Jaspreet Singh: Getting Rich Slowly and Why Some People STAY Broke

This story was originally published at BiggerPockets.com

Want to know how to get rich but fear it could be too late? Perhaps you’ve got responsibilities, bills to pay, and a family to feed. How can you possibly get ahead? Jaspreet Singh’s message is clear: you can still build wealth, but you’re going to have to be intentional with your money, just like every other rich person. There are no shortcuts!

Today, Jaspreet is a serial entrepreneur, real estate investor, licensed attorney, and host of The Minority Mindset Show. But growing up, his parents wanted him to become a doctor. Despite the immense pressure to fulfill their wishes, Jaspreet found himself gravitating toward entrepreneurship. He started several businesses throughout adolescence and young adulthood—from playing drums at weddings and planning college parties to building ecommerce stores. He lost a TON of money along the way, but taking these risks early on paid off. Eventually, he discovered his true passion, financial education, and built an enormous online business by teaching others how to master personal finance.

America’s capitalist financial system benefits those who are willing to “play the game.” In this episode, Jaspreet shares how fostering a “minority mindset” unlocks the ability to use this country’s tax code, banks, debt, and other systems to your advantage. The catch? It’s a hard, long road. Jaspreet recommends drastic lifestyle changes, such as ruthless frugality, a “decade of sacrifice,” and the 75/15/10 rule. Make no mistake—it’s not going to be easy. But years from now, you’ll be thankful you stuck to this tried-and-true wealth-building philosophy!

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Mindy:
Today’s episode is about the financial system we have in this country and how you can work within it and succeed as long as you understand how to play the game.

Scott:
Yeah, that’s right. Today we’ve got Jas Breed Singh, the Minority Mindset with us. Jas Breed is going to tell us about the simple tried and true path to building wealth, which is really an all out path that involves a philosophy steeped in risk taking the need for early sacrifice, including the decade of sacrifice that he really touts there that I couldn’t agree with more, and why he chose to invest in a specific way, including not investing in a 401k or IRA.

Mindy:
Scott, I’m super excited for today’s episode and I cannot wait to bring in re Hello, hello, hello and welcome to the BiggerPockets Money podcast. My name is Mindy Jensen and with me as always is my risk taking co-host Scott Trench.

Scott:
Thanks, Mindy. Great to be here with my beta half of the BiggerPockets Money podcast. Mindy Jensen.

Mindy:
I love That one.

Scott:
We’re here to make financial independence less scary, less just for somebody else to introduce you to every money story because we truly believe financial freedom is attainable for everyone, no matter when or where you’re starting, and as long as you have the minority mindset.

Mindy:
Jaspreet Singh, welcome to the BiggerPockets of Money podcast. I am so excited to talk to you today.

Scott:
Well,

Jaspreet:
Thank you for having me on. It’s really an honor to be on with you and you guys are doing some amazing things, so thank you.

Mindy:
Well, you are doing some amazing things. Thank you. Your YouTube channel and personal brand is called Minority Mindset. For you, what defines a minority mindset?

Jaspreet:
The minority mindset has nothing to do with the way you look your ethnicity or your skin color. It’s the mindset of thinking differently than the majority of people. And it’s kind of funny, I started this whole personal brand on accident. I was always kind of an entrepreneur, but I had to do it in secret because my parents never wanted me to be an entrepreneur. I was supposed to be a doctor, and so I got involved with investing in entrepreneurship in secret, but then a little bit later I was in college. I got scammed during the launch of one of my businesses and I was so frustrated because I had to go through so much, just a lot of, let’s call it crap, to figure out how to start a business, how do you start investing and doing it all in secret and kind of never really feeling like I had support. So I created a class called How to Launch a Business Without Getting Screwed Over. I sold it for like $7 online and I did it under the alias minority mindset because you had to think differently than the majority of people to start a business That slowly became an Instagram page that slowly became a YouTube channel and that, I mean, it’s crazy, but it really grew from there, but it all kind of just started on accident. Well,

Scott:
I’d like to go zoom all the way back and start from the very beginning of your journey. Can you tell us about your journey with money growing up? It sounds like there was a heavy encouragement to go into the medical profession here. I’d love to hear where this begins, where this entrepreneurial

