4 Investment Rules to Get Rich (Escape Inflation & Risk!) | Finance Hacked
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FINANCE HACKED team would like to thank the audience for their interest and support of the Channel in the past time. We hope that the content of FINANCE HACKED will bring long-term value to the audience.
All contributions to support the development of the Channel, dear viewers can send to:
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Are you tired of seeing your savings lose value to inflation? Do you feel like investing is too risky, or that only "experts" can succeed? You're not alone. Many face the dilemma of saving to get poorer or investing to potentially go bankrupt. But what if there was a smarter way?
In this video from Finance Hacked, we expose the pitfalls of traditional saving and the illusions around so-called financial "experts." We dive deep into the REAL way investing works and reveal the four immutable rules followed by successful investors like Li Ka-shing and Warren Buffett.
You'll discover:
Why being an "Outsider" is the biggest investment risk and how to become an "Insider."
The two primary ways investing generates wealth: price difference and cash flow, and which is often overlooked.
How to avoid the costly mistake of the sunk-cost fallacy in your investments.
The crucial importance of maintaining liquidity and how illiquid assets like real estate differ from liquid assets like stocks.
Why blindly following common investment advice can lead to losses.
Stop letting inflation erode your wealth and avoid the common traps that keep people from achieving financial freedom. This video provides a clear, actionable framework for investing wisely and building lasting wealth.
If you're ready to take control of your financial future and learn the proven principles of getting rich through investing, watch this video to the end!
👍 If you found this video helpful, please give it a like!
✅ Subscribe to Finance Hacked for more insights on building wealth, entrepreneurship, and financial freedom: [Link to your channel]
🔔 Turn on the notification bell so you don't miss our future videos!
📢 Share this video with anyone who needs to learn the truth about investing!
Let's achieve financial freedom together!
#investing #getrich #financialfreedom #wealthbuilding #stockmarket #realestate #moneymanagement #investingtips #finance #investors #howtoinvest #financialeducation #passiveincome #inflation #wealth
----------------------------
FINANCE HACKED team would like to thank the audience for their interest and support of the Channel in the past time. We hope that the content of FINANCE HACKED will bring long-term value to the audience.
All contributions to support the development of the Channel, dear viewers can send to:
- PayPal: https://paypal.me/FinanceHacked
- Wise: https://wise.com/pay/me/hongnguyenphuongd
All ideas or feedback to the Channel, our dear friends can send to:
- Gmail: financehacked@gmail.com.
----------------------------
Are you tired of seeing your savings lose value to inflation? Do you feel like investing is too risky, or that only "experts" can succeed? You're not alone. Many face the dilemma of saving to get poorer or investing to potentially go bankrupt. But what if there was a smarter way?
In this video from Finance Hacked, we expose the pitfalls of traditional saving and the illusions around so-called financial "experts." We dive deep into the REAL way investing works and reveal the four immutable rules followed by successful investors like Li Ka-shing and Warren Buffett.
You'll discover:
Why being an "Outsider" is the biggest investment risk and how to become an "Insider."
The two primary ways investing generates wealth: price difference and cash flow, and which is often overlooked.
How to avoid the costly mistake of the sunk-cost fallacy in your investments.
The crucial importance of maintaining liquidity and how illiquid assets like real estate differ from liquid assets like stocks.
Why blindly following common investment advice can lead to losses.
Stop letting inflation erode your wealth and avoid the common traps that keep people from achieving financial freedom. This video provides a clear, actionable framework for investing wisely and building lasting wealth.
If you're ready to take control of your financial future and learn the proven principles of getting rich through investing, watch this video to the end!
👍 If you found this video helpful, please give it a like!
✅ Subscribe to Finance Hacked for more insights on building wealth, entrepreneurship, and financial freedom: [Link to your channel]
🔔 Turn on the notification bell so you don't miss our future videos!
📢 Share this video with anyone who needs to learn the truth about investing!
Let's achieve financial freedom together!
