Building Wealth vs. Chasing Money – Episode 614

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[00:01] Welcome to the Prosperity Podcast. Prosperity thinkers, welcome to the podcast. We’re going to be talking about building wealth versus chasing money and how to know the difference. And I think most people don’t know the difference to you. No, they chase money and they also chase rates of return, right? I mean, I’ve literally had people say to me, oh, 7%, like I don’t do a deal unless it’s 15. I’m like, cool, how about it? I’ve heard those same words and it’s always the same people. And it’s like, what part of the roller coaster are you on? Are you at the top of it or the bottom right now? Because that’s the top of the roller coasters. So why is it that they don’t know the difference, even if they’ve been successful

[00:51] in some area of business or life? Probably they haven’t lost enough money yet. So the people that have actually lost money because they did deals like that, and I’m not saying that you can’t find a deal like that, and that deal might actually turn out. The problem is the repetitive nature, the repetition that is necessary to actually get results. And again, sure, some people, they can do it. They’ll knock it out of the park every single time, have at it or have a small loss, whatever. But nobody is ever talking about the money that they lose seeking those kinds of returns. And furthermore, people talk about it as if it’s just like a given. I even saw something the other day where the 7% was listed as a given out of

[01:41] the stock market when somebody’s retired. That is not a given. And so if you have not lost money, if you have not personally gone through that, or had a family member go through it, I’m aware of somebody that’s in our business that moved to a completely different state in the country because their mother-in-law experienced extreme investment loss, and they basically all had to move in together to let the family’s situation work itself out. So, you know, in some families in the Orient, for example, that’s like awesome. All the generations live together, but pretty unusual in America. So it’s just good learnings that can occur. So my quest is please let the losses that I’ve seen, not only with our own

[02:37] personal money, but with clients’ money, lend you some experience so that you as a listener to our podcast can seek spaces where the dollars cannot get lost. Are they boring? Yes. Are they findable? Yes. Are they actually probably more efficient than you thought? Yes. And so that’s the financial space that breeds peace of mind, quietness, confidence, control, ability to solve emergencies, take advantage of opportunities, help others, right? Because we have dollars that are controllable. They’re liquid. They’re usable. They act like equity. And I’m not just talking about the cash value of life insurance. That certainly fits all those things. But there are spaces, products, there are products that will produce a guaranteed income for life for people.

[03:41] I’m shocked at how many people do not want to purchase that product because they think they might get a better rate of return. It’s awful. As you have mentioned these pieces, there’s the mental model and the thinking called Occam’s razor, which means the most obvious choice is probably the correct choice. And it has me think about some of the other experiments and things I do, which is with AI and creating stuff. And I will say there’s one rule that I’ve stuck with that makes a difference. And it’s not one that I came up with because I learned from many mistakes, which is to make it more simple. Don’t overcomplicate. And I think a lot of people, when they’re chasing these rates of returns and whatever it looks like,

[04:37] they’re overcomplicating. They’re taking something in front of them, as you’ve mentioned, that could be simple, that is proven, and they just, it’s like they want to create a new job on top of whatever else they’re doing. I don’t get it. So one, how do we, Occam’s razor, how do we dumb it down and say, no, like, stop, cut the noise? Well, really one of the first hurdles that I think people have is this idea that they think they can do it better themselves. And so when you look at, for example, the life insurance industry in America, and I’m talking the mutual companies that are owned by their policyholders, it couldn’t be more simple than that because you don’t have to do the work. You just have to put the money in. And so people, not only do they

[05:27] think they can do a better job of the growth of cash value, they think they can do a better job of insuring themselves, the wealthier families that don’t have life insurance because they feel like they are self-insured. Well, they wouldn’t do that to their car or their home, so why on earth would they do that to their life? And in business, we know that we cannot, as owners, do everything ourselves. We must delegate or elevate, if you will, other tasks to other people. Well, what’s the best way to get result? It’s to elevate a task to somebody that is experienced and competent and proven themselves to do the job. Well, that’s all you’re doing with the life insurance space. You’re just taking a little bit of cream

[06:14] off of your crop, in other words, taking some profit and pushing it over to the life insurance space where you will never lose it again. While yes, it might be boring, a very, very amazing 10-story building is beautiful and gorgeous and will stand the test of time because of the underlying, very boring, gray and ugly cement foundation that sits below it. It’s that gray cement foundation that is equivalent to the life insurance space in a family’s finances, in a generation’s finances, in an environment where there is a lot of CLUE, control, liquidity, utilization of the money and the ability to act like equity. And notice in all of our commentary, we haven’t mentioned once the retirement plan space, right,

[07:14] the 401Ks and the 403Bs and that type of thing. We haven’t mentioned once other investments that are so appealing to people and I’m not opposed to them at all. Please, yes, go do some other investments and make sure that you have your certainty money really dialed in. And I’m not using security money on purpose because the word security gets applied to the stock market securities and that space cannot guarantee a 0% return. The best that the securities industry can guarantee is negative 100. Now, thankfully, most people won’t experience that, but that is the best that they can guarantee. I don’t know if Skype was a public company or not, probably not, but they are closing their doors. That’s negative 100.

[08:14] That’s awful. You know that in our other episode, this actually ties in perfect. We recorded an episode and you can listen to it from a couple episodes ago. Wisdom from Naval Ravicon, self-made billionaire. But he says there’s two things that he always focuses on. One, like when he’s doing a deal or anything with money. One, avoid going to zero. Don’t ever go to zero. So you’ve mentioned right now the financial way of protecting. It’s boring, but it doesn’t get us to zero. Two, don’t do things that will put you in an orange jumpsuit. Again, if someone says the return isn’t high enough or they’re gloating about this or they’re gloating about that or whatever it is, go back to simple. Think prosperously.

[09:02] This was a fun episode, Kim. I appreciate it. Thank you. Thank you for listening to the Prosperity Podcast. To take control of your money and have it work for you, visit ProsperityThinkers.com.