The Matrix Lie to you

How the Matrix Lies to you

There is a relationship between your income and expenses. Another practical way of expressing this is your production versus your consumption. For the most part, money comes in and goes out of our lives. Its relationship to our income and expenses affects how we live our lives.

americans now have the highest credit

card debt

in history translation

you didn't learn anything debt is an

invisible burden being carried by the

country's most vulnerable

of course these statistics are

reflective of the uk and the us

but consider for a moment your own

attitude towards money and how money

exists in your own life what is money to

you

does it seem to enter your life and

immediately leave once you have it

has it ever placed you in a vulnerable

position a vulnerability that drew you

closer to a get-rich-quick scheme

or a guru telling you that you can get

rich if you just bought their course

whilst my entire channel aims to tackle

these topics to some degree or another

i realize that our perceptions of money

are sometimes more crucial than our

ability to generate it

especially when our very brains are

wired in such a way that prevents us

from being financially

sensible does it really matter if you're

earning more than six figures a year

if by the end of that year you have

nothing left to show for it

where is the disconnect it's time we

solved that mystery

and not only that but explore a better

framework for understanding money

a framework commonly taught in personal

finance but oftentimes missed in formal

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education

a question what is money

or rather what does money represent when

you make a purchase from amazon when

you're paid for your time working a job

what is the significance of money in

these transactions money is commonly

defined as a medium of exchange

an instrument that facilitates the sale

purchase or trade of goods between

parties

but i don't think this says much about

what money actually represents

i think a better way of looking at money

is an expression of value

you hand over a certain amount of money

to purchase something because you

perceive its value to be equivalent to

the amount of money that you handed over

of course the price is often not

determined by you as an individual but

the market as a whole

but hone in on this one point money

equals

value why is that so important because

often we give money a moral significance

a quote that i'm sure you've heard money

is the root of

our evil we look at someone who seems to

have a large amount of wealth and think

they got lucky who did they take

advantage of to get to that position who

had to lose in order for them to gain

and never

what value was created in order to

generate that money understanding that

money is simply value is the best way to

understanding that money is not

necessarily

evil nor does it make a person evil sure

there are things such as scammers who

convince you that what they have to sell

is worth value

but that doesn't say much about money

more so than it does their own morals

money simply opens your options and

broadens your horizons

the choices you make with that money

have everything to do with your own

moral dispositions

so money is an expression of value now

what how does this change the reality of

a person living paycheck to paycheck or

someone who is consumed by

credit card debt the simple mention of

money equals value changes

nothing it may make me see money in a

different light but what part of that is

actionable advice to answer that

question i'll post you another question

what is your relationship with money

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money will come into your life and it

will leave this is a relationship that

is often expressed by your income and

expenses another practical way of

expressing this which i particularly

like

is your production versus your

consumption for the most part

money will enter your life because you

have produced some form of value and for

most of us this value will come in the

form of labor

a job money will leave when you have

consumed something

a netflix subscription a new car a house

in many ways we can look at the net

worth of an individual as a metric for

determining their relationship between

consumption

and production now cast your mind back

to those statistics

i mentioned at the start of this video

what part of the consumption versus

production relationship do you think

is at fault here consider yourself for a

moment think about all the money that

has entered your life

and left how much of that do you still

have in possession today or invested

into some sort of asset

and which part of this relationship do

you feel is unbalanced or needs

improving the likelihood is

both but for most of us the biggest

issue lies in our consumption

remember the career builder study that

found that 78 of american workers were

living paycheck to paycheck

well it also found that of the workers

who made a hundred thousand dollars or

more a year

one in ten of them were living paycheck

to paycheck now you could argue that

someone earning six figures a year may

still like to earn more

but when you are paid a figure that is

well above the average wage and the cost

of living and yet you still

somehow find a way to spend it all i'd

argue that your relationship with

consuming must be fixed before you even

consider your relationship with

production

as any wealthy celebrity who has filed

for bankruptcy can show us

production means nothing when you have a

problem with consumption

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a rat race an endless self-defeating or

