QUESTION: Marie in Peoria says her husband has a great job, and Marie works as a substitute teacher. Her husband would like her to take a more full-time position to build more wealth. Dave has a philosophical answer for Marie.
ANSWER: First and foremost, the two of you have to be taking care of your own household. So your only reason for taking a “big girl job” or “big office job” would be to make more money to pile up more money. The way you’re asking the question sounds like you don’t want to trade your quality of life for that.
I think wealth is for quality of life, and quality of life includes giving. It includes a future. It includes those things, but if you have to surrender the joy of your life to do that—to build extra wealth or build at a different pace—I wouldn’t do that. I think your husband’s wrong.
I need to juxtapose that with the thing that seems inconsistent to a guy who worked 17 hours yesterday to say that. That’s me. I was at Fox and Friends at 6:30 in the morning, and I got in bed at 1 a.m. after working the entire day yesterday, so it doesn’t sound like somebody that’s very content that does that, but contentment is not on the same spectrum with ambition or service. If you found something you were on fire to do—and I’m on fire to do what we’re doing—I get up every morning just glad I’m alive, and I build wealth in the process of doing that, but I’m not doing it just to pile up money. I’m doing it because I get great joy out of serving. If you found a way where you worked really, really hard, served, and built wealth, that’s not inconsistent.
Content doesn’t mean number of hours in the week worked. Content means your state of being. It’s a manner of the journey. It’s not opposite of ambition.
I don’t think for you to just pay off the debt in seven years rather than eight years you ought to go take a job you hate—pay off your house in seven years rather than eight years. I wouldn’t do it. I wouldn’t recommend you do it.
It’s a good thing to read about and think about, but this idea that contentment is on the same spectrum with ambition—no. Lazy is on the same spectrum with ambition on one end or on the other, and that’s different than content. I want to do with my life something that’s enjoyable and that I’m called to do and I don’t have to work 40 hours a week in a glass box somewhere to do that. If you’re not paying your bills and your kids aren’t being fed, then you go do what you’ve got to do. Shut up. But in your case, you’re in a great place to do that, and I think he’s wrong.
QUESTION: Amanda in Ohio and her husband are only 28 years old and have no debt whatsoever. They don’t share this information due to being treated differently by others. How should they handle this situation?
ANSWER: One thing you start to figure out as you start to win with money and build wealth and achieve some of those goals is you have a very, very small group that you can celebrate with. A lot of friends, a lot of family—you just can’t celebrate with them because it just comes off as bragging to them. That’s not what you’re doing. You’re just trying to celebrate milestones. But it feels like to them you’re bragging or you’re being a big dog or something, and it feels like a putdown to them for some reason. You learn to keep a lot of it private. You don’t share a lot of it.
I’ll give you an example. There’s only a handful of people on the planet that know my income and just a handful of people that know the gross revenues of our company even. It’s privately held. The reason for that is that most people don’t even know the difference between gross and net. They don’t know the basic P&L structure.
If you hear a company makes $1 billion or a company has an income of $500 million or a company has an income of $10 million, people think they made $10 million. They may have had expenses of $11 million. They may have lost $1 million on that gross revenue. People immediately go, “Well, that guy owns that $10 million company. He’s making $10 million.” It’s as dumb as these politicians saying that somebody that makes $1 million a year is a millionaire. That’s not what a millionaire is. That’s stupid. It’s an indication we have idiots in Washington. Oh! We knew that. Okay. My gosh. It’s just ridiculous.
You do have this narrow group of people that you can share your successes with. You just have to enjoy the successes, and they are what they are and those kinds of things. Just enjoy that part of it. Find a few people that you can celebrate with, but some things you’re just doing that indicate that you’re successful. You have a nice car. You have a decent home—those kinds of things. Even if it's a small percentage of your world, sometimes that still generates people that are jealous or envious.
