The Psychology of Making Money

The single greatest skill that separates

broke people from wealthy people is not

intelligence or luck. Okay? It is

mastering the psychology of money. I

went from being 100 pounds overweight,

broke, arrested six times to building

companies worth hundreds of billions of

dollars. And it is not because I'm

special. I am no different from you. Is

because [music] I stopped letting my

broke mindset run my actual life. So if

you want to build real wealth, you need

to break free from these six limiting

beliefs that are keeping you broke. The

first limiting belief or system of

beliefs that is keeping you poor is what

I call the money script. Every financial

decision that you make, what job you

take, how much you charge, how guilty

you feel spending a certain amount of

money, is all controlled by this

subconscious script that you probably

didn't even write yourself. And this is

actual science. There's research by

financial psychologists that talk about

the four types of money scripts that

predict financial behavior. And these

scripts are actually formed in childhood

before you're even conscious enough to

understand what money is. As I go

through each of these, I want you to

think about which one you unconsciously

follow yourself. I will tell you what I

am at the end or at least how I grew up.

Okay, the first one is a money avoider.

These people believe that [music] money

is bad and that they don't deserve it.

Okay, they will sabotage their own

success. They often work in helping

professions that have very low pay and

they feel guilty about wanting to have

money. So if you grew up hearing people

say rich people are greedy, money is the

root of all evil, that's probably the

script that you have in your head. Now

on the other hand, we also have money

worshippers. Okay? So if you're a money

worshipper, you believe that money will

solve all your problems and [music]

bring you happiness. Okay? So a money

worshipper, they chase money

obsessively, but they never feel like

they have enough. They hoard. They

prioritize [music] work over

relationships, always believing that a

certain amount of more money is going to

bring them happiness. Oh, I just haven't

made enough yet. I need to make a

million dollars. Now it's 10 million.

Now it's a hundred million in order to

be happy. Now there's the money status

script. People who suffer from the money

status script tie their self-worth to

their net worth. They overspend because

they want to keep up appearances, hide

their finances even from like spouses if

it's not what they think it should be,

and they feel anxious when other people

are wealthier than them. So it's like

the typical keeping up the Joneses. It's

like you're looking in the the yard of

your neighbor and you're like, "Dude, I

need to have a better yard than him."

Research shows that this script is

actually linked to lower well-being and

increased unhappiness. Now, [music] why

is that? Because you're constantly

comparing yourself. Right? The last one

is money vigilant people. Okay, these

are people who are chronic savers who

live below their means, but they

experience constant anxiety about their

financial future. They're usually

secretive about money. They never feel

secure even when they have plenty. So, I

want you to think about of those four,

you might be a mix of a couple of them,

but think about the one that you

identify with the most. Think about how

it affected you growing up. So, when I

went through these, I was like, I

definitely identify the most with money

vigilant, [music] which probably sounds

weird cuz you're looking at me and

you're like, I see jewelry and I see

makeup and hair and all. I'm going to be

really honest with you guys. I spend

nothing compared to how much money I

have. to the degree that when I had $100

million net worth, I didn't even want to

spend over a couple million dollars on

the house. In fact, I rented for three

years at that point in my life and

didn't even own a home. And that is

because it's the constant anxiety of

like never feeling secure even when you

have plenty. So, Alex actually knows

this about me, which is a terrible

habit. But when I feel like I'm not

making as much money or less profit for

a couple months, even though it affects

nothing about my personal life, cuz I

don't even take money from my business,

I just start to spend less money. I

don't look at things. I don't buy stuff.

I tell people, I'm like, "Don't buy

that. What are we doing?" I tell my

whole assistant team, I'm like, "Ah, we

don't [music] need that. No, let's cut

here. Let's go through our our finances

and cut stuff that we don't need." I

realized it was a pattern that I had in

my past that I was bringing into my

current day life that wasn't serving me.

And so something I tried to start doing

the last few times that's happened where

I've just felt that urge to spend less

money. I go spend more money. It's

probably a worse behavior, but it's

telling my brain like, listen, you're

going to listen to me. This is

irrational. I'm not going to listen to

you. And so I will spend money even when

I have that impulse not to to teach

myself it's okay because the evidence

shows it is. And whatever's happening in

my brain has nothing to do with what's

happening on the outside. So here's what

I want you to do. I want you to think

about the phrases that you heard growing

up. Maybe it's, you know, one, money

doesn't grow on trees, be grateful for

what you have, rich people are greedy.

Okay? Those things are not lessons.

They're other people's thoughts that you

took on. And so once they get written

into your subconscious, then they start

dictating everything about your life.

