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Why Smart People Stay Broke - Erik Weir #6354 · Financial Survival Network

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  Speaker 1: Well, it's education really, so the school system or parents,
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  Speaker 1: they don't teach about investing. They don't teach about saving.
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  Speaker 1: And the wealthier families or the families who have children
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  Speaker 1: who have training, they say, you set aside for yourself
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  Speaker 1: first and you spend later. That's a cultural difference. Most Americans,
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  Speaker 1: they spend all they have and they hope they get more.
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  Speaker 2: You're listening to Carrie Let's's Financial Survival Network, where you
• 0:27
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• 0:31
  Speaker 2: thrive in today's trying times. You need the Financial Survival
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  Speaker 3: Ever, and welcome. You are listening to and watching the
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  Speaker 3: Financial Survival Network. I'm your host, Carrie Letz, and I'm
• 0:57
  Speaker 3: traveling a bit, so the studio that you see in
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  Speaker 3: the background is not my usual studio, please forgive, and
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  Speaker 3: don't have my usual mic and equipment. But my next
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  Speaker 3: guest I felt was important enough that you would want
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  Speaker 3: to hear what he had to say. His name is
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  Speaker 3: Eric Weir, and of course Eric is in real estate
• 1:18
  Speaker 3: because everybody we have on this show is in real Estate.
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  Speaker 3: He's also the author of an Amazon bestseller, a fellow
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  Speaker 3: best selling author, Who's Eating Your Pie, and Essential financial
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  Speaker 3: Advice that will Transform your life. Before we got on
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  Speaker 3: the call, Eric was sharing some things about himself. He
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  Speaker 3: told me when he was five, he was in a
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  Speaker 3: car accident and when he emerged from the accident he
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  Speaker 3: had a stutter and talk about taking a liability and
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  Speaker 3: turning it into an asset. Eric, you seem to have
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  Speaker 3: really mastered that, So just share that story with us
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  Speaker 3: if you don't mind.
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  Speaker 1: Yeah, yeah, sure, yes, sure. So at age five, I'm
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  Speaker 1: in a car wreck and I'm spun around in the
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  Speaker 1: car and I look look look over and I see
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  Speaker 1: a person that's being taken away on a stretcher, like wow,
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  Speaker 1: And my mom says, stay in the car. My brother says,
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  Speaker 1: you know, we got to stay here. The cops says
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  Speaker 1: stay there. And at that time they had a show
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  Speaker 1: called Bugs Bunny and the you know, the road Runner show.
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  Speaker 1: But car's wrecked, they explode, so I thought it was
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  Speaker 1: going to be blow up. So it was very traumatic
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  Speaker 1: and I had a brand injury. I went to a
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  Speaker 1: speech therapist maybe a week later. Since nineteen seventy two,
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  Speaker 1: and the speech therapist said, Eric, odds, Are you're going
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  Speaker 1: to be a failure. You're going to be reclusive, You're
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  Speaker 1: going to avoid conversation, You're going to withdraw and insids
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  Speaker 1: You'll be a failure. And she stopped and she goes,
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  Speaker 1: Are you could reframe every obstacle, every person you talk
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  Speaker 1: to and make it like a rocky climb to success
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  Speaker 1: and you'll be unstoppable. But the choice is up to you.
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  Speaker 1: You could be a failure or you could be a success.
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  Speaker 1: I looked at my dad, thinking, Dad, tell me this
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  Speaker 1: person is a quack, right, and he goes, Eric, well,
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  Speaker 1: that's going to be hard, so let's get started. And
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  Speaker 1: a good thing happened with that. Because I never thought
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  Speaker 1: life would be easy. Are there anything would be given
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  Speaker 1: to me? Or that the government would take care of me?
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  Speaker 1: I love at age five, thinking I got to own
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  Speaker 1: this and I've got to take charge. Yeah.
