Latest / Masterminds Podcast / Why You’re Still Broke, And How to Fix It - Masterminds Podcast EP8

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Why You’re Still Broke, And How to Fix It - Masterminds Podcast EP8 · Masterminds Podcast

• 0:00
  SPEAKER_00: So many people are working hard every single day of their life and they are still struggling financially.
• 0:06
  SPEAKER_00: Everybody wants to know how.
• 0:08
  SPEAKER_00: Show me the way, show us the way.
• 0:10
  SPEAKER_00: So today we're going to discuss why you are broke and how to fix it.
• 0:15
  SPEAKER_00: The fact that you're watching this video alone tells me that you are somebody who is ready to dig themselves out of the bad financial situation they find themselves in.
• 0:25
  SPEAKER_00: So let's discuss how.
• 0:27
  SPEAKER_00: The first thing that's holding you back is financial illiteracy.
• 0:32
  SPEAKER_00: Did you know, according to research, about 60 to 62% of Africans are financial illiterates?
• 0:39
  SPEAKER_00: I don't mean they are illiterate like they can't read and write, but you don't understand assets, you don't understand liabilities, you don't understand cash flow, you don't understand the world of finance, you don't understand money itself.
• 0:53
  SPEAKER_00: How can you become rich?
• 0:55
  SPEAKER_00: How can you make money if you don't understand money?
• 0:58
  SPEAKER_00: Money is an idea, money is a concept that we created for our society.
• 1:04
  SPEAKER_00: So for you to become rich and wealthy like the way you want to, you need to understand it.
• 1:09
  SPEAKER_00: There's a phenomenon that is so true.
• 1:12
  SPEAKER_00: Your level of wealth is equivalent to the level of your financial knowledge.
• 1:17
  SPEAKER_00: So if you want to make more money, you need to learn more about money.
• 1:22
  SPEAKER_00: The second thing holding people back is the contrast between the rich and poor money flow.
• 1:28
  SPEAKER_00: So poor people spend first and invest later.
• 1:32
  SPEAKER_00: Whereas rich people invest first and spend later.
• 1:36
  SPEAKER_00: When you read Rich Dad, Poor Dad, he explains this perfectly when he's talking about cash flow, where he talks about income, expenses, assets, and liabilities.
• 1:46
  SPEAKER_00: So what poor people mostly do is you get your income and you go straight to expenses.
• 1:52
  SPEAKER_00: What the middle class does is you get your income and they buy liabilities, a new phone, clothes, you know, expensive food.
• 2:01
  SPEAKER_00: They spend on liabilities and then it goes to expenses and they are broke again.
• 2:07
  SPEAKER_00: What rich people do is when they get income, they invest in assets which bring them more money, and then they spend later.
• 2:17
  SPEAKER_00: So to be able to amass wealth, you need to change your spending habits and understand, invest in your future before you spend today.
• 2:25
  SPEAKER_00: The third thing affecting so many people, we've all seen it happen.
• 2:30
  SPEAKER_00: Lifestyle inflation.
• 2:32
  SPEAKER_00: You know, you are getting your normal salary, you are living your basic life, living in a cool apartment, you know, buying normal food, wearing your boring clothes, and then you get a salary.
• 2:44
  SPEAKER_00: As soon as you get your salary, you inflate your lifestyle as how much money you have gotten has also increased.
• 2:51
  SPEAKER_00: So you see people start to even spend before they get the money.
• 2:55
  SPEAKER_00: They tell you in January that you are going to get a raise in March.
• 2:59
  SPEAKER_00: So the person starts to change their clothes in February.
• 3:02
  SPEAKER_00: That's not the way to get rich.
• 3:03
  SPEAKER_00: The way to get rich is once you've been able to live a certain lifestyle, it means you can maintain that for an amount of time so that any new money which surpasses what you used to make can now go into savings and investments to build your rich lifestyle.
