Why the American Dream is a Lie
Have you ever wondered why it is that some people struggle financially and then they get a pay raise or start making two or three times more money than they used to, and they still struggle financially? Many of you have seen it with your parents, with your friends, with your coworkers, and possibly even in yourself. This is what I mean when I say the American Dream is a lie.
Is the American Dream Myth or Reality?
Yes, I said it. The American Dream is a lie! It doesn’t exist, my friends. Now, here’s what we’re talking about. We’re talking about finances today and we want to talk about money. We want to talk about this incredible dream that you want to build. Because see, I said the American Dream is a lie. It’s not that the dream is a lie; it’s the way that people have told you you’re going to make the American Dream your reality.
That’s the part that’s the lie, and it’s not even necessarily a lie as much as it is people just teaching you what their parents taught them. But the problem is that people who are teaching you how to make the American Dream a reality haven’t been able to make it a reality for themselves, because most of us learn about finances and money from who? Hey, we learn from our parents.
And for most of you listening to this podcast, I have a question for you. How well did your parents do in the area of finances? See, some of you have had parents who’ve done very well. Hey, you probably should listen to your parents. But for most of us, our parents struggled financially and for many of us, they still struggle to this day. But the problem is they’re the ones we learned money management from, right?
For those of you who are old enough to remember checkbooks, when we actually used checkbooks, remember balancing your checks? I remember going to the grocery store with my mom and she would write a check and I learned how to use credit cards and banks and, you know, make payments and pay bills and budget and all of that stuff –or, the lack of budgeting –from my parents.
Most of you learned it from your parents, right? Because we most often learn from experience and we learn from watching other people doing something, and we mimic the people we watch. So most of you are doomed to have the same financial status or the same financial outcome that your parents have had and for most of you, that is not good news. But your parents taught you the American Dream, right?
Everyone Can’t Have the Same Definition of the American Dream
They taught you –even if you’re not American, by the way. The dream exists in other countries, too. They teach the same exact stuff. What do they tell you? They say, “Here’s what you’ve got to do. You’ve got to go get your education, you’ve got to work really hard, you’ve got to make good money, and then you’ve got to save your money, and eventually one day you’re going to have financial freedom.”
And we buy into this thing and we’re like, “One day, I’m going to have a house with a white picket fence and all I’ve got to do is make sure I get my education and work hard.” It’s just not true. Those rules do not work. I’ve tried them and they failed me. I’ve seen it with other people; it fails. They simply do not work and here’s the problem with it. Do I believe in education? Absolutely! I’m a huge, huge advocate for education, right?
But what you can’t do is use your education as an excuse, thinking just because you got an education, the money is going to follow. We’re seeing this today with doctors and a lot of professionals complaining about it. “Well, you know, the insurance companies have ruined it for us…” See, if you went and got an education, you’re very intelligent. By the way, if you haven’t gotten your education yet, go get it.
Is the American Dream Still Possible?
Education doesn’t always have to come in the form of enrolling at a school. For some of you, education is doing this –what you’re doing now, which is listening to this podcast and listening to people who have something to teach you, taking programs, going to seminars, whatever it is, but consistently educating yourself.
So when it comes to the area of money, the number one thing you need to do is educate yourself. Learn about money and that’s why, my friends, I’m giving you an amazing gift here. Here’s what I’m going to do. This episode is part of a six-part series on absolutely mastering your finances.
We’re going to start with the basics here and then over the next five episodes, I’m going to get into some really cool stuff with you. I’m going to talk to you about some stuff that is not the boring way of talking about money the way a CPA might. It’s the fun way of talking about money and these rules apply to you as a person and they apply to you as a business owner if you have a business.
Today, let me give you some of that overview. So if the American Dream is a lie and you can’t just work hard, save money,and eventually be wealthy, then what does work? Well, here’s the thing. Human nature is to spend more money as we make more money. In fact, what’s the first thing most of us do when we get a pay raise?
Well, we go celebrate. So you go out with friends and you have a drink or you go and get some food or, you know, you celebrate. You often celebrate pay raises.
But here’s the problem with doing that. By celebrating a pay raise by spending money, you’ve essentially started the first day of your pay raise –and by the way, typically it’s not even the first day of your pay raise because you get your pay raise today. You’re not getting a check for a couple more weeks.
