Does it make sense to pay money to make money? That is the question and in this episode, Mitch and Terry get to the heart of the matter. Because the truth is, there are times when it does, and there are times when it does NOT make sense. The rules and tools in this episode will help you make wise investments in yourself for the rest of your life.
Also in this ep:
Resources and Links Mentioned
Terry's article
👉 'How Much Should You Pay for Financial Education?'
Join the Private Podcast Community
Click here to access free courses and trainings, build new habits, and connect with us and others on the journey to financial self reliance.
Other links 👇
Money mentorship:
Click here to start putting what you've been learning into practice.
Corporate program:
Click here to find out more about our workplace program
Follow us on Instagram:
Click here to see behind the scenes of our business and learn more about personal finance in bite-sized chunks.
Does it make sense to pay money to make money? That is the question and in this episode, Mitch and Terry get to the heart of the matter. Because the truth is, there are times when it does, and there are times when it does NOT make sense. The rules and tools in this episode will help you make wise investments in yourself for the rest of your life.
Also in this ep:
Resources and Links Mentioned
Terry's article
👉 'How Much Should You Pay for Financial Education?'
Join the Private Podcast Community
Click here to access free courses and trainings, build new habits, and connect with us and others on the journey to financial self reliance.
Other links 👇
Money mentorship:
Click here to start putting what you've been learning into practice.
Corporate program:
Click here to find out more about our workplace program
Follow us on Instagram:
Click here to see behind the scenes of our business and learn more about personal finance in bite-sized chunks.
back to the Wealth Time Freedom Show. Dear listener, I'm here your host, Terry Conant, and I'm here again with Mitch Parkins. Welcome bait.
Track 1:Hello Tex, how are you?
tex:I'm awesome. I'm awesome. How are you? I'm looking at this nice big vista behind you. Where are you?
Track 1:mate. We're in cozy ASCO National Park, uh, near some really significant caves and a thermal hot spring, which we're gonna tackle in the next couple of days. So yeah, life's pretty good, mate.
tex:some heavy ESIS happening here right now between me and you I'm
Track 1:It's pretty cool.
tex:I'm starting to look up Outback, caravans, and Elise is like, this is looking pretty good. I love it, mate. I love it. Um, well let's, uh, let's jump into this episode. are we gonna talk about in this episode? Yep.
Track 1:Really important episode. This one. How much would you actually pay for financial education? That's the question we're gonna tackle and ultimately, why is this such an important question? Well, we recently had a review from a couple of legends, Mitch and Britt, and this review is smack bang on the website. You can't miss it. And the comment from Britt, God lover was everything. Her statement, this is stupid, we don't need to spend money to make money.
tex:Yeah.
Track 1:Was was how she felt about this whole situation, which prompted you to write an article to discuss this, which don't think this is an uncommon objection that people face with financial education.
tex:and, and it's funny, like I love that review. I remember sort of looking at it when it came through, it got sent back to us. I love that statement. It's just, she's so honest. She's just salt of the earth and she's like, we don't need to spend money to make money. But I, I was thinking about it. I'm like, you know what? That actually, that question used to be on my mind a lot. You know, when I was sort of coming into this, really wanted to educate myself and, and want to get smarter with money. When I start looking at just getting help and things like that, that question just kind of sat there. It was like, and I think it's the biggest question that people wrestle with when they consider getting help when it comes to money, and probably why a lot of people don't do it and just go the solo path, go it alone and just, know, do it themselves a rugged individualist way. Um, so I thought it did make sense to address it, right, because it's, it's a valid question, right? Everybody works pretty hard for money. We all work pretty hard for it. Does it make sense to give the thing away that you wanna do better with and presumably get more of and have more choices because of it? Does it make sense to give that same thing away? and it does kind of make sense if you think about it and if you squint at it. But you just look a little bit deeper, there's a little bit more to the story. As an Emma.
Track 1:Oh, there absolutely is. I, I get why people arrested with this. Totally. The reality is we've been on both sides of this question. For me, this was ultimately all about hesitating on the decision to live life. How we are right now,
tex:mm
Track 1:around Australia, have this incredibly precious opportunity with our kids and not being financially educated. what's holding us back from doing that? And you've experienced this too, mate.
tex:Yeah. I mean, I've talked about it before. Sitting on cash, not knowing how to put it to work, and just kind of struggling through that solo myself. So I guess, yeah, that was the kind of the impetus to sort of think about putting some pen to paper and writing down.'cause I, like I've said before, I, I write to think, and I wanted to think
Track 1:Mm-Hmm.
tex:this question'cause I feel like it's, it's one of those big unanswered questions that sits there as a source of doubt. And again, I've said this before, but every unanswered question is a source of doubt that stops you, slows you down, turns you around. And like the
Track 1:Hmm.
tex:says. You wanna resolve doubt to create progress and move towards enlightenment. So I was like, let's resolve this question once and for all, for ourselves and for every money that ever asked it of themselves. Does it make sense to pay money to do better with money
Track 1:That's right. It is a beast of an article, and in this episode we are going to answer that question because the truth is there are times when it does, and there are times when it absolutely does not make sense to pay for financial education. So there's two parts. What are they?
tex:Yeah, mate. So the first part of this is we're just gonna talk through understanding the puzzle here. Like what's happening in our minds? What is the actual that we're dealing with. cause it's very important to understand it first so that we can actually solve it. So the first part of this conversation, you and I are gonna unravel that logic and really just go right back down to the core of it and understand what's sitting there at the source. then once we've done that, gonna solve for it and figure out how to answer it it doesn't make sense. We'll talk about that when it doesn't make sense to spend money to make money, to value financial education. And then the three steps that I use to determine how much I should pay for whatever opportunity that's gonna improve me in the money space.
Track 1:What I really love about this is ultimately this is gonna help you value any opportunity for investing in yourself, not just financial education.
tex:Yeah. And there's a few of these examples that, uh, you know, financial education, but also just your own developments. And we've talked about this in the past, but. Investing in yourself, if you've ever thought about that and wondered how do you invest in yourself? Well, any opportunity that can improve you as a person, as a product, what we're about to go through is gonna help you look at those opportunities and make better decisions when it comes to that. So you're a hundred percent right.