• 3:20
  SPEAKER_00: Avoid lifestyle inflation.
• 3:23
  SPEAKER_00: You need to live below your means.
• 3:26
  SPEAKER_00: If you are making 2,000 CDs a month, you need to spend less than 2,000 CDs a month.
• 3:33
  SPEAKER_00: So the rest can go into investments to build your rich lifestyle in the future.
• 3:38
  SPEAKER_00: Now, this one we see the most on social media.
• 3:42
  SPEAKER_00: Looking rich versus getting rich.
• 3:46
  SPEAKER_00: The pressure, you know, the peer pressure, the likes, the followers is making people spend so much money on their appearance and appearing rich instead of actually trying to become rich.
• 4:00
  SPEAKER_00: So they buy the newest shoes, the newest phone, the newest watch, the newest car, the newest everything so that they can appear rich to people.
• 4:09
  SPEAKER_00: When in actual fact, the people getting rich are mostly the most subtle people, the most humble people, wearing the same black or white t-shirt all the time, wearing that no-name brand shoe, eating that basic meal every single day.
• 4:26
  SPEAKER_00: A lot of people say that the wealthy people are stingy.
• 4:30
  SPEAKER_00: They are not stingy, they just prioritize to grow their wealth instead of looking rich.
• 4:37
  SPEAKER_00: Because buying the most expensive things is only about trying to impress other people.
• 4:42
  SPEAKER_00: You need to focus on what you want for yourself, the lifestyle that you want.
• 4:48
  SPEAKER_00: So don't look rich.
• 4:49
  SPEAKER_00: Be rich.
• 4:50
  SPEAKER_00: Another problem I know you are facing is budget and finance tracking.
• 4:56
  SPEAKER_00: How many of you know what's happening to your money?
• 4:59
  SPEAKER_00: There's this thing called the ostrich mindset where people feel if I don't look at my money, if I hide from my money, then I'm not going to see how bad things really are.
• 5:07
  SPEAKER_00: They don't want to check their account balance because they know there's nothing in there.
• 5:12
  SPEAKER_00: But that is not how you become rich.
• 5:14
  SPEAKER_00: You become rich by actually understanding your money, knowing how much you're spending, knowing how much you want to spend.
• 5:21
  SPEAKER_00: Money is a jealous mistress.
• 5:22
  SPEAKER_00: It wants you to give it attention.
• 5:25
  SPEAKER_00: So you need to know.
• 5:26
  SPEAKER_00: I spent 200 CDs today on booth roots.
• 5:29
  SPEAKER_00: I spent 500 CDs today on clothes.
• 5:32
  SPEAKER_00: So you can make better decisions going forward.
• 5:34
  SPEAKER_00: You need to know what's in your account.
• 5:36
  SPEAKER_00: Budget ahead of time.
• 5:38
  SPEAKER_00: And I know it's quite difficult to do because it feels like a chore.
• 5:42
  SPEAKER_00: So you can make it simple with modern technology, just download an app.
• 5:46
  SPEAKER_00: There are so many free apps out there.
• 5:48
  SPEAKER_00: Choose one that works for you.
• 5:50
  SPEAKER_00: Very simple.
• 5:51
  SPEAKER_00: So that every day you can just write how much you spent and you can also just budget how much you want to spend.
• 5:57
  SPEAKER_00: Know your money so that your money grows.
• 5:59
  SPEAKER_00: Let's go into wealth building.
• 6:01
  SPEAKER_00: To build wealth, you need to focus on what you keep more than focusing on what you make.
• 6:09
  SPEAKER_00: Everybody has that wrong perception that if I want to be rich, I need to make more money.
• 6:16
  SPEAKER_00: It's not true.
• 6:17
  SPEAKER_00: If you want to be rich, you need to keep more money.
• 6:20
  SPEAKER_00: It doesn't do you any good if you are making a huge amount of money and you are spending all that money.
• 6:26
  SPEAKER_00: It's about what you are able to save and invest and grow.