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  Speaker 3: So taught you a valuable lesson, and I'm sure you've
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  Speaker 3: applied that lesson repeatedly throughout life.
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  Speaker 1: I mean it's over and over again, yes, almost daily.
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  Speaker 3: Yeah. So these are like not the best of economic times,
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  Speaker 3: but in every economy there are winners and losers. How
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  Speaker 3: do you become a winner in this economy?
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  Speaker 1: Eric, Well, it's education really, So the school system or parents,
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  Speaker 1: they don't they don't teach about investing. They don't teach
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  Speaker 1: about saving. And the wealthier families or the families who
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  Speaker 1: have children who have training, they say, you set aside
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  Speaker 1: for yourself first and you spend later. That's a cultural difference.
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  Speaker 1: Most Americans, they spend all they have and they hope
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  Speaker 1: they get more, and when they get more, they spend more.
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  Speaker 1: They get more, they spend more, and they get a
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  Speaker 1: credit card, they get a student loan, and they set
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  Speaker 1: themselves up in debt. And the financial system is set
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  Speaker 1: up in such a way that they don't teach them
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  Speaker 1: and so people end up in debt and up in
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  Speaker 1: despair and they spend the raise is to save the rays.
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  Speaker 3: Right, So you know that's a thing where people easy credit,
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  Speaker 3: they get a windfall, the first thing they do is
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  Speaker 3: go buy a flat screen, although now flat screens are
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  Speaker 3: so cheap that but you know the point is they
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  Speaker 3: don't invest. And in today's world, you have to be
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  Speaker 3: looking forward to putting your money to work for you.
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  Speaker 3: How do you plan for the future, for retirement. You
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  Speaker 3: can't just live for today, right.
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  Speaker 1: You can't. I tell people retirement is not an age.
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  Speaker 1: It's a math problem. It's a math problem that when
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  Speaker 1: your investments are a business you've started or something, it
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  Speaker 1: pays your bills and not your current income. So it's
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  Speaker 1: not an age. It's a math problem. Right.
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  Speaker 3: So you know, people really maybe don't view it as such,
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  Speaker 3: and they don't teach math very well in school these days.
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  Speaker 3: But how have you made it different? How have you
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  Speaker 3: taught your children so they don't fall into this trap?
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  Speaker 1: So what I did I made a box for them,
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  Speaker 1: and I said, you know, you need to be charitable.
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  Speaker 1: No matter what you give to you, you have to
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  Speaker 1: give to something. So part of every of a bit
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  Speaker 1: of money is giving back to somebody less fortunate than you.
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  Speaker 1: And that's another it Also it frees you of the
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  Speaker 1: greed of money because you, at a young age you
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  Speaker 1: learn it's not all about yourself. Then I say there's
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  Speaker 1: some that you invest. I don't say save. I say
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  Speaker 1: invest because save is like you're thinking I'll buy a
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  Speaker 1: CD or thing.
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  Speaker 3: It's passive.
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  Speaker 1: You don't make mistakes, but you don't learn from mistakes,
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  Speaker 1: and you never own Amazon for ten years. If you
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  Speaker 1: just do that, the third thing I say is then
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  Speaker 1: you live. You have an amount of money you live on,
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  Speaker 1: and as you start to make money, don't let your
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  Speaker 1: don't let your lifestyle grow as fast as your wages do.
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  Speaker 1: And I say, if you're smart for ten years after
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  Speaker 1: college or after high school, and you do that, the
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  Speaker 1: rest of your life, you'll be set up. Two things
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  Speaker 1: will happen. You'll build a discipline that you'll follow the
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  Speaker 1: rest of your life, and two you will have a
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  Speaker 1: nest egg that grows the rest of your life. And
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  Speaker 1: I was talking to a twenty three year old yesterday
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  Speaker 1: who inherited a couple hundred grant and the first thing
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  Speaker 1: you want to do is spend eighty five thousand on
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  Speaker 1: a car and shut the balance on a down payment
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  Speaker 1: on the nicest condo he could afford. And I said,
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  Speaker 1: you're putting money in an asset is going to go down,
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  Speaker 1: and you're buying a house that best case keeps up
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  Speaker 1: with inflation, and you have expenses and things you just
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  Speaker 1: don't need. Get a roommate apartment and save all the money.
