if one had $100,000 just for simple mat $100,000 and you want to put this away for 10 years and have the greatest odds of seeing this money multiply where would you put this $100,000 in savings that's the question and that's what we're going to be talking about in this episode of the Mind Valley podcast so welcome a special guest today jreed Singh well first off thank you for having me before we go into where to put this 100 Grand we want to understand where is the advice coming from now you grew up in an Indian
family right correct which means becoming a YouTube star was not something your parents were pushing you to do they were probably disappointed with you uh disappointed I would say is a little bit little bit of an understatement we could put it this way when my mom found out that her son was not going to be a doctor she was on the B border of going to the hospital she it took my mom a year and a half to believe that her son was not going to be a doctor my dad was so angry because when
you grow up in a traditional Indian house and your parents tell you you need to be a doctor this isn't like a recommendation this is like either you become a doctor or you're no longer a part of our family it's it's it's a really hard kind of line that gets created and so from the day that I was probably one years old everybody in my family's friend Circle and our family Circle knew that just B was going to grow up and become an opthalmologist or a dermatologist like it it was at one year old at
one year old yeah I don't know what is it with Indian parents my my Indian parents are in the audience Mom Dad what's up with you guys my mom is waving a finger at me does that mean you're disappointed that I'm not a doctor so what happened so what happened was I started learning well I knew I wanted to become successful because I saw how hard my parents were working my dad was working around the clock uh six or seven days a week consistently and I wanted to then buy my dad's time back because I
wanted to spend more time with him and so that made me realize I wanted to become financially successful now I couldn't say I wanted to be rich because that was a very bad thing but my intention for wanting to become financially successful wasn't to hoard the whole bunch of money and material things it was I want to spend more time with my dad and I think it was that understanding of how does money play a part in your life and why do so many people put a smoke screen around this topic of money that really
got me intrigued about learning about money and by learning about money that was for me when I was in Middle School there's a Indian drum called the toll and I went to India when I was in Middle School and I really was intrigued by this drum uh and and I bought it from Punjab and I brought it back to America and I started learning how to play it in my bedroom and I played it for my uncle's wedding I was 12 years old the DJ at that wedding said hey do you want to make a
little bit of money playing this drum at other people's weddings I said heck yeah so I was 12 13 years old and he started paying me like $50 at a wedding to play this drum at other people's weddings that got me to meet a lot of the other local Indian DJs who then when I was in high school proposed the idea to start hosting teen parties for kids in my high school I said okay that works so then we kind of created this teen party business when I was in high school we started hosting teen
parties making a little bit of money the actually the first party that we did we made $4 of profit the DJ made $2 I made $2 at the end of the night so it was like a it wasn't really about the money it was more about the experience was a decent stop yeah and we were having a great time too and I was learning uh and so that was my experience into the entrepreneurial world I took that education and knowledge to the same University you went to the University of Michigan but interestingly I didn't know
that people go to college to party I didn't know that people drank alcohol in college so and and that's funny because we both went to the same University the University of Michigan I graduated in '99 you graduated in 2007 2013 yes 2013 and so I got to U ofm and it's kind of funny because the day that left for college my mom was in the kitchen I said Bye Mom she said where are you going said I'm going to college she said oh when you coming back I said I don't know and I got a
call later that evening from my dad he said where are you I said oh I'm at College he said when are you coming home I'm not sure yet I had no idea what to expect in college like that's how oblivious I was I only applied to one college uh which was the college that I got into fortunately I had no idea what to expect my parents didn't go to university here I I didn't know people that went to University I didn't know people partied in college I didn't know people Drank in college I also didn't
know where people got the money to drink in college so I got to the University of Michigan I parked my car I brought him a microwave on my sleeping bag because I thought he slept on a sleeping bag in college and now I see people partying drinking and blowing money that they don't have and now I'm like wait hold on I thought everybody was here trying to achieve some level of success in college why are you guys partying shouldn't you be in the chemistry lab doing some like important stuff and that was when I was
like okay how would I take this teen party business that I had in high school bring it to College because I don't drink I'm not really into the party scene and so that was kind of my now into college I started hosting parties and that was when I started making more money and when I realized oh you can make money without a degree that's interesting well what can I do with this money and that's when I started learning about investing I started learning about financial education and that's when I also get very upset and angry
