WEBVTT - Ep 367: How To Get Rich ft. Ramit Sethi 0:00:06.240 --> 0:00:11.840 Hey, hey, hey, we're back. We're extra well, not black, 0:00:11.880 --> 0:00:18.240 but extra brown. Ambition, ambition, ambition, ambition, ambition. 0:00:18.720 --> 0:00:19.600 Welcome ba Fan. 0:00:19.720 --> 0:00:23.680 I'm so excited because we have one of the oh 0:00:23.840 --> 0:00:27.479 gee's in the game on Brown and Bison today. You know, 0:00:27.560 --> 0:00:29.840 y'all always want to call me somebody's auntie, not you 0:00:30.000 --> 0:00:33.280 thirty year old. You tried it, but I will say 0:00:33.280 --> 0:00:35.239 REMI has been in the game longer than me. Let 0:00:35.320 --> 0:00:36.599 me tell you a little something. F First of all, 0:00:36.680 --> 0:00:38.280 let me tell you how it was introduced to remed 0:00:38.440 --> 0:00:40.080 so y'all knew. I grew up in the household where 0:00:40.080 --> 0:00:42.640 my dad talked about money to my sisters and I'm 0:00:42.960 --> 0:00:46.800 happy Father's Day just passed. And he born and raised 0:00:46.840 --> 0:00:49.600 in Nigeria, super super immigrant house school. It was like 0:00:49.680 --> 0:00:51.840 Nigeria in the house in like America every place else. 0:00:52.080 --> 0:00:55.600 And I can distinctly remember my older sister Karen going 0:00:55.640 --> 0:00:59.200 to school college. We went to Rutgers and coming back 0:00:59.320 --> 0:01:01.840 like one summer, maybe it was her freshman year, and 0:01:01.920 --> 0:01:04.440 her being like, cause, you know, we listened to my dad. 0:01:04.280 --> 0:01:06.400 But who's trying to listen to your parents? And she 0:01:06.440 --> 0:01:07.360 was like, oh my god. 0:01:07.360 --> 0:01:11.640 I have this book and he knows exactly. She's like, 0:01:11.680 --> 0:01:14.080 it's a money book, but it's like he grew up 0:01:14.120 --> 0:01:16.399 the way we grew up with like these immigradparents, and 0:01:16.400 --> 0:01:17.880 you're like, what are you talking about. She was like, 0:01:17.920 --> 0:01:20.240 he's really funny. And I remembered this thing and I 0:01:20.280 --> 0:01:22.959 have if anybody knows me, I got the worst memory possible. 0:01:23.319 --> 0:01:25.080 And she showed me and it was I will teach 0:01:25.120 --> 0:01:26.960 you to be rich. And she was like, he's walking 0:01:27.000 --> 0:01:29.399 me step by step. I've had a manify money because 0:01:29.400 --> 0:01:31.920 she had like messed up all of her finances and 0:01:32.120 --> 0:01:34.240 she did cut co nive. Sorry to put your business 0:01:34.280 --> 0:01:36.319 on blast care because she listens, Oh well, girl, it 0:01:36.360 --> 0:01:38.640 was a long time ago. She did cut co nive. 0:01:38.880 --> 0:01:39.199 Child. 0:01:39.480 --> 0:01:42.240 She every financial mistake she made she could think of, 0:01:42.319 --> 0:01:45.080 she made, and so I remember thinking that was the 0:01:45.200 --> 0:01:47.440 very first I didn't even know because at the time 0:01:47.480 --> 0:01:49.640 I was I'm two years younger than her and I 0:01:49.680 --> 0:01:51.880 was still in high school. I didn't I never thought 0:01:51.880 --> 0:01:54.240 about books on money, and I guess I probably thought 0:01:54.240 --> 0:01:55.920 about it was like for like I don't know old people, 0:01:56.360 --> 0:01:58.840 and she was so excited about it and showing me 0:01:58.920 --> 0:02:00.840 like little lines if you don't you know meat has 0:02:00.920 --> 0:02:04.279 quite the personality, so she would showing me different lines 0:02:04.360 --> 0:02:06.560 inside the book, and I was like really. 0:02:07.000 --> 0:02:10.080 So that's how I was first introduced to Rematra. 