#investing #getrich #financialfreedom #wealthbuilding #stockmarket #realestate #moneymanagement #investingtips #finance #investors #howtoinvest #financialeducation #passiveincome #inflation #wealth
Category
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LearningTranscript
00:00For rules for getting rich through investing, FinanceHacked warmly greets you and our dear
00:05friends. In 2025, most people will face a dilemma. If we save money, the more we save,
00:15the poorer we become. If we invest our money, we might go bankrupt. Many people at this point
00:23realize that once they retire, they will have no income. So at first they choose to save.
00:31But the smarter ones, after four or five years of saving, notice something is wrong,
00:38no matter how much their income increases, the amount they manage to save becomes smaller.
00:45Why is that? You work hard to earn money, but the first thing you do isn't to enjoy it yourself,
00:52it's to set aside a portion to pay taxes to the government.
00:57Moreover, the more you earn, the more tax you pay. The government tells you this is your civic duty,
01:05those who can afford it should contribute more to society. But then you realize that Buffett,
01:12Bill Gates, even US President Donald Trump pay less tax than their secretaries.
01:17What about you? When you earn money, you pay taxes, when you have no job,
01:25earn no money, even suffer losses and debt, what happens? At that point you simply don't have to
01:31pay taxes anymore, you don't get a refund for the taxes you've paid in the past.
01:38Some will think there's no other option, even though your after-tax salary is reduced,
01:43you still save, live more frugally than others, and that must be better. But after several years
01:51you'll discover that even a simple meal costs more, rent is higher, everything becomes more expensive.
01:59Why? Because every year more money is printed, and money continually loses value.
02:05Clearly, five years ago you had US$50,000, and by persisting in saving you finally accumulated
02:14US$100,000. But what US$50,000 could buy five years ago, today even US$100,000 may not buy,
02:24such as the down payment on a house, in other words, if you do nothing but obediently save,
02:30you tacitly allow inflation to quietly eat away at your money each year.
02:35Therefore everyone realises that money must be kept in motion, use money to make more money.
02:43But the problem is you don't know how to invest.
02:47So most people turn to financial planning experts, hoping they can help them earn money through
02:53investing. When I was in college, I took many courses, CFA, CPA, CFP, and so on, thinking that
03:03after finishing them I'd understand investing, become a financial expert, and achieve financial freedom.
03:11But later I discovered that most financial experts have never really invested.
03:17They are mostly employees or freelancers, earning money through salaries, advisory fees,
03:24or commissions, not through investment returns. For example, most CFP graduates end up selling
03:32insurance or bank financial products. The game they play isn't helping you get rich,
03:39it's managing your assets to make themselves rich.
03:42I agree that you should leave specialised work to professionals. But you'll find that anyone can
03:50call themselves an investment expert, anyone can talk endlessly about investing, the saddest thing is
03:57that in reality everyone is talking about completely different things, yet they think they're discussing
04:02the same topic. So what is real investing? How do you invest to earn money consistently?
04:11How do you invest without risk? If today you don't understand these things clearly,
04:18then you and your descendants will forever be asking, what should I invest in in 2025?
04:23In 2026? In 2027? And a whole crowd of people will follow, eager to help you manage your assets.
04:37So if you don't want your ignorance to let others make money off your back, you must watch this entire
04:43video. I sincerely wish that everyone who likes this video will soon achieve financial freedom,
04:51first, the primary rule of investing is, stop always thinking that investing is unsafe and risky.
04:59Today you and Lee Cushing each have 100 million and stand at the same starting line.
05:06Who do you think faces higher risk, you or Lee Cushing?
05:11This shows that investment risk has nothing to do with the amount of money you have.
05:16Only the ignorant face great investment risk.
05:21Investment risk itself can be very low.
05:25In this world there are two kinds of investors, insiders and outsiders.
05:31Listen carefully, why is Lee Cushing's investment risk lower than yours?
05:37Because long ago, when Lee Cushing read a magazine, he learned that a new product was trending in Italy,
05:44a kind of artificial flower.
05:46This flower was not only cheaper than fresh flowers but also lasted much longer.
05:52At that time Hong Kong had none of these, and consumer demand there was rapidly rising.
05:59Lee Cushing felt sure that bringing those artificial flowers to Hong Kong would make a lot of money.
06:05However, he didn't immediately invest, because he knew he was an outsider.
06:12All he saw was the trend, he knew nothing of the internal details.
