Why Working Harder Will Never Make You Wealthy.... (But What Actually Does!) | The Wealth Experts
In a Nutshell
Hard work alone won't make you wealthy—advancement comes from moving from low-value execution to high-value thinking and ownership. Build an emergency fund first, then follow the 75-15-10 system: spend at most 75%, invest at least 15%, and save at least 10% of every dollar. Invest consistently in index funds while avoiding status spending and high-interest debt to escape the cycle of living paycheck to paycheck.
These notes were generated by AI and may contain inaccuracies.
There is a culture of hustle culture that promotes the idea that hard work will equal wealth, but that is actually not true at all. If hard work would equal wealth then the person who runs a laundromat would make just as much as Jeff Bezos. There is a video showing for the 60 seconds that Jeff Bezos is in the video how much money Jeff Bezos is making every single second as he walks around the factory. He makes x millions of dollars per second. By the time the laundromat owner has picked up his coffee put it in his mouth, Jeff Bezos has already lapped him multiple times for the year. Jeff does not work as hard as the guy who's laying actual bricks or actually cleaning the roof. The idea of just work harder and improve your work ethic is not true anymore, especially in the age of AI.
If you want to make more money as an employee, number one, you have to understand how much money you make the company today. If you do not understand what your value dollar amount is that you bring into your business, you should probably go talk to your boss and say, "Hey, I'd like to understand how I make you money. If you had to quantify how I make you money, could you help me understand that?" Your boss is going to be like, "This is amazing. Nobody's ever asked me this before." Once you understand that, you need to figure out how could I make more money for the company. Once you can understand how you can make more money, you can say, well, what do you think the profits of this business are? If we bring in a $100 sale, do we keep 20 bucks of it? If you figure that out, then you can go, okay, I made you a hundred bucks, we kept 20 of it. If I do that, could I keep five of that 20 I brought you? Then you actually know how to negotiate for your salary. This isn't always possible if you're in a big corporate job, but more often than not, there is money available for those who understand how to ask for it because they've earned it.
From your boss's perspective, they hired you for a reason because they thought that you would make their life easier and that you would make the business better. A lot of times you leave your job before you get all of the money out of your job you could have. You would make way more money if you thought that you could have a conversation with your boss and say, "Man, this isn't exactly working how I thought it would be. I think I could be of use over here as well. I'd love some additional responsibility here. Maybe less here. Could I make you more money over here if I prove myself here? Could we do less here?" You leave the devil that you know for the devil that you don't often. When that happens, you actually lose more money than you anticipate.
It used to be back in the day, you made about 20 to 25% more money every time you job hopped to the next job. These days, there is a real value you can have to increase your salary or overall pay by more like 25 to 50% if you stay and you diagnose as opposed to you skip and then you guess. It is highly recommended not to skip and never give the place a chance to pay more. They might want to. What you miss when you skip is you actually miss the skills of negotiating, up managing, learning new skills and abilities at that place.
A framework of how to talk to a team about what helps you grow at the company uses a very simple analogy and metaphor of beginning at the brick layer. The brick layer is usually at the level with which you come in. The brick layer knows I have to lay this brick and I've got to lay it next to this one. And I know the pattern and I can lay a brick and maybe I can build a wall. The next level up is a builder. You actually know how to build a wall. You know how to paint the wall. You know how to put up scaffolding. You know how to connect walls. You can do a bit more and you're a builder. Above from that is the architect. The architect is not just good at building a wall. They could actually go and build and design a new part of the business, an extension of something, a new idea. The highest stage is the city planner. This person's not just building one home. They're planning the whole city of the ecosystem of how everything falls into place. The goal is for people to graduate from brick layers to builders to architects to city planners. That is what's attached to more money. It's not more effort. It's not more work. It's not being more busy. It's not doing more stuff. These all come with a different type of vision. They come with a different strategic element. They come with more care. They come with a wider scope. It isn't just about, oh, but I worked more hours this year or I put in more time. Didn't you see how much effort I put in? Those things don't necessarily result in more success for a company.
Another way to talk about growth is called the NPC ladder. In video games, you have the NPCs, which are these people that stay in the same spot and repeat the same things, like, "find the dragon, find the dragon." Some people choose to stay in the same spot and to stay as an NPC for much of their life and not to move to each level of the game where you become not the main character next, the supporting cast member, and then you might be one of the main characters and then you might be the protagonist. At the very top of the best performers who will be paid the most and maybe eventually get equity, they're the main characters and that means that they actually change the script. They move forward the company overall. You don't leave bad jobs, you leave bad leaders. When somebody leaves, that's a reflection on the leader and the team that they didn't see a way for them to become a city planner and that they didn't see a way for them to come to the next level.