0:02:10.200 --> 0:02:13.160 Meat is the host of Netflix's hit show How to 0:02:13.240 --> 0:02:15.400 Get Rich and the author of the New York Times 0:02:15.400 --> 0:02:18.600 bestseller I Will Teach You to Be Rich. Remat is 0:02:18.680 --> 0:02:22.800 known for his unconventional insights on money, psychology, and his 0:02:23.040 --> 0:02:25.560 no nonsense approach to designing and. 0:02:25.560 --> 0:02:28.680 Living a rich life. Okay. 0:02:28.840 --> 0:02:31.800 He was born in California to an Indian immigrant to 0:02:32.520 --> 0:02:37.200 born in California to Indian immigrant parents. He attended Stanford 0:02:37.240 --> 0:02:38.800 Oh he's a smarties, That's why I forgot about that 0:02:38.880 --> 0:02:43.360 on scholarship, where he studied technology, psychology, and persuasion, earning 0:02:43.480 --> 0:02:47.639 undergraduate and graduate degrees FORMI began his company, I Will 0:02:47.680 --> 0:02:50.160 Teach You to Be Rich from his college dorm room 0:02:50.280 --> 0:02:53.360 in two thousand and four. His goal was to reframe 0:02:53.440 --> 0:02:55.720 the way we think about money, so in two thousand 0:02:55.760 --> 0:02:58.160 and nine he published his book, his first book, I 0:02:58.160 --> 0:03:00.880 Will Teach You to Be Rich, which became in New 0:03:00.960 --> 0:03:05.160 York Times bestseller and cemented his reputation as a leading 0:03:05.240 --> 0:03:09.240 voice in personal finance. Ramat also hosts a popular podcast 0:03:09.320 --> 0:03:12.040 call I Will Teach You to Be Rich, which features 0:03:12.160 --> 0:03:15.160 real couples sharing real stories with real numbers from. 0:03:15.000 --> 0:03:16.680 Behind closed doors. 0:03:17.200 --> 0:03:20.040 His influence in the personal finance space has continued to 0:03:20.120 --> 0:03:23.960 expand with his recent release of Netflix How to Get Rich, 0:03:24.280 --> 0:03:27.560 which became an instant top ten Netflix show. When I 0:03:27.560 --> 0:03:28.840 tell you how hard that is, I don't think I 0:03:28.919 --> 0:03:31.600 understand because I'll be doing my Googles and my numbers, 0:03:31.639 --> 0:03:34.360 and that is really hard to do to get to 0:03:34.360 --> 0:03:36.600 be in the top ten because Netflix at any moment 0:03:36.960 --> 0:03:38.120 has like one hundreds of. 0:03:38.120 --> 0:03:39.000 Thousands of shows. 0:03:39.280 --> 0:03:43.320 So the show features Remeat's trademark practical and actionable advice 0:03:43.560 --> 0:03:46.160 and follows him as he helps real people transform their 0:03:46.160 --> 0:03:50.600 finances and take control of their financial futures. Ramat's financial 0:03:50.640 --> 0:03:54.840 philosophy is centered around several key principles, including the importance 0:03:54.880 --> 0:03:58.800 of automating your finances Love that, using money psychology to 0:03:58.920 --> 0:04:03.760 prioritize your dials super love that, and focusing on thirty 0:04:03.840 --> 0:04:07.560 thousand dollars questions instead of three dollar ones. The shade 0:04:07.720 --> 0:04:10.040 is real about them three dollars. I feel so bad 0:04:10.040 --> 0:04:11.320 for the late guy. I'm not gonna say his name 0:04:11.320 --> 0:04:13.680 because we're gonna shade him. But that poor Latte guy. 0:04:14.000 --> 0:04:17.440 I mean it was at the time, it seemed like 0:04:17.520 --> 0:04:18.360 a good idea. 0:04:18.720 --> 0:04:24.159 Anyway, we welcome for me to the stew So welcome 0:04:24.200 --> 0:04:25.240 to the stew for me. 0:04:25.400 --> 0:04:27.120 Thank you so much for coming, Thanks for having me. 0:04:27.160 --> 0:04:28.080 It's great to be here. 0:04:28.279 --> 0:04:29.240 Yeah, I'm so excited. 0:04:29.240 --> 0:04:30.840 I don't think I've ever met you in person, like 0:04:31.200 --> 0:04:32.640 just like via social media? 0:04:32.760 --> 0:04:33.280 Is that right? 0:04:33.440 --> 0:04:34.159 Yeah, I don't think. 0:04:34.160 --> 0:04:36.839 We've ever I don't think I'm looking at you him like, no, 0:04:37.600 --> 0:04:40.280 con no, not even fin con No. I don't think 0:04:40.279 --> 0:04:42.279 we've we were ever at a or if I was 0:04:42.320 --> 0:04:43.520 at a fincnn back that I didn't. 0:04:43.520 --> 0:04:45.280 I mean, I knew of you, but I didn't know you. 0:04:45.360 --> 0:04:48.039 So oh man, Well it's a pleasure to see you 0:04:48.080 --> 0:04:48.560 in person. 