Latest / Money And Wealth With John Hope Bryant / Cash, Charge Cards and Credit Cards - Unpacked

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Cash, Charge Cards and Credit Cards - Unpacked · Money And Wealth With John Hope Bryant

• 0:00
  Speaker 1: Welcome the Money in Wealth with John Hobryant, a production
• 0:03
  Speaker 1: of the Black Effect podcast Network and iHeartRadio. Yo Yo yo.
• 0:15
  Speaker 1: This is John Hope Bryant and this is Money and
• 0:18
  Speaker 1: Wealth on the Black Effect Network. And I am talking
• 0:22
  Speaker 1: about cash, money, charge cards and credit cards unpacked. I'm
• 0:29
  Speaker 1: going to demystify all these things. You know, people who
• 0:34
  Speaker 1: are underserved black and brown folks who never got the memo.
• 0:38
  Speaker 1: This is my fourth book, I think on money. They're
• 0:41
  Speaker 1: six in the series I've done, and the last one
• 0:43
  Speaker 1: of financial literacy for all. By the way, bestseller number
• 0:45
  Speaker 1: one is Business Plans, a year after publishing Mixture. You
• 0:48
  Speaker 1: go get that. But the book, the memo I wrote
• 0:52
  Speaker 1: essentially said, we're not dumb and we're not stupid. It's
• 0:55
  Speaker 1: what we don't know that we don't know this killing us.
• 0:57
  Speaker 1: But we think we know ever told gave us a memo,
• 1:01
  Speaker 1: No one ever taught us how money works. So we
• 1:04
  Speaker 1: we think that money is a thing we want to
• 1:08
  Speaker 1: I we get that bag and we'll get that cash,
• 1:09
  Speaker 1: We'll get that dollar, we get that get that you
• 1:12
  Speaker 1: know again, that bag, as if that's something. Literally, money
• 1:17
  Speaker 1: is just simply a means of exchanging value. And we
• 1:23
  Speaker 1: over value no punt intended money itself. The reality is
• 1:29
  Speaker 1: you can run out of it, and most people who
• 1:31
  Speaker 1: are not financially literate do. When your outflow it sees
• 1:36
  Speaker 1: your inflow, then your overhead will be your downfall. And
• 1:38
  Speaker 1: that's why they call it making a living, not building
• 1:41
  Speaker 1: a life. So you get paid, you're making a living,
• 1:45
  Speaker 1: and typically you're only getting paid enough to subsidize a
• 1:48
  Speaker 1: lifestyle that you have developed for yourself. Or put another way,
• 1:52
  Speaker 1: your lifestyle tends to track how much money you make.
• 1:55
  Speaker 1: So you got to find a way to build wealth
• 1:58
  Speaker 1: separate from making a living. You get that. My brother
• 2:01
  Speaker 1: Tony Wrestler taught me this lesson. He owns the Atlanta
• 2:05
  Speaker 1: Hawks and build a bunch of companies. And I'm always
• 2:08
  Speaker 1: learning from my friends. I'm just very nosy. Hopefully they're
• 2:11
  Speaker 1: learning a little bit from me. I'm certainly learning from them.
• 2:13
  Speaker 1: But one day he told me, you make money during
• 2:15
  Speaker 1: the day, John, you build wealth in your sleep. Very
• 2:18
  Speaker 1: simple message, but very powerful. And it's compounding stocks, bonds,
• 2:24
  Speaker 1: home ownership, equity, real estate, in general, businesses, entrepreneurship, things
• 2:31
  Speaker 1: that I think I personally believe education compounds, right, So
• 2:36
  Speaker 1: let's get into these things that no one ever taught you,
• 2:42
  Speaker 1: and supposedly, somehow we're just supposed to magically understand. And
• 2:49
  Speaker 1: before I get into the definition of money, first, let
• 2:52
  Speaker 1: me hit you with a newsflash. Total credit card debt
• 2:57
  Speaker 1: right now because of massive financial illiteracy in this country,
• 3:02
  Speaker 1: the biggest economy in the world, and because people have
• 3:05
  Speaker 1: got too much month at the end of their money,
• 3:07
  Speaker 1: they're literally living beyond their means, by no fault of
• 3:10
  Speaker 1: their own. The you know, the rate of inflation, the
• 3:14
  Speaker 1: rate of costs increases, the cost of living has out
• 3:17
  Speaker 1: paced their ability to make a living. Middle class incomes
• 3:21
  Speaker 1: have not since World War two, well not World War
• 3:24
  Speaker 1: to be unfair, the seventies. You know, middle class incomes
• 3:28
  Speaker 1: have not kept up with the cost of living of
• 3:31
  Speaker 1: all people. By the way, it's just when main when
• 3:33
  Speaker 1: mains in America has a headache, black and brown folks
• 3:36
  Speaker 1: have a pneumonia. But we're all sick. And you know,
• 3:41
  Speaker 1: it doesn't matter whether you're white, black, red, brown, and yellow.
• 3:44
  Speaker 1: Everybody wants some more green can again an a man.
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  Speaker 1: It's the church of what's happening now? And what have
• 3:49
  Speaker 1: you done for me lately? So credit card debt. We're
• 3:52
  Speaker 1: gonna again get into I'm going to demystify and unpack
• 3:55
  Speaker 1: all this stuff because people are just like a shamed
• 3:57
  Speaker 1: to admit they don't understand this stuff. I believe financial
• 4:01
  Speaker 1: literacy is a civil rights issue of this generation, and
• 4:05
  Speaker 1: AI literacy is the silver rights issue sil v e
• 4:09
  Speaker 1: Er the civil rights issue of this generation. And I
• 4:13
  Speaker 1: will get into what I call what I define a why.
• 4:16
  Speaker 1: I picked on civil rights as my moniker during the podcast.
• 4:23
  Speaker 1: But credit card debt right now stands at one point
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  Speaker 1: two trillion dollars. Again, I think financial literacy is the
• 4:35
  Speaker 1: civil rights issue of the generation. Is just as important
• 4:38
  Speaker 1: as the right to vote. And understanding financial literacy and
• 4:42
  Speaker 1: understanding your credit score and managing it has a lot
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  Speaker 1: to do with your quality of life and whether you
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  Speaker 1: are a happy camper or you end up upside down.
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  Speaker 1: You know that you may not know this. The number
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  Speaker 1: one calls for divorce in America is money. Number one
• 4:58
  Speaker 1: calls for a domestic of use calls to the police
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  Speaker 1: is money. Number one reason that police officers get hurt
• 5:06
  Speaker 1: on the job is our domestic abuse calls. Number one
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  Speaker 1: calls for heart attacks, So says the American heart association
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  Speaker 1: is stress. Number one calls for stress is money, and
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  Speaker 1: we don't understand money other than wanting to spend some
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  Speaker 1: about forty Ever, take of Americans in this country don't
• 5:33
  Speaker 1: have four hundred dollars of their own money. Actually, yeah,
• 5:37
  Speaker 1: forty dollars of their own money, pure cash for an
• 5:39
  Speaker 1: unplanned event in emergency. The number, I think is generous.
• 5:45
  Speaker 1: I think that that number, that's a Federal Reserve report,
• 5:48
  Speaker 1: but I don't think it. I think it factors in
• 5:49
  Speaker 1: your ability to access a credit card. That's not your cash.
• 5:53
  Speaker 1: That's as I'll get into it is borrowed money. I
• 5:56
  Speaker 1: think that if you looked at just the ability to
• 6:00
  Speaker 1: get your hands on cash like you is your money.
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  Speaker 1: I think the percentage is much higher. I think it
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  Speaker 1: is as high as sixty some percent. But even the
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  Speaker 1: Fed or Reserve number of thirty seven, thirty eight to
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  Speaker 1: forty percent is shocking. In the biggest economy in the world,
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  Speaker 1: and seventy percent of the biggest economy in the world,
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  Speaker 1: this economy, the United States of America, is consumer spending.
• 6:22
  Speaker 1: Let's go back to this credit card number, because it's
• 6:24
  Speaker 1: really important to understand why I'm unpacking all this stuff.
• 6:28
  Speaker 1: So you can take care of your like not getting this.
• 6:32
  Speaker 1: It's like there's a cancer flowing through your body. There's
• 6:34
  Speaker 1: something affecting you, disease could be in many cases, disease,
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  Speaker 1: and you don't know what it is. It's something chasing you.
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  Speaker 1: There's something burdening you, and you don't realize what it is.
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  Speaker 1: It's got you burned down, weight downs. You're sitting in
• 6:47
  Speaker 1: your car right now, going yeah, that's me. And you
• 6:49
  Speaker 1: don't know what it is. And it's this money thing
• 6:52
  Speaker 1: and you don't understand it. And maybe you do shopping.
• 6:56
  Speaker 1: Maybe you shop for therapy sometimes because you're swiping a
• 7:00
  Speaker 1: credit card because it makes you feel good in the
• 7:02
  Speaker 1: short term, but then you get a sugar high. It
• 7:04
  Speaker 1: feels good for a minute, then you get that bill. Right,
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  Speaker 1: And so I want to empower you. I want to
• 7:09
  Speaker 1: give you the tools to take your life back. Go
• 7:11
  Speaker 1: to Operation Hope. Get my book Financial Literacy for All.
