9 Brutal Truths of Money - How to Get Rich From Nothing
In this episode of the Growth Stacking Show, Dan Martell dissects money and wealth-building from a pragmatic lens. He prescribes adopting a disciplined, "pay yourself first" approach to saving and investing as a foundation. Beyond finances, Martell underscores cultivating a growth mindset - investing in skills over indulgent lifestyles, challenging inherited beliefs hampering wealth accumulation, leveraging external resources strategically, and clarifying a deeper "why" to fuel commitment.
Drawing upon his own journey, Martell maintains building wealth necessitates overhauling one's relationship with money. He outlines reframing money as an enabler, not an obstacle, and surrounding oneself with a supportive network. Ultimately, Martell encourages listeners to reshape their perspectives and tap into purpose to build both wealth and fulfillment.
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1-Page Summary
Principles for Building Wealth
Pay Yourself First
Per financial expert Martell, forcibly allocating a majority (60-70%) of one's income toward savings and investing spurs disciplined saving habits and growth. Martell argues this "pay yourself first" approach drives efficiency, contrasting it with spending on conveniences that ultimately cost time.
Invest in Skills Over Lifestyle
Rather than indulging in luxury lifestyles, Martell advises investing in one's skillset through avenues like books, courses, events, and especially one-on-one coaching. He views money as an output of energy—by enhancing one's abilities to solve larger problems, greater value and income is attained.
Mindset Around Money
Challenge Limiting Beliefs
Martell reveals we inherit "money stories" from influences like parents that shape beliefs around wealth. He urges rewriting any negative associations or limiting beliefs about money that may hinder financial success.
Adopt an Abundance Mindset
Martell cautions that fearing money pushes it away. Instead, he advocates creating from an abundance mindset to transform one's financial reality. Examining and overhauling subconscious narratives about wealth is key.
Leveraging Time and Resources
Spend Money to Save Time
Martell argues the wealthy spend money to reclaim time for higher-value pursuits. By delegating tasks to experts, one can concentrate efforts on scalable, lucrative goals.
Build a Supportive Network
A supportive network of diverse talent can offer advice and accountability while expanding capabilities without personal risk. Training this team enables efficient operations as the business grows.
Finding Purpose
Clarify Your "Why"
Martell shares how a strong sense of purpose, like his Kings Club mentorship program, provides motivation and meaning. Having a deeper "why" transforms effort into a purposeful mission.
Commit Fully to Your Purpose
Martell believes committing wholeheartedly to one's purpose enables overcoming any obstacle on the path to building wealth, making challenges feel surmountable.
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Counterarguments
- Allocating 60-70% of income towards savings and investing may not be feasible for everyone, especially those with lower incomes or higher necessary expenses.
- Investing in skills is important, but not all investments in education or training guarantee a return in terms of increased income or value.
- While rewriting negative money beliefs can be helpful, it's not the only factor in achieving financial success; systemic issues and external economic factors also play significant roles.
- An abundance mindset can be beneficial, but it must be balanced with realistic financial planning and risk assessment.
- Spending money to save time assumes that one has disposable income to do so, which might not be the case for everyone.
- Building a supportive network is valuable, but it can also be challenging to find and maintain such a network, and it may require resources that not everyone has.
- Clarifying one's purpose is a subjective process and what provides motivation and meaning for one person may not work for another.
- Full commitment to one's purpose is ideal, but it's important to maintain flexibility and adaptability, as rigid adherence to a single purpose can sometimes lead to missed opportunities or failure to pivot when necessary.
Actionables
- You can create a "skill investment diary" to track the time and money you spend on learning new skills versus indulging in luxuries. Start by jotting down your daily expenses and categorize them into 'skills' and 'luxuries'. At the end of each month, review your diary to see where your priorities lie and adjust your spending to favor skill development. For example, if you notice you've spent more on dining out than on a course that could enhance your career, consider reallocating funds to prioritize learning.
