The Personal Finance Podcast - How to Build Wealth (Even on a Low Income!) With Joshua Mayo

Episode Date: July 27, 2022

In this episode of the personal finance podcast, we're gonna talk about how to build wealth, even if you don't make a ton of money with Joshua Mayo. Connect with Joshua: Joshua's Youtube Channel Joshua's Instagram How to Build Wealth from $0 Video Joshua's Blog Checklist of what we talk about: . How do you start to build wealth if you have a low salary. Reasons why you need to increase your income. How to get to million-dollar net worth. The power of the savings rate and why it's so important. Checklist of relevant episodes:  From Graduate to Millionaire By Age! (High School and College!) Should You Invest All Your Money at Once or a Little Each Month? (Dollar-Cost Averaging vs. Lump Sum Investing!) How to Become a Millionaire (By Age)!   FREE GUIDES: ============== -Check out the free guide on where to put your money in what order!  https://www.mastermoney.co/stairway-to-wealth   -Here is the free How to Ask for A Raise ebook! https://www.mastermoney.co/get-a-raise-ebook   -Get Access to the 75-Day Challenge: https://www.mastermoney.co/75daychallenge    =============   We have a YOUTUBE channel! Check it out here!    Our Latest Videos:  How To Grow A Podcast Organically What Would Happen If You Maxed Out Your Roth IRA By Age?! (These Results Will Amaze You!) How to Become a Millionaire With a Small Amount of Money (Is it Really This Easy!?) Pre-tax moves for high earners   ============   Got questions? Ask me on Instagram Here. @mastermoneyco This is the fastest way to get in touch with me.    ============ Sponsors:    Thanks to Policygenius For Sponsoring the show! Check them out a Policygenius.com Thanks to Mint Mobile for supporting the show! Cut your phone bill to $15 a month by going to https://mintmobile.com/pfp Thanks to Fundrise for Sponsoring the show! Invest in real estate for as little as $10 by going to fundrise.com/personalfinance Thank you to Hello Fresh for sponsoring the show! Go to Hello Fresh and use code PFP16 for 16 free meals and 3 free gifts. Thanks to Gusto for Sponsoring the Show! Check them out at Gusto.com/pfp. Thank you to Chime for sponsoring the show! Check them out at chime.com/pfp     ============   Want to Support the Show? Follow on Spotify or Follow and Leave a 5-Star Review on Apple Podcasts! ============   More Episodes You Will Love:    The Stairway to Wealth 2.0 (The Order You Should Put Your Money in!) How to Track Your Net Worth How to Set Money Goals You Will Actually Achieve ============   Check out all the Stuff I Recommend!    USEFUL RESOURCES: Best Place to Open a Roth IRA: https://m1finance.8bxp97.net/5vzD1 My Favorite Free Net Worth and Budget Tool: https://fxo.co/905L Best High Yield Savings Account: https://bit.ly/3HpPjAr  Get a $10 Free Bonus with Acorns: https://bit.ly/3lV0LLE Best Bank and Debit Card for Kids: https://bit.ly/3pJeI09  Get $5 Free Bitcoin at Coinbase: https://bit.ly/3oIQOml Best Credit Building Tool: https://bit.ly/3rmBuwZ  Best Personal Finance Books: https://kit.co/MasterMoney/best-personal-finance-books    ============     DISCLAIMER: I am not a financial adviser. This Podcast is for educational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. I am sharing my opinion.    AFFILIATE DISCLOSURE: Some of the links on this channel are affiliate links, meaning, at NO additional cost to you, I may earn a commission if you click through and make a purchase and/or subscribe. However, this does not impact my opinion.   ============     Check us out on social fam!    Twitter   www.thepersonalfinancepodcast.com   www.mastermoney.co Learn more about your ad choices. Visit megaphone.fm/adchoices Learn more about your ad choices. Visit megaphone.fm/adchoices

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Find your advisor at IG Private Wealth.com. On this episode of the personal finance podcast, we're going to talk about how to build wealth, even if you don't make a ton of money with Joshua Mayo. Welcome to the personal finance podcast. I'm your host, Andrew, founder of mastermoney.com. And today on the personal finance podcast, we are going to be talking to Josh Mayo about a bunch of different things all about personal finance. If you have any questions, hit me up on Instagram at Master Money Co. and follow us on Spotify, Apple Podcasts, or whatever podcast player, you love listening to this podcast.

And if you want to help out the show, leave a five-star rating and review on Apple Podcast and Spotify. Now, today we're going to be talking to Josh Mayo, and we're going to be talking about a number of things. We start the conversation off by discussing how do you start to build wealth if you have a low salary? And one of the biggest things that we talk about is how important it is to increase your income. and the reasons why you need to increase your income. Then we're going to dig into one of my favorite stories, which is how a janitor built an $8 million portfolio by the time he died.

Then we get into a bunch of things on how to get to a million dollar net worth. This episode gets deep. So I want to make sure that you guys have enough time to tune in because Josh gives so many amazing insights in this episode and really lays out the groundwork on how you can start building wealth, no matter how much money you make.

So I am so excited to share this episode with you. And without further ado, let's get into it. So Josh, welcome to the Personal Finance Podcast. Thank you. Pleasure to be here. So we are so excited to have you because you have such an incredible way of teaching personal finance.

So what made you actually start teaching personal finance on your YouTube channel? It's a good question. So I've always been an entrepreneur since like a early age. So it's always been in me to enjoy like the money side of things. And for the longest time, I've always tried different things. Like growing up, I would build stores in my house and like sell little things to my family,

sell things to friends. There's a famous story actually that my mom always likes to talk about where I sold a broken pencil to my friend, like literally a broken pencil. It was broken in half and I somehow sold it for like a dollar to my friend. just by convincing him that it was somehow worth that, right? And so it's always been like something that's been a part of who I am. And a couple of years ago, I was just like in this place in my life where I was trying to find what I wanted to do. You know, it was, I think it's something that like a lot of us go through where it's like you just try to figure out what the next step is.

Even if you don't know what it is, you may not know like what you're passionate about, but you just want to know, like, what you can do to kind of like level up your income to, level up your life. And I was at that place and I was trying all sorts of different things. And I started a blog called fine curate.com. And the blog was basically like a lifestyle blog. And I would write articles about vegan Easter desserts, five reasons to drink more water, how to get better sleep at night, just all sorts of like lifestyle things. And that's not who I am. You know, I don't care about vegan Easter desserts, but I was writing about that because I was just trying to figure out what that thing was that I wanted to do. And so one day my wife comes to me and she says, like, why are you doing this? You know, like, why are you writing about these topics?

And I said, because I don't know what else to write about. Like, I know I need to do something. I want to start something, but I don't know what. And she said, Joshua, like, you always talk about money, about personal finance. Like, always. Like, that's the only thing. That's the only thing. thing I talked about. And she said, just do that. And I said, oh, yeah, great idea. And so I started a personal finance blog that went through several name changes. It started off as Mayo Finance, then I shortened it to MayoFi, and then I changed it finally to the investor post. And I would just write personal finance articles. And I just, I quickly realized that that was a topic that not only did I not enjoy or did I enjoy talking about it to other people like in my close circle

but I enjoyed like teaching people as well right because it's one of those things where it's like even if you enjoy like you might enjoy movies like watching movies but that doesn't mean that you want to go and make movies right just because you like you enjoy watching them doesn't mean you want to go make them there's two different things and so that's where things could get confusing sometimes for people trying to start something for themselves is what your passion. Well, I like playing video games. Does that mean you want to go be a video game developer, though? Not necessarily, right? And so personal finance, though, was just that thing that clicked for me. I like talking about it in my personal life, and I like talking about it to other people, you know?

So that's kind of where it all began. That's awesome. And I have a similar story, which is so funny that you say that, because I started with different niche sites online as well. And it just, building wealth was my big passion. And that was the biggest thing I wanted to do. And And it kind of drew me back in. I was like, what am I doing here just making all these niche sites when I could go out and actually teach people and change lives and all that kind of stuff? So that's where that kind of, it's kind of the same path, which is funny. Yeah.