What jobs you take, how much money you

charge, what you believe you deserve,

how much money you spend, when you

should be anxious versus excited about

spending money. So, here's how we want

to rewire our brains to think about

money differently. Write down your

earliest memory about money. What did

your parents say [music] about it? How

did they behave with it? That's probably

your money script. And once you see it,

you can rewrite it. And so your new

script, for example, could be money is a

tool that lets [music] me create freedom

and help more people. Once you change

that internal script, your external

results will start to update. It takes a

lot of the emotion out of it. And once

you associate positive feelings with

that new narrative, you start to

actually see that your behaviors align

with it more. The next limiting belief

keeping you poor is what we call a

wealth ceiling. Here's the truth about

it. you will sabotage. Say it's a

$200,000 opportunity if you still see

yourself as somebody who only pursues a

$50,000 [music] opportunity. Now, why is

that? The amount of money that you have

is capped by how you see yourself. Just

[music] like the partner yet you have,

just like the job that you have, just

like the house that you live in, the

research on this is very clear. Your

self-concept acts as a [music]

thermostat. If you see yourself as

somebody who earns $100,000, you'll

unconsciously strive to [music] maintain

that level, right? And you will not

pursue a level above it. That's the

really important piece. Now, if you make

$150,000, you'll probably spend an

additional $50,000. [music] If you make

$80,000, you'll stress and work until

you're back at the $100,000. See what

I'm saying? [music] So, for me, for

years, I was I'm scrappy. I'm surviving.

I'm getting by. And I remember because I

got stuck [music] when I was in my first

job making around $85,000 a year. It was

like I created this identity around it.

I knew [music] logically that I could

make more, but one I remember the moment

I started making more, I started to

compete and then all my money started

going to competition fees. The second

piece is that I remember so many times

when I knew I was about to start making

more. It's like I would almost sabotage

myself by getting wound up in it. I was

like, "Oh my god, what if I up? What if

I mess up? What if I don't actually make

more?" And I didn't realize at the time

that that was like me regulating my

internal temperature. And so if your

identity is I'm somebody who struggles

with money, you find ways to keep

struggling. But if it's [music] I'm

someone who creates and manages my

wealth and can make more money if I

choose to, then you're going to find a

way to live that out. So here's how you

[music] change this. Okay? I want you to

write this down. I'm the kind of person

who. And then finish the sentence

honestly. Whatever your current

financial identity is. I overspend. I

underspend. I save [music] too much. I

save nothing. Then I want you to put a a

line down that piece of paper. On the

other side, write, I'm the kind of

person who builds and manages wealth

with ease. You don't need to feel like

[music] that person yet. You don't need

to act like them just yet. I just want

you to actually write it down and not be

repulsed by what you see on the piece of

paper. I'm serious. Every time you now

make a decision for money, I want you to

pull up that piece of paper. That's all

I want you to do right now. [music] And

the thing is is that the moment that

your self-image expands because you're

constantly reading that, reminding

yourself of it, writing a new sentence

to put in your brain, your income is

going to follow that. The next limiting

[music] belief people have is thinking

that they should buy liabilities instead

of assets. Maybe just not even knowing

the difference. [music] You were

programmed to consume, not to build

things. And that's why a lot of people

stay broke. Okay, Robert Kiosaki, he

wrote Rich Dad Poor Dad. One of the

first books I read on money, he put it

very simply. He said, "The rich buy

assets, the middle class buys

liabilities thinking they are assets."

Wealth is actually fairly simple. There

are two categories: assets, liabilities.

An asset puts money in your pocket. A

liability takes money out of your

pocket. And a lot of people spend their

entire lives buying liabilities and

wondering why they can't get ahead. They

ask, "Can I afford this?" Instead of,

"Will this pay me back? What's my return

on this?" Now, how do you know the

difference between an asset and

liability? I'll break it down in the

most common cases that you probably can

relate to. Your car, liability, okay,

loses value immediately. Has insurance,

which is Gas, maintenance,

happens to it all the time. your house

you live in. Liability. I know this is

very controversial, but it's true. You

have a mortgage, property tax,

insurance, repairs. It doesn't generate

income. The next one, a course that

teaches you a skill, asset. Now, how

does that an asset? Because it pays you

back through increased income because

you've invested in your skills. A rental

property. An asset. It generates monthly

income. A designer handbag, sadly, a

liability. Okay. Loses value over time.

Doesn't, you know, generate any income.

I've had that discussion with Alex

before. equipment for your business.

That is an asset if it helps you

generate more revenue. It's a liability

if you don't use it and just sits there.

So, when I started filtering all my

purchases through that, is this an asset

or a liability? My wealth compounded

because I realized I was like, my money,

if I don't put into either of these

things actually is just a liability.

Money sitting in the bank, it's just

deteriorating over time. So, my money

actually can become a liability if I

don't do something with it. And that's

when I really started learning how to

invest in things that create money, in

skills that create money, in learning

that creates money, and in assets for my

business that create money. Here's how

you can start spending on what matters.

