How Young YouTube Millionaires Are Lying To You

Listen, we're probably going to ruffle some feathers with this one, but it's got to be done because I'm seeing a slew of young millionaire YouTubers out there that are slinging all sorts of business, investing, and financial advice. And the truth is, the majority of them are straight up lying to you. And the other ones, well, they may not be lying, but they are wrong in a lot of cases. Now, we're not going to bother with the really blatant offenders because they tend to be pretty easy to weed out with just a little bit of digging. They're typically the guys who are sell you on their course, which if anything is either content they took from someone else, or it's them just making up some garbage and putting a pretty little bow on it. Now, the guys that we're going to focus on in this video, they're a higher class of criminal. Okay, actually that's overselling it. The young YouTube millionaires we're going to talk about here actually aren't bad guys. In a lot of cases, they're wicked smart and they've tapped into a wisdom far beyond their years. Not to mention that they've made way more money than I ever did before turning 25. So sure, go ahead and keep watching their content because these guys truly are a great source of inspiration and entertainment. But when it comes to learning from these people, well, that's what we're going to talk about in this video. Because you see, the most important skill that you've got to develop on your path to winning the money game is that of judgment. You have to develop the ability to consume information, to break it apart into its component pieces, and then critically evaluate it. And then to take that information and keep the parts that serve you while ignoring the parts that don't. And this skill is so damn important when it comes to these young YouTube millionaires, because truthfully, they say a lot of great things that I absolutely agree with. But they also say some things often without even realizing it that are just flat out wrong. Now, truthfully, it's not really their fault. I don't think that they're trying to mislead you. They're just, they're young and they don't quite see the full picture yet. So please don't take this as the rantings of a disgruntled old man, just bitter at the youth for kicking ass and taking names. But here's how young YouTube millionaires lie to you and why you probably shouldn't be taking advice from them. First, numbers don't lie, but I can make them say whatever I want. Over the past three years, I've raised $25 million of capital from private investors to invest in commercial real estate. Often, when I sit down with a new or first time investor, they're eager just to jump straight to the returns, which makes perfect sense. Of course, you want to get an idea of how much you could potentially make in a deal, but it's the absolute wrong place to start. And the reason is this, numbers don't lie, but I can make them say whatever I want. So when I show you my return projections and all my fancy spreadsheets, if you don't trust me, you can't trust my numbers. Because inside of all those rows and columns and assumptions, I can hide pretty much whatever I want. So I want you to think about this next time you're watching some young YouTube millionaire, because at some point, they're going to use numbers to impress you. And if you don't speak the language of those numbers, then you can very easily be misled. For instance, one of the most popular video titles out there is How I Became a Millionaire by 23, or something like that. Full disclosure, I have a video just like that on my channel about how I went from $80,000 in debt to a millionaire in only three years, and you can check that out here. But what exactly does it mean to be a millionaire? It's pretty straightforward, basic question, right? Well, not really. Are you an income millionaire, meaning you made $1 million of income in the past 12 months, or are you a net worth millionaire? Which means if we add up the complete value of all your assets minus all your liabilities, they'd be worth north of a million dollars. Or are you the rarest of all breeds, the liquid millionaire, meaning you have just a million dollars in cash or cash equivalents sitting around? So you see, one word, three definitions. And you might be saying, yeah, Anthony, who cares? Regardless of which definition you use, it's a lot of money, right? Maybe, maybe not. For instance, if you've got a million dollar income, but your yearly expenses are one and a half million, then you actually lost half a million dollars. And I don't know about you, but that's not someone I would take advice from. Now, the easiest way for a young YouTube millionaire to lie is about their net worth. Again, to calculate net worth, we subtract all your liabilities, like your school loans, your credit card loans, your car loans, and we subtract that from your assets. And this gets tricky because it's easy to calculate how much cash is in your bank account, but it's harder to calculate how much a piece of real estate is worth, or even trickier, how much a business is worth. Because here's another thing you hear people say all the time, I built a seven-figure business. But again, what exactly does that even mean? Is that six figures worth of top-line revenue of profit of enterprise value, which is just a fancy way of saying, if I were to sell it right now, what could I get for it? And this matters because there's no YouTube police going around verifying how people are calculating their numbers. There's nothing stopping young Ricky from starting an ad agency, doing $50,000 of top-line revenue, and then saying it's worth a million dollars at a 20X multiple, despite the fact that there's probably nobody on the planet willing to pay that kind of a multiple. Again, this is not the kind of guy I'd be taking financial or business advice from, but to each their own. All right, so here's a real quick example that I just found to prove the point. This video is titled making $10,888 every 24 hours, a day in the life of Sebastian Georgiou. And this thing has been viewed 1.4 million times, which makes sense because this is a bold claim. For those that haven't done the math, $10,888 every 24 hours would be about $4 million a year in income. And for the record, that's an insane number. But you've only got to watch the first five or so minutes before Sebastian reveals the dubious accounting principle he's employing, which interestingly enough, is the same exact accounting principle that bankrupted Enron back in the early 2000s. Now, for the youngsters out there who've never heard of the Enron scandal, this was one of the biggest companies in the world with hundreds of billions of dollars of assets. And they filed