Afford Anything - The Harsh Truths About Money, with Dr. Brad Klontz and Adrian Brambila

Episode Date: October 25, 2024

#552: In this special three-part series, we discuss some of the 21 Harsh Truths About Money.  For more information, visit the show notes at https://affordanything.com/episode552 Learn more about your ad choices. Visit podcastchoices.com/adchoices

We have a special episode today. This is part two of a three-part series with Dr. Brad Clans and Adrian Brambila about how to start thinking rich. Welcome to the Afford Anything podcast. You can afford anything, but not everything. Every choice carries a trade-off. And that applies not just to your money, but to any limited resource you need to manage, like your time, your focus, your energy, your attention. This show focuses on five pillars, financial psychology, increasing your income, investing, real estate, and entrepreneurship. It's double-eye fire. I'm your host, Paula Pant. I trained in economic reporting at Columbia, and I help you focus on what matters. Dr. Brad, Adrian, welcome.

Thanks for having us. Thank you. Thank you for being here. You've written 21 harsh truths about money, 21 harsh truths that take you from broke to financial freedom. In this episode, we're going to be able to. they cover 10 or 11 of them. And in the next episode, we'll cover the rest. Let's start with the first one, being poor sucks. Isn't this obvious? It sounds obvious, but people say that being rich is evil, or they use these examples like there's the depressed billionaire and having money is, it leads to a

life of emptiness and sorrow. So the opposite of that is the people that are usually saying these things, I've actually probably never experienced being poor or poverty. Because as funny as it sounds, we come out and say being poor sucks because not being able to put food on the table is something my parents, my dad specifically he struggled with. He grew up in subpoverty, Mexico. And he's someone that like really experienced being poor. Because of what they did, they built this platform. I'll never have those same adversities and struggles. And so as funny as it sounds, I don't think it's that common sense actually truly being poor sucks. Otherwise, there wouldn't be people who would kind of find ways or excuses to paint the picture that

being rich is evil or bad. And having a lot of money is a problem. Because I think those two truths can't hold true. So I think that's why we have to say it. We have to express and demonstrate it. Right. Because you do hear more money, more problems, or you hear, I'd rather be happy than rich with the implication being that they're mutually exclusive. where do those ideas stem from? Yeah, I think partially it's a psychological and emotional bailout for not having money, for being broke. And in the book, too, we distinguish between broke and poor. So we say a lot of disparaging things about the word poor, but when we're talking about poor,

we're talking about a poor mindset. Our philosophy is that you can be broke, which means you have no money. We like to look at broke as a temporary condition. And hopefully if you're broke, it's temporary. I've been broke, Adrian's been broke. A lot of people have been broke. A poor mindset, however, can keep you broke forever. And so when we insult and sort of give harsh truths about poor, it's about a poor mindset. Because we do know people who have six figure incomes who have a poor mindset. We know people who win the lottery and they have a poor mindset. And because they have a

poor mindset, all the money's blown. So essentially, we want to help people go from broke, but we essentially want to cure a poor mindset because that is the true. tragic mindset that'll keep you stuck forever. What is a poor mindset? A poor mindset is one that just looks at today without having a vision of the future. So they're they get money, they spend money. They have no problem racking up debt or they're not even conscious of their debt. So they're mismanaging that and quite often it's the highest in the worst kind of debt like credit card debt. They're focused on what money can buy them in terms of stuff and our philosophy around what is actual wealth and what is rich, and it's owning your time. And so looking at how you can buy your

most precious resource back, which is for many Americans is owned by their boss. It's owned by their corporation, people who don't care about you at all. And so how can you own more of your most precious resource? So a lot of it has to do with attitudes about money that lead to terrible financial outcomes, mismanagement of debt, and essentially an inability to live a life that you actually want to live. You can have a high income and be poor. Could you have a high net worth and be poor, assuming that it's a self-made net worth and not an inherited one? If you, I think all of us are susceptible to having our mindsets change.

And even if you begin a journey of coming from nothing and you make it to the top, you do have, let's say, $10 million net worth, there's no specific number that you will ever achieve where you don't have to see. stay sharp and you can go switch back to the reverse because the amount of objects that can fill desire is infinite in this world. And you think of celebrities and athletes who earn millions and millions of dollars who at one point in their career do have a high net worth. And then you learn to the stories like, how did this person make hundreds of millions of dollars as a boxer as a career and then they lose it all. So what we believe is the switch that happens is like the accumulation of income. That's that rich skill set. But if you,

you have a high income and you have a poor mindset, it's just a matter of time. If you are able to achieve a high net worth, but you still are operating from a poor mindset, you're on a clock. And eventually that money instead of accumulating is going to be gone because you're not operating from like a rich mindset of like, how do I take this money that I've earned and how do I make money? How do I learn how to save it? How do I invest it so I can live off the income versus just depleting my net worth? So it's something that you always have to stay disciplined. You always have to maintain this rich mindset. And I don't pretend that I am immune to having my mindset go from where I think right now is a positive, rich mindset, to poor mindset. And that's why I have to stay

discipline. For somebody like you, you weren't a celebrity or an athlete. Like that wasn't the thing that helped you build your net worth. You did it through, like most of the people who are listening to this, who have a high or relatively high net worth. Most of us in this community have done it through having either a job or a small business and saving, living on less than what we earn, saving that money, investing that money, reinvesting that money. You know, most of the people who are watching this have done it through good financial habits. What could trigger any of us to slip into revenge spending or, you know, to have that pendulum just swing in the opposite direction or to switch into total avoidance?

I think what we have to admit is that we're all vulnerable. Like, that's the key. And a lot of it's subconscious. For example, my subconscious will give me these brilliant ideas on things that I need to do. And we'll construct an entire rationale for why it needs to happen. And the latest example for me is in the middle of the pandemic. I'm watching influencers like my buddy Adrian. I don't know if I ever told you this story.

But I was convinced that we needed a sprinter van. Like I was just convinced that we needed to do this. A Dodge sprinter van? Well, Mercedes. you know and well yeah I mean well the base isn't that expensive it's the hundred thousand dollar build you're going to do inside of it but look there's a lot of rationale to do this Paul it's the pandemic you don't want to go to a hotel you want a bathroom in your vehicle of course who wouldn't you know we want to travel with the kids whatever and I was convinced and I had

constructed an entire narrative and I was sharing this with my wife and I'll never forget this because at that point I was I would walk to my office each day living in Boulder Colorado a wonderful place. And one day I was walking to work and I looked and I saw a sprinter van there and I consciously saw it. And then I thought to myself like, I wonder how many there are. And so I literally counted the number of sprinter vans. I walked by on my way to my office and it was 12. And subconsciously, it just never made the connection. And my subconscious fed me this thing of and essentially it's keeping up with the Joneses. You know, I felt like I was deprived once I got honest with myself. It wasn't a conscious thought initially.

Here I am arguably like one of the world's leading experts in financial psychology. It slipped into my subconscious and it came with a whole list of rationale about why I needed this upgrade to my life. By the way, it'd be fine if I ended up getting one after that analysis. We ended up not getting one. But how are you vulnerable? Well, it's like you're constantly vulnerable because of your psychological wiring and how it dates back to our evolution as a species and our connection with the tribe.

I felt subconsciously deprived. And I felt like I needed this for my family and for my wife and blah, blah, blah, blah, blah. There's all these reasons that will pop up into your subconscious. But it's all around us. And so we're very vulnerable to it constantly. I think in transparency I'll share. I feel like what could derail me if I don't stay sharp in discipline and keep this rich mindset is shiny object syndrome. And I think I'll just share last week.

I probably spent four hours researching. this real estate opportunities in Japan because they're actually struggling to homes are going for sale for so cheap, some even free in the economy of Japan. And I spent hours doing it. Consider, I just got back from Japan for a few months. I could live there. And like a shiny object like that, I have to stay sharp, like, whoa, okay, hold up. Am I going to really move to Japan? Of course, maybe the house is like $10,000, but it's probably going to cost six figures to renovate. And the shiny ops like this happened all the time. I just learned like a new AI thing that you can build. Of course, it requires investment. There's always shiny.

objects that are there. And I think you have to stay sharp because there's always going to be something that pops up. The next big thing, new opportunity. My mind is always racing. I'm always seeing shiny objects. And as long as I stay disciplined, I'm not, you have to have discipline on your desire and also maintain some control. But I have more respect, appreciate people instead of the ones that say, I would never do something like that. I think it's more, it's not real reality because we're all human. I just think of a really great book I read. It's called This Naked Mine. And it's by Annie Grace. It's about how to live without alcohol. And one thing, she really changed my mind because I used to say things like, I would never cheat on my wife.

I would never cheat my wife. And then her perspective in the book was actually everyone would cheat. You need to operate from that mindset. I was like, ooh, that doesn't sound good. I don't want to say that. Here's a reality. Do you think people that actually do end up cheating, especially with alcohol, use examples, those are people who thought I never could.

So when you actually think, you know what, I'm a human, I could cheat. And so because I can, I should not put myself in a scenario where I drink 10 bottles of beer and put myself in a position where I'm with another person and then things snowball effect, right? So it's like this awareness. And the same thing financially is I'm not Superman. I don't think I'm immune to something else, even though we create content and we read and we're really sharp. So I have that perspective that hopefully protects me to say I always have to stay sharp. So is it in part then about changing your environment so that you aren't

subject to some of the environmental cues that could lead you to become a less idealized version of yourself? Environment for sure is a huge factor of your influence, the people around you, the people you see every day. But environment is not just in the physical world anymore. In the digital world, our environment is when we open up our phone and we pull up on Instagram. That's a whole environment itself. So what is your algorithm showing you? What distractions with shiny objects? What are people saying is the next best thing? you open up Facebook, there's another environment. So our environment is one element. Of course, I can't deny the fact that your circle and your inner circle, they're the most heavily influenced part of

like your decisions the way you think. But you're not protected from bad environments because we have things like the internet and social media. So you always have to stay diligent. Yeah, and I think it's also the psychological construct is overconfidence. And so that, that's deadly. Studies show that, for example, women are better investors than men because of a lack of overconfidence. And it's the overconfidence that I think keeps us vulnerable. So remaining humble and realizing that no, no, you're vulnerable. You're vulnerable to making terrible investment decisions. You're vulnerable to overspending. You're vulnerable to falling prey to the keeping up with the Jones's thing. It's just, it's hardwired. It's baked in to our psychology. And so just being aware that you're vulnerable

can help you combat it when those beliefs arise because you'll kind of know, you'll be able to have some insight into, okay, so that's where that, just getting really curious, like, why am I wanting this right now? It doesn't mean you shouldn't buy it. It just, it really is helpful to really take an honest look at why you're having this impulse, because quite often it's being driven. Well, first of all, it's not being driven by the part of your brain that is associated with judgment, planning for the future and making the right choices. It's a deeper part of your brain and sometimes you need to honor it. Like, sometimes you're hungry and you need to eat. But sometimes it is wired around that tribal stuff that just isn't useful for you today in modern society where

you don't necessarily need to constantly be upgrading your car to make sure that you're safe within the tribe. And so we are, our lifestyle has evolved a lot faster than our brains have. Let's move to the second harsh truth, which is that only poor people think the system is rigged. Adrian, what did you mean by that? That is a harsh truth. When we came up with these book chapter titles, we tried to take a really strong position of the same things that I think are talked about in a lot of financial books. But our positioning is we want each chapter to trigger this like emotional, sometimes gut punch. And then the chapter itself is supposed to be like this loving part. So it's like a little bit of tough love because when you say only poor people think the system is rigged, damn.

