so let's talk about millionaire
principle number two there's seven
levels in investor I learned this from
Robert Kiyosaki and but over the years
I've changed it little bit to kind of
put my own spin to it now during my
in-depth study of money I'm a a shocking
discovery despite the many and very
personality types in the world
yeah only really seven types of or seven
levels of investors how many seven and
while it's common for an individual to
drip a little from one investor type to
another most people stay fixed at one
level for the entire lives but King I
ticket sales world's highest-paid
consultant media celebrity multi leader
entrepreneur claimed 10x speaker
international best-selling author so if
there are some books I would recommend
you to read one would be rich test
prophecy put in your to-do list to read
which says prophecy also Harry Dan's
book the sell of a lifetime how the
great bubble burst of 2017 can make you
rich those two books I recommend it was
scare the [ __ ] out of you he would scare
the [ __ ] out of you and my
recommendation is it may happen may be
happen in 2016 it might happen in 2017
right he said the baby boomers taking
money out what we do know 100% with
certainty is it's going to happen it
just went so I say why not be prepared
when the market crash a lot of people
will lose everything and I mean wiped
out not my stock is worthless
I mean wiped out asset class gone fix
you know with risk-free investment gone
the banks are out of business but if you
prepare you also do very well it's all
depends right I can [ __ ] wait I can
tell you that I'm like praying please
come right my time has come
right
people often get caught up in their I
need to make more money trap in fact
your income actually has very little to
do your income has very little to do
with the ability to obtain financial
freedom so seven levels investors has
nothing to do with the income rather
they would like to what you do with your
income now how much money you make has
nothing to do with the income but what
you do with your income now how much
money you make how much money you keep
and what you do with it so I talk about
zero level zero the very first level is
level zero I called it the non-existent
not what non-existent they essentially
have no investments or savings they're
completely unconscious or oblivious of
money matters in general and their
spending habits in particular they
usually come playing I don't make I know
I don't make enough money that if I just
make more money everything would be okay
how many heard of people like that
before I'm making money and make more
money everything would be ok the problem
is not necessarily the income or lack of
but rather their money management habits
let me talk about the set story of Mike
Tyson during the 20-year span of his
career Tyson's income exceeded 400
million dollars not forty four hundred
million dollars in his twenty years yet
in 2004 before his 39th birthday it was
38 million dollars in debt so he blew
400 million on top of the NLRA million
now you could say well but again Tyson
at a time he made millions of dollars a
fight a guy who can make millions of
dollars a fight can be broke well his
financial statement says otherwise
doesn't matter how much money he makes
you look at a financial statement he has
the cash flow pattern of a poor person
in fact it's worse than poor because if
your net worth is zero you're 38 million
richer than him it is 38 million in debt
for me it's not how much money you make
so level number one the borrower now the
borrower is often in a far worse spot
position and a non-existent through
though his Hall though his horror
potential for change may be great cuz
usually they're making a bit more money
the borrower often has very high debt
Bora spent all they make and more they
know how to consume they know about
stuff the idea of financial planning is
to get a new visa or mastercard okay
Boris he's the thing usually they live
in complete financial denial they live
in complete financial denial they often
come to believe that the situation is
hopeless and they kind of just give up
it's just the way it is manages and when
they feel depressed what do they do they
go out and buy more it's it gets them
out of that that funk under press I
spend more in demand more debt and I and
then I go back and at the president go
has spent more money and it becomes this
cycle okay level Dhamma to the saver if
saver usually put aside small amount of
money on a regular basis now the money's
generally deposit into a very low risk
low return vehicle such as a term term
deposit or money market money market
account so savers usually safe to
consume rather than invest so they saved
up the money and then they'll go on
vacation they serve the money they'll
buy a car they save the money they
myopic TV they're very afraid of
financial matters and unwilling to take
any risk they're just safe here you can
see their army they did the ones who
would who had drive many hours to save a
few dollars they're the ones who were
lined up on Boxing Day and and and fight
and wait for 10 hours try to save their
item savers level number three a passive
investor what can investor the passive
investor so these investors are aware of
the need to invest and usually you know
at to the RSP or 401k in the US by
making employee contributions and
sometimes they even have outside
investments such as maybe a mutual fund
or share stocks or bonds they make up
two-thirds of the population that we