So your YouTube channel is absolutely fantastic. We're going to link it up down below so everybody can check it out. But you have an amazing video that just came out recently called How to Become a Millionaire on a low salary. And this is one of my favorite topics to talk to people because I think a lot of people are struggling with this issue. A lot of people are trying to figure out how can I actually build wealth if I don't make a lot of money. And this is where a lot of us start off, especially if you start off with an

entry-level job or something like that. And you tell a story, which is one of my favorite wealth-building stories out there about Ronald Reed. So can you tell us the story about Ronald Reed and how he built up a fortune? Yeah. So Ronald was a janitor and he grew up in a poor family. You know, like there is no making excuses about it. Like he didn't grow up in a rich family. He didn't grow up in a middle-class family. I mean, he grew up in a poor family of farmers, okay? So he didn't have that going for him. He had to truly start for himself. And nobody knew it.

Nobody knew this about Ronald. But throughout his life, he just began investing. At a super young age, from the first time he started making money, he just began investing, buying stocks. And long story short, by the time he passed away, he ended up donating a lot of his fortune, which obviously at that point it became public, that this man had built up a massive fortune over his lifetime, but the confusing part for people and the reason that people didn't know that he was a millionaire, first of all, because he wasn't out buying flashy cars and

things like that, which is part of the reason why he was able to build that wealth in the first place. But also, more importantly, he didn't work a fancy job. He was a janitor. You know, that that was his job for literally most of his adult life was just a janitor, and he made what would be considered minimum wage today is basically what he made. And he was able to use that money effectively to build wealth. And the reason I like that story so much is because that that's just an example that it's possible. Like oftentimes the hardest part of starting anything, anything. We can talk about starting investing. How can you start building wealth by investing in the stock market or by investing in real estate or whatever? Like,

that's hard. But even starting like a business or starting a podcast or a YouTube channel. It's hard sometimes to do that if you don't have previous examples of success, right? But like, if you can see that somebody has done it already, even if you don't have the exact blueprint, like, you know it's possible. And that hope creates the drive in a way to go and then pursue that thing. But with investing, there is a blueprint, you know? And so it's like there is no mystery. We know exactly how Ronald was able to do it. it's just that like it takes a certain level of commitment and sacrifice that I think is really

difficult to do especially today because during Ronald's time he didn't have the technology that we have or he didn't have Amazon.com where he could go online and within three clicks within five seconds buy a new I don't know a new toaster for $30 right for him like he had to get up take a bus to Sears or whatever existed back then. And there was so many more roadblocks in the way for him to get to that item that he had to buy. And I'm just making excuses for why it's a little bit more difficult today. And I think it's a realistic thing that we have to overcome if you want to build wealth, especially if you're on a low salary.

But nonetheless, Ronald was able to do it. And there's other examples of people just like Ronald who are able to do it as well. Exactly. That is one of the coolest thing. it's one of the coolest examples out there because it shows you that with consistency and maintaining the course and doing it over a long period of time, it's the same thing Warren Buffett did, just on a much more grand scale. He amassed $8 million as a janitor, which is absolutely amazing. So we're going to actually kind of talk through some of the blueprint on how other people can do that as well

if they make a new salary today. Yeah. And that's kind of what we want to lay out in this episode. So you talk about in that video, you talk about the secret wealth formula that the rich used to build their wealth over time. And the cool thing is that there is actually a formula and a blueprint that we can kind of look at to see how people do this specifically with obviously with investing, but with some other things as well. But before we jump into that, one thing I want to do is lay out kind of what you talk about not to do. So can you explain the path of money and what the non-wealthy do? Yeah. So there's a number of things. But I think there's like a few very key important things. And the reason that I'm able to talk about this with such confidence is because,

like, I've seen both sides of the spectrum, right? Like, I grew up poor. And I've already asked my mom, I know she'll be watching this podcast. I've already asked her, is it okay with you if I tell the truth about how I grew up poor? Like, you didn't have a lot of money. And she said, yes, it's fine, you know. Right. We didn't have much growing up. All my friends didn't have much, anything. And so, you know, growing up in the Detroit school system, I literally saw what poverty looks like firsthand. I experienced that. I lived it. When I was in eighth grade, we moved to a much more well-off suburb area called Lycorian. And there's no, I'm not going to sugarcoat it. I mean, it was a rich area with rich people. And so even though we lived in a trailer park in this rich area, I still went to school with all of these kids who had rich parents. And so I got to see firsthand the stuff that they did, how they lived, but more importantly, I can remember a few occasions where I got to talk to some of my friends' parents, especially as I got a little bit older, like my junior year of high school, I had a little bit more maturity. I knew how to ask

questions, and so I would ask them just like what they did, and we would just talk about it. And so I could give exact stories, but I'm digressing a lot if I get there. But the point I'm trying to make is that there are specific things that wealthy people do. that poor people don't do. And it has nothing to do with how you're born. It has everything to do with your actions, right? And so I think there's a statistic about like 80% of millionaires in America today are first generation rich.

I forget what the exact number is, right? That doesn't matter. It's a really high number. The point is that so many millionaires in America today came from nothing but were able to build something. How? How are they able to do that, right? They have the same amount of time that we have,

24 hours. Everybody has 24 hours in a day. We all have basically the same resources nowadays, especially with the internet, right? I mean, you can go take a Harvard business class on YouTube now. You can go watch a Harvard business class on YouTube for free. You know, like it's crazy. So we all have basically the same resources now. The playing field is super level. And so everybody has an opportunity. Go ahead. Yeah, I completely agree. And I think everybody does have that opportunity, like what you're saying there. And that is one of my favorite stats that 80% of millionaires, you know, are self-made millionaires because it's one of the most reassuring things for someone because it's, you can do this. They didn't receive an inheritance.

They didn't, you know, it wasn't handed to them. But 80% of millionaires actually did it on their own. So that was one of the coolest and most reassuring stats. And we talk about this in those podcasts all the time as well. It's one of the most reassuring things that you can have. Right. And so, you know, like, so I get back to the question that you asked is like, what are those key things the don'ts, the don't do? It's like, what do you not do if you want to become wealthy. The first thing is, like, you have to live below your means. Too many people live either exactly at their means, meaning if they make $40,000 per year, they also spend $40,000 per year, right? And they're not, none of that spending is going toward investing. It's just

spending on bills, on things that target, right? $40,000 in, $40,000 out. Okay, that's the first category of people. Second category is $40,000 in, $60,000 out, $70,000 out, $100,000 out, right? They're buying way, way above their means. Listen, my wife and I have had the same car that her mother-in-law gave to her after she graduated college as a gift. It was a 2004 Honda CRV, okay? We had that same car, no exaggeration up until about two months ago before we finally said, okay, let's just go ahead and buy a new used car. It wasn't even a new new car. It was a new used car. Let's go ahead and do it. Like we can do it now. We're able to do it comfortably. And so we did it. But up until then, it was just that CRV had a ton of issues, so many issues. But we just dealt with it because we knew that we didn't want to be at, you know, when we're in our 40s, 50s, 60s, we didn't want to be in the same position that our parents, are currently in, right? And or a lot of people for that matter are currently in. We knew that we wanted to be at a place financially where we were comfortable. And hopefully by then, our investments were working for us hard enough that we wouldn't have to work if we didn't

want to because our investments were making so much money that we could just live off of the interests, right? So enough digressing. So that's the first point is live below your means. Okay. If you're making $40,000 per year, spend $34,000, okay? Spend $34,000, save $6,000, put that $6,000 into a Roth IRA, tax-free money, tax-free growth, right? That's the first really, really big thing. The second thing, and I talk about this a lot in my videos, because it's just something I really believe in, like a lot. The second biggest thing, you have to find ways to increase your income.

