Escaping the Rat Race: What School Failed to Teach You About Money.

In 2003, professional boxer and heavyweight champion Mike Tyson filed for bankruptcy with $30 million in debt despite having amassed more than $300 million over the course of his career, raising a big question about

money

itself, due to much of our actions or our motivations in life. We have an underlying desire or need to acquire it, but

what

is the point of acquiring it if the big problem seems to be our ability to manage it? Americans now have the highest credit card debt in history. Translation: you didn't learn anything. Debt is invisible. The burden is borne by the country's most vulnerable.

Of course, these statistics reflect the UK and the US, but consider for a moment your own attitude towards

money

and how money exists in your own life. What is money to you? Does it seem to come into your life? and leave immediately once you have it. Have you ever been put in a vulnerable position, a vulnerability that brought you closer to a get-rich-quick scheme or a guru who tells you that you can get rich if you just buy his course while my channel completes? aims to address these issues to one degree or another. I realize that our perceptions of money are sometimes more crucial than our ability to generate it, especially when our brains are wired in a way that prevents us from being financially sensible.

Does it really matter if you're making more than six figures a year if at the end of that year you have nothing left to show for it, where's the disconnect? It's time we solve that mystery and not only that, but explore a better framework for understanding money, a common framework. It is taught in personal finance, but one question is often overlooked in formal education:

what

is money or rather what does money represent when you make a purchase on Amazon when you get paid for your time working what is the meaning of money? money in these transactions?

It is commonly defined as a medium of exchange, an instrument that facilitates the sale, purchase or trade of goods between parties, but I don't think this says much about what money actually represents. I think a better way to look at money is as an expression of the value being delivered. about a certain amount of money to buy something because you perceive its value to be equivalent to the amount of money you handed over, of course the price is often determined not by you as an individual but by the market as a whole, but make this one point. money equals value why it is so important because we often give money moral meaning a quote i'm sure you've heard money is the root of our evil we look at someone who appears to have a great amount of wealth and they think who were lucky, who they took advantage of to get to that position, who had to lose to win and never what value was created to generate that money.

Understanding that money is simply value is the best way to understand it. Money is not necessarily bad nor does it make a person bad. Sure there are things like scammers who convince you that what they have to sell is worth it, but that doesn't say much about the money other than their own morals. Open up your options and broaden your horizons The choices you make with that money have a lot to do with your own moral dispositions, so money is an expression of value Now, how does this change the reality of a person who lives paycheck to paycheck? check or someone who consumes? for credit card debt, the mere mention of money equals changes in value, nothing can make me see money from a different perspective, but how much of that is practical advice to answer that question?

I'll post another question: what is your relationship with money? comes into your life and it will go away. This is a relationship that is often expressed through your income and expenses. Another practical way of expressing this that I especially like is your production versus your consumption. For the most part, money will come into your life because you have produced. some form of value and for most of us this value will come in the form of a job, a job, the money will be gone when you have consumed something, a Netflix subscription, a new car, a house, in many ways, we can see wealth an individual's net worth as a metric to determine his or her relationship between consumption and production.

Now, remember those stats I mentioned at the beginning of this video. Which part of the consumption versus production relationship do you think is to blame? Consider yourself for a moment, think about all the money that has come into your life and gone, how much of that money do you still have in possession today or invested in some type of asset and what part of this relationship do you think is unbalanced or needs improve? The probability is both, but for most of us the biggest problem lies in our consumption. Remember the career development study that found that 78 of American workers lived well from paycheck to paycheck.

He also found that of workers who earned one hundred thousand dollars or more a year, one in ten of them lived paycheck to paycheck. paycheck now, you could argue that someone who earns six figures a year would still like to earn more, but when they are paid a figure that is well above the average salary and cost of living and yet somehow Find a way to spend it all. I would say that your relationship with consumption needs to be fixed before even considering your relationship with production, as any rich celebrity who has declared bankruptcy can show us that production means nothing when you have a problem with consumption, a career of rats, a counterproductive endless

race

or meaningless search sometimes the rat

race

is combined with a nine-to-five job; is a comparison that is often used by certain people to blame you and force you to buy shows and books for them, but this seems extremely unfair, mainly because it aims to villainize a work and excludes the fact that there are those who love or are perfectly fine with its job or have other aspirations besides their nine to five a true rat race is one who lives with a financial advantage being one paycheck away from bankruptcy constantly a feeling as if the moment money enters your life it immediately disappears and the more responsibilities you have, the more dangerous this relationship becomes.