Yeah. We sound now arrogant and that sounds very rude. But we break down again, first of all, poor is a mindset. So we're not talking about people. It's a way of thinking. That's a bad way of thinking. And we say in this chapter that the system is rigged, actually. There's tons of things that oppress opportunities that oppress you.

There's a lot of ways to lose. And you have to be aware of kind of the system itself. And once you have awareness, there's a path to get to success. And when it comes to money, when it comes investing, when it comes to real estate, all these different systems, there's a way to fail at them. And there's a way to win at them. So having this awareness makes you start to ask better questions like, how do I not live paycheck to paycheck? How do people that don't have credit card debt?

Like, what do they do? So these questions can snowball us in thinking. And a poor mindset of a person will say, the system is rigged. There's no point. And a rich mind will say, how does the system work? How do I actually get ahead? How do I move from lower class, the 1%? And understanding the rules, this first step of awareness.

Yeah. And the word rigged is there's people manipulating it and pulling the strings and it's set up against you. That's a poor mindset. Are things fair? Absolutely not. We try to do the reframe in that that it's a game. A rich mindset, it's a game. Okay, so there's a set of rules.

How do I find out what those rules are? What game am I playing is the first one? Like, what game are you playing? What game do you want to play? And if you can reframe it to a game, then it's empowering. Like, rigged sort of assumes that nobody like you, who looks like you, who's from where you're from, who grew up where you grew up, who had the experiences you had could ever be successful because it's rigged, it's set up.

And by the way, there are countries all over the world where that's exactly it. There is no upward mobility. And I was sort of shocked to learn this, actually. I have a friend from Italy, he's like, hey, look, unless you were born into a certain family, unless you had a relationship with organized crime, there is zero social mobility. you can't go start a business. You literally can't do it. And that's his perspective of Italy.

I'm not making a comment in Italy. But that's a tough game. That's a tough game to play. And then he realized, I don't want to play that game. And he found his way to the United States where the game is different. So for us, the concept of it's rigged sort of leads to the sense of powerlessness. There's nothing I can do. All these people are conspiring against me.

By the way, that was my thought. When I was growing up, I thought, like, look, my grandparents lived in trailer parks. I have branches of my family, been here since the Mayflower. I thought everything was rigged against poor people. Politicians were, everybody was rigged against poor people and you just couldn't climb the ladder. That leads to a sense of disempowerment and why bother trying? I mean, that's the logical conclusion. So it's a game.

That's the way we want people to look at it. One of the underlying premises that I'm hearing within your answer is that it is the set of beliefs that you carry that lead to certain behaviors. So if you believe the system is rigged, you might be correct, but do you want to be right or do you want to be right? want to be rich. If that set of beliefs leads to the conclusion, the set of behaviors of, therefore do not try, what's the word I'm looking for? It's not disempowering, although that's adjacent to the word. What's the word for a set of behavior that doesn't serve you? Yeah, it's like self-sabotage. Yeah, yeah, exactly. A self-limiting set of behaviors. It's self-destructive, that's not quite the word, but, you know, it's something in that family. Self-destructive, we'll

say set of behaviors. Right. Yeah. Well, and I'll just be honest with you, too. Like, when it's rigged, it's like you got to really unpack that word. Like, what do you mean? There are certain laws put into place that perhaps advantage a certain group over others. It's like, well, yeah. I mean, like, homeowners get benefits. Business owners can get benefits. So is that rig? The word rig is such an emotional, disempowering word. And so rather just look at it. Like, there's a game. Like, there's an entrepreneurial game. There's a reason people start businesses and there's certain write-offs, you know, there's certain advantages, disadvantages. So it's really trying to analyze, like, where is it you want to be and what's the game you got to play to get there? And with looking at it

as a game, it's, what's interesting about that model is that you are essentially learning a set of rules, right? And you might disagree with the way that the rules of the game are written in a given game. You're playing monopoly. There's a certain set of circumstances where in monopoly, it's like really hard to, you know, navigate or on a, but fundamentally, you're learning the rules of the game and then trying to play that game to the best of your ability. Yeah, like, we're actually in this book, too, we're not making comments about the way the world is run and the economics and the politics. I'm not a sociologist. I'm not a politician. I'm a clinical psychologist. And so essentially, my job, my entire career has been, I'm working with somebody and the system is the way it is,

the family system, their neighborhood, the school system, their, There's all these systems that have rules that can feel like, oh, it's all rigged against me because, for example, I have dyslexia. It's like, well, yeah, they're not, the school system is not designed to support you along this journey. Is it rigged because they're malevolent and they want to keep you down? I mean, that probably not in that particular example. So what is the game?

And I firmly believe that we can help people transform their financial life. We even take a stance on that chapter around capitalism. It's like, we're not even saying capitalism is the best. thing, the worst thing. I mean, it might be. Like, you can construct a great argument for that. And maybe we agree with it. Maybe we don't. My point is, it doesn't really matter. Their capitalism is the game. And so you can decide to learn to play it and do well, or you can decide not to learn to play it. If all of a sudden we found ourselves in a different system, we'd probably be writing a book on how to succeed in a more of a socialistic.

And there'd be games, I would imagine, that you could play and in rules that you would have to follow to succeed in that system too. So we're not even making a comment on the preferred system. It's more like the system you're in is the one you're in. We're not here to change the system. If other people want to do that, it's great. I think there's a lot of things that could be changed. That would be great. But we're trying to write a book for the individual who's in that environment.

And if you wait around for all the things that are going to be changed for you to make, it's not going to happen. So given that, what can you do to advance in your life and the ways you want to advance? The first step is to realize, like, what game are you in? So I'm going to go my specific example and my wife's example, because we have two different stories that could relate to people. I, soon as I got in my first 9 to 5 job, I recognized that the game to, like, excel,

and my first job was a potential retirement to go from a customer service employee to maybe one day being a manager was a seven to 10 year game. And I'd have to work there and maybe get three to seven percent increase on my salary. I had that recognition. I, like that force says, like,

is this what I want to do? And the answer was no. I didn't like being micromanaged or managed. That's when I first started my side hustle. And even though my side hustle didn't pay me any money for two years, I wanted to change my game so badly where I could be in control of my freedom and time and have more power on how much money I make based on my abilities. And it took me five years of side hustling until I was finally enough to make it.

And I quit my 9 to 5, which was awesome. And so far I've been an entrepreneur full time since 2015. Broadly speaking, so there are people who work in 9 to 5 jobs and there's a specific game associated with that. There are people who are bootstrap entrepreneurs, like the three of us. And then there are people who are funded entrepreneurs, the Silicon Valley venture capital, angel investor. That's a completely different game, utterly different game. And... Way more losers in that game, by the way, the winner. And there's nothing against that, but you need to know that about the game. Right. And I think the big eye-opening thing is, oh, it's a game.

Like, if you can just wrap your head around that, it shifts everything, that big mindset shift. Right. And people often, this is an observation made by Morgan Housel, and he was talking about stock investing, but I think it applies here too. Often people are led astray when they take cues from others who are playing a different game. That's so good. I feel like the stats on day traders specifically, professional day traders, 95% of them have a losing record over a 30-year time span. So I think that if every person knew that who decided to open up a Robin Hood account or whatever and started trading stocks, there's only 5% of professionals

that actually make a profit over 30 years, I would hope that the recognition awareness of that game and those rules and those results would be like, you know what, this is probably like gambling. And I probably shouldn't mess around with this stuff. That awareness of what the rules are and also the results of the people play in the game like look at their quality of life is it what you envision are they living on the perception does it does it seem like they're doing it those are great models i think if you want to do something like brett shares often like how he want to write a book that's a game in itself like how do you become an author and a lot of the times he was asking people who weren't in the game so he was getting really terrible advice and a lot of people actually saying good luck it's never going

to happen and then he met someone that was successful at the game and doing it but yeah this awareness is it's so big. Let's talk about the third harsh truth. You don't want to become a millionaire. You just want to spend a million dollars. That's right. We busted you because we know that that's what you want to do. We actually start that chapter with a question. So if Adrian and I gave you a million dollars, what would you do with it? And I used to go to high school classes and low income areas and ask this question as my speech in their econ class. And I'd just sit back and here, what people had to say. And the typical American answer is they're going to start to give you a list of all the stuff they're going to buy. And just mentally, you could take out a calculator. And as they're

talking, you could start with a million and then you could just start subtracting all the money, all the way until it's zero. And because that's what most people do. And we're just saying that is a poor mindset. So if your vision of if I had a million dollars, this is what I would buy. And by the some of this stuff is great, you know, I'd buy my mama house. I would invest in a business. And then, then of course, all the consumer stuff that people just want to blow it on. But our premise is that is a poor mindset. A rich mindset would do one thing with that money and one thing only. They would take that million dollars and they would invest it and using, and they might leave it in there for 20 years and just let it grow to 7 million or 10 million or 20 million.

Or maybe they want to enhance their lifestyle. So they'd use the 4% rule. They take out 40,000 a year for the rest of their lives. And with that $40,000 year, maybe they start a business. As Adrian said, most fail. You can start another one the next year. And then another one after that, until you get your business going. Maybe you take a few years of it, save up, buy a house. So this is really meant to sort of shake the reader around what is it you think you're

going to be doing with this and just to try to identify what's a poor mindset and what's a rich mindset. Do you think in the fire community, though, there are people who don't want to spend a million dollars, they want to be millionaires? Yeah, that chapter's not for them. They're doing great. Actually, the chapter for them is you need to spend some money. The chapter for them is retirement is for dead people. Yeah, that's the chapter for them. That's coming up. We're talking to you, Fire. It's coming. The Fire movement is a great example. They're the people who challenge the status quo that we should be saving and investing 15%. They're like 15. Those are rookie numbers. Like,

bump those up. How do we get 30? 50. It's a great community. It's a great community. if you're not in to really learn about there's other ways of like fast tracking our path to retirement. But maybe a conversation for another time or later. There are some cons to it on defining what retirement is because there's stats on people that retire and then they die after or they lose purpose. They get depressed. In terms of strictly speaking, the challenging our consumption habits and investing aggressively in the fire movement, there's usually a line of thought of what those investments are.

