>> Hi.

I'm Lewis Howes, New York Times best-selling author and entrepreneur.

And welcome to "The School of Greatness," where we interview the most influential minds and leaders in the world to inspire you to live your best life today.

In this episode, attorney, investor, and finance guru Jaspreet Singh demystifies some of the biggest lies we're told about money growing up and how to own your financial future.

I am so glad you're here today, so let's dive in and let the class begin.

♪ What is the the big thing that you wish everyone knew about money before they started making it?

>> Most of us, myself included, are never taught a thing, a thing about money.

We're told, "Go to school, get a degree, get a job, and you'll figure it out."

And then what happens for the majority of people is, you end up broke, you end up struggling financially, and you can never figure out why.

So, the first thing is, what is it that you want to achieve in your life, financially?

And then you have to go out and figure it out yourself, because, unfortunately, school will never teach you this stuff.

I realized that something's wrong, something's not adding up, and it actually happened -- I was studying to get into medical school, and I searched the richest people in America.

And you see people like Steve Jobs, Warren Buffett, Bill Gates, Mark Zuckerberg.

And I was like, "Huh.

None of these people are doctors.

None of these people went down that traditional route of getting a degree, doing a good job.

Am I missing something?"

Because I thought that if you go to school, get a good degree, you can make a lot of money.

And if you work harder in school, get better grades, you'll make even more money.

So I thought it was directly correlated -- your grades, your income.

And that's when I started questioning things and I realized, "Oh, maybe this isn't right."

And as you start to go down deeper and deeper down the rabbit hole, you start to realize, "Oh, my God.

Everything that I've been told is a lie."

And so that kind of pushed me into this whole painful, emotional journey of learning about money, learning about entrepreneurship, learning about what does it mean to become wealthy, and how do you actually do it?

>> Right.

>> Now I'm starting to read these business books, and every business book said wealthy people invest in real estate.

>> Mm-hmm.

>> I don't know what that means.

I don't know any real-estate investors.

My parents aren't investors.

And so I was like, "Okay, if wealthy people invest in real estate, maybe I should invest in real estate."

And this was right after the 2008 crash.

And I'm in Michigan, where real estate was hit extremely hard.

And, you know, I have this idea to start investing in real estate, so I started looking at real estate in between my study sessions.

And on August 22nd, I took the Medical College Admission Test, the MCAT, and August 23rd, I closed on my first real-estate investment property.

>> Wow.

How old were you?

>> I was 19.

>> Holy cow.

>> It was $8,000.

>> Was the investment.

>> Was the price of the condo.

>> The condo was 8 grand?

>> 8 grand.

>> How did you get a condo for 8 grand?

>> This is right after the 2008 crash.

>> Wow.

You got it on foreclosure or what?

>> It was on foreclosure.

That same condo was selling for about 150 grand just a few years prior.

>> Come on.

>> Yeah.

And, so, I came in.

It was actually listed on sale for $8,400.

I made an offer for $4,000.

They came down to $7,000, and I was still trying to push them lower, but then they said they had another offer on the table.

I didn't want to lose it, so I said, "I'll give you 8 grand," right?

>> Wow.

>> So I bought it for 8 grand, put in a few thousand dollars worth of work, and I leased it for $600 a month.

And now, all of a sudden, my mind was blown, because I kind of had this idea of what entrepreneurship was.

I had never heard that term until I came to college.

But I was running this event-planning company, and I'm starting to learn about this thing called entrepreneurship.

And now I have this condo that's generating me this, like, almost passive income.

I say "almost" because I was making a lot of mistakes in the beginning.

But now I'm like, "Wow.

This investing thing is very unique, because I never learned this in school.

My teachers never taught me this.

Why am I working so hard in school?

I mean, I want to become a doctor so I can ultimately make money."

Now I started having this -- You know, I talked about an emotional dilemma.

>> Mm-hmm.

>> Why am I becoming a doctor?

Okay, I want to make my parents happy -- check.

I want to be successful -- check.

Do I really want to be a doctor?

Maybe.

And now I'm starting to question my actual beliefs.

Because if I become a doctor, how do you make money?

You treat people.

I kind of have this entrepreneurial mind.

I want to become successful.

How do you make more money?

You treat more people.

