I have read books on financial independence such as Rich dad poor dad, the 4 hour work week, and a ton of other awesome income-generating-asset-producing idea books, and I’m going to sum it all up in this video. Make sure to watch this video all the way through and hopefully all the ideas will click and you’ll be able to start working on your dream and creating the lifestyle you want to. Oh, and I’ll also be including some facts about Selena Gomez throughout this video, and a secret about one of my other videos at the end, so pay attention!
First off, we are going to establish the fact that most people don’t get formal financial education. In fact, if you’re like me, the only education you got when you were younger was from your parents. Watching them balance a checkbook (people don’t even do that anymore), pay for groceries and things they didn’t really need in the store, and working a professional, tax-paying job for every dollar they earned. This is all most people are taught, to look at the rich wide-eyed and frown upon them for their unlawful duties and get-rich-quick immoral schemes. You’re not getting the whole story. Now that I am starting to go on my own, I don’t want to follow down their footsteps, and chances are you don’t want to either. After reading a ton of books on financial literacy, investing concepts, and budgeting tips, I’m here to teach you methods that are different from the norm. First Selena fact: I bet you didn’t know her mother gave birth to her when she was 16.
The first thing we are going to cover was taught to me by Robert Kiyosaki, the author of Rich Dad Poor Dad. Okay, so when you are spending your money, you can spend it on two things. Assets or liabilities. Lets define liabilities first, since most poor and broke people have these. A liability is anything that takes money out of your pocket in the long run. If it’s costing you daily, monthly, or yearly, we are going to call it a liability. If you own a car and you drive it to work every day, it’s a liability. You’re paying for gas, insurance, and every so often you have to pay for maintenance. You’re not making any money with it, so it’s a liability. If you own a house and you live in it, it’s also a liability. If you pay for that expensive coffee before you head in to your job, that’s also a liability. Now lets move on to assets. An asset is anything that brings you in money each day, month, or year. For example, if you own an apartment and you’re charging rent for $500 a month, this apartment is going to be an asset. If you own a small coffee shop on a corner of the street and profit $8000 a month, this is also an asset. If you have solar panels on top of your house, and you’re getting free electricity from them, but you paid an installation fee of $10,000, this is still an asset, it’s just a long term investment. This youtube channel is an example of a low-cost investment asset. If you want a list of awesome income-generating assets, subscribe to this channel. So, now that we know the difference between assets and liabilities, lets get to the main point. To become rich, you must own as many assets as possible. If you want a $200,000 Lamborghini, you must have assets that cover the cost of that lambo before you can buy it. The goal is to have more money coming in than going out. Second Selena Fact, Her net worth is reported to be around 45 million
Okay, onto the next topic. Remember earlier I mentioned something called a long-term investment asset? Well, this is what the rich and super wealthy spend their money on. If you could pay $100 to upload a video, but you earned $1 a month for the rest of your life, would you? I definitely would. In fact, that’s basically what I’m doing with this channel. The idea is to spend money on investments that continually bring you money each month, even if it takes a couple months to pay off. The super rich live for the long term. If you’ve ever played Starcraft, you know the best way to win is to get the most minerals in the early game, just like if you’ve ever played any of those automatic tapping games, once you get a couple auto-tappers going, you’re set and just have to wait. This is the idea you’re going to have to implement into your life to be super rich. Instead of buying extra mineral harvesters or tappers, you have to buy assets such as renting apartments, youtube channels, or solar panels. The third fact about Selena is that she currently has the most liked photo on Instagram, also, it’s reported that she makes over half a million a year simply from her Instagram posts.
Now we are moving on to a specific definition of being rich. So, I’ve heard it before that to be rich is to have a lot of money, and to be wealthy is to have a lot of time, but this video is going to be aimed towards having a ton of both. Who wouldn’t want to spend their summer on a mega-yacht with tons of awesome friends and family eating amazing food and doing fun stuff? First we are going to define absolute income. So absolute income is the total amount of money somebody makes per year. This could be $30,000, $120,000 or half a million, absolute income doesn’t take anything else into analysis, just the raw number of money a person is profiting. This is where most people think wrong when they think of rich. Let me introduce you to a new idea I learned from reading “The four hour work week” by Timothy Ferriss. Relative income is the amount of money someone makes versus the amount of freedom they have. For example, I’m going to give you two people and you have to tell me which has the higher relative income. John is working in New York City. He works 80 hours a week and earns $160,000. He can’t move and has to live in the polluted, highly populated, city of New York. On the other hand, we have Jerome. Jerome works only 10 hours a week, and earns $40,000. However, since Jerome is self-employed, and his income comes from advertisers, he can live virtually anywhere in the world. Who is wealthier? Technically John earns more. Jerome has more freedom though. He can move to Cuba, where he could buy a luxurious house for $30,000, while John has to pay $2000 a month for his apartment. If we break it down, John earns $38 an hour, but Jerome earns a whopping $77 an hour. So if we take this idea and apply it with another topic Rich Dad Poor Dad taught me, we should cultivate our lives trying to earn as much money for each hour of our lives as possible to become rich. It’s simple. If we can cultivate our time to be worth $500 an hour, and we work half as much as someone who can earn $10 an hour, we will always be wealthier than them. Basically, focus on relative income by calculating how much you earn per hour, as well as how much freedom you have in life. The fourth fact about Selena is that she chews pickle-flavored gum and drinks olive oil to protect her amazing voice.