AI will enable all of us to have massive knowledge. Because we'll all have massive knowledge, we will actually have to perform better because everybody will be able to do a midlevel execution. Very few people will be able to stand out amongst the noise. There is already a 47% increase in creators just this year online because it's so much easier now to go bang bam boom, put it on the internet. That's going to be everywhere. Going forward, just doing a lot more, just working a lot harder won't be what changes it. What will change it is taking a moment to look at what do I know different than anybody else, how do I increase my knowledge stack and how do I get really creative in a world of lack of creativity but mass production. Ravocant's line was: in this world today you don't want to work like a cow. You don't want to work continuously sort of grazing non-stop like this. You want to be the lion. You want to have periods of sprint and rest, sprint and rest. That will be what the top performers do.
Most of us are never taught a thing about money. There are three rules of money that you have to understand. Number one is that money flows to the investor. When you go to Chipotle and buy a bowl of extra guac, you are benefiting the owners of Chipotle and the investors of Chipotle. Money rule number two is inflation benefits the investor. Over the last 5 years, prices of things have risen because of inflation. Inflation has been happening for a long long long time. You might have heard your grandparents or parents say, "When I was young, I used to go to the movie theater for a nickel, a dollar, whatever it might be. Now it's $25 to go to a movie." This is inflation. The third rule is that our system is designed to benefit the investor. When you earn your money as an investor, you are going to pay a lower tax rate than when you earn your money as an employee. It is not bad to work a job. The point is you have to understand that when you go to work, you now have to take some of that money and become an investor.
Half of America today does not have $1,000 put aside to protect them against emergency. If your car breaks down, your kid gets sick, your window breaks, the average person has to go into debt to pay for that expense. You have zero breathing room. If you want to go on vacation, you want to do anything, you have to go into debt to do that. The way you can get out of that is by spending less or working to earn more. You have to make some extreme sacrifice if you don't have that.
If you are somebody who does not have $2,000 saved up, you should not be eating at a restaurant. You should not be going on vacations. You should not be driving around in a fancy car. You shouldn't be living in a big fancy house. You have to make some extreme sacrifices if you don't have $2,000. You should not have a Netflix subscription. Not because it's going to save you $15 a month, but because the average American is watching somewhere between two to three hours of Netflix a day. If you don't have $2,000, how can you feel comfortable sitting there at nighttime watching whatever the heck is on Netflix? You have to have a little bit of urgency that, oh my god, I got to take care of my family.
If you are given $6,500 today and you invested that money today, never touched that money again, never invested another penny again, and you could get a 20% return a year on that money, in 40, 45 years, you are going to retire very wealthy. You are going to have closer to $60 million off of that one investment of the $6,500 that you are given today. The reality is that Amex, Visa, Mastercard, Discover are getting those returns. You are the one paying it if you have credit card debt. Instead of you having that wealth, you are the one that's paying for their private jets. You are the one that's paying for their big buildings. You are the one that's paying for their luxuries. If you want to become wealthy, you have to get out of this financial danger zone.
Once you get out of the financial danger zone, you can create a system for your money. The difference between wealthy people and everybody else is wealthy people know what they're going to do with their money before they earn it. Everybody else gets the money and then they wonder, well, what should I do? How should I spend this money? One system that is taught is the 75-15-10 plan which says for every dollar that you earn from here on out, 75 is the maximum that you can spend. 15 is the minimum that you invest. 10 cents is the minimum that you save. This way whether you're earning $30,000 a year, $300,000 a year, or $3 million a year, you're always going to have a rule of how much you can save, invest, and spend.
The way to do this is to open three bank accounts. Money gets deposited into one bank account. Create an automatic withdrawal and deposit. That money gets pulled out of one bank account and 15% goes into your bank account holding your investment money. 10% goes into your bank account holding your savings money. The reason why you want to have three different bank accounts is because if you have $100 in one bank account and you think, "This is my investing money and my saving money," you go into the store and you see this nice sweater on sale, it's $90. You have $100 in your bank account. You should be able to afford it, right? You forget that some of that money is supposed to be saved and invested. And then you pay taxes on that sweater. And now you spent $98 on that sweater. You just spent your savings and your investment money. That is why you need the three different bank accounts. Your savings are not going to make you wealthy. Your savings are there to protect you. Your investments are there to make you wealthy and that spending money is what you pay for your house, your groceries, your vacations, and everything else.
When it comes to actually accelerating your wealth, you have to spend your money smartly. That means no more financing things that don't put money in your pocket. Follow the rule of five when it comes to luxuries: if you can't buy five of them, you can't afford one of them. Especially for luxuries. If you want to buy a nice $1,000 watch, you better have $5,000 of disposable income, of extra money.