Jealousy is: “I want what you have.” Envious is not: “I want what you have.” It is: “I don’t think I can have what you have, so I don’t even want you to have it.” That’s envy. Those are two really evil spirits, and they’re really loose in the land. They indicate that the people that are carrying those are small-minded individuals. You just have to kind of go, “That’s it.” You know? Part of the price of winning is that people don’t understand when you win. They’re not okay with it, and you kind of get where you’re okay with them not being okay with it.
I’ll give you an example. In our situation, it tickles me to death that some little liberal jerk on Twitter thinks somehow that I have to engage him because I’m on Twitter. I don’t have to engage you. That’s not arrogance. I’m just not going to argue with you. I’ll tweet back and forth two or three times and have some fun with something, but pretty quickly, once I realize I’m not able to take somebody and teach them, I just dump them. There’s no point in it. I’m not going to argue with you. I’m right. Why would I argue with you? I’m not going to argue with you.
But there are people out there who feel like I’m obligated to engage. I’m not obligated to engage, and I’m not obligated to explain myself. That’s true about you winning with your wealth. You’re not obligated to explain your net worth or your income or the fact that you’re winning, and you’re not obligated to be ashamed about it either.
Just enjoy it. Enjoy the fruits of your labor—your success. You earned it. You’re generous. You’re a giver. You do a lot of wonderful things with the money. You take care of your own family so I don’t have to pay extra taxes to take care of your family. All of that. It’s a good thing. Enjoy it. If people don’t understand it, the louder they are about their misunderstanding and the more crazy they are about it, the further the boundaries are put out because I’m not going to deal with you on it. That simple.
QUESTION: Johnny in Colorado Springs recently became a Christian, and up until this point, he made no plans for the future and lived in the moment. Now he wants to do right by his wife and children and needs to get his life on track. He doesn’t have any debt or credit, and he isn’t sure where to start.
ANSWER: You’re starting from a good place because you’re at least not starting in the hole, and you do have a whole new perspective on life. Vision—just starting to look into the future—gives you all kinds of motivation. It gives you all kinds of hope. One thing it’s going to do—you’re going to see it’s going to do two things. It’s going to increase your income, and it’s going to stabilize your income because you’re going to start thinking about, “Hey, what do I want to be five years from now? Where do I want to be 10 years from now?” So you’re going to start thinking long term rather than, “Thank God, it’s Friday. Oh God, it’s Monday,” which a lot of people live that way.
You’re taking on the role and saying, “Hey, I’m going to be a different kind of a man, and I’m going to think about the future, and I’m going to think about my family, and I’m going to go to places I never thought I could go before.” Hope is an amazing thing. It’ll do that for you.
There are two sides to the equation: the income side and the outgo side. Your biggest struggle right now is the income side, and that’s the development of some kind of a dream of a career or a job path that you want to go on that makes you smile when you think about it and also you say, “Hey, I could do that not only for the next five or 10 or 15 years, but in addition to that, I could really excel at that and make more money than I’ve ever made in my life because I’d be good at it. I’d be happy about it. I’ve got to get some training here. I’ve got to take a class there. I’ve got to get in an apprentice program, but I’m going to develop a game plan—a track to run my income and my career on.” That’s a big part of your equation going forward.
Then the second part is the outgo side, and the outgo side has to do with the financial peace stuff and the stuff we talk about here on the radio. That is managing the dollars, making every dollar that comes in behave. And of course, the more dollars that come in and the more they behave, the more traction they get. The more you can do for your family and the more giving you can do and the more investing you can do, and all of those things are biblical. Family, investing, and giving—those are all three things that the Bible clearly tells those of us that are believers to do. You’ve got to get a little bit of learning on how to do that, but you’ve got to make some money to be able to do something with that.