This kind of runs into a dilemma, because if I'm trying to maximize my income as a doctor, I got to maximize how many patients I see.

Maybe that means I don't get to give the best value to each individual patient.

But as a human, I want to provide the most value possible.

So I started to kind of face this dilemma where maybe I'm becoming a doctor for the wrong reasons.

>> Interesting.

>> And then I run this idea by my parents -- "I don't want to be a doctor."

>> And they're like... >> "Absolutely not."

My dad was angry.

My mom was furious.

It took my mom about a year and a half to believe that her son was not going to be a doctor.

>> Oh, man.

>> My parents would tell all their friends, "Jaspreet's not gonna become a doctor."

>> Oh, wow.

You're not becoming one.

>> I'm not going to become one.

Now I'm getting calls from my family in India.

I'm getting calls from my family across the states.

>> "What are you doing?"

You're a disgrace to your family."

>> Exactly.

Exactly.

I hear that again and again and again.

But I was like, "This is not for me."

And I started to realize that there's more to this thing.

So, now I started to go down this financial-education journey.

And the more I learned, the more I realized I was lied to.

We're taught to go to school to get a degree, to get a job so we can then get a job and climb the corporate ladder.

Well, wealthy people don't do that.

Wealthy people are not working to climb the corporate ladder.

They're working to own the corporate ladder.

I didn't realize that you could do that.

Now, you can climb the corporate ladder and work to own the corporate ladder at the same time, but it's a different mind-set, right?

>> Right, right.

>> Most of us are taught to get that degree so we can do one thing -- climb the corporate ladder, earn a bigger salary.

But if you only rely on your salary, you're just one step away from being broke, because if you lose your job, something happens to you, you can't work or your company goes down, you lost your salary, and now you have no income coming in.

And now what?

You're scrambling for a job.

Maybe you have some savings to help take care of you.

>> Right.

Or if you haven't been saving and you just spend on things all the time and you have no savings, then you're really screwed.

>> Yeah.

You're going into credit-card debt.

>> Right.

>> And now you're trying to figure out, how do you make things work?

And by then, it's too late.

This is where you've got to be proactive.

And now I'm just like, "This is crazy."

And that's when I realized it's very profitable to keep people financially uneducated and it's profitable to keep people poor.

>> What would you say is the main system that keeps people poor, then?

>> It goes down to so many different things.

The banks profit when you're financially uneducated because they'll keep you saving money in the bank.

They'll keep you in consumer debt.

If the banks lived by their own advice, which is save money, the banks would be losing money.

When you go and deposit $1,000 in the bank, that cash that you deposited is a liability for the bank.

An asset is something that puts money in your pocket.

A liability is something that takes money away from your pocket.

So when the bank has your cash, it's a liability for them.

They want to get rid of it as fast as possible.

And the way they do that is by lending it out, because it's an investment for the bank.

They don't want to hold on to cash, but they want you to save your money.

>> They want you to give them cash and just leave it there.

>> Leave it there.

And what's happening to your cash while it's there?

It's losing value to inflation each and every day.

Every day that you keep your cash in the bank, you're becoming poorer.

Governments want you to be financially uneducated, because when you're financially uneducated, guess what -- you are an employee and you're a consumer.

Who pays the highest taxes?

Employees and consumers.

Everybody knows that rich people don't pay taxes.

It makes people angry, but, a lot of times, we don't understand why.

>> Right.

>> Tax avoidance and tax evading are two similar words with two very different outcomes.

This is one of the first things that you learn in law school.

Tax evading is illegal.

>> Yes.

>> You go to jail.

>> Yes.

>> Tax avoiding is legal, and then you get hated for doing that.

>> [ Laughs ] Right.

>> But this is the way it works.

>> But you're playing within a sys-- the rules of the system.

>> And if you learn -- The IRS code -- it's a rule book.

>> Mm-hmm.

>> And the people who understand the rule book are the people who have the money to hire the good accountants and the good attorneys.

>> What are three things that people who are making half a million and above should be doing to avoid taxes better?

>> Elon Musk -- he is probably the biggest example of this.

He never got paid a salary running and owning Tesla.

He got paid in stock options.

But the stock options that he gets -- or originally got were at $6 a share.

So when the stock went up to $1,000 a share, and he was given millions of these stocks options.