Jaspreet:
Starts. So my family is from a state in India called Punjab. My parents immigrated to America just before I was born and I grew up in a house where it was me, my little brother, my parents and my grandparents. And in my household I was raised in a very traditional Indian house. I was told from pretty much the day I turned one that I needed to become a doctor and if I didn’t become a doctor, I was going to be a failure. There was no in-between from the day I could start speaking my family around the world in Punjab, India and America was told that Jasper Singh is going to be a doctor and I didn’t think anything wrong with it. For me that was, it made sense because I saw how hard my parents were working and I wanted to give back to them and support them because I love my parents and I wanted to become successful.
That was something that I wanted to do. I was a hardworking kid. I wanted to become successful. So I thought if I did good in school, I became a doctor, I’m going to have more success, financial success along the way. I started to see things that really didn’t add up because my parents also were kind of big advocates of this whole thing of don’t talk about money, don’t worry about money, don’t stress about money, but you need to become a doctor so you can make a lot of money. So I was like, that doesn’t make much sense. Why is it taboo to talk about money? Why is this whole concept of money bad? And then at the same time, I would see my dad work six or seven days a week consistently long hours and then say, don’t stress about money. I said, why are you working so much?
Why are you working so hard to get a paycheck if we shouldn’t be stressing about money? So I started questioning things and that was when I started to kind of dabble into different entrepreneurial ventures. I picked up a drum called the to, it’s a traditional Punjabi drum. I think I was like 12 or something when I got it from India because I would go there pretty often to visit my family and I played it at my uncle’s wedding and the DJ there asked me if I’d like to play this drum at other people’s weddings and get paid. Now naturally when you’re 12 years old and somebody’s going to offer you 50 bucks to play a drum, no 12 year old’s going to say no. So I started doing that, but my parents were very against it and that’s when I realized very early on that I want to try some of these other things because something is not making sense now.
I didn’t know what it meant at the time, but I started kind of doing different things. So I started working at weddings when I was 12 or 13 years old. That kind of evolved how I started hosting parties in college. So it was a lot of kind of doing things in secret, trying to figure it out. I read a lot of books and I had to go out and really just figure it out because I didn’t really have a quote mentor per se. It was really just a lot of trial error, mistakes, screwing up learning and doing.

Scott:
So I have this theory that I try with a lot of entrepreneurs. I think I know what you’re going to say to this one, but there’s a stat that is probably made up by somebody out there that says, nine out of 10 businesses fail in the first couple of years or whatever. And my conclusion from that is to start 10 businesses in that case. Do you agree with that interpretation of that stat and is that reflected in your journey then? I

Jaspreet:
Mean, it took me a lot of tries to find one that actually stuck. My company that had run now was Briefs Media. It took me a lot of tries to find something because it’s not just learning how to build a business, it’s also finding what you like to do. I started off in the event planning space. I don’t drink, I’m not into partying, but here I was hosting the parties. By the time I was a junior slash senior in college, I was making good money. Now we were hosting parties shows we were doing pretty well for a college kid, but I hated the industry. I mean, I was like, I’m doing something that I am morally against. Why am I doing this for money? Well, now I’m getting money and I don’t want to do that anymore. It was like, it just doesn’t make sense to me.
Then I got involved in real estate. I started investing in real estate and I quickly realized I need more money to buy more real estate. So I got a real estate salesperson’s license. I started helping people buy and sell real estate and I learned very quickly, I hate being a real estate salesperson. I got involved in wholesaling real estate and I learned the same lesson. I got involved in Amazon and I realized this whole FBA thing, I don’t have any intellectual property. It’s not what I want to do. I mean, I got involved then in e-commerce trying to create my own soc company, which is where I got scammed, and I realized I don’t have any passion for SOCs. And then I started getting more involved in the financial education, financial news side of things, and I realized I like this space. I am passionate about this space. There’s a personal motivation and a personal driver for me in this industry.

Mindy:
After a short ad break, Jasper Singh will reveal the smartest money move he made early on in his career and how that contributed to his entrepreneurial success.

