Latest / Money Grows on Trees / #243 - 10 Worst Assets That Keep You Poor (In Under 10 Minutes)

Transcript

#243 - 10 Worst Assets That Keep You Poor (In Under 10 Minutes) · Money Grows on Trees

• 0:00
  Buying and selling crypto and trading it, it's one of the worst things you
• 0:03
  can do and you will just send yourself insane or broke or
• 0:06
  worse, both. Over leveraged property is not an
• 0:10
  effective means for your capital. And in a lot of cases, it's going to
• 0:13
  actually take a lot more cash flow from you each week than give you. The average Aussie
• 0:16
  has student debt of $27,000 and 12% believe they'll never
• 0:20
  pay it off. Congratulations, you're neo-educated and you're broke. It's more of
• 0:23
  an emotional decision than an investment strategy because it's hard to scale.
• 0:27
  You can't determine it. It's a bit of a guessing game. And in my experience, it's
• 0:30
  like, it's a very hard one to win. It's better to be rich than look rich. Here's
• 0:33
  the savage truth with that one. So if you financed your drip, you didn't invest in style,
• 0:37
  you financed your insecurity. I'm Lloyd James Ross, seven
• 0:40
  figure investor and entrepreneur, and I've helped thousands of business owners and
• 0:44
  professionals turn financial stress into success. If
• 0:47
  you're stuck in old money habits, overwhelmed by investing, or unsure where
• 0:50
  to start, this is for you. I'll give you the mindset and
• 0:54
  strategies to take control, grow your wealth, and achieve financial
• 0:57
  freedom. It's time to make your money work for you. Here's
• 1:01
  the top 10 worst assets. You
• 1:04
  can invest in it in under 15 minutes. This is going to be juicy. Get your pens ready
• 1:08
  to go. This is going to be highly, highly valuable
• 1:12
  and very quick. So buckle up. First one, number one of
• 1:16
  the 10 worst things you can buy in terms of assets is, you guessed it,
• 1:19
  a brand new car. It smells like success until you check your
• 1:23
  resale value. A new car drops 10% to 15% in
• 1:26
  value as soon as you drive it off the lot. and up to 30% in
• 1:30
  the first year, okay? So, it's a
• 1:33
  very bad idea to buy a brand new car, right? He
• 1:37
  didn't invest, you emotionally impulse buy it. Impulse
• 1:41
  buy it? You emotionally bought on impulse, okay?
• 1:45
  You bought on impulse to get the big red ribbon around the car to put
• 1:48
  on social media, tell your friends you got a brand new car, right? You just wanna smell the
• 1:52
  new leather trim. That's not really a flex, it's draining your
• 1:55
  wealth one monthly payment at a time, especially, especially, if
• 1:59
  you have borrowed the money to buy it. The way around that
• 2:02
  is to go to a car yard, a very reputable car yard
• 2:06
  and buy one that's three years old and you'll save a lot of money and depreciation quickly.
• 2:09
  That's the way out of that one. Second worst asset you
• 2:12
  can buy, timeshare. Someone
• 2:17
  in our team asked me, she went on a holiday with her family. She
• 2:21
  came back and said, Lloyd, you wouldn't believe it. It's so exciting. I bought a timeshare. I'm like, no. Anyway,
• 2:26
  she got a deposit back. Here's why, right? They say it's guaranteed holidays but
• 2:30
  really it's guaranteed regret. Be careful I don't beat up
• 2:33
  too many businesses. I love businesses and I really go for it if
• 2:36
  you're a timeshare people, if you think the model is good but my experience of
• 2:40
  that has been the resale value is not so good so you can Often
• 2:43
  when you resell timeshare and to explain what timeshare is, it's where you buy into
• 2:48
  like a syndicate to own a piece of real estate with other
• 2:51
  people where you can holiday there occasionally. They
• 2:54
  get you on the lifestyle but the reality is you don't really go there that
• 2:58
  much so you don't really use it that much and also if you
• 3:01
  don't use it, you feel guilty by not using it and also compels you to one holiday destination
• 3:04
  for the rest of your life. you end up paying the fees
• 3:08
  to own it when you're not really using it. And if you add up the fees, it's
• 3:12
  actually cheaper just to go to a new resort every year than actually own a timeshare.