Man, only can come in. And I was living that fire movement to the best example. I lived in a van for an entire year. I had a super high income that year, the most I ever made during the pandemic. It was $1.7 million. I saved and invested 95% of it. And that drastically changed everything in terms of my trajectory of things. So it's like I lived everything to a T.

And then right now, I don't live in a van anymore. I have a nice home in Austin, nice car. But so I can say as someone that's been like the purest definition of the fire movement, to now, I would say I have the fire mindset mentality, but I'm not a minimalist anymore. Like, I believe in the move. I think it's overall doing a really great thing than versus the maybe a couple of things that pose deeper life questions. Like, now I don't have money problems.

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future orientation. You have to have a future orientation because essentially we were wired to consume it all right now. That is the natural state of being. And if you think about it in our development on earth, it's like you couldn't save anything anyway. Like we're hunter-gatherer tribes. We're mobile. So first of all, how much crap can you carry around? That was the first question on your back. And the answer is not a whole lot. You couldn't really save food because it would spoil. You couldn't have too much stuff because people would get jealous and perhaps kick you out of the tribe and shame you because you're not sharing enough.

Or they'd steal it from you. Or they'd steal it from you. Absolutely. And so what's crazy is not that people spend all their money. What's crazy is that some people don't. Okay, they're the weird ones. And that's why they're less wealthy people. And it's so interesting because, again, you can get in all sorts of like philosophical debates.

but I've run the numbers and you can actually work in fast food as a line worker your entire life and retire a millionaire without saving 95% of your income. So I hope that we're running out of excuses at some point. I really do. And I mean, I've run these numbers with kids who are working in fast food. I'm like, you don't have to do this. You go to college. We can show you lots of different ways to become a millionaire if that's your goal.

But they all do require you to have this shift from immediate gratification, which is how we're to do, to I'm going to delay. some of that for a future goal that's really exciting for me. I can imagine, though, there are going to be some people listening to this who right now are yelling at their device going, wait a second, the cost of groceries has gone up, the cost of health insurance has gone up, the cost of breathing air and drinking water has gone up. How do you save in an environment where it doesn't feel as though you're spending on discretionary items, it feels as though everything and more is going towards necessities. Right. Well, if I didn't love you, I would just say, yes, I know, it's

hopeless and there's nothing you can do about it. And maybe magically things will get better in the future. If I didn't love you, that's what I would say. But if I loved you, I would say, yes, you're right. And what are we going to do about it? What are you going to do about it? We actually, we'll get to it later. We have a chapter that the fire movement will love where we tell you, we're going to do the math for you on what you could do if you can't afford to invest. The cutbacks can be kind of painful. I'm not a big fan of the cutbacks. So what I would be looking at is how can we increase our income? What do we need to do here? There's the cutting side, which isn't very fun, but you can do it. You can become multimillionaire by cutting out some things that everyone who's listening

to this is doing right now. But it's more fun for me to find ways to increase my income, essentially to make it. By the way, I'm trying to avoid like spoil alerts on the next chapters we're talking about. So yeah. If I'm being cryptic, it's because we'll talk about it soon. Oh, okay. All right. And I will say to the point of increasing your income. So the five pillars that we talk about on this show is financial psychology, increasing your income, investing, real estate and entrepreneurship. So it's fire with two eyes, double I fire. Love it. And so increasing your income. It used to just be, that used to not be a pillar in there. It used to be financial psychology investing real estate entrepreneurship. But then that was my redefinition of

fire. But then I added increasing income because even though it kind of spoils the acronym because it adds a second eye. So now I'm misspelling such a basic word. FIRE. Right. But I'm willing to mess with the acronym to misspell the word because it was just too important to leave out. Yeah. We're huge fans of that. It's a much better emotional experience to have more money coming in then to cut out all the things you love. And if you really want to have a terrible experience, do it with your partner and sit across from each other and just cut out each other's love her life and all your passions and the things you want to do. It's not very much fun. Right. Right. You can't shrink your way to greatness. Right. You had a car that had a leaky

roof. This is in Kauai. And so you drove barefoot because it would get flooded. The floorboards would get flooded. I did. Yeah. So it had a leaky roof. roof. I spent about $450 for it. And I was in the fire phase, man. I was trying to pay off my student loan debt. It was at eight and a half percent interest. I own $100,000. I'm like, I'm going to pay this off in three years while fully maxing out my retirement plan. So I was hot to not be poor. Like I was really not wanting to be broke and poor in the long term future. So that's what I did, you know? And I eventually figured out how to bondo the top so it stopped leaking. But yeah, I was sort of laughing at myself while I'm doing it too. And it was fun. It was the game. It was my game

towards wealth. I was proud of it. I was working at a high school at the time, too. And by the way, the nine to five thing, I became a millionaire while working in a public high school. And then I later became an entrepreneur. But yeah, it was like a few weeks into it. Well, not a few weeks, but it was a few years into it. I'm pulling up to the school and one of the kids I'm working with sees it. And then as I'm walking into school, I'm like, is this a really good model for like stay in school? Because I'm in there trying to get them do their homework and all this. I'm like, I got to rethink the brand image a little bit. So I eventually upgraded to a used Jeep Cherokee, which didn't leak, which, by the way, is great.

I got a leaky car. That's something to aspire to do better. I drilled holes in the floor, actually, to solve that problem in the short term so that it would leak out. But, yeah, when I hit the brakes, the wall of water would rush forward. And so, yeah, I drove to school barefoot. So you would drive barefoot so your shoes wouldn't get wet. Yeah, and I'd roll up my pants, too. Can you beat that one, Aid, fire people?

Leave a comment. Did I mention I lived in a van? Mercedes Sprinter van. I had a 23-year-old Toyota Corolla where the body was so rusted out that you could poke your hand through the body of the vehicle towards the outside. And so this is when I lived in Boulder, Colorado. And so it would snow and it would snow into the vehicle. Right. Because the window didn't fully roll up and then the body was rusted out.

so all the weather would get inside. So it was an all-weather interior. It's a great example of how being broke. Right. With the right mindset is exciting and fun. And we're sitting here bragging about how broke we were. And the only reason we're doing that is because we're doing it for a purpose. Right. We're on a path to greatness, if you will. And so it's cutting back and doing some of that stuff now is actually fun. You can make it fun. If you're thinking, this is my life. It's always going to be this way. That is a very disempowering mindset. And not only that, it would probably make you spend more and getting credit card debt because the sense is like, no matter what I do, it's not going to matter, this is my life. So of course I'm going to spend my

credit card debt. I'm going to rack it up. You know, get it while you can sort of mindset. And anyway, surround yourself with people who brag about how humble their beginnings were because they had their mindset on financial freedom in the future and what they're willing to do to get it. Inspiring. I think another perspective is also enjoying the journey. And I feel like if you're tuning in, you're just meeting all of us, and here we are at this level that we've achieved, and you say, well, it's easy for you to say, sit down this couch and you're, you have to worry about money, and here I am struggling. I actually have proof that back in, when I first graduated college, and I was working at the call center, basically making minimum wage, and I was working

on my first YouTube channel, which was teaching people how to dance the robot, and I was struggling, struggling. I enjoyed it. And I have proof because I journaled back that. And I was working. I, When I read my journal entries, it is rosy and optimistic. And I talk about, I finally learn how to make a WordPress website. And I'm super excited. And I hope one day. And I'm talking about my hopes and aspirations. So the tone of voice I'm reading, it's like, man, I actually loved the journey.

And I had a Walmart. I would eat my, I buy like a big frozen bag of Walmart veggies. And then I would microwave them. And like, it costs like, I think one journalist is like two bucks, three bucks. And it would last like a few days and stuff. So the things I was doing, like one perspective is like my life. Life sucks. I have to eat Walmart, frozen vegetables, and re-micrame them. Like, that's terrible. But I never had that. Actually, I enjoyed the journey. I enjoyed the process. And my entrepreneurship

journey was not romantic. The only person that watched my videos at the beginning was my mom. Like, I was my mom watches like two, three views. I would write that as like, my mom's the only one watching right now. And of course, there's frustrating days. There's journal entries that say, like, man, I feel like I'm not going anymore. Of course, there's doubt. But I wasn't always energized. Like, I was frustrated, too. But overall, I can say I enjoy. it really does come down to what you spend your money on, though. So it's about buying freedom and about putting it into experiences. So you can spend time doing what you love with the people you love.

That's how money is best put in service towards happiness and fulfillment. You have a journal entry in which you wrote that your aspiration was one day to earn $60,000 at your day job and then another $15,000, $1,000 per year from your side hustle. So your aspiration was that one day you would earn a total of $75,000. And then you actually even went more granular and said, and I hope that when I'm making, eventually one day when I make $75,000 a year, that I have of that $400 a month in discretionary disposable income. Man, it makes me cringe and laugh and be frustrated all at the same time

because I'm so glad I had a vision and goal. Because when I wrote those things, I was basically making minimum wage. I also am frustrated at myself that I, like, that's it? Come on, Adrian. That's all your goals. But the number, I think, is less relevant. It was more of what the number represented to me. And because that's when I started reading financial books, self-help books,

and across all these financial books who are saying, $75,000 a year are the happiest people in the world. That's like what I was reading. So my number was based off that. perception. But I've learned from experiencing it and now making that in a month more. It's like, that's not true. I think also that study held me back from making more money sooner because I thought, well, now I'm already at 75,000 now. I'm really happy. What if I make $10,000 more? I don't be $10,000 less happy. So I think it held me back in a way too. But overall, I think I'm glad I had a goal. I had a vision. I wouldn't to not make minimum wage. And it doesn't matter what your number is.

is. It's really more of what it represented. I thought at that time, $400 in discretion and income meant that I could go to restaurants and try new food and maybe like save enough of that to go on a trip. And again, when I talk about that, I'm like, man, I didn't dream big enough. I really didn't. And now I feel like I, when people ask me their goals, I usually will, my common response is like, that's it. You sure you don't want more? Because I feel like maybe if I had higher goals, I could have, my mindset would have been totally different. I would have been not satisfied, which could be a good and bad thing to not have satisfaction. But yeah, it's, man, goals are tricky. Do you have any, like, back then? Yeah. You also bought like a $450 car. Yeah,

yeah. Yeah. So like I know the asking price was 500. I got it down to 450. We were impressed by that. Yeah. Yeah. Did you ever journal or do you remember like what was the number for you of like? I have an email that I sent to a mentor when I was a senior in college. So it's memorial. I'm memorialized an email. There's a written record where she asked, you know, what are your income goals? And I said, I want the amount of money that I make, the annual amount that I make in thousands, to be equivalent to my age. So when I'm 23, I want to make 23,000 a year. 24, I want to make 24,000 a year. When I'm 40, I want to make 40,000 a year. When I'm 50, I want to make 50,000 a year. That just sounded like so much money. And I couldn't imagine wanting more than that. What do you think of that looking back at now when you wrote that? What do you feel? So at the time, I was budgeting very, very strictly, and I was living on $1,000 per month.