- Develop a "time-value budget" to evaluate how you can spend money to free up time for higher-value activities. List all your weekly tasks and assign a monetary value to your time for each task based on what you could earn doing something else. If cleaning your home takes 3 hours and you value your time at $20 per hour, that's $60. If a cleaning service costs less, hiring one could be a wise investment, allowing you to dedicate those hours to a side business or studying for a professional certification.
- Initiate a "network growth challenge" where you aim to connect with one new person each week who aligns with your purpose or financial goals. Use social media, professional networking sites, or local community boards to find individuals with similar interests or those who have achieved what you aspire to. Reach out with a personalized message, and propose a virtual coffee chat to learn from their experiences. This not only expands your network but also exposes you to new ideas and opportunities that can support your financial journey.
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Principles and strategies for building wealth
Financial expert Martell shares methods to cultivate wealth by being disciplined with savings and investing in one's skills.
Pay yourself first to force efficiency and growth
Martell anchors his wealth-building strategy on the axiom of paying oneself first. He recalls that during his first company, he allocated 60 to 70% of his paycheck to savings, compelling himself to thrive with the remainder. This approach not only nurtured disciplined saving habits but also pushed him to continually reinvest and grow his financial base.
He contrasts his approach with his co-founder Ethan, who, by not saving adequately, could not afford conveniences such as wash and fold services, thereby losing precious time that could be spent brainstorming for the business. Martell advocates that slicing off profit first fosters a focus on efficiency and positions the business for growth, branding any other practice as operating a "fake business."
Invest in your skillset and human capital, not just your lifestyle
Furthering his guidance, Martell advises against pouring wealth into one's lifestyle. Instead, he champions the investment in oneself—specifically one’s skillset—because the world rewards the value one can create. He presents an accountant’s career progression, explaining how the value and consequently, the compensation, increases as one evolves from doing basic bookkeeping to offering complex financial strategies and deal making.
Martell describes money as an output of energy and suggests that by enhancing one’s mindset and energy through self-improvement, a person becomes more valuable and adept at solving larger-scale problems. To this end, he emphasizes spending on avenues ...
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Principles and strategies for building wealth
Additional Materials
Counterarguments
- Paying oneself first may not be feasible for everyone, especially those with low incomes or high debt burdens.
- Saving a large percentage of income might not be realistic for individuals with financial responsibilities such as family care, medical expenses, or student loans.
- Overemphasis on saving could lead to underinvestment in the present quality of life and well-being.
- Investing in skill development assumes that additional skills will automatically lead to increased compensation, which may not be the case in saturated or declining job markets.
- The value of self-improvement and coaching can be subjective and may not always lead to the expected return on investment.
- Books and online courses may not be sufficient for certain types of learning or skill acquisition that require hands-on experience or mentorship.
- Networking events and coaching can be expensive and may ...
Actionables
- Automate a savings challenge by setting up a recurring transfer to a separate account every time you get paid, with the goal of increasing the transfer amount by a small percentage each month. This encourages you to adapt your spending habits gradually and ensures that you're consistently saving more without having to think about it each time.
- Create a skill swap network with friends or colleagues where you can teach each other different skills you're proficient in. For example, if you're good at public speaking and a friend is excellent at graphic design, you can offer to help each other out. This way, you invest in your personal development without spending money, and you build a community of mutua ...
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Mindset and beliefs about money
Dan Martell discusses the profound influence our inherited "money stories" have on our financial behaviors and decision-making.
Challenge and rewrite any limiting beliefs or negative associations with money
Martell reveals that humans develop money stories based on the environment and conversations with influential figures like parents or friends. He shares his past limiting belief, which he once considered a roadmap to success: the idea that he needed to go bankrupt.
Recognize that money will only amplify who you already are, so focus on personal growth
Martell suggests that if you associate negative qualities such as greediness or evil with wealthy people, you're less likely to strive for financial success. He makes it clear that the issue is not with money but with one’s mindset. He stresses the need to rewrite limiting beliefs about money, advocating the idea, "You don't have money problems, you have mindset problems." By focusing on personal growth, one should recognize that money will amplify who they are, not change them fundamentally.
