>> Hi, I'm Lewis Howes, New York Times best-selling author and entrepreneur.

And welcome to "The School of Greatness," where we interview the most influential minds in the world to inspire you to live your best life today.

In this episode, Jaspreet Singh of "Minority Mindset," a trusted voice in financial education and wealth-building strategies, shares his top investment hacks for building wealth and achieving financial freedom.

We dive into practical tips on spending money wisely, leveraging tax codes and creating passive income streams.

I'm so glad that you're here today.

Now let's dive in and let the class begin.

♪♪ ♪♪ What would be the five steps if someone is entering their 30s, about to turn 30, in their 30s, to set them up for success to potentially be able to retire in 20 years?

What would that look like in a five-step process?

>> Yeah.

So I think it's an interesting thing now kind of being in the 30s, because what I've been seeing happen, especially recently over the last couple, few years, is I've been getting a lot of calls from my friends who kind of like woke up.

It's like this thing where, "Hey, man, I've been working for 5, 10 years.

I've been making a decent income, but I have nothing to show for it.

Like, I have a nice car, I have some nice stuff, but I have very little cash in the bank.

I don't have any investments.

I have no idea how I'm going to retire.

I have no idea how to become wealthy.

Like, what is going on?"

>> They have a lot of liabilities.

>> You have a lot of liabilities, even if you don't have any payments.

Like, I have some friends who are doctors who have nice stuff.

They kind of grew up with this mentality of debt is bad.

They don't have any payments, but they have no investments.

>> And they have no cash left?

>> You have no cash.

You have no assets.

You don't have any cash flow.

It's just you have some stuff, but you have no wealth.

And so it's like you kind of go through this like waking-up process of realizing, "Is this right or should something be different?"

And I think that's where people start their journey of "What do I do?"

And fortunately, because of YouTube, it's become much more accessible for people to find information.

Before YouTube, it was much more difficult, but even then it can be very overwhelming.

So it's like, what do you do?

Where do you start?

And the unfortunate thing is, we're never taught this stuff.

And this is what really got me so into the financial education space.

It's because I was very fortunate that I kind of got exposed to financial education by accident in my late teens, got into entrepreneurship, started reading books, and kind of dove deep into this journey to figure it out earlier.

But it's kind of a lonely process because no one else is really doing it.

>> I know.

>> And you might be like that odd duck trying to figure out, "What do I do?

How can I now go and achieve this wealth?"

And we're never taught this stuff.

We're never taught how to build wealth.

We're never taught how to build passive income.

We're never taught how to really build this stuff.

We're taught to go to school and get a job and make some money.

And then what do we do?

We spend that money.

And this is where now, if you can start thinking a little bit different, now you can start doing things differently.

And a couple of things you have to know is, for one, how much money you make isn't the sole determining factor of how wealthy you will become.

Because the first thing people think for the majority of people is, "Okay, I have all these payments.

I'm making just as much money, and I don't really have that much cushion to really save money or become wealthy.

So I just got to make more money."

But statistically, what we have seen is for the majority of Americans, when you make more money, you dig yourself into a -- >> You spend more.

>> You dig yourself into a deeper financial hole.

>> Really?

>> Yeah, because now when you make more money, you qualify for more loans.

You qualify for higher credit limits, for higher credit cards, >> You pay more taxes.

>> You pay more in taxes.

And we'll talk about that too.

But now you spend more money.

And statistically this is what we have seen happen, which is why for the majority of people, you make more money, you end up even broker.

>> Wow.

>> And what's interesting is now if we kind of take a step back and we zoom out and we say, okay, how did we become wealthy, somebody making $50,000 a year can become wealthier than somebody making $100,000 a year.

And when you hear that, you might say, "Wait, how is that possible?"

Well, if you just look at the numbers, you can kind of see what happens.

Because if you have two people, person A, person B, one person, person A makes 50 grand.

Person B makes 100 grand.

They both invest 15% of their income.

So that means person A is investing $7,500 a year.

Person B 15% of 100,000, $15,000 a year.

If person A starts investing when they're 21 and they can get the average market return, which has historically been 10% a year, and they do that from 21 until they retire.

Person B starts, say, when they're 30, like what we're talking about, a little bit after because they partied in their 20s like everybody else did.

They bought some nice stuff and they say, "You know what?

Let me start investing 15% of my income."

If person B starts investing twice as much money because they're making twice as much money, they're going to retire with not as much wealth as person A Person A will have over a million dollars more in wealth, even though they make half as much money.

They're investing half as much money because they started a little bit sooner.

