Spiritual Investing #5/7: "Silly Poor People Tricks"

We're going to talk about what I call stupid poor people tricks.

In other words,

All the silly things that we do,

Especially if you're raised poor,

Middle class,

Working class,

That are wiping out your ability to make money.

So I'm going to go through several of these common tricks and show you how to recognize it and how to get past it.

But first I want to emphasize the term stupid poor people tricks is said in a lighthearted manner.

It's supposed to make you laugh,

Right?

And to be clear,

I'm not calling people stupid,

I'm calling the tricks stupid.

And it's not your fault however you were born,

Right?

Maybe you were born to a wealthy family,

Maybe middle class,

Maybe working class,

Maybe poor,

Doesn't really matter.

No matter what different social class you were born into,

You need to learn the behaviors,

The ways of thinking and acting that are highly functional to make money.

But it just happens to be that people that tend to grow up with parents who are less affluent tend to make a very common set of mistakes that keeps them trapped.

Those of you that are Robert Kiyosaki fans,

Which dad poor dad is his own perspective on this,

Right?

His wealthy father taught him one way to relate to money and think about it.

His poor father taught him another.

If you've never had exposure to how wealthy and successful people operate,

Especially with money and investments,

You're at a huge disadvantage.

So I want to call out several of these what I call stupid poor people tricks,

Because again,

It's not the people that are stupid,

It's the tricks,

Right?

So let's talk about it.

Number one,

Chasing deals instead of values.

What does that mean?

Well,

It's pretty simple.

Poor people are always focused on getting a good deal.

Wealthy people only care about the value.

And we all fall victim to this,

Right?

Have you ever noticed that there's the store down the block that's been going out of business for the last 15 years,

Right?

When I first moved to West LA,

I went and saw this store that was selling Persian rugs and they had a big going out of business sign.

And I thought,

Oh boy,

I'm going to get a good deal,

Right?

So I'm like,

Yeah,

Awesome.

I got a good deal,

Right?

Well,

Guess what?

The rug was garbage.

And 20 years later,

That same rug store was still going out of business,

Right?

That was a con.

It was a scam.

Why?

Because again,

People that haven't had the right training are always looking for a good deal.

They will buy something they don't need that is not going to bring them value just because they feel they got a really good deal.

Why?

Everyone loves feeling like they got a good deal.

You look at car dealerships,

You look at buying houses,

Everyone thinks they're an expert at negotiating.

Everyone thinks,

Oh,

I'm going to screw the other party and get such a good deal.

Don't even worry about that,

Right?

Of course,

Be smart in your negotiations.

But what you should look for is value,

Not a good deal.

As an example,

I've said this to some of my classes.

I would say,

If I offered you an investment where you could give me $10,

000 today and be absolutely guaranteed 100% that you would get $15,

000 tomorrow,

Would you do it?

And typically,

Maybe only 10% of my audience will raise their hand.

If you have a guaranteed opportunity,

And this is not a trick question,

Right?

That's riskless,

That you can put in $10,

000 today and get 15,

000 tomorrow.

I guarantee you every wealthy person in the room will make it happen.

Are they carrying around 10 grand in their pocket?

Probably not,

Right?

But they'll get on the phone.

They'll find a way to raise that money and get in on the investment.

Why?

10 grand is a lot of money to come up with in a short time.

But if you're going to get 15 grand tomorrow,

You'll do it,

Right?

They see the value.

Most of the room,

Most of the times I've done this,

I'll say,

Why won't you do it?

They go,

Oh,

I don't have 10 grand.

Oh,

It's too much money.

Oh,

You know,

Things like that.

Well,

The fact is,

If you're really,

Really poor,

That may be true.

Maybe you can't come up with it.

And I get that.

I've been poor,

Really poor at some points in my life.

But most people can't.

You're just not willing to go to the effort because it's inconvenient.

Why?

Because we don't put a lot of value on value,

Ironically enough,

Right?

All we care about is a good deal.

You ever bought something at the store only because it was 80% off?

Of course you did.

I have to,

Right?

That's what they're praying.

There's a big difference between getting a good deal and getting a good value.

Wealthy and successful people don't care about the price tag.

They just want to know how much value is there.

People that are stuck in poverty mentality are obsessed with getting a good deal,

With saving money,

Right?

How many of us line up on Black Friday at 5 a.

M.

To rush into the department store and get something that we don't need at a big deal,

Right?

Again,

I'm not trying to make anyone shamed.

I'm just saying,

Unless that's something you were going to buy anyway,

Don't do it.

That being said,

If it's something you were going to buy,

Go ahead and get a discount,

Right?

If lining up on Black Friday at 5 a.

M.

