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What school didn’t teach you, part 2: How to manage money

Master Money and your Career with my Financial Freedom course on Udemy

High school and university failed us all. While they taught us things like algebra and history, we weren’t taught any of the things we actually needed to know to create a successful, high quality life!

In this series of 6 videos, I’ll try to teach you what school failed to do:

1) How to build self confidence

2) How to be good with money

3) Dating and relationships skills

4) Confrontation skills

5) Critical thinking

6) Creative productivity

In this second video, we cover the 10 Rules of Babylon – 10 clear and easy to follow steps on how to become rich without taking stupid risks, and how these principles apply to areas of life beyond money, financial freedom and wealth creation.


Dan’s Top Resources

Books

Dan has 3 bestselling non-fiction books available in both written and audio form:

  • The Naked Truth, his latest release, shows you how radical honesty builds self-confidence and relationships
  • Nothing to Lose explores how to build confidence from the inside by correcting the programming in your brain
  • The Legendary Life is a very practical, action-focused guide on how to plan and execute a life plan that brings you your ideal lifestyle

Online courses

Dan continues to put out high quality online self-paced courses through the Udemy platform


Full transcript (unedited)

Welcome back to brojo online. Today I’m going to record a podcast that will also be a series of videos about what they failed to teach you in school. Lesson number two that they did not teach you in school, I can’t believe they don’t teach us in school, how to manage your money. They don’t understand managing money isn’t just about getting rich in some materialistic way. Money is just a representation of resources. Money is just a placeholder, it doesn’t even exist. It’s an IOU note for goods and services traded, but resourcefulness is a critical life skill, right? You require resources to live, once you have a family require resources to keep them alive, your ability to negotiate resources will be the determination of a lot of your quality of life. And modern times, this means being good with money. What I’ve learned, because I spent the last two or three years learning to master money after being terrible with it, my entire life, came to understand the mastering money is not only a set of simple principles that anybody can follow, and it’s just basic mathematics. But also, there are deeper lessons and these principles for all life. So I’m going to share the 10 rules of Babylon, from the book, The Richest Man in Babylon by George Claisen. And not only we’re going to share these rules, I’m going to share how to interpret them as life lessons. And if you go and practice these 10 rules, you can be guaranteed to not only be good with money, but be good with decision making, in general about the resources in your life. Rule number one, keep 10% of everything you were keeping means either saving or investing that is you do not spend their money. So if I make $100 On a day, I take 10 of those dollars and either invest it in safe investments, or I put it in a savings account, right, swap it for a piece of gold and keep that in a safe. Either way, it does not ever get spent. Now I can invest it, let’s say I take that $10, I put it into the stock market, it comes back as $11, I still have to take 10 cents from that extra dollar, put it back into the investment. And then I’ve got the 90 cents to do whatever I want with but the $10 must remain in the investing account never gets spent. Now the life lesson here is yes, protect yourself first. And you delay gratification. Right before you go serving everybody else take care of your own needs, and do so in such a way that is in your best long term interest. Number two, control your expenses. The stupidest thing that most people do with money has been more than they earn. If you’re watching this video, there’s a good chance you do that. Because you’re that as the majority of people. And I can’t believe that isn’t at least a five minute lesson in high school saying oh, by the way, don’t spend more than you weren’t. How was it not taught once in five years of fucking high school, stupid, there aren’t even good courses on it in university. Except for maybe accounting. But I know accountants who still aren’t good with their own money. They’re just good with their clients money. And our chief financial officers who have been in the business for decades and only just now stand to learn how to manage their own finances. So once you put your 10% aside for investment, whatever’s left is all you’re allowed to spend, we won’t go into credit cards right now there is actually a smart way to use credit cards, but it must still be used in a way that you never spend more than you earn, you always top up the credit card, and so on to get certain bonuses. But don’t worry about all that right now. For now, know that you cannot pre spend money that you don’t have, if you can’t afford to buy it now save up and buy it later. Simple as that the life lesson there, it’s pretty simple. Don’t do more than you can handle doing. And that’ll hurt you in the long term. Whether it’s how much you work out, and whether it’s how much extra tasks you take on at the office, whether it’s how much you bend over backwards with your partner, don’t spend more than you earn, don’t expend the energy you don’t have. You should always be full of beans doing whatever you’re doing. If you’re not, you need to go back to reserving your energy. Number three, make your savings multiply. Never have money just sitting there or resources just