Now, if you're 30 and you're hearing this, you might be saying, "Well, what am I supposed to do now?

Are all of my options gone?"

No, what I'm saying is this is where financial education is so important.

Time is just one factor when it comes to building your wealth.

There's a couple other factors that I want to go over that will determine how you will become wealthy.

But this is where that financial education is so important.

It's not just how much money you make that matters.

It's what you do with the money you make, and that will determine how wealthy you will become.

So now when we talk about what are these steps, five things that you need to work on -- First, you need to know how to spend your money properly.

Second, you got to know how to grow your money properly.

Third, you need to know how to save your money properly.

Fourth, you need to know how to earn more money the right way.

And then fifth, you need to know how to protect your money.

You were talking about now how do you pay less money in taxes legally?

This is where it comes down to protect your money.

And each one of these things build on top of one another.

So maybe we can start with number one and then go over two, that way we can kind of build on top of this whole process.

>> Before you go on to number one, let's just say there's a 30-year-old watching or listening right now.

They just turned 30 or about to turn 30, and they're in that "You know what?

I'm probably only going to make 50 to 100 grand for the next 10- to 15-year range.

Maybe I break through it, but maybe I don't.

Let's say I never make breakthrough in the next 10 to 15 years, 100 grand."

>> Sure.

>> "And I really want to set myself up for financial wealth in the future."

>> Sure.

>> "If I don't educate myself around anything else, if I don't take any other action, and if I never learn another thing you say and I don't even know these next five things, but if I put my money in one place every month for the next 20 years and I just live my life, what -- How much should I put away, and where should it go to set me up for financial success?

Even if I make all the other mistakes, but this will support me."

>> So I'm thinking -- I will answer that question in this first step because you have to know how to spend your money the right way first.

And before I jump to that answer, I want to explain it because I like to help everyone understand the answer because it will help it make more sense.

See, the first mistake or the first issue that people face is how do I actually become wealthy?

How do I invest my money for wealth when I have no extra money?

>> Right, when I'm barely getting by.

>> I'm barely getting by.

And this is where you have to start with your spending because that is the most accessible thing that you can do.

And this is where now, how do you spend less money in a world where the world wants you to spend all of your money?

>> Everyone's marketing you to buy, to spend, to buy things, to travel, all this stuff, go out to eat, do all the things that are luxurious that keep you poor.

>> Well, our economic system thrives on this.

>> Yes.

>> And this is where the first education we should all have before we leave high school is how does our economic system work?

Because most people never understand this.

And then they wonder why they're living like a rat in this rat race all the time.

Because we never understand how the system works.

Our economic system is made up of three different parts.

We have the economy, which is the businesses and the economy.

We have investors, which are people who own a piece of the economy.

And then you have the consumers.

This is people -- you, me, rich people, poor people, middle-class people, businesses.

Every single person is a consumer.

Now, the problem that most people face is most people are only consumers.

They only spend money and they don't own a piece of the economic system.

So now if you look at the way this works, our economy thrives when people spend money.

The more you spend, the more money that's going into the economy.

The more you spend at Chipotle, the more money Chipotle makes.

If you're not buying the double guac, Chipotle's not making as much money.

>> That extra cheese, right?

>> So it's a system where it encourages people to spend and corporations will hire the -- like you were saying, the best and most smartest marketers in the world to encourage people to open up their wallets and spend money.

This is what's happening.

But none of us are really given a shield of knowing when should I open up my wallet and when should I not?

So if you don't understand this system, it can make you, one, broke, but then also very angry because you're like, "I have no money.

My banker is taking all my money, these greedy corporations are taking my money, my boss isn't paying me enough" and you just feel like you're stuck.

But when you understand "Hey, look, bankers are in the business of lending money."

They want to lend you more money.

They want you to go into debt because that's how they get paid.

Corporations want you to spend money.

That's how they make more money.

Your job now is to be a smart consumer and a financially educated investor, that way now you can have the nice stuff but also benefit from the way that the system works.

So now going back to this topic of spending money, you were saying how much should you invest?

This is where I would say start off with a simple system.

I like to say 75/15/10, which means that for every dollar that you earn from here on out, 75 cents is the maximum that you can spend.

15 cents is the minimum that you should be investing.

10 cents is the minimum you should be saving.

Now what you do now, you ideally want to create three different bank accounts and automate this whole process.

So you get paid, it goes into one bank account.

And then you have an automatic withdrawal, deposit where that money is pulled out of one account, put into your investment bank account and put into your savings bank account.

That way you don't accidentally spend your investing money.

