WEBVTT 1 00:00:00.000 --> 00:00:04.000 What's going on everyone, it's Alex, I'm here and if you're new to the channel, 2 00:00:04.000 --> 00:00:08.000 built three companies that did $110 million in sales and continue to do so. 3 00:00:08.000 --> 00:00:10.000 Now we invest in other companies as well. 4 00:00:10.000 --> 00:00:13.000 And one of the talks I want to talk to you about today is the money ladder. 5 00:00:13.000 --> 00:00:17.000 And so this was actually came up during the conversation I was having with Layla and my wife. 6 00:00:17.000 --> 00:00:22.000 And she was like, you should make a podcast about this. She was like, you know, a lot of people don't know how this works. 7 00:00:22.000 --> 00:00:25.000 Welcome to the game where we talk about how to get more customers, how to make more 8 00:00:25.000 --> 00:00:29.000 requests to learn how to keep them longer in the many failures and lessons we have learned along the way. 9 00:00:29.000 --> 00:00:31.000 I hope you enjoy and subscribe. 10 00:00:31.000 --> 00:00:37.000 So right now I'm writing a handful of books around a one of them is kind of wealth beliefs that changed my life. 11 00:00:37.000 --> 00:00:40.000 And then I've got a bunch of books on acquisition stuff that's coming out. 12 00:00:40.000 --> 00:00:42.000 So what's the money ladder? That's what I'm calling it. 13 00:00:42.000 --> 00:00:45.000 But basically it's the order in which people get paid. 14 00:00:45.000 --> 00:00:50.000 And a lot of times like one of the biggest beliefs in my life that changed as I got wealthier 15 00:00:50.000 --> 00:00:53.000 and that changed before I got wealthy, that caused me to become more wealthy, 16 00:00:53.000 --> 00:00:56.000 was how I viewed the flow of money. 17 00:00:56.000 --> 00:01:00.000 So what I mean by that is if you look at who gets paid when, right? 18 00:01:00.000 --> 00:01:07.000 When money flows, you can see typically where and who is making, who is the most control on who's making the money. 19 00:01:07.000 --> 00:01:11.000 So think about it from a concept of work and payment. 20 00:01:11.000 --> 00:01:17.000 So at the bottom here you have an employee in general. 21 00:01:17.000 --> 00:01:19.000 Now there's nothing wrong with this. 22 00:01:19.000 --> 00:01:22.000 I was an employee too, so it's not that there's anything wrong. 23 00:01:22.000 --> 00:01:27.000 It's more so that you just have to understand how it works from a hierarchy standpoint. 24 00:01:27.000 --> 00:01:30.000 What happens with an employee is that they work first, right? 25 00:01:30.000 --> 00:01:33.000 They work first, and then they get paid two weeks later. 26 00:01:33.000 --> 00:01:38.000 So they front their labor, they front their time, and then they get paid two weeks later. 27 00:01:38.000 --> 00:01:40.000 Or four weeks later depending on what the job is. 28 00:01:40.000 --> 00:01:46.000 So if you look at the money flow, they have cost of time, cost of effort that goes out, 29 00:01:46.000 --> 00:01:51.000 and then delay, and then they get paid, right? 30 00:01:51.000 --> 00:01:55.000 Now if you've got somebody who's self-employed, 31 00:01:55.000 --> 00:02:00.000 this is kind of like a lot of contractors, vendors, gig economy, etc. 32 00:02:00.000 --> 00:02:04.000 These people, typically, they're trying to choose scenarios here. 33 00:02:04.000 --> 00:02:07.000 One is, and you can see because these people are a little bit more flexible, 34 00:02:07.000 --> 00:02:09.000 you'll see them kind of move on this money ladder. 35 00:02:09.000 --> 00:02:14.000 So on one, on the total, I would say, worst side of the equation, the lowest side of the equation, 36 00:02:14.000 --> 00:02:18.000 they basically model the same thing that an employee would, that a normal employee would set up, 37 00:02:18.000 --> 00:02:21.000 which is they front the work, and then they get paid later, right? 38 00:02:21.000 --> 00:02:26.000 Later, if they get better and better, and they become truly more independent contractor type things, 39 00:02:26.000 --> 00:02:30.000 then they might get paid half up front and then half upon delivery, right? 40 00:02:30.000 --> 00:02:33.000 So it's kind of like 50-50, right? 41 00:02:33.000 --> 00:02:37.000 And then later, right, then they start moving up this ladder, 42 00:02:37.000 --> 00:02:41.000 some of them will get paid up front, or as they work, etc. 43 00:02:41.000 --> 00:02:49.000 Right? So the next one is paid first, right? 44 00:02:49.000 --> 00:02:52.000 So think about this. 45 00:02:52.000 --> 00:02:55.000 If you go to a doctor, right? 46 00:02:55.000 --> 00:02:57.000 They don't do the surgery and then they get paid. 47 00:02:57.000 --> 00:03:00.000 They get paid and then they do the surgery, right? 