sitting there. They should always be aimed at coming back with more. They should be invested in some way. One thing you got to understand is inflation. If you have money just sitting in a bank account, it loses value over time because inflation always goes up, the value of your dollar always goes down. So saving isn’t really saving. It’s actually a kind of spending 510 grand sitting in the bank account next year. It’s really only worth $9,900 and the year after that it’s really only worth $9,500 I’m actually spending that money by having it sitting there. I need to be making about a 5% 6% return on my interest, just to keep either With inflation, so if you’re not investing your savings, you’re losing money right now. Make sure that when you do invest successfully, whatever you invest gets reinvested. Like I said, if you make $1, put 10 cents back in, and you can spend the other 90 however you see fit. But always try to get the compound interest going, alright, you’ll find that money escalates in this beautiful, magical way. If you keep investing your profits, the life lesson here, as always do things in such a way that benefits you. Alright, if you’re going to do a job you don’t like at least try to get the free training courses out of it. So if you’re going to date people that you’re not really into at least practice honesty and courage, always make sure everything you go out to do comes back. As you being a better person, if you engage in it. 70 can’t think of any way to make that beneficial to you for your own growth, stop doing it and do something else. Listen, number four, protect your money from loss. Most people when they do go to invest, they make stupid risky investments. Like I can’t imagine the number of people right now who have all their savings in a single cryptocurrency. That’s not good investing. What you want to think of straightaway is how do I always ensure the principle that is the amount you initially invested? How do I always make sure, no matter what happens, I get my money back. Now you need to talk to people who understand money. To learn about this, you need to read books, there’s some I can recommend, just email me dan@brodo.org Or check out my financial course. And I’ll give you all the information you need about how to invest in a safe and secure way and take the right amount of risk. But your investment advice should always come from experts who are very successful and not money hungry wolves or friends with good intentions but low experience and you never make investment decisions emotionally. There should always be a rational mathematical risk assessment. What’s the life lesson nearly think, if you gotta take risks, do what smart, learn from the best copy what they do, and diversify, get a lot of different range of expert experience and guidance and mentorship. And do the wisest thing you can figure out doing. Don’t listen to your friends who don’t know what the fuck they’re talking about. Don’t read random articles on the internet written by people who don’t know what they’re talking about. Go to the successful people find out how they did it and repeat the methods. Number five, pay off your debts but don’t kill yourself doing it. Good rule of thumb is about 20%, the first 10% of what you earn goes into investing. And the next 20% goes into paying off your debts. Key here, of course is understanding that debts have interest a quick you pay them off, the lower the interest, the less you pay in total, to amazing how many people don’t do this calculation and they get a long term mortgage and they don’t realize they end up paying double what the house is worth because of interest. They can’t do the maths. So you got to be smart with loans, you want to pay them off as quickly as possible. And unless you really understand what you’re doing with money, you want to avoid getting a loan unless it improves your life to do so. Getting a loan to buy a flash car is a stupid idea. Getting credit card to buy clothes as a stupid idea. Getting a loan to invest in your business, that’s maybe a smart idea, getting a loan to go and do a training course that might be a smart idea, because at least you come out of being a person, never get a loan where you don’t clearly benefit in the long term from it. Because a life lesson here is about being honorable about what you owe. But without guilt tripping yourself into self sacrifice. Listen, number six, insure a future income. Look out for tomorrow’s version of you. You know, the money you spend now as money stolen from their future, it doesn’t mean you shouldn’t spend any now you just need to have some thought what he needed when it comes to finances. If you’re planning to retire, you’re going to need cash flow that keeps coming your entire retirement. It’s scary when you calculate how much that is for the average person. It’s in the millions. So if you’re looking right now at not retiring with millions, you’re probably not going to survive your retirement. So you need to start thinking like they’re How do I create cash flow? How do I create money coming in every month that when I retire or keep coming in? Investments, your own business online products, there’s lots of different ways to do this. But the key is protecting your future self. And that is the life lesson here. While you try to enjoy your life as much as possible now, keep half an eye on the future and think what’s he going to need me to do now so that he has a good life. Now, you don’t want to go too far with that, where you constantly have a terrible life trying to protect the future. Because then you don’t get to live at all. You want to find that nuance balance. How do I have a good time now and a good time later? Rather than how do I have an excellent time now and a