• 7:14
  Speaker 1: Go to Operation Hope, get coaching and counsel and I'll
• 7:16
  Speaker 1: give you one thousand dollars one year scholarship for coaching
• 7:21
  Speaker 1: and counseling and Operation Hope. Just tell them I sent you.
• 7:23
  Speaker 1: Go to download the Hope and handapp but I'm getting
• 7:25
  Speaker 1: ahead of myself. Let me get to I'm so excited
• 7:29
  Speaker 1: about this topic. Of course, I'm already jumping around. It's
• 7:33
  Speaker 1: and there's so much to cover, So let me get
• 7:35
  Speaker 1: all this in in forty five minutes or so again.
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  Speaker 1: Current credit card debt in this country about one point
• 7:43
  Speaker 1: two one one trillion dollars, is up from one point
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  Speaker 1: one six six trillion dollars in the third quarter of
• 7:50
  Speaker 1: twenty twenty four. This is being recorded in the in
• 7:54
  Speaker 1: February twenty twenty five. This marks the highest balance since
• 8:00
  Speaker 1: tracking began of credit card debt in nineteen ninety nine. Ever, right,
• 8:07
  Speaker 1: and student loan debt's about one point seven trillion dollars,
• 8:10
  Speaker 1: give or take, so this is right behind it. Right,
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  Speaker 1: and the average individual American has carries a credit card
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  Speaker 1: balance of about sixty three hundred and eighty dollars, and
• 8:24
  Speaker 1: balances are continuing to rise. Credit card debt increased by
• 8:30
  Speaker 1: forty five billion dollars during the fourth quarter of twenty
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  Speaker 1: twenty four, a four percent rise compared to the same
• 8:37
  Speaker 1: period the year earlier. Interest rates have it helped. Interest
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  Speaker 1: rates have climbed as we all as we all know,
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  Speaker 1: But what you may not know, and hold on to
• 8:47
  Speaker 1: your seats. Here the average credit card interest rate, the
• 8:51
  Speaker 1: average credit card interest rate, the average not for Puki
• 8:56
  Speaker 1: and them not not Jojoe, not not Booboo in the hood.
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  Speaker 1: The average interest rate for credit cards in America, for
• 9:04
  Speaker 1: the average American is twenty eight point six percent. Did
• 9:11
  Speaker 1: you hear me? That means that for every dollar you
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  Speaker 1: charge on that beautiful slick credit card that was giving
• 9:19
  Speaker 1: you by that department store, pick the one you want
• 9:22
  Speaker 1: to pick on here, that for every dollar you charge,
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  Speaker 1: you're paying a bait about twenty nine cents on that
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  Speaker 1: dollar in pure interest. Right. Wow, Just think. Let's let
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  Speaker 1: that sink in for a minute. And when we go
• 9:36
  Speaker 1: get auto loans or go shop, you know, we often
• 9:39
  Speaker 1: ask certain we go get it all loans. What we
• 9:42
  Speaker 1: don't ask? We asked what's the payment? Right? And you
• 9:44
  Speaker 1: don't ask what the payment is when there's an interest
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  Speaker 1: rate attached. You don't ask just what the payment is
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  Speaker 1: with an interest rate attached. It's a financial literacy lesson
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  Speaker 1: there for you tell everybody when you go get a
• 9:52
  Speaker 1: I'll do a whole thing just on. In fact, I
• 9:54
  Speaker 1: did a thing on the auto business. I'll do something
• 9:57
  Speaker 1: on getting a great car loan. That's part of this
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  Speaker 1: series this year. Go back and watch the episode I
• 10:02
  Speaker 1: did with Tony Mazulo on the car business. He's somebody
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  Speaker 1: you could trust. But oftentimes people show up and it's
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  Speaker 1: a lot. The more financially illiterately there are, the more
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  Speaker 1: misleading question they ask, or the wrong question they ask
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  Speaker 1: again what's the payment, not what's the interest rate. And
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  Speaker 1: this interest rate can knock you over the head. You
• 10:17
  Speaker 1: go to a B car lot, BFC car lot, me
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  Speaker 1: a non prime car lot, and someplace that carries there
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  Speaker 1: on paper as they say, and you get a Mercedes
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  Speaker 1: from these one of these B lots, your credit score
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  Speaker 1: is tow up from the flow up, and they give
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  Speaker 1: you an eighteen percent interest rate on that car loan
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  Speaker 1: on a seventy thousand dollars car. Right now, we're not
• 10:39
  Speaker 1: talking about it now, we're not talking about it six
• 10:41
  Speaker 1: seven thousand dollars credit card balance. Right now, we're talking about,
• 10:44
  Speaker 1: you know, a seventy thousand dollars automobile, and you don't.
• 10:48
  Speaker 1: You're not driving a Mercedes, you're driving Mercedes payments. And
• 10:51
  Speaker 1: that is an automotive bomb. It's going to explode on
• 10:54
  Speaker 1: you while you're driving on the street. They just can't
• 10:56
  Speaker 1: wait for you to bring that car back. Because car
• 10:58
  Speaker 1: dealerships make their money actually not on the sales of
• 11:01
  Speaker 1: the car. They make it on maintenance and finance. Or
• 11:03
  Speaker 1: should I say that the finance department and the maintenance
• 11:05
  Speaker 1: Apartment's three businesses within most automobile dealerships. Its sales, it's finance,
• 11:12
  Speaker 1: and it's maintenance. Again, go back and watch and listen
• 11:15
  Speaker 1: to the podcast I did on Money and Wealth in
• 11:17
  Speaker 1: twenty twenty four on this topic. It was one of
• 11:20
  Speaker 1: the most highly rated episodes of the year. Actually, okay,
• 11:24
  Speaker 1: it gets worse on this credit card thing. Delinquencies. Credit
• 11:28
  Speaker 1: card loan defaults have surged with over forty six billion
• 11:33
  Speaker 1: dollars in seriously delinquent loans. That means they chasing you right,
• 11:37
  Speaker 1: just to translate that written off in the first nine
• 11:40
  Speaker 1: months of twenty twenty four, a fifty percent increase from
• 11:45
  Speaker 1: the same period in twenty twenty three, in the highest
• 11:48
  Speaker 1: level since twenty in twenty ten. That should tell you
• 11:54
  Speaker 1: a whole lot about where we are in the financial
• 11:59
  Speaker 1: stress that people are under, and why people are making
• 12:03
  Speaker 1: decisions that they are making. Even around the nation's politics.
• 12:09
  Speaker 1: I think that people are just financially stressed out. As
• 12:16
  Speaker 1: in President Bill Clinton once told me something prophetic. He said,
• 12:21
  Speaker 1: it's hard to get somebody agreed to the truth when
• 12:24
  Speaker 1: the lie is paying your paycheck. Can I give an amen?
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  Speaker 1: Forty six percent of American households held credit card debt
• 12:31
  Speaker 1: in twenty twenty two. This is actually mostly higher middle
• 12:37
  Speaker 1: income holders who have credit cards. By the way, credit
• 12:41
  Speaker 1: card debt and the implications for this though of credit
• 12:47
  Speaker 1: card debt with lower income people is actually more problematic
• 12:52
  Speaker 1: because it's very expensive to be poor. So why is
• 12:56
  Speaker 1: this topic important? Because if you're days out about God,
• 12:59
  Speaker 1: or of your day is about money. Anybody heard follow me,
• 13:04
  Speaker 1: You've heard me say this that, like, whatever the topic is,
• 13:07
  Speaker 1: you can bring it back to the topic of money.
• 13:11
  Speaker 1: Even marriages and even divorces. Like if two broke people
• 13:19
  Speaker 1: to hobos are getting divorced, it's really quick. It's faster
• 13:23
  Speaker 1: than the divorce ceremony. Right, sorry, faster than the marriage ceremony.
• 13:26
  Speaker 1: The divorce ceremony is just as quick because they're broke.
• 13:29
  Speaker 1: The only thing that keeps something going forever in the
• 13:32
  Speaker 1: courts is because of money. You know, child support. At
• 13:37
  Speaker 1: the end of the day, it's about money, maintenance payments,
• 13:42
  Speaker 1: you know, alimony, all that stuff. At the end of
• 13:44
  Speaker 1: the day, it's arguing about this, arguing about that. But
• 13:46
  Speaker 1: at the end of the day, it's about money. So
• 13:51
  Speaker 1: let me now get to money. Are you with me
• 14:05
  Speaker 1: so far? Again the amen or at least a continue
• 14:09
  Speaker 1: on the evolution of money. This is going to start
• 14:13
  Speaker 1: really getting really sexy. Hold on a minute. The evolution
• 14:17
  Speaker 1: of money started about three thousand BCE, which is, I
• 14:23
  Speaker 1: would translate that before Christ's era. There's a spiritual way
• 14:28
  Speaker 1: of saying this, and then there was a secular way
• 14:29
  Speaker 1: of saying this. So I'll say BCE is before Christ.
• 14:34
  Speaker 1: Some others would say it's the common era, right, but
• 14:41
  Speaker 1: it's a prehistoric times before Christ three, so three thousand
• 14:45
  Speaker 1: years before Christ, right, people traded goods and services directly.