Or for the business owners, you get a new client or something happens where it’s the equivalent of a pay raise. Most of you have already spent the money before you even earn it.
So what do we do? We go get a new car. I see this with my employees where they wait for their tax returns and they’re always planning what they’re going to do with their tax returns and vacations they’re going to take and cars they’re going to buy and all the stuff they’re going to do, or gifts they’re going to buy people.
Making More Money Doesn’t Automatically Grant You Financial Freedom
And it makes me sad to see these folks struggle time and time and time again because they’re consistently attempting to make more money and they think that a pay raise is going to solve their problem. It’s never going to solve your problems because as you make more money, you just spend more money. We’ve shown this in numbers. At my events, I invite you to please come
and join me at Titanium Live, where we talk about all of this stuff: about your finances, your business, your health, your fitness, your relationships –all of that –in a three-day period where you’re surrounded by all these incredible people who are there to do the same thing. So come to that event. But for now, listen up in this podcast because I’m giving you a lot of the information here.
When you come to the event, you’re going to go even deeper and you’re going to have time to really plan this stuff out. But see, human nature is just to spend more as you make more. If you try to build wealth by simply making more money, what you have to understand is you’re in a cycle that is doomed to fail and the numbers prove it. Most Americans as they make more money, they actually get into more debt.
The numbers don’t lie. So when someone’s making $35,000 a year, they’re less likely to be in debt than someone who makes $45,000 a year. Isn’t that amazing? So as you make more money, you’re more likely to go deeper into debt. That’s incredible! And the reason is again, it’s human nature. That’s just what you do. So what’s the number one rule to building wealth?
Step 1 of Achieving Financial Freedom – Cut Your Expenses
The number one rule, my friends, is this. If you truly want to make the American Dream a reality for you in your life, it’s not about working harder and making more money. That is not the first step. Step number one, you must –absolutely must –cut your expenses. So here we go. Let me give you your game plan. See, the first step is you must cut your expenses. Again, it’s true for business, it’s true for people, it’s true for anyone who wants to build wealth. You must cut your expenses and I don’t care how much money you make.
You tell me you make $9 and that’s not a lot, I guarantee there’s someone else making $8 and still getting by. See, people, whatever pay rate they’re at, because most of us just have our lifestyles increase to that level, we think that it would be impossible to survive on a smaller budget.
Examples of Why Cutting Expenses is Important
Yet I see it in my companies all the time. I have people making from anywhere close to minimum wage all the way up to these huge salaries and they all essentially struggle from the same thing unless they’ve learned to apply this.
And you see the people who don’t make a lot of money that apply this and they’re not the ones in here begging for a pay check three days early or telling me that they can’t make their car payment or they missed their rent or something like that.
Whereas I have people who make a lot of money and haven’t figured this out yet and they struggle with these things. Then those same people –imagine, I’ve seen these people go from making very small salaries to huge salaries in some cases, and their stories seldom change.
Their struggles seldom change because their habits seldom change. And so if you don’t know how to manage a $40,000/year salary, trust me, you will not be able to manage a $100,000/year salary. The example I always give is if you have a kid you’re teaching to drive –a 15-year-old kid who is learning to drive –they get into a car and they veer out of their lane.
What do you tell them? Do you tell them to drive faster? Let’s try that and see. Yeah, you know what your problem is, kid? The reason you’re veering out of your lane is you’re not driving fast enough. Go faster! (So they go faster now.) Now, they’re going faster, they’re veering out of their lane even more. T
he car is starting to get out of control and you’re like, “You know what your problem is? Go faster, faster, faster!” They go and they get even faster and now they’re starting to bump into things. You’re like, “No, no, no! Just go faster, faster, faster!”
Eventually, they’re going to crash, right. So the analogy is very easily understood about cars that when a young person is learning how to drive, if they’re struggling to stay in the lane, you tell them to slow down, right?
Because they can’t handle that speed yet. Well, have you ever thought about the fact that the reason you’re broke or the reason you’re struggling or the reason you’re in debt is because you don’t quite know how to use money yet.
So you really don’t know how to use money. You don’t know how to utilize it to give you the wealth that you want. You know how to spend it, but you don’t really know how to use it.