because I realized how somebody in that traditional household where you learn go to school get good grades get a good highp paying job you miss out on a lot of financial education opportunities like there's nothing wrong with being a doctor nothing wrong with getting a good profession or career but there is something wrong when you don't learn a thing about financial education because well a lot of doctors end up broke and you might not think so because you think oh they're making a lot of money and overworked and many times overworked but just because you
make a lot of money doesn't mean you're going to make a lot of wealth and that was the key thing that I realized that there's a difference between Financial education and the school education that we're taught now like what you do here at mind Valley you guys are really going outside of the school education because there's a huge lack there I focus just on the financial side side that's all that I saw because I realized there was such a lack of what is investing what is dividends what is cash flow what is wealth I've never
heard of these things before and in a traditional Indian house I had never heard of the concept of Entrepreneurship or investing I had no nobody in my family was an investor or a real estate investor I had never heard I didn't even know you could do that and if you don't learn that in your home if you don't learn that in school where are you going to learn it and that was the thing that you know if you grow up in with Rich parents your parents are going to tell you how to stay Rich hopefully
but if you don't then where do you learn that and that's where this and where do you learn it well I started learning with books um the first time I read a book cover to cover was on my a flight to India because this is back in the day before they used to have those nice TVs on planes if you remember those days you used to have the one little TV in the aisle of planes and you'd be on a plane for 20 hours and when you're sitting on a plane in economy class like this
for 20 hours with nothing to do it gets very boring very stressful and very difficult and so I would take books with me which I'd never read but I happen to bring a financial book and that was the first time I read a book cover to cover because it actually intrigued me now can I ask what book that was it was called Rich Dad Poor Dad by Robert kosaki how crazy is that we we have a lot in common that was the First Financial book I read too really yeah Rich Dad Poor Dad by Robert
by by by kosaki he had a follow-up book the cash flow quadrant yes and both those books were among the books that helped inspired me to become an entrepreneur the other was the guy that Kiyosaki actually learned from which was Robert Allen who wrote multiple streams of income yes so I read his book first and that was the first time I learned about money and investing and I was like holy moly you're telling me there's a whole world of things outside of Science and Math because in my house you my English grades didn't matter my
history grades didn't matter the only grades that mattered were Math and Science and then I read this book and I was like whoa there's a whole world of things that I had no idea about and then I started reading more books I started reading more books I started reading more books and that was when I realized I need to start doing some of these things that I'm learning because wealthy people are doing something completely different and it's not just your grades it's not just your job it's what you do with the money that you make
and that was that missing piece of Education that I had never received and so you started minority mindset the YouTube channel and it's blown up over a million subscribers congratulations thank you very much yeah that's fast forward a decade and that's what happened what what sparked you to start that channel so I was an entrepreneur so when I started learning about money the game became for me make money buy real estate make money buy more real estate and so the way I made money just was wherever I could find a opportunity I started off in
the event Planning Companies where I was hosting parties uh that grew to concert shows then I got into real estate wholesaling I got my real estate salesperson's license I started an e-commerce store I mean I did a anything that you can imagine because this was how I learned and I was running now an athletic sock company uh created a way to create athletic socks that were water resistant and during the launch of this company I got scammed by a fake marketing company they approached me and they said you know what just we can help you
blow up your sales we can get you all these orders etc etc and they said we also have a 100% money back guarantee if you are not 100% satisfied you can have all your money back I said that sounds like a good deal so I gave them uh the bulk of our marketing budget and the next day and I remember this so clearly because I was in the gym I was doing chest fly I and I had this weird feeling in my stomach like you just feel like something is wrong something's not right and so
I called up the marketing company and I said you know what I know it's only been a day but I'm a marketer I think I would do better with that money myself let's just refund it before you guys spend any money and let's just cancel the deal right now he said okay no problem just give me a minute he puts me on hold and now I'm getting really frustrated because my whole workout is getting messed up because of how long I'm going hold and eventually it just goes beep beep beep and I was like oh
something's wrong and so I called back now it says this number cannot be found I called the other number that I have no one's picking up and that's when I found out that I got scammed so they took my money and I had never saw it again now the launch of that company still did very well I think we sold like $21,000 worth of socks in the first 30 days but I was so frustrated because every time I started a new Venture I got screwed over in some way and by this time I'm finally starting