• 14:52
  Speaker 1: The system was inefficient though, because it requirement was called
• 14:56
  Speaker 1: a double coincidence of once. In other words, I've got
• 14:59
  Speaker 1: a want the same thing that you want at the
• 15:01
  Speaker 1: same time in order for that to make any sense,
• 15:05
  Speaker 1: and so that system will existed. But then it was
• 15:09
  Speaker 1: quickly replaced by a commodity money. And these are things
• 15:16
  Speaker 1: like gold and silver and shales and livestock as a
• 15:21
  Speaker 1: medium of exchange because it was, you know, more asset based.
• 15:30
  Speaker 1: And one of the problems I have with modern cryptocurrency
• 15:33
  Speaker 1: blockchain think is a brilliant technowledge you, by the way,
• 15:35
  Speaker 1: but most cryptocurrencies, Bitcoin is the exception right now, they
• 15:41
  Speaker 1: have no asset based to them. There's like a gym
• 15:43
  Speaker 1: membership that's that's popular something they're valuable because people hype
• 15:47
  Speaker 1: them up. So just you know, I'm not saying cryptocurrency
• 15:50
  Speaker 1: is not real. In fact, some of it is very real,
• 15:53
  Speaker 1: and certainly digital currency is one hundred percent real. Most
• 15:56
  Speaker 1: money today is digital. I'm just saying, don't invest, don't
• 15:59
  Speaker 1: quote invest, because really you're speculating it. On the twelve
• 16:04
  Speaker 1: thousand plus cryptocurrencies, it went poof, it just exploded, went
• 16:08
  Speaker 1: away thinking you're gonna get your money back because if
• 16:10
  Speaker 1: somebody calls it the currency, it's really just speculation. You
• 16:12
  Speaker 1: can win big, you can lose big. Don't use your
• 16:14
  Speaker 1: rent money back to this. The people have made it big,
• 16:19
  Speaker 1: by the way, So but again, just know what you
• 16:21
  Speaker 1: know what you're doing, because it's it's speculation. Commodity. One
• 16:25
  Speaker 1: of my billionaire friends was in a meeting and he said,
• 16:27
  Speaker 1: if somebody could tell him how cryptocurrency goes up value
• 16:30
  Speaker 1: and how it goes down, he'll buy some. And no
• 16:32
  Speaker 1: one said anything in the meeting, and so he just said, oh,
• 16:34
  Speaker 1: thank you. Commodity money between six hundred, well between three
• 16:41
  Speaker 1: thousand and six hundred before Christ. So the years went
• 16:45
  Speaker 1: from bigger to smaller as we get to year one
• 16:48
  Speaker 1: in the period that was AD, which is in the
• 16:55
  Speaker 1: life of the Lord, a year the year of the Lord.
• 16:58
  Speaker 1: It makes me after someeople say after death, but it's
• 17:02
  Speaker 1: after Christ's birth. Isn't it cool that Christ defines before
• 17:05
  Speaker 1: and after dates of the world. I think that's pretty cool.
• 17:09
  Speaker 1: So three thousand BCE to six hundred BZ societies began
• 17:14
  Speaker 1: using these valuable commodities, all right. Then metal coins came
• 17:18
  Speaker 1: around six hundred BCE. First standardized metal coin were minted
• 17:23
  Speaker 1: in modern day Turkey. This made trading easier and more reliable.
• 17:29
  Speaker 1: Modern money, okay, was the seventh century in the Tang
• 17:33
  Speaker 1: dynasty in hold on now China. Yeah, China's very old
• 17:39
  Speaker 1: China introduced paper money backed by precious metals, a concept
• 17:42
  Speaker 1: that spread to Europe by the seventeenth century and the
• 17:46
  Speaker 1: gold standard nineteenth century to the twentieth century. Many countries
• 17:51
  Speaker 1: pegged their currencies to go. This system lasted until the
• 17:55
  Speaker 1: twentieth century when fiat currency, government back currency took over. Now,
• 18:00
  Speaker 1: before I go here, let me back up, because I've
• 18:03
  Speaker 1: just jumped over. I'm justing over a lot of stuff
• 18:05
  Speaker 1: coming on the ground in forty five minutes. And you
• 18:08
  Speaker 1: can in comments in social media, you can tell me
• 18:10
  Speaker 1: what things you want me to go deeper on. If
• 18:12
  Speaker 1: you want to carve this out and create one a
• 18:15
  Speaker 1: separate podcast just on a topic. Right, I'll go deeper.
• 18:18
  Speaker 1: But before gold was used as a standard in the
• 18:22
  Speaker 1: US for money to back it, silver was. And I
• 18:27
  Speaker 1: like silver because it's like the common man's current. It's
• 18:31
  Speaker 1: a common man's precious metal. And silver was used all
• 18:36
  Speaker 1: around the world, not just in the US. In fact,
• 18:39
  Speaker 1: it was used in Africa get to that in a minute.
• 18:41
  Speaker 1: But it was used in the US before gold was used.
• 18:46
  Speaker 1: But then in nineteen seventy one, really the present, you've
• 18:49
  Speaker 1: had what people call fiat currency, and they say it
• 18:52
  Speaker 1: in a sort of a sly negative way, as if
• 18:56
  Speaker 1: you know fiat currency some negative thing. It's actually pretty
• 18:59
  Speaker 1: Gangster's official officially abandoned the gold standard under President Nixon.
• 19:03
  Speaker 1: Today is money's values determined by governments to create and
• 19:07
  Speaker 1: trust in financial institutions. And it's quote literally backed by
• 19:10
  Speaker 1: the full faith and credit of the United States government.
• 19:12
  Speaker 1: Now this is pretty gangster because this is the biggest
• 19:15
  Speaker 1: economy in the world, about twenty nine trillion dollars and
• 19:20
  Speaker 1: we can issue a dollar. And by the way, it
• 19:22
  Speaker 1: is the flight to quality of this day in the world.
• 19:24
  Speaker 1: Don't don't don't listen all this noise out here by
• 19:27
  Speaker 1: people saying there's a new currency in China. There's a
• 19:30
  Speaker 1: new currency here there Russia wherever. Russia's currency is exploding. Actually,
• 19:35
  Speaker 1: but the people keep talking about Russia. Russia is a
• 19:38
  Speaker 1: rounding error to the US economy. It's like ten percent
• 19:40
  Speaker 1: of the US economy for anybody who's really interested. So
• 19:43
  Speaker 1: it's really not a serious threat. They just threat us,
• 19:45
  Speaker 1: They just threaten military and all kind of other things.
• 19:49
  Speaker 1: And they got a gangster economy, a negative connotation of gangster,
• 19:53
  Speaker 1: not the one I just used, just like North Koreas.
• 19:57
  Speaker 1: But anyway, currency is when somebody just says, hey, take
• 20:03
  Speaker 1: me on my word, and China Russia, all these olive guards,
• 20:07
  Speaker 1: all these people in these countries, the country, these countries
• 20:10
  Speaker 1: are talking all kind of badness about America, Iran, all
• 20:14
  Speaker 1: these places. Guess where their leaders and their business leaders
• 20:17
  Speaker 1: are trying to put their money, trying to make their investments.
• 20:21
  Speaker 1: They want us currency and they want us assets. It's
• 20:25
  Speaker 1: we're Americas are called what's in financial terms called a
• 20:29
  Speaker 1: flight to quality in the world. So it may change,
• 20:34
  Speaker 1: but at the moment, and we got to make sure
• 20:36
  Speaker 1: we're managing our death of this country is the defenitis ballooning,
• 20:39
  Speaker 1: and we're not doing a good job of managing it
• 20:41
  Speaker 1: and investing in the biggest asset that we've got for
• 20:43
  Speaker 1: the next economic boom, which is our people. That's another
• 20:45
  Speaker 1: podcast for another day. But at the moment, if you
• 20:49
  Speaker 1: have currency is pretty positively stated gangster. We've done it. Amazing, everybody.
• 20:55
  Speaker 1: We're a quarter of the world economy and we're only
• 20:58
  Speaker 1: we're fractioning the world's populations. Eight big people in the world,
• 21:00
  Speaker 1: give or take. In America's about three hundred and fifty
• 21:02
  Speaker 1: million people, give or take. So check that out. Okay,
• 21:06
  Speaker 1: now it gets interesting. I'm gonna get I'm gonna summarize
• 21:11
  Speaker 1: these things, and I'm gonna go back and tell you
• 21:13
  Speaker 1: some cool things about Africa, and then some suggestions for you,
• 21:17
  Speaker 1: and tell you about me and how I used these
• 21:19
  Speaker 1: things and in some cases screwed it up. Charge cards
• 21:24
  Speaker 1: this is the first cash list credit system, all right now.