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  Speaker 1: He goes, what do you mean. I said, let's just
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  Speaker 1: say that you you average I picked a number twelve percent,
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  Speaker 1: which is higher the most people have averaged in the markets.
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  Speaker 1: But just to make a point, I said, if you
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  Speaker 1: put that two hundred thousand today when you're sixty, will
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  Speaker 1: be worth thirty times what it is today, thirty times.
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  Speaker 1: And he's like, what, So it'll take you five years
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  Speaker 1: of double the first time, then five years to double
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  Speaker 1: the second time, but you're double in the double and
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  Speaker 1: by the thirtieth year, your original investment is doubling it
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  Speaker 1: every two months.
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  Speaker 3: Yeah, it's the power of as Einstein said, the greatest
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  Speaker 3: mystery in the universe, the power of the compound interest.
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  Speaker 1: Right, one hundred percent. And he and he's a smart kid,
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  Speaker 1: he's been through college. He's like, I've never heard that before,
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  Speaker 1: no matter who I've heard save, I've heard don't spend money,
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  Speaker 1: don't buy a card, stupid, but I've never heard the
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  Speaker 1: logic behind it, just like, don't do it, but not
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  Speaker 1: why not to do it?
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  Speaker 3: Yeah? Well, it's called the deferred consumption from an economic standpoint,
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  Speaker 3: and basically it's not living for today. But there's a
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  Speaker 3: balance there too.
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  Speaker 1: You can't hundred percent yeah, right, And what you find
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  Speaker 1: is that discipline allows you to think differently. You think
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  Speaker 1: about your education differently, but the jobs differently. You think
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  Speaker 1: about deferred gratification. So, you know, if you find out
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  Speaker 1: that you can solve problems for other people. If I
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  Speaker 1: solve a problem by breaking your yard, that has a value, right.
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  Speaker 1: But if I solve a problem that saves you one
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  Speaker 1: hundred thousand dollars, that has a different value. If I
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  Speaker 1: solve a problem saves you five million, that has a
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  Speaker 1: different value. Still, So how do you solve bigger problems
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  Speaker 1: for people? And it's just and you know, and problems
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  Speaker 1: are opportunities. They're not people look at they don't want them,
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  Speaker 1: and somebody else's problem is an opportunity, particularly if you
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  Speaker 1: can help them solve it. You know, Leiah Coca, when
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  Speaker 1: you was talking about the first turnaround of Chrysler, you know,
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  Speaker 1: where the country, the company was really on the balls behind,
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  Speaker 1: and he said, we had the luxury of adversity. And
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  Speaker 1: that has always stuck in my mind, because you perform
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  Speaker 1: best when you when the odds are against you, when
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  Speaker 1: you have to really knuckle down and really really face
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  Speaker 1: adversity and overcome it, you know, and that's and that's
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  Speaker 1: what builds.
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  Speaker 3: True, true self esteem. It's not like you got an
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  Speaker 3: A at a class, although if you really worked hard
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  Speaker 3: and you were failing and you turned it around, that
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  Speaker 3: could very well be a self esteem builder. But when
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  Speaker 3: stuff comes easy and you know and there's basically no
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  Speaker 3: challenge to it, like with the example you gave with
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  Speaker 3: that young man inheriting two hundred thousand, it just came
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  Speaker 3: out of the sky and you not talk to him.
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  Speaker 3: So did he wind up not buying the car and
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  Speaker 3: the condo?