After you have a system for your money, the next step is how do you earn more money. This is step number six. If you make more money without knowing what to do with that money, you make more money then you make other people rich with it because you just go and spend it. You have to figure out how can you earn more money. Maybe you ask for a raise at your job. Maybe you get a second job. Maybe you create your own business. Maybe you learn how to utilize artificial intelligence. You find ways to earn more money. But you keep following that system, the 75, 15, 10. As you earn more money, you keep investing more money because that's what's going to make you wealthy.
Step number seven is you have to protect your assets. There are two parts to this. Number one is you have to understand the legal side. That means understanding taxes because taxes can be one of the biggest expenses that you have to pay. You have to understand how do you pass this wealth down? How do you put shields around you? Because when people realize you have money, they're going to want some of it for themselves. This also means how do you give back? How do you help others? How are you going to leave a legacy for yourself and your family? That's now wealth planning.
The whole progression of these seven steps starts with the mental side of understanding the mindset. Then you have to understand the framework of the rules of money. Then you start with the basics of saving the $2,000, paying off the credit card debt. Then you build a system for your money. From there, once you have the system, you have to know how to spend your money the right way. Then you have to learn how to earn more money the right way. Then you learn how to manage your wealth, grow your wealth, and pass on your wealth.
To start investing, we believe that we need to pick individual stocks. We need to find the next Tesla, the next Nvidia, the next Amazon. But the truth is that could work, but it's very, very hard to do and it requires a lot of time and a lot of energy to do it even semi-safely and you could still get it wrong. Even experts get it wrong. The way that is recommended for people to start when it comes to investing is through index funds. Index funds means instead of buying individual companies, you're buying tens if not thousands of companies all at once. For instance, an S&P 500, it's 500 of the largest companies. You're buying a small slice of 500 of the largest companies, Coca-Cola, Amazon, Tesla, Johnson and Johnson, all in one go. This is the safest and most reliable way to build long-term wealth. Even Warren Buffett has instructed for 90% of his wife's inheritance to go towards low-cost diversified funds. For the majority of people, that is the way to go. Once you have that foundation set up, then you could have your fund money and play around with some stocks that you might think are high growth, but you can't do that without having a solid foundation in place. It's just not worth that level of risk that comes with individual stock picking.
You should not invest anything that you're going to need in the next 5 years because historically the stock market has averaged 8 to 10% over the long run. That's the average annual return of the stock market. But that is over the long run. If you look at any given year the stock market could go up 30%, it could be down 40%. If you need that money in the next 5 years, say you're saving for a home, you're saving for a car payment, you're saving for your kids' education, you don't want to put it in the stock market because the last thing you want is to save money and then need it in the next couple of years and actually at that time, the stock market is at a dip and you have to pull out at a loss. You want to avoid that. Any money that you want to invest, you want to make sure you don't need that money in the next 5 years, and you want to keep it there for 10 years, 20 years. The longer you keep it, therefore, the closer you get to the average stock market returns. You could start with a dollar. You can start with the price of a loaf of bread. The hurdles that existed to invest back in the day just don't exist anymore. You could do it within a second on your phone with as little as a dollar.
You do not want to look at a home as an investment opportunity. There was a time when buying a home was thought to be a really, really good decision. When a home was bought, it was thought that was a great financial decision and it gave a lot of comfort and peace of mind knowing that no matter what happened, there would always be a roof over your head. That psychological comfort is hard to put a number on. Now renting gives a huge amount of psychological comfort because knowing that you could pick up and leave if an opportunity comes up, that you're not tied to a certain place, that gives a lot of freedom. There are two ways to look at the buy vs rent situation. First is actually when it comes to your home, it is a psychological part of it that plays a big big role. And then the second part then comes the numbers. You want to figure out okay does it make sense to be putting this money towards buying a home? Also taking into account the cost that most people forget which is stamp duty, buying all the furnishing, legal fees, surveyor fees, all of that comes into the maintenance. Or does it make sense for me to rent and invest that difference? Those are the ways you want to look about the buy and the rent situation. It's not what used to be thought which was just buying is the way to go and if you're paying rent you're just paying someone else's mortgage. There's so much more that comes into the emotions and the psychology of making something like a house purchase which is one of the biggest purchases you're going to make in your entire life.