• 3:16
  And the reality is they don't grow in value that much. In fact, they go down
• 3:19
  in value a lot. So sometimes when
• 3:22
  you get into it, you can't get rid of it. And I don't know anyone that's
• 3:26
  had a great experience with it. So I would suggest to you if
• 3:29
  you go to a nice holiday destination, they put you in the room and they show you the
• 3:32
  presentation, just Leave. All
• 3:36
  right. It's not a getaway. It's a financial trap with ocean views. All
• 3:40
  right. So, number three, worst asset you can buy. I
• 3:43
  know this one well because I've done it. All right. Degrees with
• 3:47
  no ROI. Congratulations. You're neo-educated and
• 3:50
  you're broke. All right. The average Aussie, check this out. has
• 3:54
  student debt of $27,000 and 12% believe they'll never pay
• 3:57
  it off. So imagine borrowing the money to get an education and
• 4:00
  the education is not even helping you to get ahead. That's what's happening at scale
• 4:04
  in our country. Here's the savage truth about that. You
• 4:07
  spent 4 years and 5 figures to find yourself but
• 4:11
  if it doesn't boost your income, it's not really an asset, it's more like a diploma in financial denial,
• 4:15
  right? Because you're like, I did that but it really didn't help me move forward.
• 4:18
  So you want to just get around that by doing practical education instead
• 4:22
  of academic education. So practical instead of academic,
• 4:25
  that's the difference. Okay, number four, worst things you can buy when
• 4:29
  it comes to assets, luxury fashion, especially bought on
• 4:32
  credit. I mean, luxury fashion just in general. Do you know how cheap
• 4:35
  they make those clothes? Recently, what happened, there was a lot of vendors
• 4:39
  in China and they came out openly on TikTok. Red
• 4:42
  note and they showed people that they're making all these designer handbags for so
• 4:46
  cheap and it literally exposed the absolute ripoff that
• 4:49
  luxury brands are and People for the first time only discovering this
• 4:53
  which is pretty wild because it's been happening for many many many many many decades All
• 4:56
  right, so Avoid luxury
• 4:59
  clothes altogether, right if the tags are a flex I then
• 5:04
  you're doing it wrong, right? It's not really a flex, it's just showing people
• 5:08
  that you think you're rich, okay? So you can't really even
• 5:11
  resell those luxury items generally.
• 5:15
  So just be aware that It's
• 5:19
  better to be rich than look rich, okay? So here's
• 5:22
  the savage truth with that one. You're not wearing wealth, you're wearing payments,
• 5:26
  especially if you put it on after pay or Klana, all right? So
• 5:29
  if you financed your drip, you didn't invest in style, you financed your
• 5:32
  insecurity. You're financing your insecurity. Isn't
• 5:35
  that a cool way to put it? All right, cool. The fifth asset to avoid when
• 5:39
  it comes to investing is this one. And you will hear me a lot on
• 5:43
  Instagram and Facebook and everything like that. I'm sure you've heard me say it before. I'm
• 5:48
  leading an anti-property rebellion. And that's really weird because
• 5:51
  my whole background was property for a long time. And what I've noticed is
• 5:54
  that over leveraged property is not an
• 5:59
  effective means for your capital. So you have to be very careful that
• 6:02
  property doesn't take more from you than what you get. Nice views,
• 6:06
  zero liquidity, and difficult to refinance if it falls. People
• 6:09
  only have experienced recently property going up, right? And so you
• 6:12
  have to be very careful because if you got a lot of debt on it, it's going to
• 6:16
  sap your cash flows. And in a lot of cases, it's going
• 6:19
  to actually take a lot more cash flow from you each week than give you. And
• 6:22
  this is how sometimes certain property investments can be terrible,
• 6:26
  terrible, terrible assets to own and you'll end up just selling it.
• 6:29
  It's got to be done correctly. And right now, to be frank, I can't see any
• 6:33
  market in Australia or many other areas of the world where you're getting good deals
• 6:36
  in property. So the best thing to do for now is probably just avoid it.