0:04:48.920 --> 0:04:49.920 No, this is awesome. 0:04:49.960 --> 0:04:51.600 So well, one, I want to take it back to 0:04:51.640 --> 0:04:56.040 two thousand and nine, right, what made you like write 0:04:56.080 --> 0:04:59.800 this book, like this funny, helpful book when no one 0:04:59.920 --> 0:05:01.719 was writing books to young people about money? 0:05:02.000 --> 0:05:04.200 Like what was the impetus to all of that? 0:05:05.760 --> 0:05:07.720 Honestly, one of the biggest reasons I wrote it was 0:05:07.800 --> 0:05:11.120 I had I was getting the same ten questions every 0:05:11.200 --> 0:05:14.160 day of my life. I was like I don't want 0:05:14.160 --> 0:05:18.159 to answer a question about a roth Ira anymore. Here 0:05:18.520 --> 0:05:20.719 here's the book. It's going to answer your question, and 0:05:20.760 --> 0:05:23.160 it's going to actually show you the thirty other questions 0:05:23.160 --> 0:05:26.120 you really should be asking. So that was one reason 0:05:26.920 --> 0:05:30.960 I had started my blog in college. And I started 0:05:30.960 --> 0:05:33.800 it not because I had some grand master plan. It 0:05:33.960 --> 0:05:37.080 was that I was taken some of my scholarship money 0:05:37.120 --> 0:05:39.640 put in the stock market, lost half of it. Realized 0:05:39.640 --> 0:05:41.720 I wasn't as smart as I thought. And as I 0:05:41.800 --> 0:05:47.320 learned about money, and I was studying human behavior persuasion psychology, 0:05:47.400 --> 0:05:50.400 I started developing my own point of view on money. 0:05:50.560 --> 0:05:52.520 And so when I tried to teach my college friends 0:05:52.839 --> 0:05:55.839 about personal finance, they all were like, yeah, that sounds cool, 0:05:55.920 --> 0:05:58.200 and then they would never show up. And this was free, 0:05:58.920 --> 0:06:01.880 free classes I was giving away and I did that 0:06:01.920 --> 0:06:04.039 for a year and a half. Nobody came. It was 0:06:04.160 --> 0:06:07.880 very demoralizing when you have something that you feel the 0:06:07.920 --> 0:06:12.320 world needs to hear but nobody is listening. And I 0:06:12.440 --> 0:06:14.839 realized this was a very pivotal moment. I could just 0:06:14.839 --> 0:06:17.880 give up. But I was a little arrogant, you know, 0:06:18.839 --> 0:06:21.120 I was a twenty year old kid. I go, they 0:06:21.200 --> 0:06:24.560 need to hear this. Maybe I'm not sharing it in 0:06:24.600 --> 0:06:27.520 the right way. Maybe college kids don't want to come 0:06:28.160 --> 0:06:31.400 to events about money, even if they're free. And I 0:06:31.480 --> 0:06:33.400 later learned that's true. People don't like going to events 0:06:33.400 --> 0:06:36.080 about money makes them feel bad about themselves. So I 0:06:36.080 --> 0:06:39.560 started a blog. Spent five years plus on the blog, 0:06:39.640 --> 0:06:41.840 every day writing, treating it like a lab, and by 0:06:41.839 --> 0:06:45.440 the time it came time to even think about doing 0:06:45.440 --> 0:06:48.520 a book, I had talked to hundreds of thousands of 0:06:48.560 --> 0:06:54.720 people and really refined this system for saving money automatically, 0:06:54.760 --> 0:06:58.159 for investing, even knowing how to calculate how much to 0:06:58.240 --> 0:07:00.760 save for a wedding or by buying a house or 0:07:00.800 --> 0:07:03.880 a car, and those things I was ready to share 0:07:03.920 --> 0:07:04.440 with the world. 0:07:05.040 --> 0:07:05.479 That's awesome. 0:07:05.520 --> 0:07:07.719 So did they Were you approached about the book or 0:07:07.760 --> 0:07:09.440 did is there something you pitched? 0:07:10.640 --> 0:07:13.680 I was approached at the time, around two thousand and six, 0:07:13.760 --> 0:07:17.360 there were some publishers who started reaching out. One of 0:07:17.360 --> 0:07:21.440 the things, I think I have a skill that just 0:07:21.560 --> 0:07:23.640 I don't know where it came from. But I'm very patient. 