terrible time later? Or terrible time now and hopefully I get to enjoy it later. Number seven increase your earning ability. The easiest way to make more money is to become a better person. It’s pretty simple. Get smarter, get more skills, get more experience constantly look to make yourself a better person. person to hire, whether that’s as an employee or as an entrepreneur, consultant, whatever, constantly tried to make yourself a more skilled, more valuable person, your investment should go into your self development more than anything. I’ve never spent more money than I have on receiving coaching and doing training courses and books and everything like that. My self development has taken a huge majority of my income. And for that reason, I keep getting more and more income, simple life lesson here. Invest in yourself in all things. Your own development should be your priority focus at all times, however you do there, whether it’s eating healthy and exercising, getting coaching and reading philosophy books, starting around business challenging and facing your fears. Whatever it is, every day should have some tasks designed to develop you not just stay the same. Is James clear see his action, not just motion. Rule number eight, gambling always favors the house stupid investments are basically any when the risk is stacked against you, and the odds are against you, there’s a reason casinos stay in business they designed so that you lose over an extended period of time. Even the machines are rigged in such a way where they’ll give you a win early, so they get the sunk cost fallacy, and then they’ll take all your money later. So lottery risky investments, get rich quick schemes, ignore all of that shit. It’s all crap. It’s all crap. Everything you do should be the safe kind of boring, smart way, and give Sun Tzu and the art of war. Never go into a fight that you’re not guaranteed to win. Number nine, don’t hesitate to take advantage of good opportunities. Most of the time, it’s missed opportunities, opportunity costs, where people really lose their money, good investments, safe investments, good ideas, that they could put money into good businesses that they could join a great job offer. Most people let the stuff skip by because it takes a little bit of risk or it’s a little bit uncomfortable. And that’s actually they’re losing money in doing that. So learn as much as you can on the principles of investing and how to do it well, so that when a good opportunity comes up, you know the difference between that and a stupid high risk, and you’re able to take that good opportunity. It’s what lucky people actually are doing when it comes to finances. They’re well trained, looking for good opportunities, and they act quickly. The life lesson years of an unexpected opportunity comes up and it seems like a good idea, do it. Don’t hesitate just because it’s unexpected. And because you had a different plan, somebody suddenly pops in your door and saying I’m going to go traveling around Peru Do you want to come I’d have to take time off work. But if you want to trail around Peru, just gonna pack my bags, I’ll figure out the details later. Right grab opportunities when they come up, because the good ones are rare. And the bad ones happen all the time. So when a good one happens, grab it, even if it means upsetting your comfortable life. Lesson number 10 diversify. The safest principle of investing is making sure you don’t have all your shit in one basket. It should be that if any of your investments collapse, you don’t get too badly hurt, think of a table with lots of legs, you should be able to take out a lot of those legs before it falls over. If a table is sitting on one pole, and you hack it at the whole table falls over. Most people invest in these kinds of ways they might have all of it in buying a house, for example, all of it in a few stocks on the stock market or all of it in cryptocurrency or all of it sitting in the bank. I mean, any one of those things can be taken away from you by Just some fluke of economics or politics anywhere in the world. You want to make sure that any investment you look at you go I could lose it as long as the other ones are okay, this applies to more than your investments, you should be thinking about your income as well. If all of your income comes from a single stream, if you could get fired and lose all your income, that’s a very dangerous position to be in. The standard employee is the most at risk person and yet they feel the most safe. Why? Because they’ve got all of their income coming from a single source, they rely on their boss or their CEO to do their job, right? That company collapses you’re out of a job. So make sure that if your company collapses, you’re fine financially, make sure you’ve got different streams of income, they don’t all have to be equally strong. It should just be that there’s enough to support you should one of them fall in this diversification as another life lesson. So one will finish on, spread out all your sources, spread out all the things that you rely on. So if any one of them has taken away, you don’t fall apart. Right? If you’re all in on your partner and you’ve got no friends guess what happens when your partner divorces you? You’re fat. You’re all alone. You should have had friends all along. You know if you’ve only got one gym that you go to how are you going to exercise if that gym closes? You should know already how to do a workout at home you just have some weights in the cupboard. Always have backup options in case something becomes unreliable because you know what? Things are unreliable people unreliable, live with this truth rather than hoping it doesn’t happen to you

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