How do you make, keep and grow wealth? These three great stages may be different in strategy, yet each stage shares this commonality: The hidden villains trying to separate you from your wealth. Listen to learn more!
About Indestructible Wealth: I’m Jack Gibson. I’m your wealth strategist and I’m here to help you make some money. The Indestructible Wealth Podcast is for young entrepreneurs who want to make, keep and grow wealth to enjoy now, and for years to come.
Episode #17 – The Seven Hidden Dangers that Will Take Your Money
Podcast Episode Transcripts:
Disclaimer: Transcripts were generated automatically and may contain inaccuracies and errors.
Welcome to the Indestructible Wealth Podcast. This is the place where we help young entrepreneurs to make, keep, and grow wealth that you can enjoy now, and for years to come. I’m your host Jack Gibson, a serial entrepreneur, founder of multiple seven and eight figure businesses, and wealth building strategist. Each week I’m going to share my tips, resources and secrets, to help you create a plan and build the life you’ve dreamed of.
All right. So last week my son, John, he’s my oldest. He’s just turned 13, the dude is growing like a weed. He’s definitely likely to be taller than me. I’m 6’2, and he’s already like 5’9 at 13. So it’s coming. I wanted to always tower over him for the rest of his life, but that doesn’t look like it’s going to happen. And I’m trying to instill the entrepreneurial spirit in my children. And so far maybe it’s just a sign that it’s starting to take. So he goes to Walgreens on his bike and gets nine bags of jolly ranchers, spends $4 per bag. And so he goes to school and I really know this was going on like he didn’t really tell me his plan. All I knew is he came back with a bunch of bags of jolly ranchers. Cause our family is right now in this jolly rancher craze, it’s like gold right now to us. I don’t know where we’re on a kick just because it’s so good. It’s just so good. Just a little bit of sweetness and not enough to like putting on too many lbs type things. And so he takes the jolly ranchers to school and he sells like 5 bags and profit. I think he will profit $11. Maybe it’s 4 bags. I don’t know. So he had one kid that bought it, like for $5, one bought it for $6, one bought it for $10 for the bag.
And then he had another kid who bought a partial bag for $5. How is your pricing strategy? I don’t understand. But anyways when he comes home, he’s all excited. He said dad, I just profited $11. I could see why you really liked this game. I’m cracking up. I’m like yes, Now, you get it. You know why I love entrepreneurial-ism and profits are always going to be better than wages. And he said “Dad look, I’m getting to eat my jolly ranchers for free. They’re paying for my jolly ranchers when they buy them. I’m like, yes, you’re getting it. So anyways I posted that on Facebook and I got 20, 30 comments people loved it. And then I don’t think that my mother-in-law potentially liked it because she was the guidance counselor at that school. He was prohibited from selling items in the school, which I asked him if he was allowed to and he said yes which I should have raised a somewhat of a yellow flag. But anyways his principal had a conversation with him and told him he couldn’t sell in the school, but he could sell outside the school. Just couldn’t do it inside the building. So John’s doing his promotion inside the school and then he’s doing his actual transaction. The exchange of goods and services for money. He’s doing that outside of the building. I love it. It’s too bad school’s over because he’s going to not be able to make money doing this, but hopefully he figures out some other way to create profits.
So I want to talk to you guys today about the hidden dangers that are lurking to separate you from your money. I don’t know how else to say it. So you guys are probably acclimated to that. I’m not going to sugar coat things for you. Building wealth is really fucking hard. And if we look at the 3 major stages, the make it bucket, the keep it bucket and the grow it bucket, each stage has an onslaught of challenges to navigate.