• 21:29
  Speaker 1: Early forms of charge cards were started in the nineteenth
• 21:34
  Speaker 1: and twentieth century. Wealthy individuals and businesses use credit coins
• 21:39
  Speaker 1: and charge plates issued by retailers for store purchases. Now
• 21:43
  Speaker 1: I'm not this old, but I did have a charge
• 21:45
  Speaker 1: account at the Four Seasons Hotel on Dohini or the
• 21:48
  Speaker 1: Four Seasons Los Angeles at Dohini, or Four Seasons Los
• 21:51
  Speaker 1: Angeles at Duheini, Beverly Hills, whatever they call it. And
• 21:54
  Speaker 1: when I was twenty years old, I used to go
• 21:56
  Speaker 1: there after I left my office, and I didn't tell
• 21:59
  Speaker 1: them I didn't have any money. I was going to
• 22:02
  Speaker 1: have some money, but I didn't have the money at
• 22:04
  Speaker 1: that day. I was managing cash flow as every entrepreneur does,
• 22:07
  Speaker 1: and I was it was twenty years old, twenty one
• 22:09
  Speaker 1: years old something, and I used to sign a document,
• 22:17
  Speaker 1: a book, I signed an invoice with my signature and
• 22:21
  Speaker 1: they would carry the balance for me, and I'd pay
• 22:24
  Speaker 1: it off once a month, and so they would carry
• 22:31
  Speaker 1: an in house my charges on in house books, and
• 22:34
  Speaker 1: once a month or once every other month, I'd write
• 22:38
  Speaker 1: them a check back. Then it was checks and pay
• 22:41
  Speaker 1: off the balance after I floated their money for a
• 22:44
  Speaker 1: month or two doing other things with it, like making
• 22:47
  Speaker 1: other money. By the way, do you know that a
• 22:49
  Speaker 1: check is nothing more than a form of removing value?
• 22:53
  Speaker 1: For those who still use checks, you know, you could
• 22:54
  Speaker 1: take technically the back of somebody's T shirt right paid
• 22:59
  Speaker 1: to the order, write a routing number and an account
• 23:02
  Speaker 1: number and a few other things that makes it legal,
• 23:04
  Speaker 1: and sign it pay to the order of and you
• 23:07
  Speaker 1: could and technically, you know, you get into a big
• 23:09
  Speaker 1: fight with the bank. But technically you can take that
• 23:11
  Speaker 1: person's T shirt and go to the bank and challenge
• 23:15
  Speaker 1: them the cash your or their T shirt, and they're cool.
• 23:19
  Speaker 1: It's you know, it's just it's just pretty cool. Just
• 23:21
  Speaker 1: to understand these things. Okay, So credit cards started with
• 23:24
  Speaker 1: diners Club in nineteen fifty, now not eighteen fifty. Nineteen fifty.
• 23:29
  Speaker 1: Show you how big this economy is and how fast
• 23:31
  Speaker 1: has grown, and why I want you to teach treat
• 23:33
  Speaker 1: financial literacy like it's like it's breathing, because you've this
• 23:37
  Speaker 1: thing is just a while. The world is five billion
• 23:39
  Speaker 1: years old, and you know, American is you know, goes
• 23:42
  Speaker 1: back to you know, the sixteen hundreds and all this
• 23:44
  Speaker 1: kind of stuff, but really like fifty three or one
• 23:49
  Speaker 1: hundred fifty three dollars of acid value of sorry, net
• 23:53
  Speaker 1: worth today in America was created since the year two thousand.
• 23:57
  Speaker 1: That's last twenty five years. That's another document, another podcast
• 24:00
  Speaker 1: part of the time. But I want you to understand
• 24:03
  Speaker 1: how quickly this stuff compounds and bills in each other,
• 24:06
  Speaker 1: and it can just run away from you and get
• 24:07
  Speaker 1: away from you, and you don't understand anything, and you
• 24:09
  Speaker 1: end up with I was with a credit card that
• 24:11
  Speaker 1: paid twenty nine percent, with too much month into your money,
• 24:14
  Speaker 1: and try to figure out where did all your money go?
• 24:16
  Speaker 1: With somebody smarter than you separate you from your wallet.
• 24:19
  Speaker 1: That's what happened. So in nineteen fifty to the modern
• 24:23
  Speaker 1: charge card was launched by two entrepreneurs allowed users to
• 24:27
  Speaker 1: pay for meals at participating restaurants and require full payment
• 24:30
  Speaker 1: each month. This is very important because the next credit
• 24:33
  Speaker 1: card was created in nineteen fifty eight is called the
• 24:35
  Speaker 1: American Express, one of my favorite cards. And I have
• 24:38
  Speaker 1: the AMEX, the vaulted Ames Centurion Card, the Black card
• 24:42
  Speaker 1: they call it, which you cannot apply for. They've got
• 24:44
  Speaker 1: to give it to you. Which technically I could purchase
• 24:47
  Speaker 1: the hotel I'm staying in, or walk into a car
• 24:50
  Speaker 1: dealership lot and put my credit card down and buy
• 24:53
  Speaker 1: a Ferrari technically, but the thing about a and so
• 24:58
  Speaker 1: the AMES was created initially for traveling, and it evolved
• 25:03
  Speaker 1: into a much more premium product. It was created in
• 25:07
  Speaker 1: nineteen fifty eight. But it requires also you to pay
• 25:10
  Speaker 1: the full bill in thirty days. So these two cards,
• 25:13
  Speaker 1: Diator's Club Card and the America Express Card are two great
• 25:16
  Speaker 1: examples of a charge card. It's not a credit card.
• 25:20
  Speaker 1: You must make the payment full payment every month. So
• 25:25
  Speaker 1: I'm not gonna get you to my business. But I
• 25:28
  Speaker 1: run a very big business and I travel a lot,
• 25:32
  Speaker 1: and I will put business charges. Well, I put all
• 25:39
  Speaker 1: charges on my card. I'll be reimbursed. I don't want
• 25:43
  Speaker 1: an expense account. You don't want to do that. If
• 25:44
  Speaker 1: you're running a nonprofit, by the way, for sure, you don't.
• 25:48
  Speaker 1: You don't want to expense account. You want to expense report, right,
• 25:51
  Speaker 1: so expense account, which means they just give you some
• 25:54
  Speaker 1: money and say spend it and tell us how you
• 25:55
  Speaker 1: spend it. I think you're asking for trouble report, which
• 26:00
  Speaker 1: means I put it on my own card. And then
• 26:02
  Speaker 1: the expenses that are related to Operation Homee are related
• 26:05
  Speaker 1: to Brian Grew Ventures or Brian Group Advisors or Brian
• 26:07
  Speaker 1: Group real Estate or Promise Homes Company are the other
• 26:11
  Speaker 1: ventures I'm associated with. They reimburse me based on a
• 26:16
  Speaker 1: written report that I give them of my It's called
• 26:19
  Speaker 1: an expense report. Okay, but but I charge a lot
• 26:24
  Speaker 1: every month and I get reimbursed, and I pay the
• 26:29
  Speaker 1: whole bill every month. And if I really thought about
• 26:34
  Speaker 1: where I was twenty years ago, I would have a
• 26:35
  Speaker 1: heart attack. Knowing twenty years forward, if I was thirty
• 26:39
  Speaker 1: years old and I look forward to see what I'm
• 26:41
  Speaker 1: paying for my credit card bill every month, I would
• 26:43
  Speaker 1: have a massive heart attack. But I manage it just fine,
• 26:49
  Speaker 1: and they've never missed a payment. I also do this
• 26:52
  Speaker 1: because I get points. So when I go to if
• 26:56
  Speaker 1: you see me in Maui or you see me in
• 26:58
  Speaker 1: Turks and Caicos, I'm not paying for it. Turks and
• 27:02
  Speaker 1: Caicos pays for itself. That's more complicated the explanation, but
• 27:07
  Speaker 1: it pays for itself, the phone, the phone bill, the
• 27:10
  Speaker 1: airplane tickets or reward tickets. So you see me, you
• 27:15
  Speaker 1: see me sitting me and my wife sitting in first
• 27:17
  Speaker 1: class going to Turks and Kkos or Maui. That was
• 27:20
  Speaker 1: because of points, AMEX points. You see me in a
• 27:24
  Speaker 1: rental car, points free hotels. Often if you see me
• 27:29
  Speaker 1: on a non business trip, why do I stay at
• 27:31
  Speaker 1: the same hotels versus trying to floss and stay at
• 27:33
  Speaker 1: these boutique places. I stay in the same brands all
• 27:38
  Speaker 1: the time because I'm building up my point balance. And
• 27:41
  Speaker 1: so when I'm ready to go on vacation or whether
• 27:43
  Speaker 1: we reward my assistant Tina Fair or run to reward
• 27:47
  Speaker 1: somebody on my team with a vacation someplace, or allow
• 27:51
  Speaker 1: my wife to go on vacation or my family members,
• 27:54
  Speaker 1: I don't give them cash. I can give them the
• 27:56
  Speaker 1: points for a hotel state and then points for a
• 27:59
  Speaker 1: rental car, and then points from my AMEX card, which
• 28:02
  Speaker 1: is just like cash by the way, to pay for
• 28:06
  Speaker 1: miscellaneous And I have points from the airlines so I
• 28:11
  Speaker 1: really treat credit cards like a partner to me in
• 28:16
  Speaker 1: cash flow and benefits management. I could stop the podcast
• 28:20
  Speaker 1: right there. There was a lot of benefit for you.
• 28:22
  Speaker 1: I hope you got that. Credit cards. Now, the birth
• 28:24
  Speaker 1: of revolving credit Bank of America, this is deep now
• 28:29
  Speaker 1: nineteen fifty eight. Why you're saying, why you mentioned the
• 28:32
  Speaker 1: Bank of America, because that's where the first credit card
• 28:34
  Speaker 1: came from, the first revolving credit card compete created, I
• 28:38
  Speaker 1: believe to compete with American Express. In nineteen fifty eight.