Track 1:Love that text. Let's jump into the first part of this conversation. So the hidden cost that you are already paying. What is that?
tex:This is the thing, man. Does it make sense to pay? And that's the thing you gotta realize. And what I had to realize as well, we're actually already paying. We're all already paying but the thing is, we're not paying an out-of-pocket cost. We're paying a tax and it's an ignorance tax. It's costing you money and time to not know what to do and how to do it to achieve your financial goals. And that is costing you the choices that you want in life. So you just talked about before, the choices that you wanted, around this trip. was it costing you not to know what to do? What was it costing you?
Track 1:Years and years and years working in jobs that I didn't like My life
tex:It was costing you the choice that I'm watching you like enjoy right now.
Track 1:Oh, categorically. Categorically. And we got there just in the nick of time.
tex:yeah, yeah. And it's funny, like there's all these, it's all these costs, but we just cannot see them'cause they're not out of pocket. But when we have to pay for something, we're seeing it out of pocket. Because it's a tax, it's being lodged on us whether we know it or not. It's happening. It's like the A TO just takes it outta your paycheck and you're like, oh, I didn't even see the money. So it's okay. But if you actually look at the numbers and then you start to break down those numbers in terms of those choices, it actually can be quite significant. And I'm reminded of like just a very simple one for me, but of our members in the mentorship, she just told me that in the third week of the mentorship, she's working through the second evolution with structure, and she realized that she was paying an ignorance tax of$8,000 a year when it came to how her money was configured. So when she fixed up her structure. She stopped paying that ignorance tax and started making that money back straight away. And she's like, this has already paid itself. And I haven't done anything yet. I've just started the start part. So, you know, that one, that one sort of come to mind for me. And I've talked about my story in the past, sitting on savings, bloody and sacks of cash, knowing that I need to be investing and calculating later on that I had given up about 30 grand in four one returns, and never actually calculated what that would've looked like, reinvested over 30 years.'cause Mitch, I don't wanna know, mate, that number's
Track 1:No.
tex:a hundred grand, I reckon
Track 1:Yeah, painful.
tex:mm
Track 1:Super painful.
tex:mm.
Track 1:for us, like I think the point you made there around the A TO is really powerful. The problem with the ignorance tax is that unlike the A TO, they tell you how much tax you've paid. The ignorance tax is really hard
tex:Mm
Track 1:you to actually see how large it is in your life. And for us, man, it nearly cost us the ability to do this Full stop.
tex:Well you are, it's almost like you did this in the nick of time, right? Because next year CO's at school
Track 1:Yeah. Ignorance tax costs us the opportunity to actually get this done,
tex:Yeah,
Track 1:to work out how to enjoy our life and smash our financial goals. Uh, quite incredible really. We're all paying this ignorance tax.
tex:yeah, that's it, man. Like that's the point I was about to make. We are all paying it and we are actually all ignorant. The question is not whether we are or we aren't. The question is how much are we paying and whether we want to pay it your choice. It's your choice
Track 1:Yeah,
tex:it or not. And it's your choice how much you pay.
Track 1:I think we should all try and reduce our tax, uh, the ignorance tax. So what causes it?
tex:Yeah, mate. So it's interesting thinking through this. What I realized is it's caused by this concept called myopic loss aversion. and this was coined by Richard Dayla, one of the fathers of behavioral economics. So you would've heard us talk about Daniel Kahneman, a must dki thinking fast and slow. Ritz Taylor's like one of these guys. These are all like in a group. And anyway, he coined this term of myopic loss aversion to explain why. As investors, we shoot ourselves in the foot all the time. We buy high and we sell low. We follow the crowd, we fuck it up every time. And probably worth going through just the components of this, I think, because we can sort of decode what is actually going on to muddy our thinking and to cause us to miss what we're not seeing when it comes to that ignorance tax.
Track 1:So where does that start?
tex:Yeah, so I reckon we just break it down in terms of the words like, let's go through the first part, myopia. What is myopia? It's just very narrow, very short term thinking, basically. That's all it is. It's just causing you to think very narrowly, very short term.
Track 1:And as humans, we don't like losing, do we? So what? So how does our brain actually play out here?
tex:Yeah. So the second part of it, right?
Track 1:How.
tex:Myopic loss aversion. So what is loss aversion? One of the most famous studies in behavioral economics is called Prospect Theory, and it's from Daniel Kahneman. And what he and Amos Tversky found was that humans hate losing two to 2.5 times more than we appreciate gaining something. So it's really important to understand that and understand where that's coming from. It's coming from our prehistoric wiring. Danger is really, really a lot more important for us to be alert to danger and loss and I guess something not working out. So,'cause we wanna be able to fix problems and we wanna be able to avoid danger. Okay. So we are very attuned to that and we're much more motivated than that. But what that tends to do is it tends to cause us to shift our priorities unconsciously towards safety away from success. And often that safety causes us to not have success. You know, you just get stuck on feeling safe and actually what we're trying to pursue when it comes to money is freedom. That choice that we don't even know we are making. That's
Track 1:Safety freedom.
tex:huge. Yeah. Like we don't even know we're doing it, but we're just putting safety ahead of freedom. And the thing is, if I'm free. What do I need to be safe from I don't need to be, I don't need to be safe from anything. you know what I mean? So it's interesting you think about the investing side of things. People will be playing it safe. I'll just pay down all my mortgage as quick as I possibly can. Instead of thinking what's the best and highest use of that money? Where else could it possibly be going, and how many more choices could it buy me? And I'm staying in the job that I hate because I think I suggest like zero in on this one particular goal. And I just gotta like get the, that mortgage pay down. And I guess on the other side of that, then I'll be safe and I'll be successful. But not even realizing what we're giving up in the meantime, the choices that we have. isn't it?
