The Two Vehicles that Present the Greatest Possibility for YOUR Financial Freedom | DO 70

Freedom Possible

Freedom VehicleIn our last episode (#69), listeners were guided through developing their own personal roadmap to financial freedom.  In this episode, Matt shares the two vehicles that present the greatest possibility for you to travel your roadmap successfully.  Additionally, Matt imparts the four different ways to generate income and the three actions you must take to exit the proverbial “rat race.”

Today’s episode is part 5 of our Freedom Possible Series.  If you are new to the series, be sure to check out the previous episodes:

Episode 66: Freedom Possible – Let’s Get Started

Episode 67: The Silent Killer of Your Financial Freedom

Episode 68: Getting to Your Financial Freedom Number

Episode 69: Your Personal Roadmap to Financial Freedom

 

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5 Important Lessons from the Episode:

1   Only 5% of people 65 and older are financially stable. Only 1% of those reach a position of financial independence (net worth: $5M +).
 
2   Education and the ability to act on one’s knowledge are critical pieces in the successful pursuit of financial freedom. The plague of reluctant learning has been – and will always be – a significant barrier to that freedom.
 
3   Self-education, life experiences, coaches, mentors, mastermind groups, books, and podcasts can all be effective and time-efficient alternatives to formal education.
 
4   It is possible that your desires are in direct conflict with you exiting the rat race. By understanding the cashflow quadrant and the three methods to achieve financial freedom, you will make choices that are congruent with attaining financial independence.
 
5   If you have fear surrounding the work and commitment that it will take to become financially free, you must consider the alternative. Is the thought of doing the work more frightening than the thought of spending the rest of your life financially dependent?

 

What You’ll Learn:

  • Why financial freedom is virtually impossible to the average person and how to stack the odds in your favor.
  • How to choose a reliable vehicle that is the most likely to help you travel the road to financial freedom; and
  • Why your choice of vehicle could make it impossible to reach that freedom.
  • Why glamorous and exciting vehicles (such as going pro in sports or platinum in music) are often unreliable choices for successfully achieving financial freedom.
  • How to imitate the accomplishments of fiscally successful people by choosing the vehicles that present the greatest possibility of becoming financially free.
  • Why you need to have a net worth of at least $5M at the time of retirement to achieve financial independence.
  • How some doctors, lawyers, CEOs, presidents, and sales people are able to advance themselves and make it to the 1% of people to gain financial independence.
  • The two careers (vehicles) that offer the most probable likelihood of successfully traveling the road to financial independence.
  • The number one investment you must be making if your goal is financial independence.
  • Why education is critical to success and why knowledge is only potential power.
  • The invisible barrier that works relentlessly to keep you from financial freedom.
  • What the three realms of knowledge are; and
  • Why making choices grounded in all three realms will keep you from limiting what is possible for yourself.
  • Why children are great learners; and
  • The trait that children do not have, but that could be preventing you from being open to good ideas.
  • How applying principles from Robert Kiyosaki’s Cashflow Quadrant can help you develop your residual income mindset.
  • The difference between being a business owner and being self-employed; and
  • Why this distinction will absolutely make the difference in your ability to reach financial independence.
  • The three methods that you can use to get out of the rat race.
  • Why the way that you were taught to secure your financial future makes it nearly impossible to become financially free.
  • The investment that Matt recommends that everyone make annually.

Quotes:

  In times of change learners inherit the earth; while the learned find themselves beautifully equipped to deal with a world that no longer exists.” – Eric Hoffer
 
  Every act of conscious learning requires the willingness to suffer an injury to one’s self-esteem.” – Thomas Szasz
 
  Discipline is merely choosing between what you want now and what you want most.” – Unknown

Resources Mentioned in this Podcast:

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Podcast Transcript:

Voice Over: During an era where countless people, businesses and organizations are feeling the pinch, running out of time, running out of money, losing confidence, feeling as if life is unfair, and praying for another chance. And unless something is done, life is going to pass them by. Fortunately, in the nick of time, there is now a place where the ignored, underestimated and unknown steps to producing results and making life work are revealed.

Save your career, save your business, save your health, save your relationships, save your life. Get from where you are to where you want to be faster and with greater ease than you ever thought possible. Say hello to your Do Over.

Matt Theriault: Welcome, welcome, welcome. This is episode 70 of the Your Do Over podcast and this is Matt, The Do Over Guy, Theriault. This is the podcast that’s going to show you how to start over. It’s going to help you identify whatever it is that didn’t work for you for the first time or didn’t work for you last time in case you had a couple Do Overs.

This is your chance to Do Over the right way, to learn from your past mistakes, to learn from other’s past mistakes so that you can build a life of peace and joy and love and blessings and abundance and enjoy that life during the most active years of your life. To help you get a jump start on your Do Over, you can download the three pillars of creating the ultimate do over for free at FreeDoOver.com.

There you’ll just download a simple 55-minute mp3 audio program that I created just for you to help you start your Do Over. That is my gift to you. It’s whole and complete. No strings attached, it’s yours 100% for free at FreeDoOver.com. Alright, well welcome back and by the response that I’ve been receiving, you are really anticipating each episode of this Freedom Series.

In fact it’s actually putting a little bit of pressure on me to make sure that this series doesn’t disappoint and actually lives up to your expectations. Some of you out there have some very, very high expectations of this and that excites me. It gets me really excited. So I’ve been spending a little extra time preparing to make sure that this series really does make a difference in your life.

