Latest / Money Grows on Trees / #314 - Why You Should NEVER Listen To Finance Influencers

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#314 - Why You Should NEVER Listen To Finance Influencers · Money Grows on Trees

• 0:00
  How do billionaires not pay taxes? Well, it's because they
• 0:04
  Billionaires don't pay taxes. Elon Musk was the biggest contributor
• 0:07
  to US tax last year. Warren Buffett was the biggest contributor ever to
• 0:12
  Here are the top five AI infrastructure companies with
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  massive upside potential. Number one is APLD. Number
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  two is IREMS. Number three. I wouldn't touch
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  This kid has no, it's almost like he hasn't read any history
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  in finance before. Don't buy this. Instead, buy this. I
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  have known friends who have bought Lamborghinis that put them in a position of
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  personal branding that's opened up incredible opportunities for them to build businesses. So
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  You should buy these tech stocks that just keep going up. Nvidia's up
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  So, should I buy it though? You shouldn't want
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  to get financial advice from anyone because if you do, it means you
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  don't know what you're doing. You're trying to delegate and outsource your money management
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  to assets that you don't understand. Now, one of my favorite episodes, Reactions,
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  where I debunk some of the gurus online as to
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  what they say and think and feel about the world of finance. Let's dive
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  Never sell your stock. There's only four
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  reasons why you would ever sell a stock, and this is an
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  easy way to remember. I call it TVOD, T-V-O-D. T
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  stands for thesis. If something changes in the company and
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  it breaks your thesis for originally buying the company, sell
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  it. B is for valuation. If the price has
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  risen so far ahead of the valuation of the stock, sell
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  It really has to rise really high to sell it
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  for valuation, just so you know. Like 50 times
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  And the last TVOD stands for when you've doubled
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  your money. Once you've doubled your money in the investment, you
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  should take some of the original money off of
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  the table and use that money for market corrections
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  That's really hard to do that. They call that using house money
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  where when you double your money, you sell half and you can use it. It's called house money,
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  money that you've made from your previous investment. The challenge with that is you've got to pay one tax.
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  Two, if you own a piece of a great company, the time to sell it
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  would be never. Even if it's shot up and doubled, it's
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  irrelevant. If you look at some of the best trades in history, they've
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  10xed So as long as the thesis is correct,
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  as long as the valuation is reasonable, not egregiously overpriced, and up to 50 to
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  60 times earnings is still okay, and as long as it's still a good quality
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  business, I think the holding time can be 30 and 40 years. If you
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  look at some of Warren Buffett's holdings, Coca-Cola, American Express, etc.,
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  it's 30 and 40 year holding periods. It's because you don't
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  want to interrupt compounding unnecessarily. So whilst I agree with some
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  I control cars, planes, helicopters, and more. He's got a retail store?
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  Second is my own brand and product range, which I manufacture in
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  Third is my eBay store, where I buy stock from failing businesses
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  and sell it online. Octobery. Fourth is the stock market,
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  where I invest my money and let it grow over time. Fifth is
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  my residential real estate, which I rent out to family. Sixth
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  is my commercial real estate, which I rent out to other businesses. Seventh
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  There's some cool, cool income streams there. I
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  think you can have seven. I think we have about ten. I've done an episode on
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  it. Go check it out. But you definitely want to build one at a time. So I
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  think what he's obviously done is build one business at a time and you
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  can scale to the next one. I think we've got now five companies and five businesses in
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  different areas and we've got our investment portfolio. So we've definitely got six
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  to seven in our book, of course. We get royalties from that. So certainly seven
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  core income streams. The most important part is to build one at a time.
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  If you're young and you want to get wealthy, start one business. Take
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  some wealth and start investing in assets like what Mark's done here, and
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  Hey, should I buy these tech stocks that just keep going up? Well, amazing
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  run. Record highs. NVIDIA's up a trillion bucks in a year. P-evaluation's
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  a little bit stretched. Could keep going though. So, should
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  I buy it though? I don't know. Huge
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  run there. Punched right through 70,000. Solid momentum. Pretty
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  volatile though. So, shall
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  See, this is interesting. The reality is that you
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  shouldn't want to get financial advice from anyone because if
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  you do, it means you don't know what you're doing. You're trying to delegate and
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  outsource your money management to assets that you don't understand, which
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  means if they point you in the right direction with good intentions, it could also be wrong. And
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  if you don't know what you own, you're going to beat them up. And so what you want to do
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  is learn to fish, not ask for a fish. And in this reel, he's
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  asking over and over again, what fish should I eat? What fish should I eat? What he should be asking
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  is, what can you educate me on so I can learn this myself? And
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  that's why I'm an educator around this and I'm not a financial advisor because
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  I don't want to tell you what to do. Because if I tell you what to do and I happen
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  to be wrong, which hey, we can all be wrong, you're going to want to punch me
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  in the face. I don't want that. So the best thing you
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  can do is invest in your education and make your own decisions based on what you know you
• 5:25
  How do billionaires not pay taxes? Well, it's because they don't
• 5:32
  Billionaires don't pay taxes! Actually, Elon Musk was the
• 5:35
  biggest contributor to US tax, I think, last year. Warren Buffett was
• 5:38
  the biggest contributor ever, you know, to US tax. One of the biggest ever to
• 5:42
  US tax. So they do pay tax. They pay the tax
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  Take Mark Zuckerberg, for example. He's the CEO of Meta, a
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  multi-billion dollar company, but as an employee, he only
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  So people are like, I don't pay tax. They don't pay any personal income tax on
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  wages because they don't take wages. They take stock options or they own
• 6:03
  pieces of their stock. So if you own a piece of stock of a company and
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  that company pays taxes, inadvertently you do pay taxes. They
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  just pay it differently. And there's not that many billionaires in
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  the world. So who really gives a shit as to how they pay taxes? What I'm most
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  interested in is how you pay taxes. Are you building a business or
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  are you just in a wage job at 47% taxable rate? and
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  I would love you to build a business so you can be taxed less or own
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  assets where you can sell it after a year and only pay 15% roughly
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  of capital gains tax instead of 47% income tax. That's
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  a better question. Who cares what billionaires are doing? Let's find out
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  what you're doing. Just quickly, if you're ready to take control of your finances but
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  feel stuck on where to start, I have a solution. My
• 6:43
  book, Money Bias Happiness, simplifies investing and
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  wealth building with practical steps to help you achieve financial peace.