0:07:24.120 --> 0:07:27.440 I'm not in a rush for anything, so I knew, 0:07:27.880 --> 0:07:29.840 you know, if you come knocking on my door, you're 0:07:29.880 --> 0:07:33.160 probably not the kind of person that I want to 0:07:33.200 --> 0:07:36.440 publish my book. I was very patient, and I had 0:07:36.440 --> 0:07:39.800 built some relationships with people in the publishing industry. I 0:07:39.880 --> 0:07:43.360 had interned for Seth Godin, and so I made friends 0:07:43.360 --> 0:07:46.080 with his agent, and I called a lot of people 0:07:46.080 --> 0:07:48.000 and asked like, should I write a book? Should I not? 0:07:48.280 --> 0:07:50.320 And a lot of the advice. The same advice I 0:07:50.320 --> 0:07:52.400 give people now who are thinking about writing a book 0:07:52.480 --> 0:07:55.840 is I say, slow down, write a book when you're 0:07:55.920 --> 0:07:59.520 absolutely ready. When you feel like you have to write 0:07:59.520 --> 0:08:02.520 a book, be clear about why it's not so you 0:08:02.560 --> 0:08:04.840 can see your book in a bookstore. That is a 0:08:05.160 --> 0:08:09.440 that's a sort of very surface level goal. I had 0:08:09.480 --> 0:08:11.920 something that I knew the world needed to hear. I 0:08:12.000 --> 0:08:14.840 had refined it over years. I didn't care about money 0:08:14.920 --> 0:08:18.200 from a book. In fact, I took a pretty small deal. 0:08:18.880 --> 0:08:20.720 My publishing deal for I Will Teach You to Be 0:08:20.800 --> 0:08:24.680 Rich first edition was quite modest. I chose a publisher 0:08:24.720 --> 0:08:28.200 that paid less, but I chose them because, just like me, 0:08:28.920 --> 0:08:31.800 they are known to invest for the long term. So 0:08:31.920 --> 0:08:34.000 eighty percent of their sales come from the backlist. That's 0:08:34.000 --> 0:08:37.760 exactly what I wanted, and so that is how I 0:08:37.800 --> 0:08:39.760 decided to sell my book in two thousand and seven, 0:08:39.840 --> 0:08:41.800 and I started writing it for the next two years. 0:08:42.120 --> 0:08:44.240 No, I love that because I honestly your book was 0:08:44.240 --> 0:08:49.240 one of my You Tim Ferris, I remember telling my casaying, 0:08:49.320 --> 0:08:51.800 I was like, I mean, the money's cool, but I 0:08:51.840 --> 0:08:54.800 make plenty of money externally, you know, so and I 0:08:54.800 --> 0:08:57.959 also knew enough to know that. I mean, very few 0:08:57.960 --> 0:09:01.480 people get quote unquote rich off of books, you know, 0:09:01.679 --> 0:09:03.720 just because people don't know that even if you get 0:09:03.720 --> 0:09:07.520 like I got a good size, you know, like my 0:09:07.559 --> 0:09:09.960 idea was a pretty decent size, but it was over 0:09:10.000 --> 0:09:12.400 two years. I'm like, I make more than that, you know, 0:09:12.520 --> 0:09:15.400 in a few months. So it wasn't the money. It 0:09:15.559 --> 0:09:17.520 was because I'd been approached prior, but it was also 0:09:17.600 --> 0:09:19.839 I just was like I didn't I wasn't really sure 0:09:19.880 --> 0:09:21.839 about what I wanted to say, and I didn't want 0:09:21.840 --> 0:09:24.000 to just be talking to be talking, and so finally 0:09:24.000 --> 0:09:26.800 I was ready to do my book. So one thing 0:09:26.840 --> 0:09:28.400 that you know, I don't know if you're I'm sure 0:09:28.400 --> 0:09:29.600 you know you're known for this is that you like 0:09:29.679 --> 0:09:31.520 to shake the table right for. 0:09:31.559 --> 0:09:34.480 Me, Like, yes, I'm a little teddy bear, what are 0:09:34.520 --> 0:09:38.440 you talking about. I'm known as the greatest Indian teddy 0:09:38.440 --> 0:09:41.120 Bear online? What are you talking about? Yo? With me? 0:09:41.280 --> 0:09:43.240 Loves to shake the table And what I love is 0:09:43.280 --> 0:09:45.400 that you you're like you're not going to back down 0:09:45.480 --> 0:09:47.760 from from like you like I said what I said 0:09:47.840 --> 0:09:48.760 and this is why. 0:09:48.640 --> 0:09:51.000 So wait, hold on, why would why would I back 0:09:51.040 --> 0:09:51.719 down when I'm right? 