And that’s perfect, I mean I welcome the pressure. It fits perfectly within the new commitment that I made at the beginning of this year. You know I was listening to another podcast at the end of last year around November-December time. That podcast, that posed a question. It was an interview. I forget exactly what the interview was at this point.

But the one question that that podcast posed, it definitely stuck with me and that question was “How would your business change if you weren’t compensated until your customer got their desired result?”

Might have paraphrased it a little bit but that was the essence of it. How would your business change… If you think about this for your own business right now or your own work right now. How would your business change if you were not compensated, if you do not get paid until your customer got their desired result?”

It was that one question that just caused me to stop and pause and look at my business. It’s also affecting everything inside of my life as well. It has me at every corner stopping to realize or I guess has me analysing at my desired outcome to realize that I got to begin with the end in mind. I got to start by really analysing that desired outcome of which, you know, I’ve somewhat always done.

But it seems to be much deeper now. I’ve peeled back some layers of that onion, so to speak. I’ve gotten deeper into it and the end goal of this Freedom Series episode of this series that I’ve put together before you on this Your Do Over podcast.

It’s to positively impact your life financially and not just a little bit. I’m not here just to make a couple tweaks so you can make a couple of extra bucks. That’s now what I’m going for.

I want to impact your financial lives a lot. I want to make a significant difference for you. So feel free to hold me to that commitment. In fact please do and together we’re going to cause some breakthroughs.

That’s my commitment to you and, you know, but remember, this is a two-way street. I’m going to do my part but you got to do yours too, deal?

Alright, now before we get started today, have you laid out your road to financial freedom? Have you at least gotten it started? That’s what I mean, you have to do your part, nobody is going to do it for you.

If you have yet to lay out your road to financial freedom or at least start it, I highly encourage that you just stop the recording right now and you go back to episode 69 and do it.

Go back to episode 69, wheels to that. and do what it’s just suggested there. Or if you don’t, you know none of this information is going to make a difference for you. If you take on the work and move at the speed of instruction, this won’t be your Freedom Possible series. This wil be your Freedom Probable series.  Got it?

Thst’s how important it is.  We both got to do our part.  I’m here for you.  I’m going to give you everything that I know.  I’m not going to hold one thing back but you got to do your part.  now as your road to financial freedom is beginning to emerge after you’ve completed the exercise of Episode 69.

It’s beginning to emerge.  It’s beginning to come or become more clear.  Now what vehicle or vehicles are you going to take to travel that road?  You can see the road clearly but how are you going to travel it?

You know, we laid out the road on that last episode.  Now it’s time to travel the road.  So do we walk?  Do we run?  Do we drive?  Do we hop on a bus with a bunch of others? Well we are going to answer that on this episode.

We are going to get an answer to that question on this episode.  And you know, you can.  You could create a vehicle from scratch of which whether it will work or not is going to be uncertain.  If it will, maybe it won’t.  or perhaps you can drive a vehicle that has been proven to get there.

You could save yourself a bunch of time. I mean it’s already proven.  You know since this show is about learning from your past mistake and learning from other’s past mistakes.  As we know, we’re not going to be here long enough to make them all ourselves. We might as well learn from other people’s mistakes.  I’m going to recommend that you do not attempt to reinvent the wheel.

I mean you could what you want and because there are multiple vehicles from which to choose to travel your freedom road.  And you know as I’ve started my Do Over, I researched many of them. I even tried many of them.

And I began with the ones that either appeared to be the easiest or that appeared to be the most glamorous. I came from music business that was appealing to me. That’s where I started.  And regardless of how they appeared on the outside.

What I discovered is that they all require serious effort.  Regardless of how it appears from the inside, they all require serious, consistent, and persistent effort.  And by no means will it be easy. By no means will this journey be fast.

Regardless of which vehicle you choose.  There are some vehicles that are fast or easier but none of them are fast and easy.  In fact, most of the vehicles people use to travel their freedom per the statistics suggest that it is virtually impossible to reach that freedom merely because of the vehicle that they chose.

Does that make sense?  So your choice of vehicle is going to be very, very important. I mean the people that they, a lot of people have a clear road of what they want to travel but the vehicle it just that they chose it.  it can’t navigate the road the way that they want it to.

However these virtually impossible ways are often the most visible ways.  That’s the tragedy here.  You know there’s a lot of road out there that weall see that we want to travel or the vehicles we want to use to travel our road.  And because they’re around us all the time, we see them all the time.

We see them all the time.  They’re the ones you hear about the most.  They’re the most exciting ways.  And we hear about them most because it’s newsworthy.  It’s newsworthy that someone actually reach the end of their freedom road using a vehicle that fails so many.

Does that make sense?  That’s why it’s newsworthy.  They’re the most visible.  And we hear about them the most because of how the odds were so extremely stacked against the person.  That’s news.  No one wants to hear about how easy it was.

People are fascinated by the struggle and the challenge and the obstacles that one to overcomes to reach the end of their financial freedom road.  That’s news.  And that’s what we’re expose to.

And as great as it is to hear about such stories, these stories are taken in the wrong context can be very dangerous to your financial freedom.  They can be very dangerous.

For example, you know, if you’re aspiring to become a professional athlete.  And this, what I am about to show to you is not to crush your dreams by any means but do you realize how good you have to be, to be the lowest paid player in major league baseball, to be the lowest paid player.