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  Speaker 1: Too soon to tell? I don't know. It was this week,
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  Speaker 1: so I don't know, And I'm just like, just just
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  Speaker 1: keep your current car. You can have all the cars
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  Speaker 1: you want later. And it's just it's just it's timing
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  Speaker 1: and being thoughtful and how do you And I said,
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  Speaker 1: your job, as I told him, your job is to
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  Speaker 1: make enough money that you don't need to touch your
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  Speaker 1: inheritance and let that work for you. And if you
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  Speaker 1: do that, you'll probably probably the rest of your life
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  Speaker 1: you'll be in good financial shape. But you've got to
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  Speaker 1: protect your an estate. Does it act like you didn't
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  Speaker 1: have it, You didn't have it a week ago. So
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  Speaker 1: if you live like you didn't have it, then nothing
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  Speaker 1: changed other than you've got a backstop that most people
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  Speaker 1: your age don't have.
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  Speaker 3: Yeah, well, right, you know, Eric, I got one question
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  Speaker 3: for you. Where were you when I needed you?
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  Speaker 1: I was flying a very well known I have an airplane,
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  Speaker 1: and I donate my airplane for people to travel to
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  Speaker 1: speak at events, to encourage the people. So it's a
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  Speaker 1: little bit selfish because I picked the people up. I
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  Speaker 1: spend time with them. They fly up front with me
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  Speaker 1: and I talked to them. He said the same thing.
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  Speaker 1: He goes, I want to cy Young Award. I've won
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  Speaker 1: all these golden gloves. I've made you know over you know,
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  Speaker 1: seventy five eighty million as a pitcher. And I didn't
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  Speaker 1: save much money, And he said, wherever you And it's like,
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  Speaker 1: because when I signed my first contract, I spent it all.
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  Speaker 1: And literally, there are businesses that prey on athletes that
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  Speaker 1: will factor their bonuses up front and they'll give them
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  Speaker 1: eighty percent of it. So when they get the check,
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  Speaker 1: the company gets the money and they give the advance
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  Speaker 1: the athlete money and they don't give them the cars.
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  Speaker 1: And it's just it's a it's an industry of consumption
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  Speaker 1: and if you if you spend it now, you spend
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  Speaker 1: less if you spend a letter, you spend more actually
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  Speaker 1: deferred gratification. You can have everything you want and even
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  Speaker 1: more than he ever drained if you if you reframe
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  Speaker 1: it and can just deffer some gratification, I mean, do
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  Speaker 1: some nice things. I'm not saying nothing, but just be thoughtful.
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  Speaker 1: You can spend. I have another person that brought me
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  Speaker 1: in the kid to consult and they said, help me
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  Speaker 1: save money. And I observed him and I saved them
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  Speaker 1: a crazy amount of money, and I said, what are
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  Speaker 1: you doing now? I said, well, I'm one own person.
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  Speaker 1: I have a big contract, and I've got a fly
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  Speaker 1: from Atlanta to la and I could take an airline,
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  Speaker 1: but instead he charted a golf stream and he shook
• 12:36
  Speaker 1: all his friends with him, and he had the limo
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  Speaker 1: service and he had to get security and all this stuff.
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  Speaker 1: I got two hundred and fifty thousand dollars trip, and
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  Speaker 1: he could have done it for ten thousand in an
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  Speaker 1: amazing way and save two hundred and forty. But that
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  Speaker 1: money's gone forever now.
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  Speaker 3: Or he could have flown steerage and done it for
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  Speaker 3: five hundred bucks exactly. It's yeah, it's shocking, but I've
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  Speaker 3: been guilty in my own respect. But the one thing
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  Speaker 3: I did was I had a different kind of force savings.
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  Speaker 3: I put it into gold and silver and I managed
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  Speaker 3: to hold on to all of it for the past
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  Speaker 3: fifteen years. But I you know, because life happens like
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  Speaker 3: That's the other thing when you save the money. When
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  Speaker 3: when you get a divorce, so you get a bill
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  Speaker 3: from the irs, or one of your kids or both
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  Speaker 3: of them are going to get married, you know, you
• 13:30
  Speaker 3: go to your stash wherever it is, and you have
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  Speaker 3: the money to do it. So that's that's why you save.
