How To Build Long Term Wealth For Beginners

Are you someone who says they want to become wealthy, or do you want to actually become wealthy? Because everybody says they want to become wealthy. I mean, who doesn't want to fly around in first class and have nice cars? But actually getting there takes more work, sacrifice, and discipline. And it starts by understanding what is the purpose of the cash that you have. Because for the average person, when you think about getting an extra $1,000 or $10,000 or $100,000, we think in terms of spending. If I had an extra $1,000, what nice thing could I buy for myself? Could I get myself a new watch? Could I go on a fancy dinner? Could I go out and get myself something really nice? If I had an extra $10,000, what car could I get as a down payment? What vacation could I go on? What Rolex could I buy? If I had an extra $100,000, could I get myself a Lamborghini? We think in terms of spending, but when you start to look at what wealthy people do and people who become wealthy, they look at their cash very differently. They don't think about their cash in terms of spending. They think about, how can I turn this $1,000 into $2,000? How do I turn my $10,000 into $30,000, and how do I turn this $100,000 into $1,000,000? They think about earning cash as a way to make more cash, while everybody else thinks about generating cash as a way to pay for their bills or to get something nice. And the reason why is because wealthy people are focused on growth, not just growth of their mind, growth of their selves, but also growth of their money, because they want to generate this cash to create more cash flow. They want to turn this cash into assets, and that thinking is what's going to either allow you to become wealthy or continue paying every other wealthy person, because every time you make money, you're making Gucci rich, you're making BMW rich, you're making Rolex rich, you're making a landlord rich, you're making a whole bunch of people rich. It's just not you. And so now what's happening is you're going to work every single day. You're working hard, but you're working hard not to make yourself rich, you're working hard to make everybody else around you rich. And if you want to work hard to make yourself rich, it's going to require some sacrifice. And this is the really difficult and unique part, because when you realize this, the first thing that's going to end up happening is you're going to have to make a sacrifice. And you're going to now go from looking rich to looking broke, even though you're more financially savvy now than when you were before. If you were making $70,000 a year, you were driving around in a BMW, you had a nice apartment, you had a nice watch, you were going on some fancy vacations, well now you realize if I make $70,000 and I spend all my money, I'm never going to be able to become wealthy because Delta taking my money, my landlord's taking my money, I'm spending all my money. Well now, you stop spending. You go from a BMW to a Toyota, you downsize on your apartment, you don't go to Cancun as much, you stop going to Benihana's, now all of a sudden, you look like something's wrong because you got a beat up car, you downsize where you live in, you're not spending and lavish and having this extra extravagant lifestyle, you just are spending less. And now people start to wonder if something's wrong with you because you're making these sacrifices, but now what happens? Your bank account starts to grow for the first time. You have some extra cash because maybe you don't have a car payment anymore. Maybe you don't have such an expensive rent payment anymore. You don't have to keep paying for all of these expensive things that you had. And now you have some extra cash, so that's the sacrifice stage. Then what happens is you got to start making your investments because if you keep that cash in the bank, well, it's better than spending your money. But then what ends up happening is your cash in the bank starts to get eaten up by inflation. We know what inflation is now, and I talk about this because the first time my YouTube channel Minority Mindset went viral was in 2016, and the reason why it went viral is because I made a video talking about inflation in 2016. The price of things go up by 3% a year is called inflation. That means if a pack of gum costs $1 on January 1st, at the end of the year, it will cost you $1.03 to buy. I was talking about how inflation is 2% to 3% a year, and your savings account back then was paying 0.03% a year, and so you're losing 2% to 3% of your money in savings. And that was a new concept for a lot of people in 2016, and that video went viral. Well, today, a lot more people know what inflation is because of what happened during the pandemic, but inflation hasn't gone away. Just because the inflation rate has fallen doesn't mean that inflation is no longer a problem. And so if you were to save money in the bank, that's better than spending your money, but the savings that you have in the bank is still being eaten by inflation, even if you have a high-yield savings account. And you will say, well, Jaspreet, if I have a high-yield savings account, isn't my interest rate higher than the inflation rate? Well, maybe, but remember, the average inflation rate is the average inflation rate. It's not always the real inflation rate that you're paying, and it's the average inflation rate based off of reported numbers. Remember, the reported numbers say that grocery prices have gone up by a little bit more than 20% over