Now, this is in 2005, so you've got to adjust that for inflation. But that's the equivalent of, I mean, I don't have an inflation calculator on me, but I'd estimate maybe 1,300 a month in today's dollars. So that's really not a lot. And I was paying, that was my rent. It did not cover health insurance, but it covered rent, it covered groceries, it covered utilities, and it covered gas and insurance for my $450 car. And so making $1,000 stretch to cover all of those bills took just enormous penny pinching. In fact, I regret that I did not take out debt. I really do. If I had even taken out $500 a month, it would have made my senior year of college so much easier.

I regret that I didn't go into debt because that would have been such a relief at that time. So I think that in that moment, because I had learned how to live on $1,000 a month, it made my thinking small because anything beyond $12,000 a year just seemed like so much money. Like what would I possibly do with that? I think no matter where you're at right now, if you're trying to level up, it's important if you've just learned from these two stories to have some type of North Star or direction. And the direction itself, like the end goal, I actually think it's not as important. You don't realize it now, but like the level, I don't remember the day I probably have a general entry of when I finally made $75,000 a year.

Like I wasn't instantly happier that day. And same thing, when you started hitting your income goals based on your age. that doesn't matter as much it's more of like what's going to compel you to take the action and this is where i mentioned too for especially youth a lot of people that follow me like they're they're obsessed with sports car they want a Lamborghini or something like that and although i lived in advance on the very opposite of a Lamborghini i actually don't care if the Lamborghini is the thing that starts getting you action because that's the motivation and drive i think it's superficial but my opinion doesn't matter what's going to actually be it for you that starts exuttering you start taking action

you start doing these things, you start investing, you start side hustling, start learning. It doesn't matter what it is. I think it's more, there's more depth if it's about love, it's about relationships. Like a lot of single moms that say, like I want to provide for my kids. I want to spend more time with the kids. Like that to me, I get behind that. I can't really get behind the, yeah, I'm like get a Lamborghini. But again, everyone's different.

And there's no right or wrong, but you need some type of direction that's going to compel you to take action. Mine was the idea of $75,000 a year. Yeah. People often lament that the goal post. change, but maybe that's a good thing, right? Maybe the goalpost should change because that means that as you ascend to each next level, you're thinking bigger. Yeah, and people get frozen on not sure where they need to be. And I worked with, like I said, in high school for many years.

And I was always really happy when a kid would say, I'm going to go to college for four years. I'm going to become an engineer. I'm going to get a degree in this and that and the other. And I'm sitting there going like, yeah, we'll see. We'll see what you end up deciding to do. I'm just super stoked that you've got a North Star because you can revise it along the way. The ones that I was most concerned with were the ones who had no vision. They weren't sure. So then they were frozen. And so my advice to them was always like, I don't care where you're going, but you need to be moving towards it every day.

Because we know that sitting on the other side of it, I had no idea that I'd be a financial psychologist. I had no idea. I just went to college for wildlife biology, frankly. Really? Yeah. That was a major? Yeah. And then I walked into the algebra class and some guys.

I spent 15 minutes writing a formula on the board. And minute 13, I walked out the back. And I'm like, I'm like, I'm never going to pass this class. So I switched to psychology where there's stats, but there's not that kind of math. And you have no idea, you know. So, and you're going to learn along the way. And each step, even if you go down the wrong, a wrong path, quote, wrong path, you're going to learn so much. But the key is to keep moving. Keep moving. Don't wait for the ideal goal. Don't wait to you have it all figured out. You're never going to have it all figured out. News flash, 90-year-olds don't have it figured out. It's about moving forward. Right. Let's talk about the fourth harsh truth. Your beliefs about money are keeping you poor.

So in my research, we've looked at money scripts and certain belief pattern that we've talked about that will set you up for failure. And these include things like money avoidance beliefs, where money's bad, rich people are greedy, terrible for your financial health, being worshipping money and stuff thinking it's going to solve. all your problems, money status where you think that it's all about outward displays of wealth to show the world you've made it. So there's all these beliefs. But the most important belief that I think that is important to you with regard to your financial outcomes is the name of the chapter. Just understanding that it's your beliefs that are keeping you poor. Because if you can just wrap your head around that, I instantly don't worry about you because I know you're going to figure it out because you're going to start looking at your beliefs. You're going to start looking

at your outcomes and saying, okay, so I'm not happy with this particular outcome. I have too much debt. I'm not making enough income. I've lost all my money day trading. And if you can understand that it's your beliefs that got you to that point, it'll set you on a path of self-discovery, which is really the important part. And you'll do what I did. So this is how I got interested in financial psychology. I lost my money day trading. I had $100,000 student loan debt. I was desperate to get out. I was super anxious about money. I was always taught to never have any debt. I couldn't have through school without the student loan debt. So I did the math and I'm like, all right, well, I'll make more money. So I saw a buddy make, actually as a mentor. I'm not going to name names.

He made $100,000 in one year trading stocks. And I remember sitting next to him at a computer and he's buying stuff on margin going crazy. And I'm like, what's that stock? He's like, I remember it as a cackle. I have no idea. Click. You know, and I watched to make $100,000 trading like that. And I thought, well, oh my God, maybe I can get out of debt by doing this. So sold everything I I had a value, bought a $400 car that leaked, started day trading, had a fabulous run. I got real concerned a few years ago on TikTok. That's why I started creating videos because people are making money day trading. And I was like, oh my God, it's back.

People are going to lose everything, which of course they did, which is what happened to me. Tech bubble burst, lost all my money. And I was like, oh my God. And so here's the question, why would a reasonably intelligent person do something so stupid with his money? That's the question I asked myself. And as a psychologist, I immediately blame my mind. mother. That's what we do. We like to blame our parents. But I literally went back and I interviewed my mother. I put like a recorder in front of my mom and she'd been through this before as my training

and clinical psychology. What was it like for growing up around money? What was it like for grandma and grandpa? I just did a deep dive in my family history and I was blown away by the stories I heard. My grandfather lost all his money in the Great Depression in the bank. I didn't know that story. He lived in his 90s in a trailer park. He never put a dollar in the bank the rest of his life. He was unbanked his entire life because of that trauma. Now all of a sudden I'm like, oh my gosh, no wonder my mom's so anxious about money. My mom was too anxious to invest, okay, but she was so worried about being poor that she saved. And Adrian's parents similar, I think. They savers, but not going to invest anything. And then I'm like, well, no wonder we don't have any money.

She never invested her money. And so I call it a dysfunctional pendulum swing. What I knew is I didn't want to be poor like my family. Oh, oh, and then I meet this guy and he's like, oh, he's trading and he's making money, oh, that's what rich people must do. So I was like, all right, let's do that. I called a dysfunctional pensional swing because I went from a family that was so conservative and so afraid they didn't invest to me investing in the most risky, idiotic way possible and then losing my money. And if I wasn't digging into my own psychology to try to figure out why my beliefs were keeping me poor, I guarantee you I'd have swung right back to my grandpa and my mom's vision up like, investing is risky. We hear this a lot too. Investing is risky.

you lose all your money. And as soon as people say that, I'm like, you're not talking about investing, because that's not what happens. So you probably got a story of an uncle who invest in, quote, invested in a business or quote, invested. And then you look under the hood and it's all this speculative stock stuff or penny stocks or crypto or NFTs, all this stuff. We're like, that's not investing. That's speculation. And yes, of course you're going to lose. For me anyway, that chapter, like if you can just accept even the hypothesis that your financial situation you have right, now is because of your beliefs, that opens the door for transformation. With the dysfunctional pendulum swing, the thing that strikes me is that, A, sometimes when

you're too unbalanced in one direction, you kind of have to counterbalance in the opposite direction in order to find equilibrium, and B, sometimes you have to push the boundaries to know where they are or where they should be. Yeah, and I will say this, here's the dangerous part. The average millionaire has had three major financial catastrophes. So I had one when I lost my money day trading. The average non-millionaire has just one. And that's the danger is that if you don't pin it on yourself, you are going to then conclude it's too risky to invest in real estate.

You live through the real estate bubble, boom, never going to invest in real estate again. And you're not looking at should you've taken on the leverage? Should you have done that? should you have bought a house at the absolute max that somebody would loan you money? Maybe you shouldn't have. Maybe it's the wrong market. Maybe you weren't diversified enough. Maybe it was all in real. I mean, there's all these things that if you're not willing to self-examine, you are doomed to repeat it. And you might stop trying. So those experiences are good only if you self-reflect. Otherwise, like what happened my grandpa, never put a dollar in the bank the rest of his life.