48 00:03:00.000 --> 00:03:03.000 And so if you think about your work like that or your business like that, 49 00:03:03.000 --> 00:03:05.000 you get paid first, right? 50 00:03:05.000 --> 00:03:08.000 Now, this is where payment plants and things like that, 51 00:03:08.000 --> 00:03:14.000 like the more someone pays up front, and then I would say like in full, right? 52 00:03:14.000 --> 00:03:16.000 That's another kind of mini variable here, right? 53 00:03:16.000 --> 00:03:20.000 Are they paying somewhat up front, are they paying all up front, or whatever? 54 00:03:20.000 --> 00:03:26.000 Getting paid first is another level of kind of wealth and kind of control and power. 55 00:03:26.000 --> 00:03:28.000 All right? Now, but notice if you're looking at this from the video, 56 00:03:28.000 --> 00:03:32.000 we're still got, we still got a little bit of ways to go up here, right? 57 00:03:32.000 --> 00:03:35.000 So then above this, right? 58 00:03:35.000 --> 00:03:39.000 This is kind of, like this is kind of where I see people ending, 59 00:03:39.000 --> 00:03:43.000 and then you kind of get into like the business side of it, right? 60 00:03:43.000 --> 00:03:48.000 So above this, you'd have like banks, right? 61 00:03:48.000 --> 00:03:51.000 So what do banks get? 62 00:03:51.000 --> 00:03:54.000 So banks have something called a capital stack. 63 00:03:54.000 --> 00:03:59.000 So this is what I mean by that is when you buy your house, right? 64 00:03:59.000 --> 00:04:03.000 You're actually, the banks really buying your house and then you're paying the bank back. 65 00:04:03.000 --> 00:04:05.000 The bank is a preferred creditor. 66 00:04:05.000 --> 00:04:07.000 What that means is if you know, 67 00:04:07.000 --> 00:04:13.000 she hits the fan, they get paid first and then whatever's left over is yours, right? 68 00:04:13.000 --> 00:04:17.000 That's how it works. That's why you repay your mortgage when you sell your house 69 00:04:17.000 --> 00:04:21.000 and then whatever's left over, the scraps go to you, right? 70 00:04:21.000 --> 00:04:24.000 Banks get paid first. They're preferred creditors. 71 00:04:24.000 --> 00:04:28.000 And so when you're thinking about like money in general, 72 00:04:28.000 --> 00:04:32.000 look at where the exchange flows, right? 73 00:04:32.000 --> 00:04:37.000 Who's running time and then getting paid or who's splitting it up up front or who gets paid in full, right? 74 00:04:37.000 --> 00:04:42.000 And then if shit goes bad, who's the one who gets paid out first and who's left with the scraps? 75 00:04:42.000 --> 00:04:49.000 Now I'd say that there's one thing above banks here, which I would say is insurance. 76 00:04:49.000 --> 00:04:53.000 This is really interesting. I've learned a lot about insurance over the last year. 77 00:04:53.000 --> 00:04:57.000 So insurance is fascinating. 78 00:04:57.000 --> 00:05:03.000 Insurance gets paid far before they ever have to do anything. 79 00:05:03.000 --> 00:05:05.000 Think about that. 80 00:05:05.000 --> 00:05:13.000 Aimos and Asian quick break just to let you know that we've been starting to post on LinkedIn and want to connect with you. 81 00:05:13.000 --> 00:05:17.000 Alright, so send me a connection request and let me know that you listen to the show and I will accept it. 82 00:05:17.000 --> 00:05:19.000 There's anyone you think that we should be connected with, 83 00:05:19.000 --> 00:05:24.000 tag them in one of my or Layless posts and I will give you all the love in the world. 84 00:05:24.000 --> 00:05:28.000 Alright, so let's get back to the show. 85 00:05:28.000 --> 00:05:33.000 You pay your insurance for 20 years before they have to fulfill what they are due. 86 00:05:33.000 --> 00:05:37.000 And they also can not end up having to fulfill anything and you just get paid. 87 00:05:37.000 --> 00:05:41.000 They just get paid for 20 years for truly doing nothing, right? 88 00:05:41.000 --> 00:05:43.000 If you really think about how the money flows. 89 00:05:43.000 --> 00:05:45.000 Think about it for a second. 90 00:05:45.000 --> 00:05:46.000 Imagine you have a business. 91 00:05:46.000 --> 00:05:48.000 Imagine I started signing people up for an insurance business. 92 00:05:48.000 --> 00:05:52.000 You know, Alex or Mosey, you know, insurance. 93 00:05:52.000 --> 00:05:54.000 And I just started going around saying, hey, I'll ensure your life. 94 00:05:54.000 --> 00:05:55.000 Hey, I'll ensure your life. 95 00:05:55.000 --> 00:05:57.000 Hey, I'll ensure your life, right? 96 00:05:57.000 --> 00:05:59.000 And people just start saying, sure, I'll sign up. 97 00:05:59.000 --> 00:06:03.000 And they start paying me $1,000 a month and I've got 100 families, 98 00:06:03.000 --> 00:06:06.000 500 families who start paying me $1,000, $2,000 a month. 