Track 1:It is crazy. It's crazy. It's very relatable. the aspect of our brains when we're talking about money changes how we think, doesn't it? There's some really interesting case studies here that are worth actually digging into.
tex:Yeah, so you're right. again, more study from Daniel Kahneman, Amos Tversky, same book, thinking Fast and Slow. There's an experiment in that book where they talk about priming people to think about the concept of money, and then they watch people's behavior. So they get people to answer a bunch of questions that are all financially related, and then they take him into a room and they give him a bunch of tasks. And really what they're doing is just watching how people interact. what they noticed is if I primed you to think about money and I watch you move into that room and not you pick up a chair and you have to set it in a circle with these other people, you are gonna set that chair a significantly greater distance away from other people in the room. Okay? And then also on the collaborative tasks, you're less likely to help other people. So the classic part of this experiment was they'd have the experiment person go in and pretend to drop a pencil in front of the participants, and the likelihood that the participant would stop. Pick up the pencil and give it back to that person much lower if they were primed to think about money. So the point about this is as soon as you start thinking about money, you become shortsighted. Think about what you don't wanna lose, and you become a lot more independent and a lot less likely to collaborate or want to collaborate. And so these things are all converging sort of shunt you into this narrow myopic focus blind you to the actual full picture of what you're doing. And there's no way if you're a human that you can not do this. We're all gonna do this at some point in time, aren't we?
Track 1:We are all gonna do this, and I think what you've gone through, how does this relate to your situation?
tex:Yeah. So come back to what I said before, right? Like just, I'll just decode my scenario. I wanna get on top of money and that's because I want these choices. I wanna be able to, you know, change my career and that sort of thing. And I wanna be able to give myself a different sort of reality. I'm stacking all this money and I'm sitting on all this cash because guess what Cash is. Safe right? So I've got the emotional attachment to the cash, but intellectually, I know I need to be investing, but I can't actually pull the trigger on it because I don't know why. And the reason why is myopic loss aversion. So the point is like, we are not wired for wealth, right? We're wired for survival, and we conflate certainly with safety.'cause that lizard brain, it just actually sees safety as success. And it's not, by the way, it's not, it's not your success. It's the success of keeping humans safe. So your body doesn't give a shit about your goals. All it caress about is keeping humans safe. it. It's all it caress about. And so that keeps causing us to keep referencing safety over freedom. And every time we make that choice in our minds without knowing it, what we tend to do is make shocking financial decisions or delay, procrastinate, or do something silly, or do something just not necessarily actually going after what we, what we actually consciously want more, more driven by our unconscious need to feel safe. So if you're not aware of it, that unconscious need is always gonna trump everything when it comes to money. And that's exactly what we see in markets and exactly how it plays out.
Track 1:I really don't like that part of our evolution. It's, it's really not working for us, is it? At the end of the day, that preference to safety meant that for us, we stayed in jobs we didn't like in situations that we didn't want to be keeping ourselves safe instead of pursuing freedom and understanding how to actually do that.
tex:If I go just a layer deeper I actually think about the situation and exactly what was going through my mind, the dialogue, if I'm honest about it, I'm sitting on this cache, right? And I'm worried about looking dumb, which is losing face. I'm worried about being taken for a ride, which is losing face. I'm worried about losing my money, which is loss of money. All these things make me feel less safe because loss of face isolates you from the tribe. of money
Track 1:Mm.
tex:your security, so I'm like fixated on this I'm completely ignoring what three years of sitting on cash had already cost me and would continue to cost me if I did nothing. And I'm also continually ignoring what I had to gain by making a considered decision, leaving that career that was becoming increasingly insecure for me and trying something new, figuring out the next thing.
Track 1:What else was at stake in that game? What genuinely, what was at stake?
tex:Well, it's, it's just the, I guess the kind of life and the lifestyle that I get to live now because of actually making that choice. I just wasn't even thinking about it. I was just so fixated on, like I said, what I had to lose instead of what I had to gain. And I was just prioritizing that safety freedom and actually success, as I'm defining it, not the success of the species success of Taron Terry Condon's family and what we really want.
Track 1:There are ways to minimize this though, aren't there? You can either pay with time or buy time. What does that look like?
tex:Yeah, it's, you're right. Um, this is kind of that next part of that article. I sort of said, well, I mean, obviously it makes sense if you're understanding this, that, holy shit, I wanna minimize this as much as possible.
Track 1:Yeah.
tex:So hopefully we're all in agreeance that that's the case. we don't wanna pay more ignorance tax than we have to. Um, and so what I'd said was like, there's two ways to do it to minimize ignorance. Tax. You can pay with time you can buy time. So paying with time looks like all the mistakes yourself going out and finding all the answers yourself. But doing that, knowing that the answers that you are working hard to find, carving the way through the jungle yourself. There's a path right next to you that's already been carved by people already gotten to the destination you wanna get to, but you are gonna just keep carving through the jungle yourself and do it that way. So you just have to do that knowing that the thing that you're trying to figure out has already been figured out. And so it actually, it's not that that's wrong, because it actually does make sense to do it when you don't have any money. you don't have any money, it makes a sense, it makes a lot of sense to pay with, with time. But if you do, it's kind of a different story. And, and just a side note here, um, if you're listening to this and you don't have a cash cushion and you've been following along and you haven't been able to put this stuff into practice yet, we actually made our build your cash cushion course free. We spent six months making that course, but we realized that ignorance tax is so large and we wanna help as many people stop paying with time as, as, as much as possible. So that course is basically just collating everything we knew, putting it into a pathway, giving you the tools so that you can actually build a one month cash cushion and start actually funding your goals and start using the money to buy time because you don't want to pay with time any longer than you absolutely have to do you.
Track 1:Nope. Nope. The aim of the game. Own your time.
tex:That's it, man. And the reason why is because when it comes to money, the longer your money is at work, The harder it tends to be working. And so buying time just looks like working with people who have already figured out the answers to the ones that you're trying to get to. They've already made the mistakes, they've already sort of got the blood on the face and the scars and So essentially I'm, we're trying to do that here, right? I'm just giving you all my mistakes up here. I've already made these mistakes.
Track 1:Yeah.
tex:and I know what the true cost of these is, and I also know that you can, you don't have to pay this cost forever. You can get it back. know, everything I've learned since then, I a hundred percent reckon I've actually clawed back a bunch of that ignorance tax. Um, and it's just because of going, well, I don't wanna do it this way anymore. And so if you use money to buy time, you're benefiting from the result for longer. And the reality is like we're again, working against our conditioning when it comes to school. I. So we've got this prehistoric wiring that's causing us to be more independent, To not want to collaborate and to just kind of stand over our stash, And then we, we have this conditioning from school where it's like, well, that's what you should do. You should just work on your own. You should find out all the answers to everything yourself, and you should never ask anybody else because that's cheating. But actually in the real world, that's the formula for winning every single time, isn't it
Track 1:Oh, mate. Life is not like school. If you can go and get the answers, get them,
tex:Yeah.