Now, he has, on paper, a lot of money, but that money isn't in his bank account.

>> Mm-hmm.

>> So what he does is, instead of selling it and having an income, he goes to the bank and says, "Hey, I have these stock options which are worth billions of dollars.

How about you give me a loan at 3%, 4%, 5% interest."

No bank is going to say no to that, because the value of this is so much -- billions of dollars.

I mean, you can make the number smaller, but no bank is going to say no.

He takes that loan, pays 3% to 4% to 5% interest on it.

And if his company grows, his stock value grows by 6%, he just made a profit on that.

He didn't have to take any money out, never took an income, doesn't pay any taxes, and is able to now spend his money, live free, buy whatever he wants, live rich, and not pay a penny in tax.

>> So, he didn't have to sell any of the stock, because if he sold it, he'd pay an income tax right when you sell it.

Instead, you get a loan out from the bank and you don't have to pay tax on that loan.

>> When you go and get a mortgage to buy a home, it's debt.

It's not taxable.

It's not income.

If you're going to refinance your home, it's not income.

It's cash that you have in your pocket, but it's not income.

You're taxed on income.

How do you not have an income?

Now, you might say, "Well, I need money to spend."

Sure, of course you do.

But how can you now strategically use your income to pay for your lifestyle?

Now, again, it's got to be within the rules, so talk to a tax adviser.

>> Mm-hmm.

>> And these things change over time, which is why the best thing that you can do is go out and hire a tax accountant, a tax adviser, somebody that isn't just going to file your taxes, but someone that's gonna help guide you and say, "Alright, you know, here's some things that you could potentially spend your money on.

Here are where there are more benefits coming this year, next year, things that you want to do."

And so there's going to be times where it's going to be more beneficial for you to spend money.

There's going to be times where it's going to be more beneficial for you to take in money.

And, you know, it's all a game.

>> Yeah.

>> And this is what wealthy people understand.

The number-one liability for young people nowadays are student loans.

And the government always talks about how we have this huge student-loan epidemic, this huge student-loan problem.

But the number-one asset on the United States' balance sheet are student loans.

>> Really?

>> You'll see student loans are their number-one asset.

So, on one hand, we have people talking about the importance of higher education, the importance of going into debt to get your degree, and then, at the same time, that's your number-one asset.

It's holding so many people back from buying a home, from living their lives, from doing things, investing their money.

Yet, at the same time, it's keeping the government rich.

>> Wow.

>> This is where, you know, that mind-set -- You have to start thinking a little bit differently and start asking questions to the status quo, to the system, to the way things are done.

>> What do you wish we taught everyone from the ages of 10 to 20, five different things around money?

>> First thing, what is money?

Because money, as we know it, is fake.

Our dollars are just pieces of paper.

I grew up thinking that our paper dollars are like the Holy Grail.

You want to save this money because it is the most valuable thing there is.

As I became older, I started to realize that that's not the case.

Our paper dollars are just pieces of paper.

It's fiat currency, which means it's issued by the government and the value is backed through the strength of the government.

And, you know, inflation is when the value of our dollar goes down.

So these dollars, which many of us think that if we hoard this, we'll become wealthy -- "save your money to wealth" -- is actually keeping you poor and it's making you poorer each and every day.

So the first thing you have to understand is, what is money?

Secondly, you got to understand what do wealthy people work for?

Most of us, the majority of us, are taught to work, to get a job, and climb that corporate ladder.

Wealthy people are not working for that paycheck.

They're working to own a piece of the company.

That way, they can get a piece of the profits.

A lot of times, people complain about how much money I'm making.

"I wish my boss paid me more."

And this is where if you start to understand the system, you'll start to ask the right questions.

They're working to drive up the valuation of the company.

So once you start to understand that, you'll realize why there's this big discrepancy between what people are paid and what people want to be paid.

And when you start to understand that, you're going to change what you do with your money.

So, how do you get that equity, that ownership?

You have to own a piece of the corporate ladder.

Now, if you work for a public company, that means, now, you can take some of your income and you can buy stock in the company.

Maybe they pay you with equity.

Maybe they give you some sort of revenue share.

That's what we do at my companies.

Or if your company doesn't do that, then you have to start taking this money that you're earning and you have to start investing it into a place where you're getting equity.

