20 Harsh Truths To Go From Broke To Financial Freedom

• This book is highly recommended for anyone seeking financial freedom.
• Many people underestimate the value of money and its impact on happiness.
• It's important to take ownership of one's financial situation to achieve independence.
• The average American's financial struggles highlight the need for change.
• Building multiple income streams can lead to greater financial security.

this book just came out recently and I got to say it is one of the best Finance books that I would recommend to somebody who is trying to go from broke to Financial Freedom.

so I'm going to share some lessons that will absolutely change your finances forever.

I want to start off with agreeing to the first chapter of this video that being poor kind of sucks and yet believe it or not a lot of people actually deny that and I used to be one of them.

a lot of times we hear that money does not buy happiness but generally there's two types of people that say that: either people who are broke or people who have never been broke.

the broke people say, you know, sure we don't have money, but money wouldn't make us happy anyway. Look at all the rich people, they're depressed.

but on the contrast, people who have never been broke and don't know what it's like to work three jobs just to pay the bills and to have to miss important things in your kids' life because you have to work, to stress out over a flat tire or broken arm or getting sick for a week, or miss out on having experiences or doing things because they don't have money.

but from experience as somebody who was broke and has gotten close to Financial Freedom, I also think it's way better to have money than to not have money for all of those reasons I just mentioned.

if you're telling yourself that it's somehow better to be paycheck to paycheck and always have to stress about money, it's not.

money is just a tool; it can be good, it can be bad, it can be whatever you want.

but ultimately, if you do believe that it is a tool, then you want the best tool that you can have to be as effective as you can so that you can literally buy better food that makes you healthier, have less stress which makes you healthier, have more time so you can like see your kids grow up and stuff.

this is something that I used to struggle with, and I think we all need to stop glorifying being broke.

money can solve a lot of problems and do a lot of good, which leads into only poor people think that the system is rigged.

if you actually believe that the system is rigged, most likely you will get stuck in that system for the rest of your life.

but I mean, it is kind of a scam, to be honest, if you do what everybody else is doing and you play along with the game but you're just playing in kind of like a wrong game—a game that you cannot physically win because you're starting off going into debt and then climbing the corporate ladder.

every time you get more money, you spend more money.

if you think that's kind of rigged, well, like, yes, but if you think the system in general is rigged, then all you're doing is saying that I have no power, and therefore I have no responsibility.

and therefore it's okay for me to just chill out and not try to change my life because I can't change it even if I wanted to.

if you have that approach, you'll never reach Financial Independence ever.

but if you take extreme ownership over the good, the bad, the ugly, the job, the health, everything—even if some of it's not in your control—and you just say, I'm going to make the best out of this and I know that I can make my life different because I've seen so many people go from way worse than I've had it to way better than I could ever dream.

I've seen that happen so many times; so why not me?

and maybe even if I don't go that extreme, I need to at least try.

but if you think the system is rigged, you never will.

if you're following these rules, you're probably never going to have money.

blame everybody else for your circumstances, spend everything and save nothing, try to get rich quick, don't trust investing, try to impress others with stuff that makes you look rich, give up your power and resign yourself to being poor forever.

if you're doing those, you need to move to the rules of the Rich Game:

• take responsibility for your circumstances,
• save and invest a percentage of every dollar that you make,
• don't worry about impressing others with your stuff,
• keep an open mind and always be looking to increase your education, whether formally or informally,
• believe that you have the power to change your life.

depending on what rules you follow, you're going to have a very different outcome.

average kind of sucks—unless it doesn't.

the average American is $96,000 in debt; 56% of Americans don't have enough money in their savings account to cover a $1,000 emergency.

49% of Americans will never be able to comfortably retire.

and so you got to ask yourself what are the average Americans doing that is leading to them being in a trash financial position?

honestly, if you're anything like me, it's not super hard.

like everybody has that friend that you can either learn from or that drags you down.

my name is Rod, and I like to party.

in fact, there's a really cool analogy that they use in here that really struck home for me, and it's like the idea of crabs in a bucket.

where if you put crabs in a bucket, you actually don't have to put a lid on because the crabs will actually grab the other ones and pull them back down to prevent them from getting out and escaping.

a lot of times, that's what our friend group can be like, where you will have people that don't want you to get in shape, to eat healthy, to make more money, to become financially free because it shines a light on what they aren't doing.

so they'll do things like, "Oh, it must be nice to have money," or "Oh, like enjoy your life a little bit, live a little bit."

they'll always have reasons why you shouldn't be pushing yourself to do better and move up, and if you have those friends, just becoming aware of some of the things that they do can actually help you not get impacted by them as much ’cause it does happen.

but also, we need to look at what the average American is doing.

the average American is spending every time they get a raise; they instantly spend more money.

they're getting into credit card debt; they have no budget, and they're not putting anything away for retirement.

they're spending their nights and weekends like watching TV and then going out and spending money—drinking or doing whatever.

there's a lot of very common habits that if you want to end up in some of those statistics, you just do what everybody's doing; you do the easy thing.

but if you want to change, then you follow the rest of the stuff in this book to be different than almost everybody you know.

and that leads to the point that having a job is insanely risky.

maybe not insanely risky—I'm not here to hate on jobs—but I just want to give you a couple ideas.