to see some success I was like you know I want to do something so other entrepreneurs other people who think different like me have some sort of guidance so you don't keep getting screwed over so I went on to a platform called udmi this is a long time ago now and I launched a class on how to launch a business without getting screwed over as simple as it could get and I charged like $7 for it not knowing anything about the internet and education world and I did it under the Alias minority mindset thinking that
you have to think different than the majority of people if you want to become successful in any way so I launched this class and the people that were enrolling on the class really liked it and they said hey can you start a social media page an Instagram page I said okay so I started an Instagram page called minority mindset with the same content and then I would get DMS or messages comments from people saying can you start a blog with more in-depth content because there's only so much you can write on in wow now what
year was this this probably 2015 2015 how much were you making from you to me oh I don't barely anything like this was like I but it was something but it something I mean it was it was probably I don't know let's say I had a few hundred students at $7 each I mean it's we're not we're talking about not a significant amount of money this was really just something that I was in wanted to do because I was so frustrated so I got these messages asking me to start a blog with more in-depth content
and my response was you don't want me to start a blog English is my second language I'm my parents never cared about my English grades which meant my writing is very bad so I know I can't start a blog but I can kind of talk so I'll start a YouTube channel so I kind of like started a YouTube channel in 2015 in 2016 I decided to make more videos and at some point we had grown to like 10,000 or so subscribers rers and this was before YouTube had any sort of monetization requirements so anybody could
monetize any channel any video with any amount of views or videos and my friend good friend of mine came up to me and he said how much money are you making on YouTube like what are you talking about like you know from your videos on YouTube like how much money are you making from advertisements and my response was again what are you talking about so he goes with me onto the back end of my YouTube channel and he's like you know just if you click this button right here your videos can start showing advertisements and
you can start making money from your YouTube videos I was like are you serious so I said okay let's click that button I I didn't know what that was going to do I was like is it going to mess up the channel he's like I don't think so so let's push it the channel was still there all right cool and now the channel started to make a little bit of money now I should also premise that a little bit of money is a little bit of money because now uh I don't know if I was
was in law school still or I'm an attorney but I'm not working as an attorney because my sock business was my full-time business this was like my hobby and I think the first check that I got was 18 months into YouTube and I don't remember the exact number but I think it was like $254 was my first YouTube check so it was not a lot of money considering the amount of work it takes to put out let's say three videos a week every week for 18 months but I really enjoyed it that was why I
did it because I had that real like and now Flash Forward I'm curious at a million subscribers how much can you make on YouTube Just from advertisements if you're making a million a million views let's talk about views because it's easier to calculate if you're making a million views uh you can comfortably make 8 to5 to $20,000 off of that 1 million views wow8 to $15,000 off a million views 8 to 15 to 20,000 off 1 million views just off of the advertisements and then if you have a sponsor on top of that so let's
say you you show a video that gets a million views you might get $10,000 in advertising Revenue then if you have a sponsorship now you might be able to charge say $10,000 or $20,000 for a sponsorship to put a sponsor in that video 25 Grand YouTu and then if you have your own business on the back end let's say you have some product that you can sell and you can show it to a a million customers viewers then you now you can just double what you just made off of there for that one video but
this is the tricky part because now when I think people hear that you think oh wow I'm going to load up my video with sponsorships and ads and sell a whole bunch of things on my videos well if you do that no one's going to watch your videos right because nobody exactly you have to in order to get someone to watch your content there has to be value and the value is not you selling stuff the value is educating entertaining providing some sort of real value to somebody making them want to watch you and then
the art which is very this is the difficult part the art is now how can you monetize without turning people away how can you promote your own brand products or sponsorships without turning people away people hate advertisements people hate advertisements so much that they will pay money to YouTube to not see advertisements and so now if you're advertising all over your videos you're not going to get anybody to come back and so this is where now your job or at least from my perspective is not to maximize Revenue per video is to maximize value per
video in fact what we do is it's value per minute how can we maximize the value in each piece of content per minute of watching because if you're going to watch my video that means you're not watching somebody else's video right so you want to keep people engaged and that's why minority mindset is such a great channel so if you guys want to check out chre channel go to YouTube minority mindset but wait before you go there we're about to answer that big question if you had a $100,000 how would you take this 100K where