Scott:
Welcome back to the show. How do you think about the subject of personal finance and money and how should people in a general sense begin pursuing the discussion of money if for example, they’re completely naive to it and just getting started on the journey of learning about how to master wealth?

Jaspreet:
I think it ultimately comes down to understanding why do people want money? Why do you want money? And the first thing is, well, it costs money to eat and it costs money to feed other people. Now when you understand that, you can start to grasp, grasp this idea that it is important to become successful. You should not avoid the topic of money. You should talk about money. And then if you should become successful, you should also understand that it is your duty to become successful because it is up to you now to support yourself, your family, and your community. If you want to be able to take your wife or your husband on a nice vacation, you want to be able to take care of your kids, you want to have to spend more time with your kids, you need money to do that. So let’s stop living on LA land and understand that money is important in today’s day and age.
Now, once you understand that now it’s all about understanding how do you use your money? Because I think the big mistake that a lot of people make, especially in America, is people make money to spend money and now what do you do? You make money, you working hard to make money and then you give all of it to Gucci, BMW and Rolex. So people are working hard so they can qualify for debt. So they can buy the BMW, so they can have the big and expensive home that is making them live paycheck to paycheck so they can have the nice watch on their wrist so they can wear the nice clothes, but now you have no assets and no investments to make yourself rich or your future generation’s rich. And I think this is where now understanding if you want to make yourself rich, it all starts with what you do with your money.
And that means instead of spending your money, all of it, you’ve got to keep some of it for yourself. Now once you start keeping some of it for yourself, now the question is what do you do with this money? You want to save a little bit, but then you also want to be investing this money to own some assets now an asset to something that you’re buying for the purpose of making money. And this is where it gets so important to understand because this one, when I started understanding this, it made me so upset and angry because I went through a lot of schooling. I ended up becoming an attorney. I became an attorney because my parents found out that I wasn’t going to be a doctor. They were very upset and said, if you want to keep any pride in the family, you have to at least become an attorney.
So I went to law school, got my law degree, passed the bar exam and never worked a day as an attorney. But throughout my long educational period, but I learned is I never learned anything about money. I never learned anything about how our economic system works. Now we live in what’s called a capitalist system, and until I learned what it really meant, all I knew about capitalism is that inflated a lot of emotions. Some people got very excited, some people got very angry. And what I realized is, well, we live in a capitalist society. We live in a capitalist economy. Now you can hate it or love it. It really doesn’t matter. What you want to do is understand how our economic system works and in a capitalist system, the people that make the most money are not the people that rely on their labor.
It’s the people that rely on their capital, which made me so upset because in all of our schooling, in all of our education, we’re taught to make money from our labor. We’re taught to get a good job, we’re taught to get a high paying job. We’re taught how we can grow in our careers to make a good income from our labor, which there’s nothing wrong with that. But the second piece to this puzzle is if you want to win in this economic system, you got use your income from your labor to put it to work because capital means money. And that means now using the money you’re making from your job, using this capital from your job and putting it to work in the capital of the system so you can win in the system because that’s how people become wealthy, stay wealthy and pass on wealth. It’s not through your job because eventually you’re going to stop working. Eventually you’re going to want to stop working and now what do you have?

Scott:
So where does, and I feel very strongly about this. I want to see how you feel about this, but I want to use the word frugality in here as a term, and how important of a role does that play in this conversion of labor, of income derived from labor into the accumulation of capital on this journey? When and where is it a key tool for