• 28:43
  Speaker 1: The first revolving balance credit card came from Bank of America,
• 28:47
  Speaker 1: and this later became hold on Visa. I've got except
• 28:52
  Speaker 1: of my wallet. You got them in your wallet. And
• 28:57
  Speaker 1: then in nineteen sixty six, the year I was born,
• 29:00
  Speaker 1: MasterCard was born by a group of banks. They created
• 29:04
  Speaker 1: MasterCard now sorry, they created master Charge. Sorry that later
• 29:10
  Speaker 1: became master Card, and they created that to compete with
• 29:14
  Speaker 1: the Bank America card. Did you hear what I said?
• 29:16
  Speaker 1: It was not called originally Visa. It was originally the
• 29:22
  Speaker 1: Bank Americ Card, right that rosimately became Visa. And then
• 29:27
  Speaker 1: and then these other bankers created this and that was
• 29:30
  Speaker 1: created to compete with America Express, right, which got there
• 29:32
  Speaker 1: in the americanpress, got their idea from the from the
• 29:36
  Speaker 1: diners Club. See how this competition in capitalism and then
• 29:40
  Speaker 1: most best good things in life are copied. I mean,
• 29:42
  Speaker 1: Steve Jobs and Bill Gates got a lot of their
• 29:45
  Speaker 1: brilliants from looking at what Xerox Park was doing in IBM,
• 29:49
  Speaker 1: and they don't, you know, just IBM. Xerox Park did
• 29:52
  Speaker 1: great things, but weren't as great marketers as Bill Gates
• 29:55
  Speaker 1: and Steve Jobs were. And likewise, these you know, Visa,
• 29:59
  Speaker 1: MasterCard and Amex sort of have emerged as the global
• 30:02
  Speaker 1: winners from this competitive explosion in credit cards that happen
• 30:08
  Speaker 1: in the twentieth century. Discovering other innovations arrived in the
• 30:12
  Speaker 1: nineteen eighties and to present, discover entered the market in
• 30:16
  Speaker 1: nineteen eighty five, offering no annual fees and cash back rewards.
• 30:20
  Speaker 1: Credit cards evolved with magnetic strips and chips and contentless payments,
• 30:25
  Speaker 1: and it's still evolving, right, And of course we have
• 30:28
  Speaker 1: debit cards, and I hope you know what a debit
• 30:30
  Speaker 1: card means, Otherwise you're going to go broke. A debit
• 30:33
  Speaker 1: card literally means it's going to debit directly out of
• 30:36
  Speaker 1: your account. It doesn't matter if it says Visa a
• 30:38
  Speaker 1: MasterCard on it. Those are just payment platforms and databases
• 30:42
  Speaker 1: and systems. When you swipe that card, it's taking the
• 30:45
  Speaker 1: money out of your account. It's not like the old
• 30:48
  Speaker 1: days with a check, where you write it and float
• 30:50
  Speaker 1: the check for three or four days and you can
• 30:53
  Speaker 1: run around trying to find the money before that check
• 30:55
  Speaker 1: hits the bank and gets processed, and then you could
• 30:57
  Speaker 1: put the deposit in and catch it as it's some
• 31:02
  Speaker 1: The joke was, I can't be broke, I still have
• 31:03
  Speaker 1: checks left. That day is over. Debit card swiping is
• 31:07
  Speaker 1: immediate origins of money in the world. Money in its
• 31:20
  Speaker 1: early forms originated in Mesopotamia. I got to say that
• 31:26
  Speaker 1: slowly our modern day hold on Iraq again around three
• 31:31
  Speaker 1: thousand BCE before Christ and the Sumerians and the Babylonians
• 31:40
  Speaker 1: developed one of the first recorded monetary systems using silver. Hello,
• 31:44
  Speaker 1: I told you that in grain it's units of exchange.
• 31:47
  Speaker 1: They use standardized weights of silver shekels they call and
• 31:51
  Speaker 1: stored grains to facilitate trade moving beyond barter. Now, as
• 31:56
  Speaker 1: all these pieces starting to right try to link together,
• 31:59
  Speaker 1: are right. Now, Let's fast forward. Now. I want to
• 32:03
  Speaker 1: cover a lot of history now in a short period
• 32:04
  Speaker 1: of time. I hope you're enjoying this. Let's talk about Africa.
• 32:10
  Speaker 1: Africa played a significant role in the history of money.
• 32:12
  Speaker 1: I don't know how people are talking about Africa the
• 32:14
  Speaker 1: dumb or stupid or lazy. I don't know where they
• 32:16
  Speaker 1: get that from. Africa is the biggest, the most the
• 32:18
  Speaker 1: biggest untapped natural resource in the world to this very
• 32:21
  Speaker 1: day is the African continent. The first human being walked
• 32:25
  Speaker 1: upright in Africa. I'm gonna do a whole podcast on this,
• 32:30
  Speaker 1: really inspired by the Black Space genius Neil Tyson I
• 32:38
  Speaker 1: thing is his name, where we talked about DNA and
• 32:42
  Speaker 1: all that stuff. So I'm gonna do a separate podcast
• 32:44
  Speaker 1: on that. But Africans were geniuses and they were involved
• 32:49
  Speaker 1: in the early development of money. They both went early
• 32:54
  Speaker 1: trade systems and the development of early currencies, and specifically
• 33:02
  Speaker 1: before coined money. African civilizations use commodity money. And this
• 33:08
  Speaker 1: starts like in three hundred, you know, after three you know,
• 33:14
  Speaker 1: the year three hundred, after crisis death. So the first
• 33:19
  Speaker 1: one they used to know about calorie shells. They were
• 33:22
  Speaker 1: used widely in West Africa. Cowori were one of the
• 33:24
  Speaker 1: most recognizable forms of currency for centuries. Then gold dust
• 33:28
  Speaker 1: and nuggets used extensively in West Africa, particularly in the Ghana,
• 33:33
  Speaker 1: Mali and Songhai empires. That's around three hundred to sixteen
• 33:38
  Speaker 1: hundred common era or after a d right after crisis
• 33:44
  Speaker 1: death saw bars. Yes, I said salt sawt bars. And
• 33:50
  Speaker 1: by the way, everybody's saying capitalism is evil, and you know,
• 33:52
  Speaker 1: we get people deal with capitalism and free enterprise and
• 33:56
  Speaker 1: money since the beginning of time. Right, the Bible talks
• 34:00
  Speaker 1: about money than any one thing. Hello, I think over
• 34:04
  Speaker 1: two thousand references. Sometimes Jesus got upset is when he
• 34:08
  Speaker 1: turned over the tables of the money changers in the Bible.
• 34:11
  Speaker 1: So like, get with the system, because it is gotten
• 34:14
  Speaker 1: with you, whether you like it or not. Like this again,
• 34:16
  Speaker 1: this is as important as the right to vote. It's
• 34:19
  Speaker 1: almost important as breathing. I want to remove your stress
• 34:22
  Speaker 1: movie from a surviving mindset. This is my book up
• 34:24
  Speaker 1: from nothing to a thriving mindset, to a winning and
• 34:26
  Speaker 1: building mindset that means that all this stuff is important.
• 34:28
  Speaker 1: Salt bars in the trans Saharan trade, salt was so
• 34:32
  Speaker 1: valuable that it was used as currency, particularly in the
• 34:37
  Speaker 1: Sahara in s held areas copper, iron, and brass rods.
• 34:43
  Speaker 1: Many African societies use metal as a form of currency,
• 34:46
  Speaker 1: especially in central and South In Southern Africa, the gold trade.
• 34:52
  Speaker 1: West Africa was a major supplier of gold to the
• 34:55
  Speaker 1: Mediterranean in European economies from eight hundred to year few
• 35:00
  Speaker 1: teen hundreds. Did you hear me? It gets deeper. Empires
• 35:04
  Speaker 1: like Ghana and Mali and Songhai controlled vast gold mines
• 35:08
  Speaker 1: and traded with North African merchants, influencing global markets. This
• 35:17
  Speaker 1: one's a famous example from the fourteenth century. The mansa
• 35:20
  Speaker 1: of Mansa Musa is what a cool name, Mansa Musa.
• 35:24
  Speaker 1: We got you know, don't go name of your child
• 35:26
  Speaker 1: Mansa Musa. Now right? I want to be to get
• 35:30
  Speaker 1: a job, right, Mansa Musa? That was a good joke. Sorry.
• 35:34
  Speaker 1: The ruler of Mali in the fourteenth century famously disrupted
• 35:38
  Speaker 1: the Egyptian economy with his lavish distribution of gold during
• 35:42
  Speaker 1: the pilgrimage to Mecca in thirteen twenty four, just completely
• 35:47
  Speaker 1: toe up. The inflation ran amuck because he was just distributing.
• 35:53
  Speaker 1: He was intentionally distributing as riches everywhere and inflating everything
• 35:58
  Speaker 1: around him. Today we'd say, let's say say it's like
• 36:02
  Speaker 1: twenty five percent inflation, all right, where we're arguing about
• 36:06
  Speaker 1: two and four and five percent inflation in America. African
• 36:09
  Speaker 1: kingdoms and the use of coinage. Some African civilizations minted
• 36:13
  Speaker 1: their own coins, by the way, the US did the
• 36:15
  Speaker 1: same thing. I'll get to that in a minute. The
• 36:20
  Speaker 1: Oxumite Empire, which is modern day Ethiopia and Eritrea, by
• 36:23
  Speaker 1: the way, you know those people, those two groups are related, right,
• 36:26
  Speaker 1: They had been worn with each other. It was for
• 36:28
  Speaker 1: the longest it was two cousins fight and Eritrea and Ethiopia.