Meanwhile, the government came in and guaranteed bank accounts up to $100,000. He never put a dollar in there. So that's the scary part is where you're, you're so traumatized, you become frozen and you're not willing to examine it and unpack it, and then you just keep living that pattern repeatedly, or you're keeping yourself small. Right. With the average non-millionaire has had only one major money catastrophe. The average millionaire has had three. I mean, my interpretation of that is the average millionaire takes more risks, tries more, falls down more, gets back up, more. That's right. And my guess is, well, it's not my guess because research bears it out. The higher network people are more likely to have an internal locus control. So when something goes bad in their

life, their immediate thought is, what did I do wrong? What did I not know? What was my mistake? Whereas people with less money have a tendency to have an external locus control, which is those people were bad. The system set me up for this. Greedy bankers. And by the way, there's always plenty of external things to pin things on. And it gives you the immediate. sense of satisfaction that, oh, it wasn't me. You know, I feel better about myself because it's these other people. Again, it's sort of immediate gratification, but it destroys your long-term success arc because you're powerless, because all these people did this to you. So it's a cope, but it's a dysfunctional one. Well said. Let's talk about the next harsh truth. Your teachers

can't teach you how to be rich. That's a hot take from a former public school employee. What was your role at the school? You were the school psychologist? Yeah, a psychologist there, yeah. But I am a professor at a university. I mean, I'm hoping the dean doesn't see that chapter. And really, the point of that chapter is your teachers can teach you how to be a teacher. They could perhaps teach you how to be a great teacher in what they're doing. But you've got to be careful who you talk to and what sort of advice they can give you. And we also talk about how your boss and your corporation has no interest in your financial freedom. them. As a matter of fact, their financial interest is in you not being financially free. So that is where their interest lies. So if anything, you know, why would they empower you to leave them? And because

you think about how much money you would cost to retrain somebody to take your position. I mean, they're just not incentivized to do it. Right. And so it's about being really selective about who you're choosing as your mentors and making sure you're strategic around what is your ultimate goal. Because we're not disparaging teachers. Most teachers aren't financially free. Most teachers don't own businesses. So if you're looking to be an entrepreneur, maybe don't ask your public school teacher how to do it. If you're looking to be an author, don't ask people who haven't written books. Because if anything, they'd have to be very enlightened to be supportive, but most likely they're either going to be neutral or they're going to advise you against it.

I think the other thing about teachers are just any profession. Because typically as we try to start asking better questions on how to level up, we go within our network. So your boss, if you're going to school or going to college, your role models are your teachers. The exception here is the overall chapter is about where you take advice, but I would say the exception, when would a teacher be a great example of someone that you should take financial advice from? And I would say it's someone that is either on the path to financial freedom was already financially free and they're truly there by choice. Once you achieve financial freedom, you get the choice. It's not saying that teaching is bad. Like you actually, if you

are financial freedom. Don't have to worry about money. You're like, how do I want to spend my time? I want to make impact. And the best way I can make impact is I teach, right? You are a professor by choice.

You have a cheap financial freedom. You're not doing because you have to be there. And I think there are people right now who don't have financial freedom, but they're doing all the right things are on their track. And it's a little more discovery on like those conversations to develop

versus an assumption that because someone is in a position of leadership means because of their position of leadership, they've had to do some successful things to get there, but doesn't mean that they're going to be the best person to get money advice. So it's just being more aware of where you're tuning in, where you're getting the information, and not this blind trust that just because people that are in these default positions of leadership are there because they truly want to be there.

They may actually be in worse financial positions than you are. I actually remember I went to school at a D3 college. I played soccer. And one assistant coach, as I started to do YouTube and side hustles, and I was really involved in my university. I was just fresh out of college. And I talked to him,

and we just started talking about money for some reason. And he never disclosed. He says, I bet you you have more money than me. And I have probably like hundreds of dollars in my bank account. I was like, there's no way. And we're going back and forth. Like, I know you don't have, like, I only have $300 is what I was thinking. And I don't know what was in his head.

But he had this assumption. And that's something, if he would have never said that, I just would assume, oh, he's my coach. So he has money. He's probably successful. Like just because student coach, you make that assumption, that's what we want to just clear there. Just because a teacher's there, the boss is there, leaders there doesn't mean that they're financials are there. Right. I think that goes back to the idea of be incredibly judicious and discerning

about who you take advice from. And don't take advice from anyone who has not achieved the thing, the outcome that you want in the specific domain that you're asking about. I love that. And we'll give this little caveat of it's okay to get advice from somebody who's a step or two ahead of you. So we use the example of, let's say you want to get into politics. Well, getting a sit down with the president, like if that's your goal, is going to be pretty rough. But maybe you can, and this is where you've got to open your mind up and get strategic, maybe, I guarantee you your local city council person will definitely have a sit down with you.

I mean, because they want your vote. They want you to be a spokesperson for them or student board. Find somebody who's already had some success along politics and getting elected. Right. And those are the people that you're going to go interview and sit down and give me the roadmap to get where you are. And so because sometimes you don't have access to those multi-gazillionaires if that's where you want to be. So what you want to do is find somebody who's a step or two ahead of you. Right. And just repeat that process. That's a process I've been repeating throughout

my life. You know who else is great is the University Board of Regents, particularly in areas where the Regents are elected rather than appointed. The University Board of Regents is a great way of getting to know people who have won a local political office, but it's at this very hyper-local level. Right. They'll give you a roadmap to getting there and then you just continue once you've had that level of success. So it's finding the mentors who've either done it or at least a step or two ahead of you and networking to find those people. A lot of times those people are already in your life. You don't even know it. You know, they're one person away. It's your mom's coworker or somebody you know or even a cousin in the family.

And this is a process that you repeat over and over and you gather more information. And essentially what you're trying to do is break out of your tribe, if you will, the comfort zone, the financial comfort zone that people are in and what's normal for them and how they invest or do they at all. You have to expose yourself. If you want to go from poor to middle class, you're going to have to learn the culture and the mindset of middle class. If you want to go from middle class to ultra wealthy, you're going to have to study

it as if you're preparing yourself to go live in another country. It's a different language, it's different customs, it's different mindsets. So you have to equip yourself for that. And that's why we see people who come in a lot of money fast end up blowing it because they go right back to their mindset level. Right, right. And oftentimes when people hear, oh, you've got to study it, they think of the superficial, they wear. This is the music they listen to. It's actually, you know, this is how they handle and this is how they think about their investments.

That's right. I had to research what all those extra forks were. Right. At the place setting. And that made me a lot of anxious. I got nervous any time there's more than one spoon or more than one fork. I'm like, how am I supposed to do with this? Yeah.

But that's not the key. The key is like how are they approaching their relationship with money? Right. In terms, since we're talking about finance here. Exactly. If you want to up your game financially, you're going to have to learn how the game is played at higher levels. Right. And how do they approach their relationship with time and decision making overall?

Speaking of time, let's talk about the next one, which is it's not. your fault if you were born poor, but it is your fault if you die poor. Did you say that? I think it was you. No, actually, I know that is not the first time that's ever been said before. And this is actually a quote from my dad. Again, it's not an original quote. This has been said many times.

You can just Google it. A lot of people said it in time. I wanted to put it in the book. I feel like you probably had a little bit of... I know. I just blame any chapter that potentially could get me canceled, I'd like to blame Adriene. I blame Brad. But we did it together, of course, of course.

This is a day I'll never forget. My dad, we were in California, plucked an orange from the orange tree. We're sitting outside, ate the orange. And then he shared that with me. We talked a little bit about my goals and my future of what I wanted to do. And I can't remember much of the conversation other than that line because it felt, it like struck me. And also instead of hearing it as an insult, I felt actually really empowered by it,

especially if I have the context of knowing where my dad came from. His dad was murdered when he was five. And my grandma, she was commuting from Mexico and back to Halisco to save enough money to bring four kids at the time. When he says something like that, if you hear it without context, geez, jerks, these guys, you hear it with context that's coming from my parents and my grandma, a superhero who brought the family here to the U.S. and lived it. They were truly born poor.

Even though I wasn't born poor, it's the same mindset. It's like it's my responsibility on, okay, just because my debt was paid, it's huge deal, but it doesn't mean I'm rich. I'm still broke, right? So it's my job. Here's my level and now to take me to the next part where now I feel like I'm the first brand villa to have really changed the family tree. We've never had trust funds.

Like that's not a thing. And my kids might be like part. Like we might actually create the first like family trust and do things. So it's like that's the level going off the platform. So it's like two things. I want to acknowledge that there's definitely people. that are born with the privilege financially, but some people really like to focus on the privilege of like, oh, you got this and you got this. And I don't care as much. I care of like, what did you do

with it? So you were given this platform that's as a higher starting point than most people. That's great. But what did you do with that platform? Are you still on that platform? Or did you elevate it? Or are you coming back down of where you came from? But it's supposed to be a very empowered thing. We dive into the chapter. And I think when you know the context, then it will read less as an insult and more of like, this is my job. This is my responsibility to really change our circumstance. So I think essentially what the message is trying to convey it through the verbiage of a hot take is that it's it's not your fault the circumstances that you were born into, but it is your responsibility to elevate above the circumstance in which you were born into

throughout the course of your life. It's fascinating that it's a hot take. It really is. It's not like you're on your deathbed at age 92 and Dr. Brad is leaning into ear and saying it's your fault. So interestingly, an entire cancel campaign was launched against me around this particular chapter title. And the way I phrased it was, I did it in a TikTok video, and there's this group of financial counselors that just tried to cancel me for this. And I find it really curious. To me, it's really curious. By the way, I love it too. I just love all that attention.

But it's sort of mind-blowing to me because in the way I phrased it was, you know, it's not your fault if you're born poor, but if you die poor, isn't it just a tiny little bit your fault? That's the way that it. And people are outraged by this. It makes me want to talk about the whole idea, like, why are we talking about it this way? Why are these harsh truth? And essentially, I'm a clinical psychologist. And I believe in people's ability to transform their own lives, regardless of circumstance. And I would challenge anyone out there who says, no, it's impossible for you to name the person. Tell me the person who this is impossible for. We want their name and we want their number, because agent and I are going to call them, and we are going to help them improve their financial lives. And I'm 100% confident we can do it. That's because I love you and I believe in you.

So essentially, my vision for this is like as a psychologist, every now and then in the high school, I'd get up and I'd shut the door so nobody out there could hear what I was saying. And I would just give it to the kid straight with the honest, unvarnished truth, not worried that a teacher is going to be appalled. Oh, my goodness. And literally to the things like, how do you get an A in biology and I would train them to make eye contact with the teacher and all these other subtle tools that improve their grades that had nothing to do with their test performance. And essentially, I'm teaching them how to increase their social skills. So they're more effective in the world, right? And so it's like, oh my gosh, you would say that? You should be telling them they should

study more. Well, I'm giving them also these other life hacks that are really true and that will really increase their performance because you get better grades when you get your teachers to like you. okay and when they don't like you they're going to give you worse grades and so that's a real truth about how the world operates but it's not necessarily the politically correct thing to say in a school system because it's no no they need to study because we're fair graders here we don't do that so we're trying to cut through the crap and none of this is meant to be shaming you like we're not shaming you by saying it's your fault if you die poor we want a light bulb to go off in your head and go oh my god you mean that I can actually improve my financial life yes yes not only that but

you're the only one who can do it. And so these really are messages of empowerment. We're not trying to catch people and shame them where they're at. We're trying to empower them by sort of taking on that mantle. If you believe that that's the case, you are going to start improving your life. Your example about what you told students in the school system in the public school system, what that signals to me is that the system wanted you to give them advice based on an idealized version of how the world should be, and what you actually did was give them advice about the reality of what the world is. And that is considered not politically correct. Right. And I think that a lot of our chapters in our book would be considered not politically correct because it's pretty harsh

in terms of the truths. But it's also extremely empowering. And that's really what we're trying to do here. And we're trying to be as real as possible and not mince words. So we're trying to just give it to you straight and then within the chapters try to give you the strategy on how to execute it and how to think about it. So let's move to the next one. You don't deserve more. You're getting paid what you're worth. Man, every time I hear our own chapter is like, dang.