Jaspreet:
You? It depends where you are on your journey. In the beginning part of my journey, well, I think it’s always important, but the degree and extremeness of your frugality is going to change depending on where you are. So I call it three phases of wealth. The first phase of wealth, which is now where you’re trying to save your first $2,000 and you’re trying to pay off credit card debt if you have any. This is what I call the financial danger zone. If you don’t have $2,000 saved up or if you have credit card debt, you cannot spend money on anything that you do not absolutely need to survive because you’re in this financial danger zone. What I like to say is if you have credit card debt, you cannot afford a Netflix subscription, and it’s not because it costs $15 a month, it’s because it’s costing you two hours of your time, and this is where now if you have credit card debt, this money is making so many other people rich.
If you have the average credit card debt in America, which is about $6,500 today, and you have the average a PR, which I believe is around 27% today because it’s been shooting up with the higher interest rates and you make the minimum monthly payments of $150 a month, it’s going to cost you $28,000 to pay off your $6,500 with a credit card debt. So if you have credit card debt, you cannot afford to be wasting your time. You cannot be affording to go out and buy luxuries because right now all you need to be focused on is paying off the credit card debt. Then phase two, in that more systemization phase, this is where I like to talk about something called a 75 15 10 plan, which says, for every dollar that you earn 75 cents is the maximum that you can spend. 15 cents is the minimum that you’re investing.
10 cents is the minimum that you’re saving. Now what does that mean? If I make a hundred dollars, I can only spend 75, the other 25, 20 $5 has to be put to work either saving or invested for myself, and this is now a type of frugality. Now notice what I said here that $75 out of the a hundred is the maximum that you can spend. There’s a whole kind of range of now how extreme do you want to be on your frugality? For me, I learned when I started learning about money, I read Total Money Makeover by Dave Ramsey when I learned how dumb I was being with my money, I went on the extreme. I was buying rental properties and I had holes in my shoes because I refused to go out and buy new shoes. I duct taped them and I continued wearing those.
When I was in law school, I started making decent money. I was making over a hundred thousand dollars a year in law school, but I lived in an apartment where I was paying 400 bucks a month and the reason why I was paying so little was because I didn’t have a room in the apartment. I slept in the living room floor. I had a mattress in the hallway and I would drag that out, put that in the living room floor, lay out my sheets, go to sleep in the morning, wake up, put the mattress back in the hallway and go to school. That way I refused to spend money because when I realized how this system worked, all I wanted to do was make money and buy rental properties, make money and buy rental properties because that was what was important to me. Now, most people are not going to want to do the crazy side of this, which is okay because I’m a little crazy and weird. I get that, but you got to find the right degree for you, and there is 100% a time and place to be extremely frugal, but at all times you got to live below your means.

Mindy:
So I love that you highlight all of the really extreme things that you, or some of the really extreme things. I’m sure there are more that you did, but also point out that that’s not what you have to do in order to get your finances good. I think a lot of people who hear about the financial independence movement and they’re like, oh, for some reason they all land on Jacob Lund Fischer’s website, early Retirement Extreme, and I don’t know if there’s a landing page that says, Hey, in order to become financially independent, you have to eat beans and rice and peanut butter and jelly and never enjoy your life at all the end because that is the mindset that people have or the opinion that people have about this concept of getting your finances in order. But what you just said, you broke down the dollar.
75 cents is the most that you can spend. 15 cents is the least that you should be saving investing, and 10% is the least that you should be saving least most. There’s a lot of wiggle room in there, and that doesn’t mean that you have to have a 50% savings rate. You will get to financial independence faster if you do have a 50% savings rate, but it’s not like it’s either 50% or you’re never going to hit it. You have to eat beans and rice or you are never going to be financially independent. There’s so many different nuances.

Jaspreet:
It really, ultimately, personal finance is personal the way you want to do it, it really depends on you. Your life goals are different than mine. I went through my own crazy story and I went through my own journey, which is my journey. I’m not telling anybody, look, I drove a $500 car to get to the office today. My car does not have a bumper on it. I am looking at a new car now, but all of my employees have better cars than me, but my journey is mine, okay? And I’m doing this for my own reasons. Now, for you do, it’s going to depend on what is right for you. There’s the big debate between should you buy Starbucks or not. The $5 $7 Starbucks is just keeping people poor, and at the end of the day, the way I look at it is, well, if you’re in phase one, if you’re in credit card debt, you don’t have $2,000 saved up.
No, you should not be buying Starbucks because you can’t afford it. Now, if you’re in phase two and now you are doing the 75, 15 10 and you love the idea of getting Starbucks and it fits within your budget, it’s within your spending, okay, fine. You’re still investing, you’re still saving. That’s something that provides value for you. Go ahead. Now you got to remember, money only has value if you use it. Money doesn’t do anything for you if it’s sit in your bank account your entire life. So you are working really hard to get this money, so you might as well use it in a way that you are going to like it.