the last five years. So a $100 carton of groceries in early 2020 should cost you about $120 today. I think the average person who actually goes to the grocery store knows that that's not true. So sure, you might be able to beat the average reported inflation rate, but the reported inflation rate isn't always your inflation rate. Not to mention, if you take a look at the highest inflation rate numbers, it's things like housing, it's things like car insurance, it's things like food. These are things that a lot of people need. And those might be even higher than the average inflation rate. And that's where you have to know how the numbers actually work. Not to mention that when you earn that 4% or 4.5% in interest from your high-yield savings account, you also have to pay taxes on that money. So even though you're generating 4% to 4.5%, you might only be netting 2% to 3% after taxes. And then you have to see, are you actually beating inflation or not? So when you keep your money in the bank, you might not actually be beating inflation. And at the very least, you might not actually be growing. I mean, maybe you're staying the same. But now, let's talk about growth. Because if you're working this hard to save your money, and your money is just sitting there stationary, well, you're not getting the biggest bang for your buck. And I say this because I've seen this happen in so many traditional Indian households. And this happens with a lot of immigrant families, but I'll talk about the Indian family because that's how I grew up. When you come from a foreign country like India, you come to the United States with $20 in your pocket, like many Indian immigrants did, that's how my dad did, you work very hard and you don't want to risk losing your money. So what do you do? You save money. It's a save-heavy culture. You work extremely hard to make money, and then you save every penny possible because you don't want to risk losing it. But what if you could actually grow that money? This is what wealthy people are focused on doing. This is what real wealth is, because if we take a look at what wealth is, and I'm going to focus just on me for now. I'm not going to talk about all the other definitions out there. I'm not going to talk about what your financial advisor says. I'm not going to talk about what Investopedia says. I'm going to talk about me. For me, wealth is when the cash flow from my investments, my passive investments, not my business, my passive investments, is more than my expenses, I'm wealthy. Why? Because my passive investments, and I use the term passive investment kind of loosely here because when I invest my money in dividend paying stocks, yeah, it's passive, but I still monitor my portfolio. When I invest in real estate, yeah, it's passive for me because I spent years building a good team. I spent years learning how to make it passive. The first few years of me investing in real estate, it was anything but passive. Now it is very passive, but I still review my monthly reports. I still have quarterly meetings with my property manager. I still go out to the properties sometimes. I'm still working to acquire more properties. There's still work, but I'm not actively working in it. But when those investments are covering all of my lifestyle expenses, that's what wealth is. Now, how do you actually get there? Well, you don't have to follow my definition of wealth. Some of you might say, I don't care about cash flow. I don't want dividends. I don't want rental income. I want to see growth of my investments. That's fine. I just had a conversation with somebody over the weekend at an event where he was saying, you know what Jaspreet, I'm young. I don't really care about cash flow because I don't want to worry about those taxes. I'd rather invest in high growth things. Perfect. As long as you know your strategy and why you're doing it, there's nothing wrong with that. The problem is so many people have zero idea of what they're doing. They have zero strategy, and then they just throw their money into something. And then they hope that they get rich quick, very fast. And this is where we got to break it down, right? You started with the sacrifice. Now we got to get into the consistency, and you have to know what the game is for you because now you're not spending all of your money, but you have to actually do something with that money that you're putting aside because we now know that saving your money is a guaranteed loss. How? Because number one, if you're getting high yield savings accounts, you're going to have to pay taxes. And then the real inflation rate is probably going to be higher than the amount of money you're making from the high yield savings account. So your savings are losing value slowly. And if you really want to grow, you have to own assets. And this is where you got to know the game that you want to play. And it's not going to happen overnight. It's not going to happen in a year. It's not going to happen in two years. I call it a decade of sacrifice, and I call it a decade of sacrifice because you're going to have to go through a decade of spending less and earning more so you can invest like crazy. And most people will not tell you this because they're trying to sell you some get rich quick scheme because no one likes the idea of here's how you can get rich in 10, 15 years. It doesn't sound very attractive, but this is the reality that many people will not tell you that a lot of people are scared to tell you. If you want to build wealth through your investments, which