06:18So he quit all his money-making jobs and flew straight to Italy to become an insider.
06:23The factories there, to save costs, often hired illegal laborers who were exploited.
06:32Lee Cushing applied and took a job as a janitor.
06:36But a janitor can come and go freely through the workshops.
06:40There he could enter any production facility, work,
06:43and carefully observe every production and sales process,
06:47even befriend the workers to learn more.
06:50Once he mastered everything, he moved from being an outsider to an insider.
06:57Only then did he quit janitorial work,
07:01pool his money, and invest in artificial flowers.
07:05The result, his money multiplied many times over.
07:10Lee Cushing once said,
07:12When I opened an artificial flower factory,
07:15it was because I had worked inside one,
07:17knew the entire process from production to sales,
07:21and there was virtually no risk.
07:24I invested in real estate and ports when I thoroughly understood those industries.
07:30That's why Buffett boldly wrote to Graham asking to join his firm,
07:35because if you're close to the source, you get the first benefit.
07:38You become an insider, learn all their research methods,
07:43and apply them yourself.
07:46Today, some say housing prices will collapse,
07:50others say they'll keep rising.
07:53Some claim stocks are the best investment,
07:56others predict gold will skyrocket.
07:59Some even advise diversification,
08:02don't put all your eggs in one basket.
08:04Yet Buffett, the stock market saint,
08:08says don't diversify,
08:10put all your eggs in one basket and watch that basket closely.
08:16So whom should you listen to?
08:18Listen to yourself.
08:21For example,
08:22if today you want to invest in a gym,
08:24you must work at the best and worst gyms in the market,
08:28even if only as a cleaner.
08:30Only then can you learn and distinguish a gym's investment potential
08:35and avoid being deceived.
08:38Or if I want to invest in real estate,
08:41I'd quit my job,
08:42view at least a hundred houses,
08:45walk the land myself,
08:47feel the prices in different areas.
08:51From that I know what price is cheap or expensive.
08:54I also build good relationships with many real estate agents,
08:59so when a house is listed below market,
09:02they alert me immediately,
09:04and I can rush over,
09:06negotiate,
09:07and close the deal the same day.
09:10Anyone can do these things,
09:12but because they seem tedious,
09:14most people don't.
09:16Then it's no surprise that those who know nothing,
09:19merely waiting for tips and hot leads,
09:21outsiders,
09:23end up losing,
09:24so remember this immutable investment rule,
09:27make yourself,
09:28through learning and hands-on experience,
09:31go from outsider to insider.
09:34Second,
09:35if you want the blood of an investor flowing through your veins,
09:39you must be clear on how investing makes money.
09:43We invest to achieve two things,
09:46one is price difference,
09:48the other is cash flow.
09:50Simply put,
09:51if you buy a house at $1 million and it rises to $1.5 million,
09:57when you sell it you've made a $500,000 profit,
10:01that's the price difference.
10:03Cash flow is even easier,
10:05before you buy the house you can estimate how much rent it will bring you each month,
10:10the rental income is your cash flow.
10:13I love investing in real estate,
10:16especially during economic downturns.
10:19The reason is simple,
10:21before I could only afford the down payment on one house,
10:25now I can put down payments on two or three.
10:30After renting them out,
10:31the monthly rent covers my bank loan repayments.
10:34Over time,
10:36rental income gradually rises while loan principal falls,
10:40so my monthly cash flow increases.
10:43All that extra money is my reserve income.
10:48The key is you don't have to sell the property,
10:51it's like a hen laying eggs.
10:52Property is the only asset you can mortgage to borrow more from the bank.
10:59In other words,
11:00when I need money,
11:02I can mortgage a property and use the borrowed funds to buy more properties,
11:07generating more cash flow.
11:09Similarly,
11:09if today you want to invest in a gym,
11:12a bubble tea shop,
11:13or a bar,
11:16what kind of money are you aiming to make?
11:19Monthly profits for you are cash flow,
11:22right?
11:23If it were me,
11:24and I saw potential in a brand,
11:26I'd invest in their franchise development,
11:29selling the rights to operate.
11:32Simple product sales limit revenue,
11:35so I wouldn't invest there.