Mindy:
So from your time spent learning about finances, what do you think is the main factor in our system that keeps people broke? You said earlier that people think their job will make them rich and that’s not true. How do you speak to that person who can’t seem to get over where their mind is going and shift them a little bit to see that investing a little bit consistently can make you very wealthy?

Jaspreet:
Well, I think you got to premise that by essentially understanding that our system profits when people are financially stupid. Our system is designed to keep people financially dumb, and it sounds extreme, but it is true because I mean, well look at it this way. We’ll look at it from a tax perspective. Who does our tax code benefit? It benefits the entrepreneur and it benefits the investor, does not benefit the employee that much because if you’re an employee and that’s your only source of income, you got to pay the highest tax rates and you get the lowest tax breaks. Well, let’s dig a little bit deeper into this banks profit When you’re financially dumb in market briefs, which is my financial newsletter in briefs media, we just covered this, but it just came out that in 2023, the big three banks, bank of America, JP Morgan and Wells Fargo made, I forget like 2.2 billion in overdraft fees last year.
That’s from people spending money they didn’t have. You got to pay a fine because you spent money you didn’t have when you didn’t have money in the first place. So banks love it when you’re financially dumb because now they’ll keep selling you loans on your cars and jewelry and things that you can’t afford. That’s not making you any money. Corporations love it when you’re financially dumb because they can get you to buy things that you don’t need, that you don’t want just because they’re good with their advertising. Even the government loves it When you’re financially dumb, I mean we talked about it in terms of how you pay taxes, but it goes a little bit deeper. The number one asset on the United States balance sheet is student loans. It is the number one largest asset that the United States government has. So now we have this whole student loan dilemma, student loan crisis.
Every young person who has student loans tells you that, dang, this student loans is expensive, it sucks. Student loans are keeping people from being able to buy homes to being able to invest, being able to do a lot of things. And now you hear, well, is the government supposed to help me with this? Well, if you really look at it a little bit deeper, you look at the government’s assets, their largest asset by a long shot are student loans. So now when you are constantly relying on everybody else to take care of you, you end up in a very bad financial situation because for the average person who do, they go for financial advice, it’s not a financial advisor, it’s their banker. Now, when you go to your bank about, Hey, can I afford this home? Can I afford this car? What is their best interest to give you a loan to give you a bigger loan?
They don’t really care if you make the payments on it or not. They just get paid when you sign the paperwork, especially that banker over there. Now, I’m not saying every single person is bad. I’m not saying salespeople are bad. I’m not saying bankers are bad, but you got to understand everybody has some sort of goal. Everybody has some sort of intention, and this is where now your intention should be to be financially educated so you can make smart decisions with their money. Because guess what? You can also use the bank to your advantage. If you know how to use the bank, if you know how to use debt, you can use debt to your advantage. If you know how to use the credit cards, you can use your credit cards to your advantage. If you know how to use your student loans, you can use it to your advantage. If you know how to use whatever products you want to buy, you can use it to your advantage because now you can buy all the nice things that you want when you can afford it, but when you don’t have the financial education, you are the subservient to everybody else and you’re making everybody else rich and you get stuck.

Scott:
We’re taking a quick ad break when we’re back. Jare Singh will talk to us about what he calls the decade of sacrifice.

Mindy:
Welcome back to the BiggerPockets Money podcast. We are talking with Jare Singh about how you can accumulate wealth even at an older