• 6:32
  SPEAKER_00: So the person who is making$100,000 a month and is spending$99,000 a month is not going to be as rich as the person making$5,000 a month and only spending$3,000.
• 6:46
  SPEAKER_00: Because in those two examples, the first one with a higher revenue is only saving$1,000 cities a month.
• 6:52
  SPEAKER_00: Whereas the second one with a significantly lower revenue is saving 2,000 cities a month.
• 6:58
  SPEAKER_00: So your aim should not just be about making more, it should be about keeping more.
• 7:05
  SPEAKER_00: Because that brings me into the definition of wealth.
• 7:09
  SPEAKER_00: Wealth is when your cash flow exceeds your expenses.
• 7:13
  SPEAKER_00: You know, Richard Niamakwe said something to me years ago, and it struck me and it's been with me for years.
• 7:20
  SPEAKER_00: He said that wealth is not an amount of money, it's an amount of time.
• 7:26
  SPEAKER_00: How long you can survive with your current lifestyle if you stopped working today.
• 7:31
  SPEAKER_00: For some of you watching, that's one month.
• 7:34
  SPEAKER_00: For some of you, that's two days.
• 7:37
  SPEAKER_00: So to become wealthy, your cash flow needs to exceed your expenses so that when you are lying down in bed, automatically you have your assets that are making money for you over and over and over again.
• 7:53
  SPEAKER_00: So the aim for everything that you do should be about how do you spend less and make more so that it grows exponentially over time.
• 8:04
  SPEAKER_00: Because wealth is not what we think it is, wealth is not cash, wealth is not income, wealth is everything.
• 8:12
  SPEAKER_00: I like to split up wealth into four things.
• 8:15
  SPEAKER_00: I call wealth fitness.
• 8:17
  SPEAKER_00: Because to be wealthy, first of all, you need to be physically fit.
• 8:21
  SPEAKER_00: Because what is the point of having all the money if you are spending it all, going to the hospital, buying medicine, doing surgery?
• 8:28
  SPEAKER_00: So to be wealthy, you need to be physically fit.
• 8:31
  SPEAKER_00: Secondly, you need to be mentally fit because wealth, you need to have the peace of mind, the relaxation, the time to just sit there and enjoy the life.
• 8:41
  SPEAKER_00: If you are having depression and you're having mental problems, you are not going to enjoy all the riches that you've been able to amass.
• 8:49
  SPEAKER_00: The third one is spiritual fitness.
• 8:52
  SPEAKER_00: Whatever speaks to you spiritually, whether it's meditation, if it's Christianity, if it's Islam, whatever religion you believe in, as long as you have a good relationship with the person inside of you, you need spiritual fitness to actually enjoy wealth.
• 9:11
  SPEAKER_00: Because spiritual fitness is purpose.
• 9:14
  SPEAKER_00: You have to ask yourself, why am I waking up every single day?
• 9:20
  SPEAKER_00: If you had$10 million in your account right now, what is your reason to keep going?
• 9:27
  SPEAKER_00: What is your reason to keep working?
• 9:29
  SPEAKER_00: What is your purpose?
• 9:30
  SPEAKER_00: That is spiritual fitness.
• 9:32
  SPEAKER_00: And then the last, which is what everybody is chasing, financial fitness.
• 9:38
  SPEAKER_00: You need to make sure you have the right assets, you have the right investment.
• 9:42
  SPEAKER_00: Money is making money for you so that when you relax, you know you will be okay for a long time.
• 9:48
  SPEAKER_00: Keep that in mind.
• 9:50
  SPEAKER_00: Wealth is time, it's not an amount of money.
• 9:54
  SPEAKER_00: Follow these and get out of your situation because nobody came in this world to be broke.
• 9:59
  SPEAKER_00: Take ownership of your finances, make the right decisions so you can become rich and wealthy, and hopefully, create generational wealth to make Africa a greater place.