0:09:54.520 --> 0:09:55.680 See look at the teddy. 0:09:55.440 --> 0:09:56.800 Bear coming out with it with the wage to play 0:09:56.840 --> 0:09:57.480 behind his back. 0:09:57.800 --> 0:09:59.640 And so I would love to talk about some of 0:09:59.679 --> 0:10:01.199 the things that people push. 0:10:01.000 --> 0:10:03.880 Back like the most with you on as they're listening 0:10:04.280 --> 0:10:06.800 and like you know and then how you know? Like 0:10:06.880 --> 0:10:09.360 why is this your So there's something for me. For example, 0:10:09.360 --> 0:10:11.040 I've been doing a lot of research on the racial 0:10:11.040 --> 0:10:12.920 wealth gap and like how do we get here? And 0:10:13.000 --> 0:10:14.760 so for those who don't know the racial wealth gap, 0:10:15.040 --> 0:10:17.120 typically when they think the racial wealth gap, they're thinking 0:10:17.240 --> 0:10:20.160 the gap between white families and black families is right now, 0:10:20.280 --> 0:10:23.040 is like for every dollar white family has, a black 0:10:23.040 --> 0:10:25.920 family has, well, for every ten dollars white family has, 0:10:25.920 --> 0:10:28.400 a black family has one dollar, and figuring out like 0:10:28.400 --> 0:10:30.959 how do we get here? And one of the components 0:10:31.720 --> 0:10:35.360 that they cite as being part of the reason why 0:10:35.360 --> 0:10:37.800 there is a racial wealth gap is a lack of 0:10:38.080 --> 0:10:40.920 home ownership in the black community, you know, and also too, 0:10:40.960 --> 0:10:42.920 not just lack of home ownership, but also that homes 0:10:42.920 --> 0:10:45.240 are devalued. Like just go look at Brooklyn, you know 0:10:45.480 --> 0:10:48.040 when it was like black people teaming there. 0:10:48.080 --> 0:10:50.120 You know, homes are worth nothing. Like I live in Newark. 0:10:50.160 --> 0:10:51.440 I mean, that's why I don't like to pick up 0:10:51.480 --> 0:10:54.120 my phone because every second someone is calling me to 0:10:54.120 --> 0:10:56.960 buy my home, which lets you know that gentrification is 0:10:57.000 --> 0:10:59.439 well on its way. But you know, Newark is still 0:10:59.520 --> 0:11:03.440 largely but when that changes, the value of these homes 0:11:03.480 --> 0:11:06.880 will totally change. So anyway, I was, I know, you 0:11:06.920 --> 0:11:09.920 have this thing about like you don't need home ownership 0:11:09.960 --> 0:11:12.560 to grow wealth. So I'm just curious about, like, you know, 0:11:12.679 --> 0:11:14.840 just because as my studies, I'm doing research about like 0:11:14.960 --> 0:11:17.720 home ownership being cited as one of the reasons why 0:11:18.200 --> 0:11:21.280 there isn't wealth in black and brown communities. Like what 0:11:21.440 --> 0:11:23.480 is your theory on, like, you know, well you don't 0:11:23.480 --> 0:11:27.400 need home ownership. Is that because home ownership? Maybe that 0:11:27.559 --> 0:11:29.280 was the Well you tell me, Like, why is it 0:11:29.280 --> 0:11:30.720 that you push back on home ownership? 0:11:31.720 --> 0:11:33.679 First of all, I'm so glad that we get to 0:11:33.720 --> 0:11:37.880 talk about personal finance and race, personal finance and politics 0:11:38.120 --> 0:11:41.160 because money is political, and that is one of the 0:11:41.200 --> 0:11:44.199 biggest things that I get pushed pushed back on, which 0:11:44.240 --> 0:11:48.520 is I literally have you know some dude wearing Oakley's 0:11:48.679 --> 0:11:54.000 telling me stick to finance? I go, are you? Are 0:11:54.000 --> 0:11:58.439 you actually? Do you actually lack this level of intellect 0:11:58.679 --> 0:12:02.040 that you don't realize money is as political as it gets. 0:12:02.480 --> 0:12:06.560 The reason housing is expensive is political. The reason healthcare 0:12:06.640 --> 0:12:10.320 is expensive is political. The reason you drive a big 0:12:10.360 --> 0:12:13.600 ass truck is political. It's not just that you like 0:12:13.679 --> 0:12:16.840 the truck and it's got a hemi engine. No, it's political. 