I’m going to do two things for you. I want to be part of your new life if that’s okay. I’d like for you and your wife to go through Financial Peace University, which is learning how to handle money according to the Bible. And I’m going to pay for it. Then I’m also going to send you a book called Start, which is exactly what you’re doing. You’re starting. It’s a really good book for where you are right now, and it’s a good career book. You’ve got to read it, and you’ve got to go to the classes. That’s my only request if I give it to you, and then someday when you’re wealthy and you’re doing really well and some guy’s starting his life, you can pay for him to go through the class if you want. That’d be neat.
QUESTION: Lisa on Facebook asks how Dave justifies building wealth when there is so much need in the world.
ANSWER: I justify it because I am not Jesus. I am not a messiah. I am not God. I cannot—no matter how much wealth I attain or don’t attain—I cannot move a needle in the scope of the whole world—number one.
Number two, I’m not building personal wealth. I manage it for God. As a Christian, I don’t own anything. The wealth that we’re managing we’re managing first for the good of our family—that’s biblical, for the good of our future, and the good of our family tree—both of those are biblical—and for the good of others. Helping others around the world is something we do very, very regularly.
The personal consumption of our wealth is a small percentage of the overall net worth, and I’m perfectly fine with it. The problem some people have is they get confused about their doctrine on this, and they get confused about their philosophy on this. I just got over my messiah complex. I’m not God. He is.
QUESTION: Chris on Twitter is concerned about hyperinflation. What would be Dave’s plan if that starts?
ANSWER: Bullets and water.
Hyperinflation means that what it takes $100 to buy today, in two months, it would take $1,000 to buy it. So if a tank of gas was $20, two months later, you go to buy a tank of gas, it’d be $200. Two months later, it’d be $800. That’s hyperinflation. Basically, that means that the currency—people lose such faith in the currency because they’ve lost faith in our government and in our way of life because at the end of the day, money, as my friend Rabbi Lapin says, is spiritual. It’s spiritual because it’s based on trust. It’s not based on actual value.
The reason I’m willing to take a green piece of paper with a “100” scribbled on it by the government is because I know I can trade it to you for something that you have in goods or services. If I lose faith that I can trade it to you for goods or services, then I would no longer accept that as payment.
In other words, what causes hyperinflation is people have lost trust in the currency—and not a vague thing where they’re all sitting around the kitchen table talking politics and they’re mad at the world and have a conspiracy theory. I’m talking about the whole society begins to melt down on its trust to the point that there is no one willing to accept these paper dollars.
Hyperinflation is actually what put Hitler into power as much as anything. Pre-Nazi Germany—the Nazis, the fascists—came to power because literally, people were taking a wheelbarrow of cash in to buy a loaf of bread because people had lost faith in the currency. We also saw a similar thing at one point in Argentina in terms of hyperinflation. But that has happened very rarely in any economy. For a while, the peso in Mexico went crazy but not to the point, quite, of hyperinflation, but it really had unbelievable devaluation of the currency, which is hyperinflation.
I don’t honestly predict that in the U.S. at this stage of the game. Do we have serious moronic things and overspending going on in Washington that needs to stop and over-borrowing? Yes. And at some point, is there a tipping point if we don’t grow some backbones in some of our leaders who actually look at this and say, “This is stupid. We can’t borrow our way out of debt. We can’t just keep taking yet another credit card out on the nation”? Yeah, we’ve got to stop that, but is it to the point that I think it’s going to cause our way of life to end? No, I do not, and that’s what you’re saying when you say hyperinflation. You basically say that the grand experiment that is the United States of America has failed—not hypothetically, not in your conspiracy-theory mind, not in your philosophical opinion, but in actual practical, tactical fact, it’s over. No one can function anymore in the economy because it’s in such meltdown mode.
If that’s the case, then you could have hyperinflation. But until then, you can’t have hyperinflation and everything else going good because hyperinflation is based on a loss of trust in the value of the currency.