• 36:32
  Speaker 1: You look at them like, yea, all the same people.
• 36:34
  Speaker 1: What's what's going on? Okay? Anyway, the Oxumite Empire produced gold, silver,
• 36:40
  Speaker 1: and bronze coins as early as two seventy CE. This
• 36:46
  Speaker 1: is the common era after Christ's death. The Sultanite of
• 36:51
  Speaker 1: Kilwa modern day Tanzania, I've been to, I've been to
• 36:54
  Speaker 1: the African African countries. Is Tanzania is fantastic. They minted
• 36:57
  Speaker 1: their own coins and eleventh to the fourteenth entry facilitating
• 37:01
  Speaker 1: Indian Ocean trade African gold was a primary driver in
• 37:06
  Speaker 1: the European Renaissance financial system. The gold from West Africa
• 37:11
  Speaker 1: supplied European mints and helped finance banking families like the
• 37:15
  Speaker 1: medicine in Italy. You heard all about the medicine. You
• 37:18
  Speaker 1: don't hear about where they got their gold from. That
• 37:22
  Speaker 1: that back door there their new monetary and financial system
• 37:28
  Speaker 1: and credit system. It was from Africa. Portuguese, Dutch and
• 37:31
  Speaker 1: British traders established commercial relationships with African kingdoms. I'm about
• 37:35
  Speaker 1: to get a little controversial here, but it's just the facts,
• 37:38
  Speaker 1: exchanging goods, firearms, textiles for gold, ivory and slaves. Yes,
• 37:46
  Speaker 1: black Africans were also in the slave trade. They didn't
• 37:49
  Speaker 1: know they were pushing them off, sending them off to
• 37:52
  Speaker 1: than on American transgressions and world horror. But you know,
• 37:58
  Speaker 1: you got folks to the coast. And that's a whole
• 38:01
  Speaker 1: nother story for another time. I will do a special
• 38:03
  Speaker 1: piece this year on Africa. Okay, So there's good capitalism,
• 38:08
  Speaker 1: by the way, in bad capitalism. Good capitalism is where
• 38:11
  Speaker 1: I benefit in somebody else benefits more, and bad capitalism
• 38:13
  Speaker 1: is where I benefit somebody else pays a price for
• 38:16
  Speaker 1: it slavery is an example of bad capitalism. Am I
• 38:20
  Speaker 1: going too far? Am I going too fast? Going too far?
• 38:25
  Speaker 1: With you? I hope not, because we've covered a lot
• 38:27
  Speaker 1: of ground so far and we're heading it here to
• 38:31
  Speaker 1: the home stretch. Okay, let's talk about the US and
• 38:36
  Speaker 1: then we'll start talking about how entrepreneurs and business people
• 38:38
  Speaker 1: can use good credit and what use some examples for you.
• 38:44
  Speaker 1: The development of money and currency and credit in the
• 38:47
  Speaker 1: United States has undergone significant transformation since the colonial They
• 38:51
  Speaker 1: are shaping the nation's economic landscape. In sixteen nineteen, a company,
• 38:58
  Speaker 1: not a government, by the way, Institution's Bay colony. By
• 39:01
  Speaker 1: the way, do you know that the first democracy was
• 39:04
  Speaker 1: a company? Do you know the first government was a
• 39:08
  Speaker 1: corporation in America? Don't trust me on any of this.
• 39:11
  Speaker 1: Check it out yourself. The sixteen hundreds, the Massachusetts Bay
• 39:18
  Speaker 1: Cup Colony. And I just like throwing this in just
• 39:20
  Speaker 1: because just fry your brain. And somebody said, what what
• 39:24
  Speaker 1: did you say? Go deeper on that. The word white,
• 39:27
  Speaker 1: the racial word white, completely made up. It's not real.
• 39:32
  Speaker 1: After five billion years in the world, four billion years
• 39:34
  Speaker 1: of organism life, two hundred million years of the Neanderthal life,
• 39:39
  Speaker 1: a couple hundred million years of a modern American, a
• 39:42
  Speaker 1: modern human being life, three thousand years of life in
• 39:45
  Speaker 1: the enlightenment, you know, post Christ. The word white was
• 39:52
  Speaker 1: created about four hundred years ago just in North America
• 39:56
  Speaker 1: for political power and economic reasons. And I will white
• 40:00
  Speaker 1: people and Backo, who used to be friends when they
• 40:02
  Speaker 1: were both in dentured servants. Again, it was all about money,
• 40:05
  Speaker 1: and I deal with that when I deal with my
• 40:07
  Speaker 1: podcast on slavery that I'm going to do, which is
• 40:11
  Speaker 1: going to be not emotional, just the facts. So the
• 40:13
  Speaker 1: masters Is Bay Colony issued the first paper money in
• 40:15
  Speaker 1: the American colonies to fund military expeditions, right right, That
• 40:19
  Speaker 1: was sixteen nineteen. In seventeen seventy five, during the American
• 40:23
  Speaker 1: Revolutionary War, the Continental Congress began issuing their own currency.
• 40:28
  Speaker 1: They were called continentals. But they went too far and
• 40:32
  Speaker 1: they became counterfeited. They printed too much of it. It
• 40:35
  Speaker 1: severely depreciated and it became worthless basically by the end
• 40:38
  Speaker 1: of the war. So in seventeen eighty five there was
• 40:42
  Speaker 1: a first attempt to create an official currency by the
• 40:45
  Speaker 1: Continental Congress. In seventeen ninety two, there was a Coinage Act,
• 40:52
  Speaker 1: you know, introducing basically denominations and standards. There's a free
• 40:57
  Speaker 1: banking era now between eighteen thirty seven eighteen sixty three,
• 41:01
  Speaker 1: but basically everybody just did their own thing. So you
• 41:03
  Speaker 1: had again picking on boomboo and Pookie and then but
• 41:07
  Speaker 1: you had you know, the corner store, you had individual banks,
• 41:10
  Speaker 1: you had individual companies. Think about a car dealership issuing
• 41:13
  Speaker 1: their own currency, their own you know, cities and states
• 41:17
  Speaker 1: issued their own currency. It was wild, it's crazy. It
• 41:19
  Speaker 1: was no you know, super it was just a wildcat era.
• 41:22
  Speaker 1: It was like no supervision whatsoever. And you should, you know,
• 41:28
  Speaker 1: for kissing, kissing and giggles, go buy some of his
• 41:33
  Speaker 1: old currency and frame it and put in your wall.
• 41:35
  Speaker 1: Some of it will be worth a lot of money
• 41:37
  Speaker 1: at some point. In nineteen started eighteen sixty three, after
• 41:42
  Speaker 1: the Civil War, there was a National Bank Banks Act
• 41:45
  Speaker 1: that tried to make sense out of this chaotic currency
• 41:49
  Speaker 1: and create some standardization. And then you had the National
• 41:54
  Speaker 1: Banking Act, you know. The National Banking Act was followed
• 41:57
  Speaker 1: by the Federal Reserve in nineteen thirteen to ablished the
• 42:00
  Speaker 1: Federal Reserve System as a central bank for the United States,
• 42:03
  Speaker 1: aiming to provide a safe and more flexible monetary and
• 42:07
  Speaker 1: financial system. That's just nineteen thirteen. And then I've already
• 42:11
  Speaker 1: talked to you now brought you up to speed to
• 42:13
  Speaker 1: the evolution of credit. I talked about, you know, shopkeepers
• 42:17
  Speaker 1: extending their own credit boo, their keeping their own books
• 42:21
  Speaker 1: on the ledger, is what I did with four Seasons Hotel.
• 42:25
  Speaker 1: I talked about the nineteen fifties and credit cards, and
• 42:32
  Speaker 1: the Franklin National Bank of Long Island issued the first
• 42:35
  Speaker 1: modern credit card. Well, b of a might might argue
• 42:42
  Speaker 1: with them, but that's actually probably true in nineteen fifty one,
• 42:44
  Speaker 1: nineteen fifty eight, be it they issue that fancy a card.
• 42:48
  Speaker 1: I've already mentioned that the card that happened in the
• 42:51
  Speaker 1: nineteen It was a lot of people competing for credit
• 42:53
  Speaker 1: at this no politic for credit. By the way, the
• 42:55
  Speaker 1: word credit comes on the Latin route word credit till,
• 42:58
  Speaker 1: which basically means credit. And I've already talked about the
• 43:02
  Speaker 1: modern credit uh credit era. Okay, So now I brought
• 43:08
  Speaker 1: you up to speed, and let me now talk about
• 43:13
  Speaker 1: businesses and entrepreneurs in the use of credit and and
• 43:18
  Speaker 1: talk about you. So I'm a businessman, I'm an entrepreneur. Also,
• 43:25
  Speaker 1: those two things are different. Businessman, a businesswoman has a
• 43:28
  Speaker 1: standard business plan, and an entrepreneur is crazy like me
• 43:31
  Speaker 1: and create something out of whole cloth that's completely new
• 43:33
  Speaker 1: and different, never been done before. And oftentimes we know
• 43:38
  Speaker 1: we don't when we're starting. We don't have backers. We
• 43:42
  Speaker 1: don't have You come from the hood where I came from,
• 43:44
  Speaker 1: you don't have backers. So I use pet boys for
• 43:47
  Speaker 1: my my my auto expenses, I used Sears credit card.