Do you know how good you just have to be just to get to that position?  Not to mention the top 100 of any given year.  I mean this is typically a person who known nothing else in their entire lives but being the biggest, fastest kid in their hometown little league.

They were the superstar that all the girls chased and all the guys wanted to be like in high school. I mean they’re the player in college that everyone wanted to be up to the plate when the game was on the line.

And to be thrown into a semi proleague of thousands and thousands of players that are just as good as you.  It takes something super special to rise to the top and be privileged to occupy one of the 1,280 professional positions available in the show, in the big show, on the major league baseball, the big leagues.

That’s right. 1280 active professional baseball players in the major league in any one year.  And how many of those can you name? How many professional baseball players can you name?

10? 20? 40? Let’s say you’re a super duper baseball fan and you can name 100 active professional baseball players out of the more than 100 million kids that play little league each year that attempt to reach the pros.

I use the 100 because those are really the only ones that you ever will hear about each year.  And it’s the example of these 100 pros, excuse me, it’s the example of these 100 pros that keep dreams alive.

It’s this 100 out of 100 million that had the childhood dreams to go pro.  That literally translates to 1 in a million.  Literally one in a million.  So going pro in your sport of choice is certainly an option but you have to look at the numbers.

It’s a long shot at best.  And yes it is possbile.  But it is a long shot at best.  One in a million to be a top 100 player in major league baseball.  And it’s just my quick and dirty math.  And the chances of you becoming a pro baseball player isn’t really the subject here.

That’s not what I want to harp on.  The subject is analyzing the odds of your chosen vehicles getting you to financial freedom.  So what about say let’s choose something else.  What about inventing the latest gizmo that makes life a little easier to live.

Let’s look at that.  Well only 5% of patents, 5% of inventions, 5% of patents result in making money at all.  And just 0.1%, just 0.1% of patents are considered to be commercially successful. 0.1%.  Not great odds there either. Right?

So let’s try another option. How about becoming a pop singer, a celebirty.  You know we see the hundreds of thousands of people that turn up for American Idol auditions every year.  After what? After 11 or 12 seasons, I think I lost count at this point.

Let’s say 12, after 12 seasons of one of the most watched TV shows in history, one of the most watched TV shows in history after 12 seasons, only a handful of those millions of contestants, only a handful are household names with great careers.

Maybe 10, maybe 10.  But really only a handful are like household names.  And again this is not about being a po star.  It’s about looking at the success percentage of the vehicle that you choose that is going to get you to your freedom.

How about becoming a working actor or a politician?  Or how about marrying rich?  Finding a sugar daddy or finding the rich girlfriend, daddy’s little rich girl?  Or how about winning lottery?

You know, some of these options, they might sound a little silly to you.  And they might be silly and completely irrelevant to you and to your situation.  Some of us know that we just aren’t blessed with the right genes to go pro in any sport.

But I bring them up for two reasons.  First because they are the most visible vehicles to financial freedom.  They are exciting.  They are newsworthy.  They are what we are exposed to most frequently.

That’s unfortunate.  It’s unfortunate because you know we as human beings will perceive these exmaples in one or two ways.  Either we are going to perceive them that “it can never be me.”  So you never try or you think this is absolutely me.  Im going to make it.

You spend your entire lives working your butt off, waiting for lightning to strike.  But did you know that you have a better chance, that’s kind of not giving lightning, it’s do justice I guess.  It’s you know it’s about being a little more optimistic.

Because you know did you know you have a better chance of getting hit by a lightning on any given day, any given day. Not just the stomry day.  Not just he cloudy days.  Any given day than you do winning the lottery, which is also a vehicle option.

That brings me to the second reason I share all these other vehicles with you.  You know in Kenneth Fisher’s book, The Ten Roads To Riches.  Great book. I love it.  It’s very eye opening.  The author is Ken Fisher.  His book is The Ten Roads To Riches.

He discusses these very options.  Everything that I’ve discussed with you and a few more.  And he discusses The Ten Roads To Riches that produce the majority of wealth in the world.

And after reading this book, I walked away with the conclusion that the odds of becoming rich, the odds of becoming financially free are stacked so much against us that financial freedom is virtually impossible for the average person or even the above average person.

And it was these two realizations that cause me to look deeper because certainly you know we’ve all met people who we thought we were smarter than or better than or stronger than or faster than that have achieved great wealth, that have achieved great success.

We all know at least one person like this.  When we see this person or even when we think of this person, we think to ourselves, Gosh, if they can do it, I certainly should be able to do it or if they can do it, why not me or what’s my problem?

I mean it was these types of thoughts that I had running through my head while bagging groceries at the age of 34.  You know despite what the odds were, I wasn’t going to give up.  I mean bagging groceries is not going to be my career.

And I did accidently already did. I mean I already did really well for myself once before on accident almost. I certainly should be able to do it again with intention with a few more years of wisdom under my belt.  Right?

Seems logical but there I was bagging groceries at a total loss of how to go about it.  So one day I thought rather than analyzing different vehicles and depressing myself by looking at the odds of achieving financial success through those vehicles. I flipped the script a little bit.

And I began looking at financially successful people looking for a common denominator with regard to how the majority of them created their financial freedom.  I mean I have done enough research to come to the conclusion that traveling this road was going to be tough.  It’s not going to be easy.

I wasn’t afraid of the work but I didn’t want to put in the work driving a vehicles and watch it konk out on the second mile just because the odds were so far against me. I just wanted a vehicle that gave me a shot I mean I’ll keep the tank fuel. Right?