pointless pursuit

sometimes the rat race is conflated with

working a nine-to-five job it's a

comparison often used by certain

individuals to guilt you into buying

programs and books for them but this

seems extremely unfair

mostly because it aims to villainize a

job and excludes the fact that there are

those who either love or are perfectly

fine with their jobs or have other

aspirations aside from their nine to

five

a real rat race is one that is living on

a financial edge

being one paycheck away from broke

constantly a feeling as though the

moment money enters your life

it immediately disappears and the more

responsibilities you have

the more dangerous this relationship

becomes the loss of a job

an unexpected health accident or any

unexpected circumstance for that matter

can throw your entire financial position

into turmoil and consider the mental

consequences of living on this financial

edge

your job no longer becomes an option it

becomes a necessity in order to keep

funding your lifestyle

or to keep paying off debt to quote

tyler durden from fight club

the things you own end up only you

what's the silver lining it doesn't have

to continue like that

the first stepping stone in personal

finance will have you drawing an

awareness to your relationship with

money

this is often done by journaling your

monthly expenses

categorized as housing transportation

food utilities entertainment and so on

it's about

understanding yourself as a consumer but

this part is tough

in behavioral finance this feeling can

often be labeled as the ostrich effect

which is our tendency to want to avoid

negative financial information it's that

feeling you get when you refuse

to look at your bank account after a

night out fearing what it might show and

yet once you pass this stage

it's time for you to take control over

your behavior as a consumer

this often involves the idea of

budgeting deciding each month how much

you aim to spend on each of these

categories and sticking to it it's about

systematically looking at what you

consume and finding ways in which you

can minimize these things to ultimately

live below your means in other words

having a lifestyle that still leaves you

with enough money to save and invest in

some form or another

it's also important to note that before

you ever decide to invest

one of the most common practices in

personal finance is to keep an emergency

fund

a specific amount of savings that you

hold onto in case of an emergency

this fund would typically hold three to

six months worth of expenses

the idea however of living below your

means is an important one

because why would we choose to do

otherwise why would we choose to live a

lifestyle that we cannot afford or one

that places us

on this financial edge i could make an

entire video on our cognitive biases the

ostrich effect is just one of which can

affect your financial position then

there's hyperbolic discounting

a tendency to favor short-term rewards

as opposed to greater rewards in the

future this is you choosing to purchase

a new pair of shoes instead of saving

that money towards a future investment

or their social proof

our tendency to think and act as others

around us think and act

when the people around you are buying

one thing you buy it too

or when the people around you establish

money as a means of evil you're likely

to assume the same thing too

the phrase keeping up with the joneses

summarizes this great problem of

consumption it's a phrase defined by

google as trying to emulate or not be

outdone by one's neighbors

they buy a new porsche you buy one too

they have nice clothes

you get some too they renovate their

home you do it too all in the attempt of

impressing or trying to keep up with

others due to some form of social

pressure only in today's world the

joneses

are not literal neighbors they're far

more present than that

we are all vulnerable to social approval

we really care

what other people think of us but the

problem is

we're measuring our self-worth by how

many people

like what we're posting governor of the

bank of canada stated it's succinctly

for most canadians debt is a fact of

life

at least at some point

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to be clear i'm not saying that