Track 1:get them,
tex:It's funny.
Track 1:get them.
tex:and I go, what are we doing when it comes to that? Like what are we actually doing? What we're doing is are sort of living in a world where it's like the result's less important than who gets recognized for the result. And that's kind of how we're taught to think about it. In actual fact, it doesn't matter who found the answer in the real world, what matters is did you get the result? Do you have the result? And so we're putting like that sense of status and ego above we actually deemed to be success. And again, so that unconscious need driving us to keep making these kind of repetitive mistakes. So to me, I think that who, not how hack is the massive one, right? If you're trying to solve a big problem, don't ask yourself, how do I solve this problem? Ask yourself, who knows how to solve that problem and how can I work with them to get the result? That's really
Track 1:Yeah,
tex:of the greatest life acts you could get. And ever since I realized that I it's so much easier and faster for me to get a result.
Track 1:that is the ultimate cheat card. So when does it make sense?
tex:When does it make sense to buy time? It makes sense to buy time if
Track 1:I.
tex:money. And if you want time to work for not against you, it makes sense to use money to buy time because, and we've said this in the past time, is more valuable than money and it's, I find it so ironic, right? People say, I don't have the time. I don't have the time. I'm like, well then buy it. And they're like, oh, I don't have the money You're like, you're like, uh, is that right? So it's
Track 1:what are we valuing more here? The money or your time?
tex:You're like, you, you're trading
Track 1:Yeah.
tex:time for the money, but that's what you wanna stop doing, isn't it? You wanna be investing, you want the money to be working for you. But in actual fact, when it comes to the crunch, what you're saying is, I'd rather trade my time and have my time I'd work with my time than actually give away the money and buy the time. So it's sort of like this backward logic, it doesn't make any sense.
Track 1:you, you had a really interesting thought experiment in the article to help us zoom out and make sense of what's actually going on here. What does that look like? It's a pretty cool one.
tex:I've thought about this, like, you know, we can go through these with time, buy with time, but I think it's always good to have like a thought experiment or analogy or a metaphor to kind of conceptually understand this and be able to internalize it. So the way I thought about it was like this, imagine the result you want, whatever that result is, be it financial or whatever else. Imagine that's behind a wall. You don't know how thick the wall is and you don't know how much force it's gonna take to topple that wall, but you've gotta topple it over to get the result. Okay? Paying with time looks like going out to find every single domino that you need to find right shapes and sizes to as to basically lay them out in ascending order, to lay'em out with the right spacing, and then to see whether that's actually gonna knock it over Now. is a really important point to make. Those dominoes are not hidden. You can absolutely go and find the dominoes. Any bit of information you ever want to get the results you want now is a hundred percent free. There's an ocean of information on the internet. your job to go and find it though. And then you've got to know which information makes the most sense, which, which you know, to sort the signal from the noise. you've got to sort that information, find the patterns, turn the patterns into principles. Use those principles to build tools, tool, use those tools to put the principles into practice, observe the results, iterate and improve. So that's what, that's what it looks like. You going out to find all those
Track 1:Few.
tex:yourself,'em up. It might take you a few iterations to be able to do that, right? So that's paying with time. Buying time
Track 1:Yep.
tex:looks like. Instead of doing that, finding someone who's already figured that out, who's already collected all the dominoes, has them in the back of the truck and saying, Hey. Could I work with you and having that person just back the truck up, drop the dominoes off the back, line'em up for, you know exactly what the exact right spacing is, and you'd be just, and you're able to just walk up with your little pinky finger and just knock over the first one. Boom. And then you've got the wall done. That's called geometric progression. And there's some really cool videos on the internet where it actually shows this geometric progression where you can see people line up bigger and bigger dominoes and you can see how much and energy they can create. Because there is some sort of crazy stat that says it. It's, it's a number of like a hundred dominoes and you can knock over. The leaning tariff pizza, that's how much force it can create. So it's it, but it's all have to be ascending and they have to be in the right order and things like that. So if you haven't already seen those videos,'em a Google, they're pretty cool.
Track 1:How much time do you think between you and Ryan you actually put in to getting to a place where you can stack those dominoes for people? I.
tex:Well, you can actually get a sense for this yourself. if you go onto our platform, and if you become part of the community, you'll see there's a resource library. And in that resource library there's something like, oh, at least a hundred books. and they're all laid out, guess, like in a different order. So if you do wanna do it yourself and you wanna actually follow the exact same path we did, you can read those books in that order. hard thing is though, like I said before, you've got to find the principles yourself, figure out what's actually, what is a universal principle. Then take those principles and figure out how to put'em into practice. And that usually involves, I. Some kind of tool. And that's essentially, I guess where the real rubber hits the road. Can you put these things into practice the development of tools that help you build skills and habits that actually help you put this information into action? That's actually the difference. I, it's not gonna be you reading more books. And believe me, I went down that road I sort spoken about
Track 1:May two.
tex:by the time I spoke to Ryan, how many books I'd already read by the time I'd spoken to him. And he is like, that's, that's all really cool man, but actually here's all you need to know. And I was like, God. But no, just thinking about that makes it's, it's probably worth noting, like what's happening right there is I found the right who and that knew that, who understood the how better than I could because it wasn't just everything that he knew for himself. He was actually in an organization that had already benefited from decades worth of learning how to solve this problem. And he just got. Implanted and he is like, oh, here it is. Point him in the right direction. I just got the tip of the sword, just bang, right, right there. So the amount of time that saved me to know and actually understand the real risk that I was taking sitting on the sidelines was actually the biggest, the biggest risk. Once I understood that, I was like, I need to do something and that's something is gonna be this right? And having
Track 1:Yep.
tex:help me, guide me through it, take me through it, absolutely priceless.
