The Difference Between Being Rich & Being Wealthy

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Welcome the Money and Wealth with John O'Bryant, a production
of the Black Effect podcast Network and iHeartRadio. Hey, Hey, hey,
this is John O'Bryant. This is Money and Wealth on
the Black Effect Network. And this is an episode that

(00:25):
I was inspired to do to give people clarity. There's
a lot of misinformation out there, and unfortunately, when you
have made a certain level of success, you may assume
that people understand understand what's real from what's not, because

(00:45):
they would say real memorys back in the day, and
that is a presumption. And to assume is to make
an ass on a Hue and me. So we're not
going to do that. I'm apologizing whenever I assume our
zoom if somebody knows something, I remember. I asked Quincy Jones,
how do he get so smart? God rest his soul?

(01:08):
He said, I'm just nosy as hell, John. I want
to know everything about everything. And he would sit around
and ask me questions repeatedly about certain topics that he
was not an expert in. When I was around hanging
around TI in the studio, I'd ask him questions endlessly
about the music business or Killer Mike, my brother, same thing.

(01:29):
And then when we were talking about business, they would
ask me questions endlessly. My brother, Bishop td Jakes would
ask me questions endlessly about real estate, and I didn't
realize that they were going to their own version of
a master class. No different than when I talked to
Bishop td Jakes about faith. I'm going to my version
or his version of a master class. Right. I talked

(01:50):
to Bastard Andrew Young, civil rights icon, doctor King's right arm,
the man who helped to build modern Atlanta into the
only international city in the South, the only lieutendant of
Doctor King to build a city, talking to him about
civil rights and social justice and the right way to
go and the right way to build and the right
way to live. I went to his master class. And

(02:13):
so I've had to get out of my own way
and not assume that things are obvious. So let me
now take a moment as I hear all of these
folks out here talking about how easy money is and
how easy it is to make it, and all these
people so supposedly are millionaires and tens of millionaires, and

(02:42):
that I just needed to break this down. So here
is the topic for today, The difference between being rich
and being wealthy, pull up a chair, sit down on
your bench, sit down in the kitchen, grab a cup
of coffee. Take this podcast to the barbershop or the
Neil salon, and got of your friends and let's have

(03:06):
a conversation. I have a hat on right now. That's
about being lucky. This is my brand, says live lucky.
My brand. It's about black clover. Black clover the manufacturer,
but live lucky. It's my brand for my company. And
even says onder the bib, live lucky. You can live lucky,

(03:28):
but that doesn't mean you're going to be lucky. And
anybody who is a multi millionaire, multi multimillionaire in their twenties,
that was exceedingly lucky. But that doesn't mean you're going
to keep it. By the way, so let me pack
what real wealth is and how that differentiates from riches.

(03:51):
Those are two things are different though, different than being
a businessman or a business woman. It's different from being
an entrepreneur. It's different. Definitions matter, Hype tends to merge
things together. Definitions and details matter. No different than the
difference between being a hustler and a businessman or a
businesswoman is paperwork. Details matter. The difference is financial literacy,

(04:15):
and you know better, you do better. So again, the
title today is the difference between being rich and being
wealthy and when wealth really comes. I repeat that, the
difference between being rich and being wealthy and when wealth
really comes. Being rich is a contract. It's temporary, conditional,

(04:38):
often loud. It's performative. You perform on a contract. You
do something contractually to deliver something of extreme value, typically
within a short period of time, and it's typically loud.
It is not if somebody's making you rich through a contract.

(05:03):
They want to compressed intense value proposition that I'm asking
you to own the stage. They want you to rock it.
They want you to rock that stage and rock that mic.
And I asked you to own the mic. They want
you to rock the mic. They owned the mic, Wealthy
owns the mic. Riches rocks the stage. This is not

(05:23):
a criticism, by the way, it's it's an explanation. I
didn't realize or when I was growing up, and I
was nine years old that when the liquor store owner
asked me, he heard I was a good talker. And
when the rich when the liquor store owner, mister mac
Max Licker store in commerin California when I was nine
years old going on ten, and I was thinking I

(05:46):
was doing research for starting my own business, and I
went there to tell him he was selling the wrong
kind of candy. After my financial literacy course in elementary school,
I wanted to. I didn't know what the word partner
meant back then. I didn't know what the word the
phrase joint venture meant. I'm not going to say yes
I did, but I knew the intention was that I
wanted to. I figured we were better together. He understood
how to run a business. He had a business, he