Scott:
Agere just observing a couple of things here. You started out on your journey and you say you didn’t learn much about money growing up, but you clearly took away the importance of money from the fact that it wasn’t discussed in your household and ran with that concept, you self-educated relentlessly. Once you kind of figured it out, you said, oh, spending is an enormous lever in my financial journey, and I’ll point out a few things. Maybe you’ve had this and discussed this from a philosophical standpoint as well, but frugality is extremely efficient and moving one towards financial independence because it reduces the amount that you spend allowing you to accumulate more and it reduces the amount your assets need to generate or that your income needs to generate in order to fund your lifestyle, which allows you to take many, many more risks. So this cycle of self-education, the learning experiences from entrepreneurship, the frugality and the capital accumulation are a compounding set of forces that just rocket ship off your journey.
In particular, from my observations and what I’ve learned today here and that compounds over the last decade following this journey, allowing you to buy more and more real estate, allowing you to buy more and more, I’m sure other assets and allowing you to invest heavily in this business, and you’ve kept the foot on the gas the entire time on all of those levers I imagine from self-education, from income generation and the pursuit of optimization there in a controllable fashion and with frugality saying, you drive a $500 car to work today. And that, I think there’s a couple of things to unpack there that I’d love your take on first. That position starts in high school for you in college for you at 12 years old really. But for someone, let’s take a peer. I am sure you can think of somebody that went to those parties that you were entrepreneurial hosting in college who is now locked into a home mortgage works at one of those banks that has made 2 billion in overdraft fees last year, has a car payment or whatever.
I think there’s something there that you talk about this, what is the system that’s holding us that’s holding so many people back? I mean, you’re going to have not just 10 times, not just a hundred times, but maybe a hundred times the wealth of somebody on that other path over the next 10 years. Tell me if you agree with my diagnosis here, first of all, and am I onto something here? Is there a kernel in there around how to extract people from the system? Because it’s hard to take somebody on the other path and put ’em on your path here. It’s almost impossible for them to do that at a certain point. Does it have to begin early?

Jaspreet:
I think what you said is 100% correct. You said, number one, it’s hard, and number two, you said nearly impossible. But notice you did not say it is impossible. And this is where one of the things I’d like to talk about because what you said is the same question I get asked anytime I do an interview. What if somebody’s 35 years old, they’re in debt, how do they get started? What do they do if they’re making an average income? How do they now start building wealth? And the reality is, first you got to get your mindset in the right place because unfortunately the internet loves to sell this idea of get rich quick, get this passive income by doing X, Y, Z, and you’re going to make a thousand dollars a month doing nothing. It doesn’t work like that. It is not that easy, but this is right now, if you reframe your mind, what I like to talk about is the decade of sacrifice.
It takes a decade to see that significant change. And now what is a decade of sacrifice is you got to spend those 10 years spending less and earning more. So you can invest like crazy. If you stick with it through this decade of sacrifice after those 10 years, you are not going to recognize your financial self and now you’re going to be on a whole new path of trajectory. But if you’re starting a little bit later, that’s okay, but you have to now start taking action because there’s three factors that will determine how wealthy you become, how much time your money is invested for the return you can get on your money, meaning how fast you can grow your money and how much money you’re investing. The one thing we can’t change is how much time we have left. If you’re starting at 25 or 35 or 45 or 55, you can’t go back and start last year. So if you ignore the T the time, that means you have to emphasize more how much money you invest and the return that you get. And this is we’re now understanding, okay, if I start later, fine, but now it’s time to make up for lost time and you got to go through the decade of sacrifice. Everybody’s got to go through the decade of

Scott:
Sacrifice. I completely agree. I want to use that for the rest of my life, the decade of sacrifice. That is a fantastic point there. And absolutely that’s it is that decade of sacrifice. And I just want to point out for middle class America, that decade of sacrifice means if you actually want to get on the other side of this train and get to financial freedom and have that decade of sacrifice, you’re probably going to have to sell the home. You’re probably going to have to downgrade the car. You’re probably going to have to stop by in luxury artifacts and goods there, and you’re going to have to really accumulate a little bit because it’s not just a linear thing here. You have to be beating inflation the entire way through that journey the entire time. And you have to go pretty big in those first couple of years.
And I love it. And I think that’s why that I think is a better diagnosis of why the system is so skewed is because some people are doing that and some people aren’t. I would even pause it to some degree. Now, that’s not true for everyone, but that is true for why from people who start off from the same middle class standpoint, the same people you graduated college with, some people will become very, very wealthy and some will be stuck in the middle class trap. It does not explain the poverty dynamic there. But I think that’s the K here. And I wonder, I think it’s an interesting dynamic and what’s fair and unfair in that context from a system perspective.