The loss of a job. An unexpected health accident or any unexpected circumstance can upset your entire financial situation and consider the mental consequences. By living with this financial advantage, your job no longer becomes an option, it becomes a necessity to continue financing your lifestyle or continue paying debts. to quote Tyler Durden from fight club, the things you own end up being just you, what's the silver lining? You don't have to continue like this, the first step in personal finance will allow you to become aware of your relationship with money, this is often done by journaling your monthly expenses classified as housing, transportation, food, utilities, entertainment, etc., it's about understanding yourself as a consumer, but this part is difficult in behavioral finance, this feeling can often be labeled as the ostrich effect, which is our tendency to want to avoid negative financial information, it's that feeling that you have when you refuse to look at your bank account after a night out out of fear. what it could show and yet, once you pass this stage, it is time for you to take control over your behavior as a consumer.

This often involves the idea of ​​making a budget, deciding each month how much you intend to spend on each of these categories, and sticking to it. It's also important to note that it's about systematically looking at what you consume and finding ways you can minimize these things to ultimately live below your means; In other words, have a lifestyle that still leaves you with enough money to save and invest in one way or another. That before deciding to invest, one of the most common practices in personal finance is to maintain an emergency fund, a specific amount of savings that you keep in case of an emergency, this fund would normally hold between three and six months of expenses.

However, living below your means is important because why would we choose to do otherwise? Why would we choose to live a lifestyle that we cannot afford or that puts us at this financial advantage? I could make a whole video about our cognitive biases. The ostrich effect is just one of those that can affect your financial situation. So there is hyperbolic discounting. A tendency to favor short-term rewards over greater rewards in the future. future investments or your social proof our tendency to think and act as those around us think and act when the people around us are buying something, you buy it too or when the people around you establish money as a means to make the wrong, you probably do assume the same thing also the phrase keep up with the jones sums up this big problem of consumption is a phrase defined by google as trying to emulate or not be surpassed by the neighbors they buy a new porsche you buy one too they have nice clothes they give you some they also renovate their house you too do it all in the attempt to impress or trying to keep up with others due to some kind of social pressure only in today's world the Joneses are not literal neighbors, They are much more present than we are.

We are all vulnerable to social approval, we really care what other people think of us, but the problem is that we are measuring our self-esteem by the number of people who like what we post. The governor of the Bank of Canada succinctly said that for most Canadians debt is a fact of life at least at some point. To be clear, I'm not saying that buying an expensive piece of clothing, jewelry or a sports car is something bad nor do I think that consuming is something bad, the objective of this video is not to philosophize about the repercussions of a materialistic vision of the world, it is about generating awareness about who you are as a consumer.

Do you care more about looking like you have money or that you really have money? ? The rat race is not about working nine to five jobs, but living life on the edge which means you're chasing the next thing, whether it's a paycheck or a material possession, so that your biggest goals and ambitions are life take a backseat so you can continue this race on a budget and keeping track of your expenses has been proven time and time again to work and get you out of this race. It's fun to talk about making money or imagining having as much wealth as possible, but what's the point when your relationship with money as a consumer means losing everything? or having to work non-stop to finance that lifestyle that is the real rat race, but with all that said, let's talk about making money now, the things that we

teach

here and have taught for almost 30 years are proven, what happens? , guys? graham here so we need to take a moment and talk about what's going on in the stock market because as we wrap up the week, personal finance stock channels like graham stefan or dave ramsey are great for learning how to work on your side of consumption. equation, but if there was one thing I wish they talked more about it would be their ability to make money and I understand why they don't, it's easier to reduce your expenses by the amount you consume than to increase your income when speaking in front of an audience mass, giving advice that will work for most people is usually the best option.