Yeah, we just kind of cut it to the floor there. I'm guessing probably don't often hear somebody else voice it either. True. So I guess. The way you say it sounds like, ooh, I like it. We set in a lot nicer tone. We didn't have much than you, Paula. No.

You don't deserve more. This one's, I think, a tough one too, because we usually got our ego wrapped up in our income. And so humbling oneself that we're actually getting paid what we're worth, that's hard to swallow because most people think they're getting, they should be paid more. They're complaining about their income. They're like, I should get paid more for what I do.

And it makes sense. Like every job nine to five ever had on the original scope of work of what I'm supposed to do, and then when I got hired and what I was actually doing was a lot more. It's like, wait a second, I thought I signed up for this. And then I start working and it's like, oh, can you actually do this? Can you help out of this project? Am I getting paid more to do those things? No.

And I think it's unfair. We get this affair. It's like, I'm doing more than what my original scope is. I'm not getting more money. I deserve more. So we start to feel like because of it's unfair. And the reality is it is unfair. I think this is where it stems from.

But the reality is we're trying to make clear. This also comes back to empowerment. If you want to change how much money you make, you have the power to do so. Right now, you're getting paid your economic value. By the way, human value, prices. We're not saying your human value has nothing to do with that. It's all prices. I'm talking about your economic value, whatever your skill set is. If you worked at a call center, if you had PhD, right, these are signals to the economy of like how much you should get paid. If you want to change your income, you're going to have to increase your value. I think that's

the real takeaway here. Certain skill sets get paid certain dollars. And there's definitely systemic issues and problems with race of people doing the exact same thing on paper and they're paid differently, gender and equality. Like, those things do exist. But instead of just pointing things out to you, we want to give you more of like a lens to operate from. And the lens is you have control to increase your value, which is going to typically increase your economic income as well.

And if it doesn't, you know, because there's also instances where people are like, my job says if I learn this, I get this extra certification, then I can get paid more. And there's times where you take that on and then your jobs like that program, that bonus program we actually don't do anymore. These things are real. So take that value in this economy that we're in.

You can still, these are hard decisions, but you can find places where they're paid what you're worth for the new skill sets. So you can either focus on the things that are against you or you can focus on how do I increase my value to increase my economic output. Well, and switching jobs is one of the ways in which people increase their income.

income the most because it's during the switching of a job. In the marketplace, you are shopping yourself around to the highest bidder. Yeah, and it really, that is a thinking rich way of viewing things. A poor mindset is just really get stuck on the, I deserve more. And I could get stuck into this too. You create an exceptional course. People should be buying it. People should be seeing the value. And the bottom line is, no, because I don't have a skill set that puts this in front of enough people to show them the value or communicate the value, etc. It's an empowering message to say you're actually getting paid what you work because we all feel like we deserve more. We all feel like we deserve more. And if you do that, if you're stuck in the we deserve more, I deserve more, people don't see me.

It's an external locus control and it's just going to keep you stuck forever. So if you can really understand that actually the reality is what your paycheck, that is actually, that is actually, what your labor is worth. You might think it's worth something else. It's not. You need to either find someplace else that will value you more, which is a possibility, or increase your skill set so that economic, because economic value is pretty emotionless, it's sort of like, if you'll do it for this amount of money, then that's what you're worth. We see that in like teaching professions, where it's all locked in. You can't be a better teacher and get paid more because that system is decided this is what teachers are worth. And so that's the reality. Now, you might be a better teacher

than other people, you might feel like you deserve more, but maybe you need to go to another location, maybe you need to communicate yourself better, maybe you need to find a side hustle to increase your economic value. So it's a call to action on increasing your economic worth. I think the other thing I want to talk about our own businesses, and we talked about prices and Paul, you shared when you first created your very first master class, because you're a good person, you wanted to make sure that whatever the price was, it overdelivered. Yeah. And you picked your price point.

Mm-hmm. I think you probably know now, based off launching that course of success, you probably could have charged a lot more. Yeah. I think on the flip side of this, you know, you're getting paid what you're worth. It has the lens that you are working for someone and you're getting paid. As an entrepreneur, we actually create our own prices if you create your own products. And there's psychology and also pricing ourselves that really affects us a lot.

And there's also customer pricing as well. There's a difference between a customer that's a customer that's, spends $27, or $2,700 or $27,000, you're totally different people. But it's different. The script is flipped. It's like, what should I charge for myself? And you're almost like valuing yourself. I think most of the time all the products I've launched, I probably always underpriced

myself. And it was because of myself. And then a couple years ago, I launched my first really high ticket program. And the highest price point was $95,000. I created it. It was worth it. I just didn't expect it to happen. And then what happened is I had not just one, but multiple.

people take that option. And I learned something about price and psychology and what we value things. And the people that spent the $27, these types of customers, they'd have the most questions, most high maintenance. They'd worry what was in it for them. What's my guarantee? And they caused the most maintenance. And then the person that sent the $95,000, they were like, where did I send the money? That was the question. Because they did all their due diligence. Like, it's just a different fire. Value, price, or internal reflection, what we believe in, whether you're creating your value or whether you're in a system and what they place the value. A lot of this is arbitrary, but the one thing that holds true across all those things is first, you do need to create value.

Because if you didn't think value first and whatever your original price was, you put 10x that price and then you did 10 times less the value. Probably got a lot of refunds and people saying, oh, Paul's product is terrible. But if you focus on value first, it doesn't mean it's now you're going to instantly get paid more. There's still a lot of work to be done, whether you're the entrepreneur side or whether you're in the system and the system is not rewarding you for the extra value. So you're now, you have to go hunt for it. But yeah, I wanted to mention that.

Because we always talk in the lens of nine to five, but I imagine you have some entrepreneurs here that are listening to. Right. Well, and I think the common thread between both entrepreneurs and nine to five employees is in the marketplace, you are pricing. The amount that you ask for is a reflection, partially a reflection of value that you've assessed through logical means, such as looking at competitor pricing. If you're an employee, that means you go to salary.com, you go to glassdoor.com.

If you're an entrepreneur, it means looking at comparable products and seeing what they're priced at. Yeah, there's a bit of logic there, but then there's also internal confidence. There's imposter syndrome. There's the fear that people might not like what you offer. If you're an entrepreneur, it's maybe that fear of, are they going to like my product? But if you're an employee, it's the fear of, is my boss going to like the job that I do? And that can adversely affect your pricing, which if you're a nine to five employee, that would be the amount that you ask for.

Yeah. And your self-worth is a tricky one too because Al-on Turner's, perhaps, they have to wrestle this dilemma. We don't want you to be delusional about your worth, your quote, worth. Because it's a slippery slope to feel like you're worth so much more, so much more. But also on the flip side, people limit themselves. because of their own lack of self-worth. And so essentially you're telling the market, I'm worth this much. And the market's going to say, okay, you know, I mean, if it's low, they're happy to pay

the lower price. They're not going to be saying, oh, you know, let me pay you more. You know, let me pay you more for this because you're so wonderful and so smart. So anyway, there's a balance there around. You need to have confidence to step into the ring and put yourself out there and price yourself appropriately. And that's a challenge for a lot of entrepreneurs, especially as you're first starting out.

Like, you know, stuff like like, like, who am I to do this? And why would people want to buy this for me, that sort of thing. So it's finding a balance there. I think time and price is another thing. How much time is put into something, I have learned to not appreciate that as much as the result or the value that's given. And I really just not an entrepreneur, like a real life example that happened the other day is the water stopped working at my house. I have a well. And that was just one faucet.

Then I went to the bathroom. And all the water was gone. I was like, there's a really bad scare that your well could run dry. But I was like, no, our well should be good. Like, what the heck? So I called a well person to come out and check the house. And in a matter of five minutes, they came, they fixed and they knocked on the door. It's like, all right, we're done.

And I was like, test the water. I was goes, like, what the heck was it? So a bunch of red ants accumulated around the pump. And so, like, the lever could not, like, open and close. Red ants are these, like, really musly ant. There was, like, hundreds of them. So all he did was he took the cap off. took a hose and then he wiped it down and it was good.

Like, that's all stuff I could have done. But I didn't even know where to look and I didn't have his expertise. And it was $200 for five minutes of work. Again, I have running water now. So although he only spent five minutes, it was worth the money because I did not have water. So that's where I keep finding examples of my life. Well, his value and his expertise knew to where to look.

And I was willing to spend $200 so I could have my running water again, despite his time of only taking five minutes. And it's also a problem with entrepreneurship is like, you've done 541 podcast, you said? As of the time that we're recording this, so we're recording this the day prior to when episode 541 is going to air. That's insane. And so if you were to your next offer,

it shouldn't be based off your time because I don't know how many people I've ever met that have 541 episodes in on financial content. That's a level of expertise that puts you in a category so rare. That to me is the most, in this aspect, that's the value, not like, oh, I'm getting 60 minutes. To me, it's like your values and your background and your expertise. So it is a different way. That's more of like the entrepreneur lens that I would encourage for those entrepreneurs

out to think more of like what you're delivering in the value. And it should give you permission to charge more, assuming all those other things like imposterousin, which are real like don't hold you back. But value to me is more important. And I try to price things on value versus like how much time did it take? You're right. the contractor who restored water to your home, what you're paying for is the expertise of knowing where to look. There's the famous story. A woman at a cafe asked him if he could draw a picture.

So he drew this quick picture on a napkin, and he gave it to her, and he said, that'll be like $1,000. You know, he quoted a very high price. And she said, what? That sketch, it only took you five minutes. And he said, no, ma'am, that took me my whole life. I love that story. Yeah. You know, and I've heard also that the corollary to you're getting paid what you're worth is you're getting paid what you negotiate. And so much of negotiation comes from understanding the value that you offer in a very realistic manner. I think that that could be the 22 harsh truth. You're getting paid what you negotiate.