Let’s take a look at what you’re up against. This game is not to be played naive with childlike wonder anymore like we’re not playing monopoly for the board game with fake cash. All right. Young investors like I was not too long ago typically just aren’t aware of all the hidden and unseen forces that are constantly eroding and trying to intentionally separate you from your hard-earned cash. So I want to take a look at the 7 major hidden forces that’s coming for your money. Let’s learn how to get them the big middle. Okay. So we know the first step is you’ve got to make money in this phase. Your primary asset is your skills, your energy and your attention. And the way you develop new skills that increase your earning power is through education. So to become more educated you have to dedicate the time and money to take courses, hire coaches, download the books and the podcasts. You got to learn, you got to get educated and you’re consistently and relentlessly being bombarded with addictive time-consuming distractions to your attention, Netflix, alcohol. Friends, restaurants, Amazon prime, internet porn these are all major distractions that you deal with on the daily. Maybe not internet porn, right? I’m just talking to people that you know I’m not talking to you, even though statistics show that like it’s highly likely that half of you have some level of addiction to internet porn, but it’s probably not this audience, right? That’s a different audience.
So Netflix has engineered their algorithms to serve you up exactly what they know you’ll be interested in. And then the shows are designed with the storyline sequence to suck you into massive binge-watching. How many courses could you have gone through by the time you just went through a few shows, right?
And then once you increase your ability to earn more money by improving your skills and your knowledge. You’ve got to keep some, you make that grow. So in the keep stage you’re bombarded by a slew of marketers and advertising messages to get you to spend your dollars. It’s estimated that the average American sees somewhere in the range of – You’re not even going to believe this. You might believe this, but it’s crazy to me, 6,000 to 10,000 ads per day. Which has gone up dramatically now that electronic ads on Facebook and Google are hitting you up for pretty much the duration that you’re online and you’re online, probably multiple hours per day.
In addition, you have another hidden danger called your neurochemistry. So that first danger is marketers and advertisers. Right? Second danger is neurochemistry. That’s wired into your brain from tens of thousands of years ago, that was necessary to help you increase your odds of survival. Why is it a real thing to keep up with the Joneses?
Well, the higher the level of status you had back in the tribal days that gave you the greater number of allies and resources which greatly increased your odds of survival. You can thank the serotonin chemical that’s still very present in your brain for your desire to showcase your status with the nicest cars, the nicest house, the nicest clothes and trips that you can possibly afford, or maybe not afford, but you buy it anyways because you need that rush of serotonin for status. And we aren’t done with the keep it bucket. The biggest threat to you keeping your funds is the biggest expense of your lifetime without anything even close, taxation. Now this may not be a hidden necessarily danger, but there is a lot about the tax code and taxation that is hidden from you that you haven’t taken the time to educate yourself on yet over your lifetime you’re going to pay 50% of your efforts to the government, probably a lot more than that. That doesn’t include the inflation tax that’s taxation without representation. That’s the government printing more money to service their debt load that doesn’t even include the devaluation of your dollar. So it’s probably, well over 50%, you do know that there are tax saving strategies that could, you could probably be educating yourself on right now not later when you rich, but let’s see I’ve got a free hour and I just need to unwind I’ve had I’ve had a challenging day and a busy day.
How about I grab a book on tax reduction strategies, or maybe I could do that tomorrow. I’m right in the middle of Ozark and Netflix. I can’t possibly stop watching this amazing show to learn terribly boring tax strategies. That’ll put me to sleep. And so then you finish that one and then the very next show is served up to you by the algorithm and tomorrow is put off indefinitely. Now all of these roadblocks and we haven’t even gotten to how to actually grow your money yet in the growth stage there’s additional hidden agendas that we’ll want to take a look at. I fall into all of these and unless you know what you’re up against, you have a good chance of encountering at least a couple of them as well. So back in 97 to 2000, I hustled, I worked hard through college and I saved up some stacks of money, internet stocks were cranking out nearly 40% gains and seeing intense speculation. I wanted a piece of it. So FOMO hit me. It was just too much for me to handle fear of missing out. And of course I wanted to get rich as quickly as possible with the least amount of effort. So I fell victim to investing for a quick gain without protecting my principal capital, someone out there made off with my money and that when the stocks crashed and I was still left holding the bag they were laughing gleefully how they found another sucker. And I was that little, I was that young, naive sucker. And believe it or not there are some bad characters out there now. I believe that the vast majority of people are good humans and would never do anything unethical or illegal. But that doesn’t mean there aren’t guys out there who will act like your best friend and simultaneously have dark plans for you.