99 00:06:06.000 --> 00:06:11.000 I'm doing $1,000,000 a month and I do that for decades, right? 100 00:06:11.000 --> 00:06:16.000 And then, as people, you know, come to term because of how I wrote the contracts or whatever. 101 00:06:16.000 --> 00:06:18.000 This is obviously a shitty way of doing it. 102 00:06:18.000 --> 00:06:21.000 But, candidly, it does happen. 103 00:06:21.000 --> 00:06:28.000 You know, they might not qualify or they can no longer afford the fees because I increase the fees as they become higher and higher risk. 104 00:06:28.000 --> 00:06:31.000 Right? I've actually meaning to fulfill this stuff. 105 00:06:31.000 --> 00:06:38.000 So, the point is that if you look at insurance, it's basically the opposite of a depreciating asset. 106 00:06:38.000 --> 00:06:42.000 So, when you depreciate a building, so you buy something and they need to appreciate it in your tax. 107 00:06:42.000 --> 00:06:43.000 A lot of people see that as a good thing. 108 00:06:43.000 --> 00:06:45.000 It's like, oh, yeah, well, we can depreciate it. 109 00:06:45.000 --> 00:06:52.000 It's only a cool good thing because in your mind, because of the tax code, not because it's actually good that things get old and become outdated. 110 00:06:52.000 --> 00:06:53.000 Right? Think about it. 111 00:06:53.000 --> 00:06:55.000 So, insurance is the reverse of that. 112 00:06:55.000 --> 00:07:00.000 So, instead of putting all your capital up front and then having to appreciate something over time, 113 00:07:00.000 --> 00:07:07.000 insurance companies get all the money up front and then they get to appreciate the money over time and then pay you off of that. 114 00:07:07.000 --> 00:07:15.000 Right? And there's a reason that insurance companies, the oldest companies in the world, the oldest ones are 182, 300 years old. 115 00:07:15.000 --> 00:07:20.000 And it's because that is a business model that is unreal. 116 00:07:20.000 --> 00:07:23.000 They even, I mean, they predate the tax code. They don't even have to pay taxes. 117 00:07:23.000 --> 00:07:32.000 So, interesting. So, when I think about this stuff, hopefully this is valuable for you when you think about, 118 00:07:32.000 --> 00:07:39.000 and you know, actually, I'll put one level above this, the top level. 119 00:07:39.000 --> 00:07:44.000 I'll say God and Franchiseours. Obviously, I'm not saying Franchiseours are God. 120 00:07:44.000 --> 00:07:47.000 It's kind of just being funny. Don't get personal. 121 00:07:47.000 --> 00:07:58.000 All right. And so, the last level above this is that God gets 10% off the top, period for life. 122 00:07:58.000 --> 00:08:01.000 And so, that's how you can see the money ladder, right? 123 00:08:01.000 --> 00:08:08.000 All the way at the bottom, people front their time, front their effort, front their labor, they delay, and then they get paid. 124 00:08:08.000 --> 00:08:13.000 They move up to self-employed, they front their time, or they split, you know, they get half now, half later. 125 00:08:13.000 --> 00:08:16.000 And as they move up this ladder, they can pay more up front, right? 126 00:08:16.000 --> 00:08:19.000 A lot of that's because of demand, because of how good you are, right? 127 00:08:19.000 --> 00:08:23.000 You're a doctor, you get paid first before you do your surgery, right? 128 00:08:23.000 --> 00:08:28.000 If you're a professional, you're a great consultant, something like that, you get paid up front, right? 129 00:08:28.000 --> 00:08:35.000 Beyond that, you've got banks who they get paid first, and they leave people to scraps afterwards. 130 00:08:35.000 --> 00:08:44.000 So, that's when there's a defined pot of money. Above that, you've got insurance companies who get paid the whole time, and then may or may not ever have to fulfill on their work, right? 131 00:08:44.000 --> 00:08:49.000 So, there they get money guaranteed, but the work that they have to fulfill on is not guaranteed. 132 00:08:49.000 --> 00:08:57.000 Think about that, right? And then above that, you've got God, who gets 10% off top line of what you make. 133 00:08:57.000 --> 00:09:09.000 So, I hope this is value before you, this is the money ladder as I see wealth, and as I've thought of these things, as time has gone on, I shifted my views around it, I changed the way we do agreements, all that kind of stuff. 134 00:09:09.000 --> 00:09:14.000 And so, hopefully you find some value in it. So, this is one of the beliefs that changed my life that made me allow up here. 135 00:09:14.000 --> 00:09:18.000 Is watching where the money flows, watching where it goes, watching who gets paid one. 136 00:09:18.000 --> 00:09:20.000 Keep being awesome. Bye!