Jaspreet:
Yeah, and I think it really, you have to define that decade of sacrifice because what a lot of people will say is, dude, I’ve been working really hard for 20 years, but I have no wealth. But I think the question is now the intentionality of what you’re doing during that decade of sacrifice. Because for a lot of people now you’re working hard, but if you’re not intentionally using your money and investing your money and allocating your money, that hard work is being put to all the wrong places. Now, when we talk about this decade of sacrifice, it has to be with the intention to buy more assets, to invest more money, whether the market’s up, whether the market’s down. It’s just this decade of trying to accumulate as many assets as possible, not the watches, not the clothes, not the vacations.

Scott:
I completely agree, and Mindy and I were just chatting here. She had, I think she said she had holes in her shoes a while back while she was saving up to buy real estate. I also had the same thing. I would get on my bicycle bike to work, bike five miles to rugby practice where all the other guys drove bike back to my duplex house hack so I could save more money to buy more real estate in the first part of the journey. And I talked to some guys at a real estate meet the other day and they’re like, house hacking no longer works. I’m like, well, walk me through it. Like, oh, I want to buy this four bed, two bath house in this nice area and have a cashflow with my roommates. I’m like, I did not. That was not what I was doing.
I was living in up and coming, if you want to call it that area of town with tiny little duplex, 700 square feet on each side with no air conditioning, none of the stuff there. That is what you have to be doing there while also working very hard full-time at work. And I think that’s what you mean by the decade of sacrifice. Working 60, 70 hour weeks while living in the nice home and driving the nice car is not the decade of sacrifice. That’s what everybody in the middle class is doing, and that’s why they’re not getting ahead. And on this other side of accumulating, I’ll also say after tax investments, I have no doubt that your portfolio is comprised mostly of after tax investments in real estate stocks, bonds in your business, not primarily in your 401k and tax advantaged accounts. Is that right? I don’t

Jaspreet:
Have a 401k or an IRA. Everything is after tax accounts. Is that going to offend people? Why is that? I’m not a fan of those accounts, I don’t think. I mean, just for me personally. Well, I don’t like the idea of number one, giving up the control. I don’t like the limitations on things like a 401k and number three, well, I think I personally can get better tax benefits through investing more money in real estate myself without using an IRA. Now, I’m not 100% against them. I think they’re right for the right people, but for me, they don’t add much value. And so now, and also we’ll talk a little theory here as well, if we’re talking pre-tax versus post-tax, if I’m investing pre-tax dollars right now, I’m going to have to pay those taxes at some point. And so now when I’m 35 years from now or 30 years from now, when I start pulling this money out, where is a tax code going to be?
And the argument that a lot of people make is, well, when I’m 65 years old, I’m going to have no income, so my tax rates are going to be lower. Why in the world would you want to have no income when you’re 65 years old? My goal is to increase my income year after year after year. And so now if I’m working to increase my income, well, I’m hopefully going to be in the higher end of the tax bracket. But then the second issue is where the heck is the tax code going to be? Because what we know is that the government is spending a lot of money and the government has a lot of debt. How does the government pay back the debt? Well, they’re going to need taxes, and the government is clearly not making enough money from taxes. So you can make an argument that tax rates are going to go up and you can make a very strong argument, but I’m not going to go into that. But if tax rates have to go up, I’m bearing that burden of the risk. Why would I want to do that? So for me, if I was going to invest in something like that, I would prefer to do a Roth, but I don’t do either because for me, I like to just invest my money into my own places all after tax for my own control and to own it and use it however I want.

Scott:
I agree completely with your diagnosis, and that’s why I invest in entirely after tax assets and a Roth 401k for those reasons instead of a 401k that is pre-tax because I believe exactly that. Why am I doing this? Why am I doing the decade of sacrifice as you put it, in order to not have any income in retirement? I’m doing the decade of sacrifice because that is going to swell for the next 30 years and produce so much income in retirement that I’m still going to be in the higher tax brackets at that point in time. And that’s why we do it, I think here. Ja, this has been fantastic. Thank you so much for joining us today. Where can people find out more about you?