(06:07):
had a location, he had the ability to order products.
I was a young person who knew what candy should
be purchased, and I knew that my friends were going
out of their way to come up to his store
to buy candy they really didn't like or want. But
he was the only game in town. And I knew
if we worked together, with my ability to sell, my
ability to market, my ability to select the right product,

(06:28):
that I had the right brain, the creativity and intuition,
the field, the texture of the culture. He had, the
left brain, the analysts that the analytical the structure, the
business plan, the balance sheet, the location. I figured the
left brain, right brain working together, we would be better together.
I was nine, ten years old. So he just wrote
me off, just dismissed me. But he said, as he

(06:50):
dismissed me, look, you're impressive young man. You have good
gift for gab. You talked very well. Let me give
you a job after school selling candy at my candy counter.
I said, I don't want a job selling candid your
canting count. He said, no, that's the best job in
all of this area content. I'm gonna pay you top dollar.
I don't want your job paying top dollar. What do

(07:10):
you want. I want to be a box boy. Excuse me.
I want to be the person who's doing inventory and
the cod box, pushing the inventory from the back to
the front. Some people open the cobox and pull the
liquor out, or pull pull the milk out or whatever.
He said, that's the worst job I've got in the
old story. That's the one I want. I didn't want
to be performative. I didn't want to rock the mic.

(07:30):
By the way, we need people rocking the mic. Be clear,
we need people. I mean this is music, as an example,
is the soul of the world. It's probably the original language. Right.
Sports is something that gives everybody joy. You know, it
keeps you from going crazy. So where you're bouncing the
basketball or hitting the baseball, or running a football or

(07:51):
rocking the mic, whatever that contract is is making you rich,
I'm all for it. Just understand what it is. And
for me, that was not where I wanted to use
my talent anyway. Some of you know my story. I
went to go work as a box boy at very
low wages. I opened the box, figured out there was
inventory lists inside, figured out where he was buying his inventory,

(08:12):
figured out the wholesale rate and the retail rate difference
between what he's paying for it what he's sold it for,
and the difference was profit. And I decided I want
to be an owner. I wanted to write the check,
not cash it employee cashing owner writing more risk, more reward.
But I also figured I knew my market. So I
left there, quit there, went to go home, convinced my

(08:33):
mother to loan me a few bucks. She said he's
going to pay it back. Life is tough, but there
was an ultimate capitalist, Winnia Smith, gangster and a love bug.
I then went to smart and final which is where
the envoy said he bought his candy Smart and final
and Irish food store. They were connected, owned by the
same Jewish family who helped me out by the way
back then with this startup business idea, and I opened

(08:55):
up a business in my neighborhood on the way to
school and on a forty dollars investment may three dollars
a week. After several weeks and put the lick sture
of the candy business and became my dream. So I
was on a road to success that would define my life.

(09:17):
And that's who I am today. So let me now,
I've seen riches, I've had contracts, right, and I've experienced wealth.
Those are two different things. Let me, let me, let
me explain the difference. Being rich is a contract temporary, conditional,

(09:41):
often loud, engaged, involved, short term powerful. Think about an
NBA contract, NFL contract, baseball contract. Think about, well, somebody
wins the lottery. Yay, you know it's a contract from
the state, but it's temporary and it's preston. Think if

(10:01):
you're getting if you're getting compensated outsize to your labor
in a short period of time, and getting rich, it's
typically temporary, conditional, and loud, and I'm not judging loud
in this example. Being wealthy is often quiet, built on ownership,

(10:25):
patience and hear this compounding make money during the day.
Thank you Tony Wrestler for this quote. You build wealth
in your sleep. Tony Wrestler is a billionaire businessman who
owns the Atlanta Hawks, principal owner and is chairman of
Areas Management, which is I think is about five six
hundred billion dollars a lot and is run by my

(10:46):
friend Michael Arraghetti. Those two together have built this, along
with others, is bohemoth. So when you've got the power,
you don't need to use it. Real wealth doesn't need
to scream, doesn't need to holler. It is what it is.
Most people performing rich in their twenties are chasing a look,

(11:12):
not building a life, and most people who become wealthy
don't reset point until their fifties. I did an entire
podcast on becoming wealthy and when that happens, and that's
mid to late fifties. Go back and listen to that podcast,
so I go deep on that topic. Everybody wants to
be rich, but very few understand what it means to