0:12:17.640 --> 0:12:22.960 So when it comes to home ownership, I have a 0:12:23.080 --> 0:12:27.400 very strong point of view on home ownership and it's multifaceted, 0:12:27.480 --> 0:12:29.600 like home ownership is in this country. You know a 0:12:29.600 --> 0:12:36.320 lot of people they obsess over their marble island. Okay, 0:12:36.440 --> 0:12:39.920 they obsess over what color their cabinets are. What they 0:12:40.000 --> 0:12:42.960 really should ask questions about is is why am I 0:12:43.360 --> 0:12:48.280 not allowed to build an adu or a granny unit 0:12:48.520 --> 0:12:51.240 in my backyard? Why is that not legally allowed? Why 0:12:51.240 --> 0:12:54.480 am I not allowed to build multiple stories if I 0:12:54.559 --> 0:12:59.480 want to? Why am I required to have a gigantic 0:12:59.600 --> 0:13:02.640 bat front yard that nobody uses, and I actually have 0:13:02.679 --> 0:13:05.559 to spend time and money to mow it. And by 0:13:05.600 --> 0:13:09.920 the way, what role did race play in all of 0:13:09.960 --> 0:13:13.800 these rules? Why is it that in America single family 0:13:13.800 --> 0:13:19.439 homes are the American dream? Why is that? And most 0:13:19.480 --> 0:13:21.240 people have no idea, They never thought about this, They'd 0:13:21.320 --> 0:13:23.600 rather think about the color of their cabinets. So when 0:13:23.600 --> 0:13:26.360 you read books like The Color of Law, you realize 0:13:26.360 --> 0:13:31.360 that home ownership redlining, that home ownership has been a 0:13:31.400 --> 0:13:39.280 wedge to drive wealth for primarily white Americans in this country. Historically, 0:13:39.320 --> 0:13:43.120 it's not an accident. It was intentionally done so, and 0:13:43.160 --> 0:13:46.360 so freeways were created in poor communities and that has 0:13:46.440 --> 0:13:50.440 lasting effects. Okay for a lot of people, probably not 0:13:50.520 --> 0:13:54.360 listening to this podcast, maybe listening to Joe Rogan, that 0:13:54.400 --> 0:13:59.280 would be shocking, and many of them simply deny it. Well, 0:13:59.320 --> 0:14:01.680 if you try hard, harder than you can make more money. 0:14:02.000 --> 0:14:04.920 I'm sick of that shit. We've all heard it. And 0:14:04.960 --> 0:14:07.160 if you actually understand history, if you've read a single 0:14:07.240 --> 0:14:09.080 history book, you know that that's not how it works. 0:14:09.840 --> 0:14:13.800 There's not bootstraps. When they're running a freeway through your 0:14:14.160 --> 0:14:18.800 and intentionally dividing your neighborhood as they did for decades. Now, 0:14:19.320 --> 0:14:22.480 let's talk about home ownership as an investment, because that's 0:14:22.520 --> 0:14:27.720 a it's a related but different concept. In America, we're 0:14:27.720 --> 0:14:32.520 obsessed with home ownership. We believe that if you rent, 0:14:32.800 --> 0:14:37.440 you're a loser. We believe. We even have phrases borderline 0:14:37.440 --> 0:14:42.920 religious phrases, you're throwing money away on rent, you're paying 0:14:43.000 --> 0:14:47.360 your landlord's mortgage. I call them religious because they lack 0:14:47.440 --> 0:14:50.360 any actual data. They're just words we repeat over and 0:14:50.400 --> 0:14:53.480 over and over until people actually start to believe them. Well, 0:14:53.520 --> 0:14:57.040 it turns out that home ownership is certainly one way 0:14:57.360 --> 0:15:01.400 that you can build wealth. Historically, in our country, it 0:15:01.440 --> 0:15:04.720 has been a very powerful way to build wealth. That's 0:15:04.760 --> 0:15:09.920 not simply because homes themselves are great investments. It's that 0:15:10.800 --> 0:15:14.640 when people in this country buy homes, they become Nimbi's 0:15:14.880 --> 0:15:18.520 not in my backyard. They prevent more housing from being built, 0:15:18.640 --> 0:15:22.080 therefore artificially boosting the price and value of their house. 