I’ll keep my foot on the gas. I’ll drive all day and all night if I have to. I just wanted a vehicle that would give me a decent shot at hitting my financial freedom destination.  Which vehicle presents the greatest possibility?

The greatest possibility of reaching that goal.  That’s the question I want the answer to.  And the keyword here is “possible.”  Which vehicle presents the greatest possibility? I wanted a strong possibility of achieving it so I resumed my research but from a different angle.

So let’s try going in the back door and reverse engineer this thing. I stumbled upon a pie chart created by the Department of Health & Human Services. I think I spoke of this  a few episodes ago, this chart.  The chart basically showed that 95% of today’s 65-year olds reach the age of 65 either dead or dead broke.

Now I was like, duh.  That pretty much is in alignment with all of my research up to this point.  Almost exactly. I mean only 5% of the population reaches any sort of financial stability after working their entire lives.

Only 5% are just stable.  Only 1% of the population reaches a position of financial independence.  Now it was described as a net worth of $5 million or more. Only 1% gets that or hits the mark.  Now that’s a lot of money for sure.

But it’s not as much as it used to be.  Right? I mean by the time most people listen to my voice right now reach retirement age.  You better have a net worth of at least $5 million or your golden years aren’t going to be so golden.

Sad? Yes but true. You’ve got to figure out how to get in that 1% club.  So this 1% that achieve financial freedom. It was broken down into a second chart.  Basically it was really revealing what this 1% did to get there.

And there weren’t too many surprises. I mean 10% of this 1% are comprised of doctors and attorneys but I think you will agree that these aren’t all doctors and attorneys.  Right?  No.

This is your most educated ones.  And the ones that specifically took action on what they learned.  It’s not like you’re just going to become a doctor.  Snap! Then you’re automatically on the 1%.  No. It doesn’t work that way.

But 10% of this 1% ma-de it that way.  And another 10% is comprised of CEOs and presidents.  But again these are all CEOs and presidents.  Are they? I mean some of you listen to my voice right now are CEOs of your company and you are not in this 1%.  Correct?

No.  These are your most educated CEOs and presidents.  Those that took action on their education. Then you have 5% here that were super salespeople but we know that just being in sales is not going to get us there.

No. They say sales is the highest paying hard job and the lowest paying easy job.  There are a lot of sales people there that they don’t even make money at all. I mean there’s a lot of sales people that make nothing, so those are the super sales people.

And then 1% actuall won or inherited their wealth.  There’s a possibility there too.  But I want to draw your attention to this the largest portion of the pie.  It comprises almost three quarters of the pie chart.  74% to be exact.

They were business owners and investors, real estate investors.  They were business owners and real estate investors.  So success leaves clues, right?  You’ve heard that before.

Well according to this chart, success is leaving a whole lot of evidence.  It’s not a clue at all.  It’s evidence.  Business ownership and real estate investing are the two most probable ways that anyone aspiring to achieve financial freedom is going to get there.

You probably heard stats throughout your life.  Right?  That one out of 10 businesses fail in the first two years.  And only one out of those 10 make it past year five.  Something to that effect.

But three times as many people achieve their financial freedom this way than all the other ways combined.  This is where I came to the conclusion that you know achieving financial freedom is going or it’s not going to be quicker or easy.

But I did discover that too quickest and easiest ways to do it.  And obviously if 74% of the world’s wealthiest people did it this way.  These two methods aren’t just quickest and easiest.  They are the vehicles that present the greatest possibility of becoming free.

This is the answer I was looking for.  This moment of discovery was great news to me. It was great news.  I’ve been looking for a while.  I figured out what vehicle or vehicles presented the greatest possibility of completing the trip.

And we’ll get to that in just minute because before you get all excited what I really want to focus on for just a minute is these aren’t all business owners.  All right? Now we all know someone  or many or even ourselves that have failed that business maybe multiple times.

These are your most educated business owners.  The ones that took action on their education, the ones that were most persistent with their educated actions.  In real estate, this is certainly these aren’t all real estate investors that made it to wealthy status.  Are they?

No way. I mean we all know someone or many or even ourselves that have lost money or even lost fortunes in real estate.  Don’t we?  I mean real estate investing is risky.  Right?

That’s what most people think.  Well if it’s so risky, why has it produced more wealth than any other industry? If financial freedom is your goal, it’s actually, it’s riskier to not to invest in real estate than it is to do it.

The risk isn’t in real estate.  The risk is outside of real estate. There’s something that most people just don’t know that they don’t know about real estate investing.  As the real estate investors that made it here to this wealthy status, the ones that get to benefit from all of the wealth that real estate can create.  They are your most educated real estate investors.

And specifically the ones that took action on their education and were persistent with their educated actions.  And you know through this lesson, what  I just covered here.  I’ve been speaking of education.  I’m not speaking of formal education.

You don’t have to go back to college to learn to run a business or invest in real estate. It doesn’t have to take years either. I’m not speaking of formal education. I’m speaking of self educaiton. I’m speaking of life experience.

I’m speaking of the lessons learned from a mentor or a coach or an environment of like minded individuals. Education, it comes in many shapes, sizes, and colors.  It can be obtained from, you know, countless sources.

It can even come from free podcasts.  Education is important.  Well let me clarify.  The right education is important.  And you’ve surely heard of the experession that knowledge is power.  Right?