40 million Americans lost their jobs in 2023 alone.

but I think people get this false sense of security that because they have a job that pays them every other week or whatever, they have stability in their life—which is kind of true.

but also they can fire you anytime they want.

what are you going to do? "You're going to fire me?" "No, I already fired you."

you have no control if that company goes bankrupt, if your boss decides to fire you, if you get a different boss—zero control over any of that.

plus, if you only have one job, then it's even more risky because all of your income comes from one place.

if that goes away, everything goes away; the debt happens, you lose the house, everything happens if this one source of income goes away.

it's so risky.

there is no such thing as a sure thing when you are trading your life, your time for money.

it's like this trap where this stability, this security comes with this 9-to-5 but also the guarantee that it'll be way harder to reach Financial Independence.

and you actually do have a large risk that you just choose to ignore.

and that's why they teach in this book having multiple streams of income, and that's how you can move to financial invincibility.

before we get into some of the nitty-gritty of what to actually do, they address this idea that I think is super important, which is learned helplessness.

there was an experiment in the '60s where they took two sets of dogs.

they put them in a cage where there's an electric shock and no way to get out.

simultaneously, they also had dogs in a different cage, and the only way to stop the shocks was to press a button, and eventually these dogs figured that out.

now, in the next phase of this depressing experiment, they placed these dogs in a room with a partition in the middle, and the floor would intermittently shock them.

now, the dogs that learned previously that there was a way to escape this pain eventually found out to jump over the partition.

but the dogs that had not learned that, who previously were helpless, now even though they had a way to escape, they wouldn't jump over that partition.

they had learned helplessness.

the same thing affects a lot of us, especially if we grew up in a situation where we felt helpless.

sometimes we get to the point where we don't even try to do anything different because the past has been so hard that we give up our authority, our power to try to make a difference because we don't think it's going to work out no matter what we do.

if you are in that situation and you've kind of learned this helplessness and you've given up and you just think everything's against you, most likely things will never get better, and they will probably get worse until you learn that you can jump over that fence.

sometimes, it's got to be done.

by the way, if you're enjoying this and getting any value at all, it really helps the channel if you drop a like and subscribe.

I never ask, but it helps break it down.

this is something that they talk about in the book, and I also learned from James Clear in Atomic Habits, another amazing book that has changed my life, and it's just the idea of taking big goals and things that you're trying to do and breaking them down into the smallest, tiniest actionable steps and small habits so that you can consistently do those things for a long time and actually make progress.

I've actually been watching this class by James Clear over on MasterClass, who's also the sponsor of this video, and it's really been a great reminder of this exact point.

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how to actually increase your worth.

so if you don't think you're getting paid what you're worth, which I felt for years, it turns out you are getting paid what you're worth.

and if you're not increasing your value to the economy, that's going to be reflected in how much you earn.

it's not your value as a person; it is your value to other people and to the economy in general, whether it's fair or not, it just seems to be the way it works.

so how can you actually increase your worth?

read a book every week.

I've done this honestly, and it is very hard to do, but that is when I have made the most change in my life.

you never know what one page or one paragraph from a book or a video like this will be—the catalyst that turns your life one degree, and then five years from now, you won't even be the same person.

so start learning; listen to podcasts or YouTube videos from people who have more economic value than you do.

take online classes, get creative, and combine your skill set to create a high-value offer—make yourself indispensable at work.

’cause if you do, your boss might not only find it harder to fire you, but also might be more willing to give you a raise when you ask for it.

find new avenues—putting more work on the nights and weekends, and experiment to try to become an entrepreneur—because especially with online businesses, there's literally no ceiling to how successful you can be.

save 95% of your income.

one of the authors, Adrien, talked about how he was living in, I believe it was like a van or camper or whatever it was, for a year.

he lived this extreme minimalist digital nomad lifestyle where he only had Wi-Fi like a couple days a week, and he was able to save 95% of his income for that year.

that is absolutely life-changing.

it's not about the money.

if you earn $20 an hour and you buy a latte at Starbucks that is $10, you did not just pay $10 for that latte; you spent 30 minutes of your life in order to buy that thing.

calculate taxes—you spent more than that, but that's really depressing, so let's avoid that.

but the $100 bill at the bar is 5 hours of your life.

the new car is not $500 a month; it is 25 hours of your life for a car, and that's every single month.

when I made that shift to looking at everything I was buying as I'm giving up X amount of hours of my life for this, I started cooking at home.