bankruptcy almost out of nowhere when it was revealed they'd been cooking the books for decades and they simply didn't have money they said they did. Okay, so back to Seb. Here's the questionable accounting tactic he's using. It's called mark to market. At one point in the video, he's sharing all his sources of income, including his ad agency, YouTube stocks, crypto, which probably isn't doing so well anymore. And then finally, real estate. And it's that last one, the real estate that's the problem. See, he's currently building his dream home for something like $1.1 million and he got a cash offer from a potential buyer for $2.8 million. So what he's doing is saying, okay, if I were to sell the house right now, here's how much I would stand to make. And then he's adding that number into his total income and dividing it by how many days he's worked on the project. And this is exactly what Enron did. They would show theoretical future profits as actual current profits. So for instance, they'd sign a contract with another company that said that other company is going to pay them a hundred million dollars in 10 years from now. Then Enron would say, hey, look, we just made a hundred million dollars and they'd count it towards their quarterly revenue and profit numbers to drive up the stock price. And you see the problem with this, right? A lot can happen in 10 years. And so not only is that money not guaranteed, but it's not even useful because you don't have it. It's just numbers on a piece of paper. So listen, I truly don't think Sebastian is trying to grift anyone. He's just playing the YouTube game to get the clicks. I mean, I ain't going to hate on that, but I share this as an example. So you'll be better armed against one of the most common lies that young YouTube millionaires tell in an attempt to win your trust and impress you. Now here's the second way they lie to you, which is they say things like, I'm just like you. Truth is they're not, they're outliers. In fact, they're extreme outliers. We're talking about people in their early twenties who've already amassed enough money to put them in the top 1% of 1%. So in essence, they are probably not good role models to emulate. Let's break it down using something I call the success formula. Success equals skill times, hard work times, duration divided by luck, or put another way, how good you are times, how hard you work times, how long you work divided by just getting lucky and being in the right place and the right opportunity at the right time. Now we can immediately discard hard work in duration as the variables of these young YouTubers success, because while I'm sure they do in fact, work hard in reality, a lot of people work really hard. That's not unique. Also duration is completely irrelevant because they just haven't been playing the game for very long, given the fact that they're so young. So the two factors that matter most are skill and luck. Now we can assume since they are such extreme outliers that they did in fact have some pretty damn good luck, which just isn't helpful to you and me because luck generally isn't replicatable. However, there are some ways to put yourself on the right side of luck. In fact, I did a video on it a while back called the luck equation, which I'll drop a link for in the description below. Now this brings us to the last variable in the success formula, skill. And there's one component of skill in particular that's important for us to understand, and that's the role of talent or innate ability. The unsexy truth is these guys who managed to achieve outsized success so young in life probably had some innate ability that gave them a unique advantage. It's all but impossible to quantify what that is, but it is there. So let's just use an example where the innate ability is a bit more obvious so we can illustrate the problem with taking advice from these extreme outliers. Introducing LeBron James. Now, if you're a kid and you're dreaming about one day playing in the NBA, then LeBron James would be a very, very bad person to use as a role model. Why? Because he's a freak of athletic nature and unique circumstances that enabled him to go straight into the NBA out of high school. He's the one percenter of the NBA, and what worked for him is unlikely to work for you. So his advice, not terribly useful. The guy that you actually want to take advice from on how to get into the NBA is the grinder. The guy who was just okay in high school and managed to squeak his way into college, who there through years of hard work and just grinding, he eventually manages to weasel his way into the NBA. That's the guy you want to take advice from because his path, though still incredibly unlikely, is the one that has the best probability of being replicated. And so yes, we can look to LeBron James and the young YouTube millionaires for inspiration, but they're generally not the ones you should take advice from because they're lying when they say that they're just like you and me. They're not. And this leads us into the third way that these YouTubers are lying to you. They're not actually investing. They talk a big game, but these YouTubers are generally not investors. And it's funny because these guys have obviously done their homework on personal finance and investing best practices because the majority of what they say is true, but it's in the transition from theory to practice that they completely screw up. So here's what I mean. You've probably heard it said like a thousand times already. Hell, I've probably said it a thousand times myself on this channel that you should start investing as soon as possible. And the reason is because you want to get compounding interest on your side, which as Einstein said, is the eighth wonder of the universe. Those who understand it benefit, those who don't pay it. And it's true. Even like a modest amount of money, like 10 to $20 invested every month from the time that you're 18 until you retire can add up to be like a truly incredible number. But here's where I see these young YouTubers go wrong again and again and again. They confuse investing with speculating. So let's define some terms real quick, just so we're on the same page. Investors spend money with an expectation of profit after deploying reasonable judgment and thorough investigation of the probability of success. Whereas speculators, on the other hand, they spend their money on opportunities with a high probability of failure, where success is primarily due to chance or uncontrollable external forces or events. So the primary difference then is the amount of risk being taken. See, these YouTubers love to talk about how much money they've made investing in things like crypto, luxury watches, exotic cars, and flipping houses. But these