is really what wealth is, it's going to take time. It's going to take a decade. It might even take longer than a decade, but you're going to have a completely different financial life over those 10 years where you're not even going to be able to recognize yourself and you will see that light. But you've got to stay consistent with your investments because now what you're doing is you're working to make money and you're not spending all of your money and now you're working to take that extra money. Some of it you're going to save for emergencies, but now you're going to actually work to put that money into assets that are going to grow for you and make you money even when you're sleeping. And this was that concept that really blew my mind because I didn't grow up learning about investing. Maybe you didn't either. I grew up in a traditional house where the way that I learned about building wealth was you go out and become a doctor. You get a good job and that job is going to pay you as long as you go to work, but what happens if I get sick and I can't go to work? What happens if I break my leg and I can't go to work? What happens if the company that I'm working at, the hospital I'm working at, goes bankrupt and I lose my job? What happens if I get laid off? What happens if I hate my job and I want to quit and I want to travel the world for 60 days? Well, I don't have an income coming in in any of those situations, but you've still got bills to pay. You've still got to pay for your mortgage or your rent. You've still got to pay for your food and your gas, so your expenses don't go away, but your income can. And that's what wealthy people understand. They want to own assets that will pay them even when they're not working because your investments, your assets, can work much harder than you because you can be on a vacation and that money can continue to be deposited into your bank account. And the first time I saw this was when I started investing in real estate. I bought a property out of foreclosure and that property then paid me $600 a month in rent. Now, that $600 a month in rent wasn't all my profit because you have to pay for your expenses. I had to pay for property taxes, insurance, maintenance fees, management fees, and a lot of other things. I ended up netting, though, about $250 a month and that was money that was being deposited into my bank account every month no matter what I did. And that was that first realization that, wait, if I work to stack these assets, I can work to stack this cashflow and this cashflow can continue paying me even if I'm in Hawaii. This cashflow can keep paying me even if I'm taking a vacation, even if I'm busy in my business. And that was the realization that this is the game the wealthy people are playing. They're working to earn money, not to spend it. They're working to earn money to buy assets and then they want to spend the money that their assets pay them because if you can live off of the assets, now you have freedom. I can buy whatever the heck you want. You can buy the G-Wagon. You can buy the Rolex. You can buy the trip to Cancun and not even worry about the price because the cashflow is going to keep coming in. And yes, there will be times where things go wrong. There will be times the tenants move out. There will be times where they trash the property. There will be times where companies go under. That's business. But when you understand the game, you change the way you think. You're going to change how you spend your money and that's the key because your income is the lifeblood for you to be able to buy these investments. You need the income coming in to be able to actually afford buying those investments. And once you understand this, the next thing that's going to happen is you're going to wonder how can I earn more money? And maybe you do it at your job. Maybe you start a side hustle. Maybe you start your own business. It doesn't really matter. I know there's a lot of people on the internet that talk about, oh, you've got to start a business. Look, starting a business is hard. Earning $1,000 is extremely difficult when you create it yourself. It's very rewarding and it's right for the right person. But for a lot of people, it ain't worth the headache. You got to decide what's right for you. Nothing wrong with working a job. I am an employee at my own company. I own Briefs Media. I'm the CEO at Briefs Media. I'm an employee at Briefs Media. Now, sure, yeah, I started it. I'm the boss, but I'm still an employee there and as an employee, I have responsibilities. I have people that are counting on me and I have to make decisions that are good for the team and the company. And if I'm not good, well, I could be fired as the CEO and be replaced by somebody else. There's been multiple examples of CEOs that have been fired. And by the way, for those of you that are investors and want to become investors, my team at Briefs Media publishes a free daily newsletter called Market Briefs, where we break down what's happening in things like the economy, housing, stocks, crypto, and global markets into a fun, witty, and easy to read newsletter. You can read it in less than five minutes every morning. We have hundreds of thousands of investors that read Market Briefs every morning. And when you join, you'll also get an investing masterclass complimentary, where I'll walk you through how you can get started as an investor and how you can find hidden investment opportunities before everybody else. So if you want to get all of that for free, all you have