What would be your plan if that starts? Your only option—and it’s questionable whether this will work—is to own property—physical, hard assets—because paper assets will disappear. Physical, hard assets do not include gold because gold has never been used in a hyperinflation economy. Gold has never been used as a medium of exchange in a failed economy since the Roman Empire, so that’s all mythology sold to you by the gold-coin people on midnight cable TV right after a walk-in bathtub and a self-insert catheter ad. I mean, really, you’ve got to think about where you’re getting your financial advice here.
Gold is not the answer, but real estate might be, and I say might be because you might lose private property rights. We have a group of people now who are so upset in this country about the inequality of wealth that they would be leaning toward communism, which would be the fact that you would not be allowed to own anything. There’d be no private property. If the melted-down government were replaced by fascism—by communism, Marxists—because that’s fair—everybody gets a trophy although it’s a small trophy and one that’s not painted well, but we all get one under communism—then they would take away your property.
That happened in the Russian Revolution when the Marxists took over—killed everybody. And they slaughtered people, by the way, when that happened. If you haven’t read the history on that, it’s rather interesting. These wonderful communist people with flowers in their hair chop people’s heads off.
Basically, under that kind of a scenario, anything you own is taken away from you because the state becomes the owner of everything. You’re now in China. You’re now in Russia and so on. If that’s how we’re going to live because of hyperinflation, then there’s not anything you can hedge against that except a ticket out of here to somewhere else, and I don’t know where that would be if the U.S. economy goes to that point.
I think that’s a bunch of hooey is what it amounts to. Even though there’s fear in the news about hyperinflation, there’s crap in the news every day. Have you not noticed? I was looking at the websites the other day of some of the news channels. Have you noticed that their websites look a lot like The National Enquirer now? What used to be mainline major news media—when you look at their websites, they have links through to something that got washed up on the beach. “Sea monster on beach,” you know? And they’ve got every other link is to some sexual innuendo. A Playboy model on the cover of something or so-and-so’s nude pictures. And that’s on every site now. It’s like you’re looking at The National Enquirer. “Alien found in Nebraska,” you know, and all this crap. What used to be called serious media now has that on their website as their main links. I guess there’s enough of a market for that because the culture has been so dumbed down that we now believe what’s printed in The National Enquirer. We’re that shallow and stupid.
The hyperinflation goes right there between the alien, the link through to the Playboy pictures, and the sea monster that was washed up on the beach. The hyperinflation is right there with that. It goes right there in that category. In other words, I really don’t think there’s any credibility to that offering by the “news media.” I don’t think hyperinflation is on our doorstep. But that is not to say that I think that the people in Washington are doing a good job. I think the liberal spending is completely out of control. Anyone who tries to stop that spending is a racist now. Anyone who tries to stop that spending is ignorant, and they’re the problem with our economy.
No, you’re the problem with our economy. If you’re a Democrat or you’re a Republican or you’re a progressive or you’re a liberal or you’re a so-called conservative and you believe that continuing to spend at our current rate is an okay thing, you’re the problem with our economy. It’s amazing to me that the same people who tell you that the sea monster is on the beach are the people who are saying we need to stop spending are racist and are the problem with our economy. Sea monster beware.
QUESTION: A listener asks Dave to define what a free market is and how it works. Dave not only defines a free market but explains what the effect on the economy is, why capitalism works, and how regulation helps prevent anarchy.
ANSWER: Sure. Like a lot of economic terms or terminology, the politically correct police have redefined some of these things, and so you may get varying definitions from a free market.
I got a degree in business, which included a lot of economics classes, a lot of accounting classes, a lot of finance classes, statistics and so forth back in the day—back when dinosaurs roamed the earth. Back then, I think we really understood what a free market is.
A free market is when buyers and sellers are free to do business. If you want to buy a shirt and there’s no impediment, no barrier to you buying that shirt and the seller wants to sell a shirt and there’s no barrier or impediment to them to do that, then that’s a free market. Markets that are less than free are highly regulated markets, and the more regulation there is, the more the market slows down. Free markets have a tendency to be more efficient and create things like supply-demand curves.