are not investments. They're speculations. For example, depending on when you got into crypto, you either made a ton of money or you lost a ton of money. As a general rule, it's not a good investment if the only way that you make money is by getting in and then out at the exact right moment. With 800,000 subscribers, Sebastian Georgiou is probably one of the most popular young YouTube millionaires out there. And in a recent video, he shared how he'd woken up at 4 a.m. with a gut feeling and decided to short his crypto position. Wing bang boom, next thing you know, he's made $40,000 in a single hour and turned a $30,000 investment into $600,000. But that's not investing, that's gambling. Okay, so here's another thing that looks a whole lot like investing, but in actuality, it's not. House flipping. You've probably seen this on HGTV when Chip and Joanna, they go buy a rundown shanty with like a porcupine living in the guest bedroom. They slap some paint on it, they evict Mr. Porky, and then they turn around and sell it for a pretty penny. Again, our boy Sebastian flipped his first house last year and he made a nice little profit of $40,000. Seriously, no, that's awesome. I'm not hating on house flippers. In fact, I flipped three houses in college and I think it can be like a really good way to get into the money making game, but it's not an investment. It's a job coupled with an educated guest. So think of it like a painter who spends 40 hours on a single painting that they hope will sell, but there's no guarantee and it could just end up in the closet collecting dust. Then compare that to being a house painter who knows once he's done painting the house, he's getting paid for his 40 hours of work. One is an investment of time while the other is just a speculation. Now here's the really important takeaway. There's nothing inherently wrong with speculating. In fact, speculations can generate some incredible returns. After all, that painter could end up being the next Picasso. And so if you're looking for incredible outsized returns, and sure, you might hop into some more of these speculative opportunities, but it's critical that you understand when you're investing versus when you're speculating, because most people think they're doing the first when in reality they're doing the second, and then they're screwed when something crazy happens. Like $100 million is disappearing in blink of an eye when FTX to crypto exchange recently went under. And now these people who thought they were putting their money into a safe investment learned the cold hard truth that they were simply gambling. My goal in sharing this with you is to arm you with the tools necessary to distinguish an investment from a speculation, because only in understanding the difference will you be able to target the right opportunities for you given your circumstances and context. Which brings us to the really big question, when exactly is the right time to speculate? Well, as it turns out, there's really only two times you should jump into speculative opportunities. First is when you're young, because you have the benefit of time on your side. And so what if you go broke at 23? Everybody's broke at 23. Second is when you have more money than you could possibly need. And so it's interesting then to realize that while our young YouTube millionaires are technically wrong in thinking they're investing and giving you that advice, they're not actually wrong in the fact that they're doing more or less what they should be doing given their age and their financial means. However, chances are high if you're watching this video, you may be young, but you probably don't have ridiculous amounts of disposable income just laying around. And if that's you, then forget speculating and instead spend your money on acquiring skills, networking, and increasing your earning potential. Because truly, this is the one thing you should definitely take away from the young YouTube millionaires. Develop a money-making skill. If you want to make money, become a millionaire, or just win the wealth game, you have to increase your earning potential. And most people go about this in the worst way possible. They go to college, get their degrees, and they go get a job and work really, really hard thinking, if I just put my nose to the grindstone, I'll get promoted through the ranks, I'll get that raise, and one day I'm going to be rich and retired. But it's almost impossible to build meaningful wealth playing the game this way, because you're trading your time for money and you only have so many hours in the day. The key then is you got to figure out how to disconnect the money you make from the time you put in. And the core concept you have to understand to accomplish this is that of leverage. See, leverage increases your output per unit of input. So the more leverage you have, the more money you can make. And this is what our young YouTube millionaires have done so damn well and they deserve massive props and kudos. First, they developed a skill that the marketplace valued at a premium, and then they went out and put that skill to work. Second, they built systems and teams around those skills so that they could scale. And then third, they leveraged the skills and experiences they'd acquired to start creating content on YouTube, which is just another form of leverage for them to spread their message, generate more income and build their brands. Seriously, these guys are playing the game so much better than I ever was at their age. So well done guys. It's easy to hate on them, but truly I got mad respect for their hustle. And so yes, there are a lot of reasons why you should take advice from these guys. But hopefully now you understand how numbers can be made to lie, how you probably can't do the same thing they've done, and the difference between investing and speculating. And with this knowledge, I hope that you're going to be better equipped to judge the quality and context of their messages so that you can distinguish the parts that'll serve you from the parts that'll potentially ruin you. Hey guys, thanks so much for checking out the video. I really appreciate it. If you got some value out of this and you want to go deeper, specifically into learning about the skills that you need to acquire to make millions, check out this other video that we recently did about the six skills that made me millions. And then also, if you want to go even deeper, you should think about joining our newsletter, The Hyper-Focused Entrepreneur. Each week, I send out some actual business investing and just life advice to get out of your own way to get more done in less time and make more money. So I'll put a link for that down below in the description. All right guys, that'll do it for me. Cheers.