If you're only making $30, let's go back to the $40,000 example. If you're making $40,000 per year, it's a lot harder to save 10% of $40,000 than if you were making $100,000 per year, right? Then saving 10% is much easier because 10% of $40,000 is $4,000. 10% of $100,000 is $10,000, right? But you still have $90,000 left to spend. Whereas with the $40,000, if you save $10,000, you only have $36,000 left to spend, which is, especially with inflation, that's not a lot of money.

money to survive off of. And so by you increasing your income, you're effectively like hacking the system in a way, right? You're hacking the system and you're finding ways to put more money in your pocket and giving yourself sort of like a cheat code to saving more money because you're making more money, right? And so that's literally one of the easiest ways to build wealth. And I give this example a lot where it's like, if you look at two guys, you look at Warren Buffett, who from the time he was he started investing at like 12 or something. We'll just call it 18, though, just to be fair. Started investing at 18. I forget the exact numbers, but it took Warren Buffett like 10 to 20 years or something like that to earn his first million dollars in the stock market, right? By investing,

by investing. And that's great. That's fantastic. Nobody is going to complain about that. That's fantastic. But it took Elon Musk like three to four years to earn 20 million dollars by starting a business by doing something proactively to get himself ahead, right? Because if you think about it, investing, although is a very necessary part of building wealth, like they're, I'm not just going to like throw that, you know, throw it out with the bathwater and say like, don't invest. It's not worth it. No, you should be investing, right? But it's a small part of building wealth, especially if you want it sooner. And that's something that I talk about a lot in my videos because I know that the people who watch my videos, my audience, they're very interested in making money now.

Like, they don't want to wait until they're 65 to retire a millionaire, right? Because they want their youth. They want youth and they want money. Right. And if you go the traditional route of investing 6K per year in a Roth IRA or 20K per year or whatever in a 401k, however much you can afford, if you go that route, it's going to take years and years of compound interest, right? decades of compound interest to get to the point where you are able to relatively comfortably

retire. And I say that because a million dollars, yeah, like it's seven figures, but over the span of a few decades into retirement, like it's not, if you really do the math, it's not a lot of money. And so that's one way to do it. But if you really want to build wealth on an exponential level, finding ways to earn more money is it's a requirement. There is no way about it. I have people who reach out to me on Instagram and through email and on the YouTube comments and they'll say, and I'm not knocking me. I'm not knocking anybody, right? They're trying to figure out ways to better their life. And that's exactly why I'm doing what I'm doing. That's why you're doing what you're doing because there's information that people don't know that they need to be told.

And that's important. But I'll have people reach out to me and say, you know, Joshua, I make $700 per week and I have four kids and I want to start investing and in the next five years I want to be at a place where I don't have to work anymore and I can take care of my family and I'm like, okay, that's definitely possible. You can do that. Like you can retire in five years if you wanted to with four kids and take care of all of them and go live on the beach. Like that's possible, but you're not going to do it by investing $100 per month into the S&P 500 over the next five years. It's not going to happen, right? And that can sting a little bit. It can sting because, like, you see guys like Warren Buffett, and that's kind of like our standard of investing in

the stock market. Like, if Warren Buffett can make X billion dollars investing in the stock market, then I must be able to make at least a million, right? But the reality is that it's going to take a long time if you're investing the traditional way, or like if you're trying to build wealth the traditional way by investing in the stock market, you have to start finding ways to increase your income. That's the second most important thing. And I know that's kind of long-winded, but it's something that I'm very passionate about because I think that people just need to take that to heart more. You know, I could give examples all day about like my life and like my journey. Up until like this year, I wasn't making like a ton of money. And over the past like,

10 years, I've been trying to find ways to increase my income by starting businesses, by trying things. You have to start trying things. That's the only way you're ever going to get to a place where you kind of have that moment, like that epiphany moment, where it's like, oh, wow, this is working. Like, I've been working on, I've been trying to figure this out for the past 10 years. And I finally, something finally clicked for me. You know, this is my fourth YouTube channel. My fourth YouTube channel. I had somebody reach out to me, crazy. This is off topic completely. I had somebody comment on one of my videos recently saying, dude, like all caps. Oh my God.

I remember watching you and your wife like five years ago when you had like a vlog. You guys showed like your cats and you guys had like this and that. And I was like, what? Like that's like that's an OG viewer right there. That's awesome. Yeah. So it's like that, you know, that was like our first YouTube channel from five years ago. I had another one after.

And then I started another personal finance YouTube channel before I started. I started my blog, you know, and then I started this one, and this is the one that kind of, I stayed consistent with it, and it kind of, you know, took off. But you have to find ways to increase your income. That's the most important thing. Absolutely. I could not agree more on that. And that is the number one thing that we tell people on this podcast, too, is increasing

your income is the first thing you can do because you can only cut back so much. And then there's a cap to how much you can cut back, but you can increase your income. And your income is virtually infinite. And when you increase your income, you're going to see so many more things happen with your wealth. and it's going to absolutely change the way that you can actually use those dollars to make more progress investing, whether you're investing in your business or real estate or whatever else you're doing. There's so many more things that you can do in that way. And that's one of the secrets that you have

as secret number two is that the wealthy always find a way to invest money no matter what. So if someone's making a low salary, they look at increasing their income first, they start to increase their income a little bit, and maybe they have a little bit of extra cash now. What would you say to them if they wanted to start investing more? How could they start investing? With a low salary. Exactly. You just have to be very disciplined, like extremely disciplined, okay?

The running joke with investors and with like money making figures on YouTube and on podcasts and, you know, influencers who talk about money is like you got to stop buying Starbucks, right? That's the joke. You have to stop buying Starbucks. It's too expensive. And I push back against that, you know, because I don't think that that's a problem to buy Starbucks, especially if you can afford it, especially if it's not, you know, you

you know, causing too much of a problem with your overall finances. But if you have a low salary, that's where things kind of start to get gray, right? Because it's like if the bare minimum of your life costs you $37,000, right, bills, rent, this, that all, life costs money. There is no way about it. Like, life costs money. We all have expenses. And so you can't escape that. And so if the bare minimum that you can afford to,

save is like $3,000 on a 40K salary. Let me make it more extreme, actually. Let me give a more realistic example. Because most people can't save anything. Most people make 40K and at the end of the year, they have nothing. How do you fix that? There is no magic like formula. There is no magic, you know, abracadabra. And all of a sudden, you have an extra $6,000 inside of your raw thyroid at the end of the year. There's nothing like magical or fancy or pretty about it. It's ugly. It's dirty, you have to start saving more of your income and spending less. That is the truth. If you're making 40K per year and life costs you 40K, you have to figure out how to scale back. Look at your life and figure out what is it in my life that I can afford to cut back?

At this point, it's not about once, okay? Because if you're not making a lot of money, and I hate to say this, but it's the truth, and I can't help but not tell the truth, if you're only making 40K per year, especially in this economy, at this point, it's not about your wants anymore, especially if you want to invest, okay? If you want to invest, you have to throw your wants out the door. You want a nice car, but that car is going to cost you $500 per month, okay? You have to consider downsizing. I'll sell you my 2004 Honda CRV. Right, like you have to downsize to something that's going to be more affordable. perhaps you're paying for certain subscriptions.

Maybe you have Disney Plus, a Hulu, a Netflix, an Amazon Prime subscription, an Apple Music, Spotify, cut back some of that stuff. Okay? You don't need all those subscriptions. Yes, I do. No, you don't. Yes, I do. Okay, fine.

Then you don't want to build wealth. Like I said, it's not pretty. It's not, and a lot of people don't want to hear this. But those aren't the people I'm talking to. I'm talking to the people who truly, truly want to do this. And if you truly want to do this, step one, find ways to scale back your spending. If you're 100% objective about it, then you'll find things in your life that you're spending money on that you don't need to be spending money on.