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  Speaker 3: Also not just for the future, but for future challenges
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  Speaker 3: of life.
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  Speaker 1: Oh one hundred percent, elder care, medical needs. You just
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  Speaker 1: never know what comes up. You know. There's also opportunities
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  Speaker 1: when there's a recession or a difficult time. I've been
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  Speaker 1: able to buy properties or buy assets. You know, I
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  Speaker 1: always say there's no distressed real estate. They're distressed owners.
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  Speaker 1: So Eric carrs or anything else, right, opportunistic things, and
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  Speaker 1: it's just just being ready and and and when things
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  Speaker 1: go in cycles, the trees don't grow the sky, and
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  Speaker 1: whatever is in vogue today, in five years, it won't
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  Speaker 1: be in vogue.
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  Speaker 3: And there'll be opportunities. So you mentioned children. Your children
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  Speaker 3: appreciate your attitude now or do you ever get some
• 14:24
  Speaker 3: resentment for it.
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  Speaker 1: I think it's mixed. I think I think the I
• 14:29
  Speaker 1: think they have an appre The older they are, the
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  Speaker 1: more they appreciate it. The younger they are, the less
• 14:33
  Speaker 1: they appreciate it. But they're all entrepreneurial, they're all problem solvers.
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  Speaker 1: And with any key kids you have, they're all over
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  Speaker 1: the one's better one thing than the other. But I
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  Speaker 1: think I think it's a mindset that they learned at
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  Speaker 1: a young age that's helpful and and at the end
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  Speaker 1: of the day, I think it'll it'll pay them, you know,
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  Speaker 1: it'll pay them a lot of dividends over time. And
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  Speaker 1: already one of my children I'm talking to is he's saving,
• 14:55
  Speaker 1: you know, a percent of what he makes. He's in
• 14:58
  Speaker 1: a four to one Cavelan Max and that out He's looking,
• 15:01
  Speaker 1: can I buy a rental property? And I'm like, well,
• 15:03
  Speaker 1: maybe a VRBL. Maybe there's something you can do where
• 15:06
  Speaker 1: it's it's a higher return, it's more active, it's not
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  Speaker 1: as passive, but you have a little more return. You
• 15:10
  Speaker 1: have time, or you have money, and you can train
• 15:13
  Speaker 1: you don't have as much money, but you have more
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  Speaker 1: time than use your time to make money. I love
• 15:17
  Speaker 1: it later life, use your money to make time.
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  Speaker 3: Uh, that's it's such a simple thing, and yet uh
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  Speaker 3: it's so hard for most of you out there to grasp.
• 15:27
  Speaker 3: So everybody go over to Ericweir dot com. That's e
• 15:31
  Speaker 3: R I k W E I R dot com and
• 15:35
  Speaker 3: you can get the book Who's Eating Your Pie? Highly recommended.
• 15:39
  Speaker 3: Achieve every goal you set for yourself for the rest
• 15:42
  Speaker 3: of your life. Not too big a promise, but it
• 15:45
  Speaker 3: sounds like Eric is the person who can deliver. And
• 15:48
  Speaker 3: if you got any questions for Eric or myself, shoot
• 15:51
  Speaker 3: me an email kl at Carrie LUTs dot com. Eric,
• 15:54
  Speaker 3: thanks for being on.
• 15:55
  Speaker 1: It's my pleasure.
• 15:56
  Speaker 2: Thank you very much, thanks for listening to carry lets
• 15:59
  Speaker 2: this Financial Survival Network your solution to today's trying times.
• 16:04
  Speaker 2: For the latest, go to Financial Survivalnetwork dot com. Financial
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