The System Wants You To Be Financially Poor - How To Break Out | @Andreduqum x Jaspreet Singh

I would love for you to share first how do you think that institutions profit from our financial uneducation well I think the system our economic system is designed uh to keep the majority of people poor and our economic system is designed to profit off of when people are are financially poor now you might say just you sound like a conspiracy theorist well I'm not trying to be conspiracy theorist D I'm just trying to explain after learning about how money works you start to see why certain things work the way that they do and I'll explain

exactly what I mean Banks profit when you're in debt if you have credit card debt your bank is making money if you're overdrafting your bank is making money if you are spending money on cars that you can't afford your bank is making money when you go out and buy a home you can't afford you're borrowing more money and at the end of the day the more debt you take on the more your lender makes the second thing is corporations profit when you're in debt what do that mean well corporations love it when you spend money

corporations want you to buy their stuff so if they can get you to buy something through the marketing because remember they're hiring the smartest marketers and mbas in the world to get you to want to buy things they're making money what if you can't afford it well they can then sell you the financing to buy their products and now they make even more money because now they get to sell more stuff so corporations love it when you're financially uneducated because now they can sell more of their things governments love it when you're financially uneducated because

well number one if you're financially uneducated that means you're going to be an employee and you're going to be a consumer as an attorney who's not your attorney what I can tell you is that our tax code in the United States taxes income differently when I make money from my investments I say I sell my stocks and I make a million dollars and you make a million dollars as a doctor a Sur you go to work every single day to make the million dollars you're going to pay half of that in taxes depending on where

you live if you're in California half of that's going to taxes as an investor I'm paying 20% in taxes so people who are employees pay the highest tax rates it's called Ordinary tax rates versus investors Pay Less in taxes that's part one of how government's profit but also on the flip side which is consump and what I mean by that is well if you look at now the United States government's balance sheet and I don't want to get too technical but what a balance sheet shows you every single company has a balance sheet it shows

the assets and liabilities the number one asset on the United States government balance sheet are student loans now this one is interesting because obviously there's a lot of talk about student loans and how they're keeping the average person back from buying a home buying a car and building wealth well student loans are also funding the government's spending they are the largest asset on the United States balance sheet and if you don't believe me just go to Google and search the largest asset on the United States balance sheet and you'll see so there's this you know

talk of student loans are hurting our citizens but at the same time the government loves the student loans that they're selling you because they keep funding the government's spending now I'm not going to get into if the government spending is good bad that is up to you to decide but one of the biggest assets there are student loans this then creates naturally a sense of anger banks are evil corporations are evil the governments are evil and now I want you to take a deep breath and I'll let's flip the script a little bit because I

want you to understand the way that this works that way you can use the system and learn how to win in this system because there are some people that learn how to use Banks and they use the bank's money to make them money what do I mean by that they use debt to buy businesses or to buy rental properties which make them money you don't have to use debt I'm not advocating for it but I'm saying that's an alternative way to look at it or you can use Banks as a place to hold your money

and pay you interest as opposed to just paying the bank's interest like when I keep my money in a high interest savings account the banks are paying me Interest as they hold on to my cash cash and I'm not sending them a check because I don't have any credit card debt corporations I like some nice things there's nothing wrong with having nice things you want to be able to buy nice things you just don't want to be buying them when you can't afford them so that means corporations want to sell you stuff fine I mean

that's what every corporation in the world wants to do if anybody starts a business they want to sell their product the problem is people get really negative about it because they feel like they keep buying things that they don't want and so now you got to have that filter okay corporations want to sell me things that's a fact now I don't have to buy it oh okay when you when you realize that you don't have to spend money now you are in control as opposed to letting them be in control so just because Macy's has

a sale doesn't mean you have to go and spend at Macy's and now when you have your money and you know how to use your money you can use corporations because guess what now when you want to buy something nice you can benefit because you can enjoy the value that you're purchasing I have nothing against somebody buying nice things buying a nice home buying a nice car buying nice clothes buying nice stuff just make sure you can afford it and make sure it's something that you want instead of letting the corporation decide that you need