Jaspreet:
Well, thank you guys. This was an amazing conversation. I have a ton of content on the internet, minority mindset on YouTube, minority mindset, and you can also check out my company Briefs Media. We have a free newsletter called Market Briefs where we cover what’s happening in the financial markets every day. We publish market brief six days a week, and it covers things like the economy, housing market, stocks, crypto, global economy. You can go to briefs.co/market and yeah, anywhere else on the internet.

Scott:
Awesome. Well, thank you for the wonderful conversation. Really enjoyed it. And yeah, best of luck. Thank you for

Jaspreet:
Your support, guys. You guys are doing an amazing job.

Mindy:
Thank you for the conversation, Jess breed. I had a great time talking to you and we will talk to you soon.

Scott:
Sounds great. Bye.

Mindy:
Alright, Scott, that was Jare thing and that was an amazing episode when he first said that he didn’t have a 401k or Ira was like, what? But his reasoning makes sense, and I say that because he has a reason he’s not just not investing in a 401k, he’s not just skipping it. He’s doing something different. And while I choose to invest in a 401k, traditional 401k to reduce my taxable income, I’m also in a different place than he is I believe, although we didn’t ask him how old he is, I believe I’m significantly older than he is, so I have a different financial situation. If you are doing something with your finances that is different than the traditional personal finance recommendations, that’s not necessarily bad. You just need to have a reason for it, not just, Ugh, I didn’t feel like it. That’s not a reason. I mean it is, but it’s a bad, yeah.

Scott:
Look, I loved everything about his journey and the way he approaches things, and a lot of people say, oh, you can spend the money on the latte or whatever and all that kind of stuff, but that’s not what he did. He was all out, he had holes in his shoes, he was super frugal. He tried one business idea after another, read hundreds of books, saved every penny, tried everything he could to figure out how to optimize a blend of what he liked to do and what earned money and sacrificed for a decade drives a $500 car today to this point with a $2 million YouTube audience. I just like, I have this not frustration, but that is the path to becoming wealthy and really driving a large financial outcome in one’s life.
It’s not this save X percent of your income and put it into this path. It’s this. It’s go all out for this decade of sacrifice, which I think is a great framework and I think that folks need to hear that and internalize it. If the goal is to really get wealthy early in life from a financial freedom perspective, you have to do that. And I think I’ll even go a step further that it’s really hard to do once you’re already set in a pattern in your thirties with a family and have the house and the kids or whatever. It’s much easier to do that in your early twenties, starting right out the gate. And that, I think is a fundamental reason for this split in outsize outcomes between the wealthy and the middle class in this country. It does not explain poverty, and I don’t want to pretend it does, but I think that that is a major reason why a portion of millennials, for example, and Gen Z will become way wealthier and way more and unequal distribution than a lot of the middle class, if you will, is because of that dynamic out the starting gate in adult life.
And I think Jare really confirmed that. That was another data point confirming that bias for me in terms of that being the reason.

Mindy:
Scott, I could not agree more, and I think you have a spot on observation there, which is why I could not agree more.

Scott:
Well, should we get out of here, Mindy? We

Mindy:
Should. Scott, that wraps up this episode of the BiggerPockets Money Podcast. You of course are the Scott Trench. I am Mindy Jensen saying, be easy breezy.

Scott:
If you enjoyed today’s episode, please give us a five star review on Spotify or Apple. And if you’re looking for even more money content, feel free to visit our YouTube channel at youtube.com/biggerpockets money.

Mindy:
BiggerPockets money was created by Mindy Jensen and Scott Trench, produced by Kaylin Bennett, editing by Exodus Media Copywriting by Nate Weintraub. Lastly, a big thank you to the BiggerPockets team for making this show possible.

Watch the Episode Here

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In This Episode We Cover

  • How to foster a healthy relationship with your money
  • The three phases of wealth (and how to handle money in each stage)
  • How risk tolerance varies in different stages of wealth building
  • Why a “decade of sacrifice” is the foundation for long-term wealth
  • What you MUST do to thrive in America’s financial system
  • How to be “intentional” with your finances using the 75/15/10 rule
  • Pre-tax versus post-tax investment accounts and avoiding risk in retirement
  • And So Much More!

Links from the Show

Books Mentioned in This Episode

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

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