We’ve all heard.  Knowledge is power.  Well that’s not a complete thought.  That’s not entirely true.  Knowledge is potential power.  One’s knowledge mist be applied to actually be powerful.  As we move forward to the rest of the series, I’m going to introduce you to some people.

Very special people.  Some very successful people.  Some very insightful people.  I’m going to impart some knowledge of my own. I’m going to share some informations.  Some education that can literally transform your entire financial future.

But only will transform your financial future if you implement what you learn.  I have presented what’s possible for oyur freedom and retirement.  And with this episode and the last episode, I’m now giving you the road to your financial freedom.

I’m giving you the vehicles that will make your freedom and retirement probable but it’s your actions  that will make your freedom and retirement undeniable.  As I mentioned  im going to give you 10 times the value that you’ve invested here.

I’m not taking your time lightly.  I want to give you 10 times of that in return.  But in order for me to deliver on the promise, I need you to do your part.  Now the road being residual income and the primary vehicle being business ownership and real estate investing, I am almost positive that you’ve already drawn on some preconceived notions about what the rest of the series might look like.

And if that’s the case, please refrain from that perspective.  I beg you to please refrain from that perspective.  Be careful of the reluctant learner sydrome.  You know Eric Hoffer, an American writer and recipient of the Presidential medal of freedom, said, “In times of change, learners inherit the earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists.”

Such a powerful statement, you know, in short, it says, don’t be a know-it-all.  Don’t shut out opportunities because you think you already know.  If you knew you have what you wanted, you wouldn’t be listening so intently to my voice right now.

Don’t be satisfied with what you already know.  Don’t underestimate the value of an open mind.  By the very nature of being human, the plague of reluctant learning has been and always will be a barrier to freedom.

Nobody is exempt. I refer to reluctant learning as really the ultimate invisible barrier because most people have no idea that they are reluctant learners.  You, you have no idea that you are a reluctant learner.

Here’s what I mean and this is really important, I learned this through a year-long course at Landmark Education and has made a difference for me in every facet of my life especially when it comes to finances.

You see there are three different realms  of knowledge.  Three different realms.  The first realm consists of what you know, you know.  For example, you know that you know how to download and listen to a podcast.

You know, you know how to do that.  You wouldn’t be listening to my voice if you didn’t know how to do that.  I know that I know how to record a podcast. I know how to speak English. I know I know how to walk. I can drive. I know I know how to ride a bike, count money, tell time, etc.

I know I know how to do those things. First realm of knowledge.  The second realm contains those things that you know you don’t know.  The stuff that you know that you don’t know.

For example, I know that I  don’t know how to perform open heart surgery.  Don’t trust me with the scalpel in your open chest cavity.  Not going to be a good turn out.  I know I don’t know how to speak Cantonse. I know I don’t know how to juggle four tennis balls. I can’t navigate a double black diamond run.

I know I don’t know how to do those things.  Now before I dress the third realm of knowledge, I want to mention that we as humans go through our lives making decisions based on the knowledge of those two realms: what we know we know and what we know we don’t know.

When making decisions big and small, we tend to give heed to the knowledge we already have but we will completely ignore the knowledge and information that we do not have.  Or even damning, the knowledge and information that we don’t know that we don’t have.

That is the third realm.  It’s an exponentially bigger realm than the other two.  The third realm consists of those things that we don’t know we don’t know.  It’s in the third realm were all the difference it has made.  It’s here in this realm where breakthroughs and triumphs are experienced.

It’s in this realm where you’d get from where you are right now to where you want to go.  Everything you want out of life, everything that you want that you don’t have specifically exists in this third realm.  The knowledge that you currently possess has gotten you to where you are today.  That knowledge will keep you exactly where you are until you begin to access the third realm.

Here’s a more practical in layman’s example of what I am talking about. In case I’ve infuse you with what you know and don’t know and blah, blah, blah.  You know if I asked any random person for a surefire way to lose weight, just walk up and down the street.  Ask any random person: what is th surefire way to lose weight.

99% of the time I’m going to get an answer along the lines of eat less and exercise more.  That might even be 100% of the time.  Eat less, exercise more.  That’s not groundbreaking information.  You probably have the answer already yourself.

Yet America is more obese toay than it has ever been.  In fact, I heard over the radio last year sometime that here in the United States that due to obesity and the complications that accompany it.  The babies being born today will be the first generation ever, the first generation ever expected to live fewer years than their parents.

It’s astonishing.  Isn’t it?  We as a people think we know how to lose weight.  Yet we don’t do it.  Our population is more obese than it has ever been.  There is something losing weight that we don’t know that we don’t know.

There’s more to it than just eating less and exercising more.  The answer lies in that third realm.  The realm of what we don’t know that we don’t know.  Here’s another example.  I experience this on a regular basis almost daily.

Being that my primary business is investing in real estate and showing others how to do the same so they can enjoy that good life while they’re still young enough to enjoy it. I frequentlyfind ymself discussing my business with a wide variety of people.

And surprisingly a group of people who have a huge invisble barrier about this particular subject are real estate agents.  It is amazing how this group believes in, promotes, and facilitates the practice of real estate investing.

Yet the vast majority do not invest themselves.  in fact, I made a surprising number of people who don’t own any real estate including their primary residents.  Even more surprising is how reluctant they are to entertain the most simple advice or possible solutions to their inability to practice what they preach.