to do is click the link down in the description below. But going back to what we were talking about, the game the wealthy people are playing is they're using their cash to create more cash flow. They're using their cash to buy more assets. They're using their cash to create more cash. The game that everybody else is playing, that 98% of America is playing, is they use their cash to make somebody else rich. And now you've got to decide what you want to do. Now it's very easy to say, well Jasprit, I live paycheck to paycheck, I don't have any extra money left over. Now I can sympathize with you, and I can say, you know, that's tough, I get it. Or we can look at reality and say, all right, that's today. What are you going to do next week, next month, or next year? Because the reality is, if you spend all of your money, you will never become wealthy. Now let's do the math. You can either work to A, earn more money, or B, spend less money. What are you going to do? And earning more money might take more time, spending less money might take more sacrifices. What are you going to do? You can either spend less or earn more, or my suggestion, do both, especially in the beginning. It's hard. Nobody said this is easy. It's hard to make the actual effort, and then it's hard to be ridiculed, because people are going to think you lost your mind when you start driving around in a beat down Toyota after you had the BMW. But when you start saving the extra $700 or $800 a month that you had in that stupid car payment, you'll start to see why it makes sense. Because $700 or $800 a month might not seem like a lot today, but we're talking about $7,000, $8,000, $9,000, $10,000 a year, plus the more expensive insurance, plus the premium gas that you get to keep in your pocket. And then you take that money and you invest it, and you can turn that $10,000 into new cash flow streams that can make you wealthy, that can make your family wealthy. And here's the interesting part. You talk about generational wealth. This is one of the craziest things, and maybe if you are exposed to this, you know what I'm talking about. But generational wealth is about owning these assets that are paying you. And they can pay your kids, they can pay your grandkids, they can pay your great grandkids, even after you're gone, because you own this investment that just keeps working without you. When you go and invest in the McDonald's stock, the CEO of McDonald's is making the decisions. It's not you. You don't have to go to work. You don't have to flip a hamburger. You don't have to do anything. You just get your dividends. You just get your cash deposited into your bank account every quarter, meaning every three months. They just deposit money. Now, if you own a lot of McDonald's shares and that's paying you, well, now you can decide what you want to do with those shares. You could sell those shares and pay taxes if you made money, or you can take those shares and just pass them on. And now the next generation gets income from money that you put to work. And now McDonald's is an interesting one because, well, when you invest in a company, the company could go bankrupt, but you can also invest in funds. There are index funds, ETFs, mutual funds. These are groups of companies that will protect you against one company going bankrupt because now instead of investing in one company, you can invest in 100, 500, 1,000. That way, if one company goes bankrupt, that fund will kick out that company and replace it with a different fund. That way, it can be a lot more passive on your side, and you can just worry about investing more money, getting more dividends, and then deciding if you want to take that cash flow and reinvest it for more cash flow, or take that cash flow and use it to buy yourself a nice car. But you got to be willing to go through that decade of sacrifice, and that's the game that wealthy people are playing. They want to turn their cash into more cash. Everybody else wants to take that cash and turn it into something shiny, something nice, something cool, something you can show it off. You cannot show off your rental portfolio the way you can a Gucci belt. You cannot show off your stock market portfolio the way you can your BMW. But those things, those assets are what will pay you that freedom, and you got to decide what you want. Do you want the wealth, do you want the freedom, or do you want to look like you're rich? And the average person would rather look like they're rich than actually become rich. Just take a look at the average car payment in America today, and you compare that to how many people are living paycheck to paycheck. We have more and more people paying $1,000 a month on their car, and we have more and more people living paycheck to paycheck. Isn't it a coincidence? Probably. So if you want to become wealthy, know what you're using your cash for. Is your cash giving you cash flow, or is your cash giving somebody else cash flow? And when you understand that, you're going to want to start creating more wealth for yourself. Again, if you want some more resources, you can check out Market Briefs and my Investing Masterclass. I have those links for you down in the description. If you make $80,000 a year from your job, you need to make $80,000 a year from your investment income to be able to quit your job and live your life without changing anything you're doing. With a job, you have to go into work every single day to keep getting paid with your investments. Once you put your money to work, it'll keep paying.