• 43:53
  Speaker 1: But I needed to buy office supplies and furniture and
• 43:58
  Speaker 1: some clothes, I used Radio Shack. You guys remember that
• 44:04
  Speaker 1: for my computers and my electronics. And my mobile phone
• 44:08
  Speaker 1: had a phone that was like a brick that went
• 44:09
  Speaker 1: over my shoulder. It paid, weighed like thirty pounds, and
• 44:13
  Speaker 1: it was like forty five cents a minute. It was
• 44:14
  Speaker 1: analog phone calls before digital sailor phone calls. You guys
• 44:19
  Speaker 1: remember this. It was forty five cents a minute, and
• 44:21
  Speaker 1: the phone itself cost three to five thousand dollars to
• 44:24
  Speaker 1: ten thousand dollars, depending on your brand, your model. I
• 44:27
  Speaker 1: remember I was thinking I actually have a credit a
• 44:29
  Speaker 1: phone in my car at a nineteen sixty seven Mustang
• 44:34
  Speaker 1: in the hood, and I couldn't afford a mobile phone.
• 44:37
  Speaker 1: But you can go to radio shack and buy a
• 44:38
  Speaker 1: fake mobile phone kit, which was a fake phone receiver,
• 44:43
  Speaker 1: a cord that would go under the dashboard, a fake
• 44:46
  Speaker 1: and tend I remember the antenda that had the swirls
• 44:48
  Speaker 1: on it. Yes, there were actual intendance for anybody who's
• 44:51
  Speaker 1: a millennial, and the tenor would go on the you
• 44:54
  Speaker 1: tape it two sided tape, go on your windshield. And
• 44:57
  Speaker 1: sometimes you really want to show you were a big
• 44:59
  Speaker 1: bos you had two antennas in your car, four antennas.
• 45:03
  Speaker 1: You saw brothers with six intendas in the car. If
• 45:05
  Speaker 1: people have big they would drill holes in the car,
• 45:07
  Speaker 1: would put huge intendas. The bigger your antenna, supposedly the
• 45:11
  Speaker 1: more power you had. A lot of this stuff, which
• 45:13
  Speaker 1: is like me just a profile. I remember one day
• 45:15
  Speaker 1: I had a date in the car and I was
• 45:17
  Speaker 1: driving down the street and I was turned the corner
• 45:19
  Speaker 1: so it was supposedly was on the phone profiling and
• 45:23
  Speaker 1: moved the wrong direction and the cord popped out from
• 45:25
  Speaker 1: under the dashboard hit me in the head. So yeah,
• 45:29
  Speaker 1: I had nothing to do with the story. But I
• 45:33
  Speaker 1: use credit cards episodically to facilitate the different things I
• 45:39
  Speaker 1: needed because I didn't have any any equity. Capital. So
• 45:43
  Speaker 1: just so you know, capital is debt and equity. So
• 45:46
  Speaker 1: equity is you know, money that you own that's either
• 45:50
  Speaker 1: you've gotten yourself, somebody invested with you that equity, you know,
• 45:54
  Speaker 1: to make payments on it. That's equity. Debt is a
• 45:58
  Speaker 1: form of obligation also capital, but it is a form
• 46:01
  Speaker 1: of obligated capital. You have to pay it back and
• 46:04
  Speaker 1: it's typically payments tied to it. I do lines of
• 46:06
  Speaker 1: credit things like that in another podcast. But oftentimes, if
• 46:10
  Speaker 1: you're from the hood, you don't have equity, and you
• 46:13
  Speaker 1: don't have inherited wealth, and you don't have wealthy parents
• 46:16
  Speaker 1: at least nobody none that will to give you a
• 46:18
  Speaker 1: dish of their shekels. See their shekels we use in
• 46:22
  Speaker 1: these phrases today or even tho where it comes from,
• 46:24
  Speaker 1: give me some shekels, man, you have some shekels. And
• 46:31
  Speaker 1: and so if you're in from the hood and you
• 46:33
  Speaker 1: have bad credit, you're you know, one of the reasons
• 46:36
  Speaker 1: that people in the hood have these underground businesses is
• 46:39
  Speaker 1: they're going to Pooky and them Luigi or whatever around
• 46:42
  Speaker 1: the corner and getting very expensive debt as a loan,
• 46:44
  Speaker 1: and only we can pay back this loan that's thirty
• 46:47
  Speaker 1: eighty one hundred percent injuries and sometimes is with illegal enterprises.
• 46:52
  Speaker 1: So they're matching the expensive debt with with illegal ways
• 46:57
  Speaker 1: to pay it back. And you reduce your you increase
• 47:01
  Speaker 1: your credit card, you increase your financial fluency. You can
• 47:06
  Speaker 1: now go to the bank and get prime credit and
• 47:09
  Speaker 1: just engage in a regular business that will actually live
• 47:13
  Speaker 1: to allow you to live, and it will last a
• 47:14
  Speaker 1: lifetime versus these businesses tied to legal activity. It's probation, prison, parole,
• 47:20
  Speaker 1: or death tied to it. So businesses, you can, if
• 47:25
  Speaker 1: you have a choice, get a business credit card, but
• 47:28
  Speaker 1: I use a personal credit card and just assigned the
• 47:30
  Speaker 1: business purposes. I would encourage you to understand the difference
• 47:37
  Speaker 1: between a credit card and a charge card when you
• 47:38
  Speaker 1: get these cards, because if you get an American Express
• 47:41
  Speaker 1: card in business, and you've got an invoice that doesn't
• 47:45
  Speaker 1: pay for sixty or ninety days based on terms, but
• 47:49
  Speaker 1: you have a credit a charge card that requires you
• 47:51
  Speaker 1: to pay back in thirty days, and you're putting the
• 47:53
  Speaker 1: expensive So here's one lesson in business, you don't want
• 47:57
  Speaker 1: to typically finance long term equity with short term debt.
• 48:00
  Speaker 1: You don't want to finance. I mean, it's a long
• 48:03
  Speaker 1: term obligation with a short term credit facility that requires
• 48:06
  Speaker 1: payments right now. I know I'm covering a lot in
• 48:09
  Speaker 1: the short period of time. But you're smart and I
• 48:10
  Speaker 1: know you can get this. You can also hit replay
• 48:12
  Speaker 1: and play it over and over again and take notes
• 48:15
  Speaker 1: until you get it. Get all your buddies together, ladies together,
• 48:17
  Speaker 1: get your girls together, and have a conversation about this
• 48:20
  Speaker 1: and talk about it amongst yourself. There's no dumb here.
• 48:22
  Speaker 1: There's no dumb answer. Nobody taught you this stuff, so
• 48:25
  Speaker 1: how could there be a wrong answer? Is just to
• 48:27
  Speaker 1: what you have didn't know? Right, So you want to
• 48:32
  Speaker 1: align up your terms of your repayment with the terms
• 48:36
  Speaker 1: of your payments. That's the easiest wa ickon and that's
• 48:39
  Speaker 1: called cash flow management. I've already talked about reward benefits.
• 48:54
  Speaker 1: That's a big reason why I use credit cards. I
• 48:58
  Speaker 1: also like using credit cards because it allows me to
• 49:00
  Speaker 1: monitor my expenses because credit card companies will send you
• 49:03
  Speaker 1: detailed particularly MS will send you detailed printouts of which
• 49:09
  Speaker 1: categories are spending. They will help you basically create a
• 49:11
  Speaker 1: budget with cash flow management. It allows you to also
• 49:14
  Speaker 1: monitor employee expenses. And my suggestion is you look at
• 49:19
  Speaker 1: these expenses every week, no less than every month, right,
• 49:23
  Speaker 1: and you should pull your credit at least once a quarter.
• 49:25
  Speaker 1: I think you should pay it, pull it every month.
• 49:27
  Speaker 1: I look at my credit report every couple of days
• 49:30
  Speaker 1: on the outside. If you do this the right way,
• 49:33
  Speaker 1: doing a business credit card will help you all out.
• 49:35
  Speaker 1: Ultimately get a business credit facility and a business credit line.
• 49:39
  Speaker 1: I want you to be mindful of fees and interest rates,
• 49:41
  Speaker 1: which I've talked about already, and I want you to
• 49:45
  Speaker 1: make sure you're complying with the law when you're using
• 49:48
  Speaker 1: all these facilities. And I remember that al Capone, who's
• 49:55
  Speaker 1: the famed or infamous gangster. They couldn't catch them on
• 50:01
  Speaker 1: murder in Mayhem, but they got them for tax evasion.
• 50:05
  Speaker 1: I'd rather owe my mother money, God rest your soul,
• 50:07
  Speaker 1: and old the federal government a dime. They they ain't
• 50:10
  Speaker 1: playing you don't. You don't want to use it. You
• 50:12
  Speaker 1: want hardcore interest rate payments. Oh oh, the I R
• 50:15
  Speaker 1: s of money and see how painful it is, how
• 50:20
  Speaker 1: much interests they're charging, and they're not trying to hurt you.
• 50:22
  Speaker 1: They're trying to discourage you from having them as a lender.