The same way a kid who’s learning to drive doesn’t really know how to use that steering wheel, the gas pedal, and all that stuff that goes along with it.
What you tell them to do is slow down. What’s the equivalent of slowing down in finances? It’s actually like making less money or cutting your expenses so you’re spending less money.
By cutting your expenses, what you’re doing now is you’re getting things more under control and learning how to use money. So the next time your boss says, “Hey, I’m going to give you a $10,000/year raise or a $2/hour raise,” ask yourself, Do I know how to use money yet?
Because if you don’t, believe me, you’re better off not taking the raise, because the numbers show that you’re going to get into even more debt. So you must do step one, which is you’ve got to cut your expenses. Step two, you take the money that you have cut –this money that you’ve saved –and you don’t just go throw it in a savings account. You have to invest it.
Why? Because as I talk about, saving is boring. Investing is addictive. See, people who invest, they’re constantly looking at their investments, what’s happening to the value, real estate, what’s going on with the stocks, or wherever else they’re investing. It becomes a game that you play and it becomes fun.
And when you put money into investments, trust me, when you get a new girlfriend or you just decide you want a new car or something, very rarely will people pull that money out and throw it away.
Even in your business when business owners are having their businesses struggle, they’ll quickly tap into their savings account.
They’ll even tap into their credit cards, right? But very seldom will they actually go and tap into their other investments, because we feel like we’re going to lose something.
Again, this is just a play on human nature. I understand human nature. I’ve studied how human beings work, so when I talk to you about finances, this isn’t just something that someone’s talking about. This gets to the heart of who you are as a human being.
Step 2 – Invest the Money You’re Saving by Cutting Your Expenses
So step one, you cut the expenses. Step two, you take the money that you’re saving –however little it is –and you invest it. You can invest as little as $100 in the stock market.
Now, I’m not here to teach you in this episode how to invest in the stock market. Some of those tips actually are going to be in a later episode.
One of the five upcoming episodes is how to invest in the stock market and I teach you a simple concept that I use. I just share this with you.
You know, I’m not an expert stock investor or stockbroker or something. But what I do is I share with people how I’ve invested in the stock market throughout my life and how I’ve succeeded and when I’ve succeeded, when I’ve failed, and you could take that and apply it to your own life.
But the bottom line is if you can have $100 and you invest that in the stock market, it’s going to change your life. Why?
Because you’re going to watch that $100 either grow or sometimes you might even get lower. But think about for a second. I always tell people this, and when I say it, they’re like, “Well, that does kind of make sense.” If you were to take $100 today –let’s say you’re the average American and you’re living paycheck-to-paycheck, okay?
If I got you to take $100 today and put it in the stock market, the biggest fear you have is what? I’m gonna lose my money. Okay, so I have a question for you. Let’s take the worst-case scenario.
Let’s say you buy a stock and it goes down by 10 percent. Not bad enough? Thirty percent, 60 percent. The stock falls 95 percent, so now your $100 investment is worth only $5 six months later. Let me ask you a question.
If you hadn’t put that $100 in the stock market, how much would your $100 be worth? Zero, because you would have spent it on something. You would have spent it on food, on beer, on clothes, on a girlfriend, boyfriend, husband, wife –on whatever –you would have spent it.
That’s why most of us go through life living in this thing which Robert Kiyosaki calls the rat race, because we’re constantly trying to make more money, to have more money, but then we spend more money and you can never get out of it. So even if your stock falls 95 percent, you’ve still made money.
But if you’re smart, hey, you can buy stocks that actually go up. How nice would that be? Or real estate –these days, some people are scared of real estate. Are you kidding me? Real estate is and always will be the best investment that you can make.
The wealthiest people I’ve ever known in my life are those who’ve gotten wealthy through real estate. It’s by far the best and easiest way to earn wealth. But like anything, you’ve got to learn it.
So in one of the upcoming episodes, one of the next five is going to be about real estate and I’m going to give you the basics of how to invest in real estate.
(Again, I’m not an expert real estate investor. It’s not what I teach. There are people who teach that stuff and you should go learn from them, but I’ll give you the basics to get you started.)But the key is that step one, you’ve got to cut your expenses. So step one, you’ve got to cut your expenses.