Let me give you an example. Back when I was making like $500 per week after I graduated from college and worked a crappy job, my wife and I would go to Chick-fil-A no joke every single day. Okay, we were like famous in this Chick-Fleigh that we went. We would walk in and everybody, hey. And they all knew us, you know, because we went there every single day. And Chick-fil-A costs, you know, $15, $16, $17 for two people every single visit. And we're going every single, I'm not exaggerating.

Like, we literally went every single day. And the problem with that is I only made $500 per week. And so at the end of each month, we had zero. After bills, after, you know, expenses, rent, all that stuff, we had $0. If I was serious back then about saving money, which I wasn't, clearly. If I was serious about it, though, I would have to make the sacrifice, even though I loved eating at Chick-fil-A, I love the waffle fries, I love the juicy sandwiches, I love the sweet tea, I would have to cut that out and start eating Campbell's soup or something. I mean, I'm just, you know, that's extreme, but obviously you can find

cheap recipes that taste really good. The problem is, is I can't cook. And so that's, you know, but right. So that's an example. Cutting back. That's step one. You have to cut back. If you're serious about it, cut back. And if you're not serious about it, then why are you even listening to this podcast? And you're like, no, no, no, don't say that. It's, it's, you know, I would think that everybody who's listening right now is serious about it, which is why they're listening. And that's extremely good. It's proactive. But you have to start taking action in your life after this podcast ends.

After, you know, after the music turns off, what are you going to do after that? How can you be proactive in your life after that? And the first step one, stop spending so much money. If you want to not permanently be in a position in your life where you can only afford to buy Starbucks once per month because your income is so low. So if you don't want to be in that position permanently, like you want to go to Starbucks every single day, you have to increase your income. Okay? You have to increase your income.

Find a new job. Get a raise, right? Those are my least two favorite ways of increasing your income, is finding a new job or trying to get a raise. Because those, as you said, those are the most limited. Your income at your job is going to be limited to your time. And the problem with that is all of us only have 24 hours in a day. but even more importantly, most jobs will only pay you for 40 hours per week. And so like that is your limit.

That's your ceiling. And so even if HR is like, yeah, we like you. We'll give you an extra of 1K per year. You do the math. That's $1,7, $120 per month extra. Like what can you, what's that going to give you? And if you really kind of start to break it down like that, it's not a lot. Like 1K per year is like, oh, yeah, it's great.

But when you really start doing the math and breaking down, what that's going to afford? you, it's not a lot. And so, you know, increase your income. Yes, by asking for a raise or by finding a new job, my preferred way to go about it is by starting something for yourself. Because as you mentioned, the amount of money that you can make is infinite. It's infinite, right? Especially if you start getting into more passive things. And the term passive is funny because nothing is truly, except for like dividend stocks, right? Nothing is truly true. really passive where you just throw money at it and then it gives you money back without you

having to do any work. But, you know, there are certain things that are passive in the sense of you kind of put in the work once. And the example that I always give is with my YouTube channel. Like I make a video once. I put it out. That video makes me recurring money. As long as the YouTube algorithm continues to push it, I'm going to continue to make money on it. I don't have to put in any extra work on that video. And so in that sense, it is passive. And because of that, as long as I keep pushing out content, my income is going to continue to grow and grow and grow. Because those videos are going to continue to make me money, right? Passively.

And so I'm just actively working on making new videos per every single week. Meanwhile, passively in the back end, the YouTube algorithm is working and my income is increasing. And so in that way, the income is infinite. It becomes a thing of how hard are you willing to work? That's it. How hard are you willing to work? Absolutely. Go ahead.

Right. And say somebody increases their income, they have a little bit of extra cash and they want to start investing. They want to start making their first investment. Would you look at something, I know you've talked about dividend stocks. You have a bunch of great videos on dividend stocks as well and dividend ETFs and stuff like that. Would you look at investing in dividend stocks? Would you look at investing in index funds? What is your favorite place for a beginner to start with? It depends on the goal. It depends on like the individual goal. With investing there is no like one size fits all. depending on the person's goal. I mean, like, you could say, yeah, there is. Like, just go invest in V-O-O, right, and call it a day.

That's kind of a one-size-fits-all thing. But I typically like to ask people first, like, what is your goal? Like, do you want to make income or do you just want to invest for the long-term? That's why, like, when you go to certain, I'm not going to give any names because I don't want to, you know, like, it's not sponsored. So I'm not going to say, like, any specific robo-advisor. but you could go to like a robo advisor and they'll ask you certain questions because they're trying to get a feel for the type of investment strategy that should be attached to you, right? Are you trying to make income? If so, then investing in dividend stocks or dividend ETFs, something like my personal favorite, SCHD, would be a good route to go down because that ETF is going to pay you a really good healthy dividend.

If you're trying to, if you don't care about dividends much, you just kind of want to invest for the long term, build your wealth over time in the stock market. then STHG is probably not the best option because it's not going to give you the same level of growth as another ETF like VO or if you want to get more broad and go like VTI or you can get super aggressive and go like VUG, right? And those ETFs are going to give you a lot more growth because the companies that are held inside of that ETF are going to lean more toward the growth side of the strategy, right? Companies like, I don't want to give meta as the example, but you know, like Apple, Google, Amazon, these types of companies. Even though some of those companies do pay dividends, they're not really considered like dividend stocks to the core. Like when you think of dividend stocks, you think of like AT&T and like Johnson and Johnson, like, you know, Coke. Like these companies don't have a lot of growth in them. They've been around for a long time and they pay a really good dividend, but they're so established that there's not really much.

to grow. And so they just take all their profits and they give it back to shareholders. And so like when you look at the stock charts for those companies, they're not beautiful. They're kind of ugly. I mean, they're not like really doing anything, right? It's nothing like Tesla where it's like, you know, it's skyrocket. That's because all the dividends are being given back to shareholders. They're not being reinvested back into the company. And so with certain ETFs like SCHD that focus a lot more on dividend paying stocks from dividend paying companies, they're going to pay a higher dividend, right? Because they're only focused on on these companies that pay the highest dividend.

Whereas a more, you know, balanced ETF would be like V-O-O, which would be the kind of one-size-fits-all or VTI, the Vanguard total stock market ETF. It's a very one-size-fits-all ETF. That's the one that I typically recommend for most people. Like when I'm making my videos, I don't know what the thousands of people watching, what their strategy is, right? And so I kind of have to get very broad

and assume that most people just kind of want to invest for the long term to build wealth over time. And with that, VTI, VO, like these types of like broad market, S&P 500-based ETFs are going to be the best route to go. Just throwing $500 per month into a Roth rate at these ETFs, $6,000 per year, over the course of 30 years. Like, I hate to use the word guaranteed because nothing is guaranteed in the stock. The stock market's risky, right? Right. Let's find another word, right?

Like, you're likely going to be a millionaire. Let's just not say guarantee. You're likely going to be a millionaire. The math is there. The compound interest is going to work itself. It's magic. And over time, as long as you keep on investing, that's the key. Because you can't just throw $1,000 once, you know, at your wealth IRA and then let go

of the wheel for the next three years or 30 years, three decades. And then expect that that's going to grow to a million. Like, you have to consistently invest, you know, that money, every single. month or every single year, right? And so that's what I would say about that, though. I remember when I needed to hire someone fast, but finding the right person quickly felt impossible. And if you've ever been there, you know how stressful this can be. That's where Indeed comes in. When it comes to hiring, Indeed is all you need. Instead of struggling to get your job post noticed, Indeed sponsor jobs help you stand out and hire faster. Your post jumps up

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like some of the best for people, you know, who are just starting out. And they're trying to figure out their goal because it's almost an all-encompassing thing as well. Now, once somebody starts investing, one of the keys here is, you know, say they're starting to invest every single month, two of the secrets that you have that millionaires actually do is investors don't try to time the market and millionaires do not panic sell. And I think this is extremely relevant right now because I get so many messages from people who are new investors saying, I don't know what to do in this market. There's a bare market.

