How to Make Smarter Money Decisions to Build Wealth

TL;DR

Building wealth comes down to three things: knowledge, risk, and discipline. Gaining financial knowledge lets you redirect spending from things that make you look rich toward assets that actually make money, while taking calculated risks with your time and capital creates the chance for bigger upside that saving in a bank never will.

Transcript

You are one move away from having more wealth than you can imagine or being stuck in this system, barely having enough money to get by. When I was in college and I decided not to go to medical school, I was lost. I was dabbling in real estate. I had some side hustles that I was working on, but everybody around me was getting a good job. So, I figur... Read More

Key Insights

• Wealth comes down to three key factors: knowledge, risk, and discipline. These were the things that allowed the speaker to find better opportunities and make better moves over 15 years to reach a stronger financial position.
• Financial knowledge changes your decisions. After reading Rich Dad Poor Dad on a 20-hour flight to India, the speaker learned about money, investing, and assets, concepts nobody in his family had ever been exposed to.
• Spending money to look rich makes you broker. The speaker blew early business earnings on car rims, tints, HID lights, a sound system, and a watch before shifting to buying assets that make money instead.
• Life works like a pinball machine. You bounce between opportunities toward a goal of freedom and wealth, but you don't know which opportunities you'll hit, and one bad decision can leave you stuck in a job or pay grade you dislike.
• Taking risk is unavoidable when building wealth. Whether starting a business or investing, you must risk your time learning, risk money on books, classes, and research, and risk investing in markets to see any upside.
• Saving money also carries risk. Cash in the bank loses value to inflation and carries opportunity cost, because $1,000 left in a bank won't grow the way it could if invested into something that might double it.
• A low-paying job can be worth less than a gig. The speaker's $14/hour Petco analyst offer paid $560 pre-tax for a 40-hour week, less than the $600 he earned in a single Saturday playing drums at weddings.
• Mistakes are part of the process. The speaker invested in stocks that went bankrupt, real estate deals that cost a fortune, and business errors costing hundreds of thousands, yet that willingness to risk enabled more chances at success.

Questions & Answers

Q: What are the three keys to building wealth?

According to the speaker, three key things allowed him to find better opportunities and make better moves toward wealth over the last 15 years: number one, knowledge; number two, risk; and number three, discipline. He explains that with knowledge he could change his decisions to move in the direction he wanted, and that taking risk is necessary because no matter what you do, whether starting a business or investing, there is always a level of risk involved in reaching more potential success.

Q: Why did the speaker turn down the real estate analyst job at Petco?

He was offered an entry-level real estate analyst position at Petco paying $14 an hour, which at 40 hours a week came to $560 pre-tax, and this was about 12 or 13 years ago. He realized that when he worked a full Saturday playing an Indian drum called the dhol at weddings, his fee was $600. He could work one fun Saturday and earn more than a whole week at the job, and the job required a college degree while the wedding gig did not, so he decided not to take it.

Q: How did Rich Dad Poor Dad change the speaker's mindset?

His father gave him a copy of Rich Dad Poor Dad, which he threw in his backpack and eventually read during a roughly 20-hour flight to India. Despite hating reading and having English as his second language, it became the first book he ever finished cover to cover. It introduced him to concepts of money, financial education, and investing that nobody in his family practiced, and this knowledge led him to start changing his decisions and investing his money in the direction he wanted to go.

Q: Why is saving money in the bank considered a risk?

The speaker argues that saving carries two risks. First, you lose value to inflation over time. Second is opportunity cost: $1,000 in the bank will not really grow, so you lose out on the chance of growing that $1,000 into $2,000 by investing it into something like the markets or your own business idea. Feeling like saving involves no risk is misleading, because the missed opportunity to grow your money is itself a real cost.

Q: What is the difference between spending to look rich and building wealth?

When the speaker first made money from his event planning and party business, he spent it stupidly on things that made him look rich, including new rims, window tints, HID lights, and a sound system for his car, plus a new watch. After learning about assets and investments, things you buy that make you money, he made the switch to stop spending on things that made him broker so he could buy things that could make him richer. That shift only happened because he had gained financial knowledge.

Q: Why is the speaker transitioning his company from Briefs Media to Briefs Finance?

His full-time job runs a company formerly called Briefs Media that published financial news through its Market Briefs newsletter and articles, plus investment research from analysts who analyzed stocks. A third-party audit confirmed the reports beat the S&P 500. However, AI made it much harder to compete as a media company, so he is transitioning to Briefs Finance, described as a fintech-forward company powered by media, investing heavily in its own AI, software, and technology because he sees where the economy is moving.

Q: Why does the speaker say taking risks is necessary to succeed?

He explains that no matter what you do, whether starting a business or investing money, there is a level of risk involved. You have to risk your time to learn things, risk buying books and classes, risk investing in research, and risk putting money into the markets. He has made many mistakes, including stocks that went bankrupt and real estate and business errors costing hundreds of thousands of dollars, but being willing to take risks lets him try things and gives him the chance to see more potential success.

Q: What risk is the speaker taking with his new fintech company?

To build Briefs Finance, the speaker hired seven developers working full-time, and is paying for them along with all the data and tools involved, which he describes as very expensive. The company has not launched the product yet, has not made a single penny, and will not launch for months. He accepts this as a necessary risk because he sees where the economy is moving toward AI, and he believes that if you are not willing to take risks, you will never be able to see the upside.

Summary & Key Takeaways

• The speaker's turning point came in college when he declined a $14/hour real estate analyst job at Petco, which paid $560 pre-tax for a full 40-hour week. He realized he earned $600 in a single Saturday playing an Indian drum at weddings, and that comparison changed the trajectory of his life.

• Knowledge came first through Rich Dad Poor Dad, a book his father gave him and the first he ever read cover to cover despite English being his second language. It exposed him to investing and assets, prompting him to stop spending on status symbols and start buying things that make money.

• Risk is the second pillar. His company, transitioning from Briefs Media to Briefs Finance, hired seven full-time developers and is investing heavily in its own AI and software without launching a product or earning a penny yet, because he sees the economy shifting toward AI.