I have yet to meet a more concentrated group of know-it-alls in my life.  I experience this almost on a daily basis.  This group is so closed off to new information that they can’t get out of their own way.   There’s obviously something that real estate agents who do not invest don’t know that they don’t know unless they would.  Wouldn’t they?

I mean they certainly won’t be spending their weekend and bake at home and holding open houses waiting for someone to walk in and buy it.  I mean I’ve done that before. I mean I used to be a real estate agent.

This is probably why I can speak so thooughly and completely and deeply about the subject with this group. I’ve held open houses before many times.  It’s not fun.  It’s not fun especially when people actually do stop by to take a look at the house you are holding open.

And you know you found out that they were just curious.  They were in the neighborhood as they were on their way to the beach.  Do you get that?  They are going to the beach.

And I am stuck in this empty house.  Not fun.  But what I am getting at here is that real estate agents example, it just illustrates how easy it can be to slip into the delusion of being well-versed, adept, or even an expert at something and shutting off through a closed mind additional information that would make a difference for them because they already think that they know.

You can’t tell them anything.  Yet to know and not do is to not know so they don’t know. Do they?  No. in this can happen in any industry or field. It is by no means exclusive to real estate agents.  By no means.  It can even happen in your personal life.

The real danger to considering yourself is that you limit what’s possible for yourself.  And that goes with regard to your relationships as well and your business and your financial future.  You know in the eyes of a student, there are millions of options while in the eyes of an expert, there’s just a few.

The lesson here is to always be a student.  You never consider yourself an expert.  You know Thomas Zass, I hope I pronounced his name with the Ss and Zs on his name, Thomas Zass, a professor and meritist of Psychia.. woo. Professor, meritist. This is a lot of letters and syllables.  Professor and meritist of Psychiatry at the state University of New York Health and Scientist in Syracuse, New York.

He says, Every active conscious learning requires the willingness to suffer an injury to one’s self esteem.  Powerful opening sentence there.  Every active conscious learning requires the willingness to suffer an injury to one’s self esteem.

That is why young children before they are aware of their own self importance learn so easily.  They’re open.  They accept not just new ideas but any idea that comes their way.  And because they do, they learn and they develop and they progress.

So  as we discuss real estate investing and we discuss business ownership in this series, I am going to request that you think of yourself as a child learning something for the very first time.

Even if you think you already know the answer.  Just try it on.  If it doesn’t work for you, hey, that’s okay too but just try it on.  We already know what you do know isn’t making a difference.  Right? If it were, you probably wouldn’t be here listening to me right now.  Would you? No.

Of course not.  Now let’s get into the nitty gritty.  To illustrate what could be, you know, I guess a long and drawn out explanation of real estate and business ownership.  I am going to borrow Robet Kiyosaki’s Cash Flow Quadrant to explain more simply.

Maybe you’ve heard of it, seen it, and maybe you haven’t, maybe I have no idea what I’m talking about.  If you have, remember just be open.  Listen to this as if this is the first time you ever heard of it.  Now the Cash Flow Quadrant, it’s an illustration that Kiyosaki uses to show the four different ways that you can generate an income.

So imagine a piece of blank paper divided into four quadrants.  If you want just pull a piece of blank paper you can follow along and you can draw one yourself.  It’s really simple.  You don’t have to be an artist to complete this illustration.

Begin by just drawing a vertical line down the center of the page. Make a vertical line down the center of the page and then draw a second line horizontally across the page. You should now have four quadrants on your piece of paper.

So on the top left corner, you will write an E. Write an E on the middle of that quadrant.  And that E stands for employee.  An employee, this is where you exchange time for dollars.  This is how most people earn their incomes.

They punch in and punch out.  Work through Monday and Friday.  Take Saturdays off.  And do it all over again.  They exchange their time for dollars.

Now in the lower left quadrant, what you are going to write is an S.  Write an S in the middle of that quadrant.  And that S stands for self employed.  Self employed.  This is where you also exchange time for dollars.

But typically you’re earning potential is much greater here.  Its why it is an actually popular quadrant.  You’re earning potential is much greater here because of the specialized knowledge the self employed would have.

For example, real estate agents, they are self employed: doctors and lawyers.  Typically they are self employed.  They exchange time for dollars just as if they had a job but they typically earn a lot more because of their specialized knowledge.

Now in the upper right hand corner, write a B.  A B in the middle of the quadrant.  And as B stands for business owner.  As a business owner, this is where you have a system in place that generates your dollars for you.

A system that generates your dollars for you.  You don’t exchange time for dollars.  The system generates your dollars.  Then in the lower right, the lower right hand corner, our last quadrant, you have the I quadrant. Write an I in that quadrant.

This I stands for investor.  And as an investor, this is where your dollars earn your dollars for you.  Okay.  So now you got your four quadrants complete.  We got the employee, the self employed, the business owner, and the investor.  All generating an income in different ways.

Now here’s the real distinction that I want to draw your attention to when it comes to speaking of business ownership and real estate investing.  Most real estate investors think they are investing and most business owners think they own a business.

But Kiyosaki introduced one simple test to determine if one really is an investor or business owner or not.  The test is, If you were to go on a six-month vacation, in what condition would your investments and/or business be when you returned?

Would your investments and business, would they be thriving?  Would they at least be maintaining?  Would they have slowed down a bit?  Or would your investments have completely imploded? Your business, would it have completely ceased?

If your real estate investments and business won’t run without you. You are not an investor and you are not a business owner.  You are self employed.  You have a job.  Actually, your job has you.