Step two, you’ve got to start investing the money that you saved so that it’s not just sitting around in a savings account where you can use a debit card or something to access the money, and you certainly don’t want to put it under your mattress.
Step three then is what your parents told you was the first thing you do when you want more money, which is to work hard.
Step 3 – Work Hard and Make as Much Money as Possible
See, finally, if you’ve learned how to use money if you’ve done steps one and two, you’ve got financial education down. You’re cutting your expenses, you’re spending less, you’re investing your money. Now, my friend, it’s time to push that gas pedal. Now it’s time to go into overdrive.
Now it’s time to go make as much money as you possibly can because if you go from $100,000a year to $300,000 a year and you’re already investing money at $100,000, guess what’s going to happen when you get to $300,000? You’re going to be investing even more money.
If you’re debt-free, you’re going to make sure you stay debt-free. You’re not going to get into debt, as long as of course, you keep following the rules you have. But most of you will because it becomes addictive.
Investing is addictive; saving is boring. And of course, spending everything that you make is useless. That’s never going to get you there. So the next thing I want to do is I want to tell you the last step in this. It’s really the main thing that you should be doing in every area of your life, and that is what?
Keep score. You must always keep score. I tell you to weigh yourself every day. If you’ve listened to my episodes on that, I tell people to weigh themselves every day and record their weight.
Now, there are some scales –I use a scale called the Withings scale that actually beams my weight to the internet every day. It’s on my iPhone and stuff like that. My wife and I both use it. We can see how much we’ve weighed every single day.
Well, for your finances, there’s a different type of KPI –key performance indicator. There’s a tool called Mint. I love Mint –mint.com. It’s an awesome company. Get Mint and set up all your bank accounts and credit cards and loans and everything on it, and you can keep score. You can see what your net worth is, because in the next episode I’m going to talk to you about assets and liabilities.
What’s an asset and what is a liability –and no, it’s not going to be the boring CPA version of it. So join me for that episode and again, I want to review here.
So step one, you’ve got to cut your expenses.
Step two, you’ve got to invest your money, and then step three, go out there, work as hard as you possibly can, and become absolutely obsessed with your long-term goals.
And in the next five episodes, I’m going to teach you the difference between assets and liabilities, and more importantly, I’m going to connect to your heart and teach you what’s going to happen in your life if you keep acquiring liabilities and what could happen for you if you start acquiring assets.
The next thing is we’re going to talk about the Titanium Seven Year Rule, where essentially I’m going to talk to you about compound interest and how it works. Again, not the boring CPA version of it, but I’m going to talk to you about this concept of this Titanium Seven Year Rule, which is incredible –absolutely incredible. It will blow your mind away.
The next thing is we’re going to talk about the stock market. I’ll share with you how I use the stock market. Then we’re going to talk about real estate investment and how I believe you could invest in real estate.
And then finally, a lot of you are going to say, “Arman, I don’t have good credit,” and I’m going to teach you how you can repair your credit to make sure that when the time comes to buy a house or do whatever you want to do, you can get credit for it.
In fact, you can even get credit when you’re buying stocks. Most people don’t know this and I’m going to share that with you as well. And, I’m going to teach you some secrets in the episode about the stock market about how you can actually make money while the stock market is going down.
Is the American Dream Attainable?
See, everybody talks about it. You’ve all heard it. You could make money in the stock market goes down. Or, some people will say, you make the most money when the stock market is going down. It’s true, my friend.
So today if you think the stock market is overvalued, good because you’re about to make some real money and I can show you how to do that. Again, it’s not my job to teach you the steps to take; it’s my job to inspire you and to share with you what I do so you’re inspired to go to learn more and then to start putting things to use.
So starting today cut those expenses. Today, pass up on something you would have normally had. Maybe skip that $5 Starbucks coffee and have a cup of coffee at home, or skip the coffee altogether. That’s $5 that you’ve saved today and that $5 could be the start of something big for you.
So join me next time as we talk about assets and liabilities and trust me, it’s going to be fun. No boring stuff, I promise you.
All right, I want to see you guys have incredible financial wealth, I want to see you have freedom, I want you to be able to travel the world, do the things that you love, take care of the people that you love, and take care of yourself and not have all that stress from not being able to make ends meet. I’m excited, guys.
I’ll see you in the next episode and for now, go out there today and always, please, lead with your heart.