• 50:25
  Speaker 1: They want to be the lender of the irs, wants
• 50:26
  Speaker 1: to be the lender of last resort. But if you
• 50:29
  Speaker 1: have a choice between a payment arrangement with with I
• 50:31
  Speaker 1: R S, which they become now, they become your credit facility,
• 50:34
  Speaker 1: your credit your your credit card. Uh, that's not a
• 50:37
  Speaker 1: charge card, that's a credit card in an example, because
• 50:39
  Speaker 1: you want payments in there monthly. Uh. If you have
• 50:42
  Speaker 1: a choice putting owe them money, not paying them, or
• 50:45
  Speaker 1: putting them on a credit payment plan, do the latter.
• 50:48
  Speaker 1: Do not blow them off, even if it's very painful.
• 50:51
  Speaker 1: When I've done it, I've owed them money, I've had
• 50:53
  Speaker 1: payment plans and had to pay them back. But it
• 50:57
  Speaker 1: was a time value of money, time value opportunity, cost
• 51:02
  Speaker 1: of money. Write that down time value opportunity cost of money,
• 51:07
  Speaker 1: and you mix and match the credit card or the
• 51:09
  Speaker 1: credit line or your cash is available with the credit
• 51:11
  Speaker 1: facility that you have. I'm gonna give you a little
• 51:14
  Speaker 1: bit of a rich person's twist here. There is a
• 51:18
  Speaker 1: credit facility, by the way, that is the bank of
• 51:23
  Speaker 1: you now. I don't want you going crazy with this
• 51:28
  Speaker 1: A right, you know. I want you to come to
• 51:29
  Speaker 1: me telling me that, oh, John, you gave me bad advice.
• 51:32
  Speaker 1: This is a sophisticated thing I'm about to tell you.
• 51:34
  Speaker 1: I want you, ultimately to get. I want you to
• 51:37
  Speaker 1: do four one K right with your employer. If your
• 51:40
  Speaker 1: employer has giving you employee matches free money, take as
• 51:43
  Speaker 1: much money as there is available matches to the maximum.
• 51:48
  Speaker 1: I want you to get your earning come task credit
• 51:50
  Speaker 1: from the federal government. I want you to do all
• 51:52
  Speaker 1: that stuff. I want you to buy a house. I
• 52:00
  Speaker 1: want you to have a will and an insurance plan,
• 52:04
  Speaker 1: all that stuff right, life a term, our whole life
• 52:09
  Speaker 1: insurance policy, so on and so forth. I want you
• 52:13
  Speaker 1: to use credit cards and charge cards responsibly. Okay, good.
• 52:17
  Speaker 1: I want you to open a stock account and do
• 52:20
  Speaker 1: it conservatively, right, no fancy stuff. Don't invest in cryptocurrency
• 52:26
  Speaker 1: and call that traditional conservative investing. It's not. It's speculation.
• 52:31
  Speaker 1: That's a place in your portfolio for it, but it
• 52:32
  Speaker 1: should be no more than ten percent in my opinion,
• 52:37
  Speaker 1: when you get a stock account with strong assets in it,
• 52:41
  Speaker 1: not flaky stuff. Let's assume you have a stock account
• 52:45
  Speaker 1: now that has ten thousand dollars ballance. I'm just picking
• 52:48
  Speaker 1: a number, right. You can get what's called a margin account.
• 52:51
  Speaker 1: Once you're there and you have an established relationship with
• 52:54
  Speaker 1: your brokerage, you can get a margin account against your
• 53:00
  Speaker 1: marketable securities that's in that account, and you can borrow
• 53:04
  Speaker 1: from the bank of you up to x percent, fifty
• 53:08
  Speaker 1: percent to seventy percent, depending on the securities in the
• 53:12
  Speaker 1: account and how marketable they are, how institutional they are, right,
• 53:16
  Speaker 1: blue chip they call it. So if you have one
• 53:19
  Speaker 1: hundred thousand dollars securities account, this is not your four
• 53:21
  Speaker 1: to one K. This is a This is you're investing
• 53:24
  Speaker 1: in the stock market. Right. If an account value at
• 53:26
  Speaker 1: one hundred thousand dollars in this example, you could borrow
• 53:30
  Speaker 1: from yourself at typically better rates than the bank up
• 53:33
  Speaker 1: to seventy thousand dollars. In that example, you got to
• 53:36
  Speaker 1: pay it back. And here's a downside if those stocks
• 53:39
  Speaker 1: ever go down to a concerning point. Let's say the
• 53:44
  Speaker 1: easy example here is they go down. Let's say you
• 53:48
  Speaker 1: have one hundred thousand dollars account and you borrow fifty
• 53:51
  Speaker 1: thousand dollars against that for whatever business or home purchase.
• 53:56
  Speaker 1: By the way, it's your money, do as you will.
• 53:57
  Speaker 1: And by the way, you get to write off the
• 54:00
  Speaker 1: costs of the debt on your own bank of you
• 54:03
  Speaker 1: account off your taxes. Sometimes tech your tax pro to
• 54:08
  Speaker 1: or say that John Brant told you this. Your tax
• 54:12
  Speaker 1: provided situation is different. But this example, you owe fifty
• 54:15
  Speaker 1: thousand dollars against one hundred thousand dollars margin account. Okay,
• 54:18
  Speaker 1: this is your stock, so it's your money you're borrowing
• 54:21
  Speaker 1: against yourself. You want to pay that back, so you
• 54:24
  Speaker 1: want to plan to pay that back. If you don't
• 54:26
  Speaker 1: pay it back, and if that stock portfolio you got
• 54:29
  Speaker 1: was flaky and that value goes down to I'm making
• 54:32
  Speaker 1: up now sixty five thousand dollars versus one hundred thousand.
• 54:35
  Speaker 1: I don't think this is what happened, but it might.
• 54:37
  Speaker 1: That could be what's called a margin call, where they say, look,
• 54:41
  Speaker 1: you're over leveraged. You've got to now payoff this fifty
• 54:43
  Speaker 1: thousand dollars. We're uncomfortable that your value's now gone from
• 54:47
  Speaker 1: one hundred thousand down to sixty thousand dollars. This happened
• 54:48
  Speaker 1: in silicon value. By the way, all the time the
• 54:50
  Speaker 1: startup companies where the stock goes up to a billion,
• 54:53
  Speaker 1: that goes down to one hundred million. The person has
• 54:55
  Speaker 1: done all this lifestyle purchase stuff and they got a
• 54:58
  Speaker 1: credit line of two hundred million dollars against a billion
• 55:00
  Speaker 1: dollars of stock, and now it's only worth I'm making
• 55:03
  Speaker 1: this up one hundred and fifty million dollars with the stock,
• 55:04
  Speaker 1: and now they're upside down. The bank goes and takes
• 55:07
  Speaker 1: all their stuff. I don't want that happening to you,
• 55:10
  Speaker 1: so don't get overleveraged. But it is a tool, all right.
• 55:14
  Speaker 1: This is John O'Brien. I'm tired of hearing myself talk.
• 55:17
  Speaker 1: This was an exciting episode. Let me know what you learned,
• 55:21
  Speaker 1: whether this is valuable, let me know what I missed out,
• 55:23
  Speaker 1: or what else you want to know, and I'll do
• 55:24
  Speaker 1: it on the EPP the next episode or one of
• 55:26
  Speaker 1: them coming up. I do listen to all of your
• 55:29
  Speaker 1: comments and suggestions. I do read the comments myself between
• 55:33
  Speaker 1: all my business activities and traveling. I love you very much.
• 55:36
  Speaker 1: I want you to win. This is a silver rights movement.
• 55:39
  Speaker 1: SI l V E er from the streets to the suites.
• 55:43
  Speaker 1: This is John O'Brien. This is Money and Wealth. Go
• 55:45
  Speaker 1: get my book bestseller, Financial Literacy for All. The book
• 55:49
  Speaker 1: before that, Up from Nothing, the book that the money,
• 55:52
  Speaker 1: the memo how the port said, capitalism, love, leadership, banking
• 55:57
  Speaker 1: our future. But I really think you shoul get incial
• 56:00
  Speaker 1: Literacy for all and sit down with your family and
• 56:03
  Speaker 1: talk about money. I want you to go take this
• 56:05
  Speaker 1: thousand dollar offer I've given you of a one year
• 56:08
  Speaker 1: coaching credit with Operation Hope to get your credit score right,
• 56:14
  Speaker 1: get your budget right, get your life right, take control
• 56:17
  Speaker 1: of your life. Tell him I sent you. What else
• 56:20
  Speaker 1: do I want to give you? Oh? Some advice? Go
• 56:22
  Speaker 1: tell all your friends to follow Money and Wealth. It's
• 56:24
  Speaker 1: growing like nobody's business, and we're on for a new
• 56:27
  Speaker 1: movement to help set our people free through financial literacy.
• 56:31
  Speaker 1: That's my rap. It's like Jay Z said in his
• 56:35
  Speaker 1: four four four album, This is a million dollars worth
• 56:38
  Speaker 1: of game for nine ninety nine. This is none ninety
• 56:40
  Speaker 1: nine because it didn't cost you a dime, Just my time,
• 56:43
  Speaker 1: all right, Love and light child Hope. I'm out. Money
• 57:00
  Speaker 1: and Wealth with John O'Brien is a production of the
• 57:03
  Speaker 1: Black Effect Podcast Network. For more podcasts from the Black
• 57:06
  Speaker 1: Effect Podcast Network, visit the iHeartRadio app, Apple podcasts, or
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