Okay? I want you to look at the last 10

purchases that you made. And then next

to each one, simply write asset or

liability and be honest with yourself.

And then all I want you to do is just

commit the next time that you buy

something to just ask yourself, is this

a liability or an asset? Does it put

money in my pocket eventually, or does

it take money out of my pocket? The next

limiting belief is one of the hardest

ones to break. I know this because I

still find myself breaking it on a

continuous basis in the weirdest ways,

but that is the scarcity mindset. Okay,

this sounds crazy, but having a scarcity

mindset actually can make you dumber.

Here's the truth. You either operate

from scarcity or abundance. And I don't

want you to feel bad here because

[music] as humans, we are supposed to

operate from scarcity. Which one you

choose to lean [music] towards and train

yourself into will determine how much

money you make. The scarcity brain

really just says there's never enough. I

need to protect what I have. I need

more. [music] You know, if that person

has more, it means less for me. Think

about what that meant like a thousand

years ago. It meant like somebody else

has all the berries. And you're like, I

need more berries because I need berries

to feed my children and my pack. And

like you're trying to get their berries

because you're like, oh, you can't.

There's only a certain number of berries

and I need to make sure I get them and

not you cuz what if my family dies?

That's how your brain's working, except

it's working and thinking those thoughts

about something that is not finite. It's

something that's infinite. There is

money being made every day. Scarcity

actually changes your brain the more

that you give into it. When you perceive

resources as scarce that are not like

money, your cognitive bandwidth shrinks,

okay? You make worse decisions. You

can't plan longterm and you only focus

on immediate value. So, we need to

reprogram these thoughts. People with a

scarcity mindset, they hoard money. They

don't invest their money, right? Right?

They're only thinking short-term, got to

survive, right? And they see every

opportunity as a threat. If you can tap

into training yourself to have an

abundant mindset, everything will change

for you. Okay? Abundance [music]

mindsets. They say there's always more

to create. I can afford to invest. I can

afford to give some berries to my

neighbor. [music] I can take calculated

risks because there are opportunities

everywhere. And it is not a finite

resource. It is seeing the world and all

the things it has to offer as an

infinite pie rather than a finite one.

So for me, for example, when I operated

from scarcity, I was terrified to spend

money on things that made my life

better, made me better, [music] made my

business better because I felt like what

if what if I never make money again?

What if it [music] stops coming? What if

something changes? Especially in the

first few years of business, I want to

say the first three, it was really hard

for me to get out of that habit. And

then the shift actually really happened

when I realized money is almost infinite

nowadays, okay, but is renewable.

Skills, relationships, opportunities,

those things compound. And so the more

that I invest into myself and the more

and I invest in my business and the more

and I invest in my life, the more I get

back 10fold. And I realized that I

needed to train myself out of that

habit. So I'll tell you the first thing

I did. I hired a coach that was $40,000

a month when we were literally making

$50,000 a month, right? And my scarcity

brain was like, "Oh my god, you just

started making this money. Like you're

going to go broke. What if it stops

tomorrow?" My abundant brain was like,

"Well, you made 10,000 a month, then

30,000 a month. Now 40. Like next month

you're probably going to make a h

100red." and this skill is going to help

you make even more. And so I said, you

know what? I have to just ignore that

voice. I'm not going to listen to it. I

can have those thoughts. I don't need to

listen to them and follow their

directions. I can go with this one

instead. And the cool thing is that that

coach that I hired that was $40,000 a

month was the reason I was able to scale

one of my companies to the degree I did,

which then I was able to sell the

company for tens of millions of dollars.

I'm sure you're thinking, "Okay, but how

do you build an abundant mindset?" Okay,

here's what I want you to do. One is

just become aware of when you make

decisions from fear versus from

possibility. Okay? When you think I

can't afford this, I want you to reframe

it. How could I afford this? Simplest

thing you can do. The moment you stop

asking yourself, how do I protect what I

have? And you start asking yourself, how

do I create more of what I have? That's

when you start asking, I would say, like

higher level intelligence questions, and

you stop sabotaging your finances. And

that's the thing I realized for myself.

I was like, "Oh, I talk to myself like

I'm poor even when I was had a lot of

money to be honest." And it wasn't until

I realized that that I was like really

able to step into that next realm where

I was like, "I'm giving into like the

survival mechanism that exists in all of

us humans rather than retraining myself

into this abundance mindset. The next

step we have is loss aversion. Okay, I

want to define this for y'all. Loss

aversion is why you keep losing [music]

investments, avoiding risk, and

basically staying stuck where you are."

Because if you want to break this

limiting belief, I want you to listen

closely to what I'm about to explain.