You don't accidentally take your emergency savings money and use it to buy a new TV.

>> Yeah.

>> So you want to automate it.

And a lot of banks will do this for free where you just automate it.

That way you don't see that money.

So now it's a matter of okay, understanding that, hey, the way that the system works, it encourages me to spend.

Now, what do I spend my money on?

And this is where knowing, okay, I need to spend a little bit less on things that aren't producing me with value, which we'll talk about in just a second.

That way I can make myself rich before I make everybody else rich.

>> Mm.

But let me get this straight again.

Spend 75, invest 15, save 10.

Is that right?

>> Right.

So if you're making $100,000 a year, you can -- and this is take-home -- $75,000 is now what you can spend, $15,000 is what you're investing over the year, $10,000 is what you're saving.

>> It seems pretty reasonable.

>> And now this is what you can do regardless of where you are, whether you're making $25,000 a year to $150,000 a year, $2.5 million a year, $25 million a year.

The numbers scale.

This way now you're always, no matter how much money you make, you're always paying yourself first.

And by paying yourself first, I don't mean going out and buying a new Gucci wallet or belt.

You're paying yourself by buying assets which make you wealthy before you go out and spend your money to make somebody else rich.

>> What are the top three assets you should be spending on?

>> So this brings me to number two is now how do you grow your money, right?

>> Okay.

Did we finish spend first?

>> Yeah.

Okay.

Let's go into growth because now we're talking about assets.

Because why do wealthy people want to own investments?

Well, they want to own things that pay them.

This is where if you look at the mindset of a broke person and a wealthy person or somebody who wants to become wealthy, we're not looking at how much money they have in the bank.

Somebody who wants to become wealthy and somebody who is broke, their mindsets are very different because the majority of Americans -- broke people, middle-class people -- they make money to spend money.

Well, wealthy people and wealthy-minded people make money to grow their money.

Now, what does that mean?

That means they're making money for one purpose -- to buy these assets, these investments that pay them for owning it.

And it's a completely different way of thinking, because when most people make $1,000, they think, "I can go buy a new watch, I can go on a vacation, I can go out to a nice dinner."

When somebody who is wealthy or wants to become wealthy makes their grand, they say, "Where can I put this money to work so this $1,000 can become $2,000 or so this $1,000 can pay me with dividends every month or every quarter or every year so I'm getting some cash flow from these investments?"

So this is where now we talked about 75/15/10.

That 15, that money that you're putting towards your investments, where do you put this money?

And I'm going to give you more than three.

But I think the first place that especially if you're just getting started, the most accessible place for a lot of people is their 401(k) or their IRA.

And the mistake that so many people make here is, for one, they don't know what their 401(k) or IRA fees are.

NerdWallet did a study where they said that 92% of Americans don't know what their 401(k) fees are.

And so if you're watching this and you don't know that your 401(k) is costing you a fee, sorry to be the bearer of bad news.

We'll talk about how to analyze that.

But then the second mistake is they expect their 401(k) to be the sole retirement plan.

It was never, ever, ever intended to be your sole retirement plan.

Yet you have so many Americans that are relying on their 401(k) to be the reason why they're going to be able to retire rich.

But that is not what it was intended for.

Even the founder of the 401(k) has come out and said that the 401(k) has gone awry... >> Really?

>> ...because so many people are using their 401(k) as their sole retirement plan.

It is not going to be enough.

>> Should we invest in that at all then?

Or should we just move it into another investment?

>> Look, it is a good place to start for many people.

I don't invest in a 401(k) because I can get better tax advantages, better growth and better control and better access of my money by doing my investing myself.

But I'm also... >> You obsess over it, yeah.

>> I'm an investor, right?

This is what I do.

If you are not, start with your 401(k) and also you're going to do other investments that we're going to talk about.

And then you make that decision for yourself.

If you say, "Hey, you know what?

I find better investments, better returns, better opportunities, I'd rather have the control over my money somewhere else," then now you can make that decision.

But a more educated decision, not an emotional decision.

That's the key.

Don't jump to conclusions just because you hear some random person on YouTube saying something.

>> Right, right.

>> Make your own educated decision because what's good for you isn't necessarily good for me.

So you can start with your traditional retirement accounts, which can offer some tax advantages, whether it's a Roth or a traditional 401(k) or IRA.

The difference between a traditional and a Roth is with a Roth, you pay taxes first.

Your money grows, and then you can generally pull your money out tax free.

With a traditional you don't pay taxes.

So more money goes in today.

But then when you pull out -- pull your money out, you can generally -- then that's when you're going to pay taxes, when you pull your money out.