would you put it to get the greatest return over 10 years and JRE now that we know your origin story sort of your Superman story I want you to now go into addressing this question and that's a very good question and I'm going to answer that with something probably a little bit longer than what you were hoping for and I'm also going to premise it with this I don't recommend what I do to anybody else so if it was me I had the $100,000 the best best return from me is going to be back into
my own business and by business I mean briefs media the company that I run because now if I invest money back into my own business there's really no limit of the type of returns that I can get if you invest money if you are an entrepreneur you have a business you can grow if you have $100,000 and you throw it into the business in advertising in softwares and new people that you hire in new infrastructures you can turn the $100,000 into a million dollar maybe more maybe less just depending on where that opportunity is if
you don't have a business you don't have the same opportunity then you're going to be looking at what I call more of like the passive type of Investments and for me the first place that I would look is in real estate so I invest my money in five places number one I invest my money into my own business and startups number two I invest my money into physical real estate number three I invest my money into stocks number four I invest my money into cryptocurrency and number five I invest a little little bit of money
about 2% of my total portfolio into physical gold so 2% of my portfolio is physical gold 18% of my portfolio is what I call speculative that's my cryptocurrency that's my startups and then I have stocks and then real estate from there so if I had now $100,000 I'm looking for the best return possible the best financial return possible the most impact possible I'm G put it back into my own business because that's where I can work to grow that money right and and and this is common sense advice if you have a business you want
to take a portion of the profits of your business and put it back into the business to scale it that's how with no with no bank loans with no uh investors I took mine Valley from our first year we did well our first year we lost $300 and then almost two decades later we were doing 110 million in sales a year right just from reinvesting money in that business and so that's really practical advice if you have your own business now of course you want to be smart about it but if you don't have your
own business and you have 100K you have a regular job that you love you're earning money and you've saved up 100K again this is just easy mat you can apply the same the same formula if you have 10K what you're saying is number one is real estate number two is stocks and then the rest is basically crypto followed by physical gold physical gold okay yeah so the physical gold I don't consider an investment I look at gold as an alternative way of saving money it's a the way I can I best phrase it is if
I had $10,000 with the cash and $10,000 with the gold and I took both of these things and in my backyard I buried them today and then 10 years from now I went and dug them up my theory is that the gold is going to have more buying power than the cash so it's like Doomsday insurance it's a little bit of a hedge against inflation and it's an alternative way to save money it's not a huge piece of my portfolio gold doesn't do anything it doesn't provide me any cash flow it's just a hedge and
it's an alternative way to save I love real estate and the reason why I love real estate is because of three things number one you own a tangible asset something you can see feel and touch when I invest in a stock I don't actually own any Machinery I don't own any buildings I own a piece of paper that says I own a piece of the company I love that too but I love even more the fact that I can own the building so for this 100K let's say your business generates 100K Y what percentage do
you allocate back in your business and what percentage do you put in these for Investments oh that's a great question so what I do personally is I pay myself a salary of 20% of Revenue that I generate so if I were to generate $100,000 let's say from advertisements or whatever it might be I'm going to pay myself a salary of $20,000 out of the $20,000 that I get obviously have to pay your now your income taxes out of whatever is left I then passively invest the bulk of this money and passive investing means now I
have an automatic system where money gets pulled out of my checkings account and it gets invested through these brokerages so the first place where it gets passively invested is into a portfolio of ETFs ETF stands for exchange traded fund and these are funds on the stock market so instead of investing into like the Amazon company you can invest into a fund that gives the exposure to 500 different companies wait and this is from the 20% that you're paying yourself from the 20% that I pay myself so this happens now automatically when I pay myself this
20% the bulk of it is going to get invested now into the stock market and I have different types of ETFs I have what I call uh dividend ETFs because I like cash flow uh dividends mean you're getting paid okay just before we go into ETFs yeah before we go there so let's take a big picture of you what about that remaining 80% that 80% is going back in the business 80% is is going back into the business got it got it so if you were generating 100K in your business 80% you put back in
the business 20% you pay yourself and from this 20% I'm guessing you also cover your rent your travel these fancy clothes that you wear you would think so but not really so now what I so my business is making let's just say it makes $100,000 $20,000 comes to me $80,000 goes back into the business out of the 20,000 I pay tax is the bulk of that gets invested there's a little bit that gets left over but I also have now my cash flow producing assets things like my real estate and that's the money that I
want to use to live off of because my rental properties will continue to pay me even after I stopped working and so in order to do that that means my lifestyle has to stay lower because you know you were you were asking me a little bit earlier about cars you know the car that I drove to my office right before I came here it's worth about $500 it it's it doesn't have a bumper on it right now actually I'll tell you a funny story I was coming home from the office I was going to play