purchasing an expensive piece of

clothing

jewelry or sports car is a bad thing nor

do i think consuming is a bad thing the

aim of this video isn't to philosophize

about the repercussions of a

materialistic view of the world

it's about drawing an awareness to who

you are as a consumer

do you care more about appearing as

though you have money or actually having

money

the rat race isn't about working a

nine-to-five job

but living life on such an edge that it

means that you are chasing the next

thing whether a paycheck or a material

possession

such that your greater life goals and

ambitions are placed in the background

in order to continue this race

a budget and keeping account of your

expenses have proven time and time again

to work and draw you out of this race

it's fun to talk about making money or

imagining having as much wealth as

possible but what's the point when your

relationship with money as a consumer

means losing it all or having to work

non-stop in order to fund that lifestyle

that is the real rat race but with all

of that being said

let's talk about making money

now the stuff we teach here and have for

almost 30 years

is proven what's up you guys it's graham

here so we got to take a moment and talk

about what's going on in the stock

market because as we're finishing up the

week

stocks personal finance channels like

graham stefan or dave ramsey are great

for learning how to work on your

consumption side of the equation but if

there was one thing i wish they spoke

more about

it would be their ability to make money

and i understand why they don't do this

it's easier to reduce your expenses in

the amount that you consume than it is

to increase your income

when speaking to a mass audience giving

the advice that will work for most

people is typically the best choice

we see that there are entire communities

built up around focusing on frugality

the fire community is one example of

this a movement that adopts the strategy

of living extremely frugally

saving and investing as early as

possible with the intentions of retiring

as early as possible

minimalists also share a similar view to

the fire community although

more deep-rooted in philosophical

positions about the world and

materialism at large

people like graham steffen or dave

ramsey promote strategies that fall in

the spectrum of living frugally saving a

lot of money and investing in the long

run

and there's nothing inherently wrong

with this strategy it works for a wider

range of people with varying degrees of

income

but let's be honest graeme stefan

doesn't rely on cutting coupons or

living an incredibly frugal lifestyle to

be making a hundred to two hundred

thousand dollars a month

from youtube nor does dave ramsey rely

on these strategies to have an estimated

net worth of 55 million dollars

these people are utilizing a means of

production at mass scale

in my video the untold truth about money

i talked about money being equivalent to

your perceived value in the market and

the most impactful way of increasing

your value is finding a problem in the

market

creating a solution for that problem and

selling that solution to the market at

scale

this is the entrepreneurial route a

successful business at scale

is able to produce a large amount of

value to a society such that your

production side of the equation grows

exponentially in comparison to a

standard job

but this isn't a route that everyone can

take nor should they try to

it's about reflecting on your own

capabilities and whether

entrepreneurship is best suited to your

direction

with that being said increasing your

production doesn't have to just come

from the strict definition of a business

graeme stefan uses youtube as a vehicle

to produce something

in this case videos about personal

finance at mass scale

it's one reason that i chose to create

videos on youtube as well

it's a vehicle to produce something in

this case documentary style videos at a

mass scale

to a point where i can now do it full

time and build a business around it

producing is about providing relative

value to the market in some shape or

form i utilized my skills with acting

presenting storytelling and video

editing to create videos that i hope to

be somewhat entertaining and educational

and thankfully the market responded

positively your form of production may

be developing an

app or software that is solving a

problem you believe the market would pay

money for its solution

or perhaps a fitness brand that is

branded extremely well and utilizes its

community better than most other fitness

brands as i believe is the case with ben

francis and what he did with gymshark

for most people labour in the form of a

standard 9-5 job will be their means of

production

but this doesn't mean that your ability

to produce stops there

understanding yourself as a producer is

about understanding ways in which you

can produce value to the market

if you can produce value at a large

scale then it means earning money

at a large scale the internet has

thankfully provided a great deal of

opportunity for us to be able to produce

something and put it out to the market

whether the market actually wants what

you have produced can only be determined

once you've released whatever it is that

you've produced

so to summarize it's first important to

bring awareness to yourself

as a consumer understanding what you

purchase and why you purchase by

journaling your consumption and then

giving yourself a budget to manage and

control that consumption producing then

becomes a matter of maximizing the

amount of value you can bring into

society

through a job a business or some other

means of production

this is a framework that has helped me

greatly as i'm sure it's helped

countless others who have a vested

interest in making money

like this isn't just sushi we're talking

about anymore like this is this is

substantial

yeah and then to go from that to like

this focusing

is that 170 454 dollars yeah

that's insane

hello hello my friends before you click

off the video just yet i want to say one

thing thank you

so much for watching to the end of this

video you watching to this point is

hopefully proof that i've provided some

kind of value to you in some way or

another so

be sure to hit the like button and if

you want to see more videos around the

topics of

business money finance in general then

be sure to hit the subscribe button i've

also got a patreon where i post behind

the scenes stuff and i do

questions and answers and i've got a

bunch of other exciting plans for it so

if that interests you and you'd like to

support the channel further do check it

out the link is in the description below

now for me personally combining what i

know about personal finance

and entrepreneurship has really helped

me the most and as i mentioned

this youtube channel was one way in

which i knew i could produce some kind

of value

into the market at scale if you want to

do more extra reading on these subjects

if it interests you there's two really

good books

on personal finance related stuff the

millionaire next door

and your money or your life these are

really good personal finance books

and of course if you know me you know i

really love

mj demarco's work so check them out if

you want to also see the

entrepreneurship side of stuff but with

all of that being said my friends i hope

you have a wonderful rest of the day

i will catch you in the next video or on

my instagram or twitter if you have me

on there

as usual hands ahead salute

too many days is yet to come

too many times has come to pass

too many moments put aside

getting out alive

getting out of

letters in the sand