(11:35):
be wealthy. Which is a contract. It ends when you
stop showing up. Hello, I'll repeat that, Which is a contract.
It ends when you stop showing up. Wealth keeps paying
you when you don't. I'm gonna repeat that, which is
a contract. It ends when you stop showing up. Wealth,

(11:57):
real wealth keeps paying you when you don't. Income gets
you rich. Ownership makes you wealthy. Every billionaire that you've
heard of in the music business, in professional sports, in
the arts, Rihanna, Lebron James, I don't know if he's

(12:21):
a billionaire yet, but Magic Johnson certainly, certainly, mister Nike,
Air Jordan, doctor Dre and his work with the technology company.
All of these folks who have become billionaires did it

(12:43):
from going from rocking to mic effectively owning a piece
of it. They've got they've gone into corporate, they've got
into business to do compounding. They've got a licensing deal
or a co branding deal, or they did something that
leveraged them beyond their own No one became a billionaire
selling tickets to a concert. This is all a framework

(13:05):
for a larger conversation that you can really relate to.
Just walking you into this pace by peace. So again,
income gets you rich. Ownership makes you wealthy. Only seventy
percent of thirty year olds in America make one hundred
thousand dollars a year or more seven percent. Think about
all the people running around on social media bragging and

(13:30):
saying that one hundred thousand dollars is nothing in their
rich and they've got the car that they're probably renting,
they got the house they're probably renting for a photo shoot.
They got money that's probably fake. Between the front bill
and the back bill. Anybody who's got real wealth is
not fronting like that. They don't need to. Seventy six

(13:53):
percent approximately of all luxury goods, by the way, are
purchased by poor and struggling and aspirational middle class people
in the world. Seventy six percent just one percent of
households under thirty one millionaires one percent not black or

(14:13):
white or Latino or age all households. Okay, the average
age of a US millionaire fifty seven years old, by
the way, around my age, that's about when I was
a little bit ahead of that. When I was a
millionaire technically well before that, but I got a liquidity moment, right.

(14:36):
I did a nine figure deal when I was fifty
six ish, fifty five fifty six ish. I was rich
for a good period of time. I had cash flow,
I had lifestyle, but I didn't have the ability beyond
lifestyle to move assets and and do big things. I

(15:01):
couldn't just wire right seven figures when I was rich.
I'm going to do that. When I was wealthy, couldn't
wire six figures to be honest, less, it was on credit,
which means it's not your money, so should be inspiring

(15:26):
the people that you actually technically get become a millionaire
in the third quartile of your life, or if you
live a very long life, at the little over the
sixty percent mark, right, so you're not too late. We're
going to unpack why wealth comes later and how you

(15:48):
can start building it right now. Rich looks good on Instagram,
but it's often smoking mirrors. That's why the word personality
comes from a lot word persona what means to perform.
Our personalities often the performance we put on for the world,
described in this podcast as high income, flash and lifestyle,

(16:16):
but rarely backed by assets. Typically the assets are on
people's ass no pun intended. Rich depends on the next
check contract or client. Are you starting to get it.
You're starting to understand what I'm saying. You're also often

(16:39):
cashing somebody else's check, not writing your own, including social
media influencers who are cashing a check from social media
companies that are paying them for clicks and views, which
is why people are making content that is often a lie,

(17:01):
just to drag people to their site and hold them
there for three minutes so they can get credit for that.
So they're telling a lie, promoting a lie in order
to live a lie. Only eight percent, only eighteen percent
of Americans earn over one hundred thousand dollars. Eighteen percent,

(17:21):
about ten percent of black households. I believe it's households.
It's out of my it's off of my head. Black
households earn one hundred thousand dollars a year. It's either
individuals or households. It's still not. It's not a big number.
But you'd see you think of the social media stuff
that it is everybody, and it is not. It's not.