A few decades ago it felt like that's what you had to do. It has become a debate over the last 5 to 10 years because a decade ago, even for our parents' generation, it was a lot easier to get onto the property ladder. If you compare the way house prices have gone up since then, the way everything has gone up since then, and compare that to wages, it's not the same anymore. For the majority of people, it's not as easy to do as it was for previous generations. With the way the stock market is going, it might make a lot more sense saving that money, but you have to be disciplined enough to save the money that you would have otherwise put in towards a mortgage or the difference between a rent and a mortgage and saving that money and then putting towards the stock market. It's a very very different economy that we're in. Having or buying a home, if that's your goal, that's a great goal to have, but it is not the be all and end all if you don't get onto the property ladder. There are other ways to make a lot of wealth that doesn't require you to buy a home.
If someone wants to completely transform their finances in the next 6 months, the recommended plan follows a specific order of steps. The first step is saving an emergency cushion. Many people experience fear because they lack this foundation. The initial target is saving $2,000 in expenses. Vanguard research shows that saving this amount increases financial well-being by up to 21%. Increasing the cushion to 3 to 6 months of expenses adds a further 13% improvement in financial well-being. This buffer prevents operating from a place of scarcity.
After establishing the emergency fund, the next step is paying off high-interest debt—defined as anything above 8%. This includes credit card debt and consumer debt. The 8% threshold exists because the historical average stock market return has been 8 to 10%. Keeping debt above this rate makes someone worse off financially than paying it off. For debt below 8%, the mathematically optimal choice is to invest rather than pay it down. However, peace of mind has value beyond pure math. If debt causes stress and prevents sleeping at night, paying it off first may be the better personal decision. Once comfortable with the debt position, focus shifts to investing and long-term wealth building.
The first category to stop wasting money on is anything purchased to increase perceived value by showcasing possessions to others. The quickest way to save is refusing to buy items solely to signal status. For every purchase, ask: "Am I buying this for me or because I want other people to know that I have it?"
The second category is upgrades. Initial purchases create massive happiness increases, but subsequent marginal upgrades follow diminishing returns where spending no longer matches added happiness. Instead of buying the next version repeatedly, spending on experiences and memories delivers greater impact on happiness and life satisfaction.
The third category involves understanding the true motivation behind purchases: are you buying something for the name (designer label) or for its utility and purpose? Applying this distinction can eliminate significant unnecessary day-to-day spending.
A common challenge is setting unrealistic and overly long-term goals. Examples include committing to save $12,000 in 12 months when someone has never saved even $500. The better approach is setting immediate, achievable monthly targets to build momentum.
Many people recognize they have available time after work yet struggle to activate it toward creating additional revenue streams. Research points to differences in executive function—controlled by the prefrontal cortex—as a factor. This brain region matures later in young men, approximately 12 to 18 months behind young women. In college applications, a senior woman effectively competes against a 16.5-year-old male peer. This contributes to fewer men attending college in an economy where two-thirds of jobs now require a degree.
Women demonstrate higher discipline and EQ on average. Within organizations, young women often display greater maturity while some young men appear less developed. Biological factors influence executive function in men. Additional barriers include widespread temptation, a "YOLO" mindset, and the reality that everything has become extremely expensive, making saving feel discouraging.
Economic conditions have shifted dramatically. After business school, average starting salary was previously $100,000 while average San Francisco home prices were $280,000 (2.8 times salary). Current graduates earn approximately $200,000, but San Francisco homes average $2.1 million. Homeowners resist new construction, keeping prices elevated. Post-pandemic, home prices jumped from $290,000 to $420,000 while interest rates rose from 3% to 7%, increasing average mortgages from $1,000 to $2,200. Many young people have abandoned the American dream of homeownership, opting instead for travel, which has boosted airline, hotel, and travel stocks.
Recognizing personal agency is essential. Building a "kitchen cabinet" of advisors helps because it is difficult to read the label from inside the bottle. Hard work remains non-negotiable—talent alone is insufficient. Beyoncé works extremely hard, and successful people consistently put in sustained effort.
Forgiving yourself is equally important. The speaker's first job after college was investment banking, which he hated and performed poorly at. Within two and a half years he was unemployed and living at home. His eventual success came from enduring rejection, mourning setbacks, and moving forward. The twenties are a period for workshopping and experimentation. People rarely exit college and immediately succeed. The advice is to forgive yourself while continuing to try, reach out for help, show up early, be courteous, seek certifications, and once you identify something you can become great at, go all in.
You can have it all, but not all at once. Current life balance results from having almost none during the twenties and thirties. Achieving financial security in high-cost areas like Los Angeles requires substantial income. If someone prefers work-life balance over intense career focus, honest assessment of location and lifestyle tradeoffs is necessary. Moving to lower-cost areas like Santa Clarita, the Inland Empire, or Oregon may align better with different priorities. The twenties involve making sober assessments of expectations and required commitments.
The core message for young people remains: forgive yourself if things are not working out. That is exactly where most people should be at that stage.
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