Track 1:That's not the only example where you've used the who not how principle to help you get what you want. What are some other examples that are worth digging into?
tex:Yeah, there's actually a couple of good ones here. I'll put in here because like I said before, once I understood this, the cost of this ignorance tax and then that hack the who not how hack, uh, honestly, that's when things really started to get so much easier for me. That rugged individualist to me that wants to be the one that knows it all. I actually don't wanna be the smartest one in the room now. I wanna be the dumbest one in the room asking the dumbest questions so that I can get smarter quicker. That's, that is actually the goal for me Now. I'm like, who's, who knows this? Who already figures this out and who can tell me what I'm missing here? And so the couple that stood out for me when I thought about this, um, we started this business, it's an online business, right? I don't even know what that is. I was like, I just know that people can make money online building businesses. And that seems like a really cool idea because it gives you a lot of what you want in terms of financial freedom. You're able to, you're making money however you want, you are working wherever, whenever you want. And you can actually do it with all this creativity and put your own self into this thing. I just didn't know, and neither did Ryan, we're like, how does these, how do these things work? And we'd been following this guy, Sam Ovens for a while, and he's one of the OGs when it comes to this stuff. He's one of the first people that figure this thing out. And he started putting out these courses to help people with it. we were like, well, this makes a lot of sense. He's the who that knows the how. Let's pay money to work with him and buy some time. So we spent nine grand in the early stages of the business, and I'll tell you now, nine grand at the early stage of this business was not a small sum. was a bit of money. It was actually a good chunk of the cash cushion, the reserve we had in the business. And so we're like, does it make any sense to do this? We're like, well, kind of does. Like we really did the work to understand it. We're like, well, we could try and solve this for ourselves, but reckon as soon as we get on the inside of this, we can actually see what an online business is. And that is exactly how it played out. Literally the second jumped into that course, we actually saw the inner workings, we saw the mechanisms, we saw exactly how the whole thing works. We even saw what we could do slightly differently for the, the niche for, for our kind of context. And what that did was it just like, if you think about glasses, if you go in and you've got glasses and they've got all the stuff on top of the glasses and you can't quite see things, it just like wiped away the glasses. We're like, oh, okay, that's what we're doing. We're gonna build that and here's what happened, man. In the next three months, we doubled the revenue of the business, the cash cushion, the income stream. It all just kinda like went, layered up, leveled right up and then just stayed there and we just went, bang, kept going from there. So one of the best examples I could give, I reckon.
Track 1:It's not the only one though. One of my favorites is your time with the doctor, Dr. John Cracking episode 72 for anyone that's interested. What was your time like with him?
tex:Johnny Demartini. What a weapon. I spent about grand with him over the course of four or five years, just in different capacities to learn from him. All I knew was this guy understands a whole lot more about how the world works than I do, and I wanna be able to immerse myself and just learn via osmosis. Right. um. It's interesting'cause I did this one course cost me 10 grand and I spent seven days, sorry, five days and these are like 12 hour days with that guy. So imagine how intense that is. You get him on that interview and he gets wound up, he gets going. Imagine that for
Track 1:Are you all right guys?
tex:One of these days was all about wealth, was all about money. And a part of this day we started to talk about how to talk about money and how to talk with other people about money and how to negotiate he gave me a structure, he gave me a formula for number one, how to be showing up in that organization and showing up in that institution as my best self in that moment, a very precise process to be able to do that. So I was the most calm, poised, best version of me. He gave me that. Then the other thing he gave me was a very specific set of questions to ask. And that's interesting, right? I'm asking them the questions. It flipped that power dynamic. And what it did was instantly differentiate me from every other drone who came out and saying, I've got a PhD. I've read all these textbooks. I'm a smart guy. He should gimme the money. And they were just like, well, we've seen a bunch of that shit. We haven't seen that before. why don't we give that a go And so I just got to walk past all these people who were technically a lot more qualified than me. And there's a, there's a few, there's a few layers to this. I'd built a system too that hadn't existed before. So I'd innovated and I'd done something important that I didn't have. But my ability to package that and then also package myself in that moment came down to spending that time with John d Martini spending that$10,000. And it's pretty rare that it happens this way, man. But that payoff came a week later. So literally I spent, I spent the 10 grand in that next interaction that next week, those questions directly at the, at the sort of the money part of the conversation earned me an extra 20 grand a year. Now over the next four years, that made me an extra 80 grand. So here's the question. Did it cost me 10 grand or did it make me 70? Made me 70, didn't it?
Track 1:He is a weapon, the doctor and the, the 80 20 of that application to call on those questions at that moment.
tex:Yeah,
Track 1:Such a, so powerful. That's not the only story though, is it? I know. You, you, you went to a WHO for your house. So how did that actually play out?
tex:So, mate, by this stage I've gotten a lot wiser. I understand the who, not how rule. I know what I am, I know what I'm good at. I know where I fall down. I know what I'm strong at. I wanna be the dumbest person in the room. So when we make the decision property's gonna make sense for us. We want to get in, we want to get some debt, we wanna make sure we're protecting ourselves from inflation. Listen to the debt series if you haven't already, when we made that decision from decision to execution, sign, contract, done, that's our property. Six weeks from decision to done. this is, by the way, in the hottest property market in Australia's history. Okay.
Track 1:six weeks.
tex:Six weeks. But that's not the most impressive thing. So the six weeks is huge because guarantee it would've taken me nine to 12 months myself. Okay. Guarantee that.'cause you've gotta wade through all those questions and the contracts and how does this thing work and how does this thing work? And again, trying to solve all the problems that have already been solved by others. that saved me the time, but that's actually not even the coolest thing. cost me five grand to do this, right? To work with somebody who knew, okay? And she knew the vendor. She was able to take the property off the market, off auction. And because she took it off the auction, I paid$50,000 less. And I hope the homeowners that we bought this from are never listening to this. But I would've paid$50,000 more for this house. And that's actually what we thought was value. So we paid$50,000 less. During that time, and I'll tell you why, because I, I'm actually in that interaction and I'm getting screenshots of the other person's text to the, to the actual real estate agent because she's got a relationship with the real estate agent. So I know exactly where that person is. I bought the relationship between her and the real estate agent. I bought the trust that they had'cause of that I got inside information'cause of that I saved$50,000. But in the time we bought the house, it's added$50,000. So it cost me five. I made a hundred. So did it cost me
Track 1:A hundred.
tex:or did I make 95
Track 1:Oh that, that's not even taking into account. I know what you would've been like if you went at that as a rugged individualist. How much time you would've poured into that decision
tex:Yeah,
Track 1:you were pouring into this business. So it's not a hundred K
tex:it's,
Track 1:a lot more.
tex:So that's actually a really good point, man.'cause imagine I did do that right? And I waited that next nine to 12 months. How much do prices run in that time? I. How much do they keep running? And then what does it cost me eventually to buy the same house
Track 1:Okay.
tex:a lot more? A lot more. Really
Track 1:And for us, Terry, obviously we've, we've told our story, episode 87, if you're interested. I had, neither did Brooke. No real modeling of how to collaborate well with your partner around money. Brooke and I suffered in silos for ages, uh, and to have a roadmap of how to have a great marriage
tex:Mm.