Now, beyond that, this is where now you have a lot of opportunity because this is the area now that no one's really operating in, because most people assume I'm putting my money into my 401(k), so I should be fine, right?

No, this is where you have to now look at what are the other opportunities?

And I'm going to break this down into your passive opportunities and active opportunities because some people want to be involved with their investments.

Some people are money nerds like me, where you're like, "You know what?

I like studying numbers.

I like looking at companies.

I like looking at real estate.

I like looking at the financials.

I want to be more actively involved."

Some people will say, "I hate that.

I just want a place to put my money where I don't have to worry about it."

>> Set it and forget.

>> I don't have to think about it, set it and forget it and work to build wealth, that way I'm not stressed out about money and I can actually live my life financially free.

So let's start with the passive side, because now, what passive investing is, it's you're taking some of your money every time you get paid, and it's automatically going to be invested.

What I say is it's got to be automatic, consistent, and passive.

So you want this to be a system where no matter what's happening in the economy, no matter what's happening in the world, you're going to just passively and automatically have some of this money invested into something.

Now, where can this money go?

Well, the most common passive investments are into the stock market.

Now, because of technology, you can also invest into real estate indirectly into some funds passively.

But I think the stock market is the most accessible way.

And what the stock market allows you to do is we're talking about that economic system.

You have the economy, the businesses, the investors and consumers.

When you invest in the stock market, you become one of the investors.

You now own a piece of the economic system, because if you invest in the Amazon stock, even if it's just one share, you become one of the owners of the Amazon Corporation.

Now, this is where most people assume that you have to pick stocks to invest in the stock market.

Well, let's look at the numbers historically, because what you'll see is historically, the stock market over the last century has gone up by around 10% a year.

Yet most people lose money in the market, which, if you think about it, doesn't really make much sense.

Like, yeah, we see crashes.

I mean, we see crashes, like what, every decade or so?

We see dips.

But if the market historically has gone up on average -- not every year it's gone up 10%, some years more, some years less -- but on average it's gone up about 10%, how are most people losing money in the market?

Well, most people are investing their money in the stock market the wrong way.

If you're not willing or don't want to research companies, you don't want to keep up with earnings calls, you don't want to read the financial statements, you don't need to invest in individual companies.

You can be a passive investor and invest in funds that give you exposure to the broader stock market.

>> It's hard to lose when you do that.

If you do that automatic, consistent and passively every month, 20 bucks a month even, something small, 100 bucks a month, more if you have more, and you put it in a fund that is going to continuously rebalance itself and continuously set you up for success, over time it's probably going to get around 10% annually over time.

If you just did that for 20 years, you're going to see your money grow.

>> Right.

>> It may not be as sexy and big spikes and "Oh, I doubled my money in three months" like some stocks could potentially do, but that could also lose half of your money in three months also.

>> Right.

>> And so if you're looking for it to be a quick thing, you're probably going to stress a lot more and you're going to make emotional decisions that don't serve you or benefit you in the long term.

>> Right.

>> That's why doing this approach automatic, consistent and passive in a fund that is a solid fund will support you.

>> And to that point, I think the big thing that stops a lot of people from seeing that success is they assume that their success will be instant.

>> It's slow.

>> It is slow.

>> Slow.

>> And you're going to go through ups and downs because what we saw happen in 2020 -- >> It will go down.

Yeah.

>> The market crashed and we saw people selling out of their passive funds because they're like, "Well, I thought it was going to be a guaranteed return.

Now I'm down 40%."

Well, yes, in that moment.

But remember, you're supposed to be investing for the long term where it is the longer you invest for, the lower your returns are.

And what you have to remember as a passive investor is you're pretty much marrying your investment funds here, because we're not investing now with the goal of trying to sell in six months or two years.

>> And take it out and use it, no.

>> [ Chuckles ] We're trying to invest for the long term, meaning multi-decades.

Now, when you look at that horizon now, yes, your risk goes down significantly, but most of us don't have that level of vision to think that far ahead.

And when you see the market go down, you get worried.

>> If you use this approach like you talked about 75/15/10 and you said this 15% that I'm going to invest in every month -- automatic, consistent and passive.

Whether it goes in one fund, real estate, multiple things, whatever you want to split it up and do, diversified, I think knowing I'm not touching this money for a period of time.

>> Right.

>> And it should probably be a decade at least.

>> At least.

>> At least a decade for you to be like, "This money, I'm going to invest in it because I want to buy a home in a decade because I want to do this big thing in a decade," or "I want to be able to retire in 30 years," or "I want to be able to do whatever at a certain time."