(17:41):
It's mostly not anybody. In fact, seventy percent of people
in this country are living paycheck to paycheck. Half of
those making one hundred thousands a year living from paycheck
to paycheck. If you're doing that, a quarter of those
making two hundred and fifty thousand dollars a year are
living from paycheck to paycheck. If you're living in New
York City where I am today, one hundred thousand feels

(18:04):
like thirty seven thirty nine thousand dollars. So even that
is not rich, but it is bigger income than the
majority of Americans. So we all need to calm down
and stop lying about what we're doing. And I don't
want you to feel bad that somehow you're not succeeding.
It's just not true. In fact, you deserve a Nobel

(18:27):
Peace Prize because you've been doing If you're listening to
this podcast, you're probably doing so much but so little
for so long. You can almost do anything with nothing,
And I commend you. You probably have too much month
at the end of your money. A single mother deserves
a Nobel Peace Prize raising children and doing all that
well working, et cetera. Among people in their twenties, fewer

(18:49):
than ten percent earn one hundred thousand dollars a year
or more. On social media, over ninety percent of influencers
make less than one hundred thousand annually, yet almost project
a luxury lifestyle. I'm gonna repeat that. On social media,
over ninety percent of influencers make less than one hundred

(19:10):
thousand dollars a year, and many of them earn twenty
or thirty thousand dollars, And a lot of what you're
seeing are literally them renting a life for a day
to promote to you as success for a lifetime. Social
media has a lot of folks renting the appearance of
wealth they don't yet own, pro athletes and entertainers who

(19:31):
make millions early but lose it when the contract ends.
As an example of not giving the memo in financial
literacy and confusing making a living with building a life again,
making a living doesn't matter where you're making a living
in twenty thousand dollars a year, fifty thousand dollars a year,
five hundred thousand dollars a year, five million dollars every year,

(19:52):
you can steal. If your alfhaloaks eat your inflows and
your overhead will be your downfall, you can still lose
it all. Being rich means you make money. Being wealthy
means your money makes money. Did you get that one?
When you're wealthy, your money makes more money on money
than money you can never make on labor. Hello, drop

(20:13):
the mic. Wealth is ownership is what happens when you
stop working and your money doesn't. This is making smart sexy.
By the way, we've been making dumb sexy, but way
too long we've dumbed down and celebrated. It is time
to make smart sexy again. Here are the three core
wealth building vehicles. Please write these down because these are

(20:36):
not what I think you've been told. Number One, real estate.
It involves appreciation of value in the asset. They're not
growing anymore. Land plus rental income if it's an income
producing property. But the number one way you do wealth
in America is home ownership. Just know that. That's why

(20:57):
seventy five percent of my white counterparts own a home,
and unfortunately, forty four percent of my black brothers and
sisters own a home. In that thirty percent gaps called
it a delta. That difference is generational wealth or the
lack thereof. Number two. Business ownership is the second way

(21:17):
people build wealth, equity, not just income. Before I talked
a little bit about that you make money during the day,
you build wealth and you sleep. It's not making a
living business is that real big step outside of the
corporate or structured job environment using a traditional existing business model.
I break down the difference between being a business person

(21:38):
and an entrepreneur and a hustler and self employed, and
I break down all these things the steps of capitalism
in another podcast episode. Go back and watch and listen
to that number three way to build wealth in America
or anyplace else in the world. By the way, investments
that compound over time. And no, cryptocurrency is not part

(22:02):
of a basic investment portfolio. Cryptocurrency, which you can strike
it rich with, is speculation. You can also get rich
one to Las Vegas. You can win the lottery. By
the way, you can also lose it all. And that
is until they regulate crypto and all that stuff get
structure around it, and I hope that happens soon. You

(22:23):
can make it all, you can lose it all. There's
no asset based under cryptocurrency. Okay. The fact that even Bitcoin,
it's hype and promotion and everybody's sort of pumping the beat,
you know, it is sort of bidding the price up.
And theoretically there's a find out find a number of bitcoins.
So that actually because of the find out, find out
amount of bitcoin that creates scarcity, so supplying the man.

(22:46):
So there's some legitimacy there, But blockchain technology undneath that
is the real magic. But thousands of cryptocurrencies are gone
poof and people lost every time day. So I tell
people you want to do cryptocurrency, that's great, just don't
use rent money. So you should have a you should
have a living budget and investment budget and a flossing budget.