Track 1:your finances aren't the thing on the side that causes these problems.
tex:Mm
Track 1:They're actually the thing that enable you to get to experience all the things that you want in life. And to have a pathway to get to where we want to get to, but enjoy the journey and remove all that shit. Noise, stress, just rubbish. That doesn't actually need to be in your relationship when you understand how to collaborate on money. Oh, I can't put a price on that, mate. I, my, I often share this with people coming through the program that this is something I wish my parents had. My life would have been completely different, and I know now that the investment that I made in the money mentorship is fundamentally gonna change Cooper and Cody's life
tex:Yeah.
Track 1:fundamentally
tex:yeah, and, and like I've said this before, but you know, I see people who do that rugged individualist thing, but gotten really money smart I'd say. But then they've got this huge constraint, which is, we're actually not pulling in the same direction. So I'm getting money smarter, trying to just push harder and harder on this accelerator and not realizing that the biggest constraint is actually just the way we're interacting. Collaborating around money and not knowing how to solve for that. So incredibly stressful. It's incredibly frustrating, and unfortunately it ruins a lot of relationships because it just keeps, people just start living parallel lives when it comes to money. So yeah, the cost of that, it's not financial, it's it's emotional.
Track 1:It is huge. And with hindsight, it's very obvious. Brooke thought I was optimizing our life for a spreadsheet,
tex:Yeah,
Track 1:which I, which I was.
tex:Yeah.
Track 1:So why, why would she have any interest in that Like it's, how exciting is the number on a spreadsheet? It's not what it was actually gonna do for us.
tex:yeah.
Track 1:So it's not really a surprise that we were completely at odds.
tex:Yeah. Yeah.
Track 1:so the rules, there's really specific rules here. Pay with time if you have no money, okay? And if that is the case, get after the build your own cash cushion program. It is amazing if you have the money, pay with the money. Don't waste your time. That is investing. That is investing. And ultimately I think it's really important that we signpost what we've actually covered here.
tex:Yep.
Track 1:So we're all paying that ignorance tax that is caused by myopic loss aversion our jobs is to minimize it. You can do that by paying with time or buying time if you pay with time, time works against you. Ultimately, if you buy time, you get time to work for you.
tex:mm-Hmm.
Track 1:that we understand the puzzle, mate, how do we actually solve this? I, I know this was a huge part of the article.
tex:Yeah, so this part of it was like, how do you value financial education so you know it's worth it, you know, it's actually worthwhile. You don't wanna pay the ignorance tax. How do you actually value what's in front of you to know how much to pay, basically? And so I was thinking about this and you, this really quoted quote from Warren Buffet, and a lot of people parrot this quote.'cause it's very, it sounds very pithy and it's very smart, but there's, there's actually layers of wisdom in this quote. The quote is, is what you pay. Value is what you get. Sounds smart, sounds wise, and it absolutely is. And most people completely miss it. Myself included, until I really actually thought about this, thinking about this article, I started to think about it very deeply. I was like, what does he actually mean by that? is what you pay. Value is what you get. what I noticed is when I look at Warren Buffett, the moves he's made over time. I noticed this pattern between him and everybody else. What I noticed is the people that didn't know how to value things, they just focus on the price. Because price is measurable and you can compare what is measurable to something else that's measurable. So costs this amount of money. could go on holiday for that. I could do this for that. I could do this for that. So you compare what you know to what you don't know, because the brain the certainty. It'd like to seek the things that can be measured, and it's very uncomfortable with the uncertainty, which is what is the value of the thing in front of me. Warren Buffet was just way better at actually separating those two things and saying, well, that's the price, but what's the actual value?'cause that I can't put a real number. I can't actually be precise with that measure, but I need to do the work to understand it because if the value exceeds the price, then I should pay it every time. And so. If you don't know how to do that and you're just gonna keep comparing the prices and that's just gonna cause you to fixate on price and you're gonna conflate cheap with good and good with cheap. Warren Buffet never did that. paid expensive prices unbelievable deals. Apple, the best investment he ever made was a very expensive deal, but it's actually proven to be the best investment he ever made. right? He didn't get in on the floor of Apple when it was cheap. He actually got in when it was expensive. But since then, he's actually done really, really well right? And so that's a very important point. The best deals aren't always cheap. The cheap deals aren't always best. It's actually the value that matters. So that result, that returns more important than the price. And you had this interesting observation, right when I, when we started to talk about this, around we actually do start to clearly about value. Do you wanna just share that?'cause I think it's, it's worthwhile discussing for a sec.
Track 1:Yeah, so I think we think crystal clear about this, the value of something when our life's on the line when it's not about money, because that Malick loss aversion isn't at play. I am a bit of a health fanatic, and if your life is truly on the line, how much do you value something that's gonna save it?
tex:Mm, so much. But here's what's interesting. When you think about that, do you value it?'cause now all of a sudden your safety's at risk.
Track 1:Hmm,
tex:So you only see it because safety. It's going, oh yeah, that's now safe, So it's crazy, isn't it? like your wiring's fucking us at every turn here. Right? It's, it's, it's not just valuable now. It's been valuable the whole time. It's, it's valuable every day. It's not just valuable right now. super interesting. The other part of this mate is price. So if we think about this, we can use this quote to actually create a framework to value financial education. There's two dimensions. It's value. How useful is it? How useful is this thing to know to have? So being valuable, very useful to have health, right? You only know it though when you don't have it. What about the other side of things? Price. How do we think about price? Well, price actually comes down to how many times you use it. So how useful versus how many times you use it. that make sense?