0:15:22.920 --> 0:15:26.160 And so they basically, like a diamond dealer, they limit 0:15:26.200 --> 0:15:28.160 how many diamonds flood on the market, they limit how 0:15:28.160 --> 0:15:30.160 many houses, and so they buy a house for two 0:15:30.200 --> 0:15:32.680 hundred thousand dollars and the value goes up. If the 0:15:32.720 --> 0:15:35.160 market were actually free and we could build as much 0:15:35.200 --> 0:15:38.280 housing as is necessary, their house would look much more 0:15:38.320 --> 0:15:41.880 like Tokyo, where prices do not go way up, and 0:15:41.960 --> 0:15:46.640 instead housing is like any other commodity you buy, it depreciates, 0:15:47.360 --> 0:15:50.240 in my opinion, as the way it should. So the 0:15:50.280 --> 0:15:52.960 thing that people find controversial is that I say you 0:15:52.960 --> 0:15:55.280 should run the numbers on the biggest purchase of your life. 0:15:55.640 --> 0:15:59.480 And sometimes renting can be a superior financial decision to 0:15:59.600 --> 0:16:04.520 owning house, which in my case it absolutely is no. 0:16:04.640 --> 0:16:07.320 And that makes sense because I mean, so I'm because 0:16:07.320 --> 0:16:09.200 people are like, I know, they're like, Tiffany, you brought home. 0:16:09.240 --> 0:16:11.920 So I'm like, yes, But the caveat y'all, remember that 0:16:12.000 --> 0:16:14.600 I purchased a home I'm living in now. It was 0:16:15.240 --> 0:16:17.640 it was a foreclosure, had been foreclosure for like, I 0:16:17.640 --> 0:16:19.600 don't know, like a year, and so I bought it 0:16:19.600 --> 0:16:21.520 directly from the bank. It was at the time worth 0:16:21.560 --> 0:16:24.280 like three hundred thousand. I bought it for one eighty 0:16:24.560 --> 0:16:27.600 cash so I didn't have to worry about, like, you know, 0:16:27.760 --> 0:16:30.080 like renovating or whatever, and so. 0:16:30.080 --> 0:16:31.880 And then I put one eighty into it. 0:16:32.640 --> 0:16:34.800 So that brought my investment to three sixties, so it 0:16:34.840 --> 0:16:37.080 was around worth about I think I said three hundred. 0:16:37.120 --> 0:16:39.920 I think worth like three sixty three eighty, you know. 0:16:40.040 --> 0:16:42.280 So I bought it really cheap. I didn't have to 0:16:42.280 --> 0:16:45.240 worry about a mortgage. Newark, where I live, it has 0:16:45.280 --> 0:16:48.720 the lowest taxes in Essex County. So my tax at 0:16:48.720 --> 0:16:50.520 the time, I want to say, like seventy five hundred. 0:16:50.800 --> 0:16:53.200 So I was like, okay, And now I don't you know, 0:16:53.240 --> 0:16:56.320 I didn't have a mortgage. And now the house, because 0:16:56.360 --> 0:16:58.280 everything was so crazy, is worth you know, like five 0:16:58.400 --> 0:17:01.200 hundred and five to twenty, especially now just because you 0:17:01.240 --> 0:17:04.760 know everyone's trying to gentrify Nework. And then I purchased 0:17:04.800 --> 0:17:07.600 another home a few like almost around the same time, 0:17:07.880 --> 0:17:11.240 directly from the city a tax ded for ten thousand 0:17:11.320 --> 0:17:14.280 dollars and I put one hundred and thirty into it 0:17:14.320 --> 0:17:19.080 and I recently just sold it for ninety five and 0:17:19.119 --> 0:17:21.399 so but those are not I tell people that, like, 0:17:21.640 --> 0:17:23.719 I mean, obviously that those deals are not available all 0:17:23.760 --> 0:17:27.000 the time. But I to your point, I try to 0:17:27.000 --> 0:17:28.560 be patient because