(23:09):
If you're in your investment budget, you want to take
ten percent and do speculative speculative investments, and you want
to do cryptocurrency in that fantastic, knock yourself out. But
the traditional investment should be things that you use every
day and are not going to go out of vogue,
and if the company even goes bankrupt, their assets underneath it,
like stocks, I'm not sorry, Like real estate and client

(23:29):
lists and brand and you know, cash flows and things
like that. So real traditional boring investments. Okay, So three
ways that you build wealth. Primary ways real estate, business ownership,
traditional investments. You can't be wealthy until your money works
harder than you do. You can't be wealthy unless your

(23:52):
money works harder than you do. I just said that twice.
I like the way it sounded. It was real cool.
I just love of truth like that are so simple.
It's like boom, right, and you're so smart. That's going
to just literally light all the endorphins up in your head.
The meeting net worth by age thirty to thirty four,

(24:13):
let's just break all this stuff down, is about eighty
eight thousand dollars. Okay, these are people who are working
and doing things by fifty to fifty four. The median,
the median climbs the median net worth. These are, by
the way, Caucasian. These are the best numbers you've got, right,
So these are not minority wealth. Creation of these are like,
you know, the median for the country. But really, in reality,

(24:36):
I'm talking about sort of the best example of each
of these categories. Thirty to thirty four eighty eight thousand dollars.
Fifty to fifty four years of age climbs to two
hundred and fifty six thousand dollars. By the way, Blacks
are typically ten percent of that number. Latinos not much
far ahead of blacks by sixty years plus. Many households

(24:56):
cross into millionaire territory if they have a discipline of
investigatf you take two hundred dollars a month at age
twenty five and invest it in the top rated stocks
and just leave it there and let it compound. You'll
be worth a million dollars by the age of retirement.
Do nothing else. Just do that. Let's serve our patients.

(25:19):
The compounding curve takes twenty to thirty years to bend upward.
That's what I just told you. Two hundred dollars a month.
Wealth is not a spirit, it's compound interest with good behavior. Right,
It's time to make smart sexy again. We make it
dumb sexy for way too long. We've dumbed down and
celebrated it. It's time to make quote my friend Vishal

(25:42):
Tdjakes boring sexy again. I want you to get the
basics right. I'm not telling you how to do this
or that right against crypto. I want you to get
the basics right right. I want you to have a
life insurance policy and a will, and a home and
an income again they man, I just want you to
get the basics right and then you can do every
whatever you like. This is why wealth normally comes in

(26:03):
your fifties. It requires patience and maturity and consistency to
turn income into independence. Wealth is what patience looks like
on a spreadsheet. Drop the micy wealth is what patience
looks like on a spreadsheet. Here's hard data. Eighteen to

(26:25):
twenty nine years of age, one percent of households are millionaires.
So so much for this live that all these folks
run around here with fancy cars and fancy bags and
fancy lifestyles and millionaires they're probably just renting all this
on high interurs credit cards. Thirty to thirty nine year
year olds five percent of millionaires, forty to forty nine

(26:47):
years of age fifteen percent of millionaires. This includes, by
the way, their primary home. Fifteen to fifty nine years
of age. Twenty five percent of everybody are millionaires who
But again, as I said earlier, this tends to skew
toward to mainstream American numbers. Certainly those are certainly not

(27:08):
the numbers of Black America, not even close. The average
US millionaire gets there at age fifty seven. It's compounding time,
debt payoffs. Kids that grow up not on your debt anymore,
on your domining more and wiser spending the millionaire next door,

(27:28):
lives modestly, invests, quietly, owns assets that cash flow. In
your twenties. You learn in your thirties, you earn in
your forties, you build. In your fifties, you harvest. Hello.
Let's shift now from chasing rich to building well. I

(27:52):
want you to Number one, live below your means. Margin
equals freedom. Margin equals for you live below your means.
I'd rather underestimate and overperform than overestimate and underperform. Number two.
Own something that grows, property, a business, an index fund,

(28:12):
a stock index fund. Number three automate wealth, automate savings,
automate investing, rent and repeat. Set it and forget about it,
going to something else. Do not do day trading doing
that stuff. Go on about your life. Set it and
let it compound. Don't mess with it. I put the

(28:33):
money in an account and the market timing was horrible,
lost money and pulled some money out. I tell people
don't make investment decisions emotionally, and this was one where
I admittedly did it emotionally because this was money I
did not want to lose. It was some safety net money.
I did this. I covered this in another podcast when
I talk about my own mistakes. You know, I can

(28:54):
watch that. And I put this money in this account.
It dropped in value. It took the money out of
the account. IM sorry. I took myself out of the market,
the stock market, And later on I asked my asset
manager for investments, what would have happened if I left
it there? He said, oh, you did have lost more money,

(29:17):
And I said, well, what would have happened now? He said, well,
you would have made the money you lost back and
doubled it. So if I just stayed with a good
investment and let it grow, it would have recovered the
losses and doubled the return on top of the recovered losses.