Ooh, that's extra accountable. Yeah. I like it. That means you agreed to it. Right. And well, and you also got someone else to agree to it. Oh, right. That's good.

On the subject of what you get paid at work, your next harsh truth is only liars love their jobs. Oh, man. This one is, we talked about it a little bit about with teachers, there's an exception to all these statements, right? And we talked about how a lot of our mindsets are partially true. But I think when it comes to a job, most people are not there by choice. We have bills, mortgage, school. A lot of people are not operating from a position of financial freedom. There's people who operate from a position of financial freedom and choose to work a 9-to-5 creative podcast.

These people are living best version of their life. And those are great. I want to acknowledge that those people exist. Warren Buffett is 94 and he's still the CEO of Berkshire Hathaway. He could do whatever he wants, right, with all that money. So there's examples of that. But I also want to mention most people are not operating from that position. When we created this chapter title and a bunch of our chapter titles, we have 3 million followers online.

We've both created probably over 10,000 videos online, short form, long form. And so every single one of these chapter titles, we posted online to test the engagement, almost the reaction, the chaos. And we spent the time engaging with every comment. I love my job. It's like, oh, great, what do you do? I'm in accounting. I was like, great, tell me more. I want to know.

And what we dig in all these discoveries, we get to a question. It's like, okay, let's imagine you did have financial freedom. Will you still do accounting? Would you want to go into your office to do accounting? Or marketing. I'm not picking any position. Would you still want to be a nurse? Imagine your job right now.

If you don't have to go there for bills and you had abundance, would you still do it. I think an imaginary job, maybe it does exist, would be peting puppies. I'm not even a dog person and I would love to get paid to pet puppies. I think puppies are amazing. Joy, running around. this is my logic on why liars say they love their job because that type of work there is many jaws where people find fulfillment in the work and I believe if I was petting puppies I would love doing that and get paid doing it would be insane but I would imagine eventually in time I would

wake up to go into my eight o'clock job like you know I just I've been petting puppies for a long time like I would like a break and I don't have enough pTO because I used it all and visiting my family right I have to do it and now the work becomes just a little bit less fulfilling that day even though I used to love it, just because I just, I wanted to relax or I want to do something else. And then your boss changes. Fulfilling work. And now the boss, new boss is a grouch.

And now the work is amazing, but the boss can ruin the fulfilling work. And then next day you go to the boss, he's already a jerk. And they say, hey, we're going to need you to now clean up all the pee and the poop. And this happens a lot. We're in a job. The work is fulfilling. Originally, we're doing it. And we're in that honeymoon phase.

Even if you have a boss as a jerk, you still love your work. So you're like, he's a jerk, but I still love what I do. And all of a sudden, they're like, they add on more work for you. And now you've got to do this thing that was not really part of what you sign up for. You keep saying yes. You keep tolerated. You keep putting up with it because you don't have the choice to change instead of creating your own puppy petting business or just doing it part time.

You can't even afford to do it part time because you're stuck there because you have to. And I think that's why we say only liars love their job because if most people had financial freedom, they probably wouldn't be doing exactly what they're doing. They could potentially doing the same work, but it would be on their schedule by their choice with their freedom. And some beautiful retirements look like doing work for free and actually not getting paid at all because you're not doing it for the money. You're doing it because you love. But it's still by your choice, by your time. Because anyone with financial freedom that I know if they were in a situation where they're petting puppies and a jerkhead boss would come, they could be like, you know what? I need to find a new

puppy pet pet pet puppies on the streets or something like they'll have the freedom of choice and people that don't have that freedom that's where they get stuck in this tolerating and in this world where they keep saying yes and they eventually it's a slippery slope of like you know something you love turning to something that you hate and another last specific example for me is like I used to love being a dancer is my whole identity I tour professionally I did america scott talent I danced the robot it was like my life and I turned into a business and I turned into a business and that was my first business and eventually got to the point where when I quit to go full time on my dance business at that time made the same as my 9 to 5 job.

That is the day that a natural decline of my interest and my love for dance started to change. And each day I started to get a little more stressed out about dance and also my identity wrapped in with dance. I was getting older. I'm 35 now. I was a pro dancer when I was 21. So I'm like now moving up to my late 20s. I'm like, am I going to be a dancer festival?

I'm questioning this true love of passion I have. And today, this is kind of sad, but I don't dance every day anymore. I don't even identify as a dancer anymore. So that's one example of me of like, I made it a job. And when I was my full income, even though I was an entrepreneur, I had to do it because if I didn't make money from the dance, then I wasn't going to make any money. So that's a just true example of myself. Yeah. And I think the powerful question is, if you couldn't get paid for it at all, would you still do it? Yeah. Assuming that you had enough money to float you, if for some reason you could not get paid for the work, would you do it? Yeah, when I want to.

Right. Sometimes. And yeah, I had a similar experience where I was a collegiate athlete and I played tennis and then I'm on Kauai and I needed some extra money. So I started to be a pro and do like teach tourists, run clinics for tourists. I had started to hate tennis. I mean like I in the sense that I didn't want to get up and do it anymore. And that's really our main thrust here is that we think that you would love financial freedom. We think that you may enjoy parts of your job.

But if you're really honest, and this is where we're sort of like calling you a bit of a liar, and the lie might be serving you well emotionally. But my guess is there'd be a day where you'd rather sleep in. There's a day where you'd rather play golf, whatever it is. Maybe it's the best thing you can pick. But we're much more fans of financial freedom than being locked down. And you feeling like you've got to do something for 40 years to pay the bills because it kind of kills the joy for it. And what we notice with people are financially free, they just approach it differently.

Right. The next harsh truth. Lottery tickets are for lazy people. Framing. And again, this is testing sort of like which one of these get rich quick schemes do we go after. This is a chapter about a massive poor mindset that I suffered from, that a lot of people who are growing up lower income, suffer from. And that's the idea that I'm going to start investing. Okay. So here's a great example. I'm going to take my $1,000 and I'm going to turn it into $10,000 this year. And man, oh man,

I started making TikTok videos because my nephews were showing me TikTok and it's just all this hilarious algorithm stuff. And then I saw a day trading video pop up. And I was like, whoa. And I, you know, I lost a lot of money day trade. I thought that was gone with the tech bubble. And I was like, oh my God, it's back. And of course it's back. Like the market has run up for the last 15 years. And it's like, oh, and I got so mad. I started to create anti-day trading content. And essentially my anti-day trading content was the studies on day trading. And essentially there's been a lot of studies, but one of them showed that 97% of day traders lose money, three percent make money, but only one of those three people make more than minimum wage. And from a statistical point of view, you can explain that from random error.

Like any statistical data set, you're going to have somebody winning. And it's just as likely that it's just randomness. It's not a skill set. And that's even over 5, 10, 15 years. Anyway, it's just a horrible way to approach investing. It's a poor mindset. But people like me who come from where I came from, we fall for it time and time and time again because we don't have an understanding of how people go from poor to wealthy.

We just don't know. And so we get suckered into it. Endless examples. They're all over Instagram. They're all these get rich quick courses. And lottery is just one that I think more people have been involved in than any of the other ones going and getting a lottery ticket. And I get it. It's fun.

Right now I don't have this and I can have the mega millions. But when you add it up, there are people, and we have an example in the book where weekly contributions to lottery winning, daily contributions from people who are low income. And if you just invested that in like an income, index fund, it's hundreds and hundreds of thousands of dollars, if not millions of dollars over time, that if people had been taught the right thing at a young age, that's what they'd be doing instead of this idea, I'm going to somehow instantly become wealthy. And it's so seductive, especially if you're growing up under harsh conditions and you're living a life of deprivation, like actual deprivation. But it's one of those poor mindsets that is so infuriating to me when

I see people leveraging that to hurt people who are low income and struggling and truly just want to make a better life for themselves and their families, they're not trying to do anything wrong. And they just sort of bought into that lie because they don't know what people actually do to become wealthy. Lottery tickets, they're a metaphor for all of these get rich quick schemes, but the lottery itself literally feel so low stakes. That's a dollar or two. but it leads to a lottery mindset, and that's the part where it becomes higher stakes.

Right. I bet you we could solve Social Security problem if we just took all the lottery contributions and moved it over to, is that a controversial? I'm just making this up. I mean, maybe we make a big dent in it anyway. By on an individual level, too, it's just that the compounding interest power of putting it in the right spot. So we're just cautioning people. We're really trying to call it out that that's a poor mindset. But go ahead and do it. Have fun. Just understand that is a road to nowhere's bill.

Is that a place? You're not going to be wealthy. You're not going to be financially free. I remember specifically in the call center, every lottery, there'd always be like a corporate didn't like it, but we'd always pool together like lottery tickets. And then the week leading up to it, there was always fantasizing about lotteries. So it is more than the dollars contributed because, yeah, there's dollar, $20 dollar lotteries. I think it's this energy on this idea that we invest consciously or subconsciously

in this fantasy of like, well, maybe I actually don't need to do all these things. I'll just get the lottery. I'll just win the lottery. I'm just going to wait and do the water. So I'm just going to live in the moment, do my thing, and then hoping for something to hit big. Struck oil, strict, you know, like these. And I just remember that we had these little cubicles you'd pull your head over and we would fantasize about at the lottery. I was guilty of it too. And every single potluck lottery, I always put money in.

I always put money in. So we use the word lazy people, though. And I think if people are only doing that is their hope that they're going to get some bailout. This is the same ideology unlike government or someone coming to save you, a lottery. That's going to be the thing that happens. That's straight up, that is a lazy way of thinking.

Because to become wealthy, to become rich, it's the opposite lazy. It's hard work. People that are becoming rich, maybe they put some money in, lottery. I actually haven't done it. I can't remember the last time I did it, but my energy is not focused at. I see the number when it gets really big and I look at the billboard and I drive by, like, dang, there's a lot. I'm going to keep working hard over here. Yeah. We have limited cognitive

bandwidth and you can only spend it in so many places. And so devoting even a small portion of it to the lottery is negative EV. It's a negative expected value. And also like to Adrian's point, it's like you actually feel like you're doing something. See, that's the danger. The danger is you feel like you're doing something by doing that. And you're not doing anything. Maybe you're having fun and maybe it's worth the fun money, whatever. You know, people waste money doing all sorts of things. But if you think you're actually doing something there, like this is something part of your financial plan, like something's going to happen for you, that's the danger because you're less likely to do things in other areas. Right. So that's the real danger, I think, with lottery and other

get rich quick type schemes is people, they put all their eggs in that basket metaphorically in the sense that I don't need to do this other stuff because I'm going to do this. And it's going to happen for me. Same thing with gambling. So people, it's a real suckers bet. And those things prey on poor people. They're the ones who are putting the bulk of the money into it because they're feeling like there's no other way. Right.