I have to run the numbers. I 0:17:28.560 --> 0:17:30.440 did not run the numbers on my first property when 0:17:30.440 --> 0:17:32.160 I was twenty five I bought a condo for two 0:17:32.200 --> 0:17:34.960 twenty it went up to two twenty five, and then 0:17:35.080 --> 0:17:37.639 I bought a two thousand and six, and then the 0:17:37.680 --> 0:17:40.600 market just crashed and I lost it to foreclosure. And 0:17:40.680 --> 0:17:43.680 so I learned from that, like oh, up until then, 0:17:43.680 --> 0:17:47.000 from two thousand and six to like five years ago, 0:17:47.080 --> 0:17:49.359 I was still renting until I found something that that 0:17:49.440 --> 0:17:52.280 was going to make sense for me, you know, to purchase. 0:17:52.480 --> 0:17:57.320 So it's pretty interesting. I like that you are encouraging 0:17:57.320 --> 0:18:00.560 your listeners to run the numbers. I want to share 0:18:00.560 --> 0:18:02.920 some numbers from my own example as well. So I've 0:18:02.920 --> 0:18:06.800 lived in San Francisco, New York City, and LA and 0:18:07.359 --> 0:18:10.240 high cost of living cities and high cost of living 0:18:10.320 --> 0:18:12.480 neighborhoods within those cities. I like to live in a 0:18:12.560 --> 0:18:15.840 nice place, and I could go and buy a house 0:18:15.880 --> 0:18:19.280 today cash in any of those cities. I choose to rent. 0:18:19.880 --> 0:18:21.800 So when people hear this, it's like somebody telling them 0:18:21.800 --> 0:18:24.280 the sky is green. They're like, wait, I will teach 0:18:24.320 --> 0:18:28.280 you to be rich. Guy rents and they're shocked. Why 0:18:28.600 --> 0:18:30.879 Because again, in our country, deep down, we believe that 0:18:31.720 --> 0:18:34.440 owning is for successful people and renting is for losers. 0:18:34.520 --> 0:18:35.920 And so when they look at me. They go, well, 0:18:35.960 --> 0:18:37.800 this guy has a show on Netflix, he's got this 0:18:37.880 --> 0:18:40.840 best selling book. How can he rent? That's a moment 0:18:40.880 --> 0:18:43.840 where they start to question some of the beliefs that 0:18:43.880 --> 0:18:47.000 have been passed on to us for generations. You got 0:18:47.000 --> 0:18:50.720 to own a house, you gotta build equity. So let 0:18:50.720 --> 0:18:53.120 me tell you. When I was living in New York, 0:18:53.200 --> 0:18:57.520 I kept an extremely close eye on real estate values. Okay, 0:18:58.119 --> 0:18:59.719 a couple of things I want to share that might 0:19:00.080 --> 0:19:04.439 prize people. First off, my rent dropped four times in 0:19:04.520 --> 0:19:09.080 eleven years. Okay, yes, people in America think rent only 0:19:09.119 --> 0:19:13.480 goes up wrong. Just like the price of anything, rent 0:19:13.560 --> 0:19:17.200 is governed by supply and demand. But guess what. When 0:19:17.200 --> 0:19:19.560 I asked, they go, that's not possible. Rent never goes up. 0:19:19.600 --> 0:19:21.200 I go, number one, do you keep a close eye 0:19:21.200 --> 0:19:23.320 on real estate values in your market? They go no? 0:19:23.600 --> 0:19:25.800 I go number two, do you actually negotiate? They go, 0:19:26.000 --> 0:19:27.800 what's that? I go, then, how the hell do you 0:19:27.880 --> 0:19:31.320 expect rent to drop? If you yourself are not actually negotiating. 0:19:31.600 --> 0:19:34.280 Your landlord doesn't just walk in and drop your rent? 0:19:34.280 --> 0:19:36.840 Why would they? You got to ask, and you got 0:19:36.840 --> 0:19:39.200 to have You got to be lucky in the sense 0:19:39.240 --> 0:19:41.879 that there has to be more supply, which there was 0:19:41.920 --> 0:19:43.960 in my case. And you know, you need to know 0:19:44.000 --> 0:19:47.640 your numbers. So that's number one. The second is there 0:19:47.680 --> 0:19:50.280 is an apartment building right next to us, and it 0:19:50.359 --> 0:19:52.080 had this. There was a unit there, it had this, 0:19:52.320 --> 0:19:56.400