33.679 So person one over here has their one hundred thousand dollars, 0:19:33.800 --> 0:19:39.280 all right, Person two over here has one hundred thousand dollars. Okay, 0:19:39.720 --> 0:19:44.640 Now over here, person one saves one hundred thousand all right. 0:19:44.800 --> 0:19:48.280 Over here, person two stacks. So let's just put that here. 0:19:48.520 --> 0:19:53.000 Person one saves Person two stacks. Now, Option one, I 0:19:53.080 --> 0:19:56.160 leave the one hundred thousand dollars in savings. The final balance 0:19:56.440 --> 0:20:00.520 times let's say twenty years, is you know, earning at 0:20:00.920 --> 0:20:04.280 zero point five percent interest, ends up with about one 0:20:04.359 --> 0:20:07.680 hundred and ten thousand dollars. Good job, So we went 0:20:07.680 --> 0:20:10.000 from ten thousand to one hundred and ten thousand, so 0:20:10.000 --> 0:20:13.600 we made about ten K over twenty years. Okay, Option 0:20:13.680 --> 0:20:17.680 number two over here. Option number two does something a 0:20:17.680 --> 0:20:20.960 little bit different. Number one. They stack their wealth in layers. 0:20:21.200 --> 0:20:24.760 So they first put the one hundred thousand into a 0:20:25.040 --> 0:20:30.080 life insurance policy. Number one. Then that right there makes 0:20:30.119 --> 0:20:32.239 them about forty seven K. Number two, they take that 0:20:32.280 --> 0:20:35.679 same hundred thousand and put it down into five hundred 0:20:35.720 --> 0:20:39.119 thousand dollars of real estate. Okay, and then with the 0:20:39.160 --> 0:20:43.840 appreciation they get about four hundred k from that, all right, 0:20:44.280 --> 0:20:46.760 Then they get the tax savings and the write off. 0:20:46.800 --> 0:20:48.920