basketball with some of my friends and there was a cop that was standing right in front of like where I was turning and I just there's something I I looked at him he looked at me I knew something was off I turned and he immediately came behind me and I was like oh man and so I was you know I was very careful driving slowly following the limits he turns on his lights and he pulls me over and I'm getting late for basketball now and at this time I got like all my lights on in
my car my gas is low the tire pressure is low my oil needs to be changed and he comes up he looks at the back of my car he can't see my bumper uh the license plate because it's on my back window cuz I don't have a bumper right now and my back window is tinted so I'm also an attorney so I know some of the rules but I didn't tell him that anyway so I have my my license plate on my back window and he comes up to me and he says like you don't
have a license plate I said oh oh sorry officer it's actually right here let me get that for you let me show you the registration tags are all set and so he's he's going through my he just like he looking at he looks at my dashboard and he says you know you really need to get your life in order I I I know times have been tough the economy has been tough but you got you got to get your life in order and I said I know officer it's just been busy I'm trying to get
to basketball right I'm I know officer it's just been hard and so he goes and runs my I got a clean record he's said you know what I'm going to let you go today not going to give you a like uh a ticket I'm just going to give you a verbal warning get that bumper taken care of I said I will do officer I haven't taken that care of that bumper yet but if you're listening I will so you know it's for me it's like you know where do I want to put my money so
I love that I love that so 80% going back in the business 20% going into ETFs and what you're living your life on is the cash flow from the rental properties and other Investments yeah and I mean majority there and then a little bit of whatever's left over from the 20% I don't want to be you know completely like most of the money gets invested primarily into ETFs some of it goes into cryptocurrency some of it goes into gold but then some of that gets left over that's kind of the extra fun okay so we
want to come to I want to park ETFs aside for a while and we're going to come back to ETFs okay but now to that question you have 100K so let's say there's someone in the audience right now who has saved up 100 Grand and it's sitting in a bank account because they don't know what to do with it and I've been in that position before right I didn't know what to do with the first 100K I had saved up how would you advise this person to park that money well the first thing that I
would say is you $100,000 sitting in a bank look into a highin savings account because now there are high interest savings accounts banks that are FDIC insured in the United States that will pay you three four even up to 5% in interest just on your savings for sitting there doing nothing so first thing take the $100,000 start earning a little bit of interest if it's not already then the next thing you have to ask yourself how involved do you want to be in as an investor do you want to be an active investor or what
I call a passive investor an active investor is somebody who now is going to manage their Investments not be a Trader not be a flipper that's not investing but rather actually manage their Investments like if you go out and you buy a rental property that's an active investment because now you have to look for the deal you have to find the tenants you have to find the property manager you have to find the contractor it takes time that's active if you want to go out and invest in say individual companies Amazon or apple you got
to research the companies look at their financials do all that work that takes time and you want to listen to the earnings calls that's what I call Active investing passive investing is now instead of investing into an individual company you invest into a fund instead of investing into an individual real estate deal you invest into a syndicate deal or a crowdfunded deal which means you have another investor or developer who's going to manage the deal for you they're going to do all the headache all the hard work you just got to give them your money
and if it goes well you're going to get your piece of the return so that's active versus passive investing and so now the next question you have to ask is how involved do you want to be and if you say yes I want to be involved then you ask would you rather be involved in something like stocks or something like real estate I don't recommend going into something more speculative especially if you're just starting off look for something like stocks or real estate as a beginner if you say I don't care about managing my investments
I don't Financial spreadsheets intimidate me researching Investments intimidates me I don't want to take on a lot of risk I want something that's lower risk that's less time and work on my end okay this is where you can look into things like index funds you can look into ETFs you can look into mutual funds these are now funds now what percentage should we be putting into these funds so there's two things you need to understand number one a lot of people say diversification is the key diversify diversify diversify second the wealthiest of the wealthy people
say diversification is for people who have no idea what they're doing so if you want to be now an active investor right you want to manage your Investments and you want to get the best returns forget about diversifying figure out where you want to be right for me when I started off it was 100% real estate you you chose real estate but if you actually look at the data the stock market's been growing by around 11% on average the the real estate um economy in in America around 3.5% if I remember those numbers right so