We see that there are entire communities built around frugality. The fire community is an example of this. A movement that adopts the strategy of living. Save and invest extremely frugally as early as possible with the intention of retiring as soon as possible. Minimalists also share a similar view to the fire community, although more deeply rooted in philosophical positions about the world and materialism in general, people like Graham Steffen or Dave Ramsey. promote strategies that fall on the spectrum of living frugally, saving a lot of money and investing for the long term and there is nothing inherently wrong with this strategy, it works for a broader range of people with different income levels, but let's be honest, graeme stefan doesn't He doesn't rely on clipping coupons or living an incredibly frugal lifestyle to make between one hundred thousand and two hundred thousand dollars a month from YouTube, nor does Dave Ramsey rely on these strategies to have an estimated net worth of $55 million.

These people are using a means of production on a massive scale in my video, the untold truth about money, I talked about how money is equivalent to its perceived value in the market and the most impactful way to increase its value is to find a problem in the market, create a solution for that problem and sell it. solution to market at scale: this is the entrepreneurial route: a successful business at scale is capable of producing a large amount of value for a society, so its production side of the equation grows exponentially compared to a standard job, but This is not a route that everyone can take nor should they try it is aboutReflect on your own capabilities and whether entrepreneurship best suits your direction.

That said, increasing your production doesn't just have to come from the strict definition of business that Graeme Stefan uses. YouTube as a vehicle to produce something, in this case large scale personal finance videos, is one of the reasons I chose to create videos on YouTube and it is also a vehicle to produce something, in this case large scale documentary style videos. scale to the point where I can now do it full time and build a business around it. Production is about providing relative value to the market in some way. I used my skills in acting, storytelling, and video editing to create videos that I hope are somewhat entertaining and educational. and luckily the market responded positively your form of production may be developing an app or software that is solving a problem that you think the market would pay money for your solution or maybe a fitness brand that does the branding extremely well and utilizes its community better than most other fitness brands, as I think is the case with Ben Francis and what he did with Gymshark for most people, work in the form of a standard 9 to 5 job is going to be their means of production, but this No This doesn't mean your ability to produce stops there, understanding yourself as a producer is about understanding the ways you can produce value for the market, if you can produce value on a large scale then it means making money on a large scale, Fortunately the Internet has done it.

It gave us a great opportunity to be able to produce something and launch it on the market. Whether the market really wants what you've produced can only be determined once you've released whatever you've produced, so long story short. It is first important to become aware of yourself as a consumer, understand what you buy and why you buy, recording your consumption and then giving yourself a budget to manage and control that consumption. Production then becomes a matter of maximizing the amount of value you can bring. society through a job, a business or some other means of production, this is a framework that has helped me a lot as I am sure it has helped many others who have a personal interest in making money like this, we are not just talking about sushi. since this is substantial yeah and then go from that to like focus on $170,454 yeah that's crazy hello hello my friends before you click on the video yet I want to say one thing , Thanks so much for looking. until the end of this video, what you're seeing up to this point is hopefully proof that I've provided you with some kind of value in one way or another, so make sure to hit that like button and if you want to see more videos on business money finance topics in general, then be sure to hit that subscribe button.

I also have a patreon where I post behind the scenes stuff and do Q&As and I have a lot of other interesting plans for it, so if that interests you and you would like to continue supporting the channel, check it out. The link is in the description below. For me personally, combining what I know about personal finance and entrepreneurship has really helped me the most and as I mentioned, this YouTube channel was one. way I knew I could produce some kind of value in the market at scale if you want to read more about these topics, if you're interested, there are two really good books on topics related to personal finance, the millionaire next door and his money or your life, these are really good personal finance books and of course if you know me you know that I really love mj demarco's work so check them out if you want to see the business side too but with all that said guys mine, I hope.

Have a wonderful rest of the day. I'll see you in the next video or on my Instagram or Twitter if you have me there as always. Hands forward. Greetings. Many days are yet to come. Many times. Too many moments have passed. let go leave alive leave letters in the sand