to spend your money it's the same with the government you know hater to love it the United States is the best place in the world to be and they have the strongest military the strongest economy and our system hate it or love it this one took me a long time because this one made me really angry but I'll just lay it out our IRS tax code in our government incentivizes and is designed to benefit the financially educated the wealthy and the business owners period now you can hear that get angry kick scream cry complain or

you can learn and use it I will let you decide what you do with that information but our system benefits certain people more than others if you are an investor you qualify for lower potential tax rates if you are a business owner you qualify for higher potential tax deductions if you are an employee you don't if you are in debt to the government you're going to keep paying the government if you're not you get to benefit from the government services and so this is where now I want you to understand the game learn the rules

to the game that way you can win in the game because what happens to most people is they're playing in the system but they don't know the rules they don't know how money works it's like playing football you go to the NFL and you playing without a helmet on you don't know the rules you're obviously going to get hurt and that's how the majority of people in America particularly are playing they have no idea how the system works yet they're grinding every single day wondering why I have no money left over wondering why I have

no ability to have any freedom wondering why that rich person your Rich boss that greedy person is taking all of your money they're exploiting your hard work and you're sitting here trying to figure out how you can feed your family but in order for you to break out of that system you got to change the way you think you got to change what you learn and you got to change what you do and that's going to allow you to live a completely different life because this system allows for that too but most of us never

learned that because schools don't teach that either the rabbit hole goes deep it does and you know I just love how you shared about it's really like a bug in our code of this consumerist mentality that thinks we always need these things that we don't need and programming things to want things and think that we need them and yeah it it run so deep I too enjoy nice things I enjoy fine quality things um and at the same time you're you're you know sharing how important it is to be able to still just make sure

that you can afford it and and make sure that it really is enhancing your life and that you really value it um and encouraging that delayed gratification to be able to invest in things that will give you much more Financial Freedom and Mobility down the line than just the compulsive spending that Society really rewards right now so our listeners I'm sure on the Spectrum from people just starting out that don't have any money they're just starting to figure out what their career is or how they're going to go out and make money in the world

to people that are you know riding the horse of their career and they're building momentum and they're growing to people that are you know extremely well off when you look at advice that can be the fundamentals principles that support everybody no matter where they're at what are the baselines I know you kind of briefly mentions assets first liabilities like what are the kind of principal fundamental things that everybody should know when it comes to money so I'll I'll break down the Playbook step by step and I'm going to make it very simple and basic because

Building Wealth really is not rocket science you don't have to be a genius but you have to be able to number one invest in your financial education and be willing to make sacrifice if you can do those two things you have the ability to build wealth especially if you're in the first world country number one he's got to earn money how do you earn money doesn't matter assuming it's legal okay if it's illegal don't tell me about it but you can make money from your job make money from your business make money from side hustles

I don't care you got to just start making some money number two is when you make money don't spend all your money and now when you don't spend all your money the reason why this is difficult is because most people assume that if I have $1,000 in my pocket I can buy $1,000 TV no you got to stop spending all your money the more you keep the wealthier you'll become because then number three you take the money don't spend you buy assets not liabilities so a liability is something that I buy that takes away my

money your car is a liability your clothes are your liabilities your vacations are liabilities your home is a liability every time I say that this going to make people angry so let me explain what I mean an asset is something that puts money in your pocket so when I say your vacation is a liability this is the first thing that really gets people upset because they say no jit when I went on vacation it was a way for me to relax and recharge so I can make more money sure but how much did the trip

from Cancun make you uh cost you cost me $6,000 okay did Cancun put any money back in your bank account no but if I no if Cancun is not direct depositing money in your bank account is a liability I'm not saying don't spend on it but you got to understand the difference between an asset and a liability that way you can have more assets to buy more liabilities the second thing is I say your home is a liability and the reason why is because I got started investing in real estate during the 2008 real estate