Supply/demand curve, most people understand that basic thing of economics is simply that the greater the supply of anything and the accessibility of that thing, the cheaper the price of it is. When there are too many homes on the market, home prices tend to go down or not to increase as much. If there’s a shortage of homes, then home prices tend to shoot up in an area. The market’s hot. You can’t get one.
The supply/demand curves work better when there’s not regulation slowing down the speed of doing business. People argue that regulation is needed because people are immoral and they take advantage without regulatory things to keep immoral people from doing business improperly. It’s certainly a reasonable argument. The problem is like so many things that are reasonable, when taken to an extreme, it becomes unreasonable.
I like markets to be free because I like freedom. I don’t like governments telling me what to do, and I’m of the opinion that people have a tendency towards what we call sanctified capitalism—people being moral—as much as they do towards a free-for-all anarchy-type capitalism—capitalism where no morals apply.
Here’s the truth: The truth is that as you study the history of economics, the history of markets and capitalism, that people who are dishonest are eventually punished by the market. Now there are exceptions to that and there are situations—stuff like a monopoly and anti-trust things—that come into play. But this idea that you can put so many regulations on things that everyone is always protected from dishonest people is ludicrous. Let the market punish someone who doesn’t do a good job.
Let me tell you, if I go into a restaurant and eat, I don’t care if it has a 100 score on the side or an A or a B or however they rate it with the health department in that area. If it’s dirty and slimy and greasy, not only am I not going to eat there again, the next time someone mentions it, I’m going to say, “Ew. Don’t go over there. That place is filthy. You’re going to catch something. Seriously. You’re going to die.” And so the fact that they don’t keep it clean loses them customers more than the health department does coming in and regulating them. So the marketplace will punish a restaurant for being dirty. “Are you saying health departments shouldn’t regulate?” No, I’m using that as an example as a free-market issue.
The market will punish if there’s reasonable access to information. The market will punish a company that is doing things late, doing things poorly, overcharging, delivering bad quality, dangerous products—all of those kinds of things.
Now, there’s a certain amount of regulation that’s going to be in a civilized society. The problem is that we have people that are so nannyfied, that are so driven by the nanny-state mentality, that they have this idea that in order for everyone to never have any pain, there has to be enough government regulation, and there’s no such thing as that much government regulation. And then what happens is you stifle the economy, and when you stifle the economy and the market can’t move at the velocity that it normally moves at, the speed of doing business is slowed down—that kills jobs. And when you kill jobs, you kill people’s ability to earn an income and you hurt them a different way. So the very thing you set out to do with your regulations—your overregulation to protect people—has the reverse effect net when the smoke clears because you slow down the velocity of doing business to the point that business can’t be done at a reasonable profit margin, and so that slows down the amount of jobs that business or that industry can create.
Markets that are left to flow with a reasonable velocity where I can get there and buy my shirt easily, quickly, efficiently, I can choose never to do business with that company again easily, quickly, efficiently, if they aren’t handling things right, let the market punish rather than regulations being the answer to everything, then what happens is the economy booms.
I’m not for Ayn Rand anarchy. I get that Atlas shrugged. I get it, but this idea that zero regulation and that everybody’s just going to run rampant and people only function from their own personal self-interest is a theory, and it’s absurd because truthfully, the most profitable businesses over an extended period of time are those who don’t function in their own self-interest exclusively. They see their self-interest as being served by first serving their customer. I know if I help enough of you, I don’t have to worry about money. I know I’ll be able to sell books, radio ads, live event tickets, and if I’m really helping enough people and I really am doing it, then I don’t have to worry about money. That’s sanctified capitalism. It has a moral component to it. And that’s the only way to do business and win long-term.
Giving the sanctified capitalists that are out there—there’s a bunch of them, a bunch of us—free markets is the best way to go because it increases the speed, the velocity at which business is done and it gives more of you more opportunity not only for jobs but to open your own business as entrepreneurs as well. Overregulation kills all of that.