Maybe that means stocks.

Maybe that means real estate.

It could be, you know, a number of different investments, but you have to work towards that equity.

>> Yeah.

>> The third thing, you have to think bigger.

I know I grew up thinking that somebody who looks like me, somebody who's brown, somebody who wears a turban, somebody who didn't have entrepreneur/investor parents could go out and do this.

But you have to be the one to take that first step.

>> Mm-hmm.

>> And once you start to take that first step, you're gonna learn and see the second step.

Then you take the second step, and you're like, "Oh, I can start a $100 investment here."

You don't have to start with, you know, hundreds of thousands or millions of dollars.

Start with $100.

And then, the next thing that you have to do -- >> Number four.

>> Number four is, you have to understand the concept of debt, because we live in this consumer culture.

You know, we want to live this flex lifestyle, right?

I want to show up on Instagram.

I want to show off my new car or my new Chanel, Gucci purse.

We kind of get caught up where I need to live a certain lifestyle.

That way, people can think that I'm rich.

But what you're doing now is, you're living broke... >> Right.

>> ...making everybody else rich so people think you're rich.

>> Right.

>> You're product-rich.

You're going into debt to buy liabilities, which are things that lose you money, and then you're paying interest on top of that, which is making everybody else rich, which leaves no money in your pocket to make yourself rich.

>> So, what do we need to know about debt then?

How do people get comfortable understanding about debt, either using it in the right ways, and eliminating the debts that don't support our financial growth?

>> Yeah.

So never finance anything that isn't going to pay you, okay?

>> Give me an example.

>> Gucci, your vacations, your car.

Stop financing these things that aren't paying you.

And people are going to get upset when I say "your car," because they're going to say, "Wait.

How am I supposed to buy a car without a car payment?"

>> Don't buy a $100,000 car unless you've got the money in the bank to buy it, and plus more.

Buy a used car for 6 grand.

>> Exactly.

Go buy a used car, good-working-condition car with cash.

>> And ride it for 10 years.

>> Exactly.

The first time I made $1 million in a year, my car was 500 bucks.

My employees had better cars than I did.

And so, you know, you have to just first understand what it is that's worth spending money on and what's not.

And then, you know, if you do have that debt, you've got to come up with a strategy to pay it down as fast as possible.

First thing you can do, if you have a lot of credit-card debt, call up the companies.

See if they're going to be willing to just give you a lower amount.

See if they're willing to work with you.

Say, "Look, I got $10,000 worth of debt.

I'm never going to pay this off.

It's not going to happen.

How about you work with me and give me $5,000, and I will work to pay that off."

Right?

You start to work with them, see if you can do something.

Then you can consider moving some of that money to a 0% APR card, if you have 12 to 18 months to do that.

That way, now you can aggressively -- You've got to do this smart, because if you're just gonna keep doing the same things you were before, don't do it.

But you have to start aggressively paying it down.

You stop spending money.

That way, now you can pay down this debt as fast as possible.

And then you work to earn more money, and that money has to go somewhere as you're earning more money.

You live the same lifestyle, if not smaller, and you take all this extra money and you use it to pay down your debt.

That way, now you can start building, right?

You've got to lay that foundation, you've got to start working to grow upwards, but you have to get aggressive.

>> Okay, so, understanding debt was the fourth thing.

What was the fifth thing you wish people learned from 10 to 20 years old about money?

>> You have to be willing to make mistakes, take risks, and start.

And this one is hard, and it sounds simple, but a lot of people that I know are so hesitant to making that first investment because what if I do something wrong?

What if I make a mistake?

What if my investment goes down?

And so the simple thing -- >> That's happened to me multiple times.

>> Yeah, but you learn every time, right?

It's your tuition.

It's your real tuition.

And you have to be willing to try things, because if you don't, you're going to get stuck in the game of "what if?"

"What if I lose money?

What if it doesn't work out?"

Well, what if it goes up?

What if you learn?

>> What have you done, psychologically, mentally, and emotionally to prepare for the big swings, when you see, "Oh, my money just went up 10x in the last three months.

Oh, I'm negative hundreds of thousands in a few weeks or millions."

>> Every month, I passively invest my money into stocks, physical gold, and cryptocurrency.