why real estate well real estate is is more than just appreciation of properties because in the real estate you get the the physical asset number one you get cash flow which is many times not included in that number because now when I go out and invest in rental properties I'm looking for a 7% cash on cash return on my money so if I invest 100 Grand I want $7,000 worth of profit and then the third factor which is one of the most difficult to calculate factors is the tax breaks as an attorney who is not
your attorney I can tell you that real estate has some of the biggest and best tax breaks that a tax code has to offer which means if let's just say you made $7,000 in profit from their rental property there are ways strategically legally that will allow you to tell the IRS hey I made $7,000 with the profit but I'm only going to pay taxes on $22,000 maybe even zero because there are a lot of tax breaks such as number one the depreciation deduction which says hey my property is one year older even if it's worth
more money my property is one year older so I deserve a write off on my taxes or you get to say hey I need this truck or car for my rental property business cuz I have to drive to and from my property I deserve a write off for that I had to have dinner with my realtors and my Brokers and my property managers I deserve a write off for that I had to go to Hawaii to look at some real estate I need a write off for that so these are things that the tax code
says which you need a good tax adviser to do this don't go out and try the IRS tax code is over 2,000 pages long and I have read a lot of it it is extremely confusing I love that you're a lawyer and you went into this and found these loopholes well I didn't find them myself I don't have the patience or the brain capacity to read all those words and find them uh I've been fortunate enough to find good advisers good accountants and you have enough of a background to know which loophole you should be
paying attention to yes so you know that's where now right an active investor you figure out where what's the best book other than your channel on YouTube minority mindset what's the best book you'd recommend on investing in real estate so I would say the first thing is you don't have to like me you don't have to watch my content I rather somebody be financially educated I I if you don't like that's the beauty of YouTube is if you don't like it hit the x button go to somebody else i' rather somebody be financially educated now
where do you learn real estate um there are I think my favorite book I don't have any books but my favorite book is real estate investing by Gary Eldred he's got a few different um versions of him just read the latest one that's an amazing book there's a book by Robert kiyosaki's team actually called like the big book of real estate which was really interesting because it explains all the different types of real estate because when I think real estate often times I'm thinking residential single family homes apartment complexes but that's not what a lot
of people think some people are thinking hotels some people are thinking medical office some people are thinking regular office some people are thinking storage some people are thinking like uh retail buildings so there's a lot lot of different types of real estate and there's a lot of different ways you can do it just understanding what are the different opportunities now the the book I recommend is nothing down by Robert Allen a new version came out nothing down for the 2000s by by Robert Allen Robert Allen was the original guy who popularized buying and flipping houses
really quickly he was all over the news he was on Fox um and his challenge was drop me in any City give me $100 in my pocket and within 72 hours I will own two or more properties right so he is the guy that Robert kosaki learned from Kiyosaki told his wife do what this guy is doing and today Kiyosaki has 6,000 properties he owns 6,000 pieces of real estate Robert Allen suggested that you buy two homes um and he says look at look at homes with that are slightly below the median price of the
the market that you're looking at but two homes a year and he turns it into a machine and the cool thing about now your home is now how can you house hack your own home because a lot of times we grew up being told that the home that you live in is the biggest investment you'll ever make but let's think about that for a second because who does that home really benefit and I'm going to tell you the kind of the long answer because I'm a also a realtor uh and when you're a realtor you
learn how to sell homes because the bigger home you sell the more commission you get now this does not mean Realtors are bad they're in the business of trying to help you find your dream home but if you can't make the payments on your home the realtor doesn't care they got their commission check when they sold you the home home your Banker also doesn't care they get their check when you sign the paperwork and you get the mortgage the bigger mortgage you get the more money they make your home that you live in ends up
becoming a money pit until you ultimately sell it and then you have to hope that you can sell it for a profit we've seen times when Real Estate goes down and we've seen times when Real Estate goes up so when you go in thinking that your home is an asset you're going to buy bigger because it's a home that You' be able to build generational wealth in but when you ask any wealthy person ever anywhere in the world how did you become wealthy they never say oh because I paid down my home that's not how
it works and so your home there's nothing wrong with owning a home but you have to understand that your home treat your home like a liability however there are ways that you can house hack especially in the United States because when you go out and get a mortgage you're getting a mortgage for what it's not your home you're getting a mortgage for your primary residence the question is what does primary residence mean legally primary residence can mean a one unit a two unit a three unit or a 4 unit so now let's play this out