There was a winning research by it was

like Daniel Conman [music] and some guy

named Amos. Okay? And it showed that the

pain of losing $100 [music] is

psychologically twice as powerful as the

pleasure of gaining $100. Losing feels

twice as bad as winning feels. This is

why as humans, we hold losing stocks,

you know, hoping that they're going to

recover instead of just cutting our

losses. We stay in dead-end jobs. We

stay in bad relationships. [music]

We don't negotiate salaries. We avoid

investing because the fear of loss

outweighs the potential gain. So for me,

for example, I stayed in a terrible job

for probably 2 years longer than I

should have because I felt like [music]

if I ended it, I was losing. But the

funny thing is like staying in that job

cost me way more. It was like money,

[music] mental energy, mental health,

who knows how many years off my life

because the fear of loss was bigger than

the logic of leaving. Your brain is

designed to protect what you have, not

to pursue what you could have. And that

is why most people never actually take

risks to build wealth. And then they

say, "Oh, there's something wrong with

me. I feel like what if I lose?" I'm

like, "There's nothing wrong with you.

You're a human. I don't know how many

times I have to say this. Like, we're

all wired this [music] way. I'm wired

this way. You're wired this way. If I

can do it, you could do it. Promise."

Okay. So, here's how you break that

cycle. You need to reframe every loss as

tuition. If you lost $50,000 on a

business venture, abundance is going to

say, "You paid $50,000 for an education

that will make you millions." When I

changed that frame for myself, the loss

stopped controlling me. In fact,

recently I had a business decision and

there was, you know, about a $3 million

delta between what somebody was saying

something was and somebody else was

saying something was. And I ended up

just going and agreeing with this person

because I said I think this is the right

way forward and I think that I actually

should have defined terms earlier in the

relationship to make it more clear and I

hadn't done that. And so, you know, when

I was telling the story about this, it

was just a week ago. I said, "Yeah, I

paid $3 million to learn this lesson."

And you know what? I would pay $3

million again to learn that lesson. The

last limiting belief might be the most

important one to break. And this is what

we call the time trap. Most people spend

their entire lives trying to save money

and that is what keeps them from making

money. Ironically, they forget that

money multiplies. But time doesn't

multiply. Okay? And that is why you want

to save time instead of saving money. So

here's what I mean. If you make $100 an

hour doing anything worth less than $100

an hour is costing you money. So, if you

spent 2 hours cleaning your house,

instead of hiring someone $50, you

didn't save $50, you lost $150 because

[music] 2 hours at $100 minus the 50 you

didn't pay. Wealthy people understand

this. They buy time. They hire

assistants, meal prep services,

housekeepers, not because they're lazy,

but because their time is worth [music]

more. They put it elsewhere. Guess what?

I didn't just do this now when I had a

lot of money. I did this when I first

had barely any money. The first thing I

hired was an assistant. When I was

barely had enough money to hire six

people for my team, I hired an assistant

because I said, "You know what? This is

what rich people do. They hire people to

get their time back. And if I have to

like take care of this and that in the

house, then like I'm not going to be

making money." And it was the best

decision I ever made. Whereas poor and

middle class, they tend to sell time,

right? They're trading hours for dollars

and do everything themselves to save

money and then wonder why they're not

getting ahead. And so when I started

filtering every decision through, does

this buy me time or cost me time,

everything changed. I stopped doing the

$10 an hour tasks, hired help, automated

things, and I focused really on the work

that was, you know, say $1,000 an hour.

And you can calculate how much money you

make per hour by asking yourself how

much money do I make in a year? And

divide it by how many hours a year there

are. That's it. So like right now, I

know how much I make per hours. So then

I'll ask myself, I even have it on one

of my ASA cards for people. I'll say,

"Is this worth, you know, $50,000 for

Lelaya to do this if it's going to take

an hour?" Now, here's the thing. If

you're able to do this, you will make

more money in less time, which then you

reinvest into more leverage. And then

that leverage creates freedom for you

because things that you have leverage

on, they take less of your time and

create money. They're how you get free,

right? So, how do you get out of that

trap? Calculate your hourly rate.

[music] Your annual income, divide it by

2,000 work hours. Then, audit your time.

Ask yourself, how many things am I doing

that are not worth this? My favorite

thing that somebody will do in one of my

companies is they'll come to me and tell

me that they're doing tasks that are not

worth how much I'm paying them. My

favorite thing in the world. I had

someone do it recently. They said, "Look

how many hours I'm spending on admin

tasks." And they had actually gone

through their calendar for the last 4

weeks and they calculated it and I was

horrified by how much time. And I

immediately hired them assistant and

they started literally 3 days ago.

That's all because anybody who thinks in

terms of getting a good return, I'm

going to hire that person for somebody

else as well. So here's my challenge for

you. I want you to pick just one of the

shifts from this video and I want you to

say, "This is the one where I think I'm

going to get the most gains. I'm going

to start [music] practicing it this

week." And if you like this video, don't

forget to check out my next one and

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