I just lost 20% of my money. I've never invested before. How do you kind of keep your emotions out of investing and kind of give us some insight on why you shouldn't time the market, why timing the market is actually a bad idea. Yeah, yeah. Stop looking to have a video that just got put out 47 minutes ago, and I'm talking about this in the video. Stop looking at your stock app on your phone. Stop going to Google and typing in Dow Jones to see what is happening in the market, right? Stop. Let go of the wheel and just kind of let it do its thing. That's the best way to not panic sell. That's the best way to not let your emotions, you know, because it's very emotional. I tried day trading years ago.

And when you see people doing it, it looks so easy. You're like, oh, I could do that. It's nothing. And then once you start and real money's on the line and you're in the red, that's real money that you're losing. And it becomes very emotional, very fast. And you can't control your emotions. And so the best way to not panic sale is just by simply.

not looking. And that sounds like irresponsible. Like what do you mean not look? Like I should just ignore that I'm losing money. Two things. Yes. But second, you're not losing money, right? You only lose money if you sell, if you panic sell. All the people who bought, who Yolowed their life savings last, this time last year, because the stock market was hitting all time highs. I mean, you could throw money at anything and you would make money. Like, it was just, it was the start of the great bubble, right? Right. Those same people are now selling.

I had somebody reach out to me on Instagram and say, hey, Joshua, I followed your advice and I invested $1,000 or whatever, $10,000 into VOO three months ago, and I'm now down $1,000. I'm freaking out. What do I do? And I'm like, why are you freaking out? Like, is that money that you're going to use to buy a house in the next two years? If so, then, yeah, that's a problem. You shouldn't have invested that money aggressively into the stock market.

That money should have probably just went into a high-yield savings account, right? If you plan on using it anytime soon. But if you're investing that money for the long term, who cares? Instead of looking at the daily or the monthly or the weekly stock chart on the Dow Jones or on the S&P 500, zoom out and look at the max chart. Look at the max. And you'll see that over time, it kind of plays out in your favor. You know, again, I don't want to sit here and say like, it's going to be.

going to go up all the time because past results or not, you know, whatever, blah, blah, blah. But it's going to work itself out. And so if you just don't look at it, just continue to dollar cost average, right? And for those of you who don't know, dollar cost averaging is just a way for you to sort of mitigate the risk associated with investing in the stock market because there is no doubt about it. Investing in the stock market is risky. I mean, we can see what's happening right now. Everybody's losing money.

All of our portfolios are red. unless you're shorting the stock market, in which case you're probably making a lot of money. But most people are long. They're investing for the long term, and they're hoping that the stock market goes up. And so by you continuing to invest, small amounts of money each month, $500 per month,

$100 per month, whatever you can afford, and you're a dollar cost averaging into the stock market, right? And so instead of you throwing a lump sum of money into the stock market at the beginning of the year, right? In which case, like this year, it would have been a bad time to do that because we all know what happened after that. After once January hit, it's been downhill since. And so imagine if you would have thrown $6,000 to the stock market in January.

What are we down? Like 30% right now? 20%. I don't know the exact number because I don't really look at it. But I know we're down over 20% because I know that we're officially in a bare market. Okay. And so imagine if you threw $6,000, you'd be down 20% on that $6,000. Or you could dollar cost average and you could throw $500.

in each month over 12 months, which is $6,000 over the course of the year. And so right now you'd only be down 20% on whatever you invested up until now. What, $3,000 if you were to do $500 per month up until now? And who knows what's going to happen to the stock market the latter half of this year? It might kind of start consolidating, leveling out. It might go up. I don't know. But you're still investing.

You're still dollar cost averaging. And so all the money that you lost at the beginning of the year, well, if the stock market's going up, then you're making it back, right? But you're also continuing to dollar cost average in at a higher price. And, you know, it just, it all kind of levels itself out over the course of 30 years of you just continuing to invest small amounts of money. It's just a way to mitigate risk in the stock market, you know. And it's also a good way to just stay consistent because it's a lot easier to invest $500 per month than it is $6,000 in one lump sum. because most people don't have $6,000 to just throw into their investment account, right?

But a lot of people can budget $500 per month to go into that account or $100 or $50, whatever you can afford at this moment, right? That's the important part. Exactly. And I agree with you in terms of look at your account less. And some people say, well, you're the finance guy and you're telling me to look at my account less. And yes, I am. The reason why is it because it removes that emotional part.

I couldn't even tell you what my balances are in my investment accounts right now. I think about investing all the time. Yeah, same. And it's one of those things that if you look less, it just helps you out. And then the key thing that you said too was zoom out. And zooming out, one of my favorite exercises to tell people to do is take your phone, turn it sideways to the longest time horizon on any stock chart.

And what direction is that index going or what direction is that stock market going? It's going up. So if you do that and you use that as a reminder all the time, it's going to be something that's just going to help you through some of these times. It's buy low, sell high, yet most people do the opposite. But if you can put that into your brain and kind of train your brain to do that, it's going to be something that can absolutely change your life

because most people panic, sell, and that's the last thing that you want to do. And you know, it's funny, too, Andrew, is like, what's funny is that people, they buy high and they sell low, right? That's what a lot of people do, because they panic. But the weird part to me, and this really gets into,

which I'm not going to even get into, because it's like market psychology and stuff like that. But it's the reason why not looking at the stock market is so important. You just invest your money, dollar cost average, and let go over the wheel, Okay. But what's funny to me is that people have a tendency to want to buy when the stock market is hitting all-time highs. It's a rally. It's everything's going, everybody's going crazy. All these IPOs and these companies going, you know, up 50% on the first day. And so everybody's tossing in money because we're in a bull market. Times are great. But the moment the market starts going down and we hit a bear market and we're losing money. People don't want to invest. But the reason that's so weird to me is because of that.

You make money by buying low and selling high. And so the time to buy is when we are in a bare market, when stocks are at a discount, right? That is the time to buy. Right. Not when things, I mean, of course, you still continue to dollar cross average even during a bull market. When the stock market's hit an all-time highs, you continue to dollar cost average. But like, you also do that right now. Like, do you also keep on investing right now when the market's hitting, you know, X year lows, right?

Whatever, the lowest set it's been since whatever. You continue to invest. So that's all I wanted to say about that. Absolutely. I completely agree. And we're talking some about risk here. And I think one of the riskiest things that someone can do is rely on one stream of income. And you talk about this a little bit in the video as well.

But having just one stream of income is really tough. And we talk about increasing our income. but how can someone actually, or why is it so dangerous to rely on one stream of income? And how can someone add multiple streams of income to their life? Yeah. So, I mean, it's dangerous because, yeah, it's funny. People often think that, like, being an entrepreneur or, like, starting something for yourself is risky. It's more risky than working in a corporate environment underneath a big company.

I would argue that the latter is more risky. Like, you relying on somebody. in HR to decide whether or not they want to let you go that day or some manager who has his own personal problems, who if he comes into work one day, decides, you know what, I don't like you anymore, right? He could do that. HR could do that. HR could decide, you know what, I'm not going to give you a raise this year.

Even though you've been with the company for 20 years, I'm not going to give you a raise. And so I would argue that working for somebody else for another corporation is more risky because you have one stream of income and that income. and that income is relying on other people who are people, and so they're emotional. They make decisions. Sometimes they get a little bit power hungry, and they might decide, you know what, I don't like you today, so I'm going to fire you. And there goes your livelihood, just like that.

It happens all too often. I'm not sitting here saying something that doesn't happen. Like, this happens all the time. I've seen it happen with people that I know. Just like that, in the blink of an eye, you're gone. Your whole livelihood has done. for, right? And the worst part is that you don't have any savings because you're living paycheck to paycheck because you're, you know, living at your means or above your means. And so that's the

problem with having one stream of income. And even if you're an entrepreneur, let me just use the example of being a YouTuber because that's near to my heart. That's what I do. I love doing it, right? So that's the example I always give. As a YouTuber, I could rely only on Google AdSense for my money. Right? That's the money that Google pays me. When people watch my videos, they get served ads. And so I make a cut from those ads. that's risky. If I'm only relying on Google AdSense for my income, that's also risky. Because what if YouTube decides, you know what? Your content's been flagged as offensive.