But that 15% you should not be thinking about "I'm going to spend this in three months, and I want to make it go up 20% in three months so I can spend it."

>> Right.

>> That approach would not work.

Spend the 75%, save the 10%.

So you have a window of buffer to pay for things as emergencies that come up, but not with the investment dollars, right?

>> Right.

The investment money is working to build you wealth.

You become wealthy with your investment money.

Your savings are there to protect you against an emergency.

Your spending money is what allows you to... >> To live your life.

>> ...live your life and have the nice things.

And so now we'll get into now how do you live more and live better today By earning more money in a bit.

But this is where now the passive investing is the most accessible way for somebody to start investing.

And then somebody is going to say, "Well, what do I invest in?"

Right?

Because we're talking about, well, you can invest in the stock market.

There are funds, like there's index funds, ETFs, mutual funds.

They all work similarly with some nuanced differences that allow you to invest into a basket of stocks, a group of companies.

So for example, I like ETFs just because they're very convenient.

So you invest in a ticker symbol.

>> ETFs stand for...?

>> Exchange traded funds.

So, for example, if you wanted to invest in the stock market, this is where now remembering it costs money to eat, it costs money to feed other people.

When you have more, you can give more, and now how do you give?

You can give with money.

You can give with time.

You can give with education.

And how do you give?

And this is where you can do -- And this is what I love about this particular part is everybody has a different passion.

Some people are passionate about mental health.

Some people are passionate about world hunger.

Some people are passionate about whatever disease.

And when you have money, now you can do something to fuel your passion, and you're going to be criticized no matter what.

When we feed people in Detroit, people will say, "Why are you feeding them?

Why aren't you fighting the drug problem?"

Look, here's the thing, right?

When you -- >> "Why aren't you doing more of this or that, or helping this way," yeah.

>> It's usually somebody sitting on their sofa who is just complaining off their phone.

Right?

But the thing is, when you have that money, you get to decide.

>> Yeah.

>> And what's important to you.

And you get to help however you want.

Like, when we, the Minority Mindset YouTube channel hit a million subscribers.

I wanted to do something fun to kind of give back with the team.

So we did this, like, fun giveaway where -- And this was like in the pandemic time so people weren't going to school.

And so you had a lot of businesses getting hurt, especially like teacher businesses, people that were supplying supplies to teachers because people aren't going to school.

So we did this thing kind of like MrBeast style, where me and my team, we went to a teacher store and we said, "Hey, can we buy some stuff here?"

She said, "Sure."

I said, "Well, let's have some fun with it."

So we put on the cameras and we had, like, my team get shopping carts, and we just bought a huge chunk of the store and it was like a huge -- just a lot of fun.

We bought thousands and thousands of dollars worth.

I don't remember how much, but thousands of dollars worth of stuff, which then we went to a school in Detroit that I was working with, and we gave it to them for free.

And now they have a whole bunch of school supplies, and I asked the principal, I said, "Hey, how many teachers do you have here in the school?"

And he told me, and so I gave a check for $500 for each teacher in the school.

>> Wow.

>> Just as a way to now, the more you have, the more you can do, and this is where just remembering that you have the ability to give back.

Like, it doesn't have to be necessarily religious.

Like, I talked about seva and the Sikh religion.

Seva is a fundamental tenet in the religion.

It doesn't have to be something religious.

It's just now you have the -- you have the freedom and the choice.

Now, how you can help and who you want to help, and being willing to give back because it can be time, money, education.

How will we help to help somebody else see that success as well?

>> Jaspreet Singh, man, this is powerful stuff, man.

We've covered five key things that you can do to start in your 30s to be able to set yourself up to retire in your 50s and potentially even sooner if you learn that earning and investing part and saving part better.

We hope you enjoyed this episode and found it valuable.

Stay tuned for more from "The School of Greatness" coming soon on public television.

Again, I'm Lewis Howes, and if no one has told you lately, I want to remind you that you are loved, you are worthy, and you matter.

Now it's time to go out there and do something great.

If you'd like to continue on the journey of greatness with me, please check out my website lewishowes.com, where you'll find over 1,000 episodes of "The School of Greatness" show, as well as tools and resources to support you in living your best life.

>> The online course Find Your Greatness is available for $19.

Drawn from the lessons Lewis Howes shares in "The School of Greatness," this interactive course will guide you through a step-by-step process to discover your strengths, connect to your passion and purpose, and help create your own blueprint for greatness.

To order, go to lewishowes.com/tv.

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