Adopt an abundance mindset around money and resources
Avoid judging or fearing money, as this will push it away
Martell urges listene ...
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Mindset and beliefs about money
Additional Materials
Counterarguments
- While mindset plays a significant role, systemic issues and socioeconomic barriers can also heavily influence one's financial situation, which may not be overcome simply by changing beliefs.
- The concept of money amplifying who you are doesn't account for the complex ways in which financial stress can alter behavior and personality.
- The idea of needing to rewrite limiting beliefs about money may not acknowledge the valid concerns and ethical considerations some individuals have about the accumulation of wealth.
- An abundance mindset can be beneficial, but it must be balanced with practical financial planning and awareness of limitations in resources.
- Avoiding judgment or fear of money might not address the need for critical thinking about financial ethics and the impac ...
Actionables
- You can create a "money story" journal to track and reflect on your financial beliefs and experiences. Start by writing down your earliest money-related memory and how it made you feel. Each day, add an entry about a financial decision you made and explore the emotions and beliefs behind it. This practice can help you identify patterns and origins of your money stories.
- Develop a "wealthy persona" exercise to shift your perspective on money. Imagine a character who embodies financial success and abundance. Write a short story or description of a day in their life, focusing on their positive relationship with money. By doing this regularly, you can start to dissociate negative feelings from wealth and reframe your mindset towards abundance.
- Engage in a "money dialogue" with a ...
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Leveraging time and resources through delegation and networking
Dan Martell illustrates the power of leveraging time through delegation, arguing that the mentality of the wealthy is to spend money to save time, rather than the other way around.
Spend money to save time, rather than trying to save money by doing everything yourself
Martell passionately conveys the philosophy that because time is non-renewable and money can be created, it's wiser to use financial resources to buy back time. This investment in reclaimed time then allows for activities that increase one’s value and, in turn, one’s wealth. Martell views the protection of time and the pursuit of growth-focused goals as crucial. He touches on the untold truth that rich people prioritize their time significantly higher than their money.
Martell also stresses that delegation is key to growth. By outsourcing tasks and hiring others, such as for lawn mowing or consultancy services, one can concentrate on higher-value activities. Martell’s father is noted as an example, who delegated lawn work to focus on real estate investments, thereby increasing his financial gains. The principle revolves around hiring experts to handle tasks that, although you might be capable of, would be more economically wise to offload to others.
By focusing on the bigger picture and relinquishing the need to handle every detail, one can scale efforts and invest in higher-leverage activities. According to Martell, even if someone else can complete a task to 80% of your standard, it's often acceptable because it frees you to concentrate on larger goals. He acknowledges, however, that the instinct to step in when something goes wrong is strong, particularly in areas where one excels. For example, a chef-turned-restaurant owner might find it difficult to stop themselves from stepping into the kitchen if a chef quits, which can hamper business growth. Learning to work through people, therefore, is vital.
Build a supportive, high-quality network that can offer advice, opportunities, and accountability
Through building a network of top talent like MBAs and consultants—not entrepreneurial but highly knowledgeable—one can bring invaluable expertise into the business without shouldering all risks alone. Martell suggests that owners should be the ri ...
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Leveraging time and resources through delegation and networking
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Counterarguments
- Delegation requires initial investment in training and oversight, which can be costly and time-consuming.
- Not all tasks can be completed satisfactorily at 80% of the standard without potentially compromising quality or customer satisfaction.
- Delegating too much can lead to a disconnect from the day-to-day operations, potentially resulting in a loss of control and oversight.
- Hiring experts and consultants can be expensive and may not always provide the expected return on investment.
- Building a high-quality network takes significant time and effort, which may not be feasible for all business owners, especially those just starting out.
- Over-reliance on a network can create vulnerabilities if the network fails to deliver or if key individuals leave.