And so we're going to demonetize you. Oh, that's a problem. Well, because that's my only source of income. And so now, even though I'm getting thousands, hundreds of thousands, potentially millions of views on my video, I'm not making any money from it. Right? So having multiple streams of income, no matter what you do, is important. Right.

And you can look at companies, and companies do this as well. Look at Amazon, for example. Amazon doesn't just rely on Amazon.com, e-commerce, to make money. Amazon has a plethora of companies that they make money from. Right. So even companies understand that diversifying Microsoft, they buy companies all the time I mean, they find ways to diversify all the time because they understood a long time ago, if we're only relying on software to make us money, that's dangerous, right?

That's really dangerous because at any point, some other company can come in, Apple, and start dominating the market. And so if we don't have other ways that we're making money, then we're not going to be able to pay employees. The products are going to start getting less quality. And so the customers are going to stop coming back. And so the profits are going to get really thin. And so shareholders are going to start getting stressed out and selling. And so the stock price is going to start going down. And it just kind of creates this disaster, right?

And that's not like hyperbole. Like this stuff happens. It happens all the time. And so you have to diversify your income. Just like you have to diversify your investments. Right. Don't just invest in Apple. Because what if tomorrow, for some reason, Tim Cook said,

you know what? I'm tired of dominating the corporate world. Apple's going to go private. Well, you know, I mean, like, yeah, like you'll get your money. They'll, you know, they'll buy the shares from you, whatever. They'll go through the process. Or even worse, what if you were investing in something like, I don't know, meta. I like to joke about this a lot, right? Because like, the stock is just tanking. Like you invest in meta. And your livelihood is tied up in one man's vision of what the world should be. Call him crazy, calm genius, whatever your opinion on mark is, your livelihood, your investment portfolio is tied up into one man's vision, his decisions, right? And so that's the danger of not diversifying your income, not diversifying your investments. You should be diversifying

everything because you should never be relying on one source of anything for income or for investment growth. Absolutely. And I completely agree. I think it's one of the, just one of the most dangerous things that you can do is just have that one stream of income. So if somebody wanted to add streams of income, what would you say to them? Maybe they want to start with a side hustle or something along those lines. What would you say to them? Would they go towards their interests or how would you kind of evaluate doing that? Yeah. So if you work a 9 to 5 job, and that's just kind of the default that I go to. If you work a 9 to 5 job and you want to start making more money, the easiest way to do it is by using the internet. I mean, there is like, yes, you could go. And, you could

go and get a second part-time job. That's a very practical way to diversify your income is by just going and getting a second job, right? You could go and mow lawns. You could go and paint houses. There's a lot of things out there that you could do, right? It's just that my go-to, my favorite, is making money online because it's so accessible. And there's so much more opportunity and room to scale. So that's the biggest thing, I think. If you want to make more money, find something that's scalable. Because unless you just love your job, which I lean toward that most people don't love their job. Otherwise, we wouldn't have had the great resignation, right? People, generally speaking, do not love their job. And so I'm always leaning toward the quit your job,

not before you are making money doing this other thing, right? I didn't go full time on YouTube until I started consistently making money. But you work toward that. You work toward building up enough income to then leave your job. But at the very beginning, it is just going to be a side hustle. It's going to be this thing that you do

with your free time. Okay? No more going out to have drinks with buds every single night. You can still do that, but just don't do it excessively because you have to spend some time with this new project of yours

to build it up to, turn it into something that's going to be able to sustain you, but going back to what we talked about earlier, allow you to build up your income so that you can have a much more higher quality of life, that you have more opportunities. The possibilities are endless if you make more money. There's just so much more opportunity, more room, more flexibility to do things in life if you're making more money. That would be my advice. If you're working a job, find something that's going to be scalable and preferably find something that you enjoy doing. And that can get a little bit gray because it's like your passion may not always be the

best money-making opportunity. Not everything is about making money. But if that's your goal, like if your goal is to make money, then sometimes like your passion may not align with that the best way. Does that make sense? Right. Like if you love, I don't know, throw out a random example here. If you love making cats.

toys. It's just an example. Obviously, you can make money off doing that, but it's just like a very, it's a very niche thing, right? If you love making cat toys and you're going to sell cat toys on Etsy, I would be willing to bet that that's not going to be a multi-million dollar business anytime soon, unless you found a way to scale it massively, get it in front of Shark Tank, get your products into Walmart, into Petco, into all these different stores, right? At that point, it could potentially turn into something that is making you million dollars per year in revenue, profits, I don't know, you know, but like find something that's scalable and preferably within your passion. If it's not within your passion, you just have to try things. Because a lot of people

don't know what they're passionate about. I don't know what I'm passionate about. You have to try things. I've tried so many things over the past since I graduated college and, well, actually, I didn't even technically graduate. That's a different story altogether. Since I left college back in 2015, I've tried so many things, so many things. And most of those things were massive failures, right? But I tried it anyways because I was just, I just wanted to see, am I going to enjoy this? Can I do this? Can I build this? Can I scale this? Right? And if not, that's fine. At least I know now that that thing is not for me. But I'm going to continue to try things because I'm not going to know if I'm just sitting on my couch watching Netflix all day. I'm not going to know what I'm

passionate about or what's going to make me money unless I'm trying things. You know, it's like you have to get out there and try stuff. You have to get out there and put yourself out there and start risking your time, risking your comfortableness, right? Like, it's uncomfortable. Starting stuff is uncomfortable, but that's just what you have to do if you want to get to that place in your life where you have the freedom because you have the money. For sure. And I think Toronto, things is one of the biggest things. I've done the same thing where I failed at so many different things at the beginning, just trying different businesses and seeing what I liked. And then some things just started to work and it started to click over time. And I think you just have to do that

in order to find that income stream. You're not going to just find it the first time. I mean, you can, but it would be something that would be very lucky compared to what most people do. Exactly. As people start to increase their income and they take on some multiple streams of income and their income starts to rise a little bit. One of the biggest things that you talk about is the savings rate, where a lot of people, their lifestyle starts to creep up a little bit over time and they spend more money as their income increases. But the key here is to kind of focus on that savings rate. So tell us about the power of the savings rate and why it's so important. Yeah. So I talk about this a lot because it was something that I really started to understand

on a deep level recently. Wealthy people, yes, investment return is important. that's kind of obvious, right? Like, if you're getting a negative investment return, that's not good. So, like, investment return is important. But what I sort of realize is that, like, wealthy people aren't so much concerned about the investment return as they are the savings rate, how much money they're able to save and put toward investing. Because, again, generally speaking, you know that you're probably going to be investing

in something that over the long term is going to give you a positive ROI. So that's not really a concern. The concern is how much money are you able to put away? Because back again, to the example from earlier, if you're making 40K per year and you're also spending 40K per year, you are net zero at the end of the year. A doctor who makes 300K per year and spends 350k per year is negative 50,000, right, net worth. Compare that to a plumber who makes $50,000 per year and saves $5,000, that plumber, although he has a significantly smaller income, is actually more wealthy than the doctor, because he has $5,000 net worth compared to the doctor who has a negative $50,000 net worth, right? And so what's interesting, there's an interesting phenomenon where it's like, the more money

that you make, and this is the reason why athletes are infamous or lottery winners are infamous for getting into massive amounts of debt, the more money you make, the more credit opens up to you, right? Because banks are like, well, you make a few hundred thousand dollars per year. You're an athlete who makes $5 million per year. Here you go. Have it all, right? And so they have it all. And what ends up happening is because they have a lot of credit extended to them, a lot more opportunity because they make more income, and their savings rate is negative 100%. They end up getting into massive amounts of debt. And the same thing happens on smaller levels of income.