crash and I'm from Detroit Michigan and Metro Detroit way I grew up in Leonia 20 minutes from you well there you go our office is downtown Detroit so you remember then Detroit was hit extremely hard Leonia was hit very hard by the 2008 crash homes in Leonia were selling for 80% off of what they were selling for before it was crazy and prior to that everybody assumed home values only go up the reason why everybody says your home is an asset is because number one your realtor and I'll tell you this because I was a

realtor you're trained as a realtor to say your home is the biggest investment you're going to make and when you think your home is the biggest investment you're going to make guess what oh well if I'm going to be able to pass down this home to my kids maybe I should buy a little bit bigger maybe I should buy a little bit nicer because you know it's I'm going to build wealth with this home I'm going to pay it off and I'm going to have this this this equity in my home then what happens is

you move into the home you want to upgrade the kitchen you want to finish the basement right you got mean you want to have a nice man cave in the basement and then a few years later something's going to happen to the bathroom now you want to upgrade the bathroom it turns into a money pit so now you're paying every year to maintain the home you're paying every few years to upgrade the home you got to pay for the property taxes you got to pay for the insurance but at least your home is going up

in value right maybe I mean it only really matters when it comes time for you to sell because if it comes time for you to sell and you can sell it for how much you bought it for which is what has happened in the past then it's not I mean you're losing money and even if it is worth more than what you bought it for that means you have to sell your home to actually make any money so that's why I want you to think of your home as a liability even if you financially have

it as an asset because there's equity in your home whatever think of it like a liability because those dollars that you're putting into your home for your maintenance for your upgrades for your taxes for your insurance for your morgage you're not getting any of the money back until it comes time for you to sell and there's no guarantee that you're going to be able to sell it for a profit and if you say I can refinance money out of the home you got to pay that money back plus interest okay so if you're going to

have to use debt to use your own money I don't like that idea so that's why I like to look at these things like liabilities and instead of spending all my money here I would rather spend my money on something that's actually going to make me money what are real assets this might be your own business this might be stocks this might be real estate now you might say well just bre the stock market can crash you might not make money in real estate you might see your business fail sure but what was my mindset

going in to buy these assets when I invest in a business in a stock or real estate I'm buying it with the sole purpose of making money when I go and buy a home to live in I'm buying it to make memories to live in I'm buying it for the experience not for the financial reasons when I go out and buy a rental property I'm buying it that way the cash flow the rental income can pay for the expenses and put some money in my pocket when I buy stocks I'm buying it because I believe

that this is going to go up in value or it's going to pay me dividends meaning cash literally deposit cash into my bank account every 3 months because some companies pay dividends it's a very different mindset and you're going to screw up with this sometimes these assets are going to lose you money it's a part of the process okay you are going to lose money at some point every good investor does but that's also how you learn and that's what's going to allow you to make even more money if you continue investing so now step

number one make money step number two don't spend all your money step number three buy more assets than liabilities the simple rule of thumb here is if you're paying $500 a month for your car you better be paying at least $500 a month for your Investments step number four when you start making your money from your Investments reinvest the cash flow so let's say now you start putting some money into stocks into real estate and you start making some money well the first thing that can be very exciting to do is oh my God I'm

making some money let me go buy a new vacation let me go buy a new car let me go buy some new shoes what I want you to do now is take that money that your money made you and buy more of that asset and the goal right now is to stack your assets when you're trying to build wealth you got to start by stacking the assets that way you can build your wealth first because I want you to make yourself rich before you make Gucci Rich before you make Louis Vuitton Rich before you make

everybody else Rich make yourself rich first there's a lot of joy that comes from that Financial discipline too cuz of course you want increase your lifestyle as you make more money but if you like if you apply that discipline the delayed gratification is much more satisfying it is once you get to that and I don't always follow this like I'm preaching right now you know I I've definitely invested in my lifestyle a lot over the years that I do believe has you know returned back to me and um the connections that I build and like