- Some individuals may excel at multitasking and find that doing certain tasks themselves is more efficient than delegating.
- Delegation and networking do not guarantee wealth growth; market conditions, bus ...
Actionables
- You can streamline your daily routine by using a virtual assistant service for personal tasks. By outsourcing activities like scheduling appointments, managing emails, or even planning travel, you free up time to focus on your personal growth or higher-value tasks. For example, you might use a service like TaskRabbit to find someone to handle your grocery shopping or household chores, allowing you to dedicate that time to learning a new skill or working on a passion project.
- Develop a habit of conducting weekly personal audits to identify time-consuming tasks that could be automated or simplified. Take an hour each week to reflect on the tasks that took up most of your time and research tools or apps that could help you streamline those processes. For instance, if you find you're spending hours sorting emails, you might set up advanced filters or use an email management tool like SaneBox to help keep your inbox organized without constant attention.
- Create a personal advisory board by connecting with individuals from various backgrounds for ...
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The importance of purpose and having a strong "why"
Dan Martell discusses the invaluable role that a strong sense of purpose plays in life, particularly when it comes to building wealth and finding fulfillment.
Clarify your deeper purpose and mission to provide direction and motivation
Martell illustrates the power of purpose with an allegory about three men smashing rocks—each with a different mindset. The first simply makes bricks, the second builds a wall, and the third crafts a temple. Each man's attitude and motivation are influenced by their perceived purpose. Martell also shares a personal anecdote, revealing that after achieving financial freedom and becoming a multimillionaire, he felt unfulfilled due to a lack of mission.
He learned that money and success feel meaningless without actively using it for a greater goal. Without purpose, Martell found life miserable. However, he discovered that purpose grants the freedom to define one's own direction at any moment.
Having a strong sense of purpose makes the challenges and effort of building wealth feel like a meaningful mission, not just mindless work
For example, Martell points out the difference in attitude when someone takes on a tough challenge like an Ironman or CrossFit competition; knowing why they're participating makes it easier as the effort is tied to purpose. He shares his personal mission of helping troubled youth through his Kings Club program, demonstrating how having a clear purpose can bring meaning to one's actions.
Fully commit to and go "all in" on ...
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The importance of purpose and having a strong "why"
Additional Materials
Counterarguments
- While having a strong sense of purpose can provide motivation and direction, it is not the only factor that contributes to building wealth or finding fulfillment; factors such as opportunity, education, and luck also play significant roles.
- The idea that money and success are meaningless without a greater goal may not resonate with everyone; some individuals may find fulfillment in the pursuit of wealth for personal reasons or the security it provides.
- The concept of defining one's own direction at any moment can be overly idealistic, as not everyone has the freedom or resources to pivot their life's direction based on their purpose.
- The notion that having a clear purpose can bring meaning to one's actions might not account for the complexity of human psychology, where meaning can also be derived from relationships, personal growth, or spontaneous experiences.
- The encouragement to fully commit and go "all in" on one's purpose may not consider the need for balance in life, including the importance of rest, leisure, and maintaining relationships.
- The idea that a powerful purpose can transform obstacles into stepping stones may oversimplify the challenges some people face, particularly those in disadvantaged circumstances w ...
Actionables
- You can create a purpose statement by reflecting on moments you felt most fulfilled and using those insights to draft a personal mission. Start by jotting down instances where you felt truly satisfied and look for common themes. These could be moments of helping others, solving complex problems, or creating something. Use these themes to craft a statement that encapsulates your purpose, which will guide your decisions and actions.
- Develop a "purpose portfolio" by allocating a small percentage of your income or time to activities that align with your purpose. For example, if your purpose involves environmental conservation, you might dedicate a portion of your earnings to support sustainability initiatives or volunteer with local environmental groups. This tangible commitment helps integrate your purpose into daily life and can make wealth-building feel more meaningful.
- Implement a weekly "purpose reflect ...
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