• 6:39
  All right. So the bank is making the money, not
• 6:42
  you. Just quickly, if you're ready to take control of your finances but feel
• 6:46
  stuck on where to start, I have a solution. My book, Money
• 6:50
  Buys Happiness, simplifies investing and wealth building with
• 6:53
  practical steps to help you achieve financial peace. Get
• 6:56
  your copy via the link in the show notes and let's get your money working for
• 6:59
  you. Now back to the episode. Next one, number six. of
• 7:04
  assets that you shouldn't touch and shouldn't buy and shouldn't invest
• 7:07
  in. Number six of the worst things you can buy. This is up there with like,
• 7:11
  if you've been following me for a long time, this is, you'll know this. I
• 7:15
  hope you do by now anyway. People make fun of me about it, but
• 7:19
  it's crypto and NFT. Now, NFTs are really interesting. They're non-fungible
• 7:23
  tokens. There's actually a very good functional use for them. And
• 7:26
  I think you're gonna see a lot of adoption of NFTs in society, but
• 7:29
  just because, You adopt the technology doesn't mean it's worth anything, right?
• 7:33
  It's like saying I'm gonna invest in the internet. I'm like, what does that even mean? it's
• 7:36
  just the infrastructure and crypto by and large is probably
• 7:40
  the same because when people say crypto what they mean is like a
• 7:44
  decentralized uninflatable currency in the blockchain which
• 7:47
  is blockchain is a wonderful technology of open-book accounting and I'm
• 7:51
  sure a lot of assets will be tokenized and go into a blockchain accounting system.
• 7:56
  And without a doubt, I agree, we do need a currency that can't be
• 7:59
  inflated and manipulated. However, that's not what people are
• 8:02
  using crypto for. What they're using it for is pump and dumps,
• 8:06
  actually. And so when you're buying and selling crypto and trading
• 8:09
  it, it's one of the worst things you can do. And you will just send yourself
• 8:13
  insane or broke or worse, both. And
• 8:16
  so, you know, you look at some of the crypto coins and so forth, they're
• 8:20
  like just getting smashed. It's up and down, right? NFTs, some
• 8:24
  of them, my brother bought a llama, we always joke about it. I said, how much is
• 8:27
  your llama worth? And he bought it. When NFTs were going off,
• 8:30
  going up in value, he's like, it's gonna be worth heaps. And it's like worth like a dollar. And
• 8:34
  so some of them went from like 10 million, 20 million down to like zero. So
• 8:38
  it's just, they just aren't worth anything because
• 8:41
  there's no intrinsic value. They've got no real, value
• 8:44
  to society, which means they're not really worth putting your money into, okay? So
• 8:49
  the savage truth is you didn't really huddle, you panicked. And if you bought at
• 8:52
  the top, you probably sold at the bottom and you're gonna play that game forever. You weren't really investing, you
• 8:55
  were gambling, okay? That's really what you were doing. All right, number seven, when
• 8:59
  it comes to the worst assets of the 10 you can possibly buy,
• 9:02
  penny stocks, all right? They said it was the next best thing. It's
• 9:06
  the next Tesla. It's the next this. But the reality is, it's a bit of a
• 9:09
  pump and dump. And someone you know probably gave you a bit of a stock tip.
• 9:12
  And the reality is, it's not very liquid. It's highly volatile. The
• 9:17
  businesses are usually not making any money. It's highly speculative. And
• 9:20
  it very seldom works out. Because even if it does well in the short term,
• 9:24
  like you're pumped up, you'll get greedy and not sell it. And then it'll fall
• 9:27
  back down. You'll just play this mental game in your head until you just get over it.
• 9:30
  And you'll just exit. And you'll probably exit with less money. So
• 9:34
  the best thing to do is to avoid penny stocks like just don't even
• 9:37
  touch it, not worth your time. You'll
• 9:40
  hear stories of people doing really well and they'll tell you when they do really well but
• 9:44
  the truth is like if it came from, I shouldn't say YouTube
• 9:47
  because I'm on YouTube now but Reddit or some sort of friend stock
• 9:51
  tip and haven't really done that well in life, then
• 9:55
  you're going to get played probably. So avoid that. All right, number eight,
• 9:59
  I've got firsthand experience of this, so does my dad. Over
• 10:02
  the years, at different charity auctions, we've happened to have bought sports
• 10:05
  memorabilia. You get caught up
• 10:09
  in the moment, especially when it's for charity. Sports
• 10:14
  memorabilia goes down in value so much, right? And
• 10:17
  you have these sort of dreams that
• 10:20
  you want to be closer to your heroes. So you frame your childhood dreams, but you
• 10:24
  freeze your cash flow at the same time, right? So most sports collectibles, they
• 10:28
  hold sentimental value, but they don't really hold market value, right?