>> Really?

>> And, so, what that means is, it's automatic, consistent, and it happens all the time.

>> You doing index funds with stocks or what are you -- >> In stocks, I do ETFs, low-cost ETFs.

And I have ETFs to give me exposure to the S&P 500.

>> Mm-hmm.

>> That's kind of your safe, your value.

S&P 500 are the biggest 500 companies in the stock market.

So that's kind of the safe value play.

I have some ETFs that give me exposure to innovation, startups, growth because I like that space.

Much more risky, but you can see more potential upside.

Risk means you could also see more downside.

Every week, I have money that's leaving my account and being invested into these different ETFs.

I don't care whether the market's up or down.

It happens every week.

In physical gold, every month, I use an app for this.

There's a lot of apps that allow you to do this.

I have money that's withdrawn out of my bank account that buys me physical gold.

>> Really?

>> Now, people are going to say, "Why gold?"

For me, it's real money.

It's another way of saving real money, because now if I have 50 grand of cash, would I rather save and bury that 50 grand of cash in my backyard or bury 50 grand of gold in my backyard?

I'd rather bury the gold, because I know that 50 grand of cash is guaranteed to lose value every single day.

Gold is a store of value because it takes time, effort, and labor to mine physical gold.

And that time, effort, and labor is represented through the physical piece of gold.

Then my active strategy is now where I do more of the fundamental analysis, where I understand, where am I actually investing my money?

So, on the real-estate side, I'm looking for deals that are paying me that 7% cash-on-cash return.

And so I'm going to be analyzing the numbers, looking at properties, walk through a lot of deals, and when I find something, I will go out and buy it.

In the stock market, very similar.

I'm looking for companies that I believe in, that I believe are good fundamentally.

"Fundamentally" means looking at the numbers, right?

What do the revenues look like?

Have the revenues been growing?

How fast are they growing?

10% a year?

20% a year?

But you also have to look a little bit deeper than just the profits, because you want to see what's going on with the expenses.

Where are they investing?

Are their expenses going up because the cost of business is becoming more expensive or are the expenses rising because they're investing more in their company.

Cryptocurrency -- if a big cryptocurrency crash happens, well, I already know what I want to own.

I'll just come in and buy more.

And with gold, I don't really actively buy gold.

But that's the four ways that I actively invest my money.

>> Sure.

What do you think is the difference between an abundance mind-set and a poor mind-set?

>> You're counting someone else's money instead of seeing what you can do yourself.

So you're jumping over dollars to pick up pennies.

>> Right.

>> And that's the first idea is, you're so worried about what's going on around you, but, instead, you should be focusing on you.

The second part of that is a growth mind-set.

So, you know, I talk about living below your means, which is important, especially when you're in the early phases of trying to build your wealth, right?

You need to be saving your money, investing your money.

You too.

You know, we're kind of extreme, right?

Where it's like every penny we have is going to be invested, it's going to be put back into us, because this is our time to grind.

>> Yeah.

>> But, you know, you don't have to be super-extreme, but, you know, let's just say you're putting aside 25% of your income.

So, if you're making 40 grand a year, that's $10,000 put towards your savings and your investments.

Now, what happens to most people is you say, "Okay, I realize this whole financial-education thing -- I'm learning about this investing thing.

I want to get more aggressive.

I want to do more of this.

How can I do more?"

Well, that's when you're trying to now squeeze more pennies out of your pie.

You try to go from saving and investing 25% to 30% and 35%.

But there's a limited pie, right?

So what you should be doing is thinking, "Okay, I'm making 40 grand, saving and putting aside 25%.

Fine.

Maybe I can do more," if, you know, you're into that, like -- >> Extreme.

Yeah, yeah.

>> Which is fine.

But the bigger thing is, how do I go from 40 grand to 400 grand and keep doing what I'm doing now?

Because now, if you get from 40 to 400 and you save and invest 25%, that's $100,000.

>> Mm-hmm.

>> A lot more than the 10 grand you had before.

You're still only living off of 75%.

You have the same -- you know, that same percentage, but it's so much bigger.

It's that growth mind-set.

It's thinking bigger.

And now everyone's going to hear this, saying, "How am I supposed to go from 40 to 400?"

Well, the first step is understanding it's possible.