if I can go out and get a mortgage for a primary residence like a 4unit property I can buy a 4unit building live in one unit myself and rent out the three other units now these three other units my neighbors are paying my mortgage and you get to live essentially rent and mortgage free I love that so many real estate advisers I know like alfio badola um who is a a famous Italian real estate adviser who works with Robert Allen I remember him telling me once it is stupid to own a home he says in
his company when someone is saving up to buy a home they don't get celebrated he says you should only buy property that can generate an income stream and then the home you're living in he says rent don't buy what are your thoughts on this you know I look at buying a home like buying a shirt or buying a suit if you want to buy it fine but you have to make sure you can afford it and by affording it I mean afford the down payment afford the monthly payment and afford the moving costs because what
happens when you go and move into a home number one movers are expensive then your spouse is going to say oh we need new furniture to match the blinds wait how old is this dishwasher we need a new and and now all of a sudden you thought you had the money to move in and now you have to upgrade everything upgrade the B so make sure you have the cost to move in as well if you can comfortably afford the home and you want to own it fine nothing wrong with that but if you're sacrificing
your ability to invest and build real wealth so you can own your home that's when something is wrong I see so in your case now we're going to go off property for a moment cuz we've delivered a lot on property so you said you have 20% 18% in crypto 2% in goal okay so that one I think is self-explanatory yeah crypto and startups that's the 18 crypto and startups now that 80% I'm guessing is between real estate and stocks right how does that break down for you what percentage in real estate what percentage in the
stock market there's more in real estate than stocks uh if it's 80 maybe uh 5030 I haven't really calculated it out got so 50 in real estate and then 30 in in stocks now what are your advice on what is your cut what is your advice on buying stocks well I said my advice would be for the majority majority of people 95% of people should not buy individual companies because when you buy an individual company that means you need to keep up with the company study the earnings calls study what the company is doing study
how the company's actually making money and if they're growing and when most people go out and think I'm going to go invest in stocks we think I'm going to go find the next Google and when you do that many times you're just speculating and you're gambling because you don't know what you're really buying and that level of financial that ation takes a lot of time and work and if you're not willing to go through that time and work that's okay use funds index funds ETFs mutual funds because now you're getting more diversification right diversification is
very useful if you're not going to be a full-time investor if you want to be much more involved then you don't need as much diversification so I would say h for me I have a both I invest in real estate I invest in individual companies and I invest in ETFs I'm I'm what I call a hybrid I do the passive investing I also do the active investing and what I advocate is not that you have to be a real estate investor or that you have to be a stock market investor is that you have to
get financially educated because what works for you isn't going to work for me your risk tolerance is different than mine your goals are different than mine the way you want to get paid is different than me I like cash flow that's the way that I like investing my money you might say you know what I don't need the cash flow I don't want to pay taxes on that income I want to just build appreciation So based off of your goals based off of your needs based off your desires based off of your risk tolerance the
way you use your money is going to be different and so what I'm saying is just get financially educated so you can make the smart decisions for yourself and do not just blindly rely on a financial adviser financial advisers for some reason don't like me I'm not saying don't use a financial adviser but the reason why they don't like me is because I say understand what they're doing and make sure their best interests are aligned with you because sometimes not every time but sometimes a financial adviser is going to have the interest of making you
be less financially educated because that means they can charge you higher fees and that's where it pays to be financially financially educated because now you can make sure that your advisor is doing things that are in line with what you are looking for and it's just like going into a doctor for a visit if you know the basics of health and you know I don't want to be on pills or I don't want to go through this regiment you can ask the doctor followup questions and if they keep prescribing you medication that you don't want
to be on maybe you get a second opinion or a third opinion and it's the same thing here unless you have the basic level of financial education you don't even know what questions to ask what about Blue Chip stocks like the shore bets like apple well every every company has a lifespan Sears was the category killer Bed Bath and Beyond was a category killer these were the companies that were revolutionizing the game selling technology businesses they were the top of the top where are they now they're gone bankrupt and so this is where everything has
a lifespan even Blue Chip stocks and yes they're safer Investments but again if you want to invest in individual companies understand that if you want to see the best returns you got to be willing to put in the work otherwise you're taking on all the risk beautifully said I remember when I first graduated I put my money in what I thought was a blue chip company Walmart right and there was this other upstart called Amazon and I thought no way they're going to survive this was 1999 now 10 years later Amazon stock had grown by