Track 1:Makes a lot of sense. I know how much, uh, you like your thermo mix. I think, I think it's worth sharing how to actually think through this, through that lens.
tex:Yeah. So this is the example I gave in the, uh, in the article. So I talked about this thermo mix and my wife saying, oh, I wanna get this thermo mix thing. I think we should really do it, and that sort of thing. And I was like, oh, give us a look. And I was like, oh, it's a blender. she's like, it's not a blender, and I said, what's the blender cost? She's like, two and a half grand. I was like, what? Two and a half grand. Um, that's expensive. Now pay attention to what I'm doing. I'm fixating on the price. And then she starts to gimme this other information and she's saying, actually what this does is it's not a blender. It actually is a food preparation. It actually is a food processor. It does all these functions. What it's gonna do is save me a lot of time making us better food a cheaper rate. I was like, oh, that's interesting, but it's still expensive. And then she goes, and this was the kicker, Terry. How many times do you think I'm gonna use this thing? And I was like, oh, Maybe once a week? And she goes, no, I'm telling you every meal I'm gonna cook is gonna come outta this thing. Literally every meal. And I was like, well, okay, how many meals a week do you cook? like, I dunno, six or seven meals. And then she's like, but you'll use it as well and you're gonna use it for your bloody protein smoothie. You're gonna use it for this meal that you make all the time. And she's like, we're gonna use this dozens of times a week. And then she goes, now think about that cost per use. it actually expensive?'cause how many times are we gonna use this over the course of the next five to seven years? And that's how long it lasted. Seven years, dozens of times a week. Now if I break it down to cost per use, that might've been the cheapest thing we ever bought in the house. So that's how to think about price. How many times am I gonna use it and what's the cost per use?
Track 1:I've had one of those. Smooth. These are pretty good too. Uh,
tex:there
Track 1:there, there is another example at play here and that is knowing how your money works and importantly how you work with money.
tex:That's right. Yeah. So, you know, when you think about that framework, we can use that framework to value financial education and actually get a sense of what that looks like. So you're right, knowing how money works is useful, but knowing how you work with money even more useful. That's what we're talking about here.'cause that's what financial education should do for you. It should teach you and show you how you work with money and how to work with money to get the result you want. So how valuable is that? Well, it's useful to know, I think because massive reduction in stress. We had a story pop up the other day in, uh, in the community, shout out to Monique on this one. And, uh, you know, without going into all the, all the details, you know, their son got sick very suddenly. All of a sudden they had to drop down all their tools, take time off work. she sort of put it up in the post and she said, look, you know, wealth to me is knowing that if I can drop, I can drop everything at a, at a moment's notice. I can be there for my son and I don't have to worry about money because I've got all this stuff on lock. And I asked her, I said, what would this have been like otherwise? she said, I would've spent half my time stressing about money. I wouldn't have been able to actually be there for the kid when it actually mattered. But we both were able to take time off work and a hundred percent be present for him. And so useful because it helps you reduce stress in the moments that matter. the negative side. The positive side is it helps you fund those massive life goals. I'm watching you right now. I'm looking at the mountain behind you. Living life by design that we mapped out 12 months ago. Pretty, pretty bloody
Track 1:Yeah, pretty valuable. Uh, mine's mine share. Blew me away, mate. I, and I literally just thought, you can't put a price on having your money worries removed at a time like that, where your family needs you to not have to have that stress in your life.
tex:Yeah.
Track 1:It's massive. That's not all is it? At the end of the day. There's plenty of other examples here.
tex:Yeah, so reduce stress fund life goals. The other one is buys your choice over how you wanna spend that time. Listen to episode 78, Rachel Taylor for an example of that. The best example of that, gets to retire early lives, a life, the laptop, lifestyle, luxury, you know, flies around, goes to the villa in Indonesia, and then actually just takes on this job because she wants to, not because she needs the money, because it's actually her way to give back and create a bit of a legacy in the sport that actually made her famous and she got a silver medal in. So, you know, what's, what's that worth? It's a fair bit, isn't it?
Track 1:Oh, it's, it's huge and I, I think also having the ability to get really good use out of experts is critical as well. Knowing the questions to ask the signals, you need to know that you can trust someone, whether it's your tax or debt. It's huge. It's huge.
tex:I, I reckon that's. Probably the least understood about this because your ability to get the best use of an expert is your ability to work with them. To direct them and ask them the right questions is if you are completely passive in that process, they have to make a bunch of assumptions about you or people like you instead of actually know exactly what you're trying to accomplish. So for me, that example with Amy is the paramount one. I knew exactly what we're trying to accomplish. was able to give her exact information, the criteria that we're actually looking for, and actually what success looked like and the reason and the context for that. And she was able to operate with her skills to be able to get me that result in that period of time. And it's because I wasn't saying, all the buyer's agents got it, I'm just gonna do what she says. No, the buyer's agent works for me it's all in line with this goal and it's all in line with this plan and it's all in line with this dream. And so they need to fit in. And then to be a part of your team, the expert that tells you what to do, you've got to be the captain sort of owning the decisions and you've got to be the captain. Steering the ship. So one. That one. Make better use of
Track 1:So that's value, mate, but let's talk about price.
tex:Yep. So price is cost per use, right?'cause remember, value is, how useful is it? We just established that. But price is how much do you actually use it? So use it every day. Financial education. How many financial decisions do you make every single day? You are gonna make thousands of decisions this year with money. You'll make tens of thousands of decisions with the rest of your life when it comes to money. Now, if you could improve every one of those decisions and spend more intentionally to use money in a way that actually gets you more of what you want, those choices that you want for your life. That's pretty damn good. But now think about how many of I just said, tens of thousands of decisions now spread the cost of financial education across of those decisions, and you get your cost per use. that is why I say financial education is probably the cheapest and best deal you'll ever get. Because think about it, it's extremely valuable as we've just established, and it's extremely cheap because of that cost per use. You are gonna use it every single day. Every single day. And like you said before, not even just you'll use it, the people around you are gonna watch you use it, and they're gonna learn and it's gonna improve their lives. And what is the value of that? So I just say to people, I'm like, this is the cheapest thing you'll ever buy, almost at any cost, almost at any cost. And that's why I say financial education is like wishing for more wishes. It's like the ultimate cheat code to life. Everything else works better after you've done it.