It’s very easy to feel that you are doing the right thing.  It’s easy to feel successful when you are making good money.  But if your busines won’t run without you, you aren’t there yet.  You are not financially free.

Sure, you maybe the boss.  You may really enjoy what you do but you do still have a job.  You are your own employee.  And employees, as you will see never get to experience financial freedom.  You are stuck on the left hand side of the quadrant.

The “no work, no pay” side is what I call it.  On the left side, no work, no pay.  Here’s why you don’t want to be on the left hand side of the quadrant.  Because it’s on this side where 90% of the population exists.  90%.  Yet just 10% of the wealth is over there.

90% of the people and 10% of the wealth.  A big giant portion of the population and just a little bit of the money on the left hand side, the no work, no pay side.

If financial freedom is your goal, your goal should be to get over to the right side of the quadrant ASAP.  The business owner and investor side.  What I like to call the “Freedom Side.”  Because it’s over there where just 10% of the population, only 10% of the population figured out and get over there.

Yet it’s where 90% of the world’s wealth is, where all the money is. For only 10% of the population.  And this wealth, it was created through residual income mindsets.  Residual income through business ownership, reisdual income through investing.

Now there’s nothing wrong with any of these quadrants by the way. I mean you can live a very fulfilling life in any of the four.  It’s just that if it’s financial freedom that you want, a place where you don’t have to worry about finances.

It’s going to come from the right side: the business owner and the investor side.  And again, there’s nothing wrong with either quadrant.  It’s just that you must know the difference between the four.  You got to be aware of the four different ways that you can generate money.

You must recognize where your life is right now.  I’m sure all of you are kind of assessing at what you do for money right now and how your money comes to you.  You probably have identified which quadrant you are in right now.

And then you need to recognize what quadrant that you want to be in.  You see when you understand that, it makes your decision process very easy. Because as you are travelling this road, you are going to make decisions.

And those decisions become very easy when you have these distinctions of the four quadrants.  And you will begin to see inside of your own life and analye your actions.  And you will be able to recognize if your actions are getting you closer to your end goal or not.

It will be very easy to navigate your way down the financial freedom road and make adjustments when necessary.  Here’s what I mean.  You know I just answered an email this week from a podcast listener.

He was explaining how he is in the process of saving for a new house and how that he wanted financial freedom.  That’s the Cliff Notes version.  Those are the two main points.  He is saving for a house and he wants financial freedom.

So my response was real brief. I first asked, you know, why are you saving for a house?  I then asked what does financial freedom look like to him?  And th short answer to him wanting to buy a house was that his wife wanted to be in a good school system and she wanted a house to grow in.  Good answer.

That’s very common.  And there’s not a darn thing wrong with wanting those things. Not a darn thing wrong with it.  The answer to my second question, what does financial freedom look like to you?  and here, okay.  I’ll just go ahead and read directly from the email.

I asked him, what does financial freedom look like to you?  And he starts by writing, “Freedom to me, I miss spending a lot of time with my father.  My father worked all the time so much as I still crave time with him.  Distnace determines now how much time I used to psend with him.  And I don’t want that for my three children.  I recently accepted a position for a lot more money that does exactly that.  It keeps me away from my children.  I’m travelling six states and gone 3 to 4 days a week.  My trade off?  The money. I sacrificed my family and my own wounds to gain more financially.  That’s bondage and family mutilation. I hate that. I enjoyed doing this job but I hate missing my family. I want out of that feeling and necessity to do whatever it takes in order to afford my family comforts. I want out of the corporate rat race and destruction of families that society teaches and enforces today. I can’t control everyone else’s families but I want to secure mine while trying to help as many others as possible.  I have a huge heart for serving but I have never fuly dedicated my heart and time into serving my family first.  That’s who, that is who is most important to me.  Society keeps pulling me back into the rat race.”

So that was his answer.  Again, great answer.  It’s a common one.  Just spend more time with their loved ones.  Everybody wants that.  In fact, it was the very answer I was really expecting.  You know, I’ve done this long enough that I get a feel for what people want just out of their communication. I’ve gotten pretty adept between reading between the lines. I felt that’s what he was going for so I had my answer pretty much prepared.

I’ve answered this question quite a few times.  And he told me what he wanted. Right?  He wants out of the rat race and he says that society keeps pulling him back into so he can spend more time with his family.

That’s what he says he wants.  And my first thought was if soceity is pulling him back in or is he throwing himself in?  I asked that because you know at some point you got to take responsibility for where you are in life.  Again, nothing wrong or right about where you are.

You just have to take responsibility for it.  You are where you are right now because of all the decisions that you made up to this point and nobody can make you do something that you don’t want to do.  You make your decisions.

Some decisions, they’re tougher than others.  Sure.  Sometimes because of previous decisions that we made a while back.  We put ourselves in a position where, you know, we are kind of forced to make a choice of the lesser of two evils.

But we ultimately decide and do what we want to do so you got to take responsibility for your life.  It’s nobody’s fault.  It’s not society’s fault.  It’s not society pulling you in.

So I want to illustrate that, you know, there are three ways to move you towards financial freedom or get out of the rat race as he put it.  One, you can increase your passive income. One way to do it.  Two, you can decrease your expenses.  However, nobody ever experience financial freedom by eliminating their debt alone.

But it is an ingredient that can significantly speed up the process.  So one, you can increase your passive income.  Two, you can decrease your expenses or three, you can do both simultaneously.  Now that right there, that’s a very basic truth.