(29:38):
I'm cool with it because I was not trying to
grow that investment. I was trying to preserve capital. But
it's just a lesson about the power of markets. Number four,

(29:59):
guard your credit at score with your life. It's your
economic passport. It's as important as a four year education,
in my opinion. Number five, creating multiple streams of income
at least one passive level of income. You can do
that through annuity payments. You can do that through stocks
and pervade by a dip pay dividend is a number

(30:20):
of ways you can do that. Six avoid performance pressure,
stop competing with illusions. Do one thing this month that
earns you money while you're sleep. Just do one thing.
Just buy some stock, even if it's small. You got
to do even you gotta do fractional shares. Just do
something that makes take some action this month. Twenty bucks,

(30:43):
two hundred dollars, two thousand dollars, two hundred thousand dollars.
I don't care what you do. Just start because it
changes once you make that decision. It changes your mindset,
It changes the endorphits in your brain. You start shifting
the way you see things because of what you see
depends on where you sit and whether you believe you can.
Whether you believe you can, you're absolutely right. Rich ends

(31:03):
when the check stops. Wealth begins when you stop working.
Only seven percent of thirty year olds makes six figures,
but nearly twenty five percent of people in their fifties
or millionaires. Because time, not talk builds wealth. Don't take
it into in your twenties, build it so by your

(31:23):
eighties or by your fifties. Sorry, you're free. By your eighties,
You're sitting on the yacht somewhere completely chilling, trying to
hide in your kids, probably babies and your grandchildren. Your
kids probably want a loane, but you can by your fifties,
you can be literally chilling if you set yourself up

(31:44):
the right way and by the way. I feel better
now than I did in my twenties. I think I'm
in better shape. Like in other words, don't be president
where you are, but know the future is when you
get there. If you set your life up the right way.

(32:04):
Something is like wine, do get better with time. That's
been my experience. Commit to long term wealth habits and
financial literacy. Financial literacy is the civil rights issue of
this generation. When you know better, you do better. In
my opinion, I want you to go to Operation Hope
and turn financial literacy into a habit by getting a
financial coach so everybody has the twos to go from

(32:27):
rich to wealthy. I created Operation Hope. I founded it
after the Rodney King riots of nineteen ninety two, and
we raise money every year so that you can get
one thousand to a five thousand dollars annual Hope Program scholarship,
so that the coaching and counseling, the private banker we
assign you with that gets your credit score up, your
debt down, and your savings up. That doesn't cost you

(32:47):
a diyme. It costs you your time. I want you
to invest your time. Now, let me break some myths
here as I close, seventy percent of those who win
the lottery bankrupt in five years. No free lunch. About
seventy percent of NFL players bankrupt in five years, No
free lunch. About sixty five to seventy percent of NBA

(33:10):
players bankrupt in five years after retirement, No free lunch.
If the lunch is free, it's probably still And in
all these instances of the professional athletes, within five years
they're have a divorce because the women might have just
been there or the men for the money, for the lifestyle,
for the floss. And when the lights go down, people

(33:33):
leave the performance and go to another party. And now
you're just stuck with the bills. Here's another thing about
I really need you to understand about riches. So you
become rich, You've now engaged in this lifestyle. Right. You
got three cars, you've got two houses. You're taking care
of your mother, your sister, your cousin, puki them. You
got a whole posse of people that you're taking care

(33:54):
of you got money flowing coming in. It was it
was five thousand a month, and it was ten thousand
a month, it was twenty thousand a month. Then you
you know, it's fifty thousand a month or one hundred
thousand a month. You thought this is never going to end.
Two hundred thousand dollars a month. Yeah, my god, I'm
making two and a half three million dollars a year.
I am rich, but you're not. Well what do I
mean by that? Because when that contract ends, when that

(34:16):
performance ends, when when you stop being a superstar and
the taste of the public changes, or you're you get injured,
and that contract ends or is broken. You know in
the NFL, great contracts, by the way, great healthcare, great
franchise system. But you can have a fifty million dollars contract,

(34:37):
but when if you break your leg, they can what
you get is a signing bonus and when they pay
you over to that point, you don't get the rest
of the money unless you negotiate it. That's financial literacy,
by the way. So that means that now the money
has stopped. Cash flow, cash flow making a living. See people,
if you pay attention, it's right there in front of you,
making a living through cash flow income contract riches. Once