Track 1:Wishing for more wishes. I love that. So we've just established the value of financial education distinct from price. How much should you actually pay?
tex:Hmm. So the million dollar question
Track 1:Well, how? How do you do it?
tex:So the way I do it is this, got three steps. What I do is I do the work to determine the true value. So we know broadly what the value of financial education is here. We just talked about what I can actually do for, for the average person, but what can it actually do for you? what you need to know. What are you actually trying to accomplish? What's the likelihood that it'll help you accomplish what you want? You can't get that information without going to a primary source. You can't actually get that without sitting in front of the person and actually having them understand your situation and then play it back to you and show you what that actually would mean in your current context, in your scenario. the first part of this is go to the horse's mouth, go get a primary source of information do the work to determine true value. Sit in front of that person and understand it. So for us, you know, coming back to the Sam Ovens thing, sit in a call, understand what that opportunity looks like. What is the actual pathway? How are you gonna take me through that pathway? How will you help me achieve the things that I wanna actually achieve? What will it look like? How much effort will it take me? Get answers to all those questions so that you actually put this thing into context. Do the work to determine true value so that you don't get fixated on price. Right. if you've done the work, the second step for me is then just to go through a thoughtful decision making process. And if you haven't already listened, go back to episode 88 where you and I had another banger of a conversation, not unlike this one. And you'll actually talk about, and you'll actually understand the value of making those decisions and what a privilege it is to be able to make those decisions take responsibility in that moment. But the key point that I wanna make about the second step here is that go through a thoughtful decision making process. know, we actually coach people through those decisions at the end. And often, like I, the other day, I actually coached someone out of it. I said, it's not for you. You actually need to go and explore these two or three other pathways before you come back to me, because I want you to understand how this fits in with all the other considerations you have. We're very well set up to help you solve this set of problems. we don't do is this, this, and this. And you need to actually understand what this could look like with us or actually with others, and then with us or otherwise, just with others. That's totally fine. It's not my job. To make sure everyone's doing what we're doing. It's not for everybody. And so we often find ourselves actually taking people through those frameworks for decisions, don't we?
Track 1:We do. I mean the, the simple fact is we look at decisions not as what they are, which is a gift of creation. And the way that we think about decisions is really clear
tex:Mm-Hmm.
Track 1:way finding. Life changing, understanding where it sits on that continuum. Do you trust what this is actually about? Is this going to get you closer to what you want? Can you see how this will work for you? And ultimately, do you have the resources? Are we going to buy time or pay with time?
tex:Mm
Track 1:If you've got the resources and you want to get the most out of your time, obviously you know the, the, the, the choice that you go with there. And lastly, it's, do you want to do it? You know, is this gonna get you closer to where you want to be? Uh, understanding that decisions are a gift, and ultimately by not making them, we're not unwrapping those presents under the Christmas tree. It's definitely worth a listen that episode.
tex:mate. Every decision is an act of creation. It just paves one path of possibilities and it kills off other lives, it's actually the paving of possibilities. Think about that decision I made with Amy and the parallel universe where I didn't make that decision. What am I doing now? What have I had to deal with over the last 24 months? Right? It's actually'cause I made the decision that I created this reality that we have and we live right now. Right? Exactly what I want for my family. So that's the second part of it. You need to go through a thoughtful decision making process after you've determined true value. Now, after I've done that, if I've gone through that decision making process and I've decided, yes, I actually do wanna do this. Now, here's the kicker. I pay whatever price I can reasonably afford. Now. I can't give you an exact number on what you should pay because you don't know actually what you're trying to accomplish in relation to the pathway that's in front of you. So you actually have to put those two things together. The key point for me is can I reasonably afford it? And more importantly, can I afford not to do it? Can I
Track 1:Mm-Hmm.
tex:to do it? Because what's the cost of me doing nothing? That's really what I'm really asking myself at that point. If I have the money, it's probably more to think about, can I afford not to? If I don't have the money, then obviously we go back to should we pay with time or can we get other sort of ways and means, can we raise the resources if need to, if we need to? So, that's really what I do, do the work to determine true value. Get to the horse's mouth, go through a thoughtful decision making process, and if you want to do it after that, pay whatever price I can reasonably afford. And as I said before. I love paying money to those people.'cause my rule of thumb, when I sit there in that situation with Amy Lenardi, with John the Martini, you know, and we talk about Sam Ovens, that cost me money or did I make money? Because here's my rule of thumb, this, whatever this opportunity is in front of me, should me and be worth 10 times more than it costs. It should save or make you 10 times more over the lifetime of its value than it actually costs. And if I'm sure after that process that I've gone through that, the answer to that is, yes, I believe it is gonna be 10 x worth it, then what the fuck am I doing? I'm gonna do it It's worth it. Right? Value is far exceeding the cost. It makes complete sense. Let's go
Track 1:10 x outcomes. We all like them. So to summarize, and I think it's really important, we are all paying an ignorance tax. The question is, are you working to minimize it or not? Pay with time? If you have to buy time, if you can, because the longer your money is at work, the harder it tends to work. Financial education is the best deal that you'll ever get because it is extremely useful and you will use this every single day for the rest of your life. And mate, let's be honest, I wouldn't be standing in front of a waterfall in Mount Coziosco if it wasn't if it wasn't for the financial education that we
tex:front of
Track 1:invested in. I'm It's stunning. It is stunning, mate. So I thank you for, you know, what that investment has actually allowed us to achieve with our life. But more importantly, thanks for breaking that down. It's a hell of an article. Definitely worth a read, have we missed anything here?
tex:Not really, man. I think that's the crux of this. It's helped you answer that question. How much did you pay and actually given you that actual process for doing it? actually understand the value of the thing and actually walk you through the logic and get to the source of this. We know it's the myopic loss aversion. The links to everything we talked about there, the different episodes we talked about. They're all gonna be in the description of this episode. Just scroll down and you can find them. And if you've gotten to the end of this and you've been considering reaching out to us'cause you've been wondering what's going on with the mentorship and whether it could work for you, go through that last part of the process. Give us a call. down with us. Let's actually work it out. Let's work it out. Will it actually be worthwhile for you? um, determine the true value for you and figure it out from there, we can help you make a decision and you know, take that next step, whatever that is.
Track 1:To get to wherever you want to get to. And mate, for me right now, that looks like jumping on a floaty with coop and floating down this river. So thank you for your time. I'm off.
tex:Good stuff mate. You take it easy. Talk soon.