call the middle class Nicole what
middle-class and however when it comes
to investing they are financially
illiterate
it's just kind of like put their sign
that's Desa mentality and these are very
Commons common things they might say
well I'm not very good with numbers
I love arguing numbers I never
understand how this real estate
investment work or how this stock
investing stuff work I'm just too busy
to follow everything it's just too
complicated well I prefer to leave the
money decisions to the professional oh
he's a good one I love this one I have
the best financial planner in town I
don't need to understand everything
that's going on he's a great guy
it's a nice guy Leah Griffin oh it's a
great guy they have very little idea
where the money's invested or why now
here's the thing these investors blindly
follow the market likes sheep and then
squeal a lot like pigs before running to
the only slaughter they also believe
that high rates of return of investment
are impossible and probably illegal you
tell them all this thing can get 15 20
percent we can oh that's too risky
that's impossible you don't do that so
no no no that's that's how they are it's
also common for these people to whine
and complain about missing out so it's
the same time you tell them about these
investments potential and you can make
these returns on that's too risky I
don't want to do that and suddenly they
see people making money oh [ __ ]
I should have gotten to that I should
have jumped into that I missed out and
they're the ones that would follow the
newspaper suddenly the news is saying oh
the market is crashing sell sell sell
sell sell
oh no no no no no I need to buy I need
to buy and the broker is happy to take
the call because everything buying
seldom a commission me a commission okay
so passive investor so those are the
first fear right you have the
non-existent the borrower the saver the
pass investor now if I go into the other
ones let me give you three minutes to
discuss those ones first who do you know
that belongs to what category well maybe
we'll level you're in
time to be honest I'm gonna be [ __ ]
honest one of your hand how many of you
are learning something new today yes
very good and put up your hand if you
know people who are at level zero okay
but have you know people at level one
and how many of you know people at level
2 and level 3 let's dive a little bit
deeper now the passive investor they do
not like risk they do not like risk at
the same time they very much love to use
what I call sophisticated investment
techniques such as margins short court
puts cost without proper knowledge of
exactly what is this they're committing
to or the real risk now passive
investors lose money more than 90
percent of the time they lose money more
than 90 percent of the time because they
like to speculate it will never discuss
their losses but we always brag about
their big win you don't hear about when
they lose money the only oh yeah I
bought this stock it went up a double
the money
you only hear about those stories they
believe all that all they need is just
one big hit and you'll be on easy street
they're gamblers they're basically
gamblers they like to gamble
okay and unfortunately I've seen
entrepreneurs they work very listen to
me our social burners work very very
hard the entire lives they make a
humilate quite a bit of money but they
listen to their friends listen to
something hey man surefire thing man put
some money into it
and what took them 10 used to accumulate
because they're not a good investor
level 3 what took them 10 years they can
lose it in one year everything and now
it takes them another whatever how many
years but here's the thing
entrepreneurs nature in cinah nature we
can work hard and we like where let's we
build this [ __ ] and we do and the next
time you're smarter next time but
unfortunate thing is they lost a lot of
time lost at 10 15 20 years I see that
so often so my hope for you is don't
follow that path make the money put
aside some money
yourself educated invest in what you
know don't follow that path is painful
fortunately with me I didn't take me ten
years I put in the money and now one
thing I was smart when I was investing
I wasn't greedy I wasn't trying to you
know what I'm gonna I'm gonna put all my
money to this you know even though all
the tech companies only put a percentage
from my money
so even when I lost all that money it is
still okay but if I was greedy and say I
put more because I know how to cut my
losses that's one thing I know the tech
company invest in an entrepreneurial
young guy and you know talk about burn
rate he'd burned the money in three
months I'm like okay man mm-hmm
any more money okay fine I'll write the
check right and write a check
man you know I know too few months later
come back to me man and I need more
money and I said you know what this is
last time already check one last time
if it doesn't go we don't get traction
I'm done I wrote a check of course lost
that money and that was it
so I wasn't trying to save they trying
to rescue and trying to you know what
I'm it's gonna win it's like a gambler
right they lose money they go to the
casino I'm gonna win this high man I'm
gonna win and they borrow money I'm
gonna win next time
so one thing one thing I did do right is
I minimize my losses although I'm not
quite a bit of money but still my nest
egg it's okay but in the same time I
never stopped increasing my improving my
income skills so I still have a lot of