by a crazy amount Walmart barely grew at all but I was placing a bet in what I thought was Blue Chip I wasn't very educated in investing back then but you know what's interesting about that is you're talking about 1999 to the year 2000 was when the dot bubble blew up Amazon stock fell by over 90% true and what happened was people that bought Amazon then in 1998 1999 saw the crash happen and they sold because now you panic just like everybody else right sentiment drives a lot of movement in the markets and so when
you don't understand what you're buying even if you do understand what you're buying that psychology of how you all hold a stock is very difficult and if you sold out well you didn't get to get any of the benefit of Amazon's massive growth after there which is why again investing individual companies has the most upside but also if you want to see that upside you got to be be willing to put in that work love that response thank you so JRE thanks for breaking it down can you give us a rough summary of everything you've
said so far in terms of where to put that 100K so it's locked into people's mind at least in terms of how they should think about this question yeah so the first thing you have to ask yourself is number one would you rather be an active investor or a passive investor active investor meaning you want to be involved with Investments passive meaning you want to not be so involved with the time and risk with your Investments if you want to be an active investor now you have the ability to invest in something like real estate
or you can invest in individual companies when you're making this decision what you have to ask yourself is how do you want to get paid you want to get paid with cash flow with cash flow producing real estate or dividend paying stocks or would you rather get paid with appreciation as you ask that then you have to ask how involved do you want to be do you want to be involved in a physical asset like real estate or uh something like stocks and paper asset the next question on the other side is if I'm a
passive investor I don't want to sit here and manage find Investments and research my investments and spend all my time doing that with Investments as a passive investor now where can I invest my money well okay I can invest in stocks and real estate again with real estate this would be something called Syndicate deals if you don't know what that is there are real estate investor conferences all over the world there's always investors and developers looking for money you can give them some money then they will give you uh percentage ownership in a deal with
stocks this is where you can look into things like index funds ETFs and mutual funds as a way for you to get more diversification more diversification for somebody who wants to be more passive less diversification for somebody who wants to be more active once you start to build that Foundation you build you know your your the foundational part of your portfolio then you can start looking at things like speculative Investments you can look at more Hedges and things like that but don't go and just start dumping your money into speculative Investments until you build at
least some some sort of foundation for you but the key the key before all of this is in order for you to really achieve any wealth or any sort of success financially is you have to use your money as a tool to make yourself rich Fe first before you go out and spend all of your money to make everybody else Rich so before you go out and buy all the nice stuff buy the assets for yourself first because it is your duty to make yourself rich and no one else is going to teach you how
to do that I love that now before we wrap up you did mention ETFs help help address that for a moment what is an ETF and why should we be paying attention to it sure so an ETF ETF stands for exchange traded fund and ETFs we can think of it like a group of companies so for example there's an ETF for the largest 500 companies on the stock market the largest 500 companies on the stock market is called the S&P 500 and there are funds that will give you exposure to the S&P 500 so instead
of going out and investing in all 500 companies you invest in this one thing and that will give you exposure to the top 500 companies one example is spy again I'm not telling you what to invest in but spy is an ETF that will give you exposure to the top 500 companies in the stock market so there's ETFs for literally anything the biggest 500 companies there's ETFs that'll give you exposure to the total stock market there's ETFs for real estate companies ETFs for healthcare companies ETFs for technology companies ETFs for international companies Emerging Markets you
name it there's an ETF for it and it's a way for you to invest into something without having to find the perfect company to invest in right and one of my best investments ever some five years back was in was putting my money in an AI ETF an ETF that focused solely on AI powered companies like Tesla amazing and you got in before the AI boom I did I did right so that was one of my one of the SM this investment decisions I made but thank you so much for having this conversation I admit
I made a mistake as an entrepreneur now I understood that the best investment was my business but that's all I did I mean I was maybe 40 years old before I started truly investing in the stock market and I regret that I wish I had an advisor like you when I was fresh out of college at 21 or 22 to figure this stuff out so I'm so glad and honored that we could bring you on the Mind Valley show if you want to create a step-by-step plan on how you can become a millionaire there are
only three things that you have to master people love to over complicate this but there are only three things that you have to Master number one is you have to understand and master the outflow of your cash number two is you have to master and control the