• 10:33
  They can appreciate, especially in market booms, but
• 10:36
  the truth is most of it goes way down. Like even
• 10:39
  the stuff you think is really good goes down. My
• 10:43
  dad had this boxing glove and it had all the 12 heavyweight champions of the
• 10:46
  world who signed it. I'm talking like Mike Tyson, Evander Holyfield, George
• 10:51
  Foreman, Muhammad Ali. Amazing, right?
• 10:55
  It's not worth much now. It's ridiculous when you think about that, because all the world
• 10:58
  champions. There's very few sports memorabilia
• 11:02
  items that actually go up in value. So there are some
• 11:05
  but it's best to avoid those. Does that make sense? It's more of an emotional decision
• 11:09
  than an investment strategy because it's hard to scale. You can't determine it.
• 11:13
  It's a bit of a guessing game. In my experience, it's a
• 11:16
  very hard one to win. You got to
• 11:20
  physically do stuff too. Number nine, when it comes to the top
• 11:24
  10 worst assets to buy, home renovations that don't add value. Pinterest
• 11:28
  inspired you, Zillow didn't. The average home renter returns only
• 11:32
  56% of its cost at resale, if that. Kitchens
• 11:35
  and bathrooms and so forth. I've
• 11:39
  seen this firsthand so many times where you go, you know what, I'm going
• 11:42
  to add a bathroom, I'm going to do this, I'm going to add that carport, I'm going to do that. The
• 11:45
  reality is quite often, it doesn't
• 11:49
  always get reflected in the new valuation unless there's a really fast rising
• 11:52
  market. And even then, you can only realize it when you sell the property. So
• 11:56
  you build your dream aesthetic but you're really not really building your dream bank
• 11:59
  balance. If the renovation doesn't really pay you back, it's
• 12:03
  more of an ego and a status thing. than
• 12:07
  an investment. And it can be an absolute hole for your money. You
• 12:10
  can just chuck it in there and you just don't realize it again. And it's emotional. You can get
• 12:13
  kind of like caught up in the emotions of it all, right? And number 10, the
• 12:17
  last top asset not to purchase is
• 12:21
  expensive furniture. It's a velvet couch, but it's still not
• 12:24
  passive income. Most furniture, here's
• 12:27
  the stats, depreciates by about 40-60% the moment it
• 12:30
  leaves the showroom. Almost nothing resells for more than
• 12:34
  30% of its value. It's just brutal. So you buy
• 12:37
  all this nice furniture and it's just worthless. And you see this
• 12:40
  a lot because people put their furniture on the street to give it away when
• 12:43
  they're done. They're like, all right, just take it. I've had a piece of furniture, I
• 12:46
  actually think it sells somewhat on Facebook marketplace for a little bit, but I've had
• 12:50
  furniture where I've just had put an ad
• 12:53
  just come and get it from me. That's what it's like, right? You
• 12:57
  try and buy statement pieces on ZipPay, but the statements don't build
• 13:00
  any wealth. Unless it's cash or has
• 13:04
  cash flow and appreciates, it's just a financial set
• 13:08
  dressing. That's really what it is. So they're the top
• 13:12
  10 assets that I would tend to avoid if you want to make your
• 13:16
  life easier, more pleasant, more financially secure, and
• 13:19
  scale your money without scaling your problems, all right? Because we don't want more problems, we
• 13:22
  want more money. And avoiding these things will
• 13:26
  do both for you, which is what I want. So if you've enjoyed the episode, send
• 13:29
  this to a friend, hit the subscribe button, leave us a question or comment. What was your favorite
• 13:34
  are one to avoid, which one, or actually tell me this, which
• 13:37
  one have you actually bought that you regretted? I would love to know, pop
• 13:40
  in the comments below. And of course we have comments on Spotify as well. But
• 13:44
  I hope you've enjoyed that episode. It was a lot of fun to deliver that one. It's quite funny when you go through them
• 13:47
  all and see how many bad things are actually out there that you just simply avoid.
• 13:51
  And sometimes avoidance is the best strategy you can make when
• 13:54
  it comes to scaling your money. Thanks for listening to Money Grows on Trees.
• 13:57
  If you enjoyed the episode, leave a five-star review on Apple Podcasts and
• 14:01
  Spotify and subscribe to us on YouTube so you never
• 14:04
  miss an episode. And if you're serious about building wealth, make sure to
• 14:07
  check out the links in the show notes and follow me on all social media
• 14:11
  platforms at LloydJamesRoss for more. See