(35:04):
your your your cash flow ends and the bills continue,
and you've got a monthly outflow of twenty thousand dollars
a month based on thirty thousand dollars of income, and
you've been living basically in coords with your lifestyle level
and your income level. Where your outflow sees your inflow,

(35:25):
your overhead to be your downcome, your outcome. If your
outflow exees your inflow, then your overhead will be your downfall.
If you're making one hundred thousand dollars a month and
you're spending eighty thousands a month, and you never pay taxes,
so that's a whole another problem. But then this check
stop by two, three, four months of you making, of

(35:46):
you having eighty thousand dollars a month of outflow, you're broke.
Making one hundred bucks a month with an eighty dollars outflow.
You're broke making one hundred thousand a month with an
eighty thousand dollars outflow. You're just more broke, You're more
painfully broke. You make a million dollars a month, a
million dollars a year, but if you're spending seven hundred

(36:07):
thousand dollars eight hundred thousand dollars nine thousand dollars a year,
sometimes more with credit cards and the income stops because
it rich was a contract. How long does it take
for all the bill and the lifestyle to drain every
dime you have? And then where are your so called friends? Hello?
Can I get an amen? Is this ringing true? Rich

(36:28):
people make money, well, other people make systems. I am
a plumber. I'm an economic plumber for the underserved, trying
to help you create a system for your life. If
your money stops you when you stop, you're not wealthy
yet only one percent of people under thirty millionaires's that's
the best number we have for everybody, including mostly mainstream families.

(36:53):
Wealth is a long game. Well, this is what patient
looks like on a spreadsheet? Wells is what patience looks
like on a spreadsheet? I'm saying at another time, just
so you're drilling into your head, the real flex isn't luxury.
It's freedom, and all money is its freedom. It just
might be the only freedom. My friend, my friend, it

(37:16):
was the CEO of Key Bank, Chris Gorman told me
this one of our partners at Operational, It's entirely possible.
The only true freedom is financial freedom, because every other
freedom can be taken away from you. Think about that.
Political freedom, religious freedom, societal freedom is going to be
taken away from you. But unless you screw it up,

(37:37):
the financial freedom you've earned allows you to be free
for life. So I hope I have unpacked this sufficiently
to give you a foundation of this core principle that
rich is a contract. It's flashy, it's loud, it's temporary.

(38:00):
You've got to find a way to take that moment
and make it magic and turn it into a memory
that lasts a lifetime called compounding interests. You got to
find a way to take that contract and turn it
into true wealth creation. That means living under your means
and investing in things that make money when you sleep.

(38:21):
Warren Buffett, the famed investor. He's famous for saying that
his secretary pays more in taxes than he does. I've
done a whole thing on taxes. Go back and watch
that or listen to that podcast. Well, he's right because
his secretary is a W two employee employee of his
and W two employees pay the highest rate natural rate

(38:44):
on taxes. Warren Buffett does not take my guess is
a salary, so he would Why would he pay taxes?
He does not earn W two salary income. He does
not earn inme tied to riches. He earns his income

(39:05):
the ability to live based on passive income from his investments,
maybe even loans against his investments. That's the whole other
thing I cover in another podcast. But when he sells
an investment every few years, he pays the smallest tax rate,
which is a capital gains tax of about twenty percent

(39:25):
in comparison to thirty forty to fifty percent of folks
who have W two or ten ninety nine income. You
want to write the check, you want to cash it.
I suggest you use cashing a check as a vehicle
to get him to a point where you can write
some or better, Yet, somebody's writing you some based on

(39:47):
non labor. Again, money makes more money on money than
money could ever make on labor. All right, let me
know what you thinking about this podcast, let me know
what else you wanted me to cover. I want to
thank you for continuing to make the podcast high performing
here and around the world. On entrepreneurship and business. Tell
all your friends to follow the money and wealth. To

(40:08):
go to Operation Hope for coaching and counseling. To get
the book Financial Literacy for All. And let's turn this
into the silver rights movement, from civil rights to silver rights,
from the streets to the suites. It's John O'Brien. I'm
Out Money and Wealth with John O'Brien is a production

(40:36):
of the Black Effect Podcast Network. For more podcasts from
the Black Effect Podcast Network, visit the iHeartRadio app, Apple Podcasts,
or wherever you listen to your favorite shows.