And along with the dynamics of the cash flow quadrant, you know, those are just two basic truths that you never want to lose sight of.  You have to have those in your consciousness while you’re travelling your financial freedom road.

You have to understand the cashflow quadrant.  You have to understand what it takes to get out of the rat race.  You increase your passive income.  You decrease your expenses or you do both simultaneously.

And I asked him about why he wanted to buy a house because it’s in direct conflict of exiting the rat race.  Buying your dream house in the nice school disctrict so your family has room to grow increases expenses without increasing passive income.

Not right or wrong. Nothing wrong with it.  it’s just what’s so.  So I asked, which one do you want more? Do you want the house? Or do you want to get out of the rat race?  You understand that by buying a house, you are moving further away from exiting the rat race.  By understanding the three ways to achieve financial freedom in the cash flow quadrant, it makes the decision to buy the house or not very easy.  Makes sense?

You know, a question to them to ponder might be: how could you use your house money, your savings, and your resources to increase your passive income and still live in a nice place in the area that you want to live.

Basically, rent a place where you want to live.  It’s a litltle counter intuitive to the traditional ways that we’ve all been taught to secure our future.  Isn’t it?  I mean buying a home, that’s kind of, that’s what respnsile adults should be doing.

That’s travelling the life and creating a secure future for yourself.  Now remember, home equity is one of the three traps I discussed already in great detail in the series.  If you missed that, go back a few episodes.  What I discussed in the different traps and you will get more clarity around that.

You know, listen.  This might be a little confusing. There is no doubt about it.  Real estate is the greatest investment available to the average person.  It’s the safest investment.  It’s the safest invesmtnet because it’s the most manageable investment.

You got control over it.  it’s the greatest investment available. I recommend each and every one to buy at least one rental property per year. Because it’s the greatest invesmtnet but who said you will have to live in the real estate that you own?

I’m not saying don’t buy your dream house to raise your family in but just consider when you should buy it.  Making your primary residence your first real estate investment will significantly delay your journey to financial freedom.

Because it is in direct conflict with what it takes to get out of the rat race.  You know, to send me this email to jump outside of himself and read what he wrote to me about what he wants and then look at his actions.

Are they moving him closer or further away from what he wants?  You know, for example, I own 103 units of income propertes now, I own 103 units of income properties but I still rent my primary residence.  I live in a very nice house but I rent it.

My income properties pay my rent.  My shelter is essentially free meaning I don’t have to get up and go to work to maintain my shelter. I see my family as often as I want.  Sometimes I travel just to get away from them.

Just kidding, Anyway, think about what you think about what you think you want?  Do you really want it?  If you do, understand that it’s going to take some sacrifice and it’s going to take some discipline to get it.

And I borrow this quote to end my email to him. I didn’t give credit to the author of the quote in the email but I don’t really know who said it anyway. So I claimed it as my own so I’m confessing.  The quote reads, “Discipline is merely choosing between what you want now and what you want most.

Discipline is merely choosing between what you want now and what you want most.  So I’ll close today’s episode with this question: Are you willing to do what is necessary to get what you want most?  Are you willing to do what is necessary to get what you want most?

You know most people without hesitation are shouting right now, Yes! I will do whatever it takes because what I am dealing right now is not acceptable.  Yes. I will do whatever it takes.

So going back to our stats from the Department of Health and Human Resources and recogninzing that 95% of today’s 65-year olds are living much less of a life than what they want.  I mean who wants to be financially depedent?  Nobody wants to be dependent.  Everybody wants independence.  Right?

But 95% of tody’s 65-year olds are dependent.  And take all that in if they too just like  you answered the question.  Are you willing to do what is necessary to get what you want most?  If they too answer yes I will do whatever it takes, why does 95% of the population have less than what they want?

Either they aren’t willing to do whatever it takes.  What they think they want isn’t as important to them as they thought.  You get that? What they think they want isn’t as important to them as they think it is.  It’s the cold hearted truth.

What they want just isn’t that important to them or as important as they think it is to them.  Like I said this isn’t going to be easy.  It’s going to take some effort.  It’s going to take some sacrifice.  It’s going to take some disicpline.

If that type of commitment to what you say that you want scares you.  If that commitment scares you, where does being financially depedent rank on your fear meter?  What is scarier: making the commitment and the sacrifice to go after what you want or being financially dependent?

That’s because that’s the alternative.  You get to choose between the two.  It’s our decision.  The second reason 95% of the population has less than what they want is because they just don’t know how to do it.  they don’t know what to do.

For this group of people, what they want it really is important to them.  They are willing to do whatever it takes if only someone would show them what to do.  That’s why I do what I do.  You know nobody showed me what to do. I had to go seek it out.

I had to discover it on my own what I didn’t know that I didn’t know. So next episode and from this episode forward, we are going to stay focused on the right hand side of Kiyosaki’s Cashflow Quadrant.  The business owners side and the investors side.  We are going to create a residual income system for you that will not be dependent on your presence for the system to work.

We’re going to work really, really hard right now so we don’t have to work at all later.  We’re going to work really, really hard right now so we don’t have to work at all later.  Are you willing to do whatever to do what it takes?  Are you willing to at least give it a try?  That’s it for today.  God loves you and so do i.  I am Matt the Do Over guy.  I will see you on the next episode of Your Do Over.

[End of Transcript]

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