I had an old beater Honda Civic that I paid cash for and was really cheap to drive.

I stopped buying clothes; I stopped going out to dinner; I stopped doing everything because I realized I would not go and work for an hour in order to have that t-shirt.

I don't want it that bad; I want my life.

I think when you come to that realization, everything changes.

get a roommate and a side hustle.

again, they talk about how making one decision can completely transform your life, and I literally just did this this week with some decisions I'm making about housing, so it was like so timely to read this.

and it was talking about if the average rent in the US is $2,000 and you pay that every single month and you get a roommate and that brings it down to $1,000, this can completely change your life.

if you take that $1,000 a month and you invest it for the next 25 years earning about a 10% return, that one decision of getting a roommate would be $1.3 million.

now, obviously you're not going to have a roommate that long, but it's just this idea that small decisions over a long period of time are life-changing.

the 30% rule: if you listen to most people, they recommend saving 15% of your money, and that that's a good thing—or 10% of your money; save, invest, whatever.

if you ever want to be financially free, that's just trash, horrible advice.

they suggest starting off with investing 30%.

again, they've gone all the way up to 95%.

I always shot for at least 50% to 75% of my income, or when I had two jobs, I would live on one job and invest everything I earned from the other job.

and if Financial Freedom is a priority for you, I would say if you're not investing at least 30% to 50%, then you need to make some drastic changes, either saving money in some different way like we've talked about or earning more money through side hustles, earning valuable skills like we talked about, starting a business that can scale in the nights and weekends, doing something in order to earn more to buy your freedom faster.

and if you think you're not able to make those changes, you absolutely could.

you could get a roommate; it would just kind of suck.

you could start making bulk chicken and rice at home; you just wouldn't enjoy eating it as much as you would going out to dinner and having drinks.

you could do what I've done and learn to cut my own hair, and [insert friend's name] does her own hair, and she does her own nails.

you could stop watching Netflix and start earning money in the nights and weekends.

so it's totally your choice.

so if you say that you're too broke to invest, it's generally your choice to do that.

it doesn't mean it's going to be easy—it's like extremely hard to do a lot of those things—but again, it is your choice, and that means freedom is completely in your hands.

Lucifer or Freedom.

if you binge-watch all of Lucifer, the TV show, never seen it by the way, it would take you 2 days, 1 hour, and 57 minutes.

as I'm saying this, I realized that I have watched Friends like three times.

but Adrien, one of the authors of this book, talks about how he spent some time making some Amazon product reviews and he made $115,000 just reviewing stuff that he had already bought and was just laying around his house—just making simple Amazon review videos—which are still a thing, still a side hustle, still a way that you can make money.

and two years later, in the past 30 days, he had still made $2,500 in the last 30 days from those videos that he made two years ago.

or he could have just sat there and watched Netflix.

this is actually why I stopped watching TV shows, 'cause I realized how much time I was wasting watching things like Friends and The Office and all that type of stuff that have a billion episodes.

so I pretty much gave those up, and that's when my business did well—when I stopped binge-watching Netflix and instead started to play like the real-life game of Monopoly that is life.

you are not allowed to use your credit card if you don't pay it off at the end of every month.

that's because people on average in the United States carry $6,500 of credit card debt at a 23% interest rate, meaning that the average American throws away roughly $1,400 a year.

or over a 25-year period, $156,000.

if you cannot pay that credit card at the end of every month, just burn it, cut it up, throw it in the trash, do something else until you're in a spot financially where you can use the positives of it without the negative sides affecting you.

and yes, I do realize that's extreme; some people need them.

but if you want to make real changes, you need to go extreme.

again, maybe that means working more so that you don't need to rely on them, even if that means giving up something you enjoy.

as they talk about over and over in the book, there are no easy degrees that pay a ton of money.

generally, anything worth having—you either have to sacrifice a lot, or you have to give a lot of your own blood, sweat, and tears for it.

nothing comes easily, and I think most people stick with the easy thing, which is you read a book, and then you feel better.

you feel motivated for a day or two, and then you don't really do anything, and then a couple weeks later, you read another book, or a month or two later, you read another book.

you watch some videos like this; you get excited for a couple of days; you never do anything.

if you don't implement a lot of the stuff that's in this video and in here, nothing's ever going to change.

nothing.

I know I've done it for years.

I just listened to books and podcasts and videos, and I never actually took action.

and then I started taking action because I had like brainwashed myself that that was how I thought now, and that's when I stopped spending all that money.

I sacrificed a lot of things for years, including my time, but looking back, it was the best trade I've ever made.

if you enjoy this, you can check out the book down below, and also see this video right here, which is beautiful.

the algorithm definitely thinks you'll like it.