Then you start learning.

Then you start doing.

You start making mistakes.

>> Mm-hmm.

>> And then you learn from your mistakes and you fix them.

But until you break through that mind-set and you realize that it is possible, I can do this no matter where I come from, what I look like, what my background is, it's possible, but I need the right education.

YouTube has made it so much more accessible.

Read books, you know, start learning, and then you start taking steps.

It's not going to happen overnight, but you'll start taking steps towards that.

>> Right.

>> So, if you're thinking big, you're not thinking big enough, because that's going to be your own limiting beliefs.

Second, learn the rules to the game.

The reason why so many people suck with money is because they don't understand the rules to the game.

This is why a lot of people get so angry.

They get so angry about what other people achieve.

They get so angry about everything else going on.

But what you need to do -- The best thing to do is learn the system.

You know, I talk about how rich people don't pay taxes and how you can work to own the corporate ladder, and it makes people angry, but the reality is, this is the opportunity for you to figure out how can you do it yourself?

This is what the system is.

You can hate it.

You can cry.

You can scream.

You can complain.

That's what I used to do.

I thought it was horrible.

Money was a taboo topic when I was growing up, and I was like, "It's unfair that people are doing this."

And then I realized, "What if I learned the rules?"

And you can apply it to yourself.

>> Mm-hmm.

>> And third, be willing to make mistakes.

Try.

Anything is possible, but you have to be willing to try and make mistakes and keep getting better each and every day.

Money is a taboo topic not just in my culture, but a lot of cultures, and the reason why it becomes so taboo is because we're insecure about our own money.

And so we create these smoke screens.

Don't talk about it, don't worry about it.

But at the end of the day, we're all working for a paycheck.

And if you don't think that's true, tell your boss not to pay you, right?

>> Yeah.

>> But the thing that you have to understand is how money plays a part in our lives, because I'm not saying money is the most important thing or the only thing.

It's one factor of our lives.

You have to be physically healthy, mentally healthy, spiritually healthy.

That's when being financially healthy, being financially fit can have the biggest impact.

I call it quadra-fit triangle.

And it kind of goes in that order, because if you're on your deathbed, you're morbidly obese, it doesn't matter if you have $10 million in the bank.

The only thing you care about is being healthy.

If you are mentally depressed, you're anxious, you're struggling with these mental issues, dude, more money is going to make you more miserable.

You've got to do whatever it takes -- go into rehab, go get a therapist, go do whatever it takes at whatever it costs, because more money is not going to fix that.

People think that, "I'm struggling with these mental-health issues.

If I go make $1 million, I'll be happy.

People will like me."

That's a big lie.

You're going to be more miserable.

Then you have to be spiritually healthy.

Spiritual health does not mean you have to be religious.

For me, it's what is your purpose?

Why are you getting up every single day?

What's the reason I'm getting out of the bed?

And that's going to keep driving you to live a fulfilling life.

Whether it's for 10 grand or a million or 10 million, it doesn't matter.

Once you have those three things, that's when being financially healthy has the biggest impact and the biggest power, because now you can live a fulfilled and a happy life, and the money is just the icing, man.

It's just icing on the cake.

The cake is everything else.

>> That's good principles, good foundation.

I love that.

>> It's all about food.

I love food, if you can't tell.

[ Both laugh ] >> Okay, final question for you.

What's your definition of greatness?

>> Always striving for better, always wanting to be a little bit better every single day.

>> Jaspreet, thanks, man.

Appreciate it.

Good stuff, man.

We hope you enjoyed this episode and found it valuable.

Stay tuned for more from the "School of Greatness" coming soon on public television.

Again, I'm Lewis Howes, and if no one has told you lately, I want to remind you that you are loved, you are worthy, and you matter.

And now it's time to go out there and do something great.

If you'd like to continue on the journey of greatness with me, please check out my website, lewishowes.com, where you'll find over 1,000 episodes of the "School of Greatness" show, as well as tools and resources to support you in living your best life.

>> The online course "Find Your Greatness" is available for $19.

Drawn from the lessons Lewis Howes shares in the "School of Greatness," this interactive course will guide you through a step-by-step process to discover your strengths, connect to your passion and purpose, and help create your own blueprint for greatness.

To order, go to lewishowes.com/tv.

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