If somebody makes 32K per year, they may not have as much credit extended to them as somebody who makes 100K, but they still have a credit extended to them. It's just not as much. And so if their savings rate is still negative or 0% or negative 100%, right, they're still going to get into debt. And so the savings rate is super important, no matter how much money you make, because the savings rate is directly correlated with how much you're able to invest. And investment returns mean nothing if you're not investing. Listen, you can have a stock that returns 100%. It doesn't matter. Because if you're not investing into that stock or you're investing a dollar

into the stock, congratulations. You just made another dollar. Is that going to get you somewhere? No, it's not going to get you anywhere, right? So, like, the ROI means nothing if you're not able to actually save. And this is my personal opinion. My personal opinion is that the savings rate is far more important than the ROI for that reason that I just gave. Exactly. I agree with you as well because it's one of those things.

And there's a great article, an old article that Mr. Money Mustache put out. And it was about, I can't remember the name of the article. I'll link it up down below. But it talks about the savings rate. And, like, the traditional advice was, you know, say if 10% of your income was like the old-fashioned. and traditional advice. But what happens is if you only save 10% of your income,

you end up working for like 52 years if you do the math on early retirement. So it's one of those things where you have to increase that savings rate over time. And that's why we always tell people, you know, start at a higher savings rate, because otherwise you're going to be working for a very long time. And a lot of people within our audience are interested in things like financial independence and stuff like that. So doing that, increasing that savings rate over time is so incredibly powerful for you to be able to retire even earlier, especially as your income,

increases because what most people do is they end up causing their lifestyle to increase instead of actually using that money for their freedom. So that's one of the biggest keys that we talk about as well. A thousand percent. The dream, the goal, you've made it to the top of the mountain if you're doing this, okay? Like you start at the bottom. We all start at the bottom. You look up and there's this massive mountain that you have to climb. It's scared. But you just have to take it one day at a time, just one step at a time. Don't focus at the very top. Just focus on the next 100 yards up the mountain, You're climbing this mountain, you're climbing it, you make it to the top finally. The top, in my opinion, is you're making a lot of money, okay?

But you're saving a massive amount of that money. For example, if you are living off of, say you make $50K per year and you're living off of $45,000, you're able to save $5K per year, that's great, okay? But you're living off of $45K. Imagine you start something after a couple of years, it blows up, you're making it, a million plus dollars per year. Imagine if you still keep living off of that 45K and after taxes and all that stuff, you still have hundreds of thousands of dollars left over to save and invest. You could still live off of that. You managed to live off of 45K previously when you were making

only 50K. Just because you're making a lot more money doesn't mean you have to, yes, fine. Go upgrade a few things. Don't go crazy though, right? I upgraded my car. I'm not driving anything crazy. It's not like some, you know, Porsche or something. It's nothing crazy, but it's a nicer car because I can afford to do that now. So like, fine, upgrade small things. Just don't go crazy. Don't go buy that 5,000 square foot mansion. Don't go buy that new Lamborghini, right? You can buy those things eventually. Yes, you can buy those things eventually. Buy assets first. buy assets, performing assets, that are going to make you money and then use the money that you make from those investments on the principal. The money that you make from the principal from those investments, the interest, you can use the interest to then go and buy things that you want to enjoy life.

I think there's nothing wrong with that. Those things are there for us to enjoy. It's just that the problem is people try to enjoy those things way before they can afford to. And so what ends up happening is it's the common saying. You buy things to impress people who don't care or whatever the quote is, right? Keep it up with the Joneses. You see somebody else doing this thing. And so you go and you try to do that thing when you can't afford to do that thing.

And honestly, the person that you're watching probably can't afford to do it either. Right? And so it's a bad example. And so you can buy it. You can have nice things. It's just that focus on buying the performing assets first. You're making a million dollars per year. Continue living on a really small amount of money like you were previously.

Keep on investing aggressively. Just invest aggressively. And then eventually, the business continues to make money. Your investments start making you money. You have this overflow of money. Fine. Go buy the Lamborghini. I think there is nothing wrong with that.

But there's a path you have to take, though. And it requires patience. Right. And using your assets to pay for your liabilities is one of the classic things from Rich Dad, Poor Dad, which is one of my favorite books. And it's one of those things where you can actually buy assets and those assets, cash flow to pay for your liabilities. It's one of the best ways to actually build wealth because now you're buying an asset that

can cash flow out. It pays for those liabilities. And then once that liability is done, you're done with that liability. It's gone down in value over time. Then you still have that asset in place still spitting off cash. So it's one of the best strategies for looking at how to spend your money in the future. 100%. If you have a low salary, you're working a 9 to 5 job, making very, very,

little money, the best thing you can do is save up to buy performing assets, okay, be it stocks, real estate, whatever. There's a lot of stuff out there, stuff that has a history of giving returns. It's putting that in there on purpose, right? Because there's some things that are just really, they're still too new to go and put your entire life savings into, right? By performing assets, by saving your money, don't touch the principle. And so, for example, if you go and you put down 10K on a house, depending on where you live. I live in North Carolina, where I live, you can buy a pretty good investment property for about 100K, right? So the bank wants you to put between 10 and 20% down on that investment property. Let's just say you put down 10K.

That 10K is your principal. Don't touch that. Let the investment work, let it give you interest and never touch the principal. If you never touch the principal, then you're never going to go broke because the principal's always there. The principal's always making you money, right? And so that's the best position you can be in is in a position where you have the principal in place, which is the money that you invested originally, and the principal is making you money. And even better, what you should do is the money that you make from the principal, just reinvest it over and over and over again. It's the reason why the rich get richer is because they have been reinvesting their principal for decades now. and they have so much interest being paid to them every single month that they can start buying

nice things because they have an overflow of cash, right? Not even counting their business, not even counting their business because your business is kind of like your job. Like your business really should fund investments. That really should be like the primary purpose for the income from your business should be to fund investments, right? Because if you get to a place where you're making a million dollars per year with your business, but you're also spending a million dollars on non-investment stuff, that you're really

not better off than somebody who's working a 9-to-5 job making 30K per year, right? Right. And so it goes across the board for everybody. Exactly. That is for sure the best way to look at that as well. Now, I want to shift gears because these are some of the questions that we ask all of our guest, Josh, and some of these are really fun to ask. So one of our favorite ones is finding out, what are some of your favorite books that

you've read? They could be on finance, business, whatever, within that range. Yeah, rich, that poor dad, you mentioned. It was a huge one for me. That was a people love, you know, I made a video on five, I forgot what I titled it, like the five books to read if you want to become like a millionaire or something like that. And I got a comment. It was like, rich dad poor, nobody should ever read that book.

It's the worst book in the world. Like terrible advice. And I couldn't help but laugh because I'm thinking like, you know, first of all, like to each their own. It doesn't matter if the book is fiction. That doesn't matter. Like, you're missing the point if you think that just because the book is fiction, that you still can't be inspired by it. Right. Like, it doesn't have to be a nonfiction book based off facts. If it inspires you, it could be Harry Potter. If Harry Potter somehow gives you motivation, somehow encourages you and inspires you to go and start that business, you can't be mad at

somebody for being inspired by Harry Potter just because it's not a business book, right? And so people love to like hit on rich dead poor dad for that reason. Whether it's fiction or not, I don't know. Robert Kiyosaki could have been lying about all that. I don't care because it helped me, right? So definitely rich, dead, poor dad. There's a book called and this one's not so much personal finance related. And I've actually got it on my desk right here. It's called reword. And this book right here, I've read this book a long time ago, like five years, a long time ago. It was like five years ago. And the book is formatted really nice. I love the way it's formatted. It's super easy to read. But basically the book is talking about business and a lot of

the misconceptions of running a business. Now, I'm just going to throw this out there. When I say running a business, that sounds scary. That sounds like, oh, man, like that, I can't do that. I can't do that it's, you know, it's a business. Like, they have to go to the bank and I have to create this massive, uh, plan and I have to like get investors and I have to have a office. No, maybe during your grandfather's time. That was the case, right? In this modern era that we live in, that's not the case. You run a business with your podcast. My YouTube channel is a business. Like these are businesses that we're running, right? And we're doing it sitting in our pajamas, was like at home.