And it's a distraction. It's a distraction from the things that will actually pull you up. All right. Final one that we will discuss before we close out this today's episode. This is a big one though. Ouch. I feel like we need a drum roll. Do you even know what it is?

I'm like anxious. I'm nervous, well. Oh, oh. This one's going to get you canceled. Get rid of your poor friends if you want to be rich. Oh, gosh. Did you say that? By the way, I needed to tell you that we're not going to hang out anymore.

No. Oh, that's good. That's good. All right. You're right. This is our most controversial chapter. I remember when I posted it on my Facebook, I had 1,000 comments in the first hour, I think.

and the rage of people. Yeah. I posted something similar on Twitter and I saw. It's fire. We're giving social media advice, by the way, if you want to blow up your... Yeah. So this one's tough because friends, like, quality of life is based off huge parties around the people.

Like, loneliness kills, right? So friends, our inner circle, people around us, people we love, family. What if the people that you're around right now have really, toxic relationships with money? What if they have really toxic habits? Do you think that maybe they could be a bad influence, even if you love them, if you hang out with them, if they're a ride to die, even if they're your bestie? Do you think they could actually be sabotaging your financial success? It's a question we don't usually think about because we're blinded by love. We're blinded by, well, I have a great time with this person. This is the idea that in this sentence, it sounds like

a hot take we could get canceled, but in every single self-health book I've ever read, Every chapter dedicates a portion to, like, the law of averages. Five people you hang around. You're the law of averages of the five people you hang around. And whether they are all chain smokers and you don't smoke, maybe you never smoke, but you're around it more. You see it more. You might try it.

Same with money. The culture of work is like, yo, Friday's coming up, payday. There's a lot of signs in that, right? So payday is an exciting time. I never got excited about payday. It's to me, that already tells me a sign that like, if I am expecting on my payday to hit, that means like I'm worried about that money. Like, I need that money.

And also it's like a sign of like, ooh, hot. Like, what are we going to do on Friday night? Because I got some extra money. Like, I just got paid. If that's the culture you're around and that person, you go out, you have a blast doing it, by the way. And you go out and every time you go out to eat, there's, you get the appetizer and a couple cocktails.

All of these, if you're around spenders who like to go clubbing, you're going to get sucked into that. It's really hard to go clubbing. and not spend money. Maybe there's some be like, well, I do that. My friend's club and I don't drink alcohol. Well, that's amazing for you. But most people, we're not super humans.

We're not that strong and we're susceptible to our influence of the people around us. So this is challenging your inner circle. It's not saying also that, oh my gosh, I just realized you're poor. And I know we've known each other since the third grade, but my man, I just read this book, you're gone. It's also limiting the amount of influence that person has on you. So there are some pivots you have to make in life. I remember this is a sad, true story, my best men at my wedding. I had two of them.

But he was someone that as I started to elevate my entrepreneurship game, we were both entrepreneurs, he went the side of raising capital and tried to launch an app and it failed. It landed him in like six figures of debt. And I went to bootstrap route. He accelerated much faster off the gate because he had this $60,000 investment and started. And I was like, it was really exciting. I remember feeling like, dang, this guys are really doing it. And then mine, I was like, one sale, two sale, like trying to make it work.

And eventually when his app failed, it started to create like attention and animosity. And I realized I actually, it was a very sad day. I'm skipping a lot of details I don't want to share, but I had to let go of him. And I remember when I let go was like it emotionally affected me. It was probably the hardest example of me living this chapel, this chapter in real life, of like, I had to let go because he was bringing me down. and there was things he was saying consciously or like undertones that made me feel like, oh, I'm becoming too successful and it's like creating this adversity in our relationship.

We're butting heads. And eventually I made the mistake of lending him money from my business because he was struggling. That's what ended up killing the relationship. And I can say many years after that that was one of the best decisions I've made for my inner circle to get rid of him. So it's tough. It's really tough. And we've had people that said, but what if it's your family? But what if your family is the one that they don't believe in saving?

They believe the system is rigged. They have a lot of these poor mindset. That's a really harsh reality too because you can't get rid of your family, but you can limit the amount of influence and time that maybe you're spending them and try to find better inner circles. Yeah. And you got to remember, too, that the way we look at this, we don't look at it as broke because there's a lot of broke people that have rich mindsets.

Yes. And so they are, and I spot them all the time. And I don't even care how much money they have. like, oh my God, dude, you're going to be multimillioner. I can just tell right now. Right. Because of the way you're talking and what you're valuing and all of that. It's the poor mindset we're talking about because we actually think you should distance yourself from extremely high earning friends who have a poor mindset because they will take you down. We're really

wired to exist within a tribe and we want to fit in. And if you're going out and your friends, what you do is go out all the time and spend all their money on drinks and whatever, bottle service, this and that, the other, you're going to be broke. I mean, and so if your goal is to become wealthy, you can't hang around those people. You just can't, because they will bring you down in that sense. They'll put pressure on you. They'll put guilt on you. Oh, oh, man, you got to raise. Let's, let's go. Let's go on this trip. Let's do that. They have a certain mindset. And so you are going to start living the way they're living or they're going to have to start living the way you're living. And I always say, someone says, oh my God, it's my friend. Do I have to get rid of them?

And after they've just described for me a poor mindset, you know, not that they're broke. two totally separate things. And I will be, well, first of all, I'm like, well, why don't you try to bring them along? That's step one if you love someone. It's like, hey, I'm on this journey. I want to become wealthy. This is the way we're living. I'm going to start doing this.

Hey, instead of going out to dinner on Friday night, let's go for a jog. Let's go for a walk. Let's go have coffee. Let's have dinner at home. You know, one of those crappy dinner party things that people do. Try to bring them along. I mean, that's my first thing I would recommend if you really love them. And then after a while, though, what naturally happens is that we start to drift.

There's a relationship drift that happens naturally. And it's fairly normal because you're going to start doing things differently. And if they have some like money avoidance mindsets, they might start sabotaging you a little bit. You know, it's like, oh, you're one of them or they're going to try to bring you into their overspending patterns. This is something that just actually happens. But we want you to consciously think about it because one of the biggest things that trip people up is their inner circle. And so if you're not conscious of what you can share there.

and you might even need to distance yourself. So you're not telling these people how much money you made. You're not telling these people about your wins. And I'll give you a drastic example. But if all of a sudden you have 30 times the net worth of your friends, things are going to get weird and it's going to get awkward? Let's say that you have 30 times a net worth of your friend all the sudden. And are you going to invite them over to your brand new house, fancy house? Or are they going to feel weird about you coming into their house when they don't have as much? What if your biggest source of stress right now is this huge quarterly tax estimate you need to pay? Are you going to tell your friend when that quarterly estimate is their entire year's salary, you're not going to tell them any of that stuff. So you're going to start distancing yourself naturally. This tends to be what happens. But we're big fans of try to bring them along, you know, give them a copy of our book, start a study group, whatever. But inevitably, that's kind of what needs to happen if you can't transition somebody to a rich mindset because they're going to bring you down or keep you down. There are two people that I'm thinking about right now. One is a very close friend of mine who has amazing rich habits, rich mindset, better than mine, far better than mine.

She does not make very much money yet. But wow, I mean, her habits are dialed in, her mindset is there, her income is not there, her net worth is not there, but she's got it, right? So she's a perfect example of someone who, their income statement might be poor, but she's definitely rich in habits and mindset. So she's one of the ones to keep. Absolutely. I want to be friends with her too.

Yeah, me too. We make an intro. Yeah, she's great. There's another person who's been in my life, had been in my life for a very long time. I've known her since we were both 19. When I started to become successful, she really struggled with it because we knew each other back in the day when we were both really scrappy and neither of us had anything. And I can sit here and I can tell you stories about that.

But unless you knew me when I was 19, it's hard to feel that. This particular person, she knew me at 19. We had those same experiences together. And then our financial paths started to diverge. And she really did try to sabotage it, like you said. And it came through all of these incessant comments that because I had known her for so long, really got under my skin because I trusted her so much. And so she would just tell me all of these negative things about myself,

not in the sense of constructive criticism, but in the sense of like really attacking myself worth. And I eventually had to cut her out of my life. It was subtle, it took me a long time to realize it. But, you know, she would tell jokes publicly in groups. She would constantly tell jokes at my expense in front of, other people. If I confronted her about it, oh, you're, I was just joking. Okay, how, then why is it that your jokes are always at my expense and never, they're never self-deprecating? You're never joking

about yourself. You're always joking about me. Well, I was going to say the frame that I conceptualized that on is not that our friends and family members are evil, nasty, conniving. They're afraid of losing us. They're afraid of losing you. So my, my guess is that she saw, you leaving the tribe. And she's like, no, no, no, no, no, no, come back. And so she's noticing your self-esteem growing from the success. And so she's trying to cut you down so you don't leave her. Essentially, it's an attachment issue. And she's panicking about the severing of the attachment. And so I've seen people use guilt. I saw this a lot on Kauai. And it was really sad to me where I'd have like a kid who's, so first of all, very low income and a kid who was super

smart, like really good with the books. And I could just see, whoa, this like massive potential. I'm thinking of one girl in particular. And I'm like, oh, man, she could become like a brain surgeon. She's got it all. And I saw her family sabotage it. And quite literally, they did not want her to leave. Because it would literally require having to get on a plane and go live somewhere else and probably have a job over there because there's not a lot of jobs on Kauai. From one perspective, it looks really nasty and sort of evil. But really they were so, and they would have lost her, by the way. That's the other thing. She would have, off she would have gone. And she may not have come back to live and raise grandkids and all this. Meanwhile, they were much

more excited about her getting pregnant very young because she's going to stay there. And so I just want to put that frame around it because it really does come from the sense of love and you're part of the tribe and they don't want to lose you. So it's not necessarily that they're being bad or evil. Wow. Well, we will wrap it there. And in the next episode, we'll talk through the remaining harsh truths. But thank you for spending this time with us. Where can people find out more about you and where can people read the 21 harsh truths? Awesome. Well, we don't just have a book. We have a really awesome offer that's custom just for you and your audience. So it's start thinkingrich.com slash Paula. And you'll get a link to our book. You can buy it in all places books are available. But more

importantly, you'll get access to our community and some extra bonuses are going to be exclusive just for you. So thank you. Amazing. So that's start thinking rich.com. slash Paula. Well, thank you for putting that together. And thank you for spending this time with us. Thanks, everyone.