I found this out the hard way and my new real estate company, my business partner and my first business partner in Indianapolis ended up in FBI handcuffs while I was left, picking up the pieces for myself and friends and associates, who I referred to him to buy properties. I neglected the wisdom of former president Ronald Reagan when he spoke of how he would handle the Soviets. I’ll trust. But I’ll verify.
A simple background check would have revealed that this was not a man to be trusted, and I don’t think this is necessary to background check every person that you do business with. But especially when you’re buying small ticket items, if somebody screws you over for a couple $100, okay, you’re going to move on from that pretty darn quick and it’s not going to be a life altering event.
But when you’re dealing with large sums of money, you better be very clear of what kind of character that you’re dealing with. And you’re in partnership with somebody you better be damn clear who you’re dealing with.
Another factor that many don’t realize is eroding their wealth is fees. In Tony Robbins masterful book money master the game. He did an amazing job exposing the enormous drag that mutual fund managers put on your portfolio. Side-by-side comparison models show just a 1% difference in fees with all things being equal so this is somebody that has two guys come in a $100,000 investment 30-year time frame. They both get 8% of returns and they have an equal withdrawal at retirement. The investor paid 1% more in fees. We’ll run out of money 10 years sooner, one study even shows 96% of mutual funds failed to beat the market over a 15 year period.
The result is that you overpay for under-performance. This is why I’m not a fan of mutual funds. You can not escape those awful greedy fees. So this is the plan that so many people sign up for or not paying attention to that extra 1% fee. Well because it seems so insignificant in the grand scheme of things, right? Like really what difference can a little 1% fee make, I’m gonna make that up with big gains from these experts’ picks that make a huge difference that you’re not even thinking about. This is how the wall street people are getting rich off of the hard work and Americans are just blindly putting their money into these highly intensive fee structured plans that don’t even really give them that much more value than just investing in the market and into an index fund.
Of all the hidden challenges to the wealth building process there’s another one that’s called debt and how to understand a property utilized debt. And I’ve talked about this on a previous podcast. Have you skipped over that one? It looks like a lot of listeners did. I understand I could see why that might be one where you’d be like, I don’t really feel like listening to that one, but I mean this is huge to understand good and bad debt.
I believe the distinct difference maker for me was that I love good debt and I hated and eliminated bad debt. Good debt is debt that helps you buy assets that you normally could not afford to buy. That produce income and allow you to control an appreciating asset.
Bad debt is consumer-based debt. When you borrow money to buy things you can’t afford that don’t produce any income you just increase your liabilities instead of your assets. So every payment makes you poor instead of richer, or if it doesn’t make you poor it erodes your investable income and puts you further away from financial freedom.
So let’s review the seven hidden villains to your wealth building process. You got marketers, neurochemistry, FOMO, fraud, taxes, fees, and improper use, or understanding of debt. Have a great day friends, let’s watch out and be on guard for these hidden dangers to your wealth, strategic process.
That’s a wrap for this episode on the Indestructible wealth podcast. Before we part ways, I want to help you to take advantage of 2 incredible tax saving strategies that could help you save a lot of money. All you have to do is leave me a 5 star review – if I’ve earned it – and comment in iTunes, Stitcher, Spotify, or wherever you tune in. After you’ve done that simple step, just email me a screenshot to [email protected] and I’ll send you everything you need to save money on your taxes for years to come. If you’d like to dive deeper into your own wealth building strategy, check us out at myindestructiblewealth.com and follow along on social media. Also, please share this podcast with anyone who’s looking for guidance on their own wealth building journey. Until next time, remember our mission here is to help you make, keep, and grow wealth you can enjoy now, and for years to come.