Basic rules of investing

Borrowing to invest is a central theme in one of my favorite recent books titled "Fake Money, Fake Teachers, Fake Assets." Utilizing debt for investment can lead to wealth, but it requires a significant amount of financial education. While I do not recommend this approach for everyone, it can be one of the best ways to achieve financial success.

President Trump, is often disliked by many people. However, he is quite intelligent and embodies capitalism, while others may view him as a socialist or a crook. It's important to exercise caution in today's financial landscape. The more debt we use, the less tax we pay, which is why I am a strong proponent of real estate investing. Through real estate, I can leverage debt, avoid taxes, and generate substantial profits.

Understanding the concept of infinite returns is crucial for those looking to get rich, but it necessitates a solid financial education. The wealthy often pay little to no taxes because there are three types of income, which are rarely taught in schools. The first type is earned income, which is money earned through work and is subject to taxes. Interestingly, many of the wealthy do not rely on jobs, making it difficult to tax them effectively.

The second type of income is portfolio income, which comes from activities such as flipping houses or trading stocks. However, this is not the primary focus for the wealthy. Instead, they prioritize passive income, also known as cash flow, which is income that flows without being taxed. While this may seem unfair, the real injustice lies in the education system, which fails to teach essential financial concepts.

Our schools do not provide adequate financial education, which is a significant problem. Many people still cling to the outdated belief of going to school, getting a job, and working hard for money. However, jobs are disappearing due to advancements in artificial intelligence and automation. As a result, taxes will likely continue to rise to address the growing national debt.

It is essential to understand that debt is a form of money. Since 1971, when President Nixon removed the dollar from the gold standard, money has become synonymous with debt. The wealthy have learned how to use debt to their advantage, while the poor and middle class often struggle under the weight of their debts due to a lack of financial education.

Many financial advisors advocate for long-term investments in a well-diversified portfolio of stocks, bonds, mutual funds, and ETFs. However, with the current economic climate—characterized by massive money printing and low-interest rates—this advice may not be the best course of action. Additionally, high-frequency trading has made it increasingly difficult for individual investors to compete.

My message to everyone, especially Millennials, is to reconsider their financial priorities. Many young people aspire to high-paying jobs and the trappings of success, but this mindset contributes to the financial struggles faced by 99% of Americans.

In my own journey, I initially focused on earning income through jobs and pay raises. However, after investing in properties, I realized the importance of acquiring assets that generate income. This shift in mindset transformed my approach to wealth-building.

Understanding risk begins with self-reflection; the true risk lies within the investor, not the investment itself. For example, while some may view real estate as risky, it can actually provide valuable learning experiences. Conversely, blindly handing over money to someone else or relying solely on a job can be far riskier.

Many pension plans, such as those for teachers and firefighters, have failed due to mismanagement by Wall Street. The Federal Reserve, often criticized for its decisions, has not effectively managed the economy, leading to financial insecurity for many.

When seeking financial guidance, it is crucial to consult knowledgeable teachers rather than those who lack real-world experience. Schools often fail to prepare students for financial success, emphasizing the need for true financial education.

In conclusion, those who want to succeed in entrepreneurship must understand how to increase their income and create assets. Relying on traditional education will not suffice, as it often leaves individuals ill-equipped to navigate the financial landscape.

The belief that only lazy people use their own money is a reflection of the need for creativity and intelligence in raising capital. Throughout my life, I have learned to think outside the box and seek solutions rather than accept limitations. I have never found myself in need of money because I have always found ways to raise it when necessary.