So here’s another topic I want to talk about, but this is only for business owners who wish to build an empire and pay for their dreams without paying any taxes. In America, there is a way to do this. Let me give you an example. In the American Tax system, and quite frankly, some other tax systems worldwide, if you own a business, even if it’s not classified as a business and it’s just self-employed income and your business technically loses money, you don’t have to pay taxes. For example, if I spend $500 creating a video, and that video only earns me $400, I don’t have to pay a dime. The secret is finding creative ways to write off these deductions in a legal manner. If it’s not legal, this is called tax fraud and is a serious crime, so I recommend consulting a professional before attempting this. In most cases, for the self-employed you can do this by making items you would normally buy a write off. For example, if I wanted to eat some caviar, I could buy some caviar, make a video tutorial on how to cook and eat caviar, then use the price of the caviar as a tax deduction. Big corporate entrepreneurs do this with Lamborghinis, just write them off as a “company” car, or the same with a giant skyscraper, vlogging camera, expensive gaming computer, or the new $8000 suit they just bought. Of course they get to use it to improve the quality of their life, but from the business and government world, it was used to improve the business, which in theory improves the economy and you don’t have to pay taxes on it. Oh, yes, now that you are quite invested in this video, I want to introduce a new idea. There’s a psychological effect called the sunk-cost bias, which means after you have spent money or time or effort into something, you become emotionally attached and don’t want to leave it for losses. Take this video for example, there’s still more to watch, and if you’ve made it this far, chances are you realize how much value there is and you’re going to watch till the end, even if I filled it with crap. I don’t but just remember this idea. This is also why many people who are in a dead-end relationship won’t end it, because they feel they’ve invested too much into it and don’t want to waste the opportunity it could have to get better.
The next topic I’m going to talk about is the difference between a producer and Performer. So in the book “The Self-made billionaire effect”, the author states that all billionaires fall into the producer category. A producer is someone who produces raw content, they create new strategies and invent. Producers create value from nothing, and actually give orders to performers. A performer on the other hand, is someone who uses existing processes, and a great analogy of this type of person is a factory-line worker. They’re fast, engineered to reduce errors, and just have to do what they’re told. Now, before we go into which is better, you need to understand supply and demand. It’s not that producers are better, it’s just that there are usually less of them who take risks, which means that the demand for them is higher. There is significant evidence that there will always be a low supply of producers, which means if you want to rake in the big bucks, you’ve got to be good at producing things. Start pumping out more interesting images on your instagram feed, start posting more Youtube videos, start producing more and more content overall. If you really want to take the entrepreneurial side of it, combine this with a concept from the 4 hour work week and outsource this. You could pay someone $5 to upload a relevant creative image on your feed once a day and if you have a large enough audience, you’ll be creating value in their lives that adds up to way more than $5. I wish I could go on about this topic, and I may in another video, but we have to move on, and I’ve got another Selena fact! At the time of this upload, it has been said that she has lupus, and combined with the stress she’s been receiving lately, she plans to take all of the year of 2017 off from music production and social media together.
So one last thing that you should know before this video ends and you start your path to becoming a super luxurious billionaire is that all wealthy people focus more on opportunities than obstacles. In fact, they see every problem as an opportunity to add value and to earn money. It took you 3 hours to hook up your new TV? Why don’t you contact the manufacturer with a simple tutorial brochure you created and tell them you’ll sell it to them for $300 or $1 per TV sold, which ever is higher or fits your current budget best. The idea here is to change your thinking from seeing an event as a frustrating obstacle to seeing it hope-filled with opportunity. Let me give you another example. I started this channel as for a couple reasons but the big one was that I saw a gap in the market. You probably know fight mediocrity, the most-subscribed Youtuber who makes animated book reviews. Well, I noticed for a couple months he was slacking, but people were still wanting his videos. He was probably doing this to make his videos scarce, which in turn gave them a higher perceived value, but I wanted to fill the gap. I loved reading, so I bought a bunch of books, the software, and made my own videos. Now I’m branching out to general advice and mixing all kinds of knowledge I can find and regurgitating it in this super interesting and engaging format. I saw a problem; Fightmediocrity wasn’t uploading as much as the market wanted, so I filled that gap and for like 2 or 3 months I made at least 8 book review videos a month. Now this channel has almost 30,000 subscribers, helps millions of viewers, and brings me in a decent amount of money; enough that I’m a college student and I don’t need any other job. Our last interesting fact about Selena is that she is the youngest ever Unicef’s Goodwill Ambassador.
I hope you guys enjoyed this video and learned something, and if you did, please leave a big fat like down there, it let’s me know if I should make more videos like this. Also, if you enjoyed this video, you might want to check these two videos out, they’re on the same topic and go even more in-depth than this video into technical stuff. If you want more videos like this, click the subscribe button and thanks for watching!
Also, I wanted to point out that Selena Gomez is awesome, and I hope you think so too. One last thing, if you watched my video on the psychological tricks to get a girl to like you, you’ll notice that the thumbnail has Chloe Moretz Grace, but since you watched this whole video, I wanted to give you a secret. Her eyes aren’t actually blue like in the picture. Thanks for watching!