• 6:51
  Get your copy via the link in the show notes and let's get your money working for
• 6:54
  you. Now back to the episode. Don't buy this. Instead, buy
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  this. I have known friends who bought Lamborghinis that put them in
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  it depends on who you are and what it's
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  But I agree with Mark, buying appreciating assets like real estate and
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  stocks is better than buying a car. Especially a Range Rover
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  that's brand new. As soon as you can, buy appreciating assets.
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  And it's much more effective to buy an appreciating asset than a depreciating asset
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  Elon Musk is interesting. He chose to get paid not in
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  salary. It's because you are taxed, not on your income. That's not
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  what the tax court says. You are taxed based on your taxable income.
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  And so what Elon Musk did is when he was building Tesla, he
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  negotiated with the investors on the board. I
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  want to get paid not with a salary. I want to get paid with stock
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  options. Because he goes to the bank and he says, hey bank, I
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  have these millions and millions of stock options. Would
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  This is kind of pretty stupid. Like no one who
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  watches this is going to be Elon and take stock options in
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  a company like Tesla and then borrow against it to buy houses. Incidentally,
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  Elon sold all these houses. He lives in a trailer on SpaceX property.
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  So he doesn't even own stuff like that. You wouldn't want to borrow to own
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  things that aren't going to drive value either. And I think
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  it's very farfetched to think that someone's going to build a company like Tesla. However,
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  there's some science to this because of course, Yeah,
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  who doesn't want to get paid stock options of a company that's rising so fast and
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  creating so much value like Tesla? And of course, if you do sell any of
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  your stocks, if you realize the options, you also get taxed with
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  a 50% discount on your capital gains tax if you hold it for
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  more than a year. So you can get taxed at 15% if you turn
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  it into an income. It's not income tax. It's a capital gain tax. And it
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  can be about a third of what you're paying income tax. So there are multiple ways
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  to sell assets or stocks by through owning
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  options in your company instead of deriving an income. But
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  of course, most people have jobs and that's where
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  they're getting taxed the most which is why I'm not a big believer in jobs. Start
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  a business, build a business and that's where wealth is really built
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  in businesses and assets. So be an owner is the lesson from
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  this reel. I
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  don't think you'd be around very often if your spouse has two jobs and you
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  have none. But if you're working two jobs and your spouse is not
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  contributing to your financial situation in some capacity, maybe
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  If you don't realize this now, you're going to miss out. In
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  five years, you're going to look back and wish you put all
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  of your money into that one stock that ran 1500%. And I
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  can almost guarantee you it's coming from the AI infrastructure
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  So back in the 1800s, rail was the big thing. If
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  you had to invest in the rail companies, you'd have lost a lot of money. In the early
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  1900s, cars were the thing. And 200,000 car manufacturers in
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  America, now there's two. You'd have lost a lot of money. In
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  1999, dot com. Oh, the internet's the thing. Yeah, you're going to miss out. You'd have lost a
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  lot of money. The newest thing like this is not necessarily
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  a great investment. In fact, it's almost a shit investment. So just because
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  it's new doesn't mean you should be buying it. And if you own an index fund,
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  you get exposure anyway. Well, I'll tell you what will happen. All
• 10:44
  the AI companies are going to spend a ton of money and lose a lot of free cash flow, and some
• 10:50
  So here are the top five AI infrastructure companies with
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  massive upside potential. Number one is APLD. Number
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  I wouldn't touch any of these companies with a 10-foot pole. Because
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  it's so uncertain. It's like trying to say, oh, there's
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  200,000 car manufacturers in America in 1920. Which one will I pick? That's
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  what he's trying to do here. This kid has no idea. It's almost like
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  he hasn't read any history in finance before. This has happened before. Dotcom
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  bubble, cars, rail. This is an industrial bubble. I
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  would not be identifying individual companies and our companies in
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  this bubble. And I wouldn't touch with the 10-foot pole. And I
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  think a lot of them can go broke. So I wouldn't be listening to that. Now, this is
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  why you have to be super careful about who you listen to on
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  the interweb and make sure you understand what
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  you own, why you own it, and does it compound? Is it predictable?
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  Can you put a lot of your money into it and sleep at night? If the answer is no, you're
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  listening to the wrong people. The most important thing is to model
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  what others are doing if you want to live a life like
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  them. With Mark Tilbury, He's obviously built great
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  compounding machines. He's one of the guys you can listen to. The
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  other guys out there, I mean, it just shows us you've got to be very careful seeking
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  financial advice. That's where you want to go. You don't want to go down there. You
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  want financial education because you want to be able to
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  fish yourself. And I think too many people are trying to ask, what's the fish I
• 12:15
  should have? Give me a fish. Give me a fish. Learn to fish. Thanks
• 12:18
  for listening to Money Grows on Trees. If you enjoyed the episode, leave a
• 12:22
  five-star review on Apple Podcasts and Spotify and subscribe
• 12:25
  to us on YouTube so you never miss an episode. And if you're serious about
• 12:29
  building wealth, make sure to check out the links in the show notes and follow me
• 12:32
  on all social media platforms at LloydJamesRoss for