Right? And so like, I don't want people to get freaked out when I say the word business. Basically, though, the book is about just the misconceptions of running a successful business. And so it talks about things like that where it's like, forget the business plan. Like, you don't

need a business plan to start a business. That's not like a required, that's like a prerequisite to starting a business, right? That's another big one. You know, I've got a whole bookshelf full of books and a lot of them I'm never going to read. Like, I'll be honest with you. Like, a lot of these books I bought them in bulk just to fill in the space.

And so, like, in the mix of all of it, there's, like, certain books that I will never, ever read. But there are a lot of books that I have read. But those are the two biggest ones. The first one being Rich Dad, Poor Dad, just because it's so inspiring. And it has a lot of investing principles that are just true. Like, there's just true principles that have stood the test of time. And they're just principles that will always be true, right? And that's what I like about the book is that it doesn't focus on the trendy stuff, right?

It doesn't focus on like the trends or the things that are working right now in this decade. It focuses on the basic principles of investing that worked 2,000 years ago and will work 2,000 years from now. Like, they will always work, right? And so that's why I like that book so much. That's my number one recommendation. Aside from that, I don't really read that much. I really don't. I don't have a lot of time to read.

Because my YouTube videos are just so crazy to edit. Right. And that's the key to. I'm going to link both those books up below. I have rework on my shelf and I haven't read it yet. So it's one of those. I buy books in bulk too, but I buy them in bulk because I get all excited about reading them.

Yeah. Also, I just want to throw in, I left out one. The richest man in Babylon is another very, yeah, it's a very important one. Also, see, now I'm getting ideas. There's a book that I read years ago called Acres of Diamonds. I think that's the name of it.

And that book, honestly, changed my life. That's such like a big statement to make. It really did, though. Like, it really changed my perspective on success and how, like, we all have opportunities. All of us. It doesn't matter. Like, basically the premise of the story is this guy is hearing all these stories about people in California or whatever, like finding gold. They're finding diamonds and gold and, like, riches. And so he's like, oh, I need to go there. I need to go there. And so he leaves his farm and goes there. He goes to California to try and find gold or diamonds or whatever it is. Long story short, he's trying to chase this dream for the rest of his life and he can't find it.

Meanwhile, he had a diamond mine in his own backyard that he didn't even know about until somebody bought his property after he died and then randomly stumbled upon something that he recognized and then started to dig and found that there was an acre of diamonds in his backyard. And so, like, the principle of it is that, like, stop comparing yourself to other people is a big thing, because that is literally the worst possible thing you can do is compare yourself to somebody else. You are not that person. Where you're at in your journey is not where they are, right? Like, you are your own person. And so you should compare yourself to yourself. Compare yourself to yourself yesterday. That's the only person you should be comparing yourself to is your yesterday's self, right? But that's the premise of the

book, though, is to focus on yourself, focus on what you have now, because that is your diamond. That is your acres of diamond. You, which you have right now in your possession, be it your personality, be it the fact that you can draw really well, or that you can sing, or that you, whatever, whatever it is that you have. That is your acres of diamonds. Focus on that, right? Don't focus on this YouTube, who's making prank videos. And so you want to go make prank videos now because that's the thing that's working right now, right? This NFT project that is making people millions of dollars, right?

That's you chasing something that is out of your control. It's out of your reach. And it's not a guarantee. Right. But if you just focus on what you have right now in the present within yourself, that's what's going to lead you to something great, you know? And so I love that book so much. That's another recommendation.

I'm going to check that one out too. That sounds amazing. So I'll link all of those down below in the show notes as well so everybody could check those out. So Josh, this is my favorite question to ask somebody. I always ask it as the last question because it's one that has some really cool answers. And everybody's answer is a little bit different. So what does wealth mean to you? So to me, wealth is not, and I would imagine this is probably a pretty common response.

Wealth is not necessarily money, right? Because if you think about this phenomenon, why do people want money? They don't want money just to have money. Like, they don't want it just to look at it in their bank account, right? They want it because it's going to do something for them, right? And so, like, what does it do for you? It gives you freedom. It gives you comfort, right?

It gives you flexibility, gives you opportunity. That's a real thing. Money gives you opportunity. Money gives you flexibility. It gives you freedom. It gives you comfort, right? It gives you all of these things. that not having money can't do.

And so if you really break it down and look at like the core of what it means to be wealthy and why you should want to be wealthy is for those reasons, right? Somebody who's playing the lottery, why are they playing the lottery? They're not playing it to win the money. They're not, if you think about it, they're actually not playing it to win the money. They're playing it for what the money can get them. And to me, like wealth is exactly that. Like what is the core.

thing that that money is going to get you. Comfort, opportunity, right? Flexibility to spend more time with your kids. The fact that I can go upstairs at any point if I want to and play with my two and a half year old is, that's so magical to me. I can't imagine working a nine to five and only being able to come home to see my son like during the evening right before he goes to bed, right? The fact that I can hear him playing throughout the day and I can hear him laughing, even if I'm not right there with him, the fact that I'm here and still present is amazing to me. And like, to me, that's really what wealth is, is you having the opportunity. And it's going to sound so cliche, but I can't help it. It's true. Like, it's so true. Wealth is you having the opportunity to live the life

that you want. What should life look like to you? Maybe you want to be, you know, you want to be Nate O'Brien, another YouTuber, a finance YouTuber, and you want to go live off in your truck and you want to go travel through the backwoods of Oregon, right? Maybe that's what life should look like to you. And because you're wealthy, because you have money, you can do that. If you weren't wealthy, you would have to work a 9 to 5 job or something, right? And so wealth is not about money. It's about life and how life should look for you. And health is a big part of it. it because if you're not healthy and you could be Elon Musk. If Elon Musk is not healthy and he's not able to enjoy his wealth, then it doesn't matter because he's in, he's bedridden

all day, right? And so like he doesn't do it anyways. That's probably a bad example because he's a workaholic, but you know, you get the point. Like if you're unhealthy, it doesn't matter how much money you have because like that money is only going to take you so far, right? So health is obviously a huge part of it. That's everything. But after that, that, that's That's what wealth is to me, is you being able to live life on your own terms with freedom, with flexibility, with opportunity, not based off of what the HR department thinks you should have, right? But what you think you should have, that's wealth. I absolutely love that answer. And that is one of the biggest things with wealth for me too,

is just the freedom and the time and the energy that you get to have. You have to have control over all of that. And there's so many aspects to it, but that is one of the most important things is having that time freedom. So, Josh, thank you so much for coming on today. This was absolutely fantastic. So where can people find out more about you, your YouTube channel, your blog, all those things? Yeah, definitely my YouTube channel. My blog is, I'm not super active on it just because YouTube is the main thing right now. YouTube channel. That's really about it. Follow me on Instagram at Real Josh Romeo. It's amazing how many people don't convert over to Instagram from YouTube.

You know, 135K followers on Instagram, but like 3K followers on Instagram or 135 on YouTube and 3K on Instagram. That's awesome. Well, we'll link all of those up down below, including all the videos that we talked about today. And I know Josh has a bunch of videos that kind of will coincide with what we talked about today, too, from the books videos to how to build wealth and a low salary. So we'll link all of that up down below for you guys to be able to check out.

Josh, thank you so much for coming. We truly appreciate it. It's pleasure's on mine. Andrew. I really appreciate the opportunity. Thank you guys so much for listening to this episode of the Personal Finance Podcast. If you guys have any questions, hit me up on Instagram or TikTok at Master Money Coe. And don't forget to help out the show and leave that five star rating and review on Apple Podcasts or Spotify.

I can't thank you guys enough for doing that. We truly appreciate each and every person who leaves that five star review. I'm forever grateful for you guys. Thank you guys so much. We will see you on the next episode. Rosen lasagna, medium power, 15 minutes. Sounds like Ojo time. Let's play.

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