lots of different things but you know continue I am a big believer of make yourself rich before you make everybody else Rich because as going to lay the foundation for the rest of your life I call it a decade of sacrifice that if you're willing to spend less and earn more so you can invest like crazy the rest of your life you can now spend more money and not have to worry about the price tag because now you have the Investments and the assets to pay for it and that's why the in you're from Leonia

right in Michigan we get snow and if you ever built a a snowman before you start off with this little pile of snow right and then you put it on the ground and you start rolling it in the beginning you're not seeing any progress cuz you want to build this big ball of snow but in the beginning you don't see anything but if you keep rolling it's going to get bigger and bigger and if you keep rolling it's gets bigger faster like every time you turn it it gets even bigger that's how your wealth works

it's called The Compound Effect that in the beginning you start saving and investing you see no returns right a 10% return on $1,000 it's 100 bucks it's nothing but a 10% return on $100,000 is $110,000 and a 10% return on a million dollars is $100,000 so it's the same return it's the same percentage but the amount of dollars you can get as you invest more money it's a whole lot more and that's why in the beginning I say you got to be aggressive you got to spend less earn more invest more when your Investments make

you money reinvest it just keep dumping it in because for that beginning you got to get aggressive for you to build that big wealth pile so we talked about number one earn money number two don't spend all your money number three if you buy more assets than liabilities number four when your assets make money buy more assets number five figure out how you can make more money and the reason why I say this is because what ends up happening I went down this is you start investing your money and you realize whoa I can make

money without me having to do this thing like I can make money my my investments can make me money and I can be out on the beach I can be out running my business I can be out doing whatever and I'm still making some money I want to own more Investments and so now you the first thing that I did was I started spending less money because if I spend less money I have more money to invest which is fine in the beginning and I I went to an extreme like I I stopped spending money

on everything you can imagine I mean I I was really cutting back on everything that I could but there's a limit to how many pennies you can squeeze out of your paycheck out of how much money you're making like there's really a limited pie eventually you won't be able to squeeze more pennies out and that's when I realized that wait if I earn more money now I can also have more money to invest and if I'm working to earn more money There's No Limit now to how much money I can make because there's a limit

to how many pennies I can squeeze out of my paycheck but there's no limit to how big I can grow my paycheck and this is where now understanding what are the different ways that I can earn money if I'm working a job maybe that means I see if I can get a raise I get a bonus maybe I work to get a promotion if I can't do it in this job maybe I got to get a new career maybe I have to go get a certificate maybe I have to go and go back to school

maybe I have to go and get a second job maybe I have to go and do something else yes it requires more work in the beginning especially but you can change the trajectory of your career maybe that means you start a side hustle maybe that means you start a business maybe that means you invest more in your business right I mean there's so many ways to go about doing it but now it's it's really diverting some attention and energy and focus and maybe even money on how you can earn more money so you can buy

more assets not liabilities and when you do that that's going to allow you to build more wealth now the the the thing that I like to mention about this is have a A system that allows you to grow your Investments with how much money you're making that allows you to grow your savings with how much money you're making but also allows you to grow your spending with how much money you're making so a simple rule of way to kind of look about this is uh one of the things I talk about is a 75151 plan

which says for every dollar that you earn 75 cents is the maximum that you can spend 15 cents is the minimum that you're investing 10 cents is the minimum that you're saving now what happens is if you're making $5,000 you know that there's a limited amount of money that you can spend if you make $50,000 you can spend more but you're still investing your money more you're still saving your money more that way hey you want to go out and buy more nice stuff cool you can but you're also investing at the same time because

at the key right the goal is just to buy more assets it doesn't mean that you can't buy some nice things but just make sure you're also prioritizing the assets make yourself rich before you prioritize making BMW Louis Vuitton and everybody else rich