Saves you 500 bucks on the TV you were going to buy anyway,

Do it,

As long as your time isn't worth more than that,

Right?

I just want to make that distinction.

Focus on the value.

Getting a good deal is great if you can do it,

Right?

But don't let a good deal get you to buy something you don't need.

That won't give you value.

So that's one of the big,

What I call stupid poor people tricks is focusing on getting good deal versus the value.

The next is there's a difference between cashflow versus income.

And one of the big stupid poor people tricks is that they're always focused on cashflow,

Not about income,

Right?

Payday loans are a good example of this.

Oh,

You need some cash to make it to the end of the month,

Just come in and we'll give you,

You know,

$300.

And you're like,

Great,

You got your $300,

But you're going to have to pay back 350 or 400.

So you've increased your cashflow for a short time,

But at the expense of your income.

And so I'm not saying it's always a bad idea.

If you really need the money,

Do it,

Of course,

Right?

If you really need the money,

It's worth it.

But don't give up your income just to improve cashflow if you don't have to.

A wealthy person would almost never do that,

Right?

They would not take a payday loan and be paying 30% to have a few extra hundred bucks in their pocket for a week,

Right?

So focus on building your income.

When you have the income,

Cashflow will take care of itself.

It is an issue.

It is a challenge,

Right?

Another good example of this cashflow versus income would be some people think if they get approved for a new credit card,

It's like getting free money.

It's not,

Right?

It just increases the leverage you have.

It increases your ability to go into debt.

Now,

If you need a new credit card,

If it has better terms,

Or you really need that money to buy something critical,

Do it,

Of course,

Right?

But don't think that it's free money.

I have a friend that I play D&D with.

He has a model ship company and he has a warehouse with a bunch of workers.

And one time he got a big line of credit for his business.

It was in six figures.

And he made the mistake of telling all his employees.

And for the next six months,

They were constantly pestering him.

They're like,

Hey boss,

Why don't we buy a new truck?

Hey boss,

Why don't we go out to dinner?

Hey boss,

Why don't you buy season tickets to the Lakers?

And he'd be like,

Why should we do that?

They go,

You have a line of credit.

You got the money,

Do it.

And my friend was like,

No,

Right?

Buying season tickets to the Lakers is not going to improve my business.

The point is his employees,

Almost all of them were poor people,

Saw the loan as free money and they wanted to just go blow it,

Right?

Get Lakers tickets,

Buy a new truck,

Right?

Go out to dinner.

My friend who was the owner,

Who's a wealthy person said,

Heck no.

Why?

There's a big difference between cashflow and income.

So please don't be giving up your income to get cashflow,

Right?

Unless you have to,

Right?

If you have to,

A new credit card is not free money.

It just gives you the potential to borrow more if you really need it.

So that's another trick.

Next stupid poor people trick is unit bias.

What does that mean?

We see this a lot in the world of stocks and cryptocurrencies.

So for example,

People will look at Bitcoin and they'll go,

Oh,

I can't afford that,

It's $60,

000.

And so they go and buy Dogecoin because it's 30 cents.

Well,

That's not the right way to think about it,

Right?

The right way to think about it is what will be the percentage increase over the next six months,

Year,

Three years,

Right?

Don't worry about the unit.

Why?

You don't have to buy a whole Bitcoin.

You can buy one 100 millionth of a Bitcoin,

Right?

Don't worry about how much it costs.

Worry about how much it's going to go up or down.

And so some of the meme coins that are really popular have a very low per coin value.

So people feel wealthy because they can buy lots of them,

Right?

You can buy like,

You know,

A million Shiba Inu for $10 or whatever it is.

Well,

Unless you think that coin is going to go up significantly,

Don't do it.

And the point is,

Don't worry about the price,

Right?

Worry about the value.

Same lesson in a different way.

Just because Bitcoin has a high value per coin doesn't mean you shouldn't buy it,

Right?

If you think it's going to go up a lot,

Buy it.

Buy a 10th of a Bitcoin,

Buy a 100th of Bitcoin,

Whatever.

Don't worry about the price of a token.

Worry about how much it's going to go up.

And the same thing for stocks.

People go,

Oh,

You know,

The Tesla stock is $1,

300.

That's too much.

I can't afford that.

You can buy a fraction of a share,

Right?

So they go and buy some penny stock that's worth 10 cents a share,

And it goes to zero and they lose everything.

That's unit bias.

So I know it seems obvious,

But a lot of people fall victim to this.

That you can buy more of something because it has a lower per unit price doesn't mean you're getting more value,

Right?

For an investment,

All you should really be focused on is the percent increase.

Everything else is a trick to get you to drain your money.

All right.

So the last stupid poor people trick we're going to cover here is being too much or too little risk averse.

What does that mean?

