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In episode #570, Eric and Neil discuss how the rich get richer. Tune in to hear in which businesses you should be investing in.
TIME-STAMPED SHOW NOTES:
- [00:27] Today’s Topic: How the Rich Get Richer
- [00:37] The way Neil makes more money is that he “invests in what he knows”.
- [00:53] He invests in his business and its marketing.
- [01:08] If you invest in yourself, you’ll get the highest ROI.
- [01:15] Neil has lost the most money investing in things he didn’t really understand.
- [01:48] Warren Buffett says the best investment you can make is in yourself.
- [01:55] There are two ways to invest in yourself: knowledge and your business.
- [02:15] When you invest in yourself, no one can take that away from you.
- [02:59] Once you build a business, you’re able to see your goals more clearly and see that you should invest in yourself.
- [03:50] Neil was doing a wire transfer the other day and the banker tried to pitch him on investments.
- [04:20] The perfect response to this kind of pitch is to tell them you don’t believe in investing.
- [05:08] Eric and Neil regret investing in long-shot, but great-sounding opportunities.
- [06:04] That’s all for today!
- [06:07] Go to Singlegrain.com/Giveway for a special marketing tool giveaway!
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Full Transcript of The Episode
Eric Siu: Welcome to another episode of Marketing School. I'm Eric Siu.
Neil Patel: And I'm Neil Patel.
Eric Siu: And today we're going to talk about how the rich get richer. Neil, I mean you're pretty rich. How do you get richer?
Neil Patel: I'm not really rich but sure, you can assume I am.
Eric Siu: Let's assume you are.
Neil Patel: The way I make more money from my money is I invest in what I know. And it's funny, for me it's marketing. Everyone talks about like, "Oh, you can do a lot of bitcoin stuff. You can do a lot of real estate. You can do a lot of stock market. You should do hedge funds." I stick with what I know. If I don't know it, I don't understand it, yeah sometimes I may find people who can help me out but by investing in myself I find that this is the highest ROI. Yes, stocks, hedge funds all have decent returns. But I believe if you invest in yourself you'll get your hight ROI.
Eric Siu: And have you been burned in the past trying to do this other stuff that you didn't really understand that well?
Neil Patel: Yeah, that's also how I lost the most money. When I also invest in myself and I lose money it doesn't bother me but when I invest in other things like other people and it loses me money, I get so upset. I'm like, "Dammit, I should of never put that money in. I barely knew about real estate, why did I do this transaction?" Whatever the concept or thought is going through my head but when I invest in myself it tends to be the best return and I lose a lot of times. Even putting money into myself but as I keep putting money into myself over and over again when I look at let's say the last 10 years it averages out to being a really good return.
Eric Siu: Warren Buffett says that himself too. The best investment you can ever make in is in yourself. I think of this as there's two different ways to invest in yourself. Knowledge and also back into your business. I think in your context Neil you're talking about putting it back into the businesses that you understand right?
Neil Patel: Or yourself. Whatever ends up working for you.
Eric Siu: Got it. Yeah. Here's the thing. When you invest in yourself, let's say you're paying for a conference, lets saying you're paying for a mastermind or you're paying for this dinner or whatever it is exactly, nobody can ever take that away from you. You're constantly getting better and you're constantly compounding. Tony Hsieh from Zappos has always said, "Man if we can try to just get better by 1% every single day," or I don't know if it's every single month or so, "It's going to compound." You got to think about constantly stuff that you're learning is compound interest.
Now the way I used to approach this I think when I was maybe 20 years or so I was like, "Man, the life hacker says that people, once the salary is $75,000, once you go beyond that they can't be much happier," so I just want to make $75,000 for the rest of my life. That was my logic. And it came from a kind of mindset of scarcity where it's like, "Man, you know what, I just want to have a house. I want to have this, da, da, da. Once I have that I'm good. I'm going to protect my own bubble."
But once you get into business things start to work, things start to build on each other, then you're just able to, you decide what you want. I think for the people that are really successful they just keep putting it back into themselves or they just keep putting it back in the business or investing in other businesses and by doing that, when you're doing something like that, you're going to also lessen your tax burden a little bit but you're constantly focused on building value in the world and of course that's going to build up.
Always, I think, Neil can just cash out right now and say, "I don't want to do anything the rest of my life. I can cash out and live comfortably and not worry anymore." But for me, I get a kick out of doing business and I think Neil, I think our [workaholism 00:03:44] is just related to just how much we enjoy business.
Neil Patel: Yeah, and it's funny. I was at the bank the other day. Literally I was doing a wire transfer a few days ago and the bank teller ends up telling me ... Actually it was yesterday, not even a few days ago. And the bank teller tells me, "What are you doing with," or not the teller, they sent me to this private banker and I hate it because when I'm doing wire transfers I'm like, just give me anyone. I just want it done. I don't want to wait in line just for the private banker.
The private banker comes in. I go into his office. He does my wire transfer. And then I always know what comes up. They're ready to do a pitch. They're like, "Why are you sitting on all this money liquid in your account? You should invest it. We'll invest it in the market for you and we'll give you a line of credit in case you ever need the money." I'm like, "Leave me alone." And my buddy Austin gave me the perfect response after I was done with the teller, or the private banker and I wish I knew about it before. He was like, "Every time these guys tell you to invest, just tell them, "Oh, I don't believe in investing." And it's not that I don't believe in investing, I just like investing in what I know.
I don't want him to tell me how to buy stocks. He's like, "Oh, we got this amazing guy here in Beverly Hills. He's one of the best. Let's do a lunch next week and we'll break down how we can invest your money and make you a good return." I'm like, "Dude, leave me alone. I just want to end up doing what I know, which is web based stuff and I get a high conversion from it so why would I want to do anything else?"
Eric Siu: Exactly. Invest in yourself. This is how the rich get richer. Don't think about cashing out too early if you want to get richer at the end of the day, if that's truly your goal and before we go-
Neil Patel: Oh, one more thing. Have you ever been hit up with the opportunity that like seems too good to be true?
Eric Siu: Oh, every day.
Neil Patel: And when you get these opportunities but not like the ones everyday, I'm talking about every once in a while a friend comes to you. You love the idea. You think it'd be the next big idea.
Eric Siu: Yes, yes.
Neil Patel: You've taken yourself on some of those opportunities and you have some of these businesses like an elder care home, a gun blog, and don't get me wrong, the gun blog's doing well. I don't know how the elder care one is doing but even these pie in the sky, these amazing ideas that you can invest in, do you regret doing them?
Eric Siu: Absolutely. I was talking about this with my EO firm the other day and I was kind of reflecting saying, "Man, if I didn't spend my time on those, things would have moved a lot faster." Because, when you put your investments or maybe your mind share into these other things, even if it's 5%, 10% or so, that takes away valuable time from what you could have put on in your own business and compounded. You're taking way that compound growth. Just think about investing in stocks as the same thing.
Neil Patel: Exactly. That's pretty much it. If you want to get some free marketing goodies and there's a lot of them, go to singlegrain.com/giveaways. You'll like them. They're free. Enjoy.
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