carrots coming in that's what you see in
stability next sense so what's okay was
okay level number four this is where
every single person in this room needs
to get you at the very very minimum
level for the automatic investor our
American investors are clearly aware of
the need to invest
however unlike passive investors they
are actively involved in their
investments in actually involve in the
investment decisions they have clearly
lay out written long term plan that will
enable them to reach their financial
objectives let me ask you a question
with the wealth triangle is that a plan
that you can follow yeah it's a very
clear very simple plan they do not get
fancy here's the thing they don't use
like options or margin accounts or any
of the other stuff sophisticated money
managers you
they buy good shares proven manage funds
or salt investments and hold them for
the long term such as Warren Buffett
write automatic investor like I said you
can have high income skills and if
you're smart and being automatic
investor you do well you can do very
very well level number five it's what I
call because you only invest a certain
percentage you're looking at it you're
learning about it but you see the
differentiation between automatic and
inactive so just put aside money
automatically and you just invest yes
yes Mike yeah when I first started out
investing in my 20s I was a passive
investor I was listen to my banker they
looked good and their suits so whatever
they said I said yes okay let's do it
and but in my 30s I realized that that
was not going to make me wealthy right
so and I lost in one trade I lost a
quarter million dollars in one stock
trade so that was a big big wake up call
and a big lesson that I need to learn
not just trust other people with my
money I have to learn to manage my own
money so but yes but now I'm I'm a
completely active investor I do work in
finance I can I can safely say
conservatively that 97% of mutual funds
don't work ninety seven percent three
percent work there's five thousand funds
in Canada three percent work and those
funds change all the time so if you have
a good financial planner who studies the
markets like I do then you you know what
those three percent all right otherwise
ninety seven percent of them don't work
so that's that's the reality of it
[Applause]
and level number five is the active
investor and this boy I met so the top
two levels of investor are reached by
only a tiny tiny percentage of the
people on planet earth active investors
understand that move to move to this
level it must become very clear on there
two things they're investing principles
what is it what is it and the rules of
investing they're what rules of
investing their vehicle of choice might
be a real estate
it could be discounted paper businesses
or shares to be even private companies
actively what's the word actively
participate in the management of their
investments they don't just put aside
the money and hopefully you know they
would do a good job they are looking
they're monitoring they can see how they
can you know add value at the active
investor a consistently strive to
optimize performance while minimizing
risk it's not they just put aside money
so automatic investor they just put
aside money they don't look at it and
they should look at I mean not even look
at it
yeah they are not super active they're
not super active they invest
automatically but they're not super
active it's normal for active investors
to have long-term any returns of return
of 20 to even a hundred percent they
intimately understand money and how it
works okay the main focus is on
increasing the assets thus their cash
flow and net worth build a net worth so
their money philosophies vary
dramatically from the poor in the middle
class rather than investing what is left
of their money is to keep after spending
they believe in spending what is left of
the money after investing that's the
differentiation that is it when I make
the money I invest in companies where
your state when they're for soft cash
flow
I spend whatever the hell I want I can
bide it nice place I can I'd this sport
car because it's an asset that's paying
for my luxuries not my work so I could
now let me ask you this
can I take my high-income skills and my
income and just go spend yes
let's not do that let's took the money
go through the filter first manage my
money pulled you the investments
whatever is left spend all you want has
this machine is assets it would keep
cranking out cash flow for me now I
enjoy my life however I want with this
does that make sense
so yeah it's that's the only difference
is the order that is the order after
investing level no mistakes there
capitalist few people in the world ever
reached this level of investment
excellence and fewer stay to manage to
remain there these are the waka fellers
the Kennedys the Fords Carnegie's ill
gates the Buffett's of course
capitalists have two principles
motivations with we got investing to be
a good manager of their money while they
are living well their life and leave a
legacy to continue after they're gone
new gates give a lot of cheong of the
wealth
same thing with Warren Buffett the
legacy give away a big chunk of the
wealth that's the capitalist just a
capitalist take two minutes hello
discuss the rest of the levels go so
what have you learned from my talk what
does it mean to you and how are you
gonna take direct action comment below
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