Well,

Risk averse is a measure of how much risk you can tolerate.

So someone that likes really conservative investments,

Like a CD at their bank,

That's someone who's very risk averse.

On the other hand,

Someone who's loves risk may go invest in brand new cryptocurrencies,

Hoping that they'll go up a lot,

Right?

So what I want to emphasize is wealthy and successful people find a middle ground where the reward is worth the risk.

One of the stupid poor people tricks is going for whatever investment suits your psychological level of risk without looking at the risk reward balance.

That's the problem,

Right?

As an example,

Some people get greedy,

Right?

And so they go into really risky investments,

Even though their risk does not justify their reward.

Or they're the opposite.

They play too conservative because they're too risk averse.

What I want to emphasize for everyone is always look at risk and reward and look at the ratio,

Right?

If you're going to take twice the risk and get four times the reward,

Do it,

Right?

If that's your best option,

Because twice as much risk for four times reward,

That's a good risk reward ratio.

That's the way wealthy and successful people look at it.

They're not concerned about how much risk there is or isn't.

They're looking at the ratio of the risk and the reward.

So if you have to take three times as much risk,

But you can make 10 times as much money,

You do it,

Right?

Also factoring in with that,

Again,

The most important thing is the risk reward ratio.

Do not take on more risk unless it is more than worth it for the reward,

Right?

That's the most important thing.

At the same time,

We also want to recognize there is what's called the declining marginal utility of money or value.

What does that mean?

What it means is this.

For most of us,

If I gave you a million dollars today,

That would make a big difference in your life.

It probably would.

You could pay off your debts,

Buy some property,

Invest in stocks,

Fund your retirement,

Help with your kid's college,

Buy a new car,

Whatever,

Right?

That million dollars would make a huge difference in your life.

If next year I gave you another million dollars,

That would make a much smaller difference.

Why?

You already got so much value out of the first million,

There's a declining marginal utility of the next million.

Why?

Well,

The next million,

You already paid off your debts,

You already bought a new car,

Right?

You already moved to a new place,

You already paid for your kid's college.

So it would be nice to have,

Of course,

Right?

Everyone would like another million dollars.

But the point is,

The second million has a much smaller impact on your quality of life than the first.

So that calculates into risk reward too.

So mostly look at the ratio,

Right?

If there's enough reward,

It's worth the risk.

But at the same time,

Recognize there's a declining marginal utility of the money.

And this is another stupid poor people trick,

Because they forget about this.

As an example of this,

Of not recognizing the declining marginal utility,

There's an NFT creator that created some artwork,

Put it online as an NFT,

And it got a bid for $2.

3 million.

And the person that created it was literally living with his mother and said no,

Because he thought,

Oh,

2.

3 million,

I can get more.

It's not enough.

And it ended up selling for 20,

000.

So still pretty good,

Right?

But the point is,

If you're broke living with your mother and someone offers you $2 million for an NFT,

You say yes.

That money is going to make a huge difference in your life.

Even if you think that,

Hey,

Maybe if I hold onto it,

I can get 5 million next month.

I would cash it in,

Right?

So the important thing,

Stupid poor people tricks,

Look at the risk reward ratio.

That's the most important thing,

Right?

Only take on more risk if there's more reward.

Don't worry about the absolute amount of risk.

That's less important,

At least to a wealthy person,

Right?

But at the same time,

Realize there's a declining marginal utility of money.

So if you have a chance to take a sure thing at a lower price point,

And that money will make difference in your life,

Do it,

Right?

So let's say that someone offers you $2 million for your EFT,

And there's a 50-50 chance it'll be worth 4 million or nothing next month.

Take the 2 million,

Right?

Why?

The first $2 million is going to make a much bigger difference in your life than the second 2 million.

So taking the extra risk to get the extra reward is not worth it.

So by using those two principles,

Look at the risk reward ratio,

But also look at the declining utility of what this money would bring to your life.

That's how a very successful wealthy person invests and makes their decisions.

So hope you found this useful.

Again,

I mean,

No criticism or shaming of people that happen to be poor,

Whatever.

That's not your fault.

I want to show you how to change that.

How to clear your blocks,

Get yourself into a deep theta state,

Connect to the quantum field,

And start killing it in every area of your life.

Not just money,

But hey,

Let's admit if money is an important part of it.

There's a lot of things you can't do without the money.

I want to show you the path to spiritual investing.

Unleash what's inside of you so you can spend your day-to-day doing what you love,

What you're good at to make a difference in the world,

And take all the financial pressure off.

That can be addressed by your more passive investments that are highly leveraged to make you a lot more money over time.

I hope you found this useful,

Transformational,

And entertaining.

Goodbye,

Take care,

And namaste.