11:37But franchise fees generate substantial income.
11:41Another example,
11:44suppose you see a purebred puppy.
11:47If you buy it for $1.000
11:49and sell it for $2.000,
11:53your profit is the price difference.
11:57But if you invest in its training
11:58and show it at prestigious competitions,
12:01turn it into a stud,
12:03each breeding can provide you with stable cash flow.
12:07Or take stocks,
12:08many think you just need to buy one exploding.
12:11stock and hold it for 10 years to get rich.
12:15But here's a common scenario,
12:17right after you buy,
12:19the stock drops.
12:21What do you do?
12:23You console yourself that it'll rebound tenfold someday,
12:27so don't worry.
12:29Some say they'll average down,
12:31buy more at a lower price.
12:34You buy at $10,
12:36it falls to $5,
12:37so you buy more,
12:39then it falls to $2.50.
12:43Now your losses double because you bought more.
12:47First you put in $100,
12:49lost half,
12:51$50.
12:52Then you put in $200,
12:55lost half again,
12:56$100.
12:57That strategy leaves you praying for a recovery
13:02just to break even.
13:04That's why most people lose in stocks,
13:07especially in a downtrend.
13:09The more they buy,
13:11the deeper their losses.
13:14In that situation,
13:15they no longer dream of profiting from the stock market,
13:19they're only happy to avoid further losses.
13:21My way of buying stocks is completely different from real estate.
13:27A company can go bankrupt,
13:29an industry can be disrupted.
13:32A few months ago,
13:33everyone rushed into Tesla because it was a top stock,
13:37now it's down 50%.
13:39Tell me,
13:41a million dollars becomes half a million,
13:44how can you hold on?
13:46You'd rather pretend nothing's happening.
13:48Those who advise long-term holding
13:52don't care about your losses.
13:55Do you plan to wait another 10 years?
13:58Stocks are like riding the elevator
14:00up the Empire State Building.
14:03It takes hours to go up,
14:04but only seconds to fall.
14:07Stocks are highly liquid,
14:09so a panic or economic crisis
14:11can vaporise most people's wealth
14:14in minutes, even seconds.
14:15Even dividend stocks can plunge,
14:19and dividends aren't guaranteed.
14:22HSBC, Hong Kong's largest bank,
14:26once lost half its value,
14:28and when it suspended its dividend,
14:30there was nothing anyone could do.
14:34Moreover,
14:35US dividends face a 30% withholding tax.
14:39Some say,
14:40but Buffett invests that way.
14:42In Buffett's case,
14:45stocks cease to be liquid assets.
14:48He manages hundreds of billions,
14:50so selling huge blocks is difficult.
14:54He must hold long-term.
14:57Also,
14:57Buffett doesn't primarily earn
14:59from stock price gains.
15:01He makes money from management fees
15:03on his funds
15:04and from dividends
15:04on his company's shares.
15:07Most people don't realise
15:09they're playing a game
15:10with higher odds of losing
15:12than winning.
15:13Historically,
15:14the stock market is flat
15:15or negative three quarters
15:17of the time.
15:19They don't understand
15:20that picking one exploding stock
15:22has nothing to do
15:23with financial education,
15:25reading financial statements,
15:27or watching quotes.
15:30What matters is playing the game
15:31like a casino,
15:33lose small,
15:34win big,
15:35the third major investment principle
15:37is that the money you invest
15:38must be used to generate
15:40the greatest possible value.
15:43Suppose you earn $100,000 a year
15:46and partner with a friend
15:47to open a gym.
15:49You invest cash but don't operate,
15:52your friend contributes labour
15:54but no capital.
15:56You put in $200,000,
15:59two-year savings,
16:00and take 80% of the shares,
16:03your friend takes 20%.
16:04Sounds fair, right?
16:09But you'll find that your $200,000
16:11not only isn't recovered
16:13but is further lost
16:14because your friend spends
16:16your money and vanishes.
16:18Now you face two choices,
16:21invest another $100,000,
16:24quit your job,
16:25and run the gym yourself,
16:27or close the gym.
16:29What would you choose?
16:30Most people choose the first,
16:34they can't bear to let
16:35their initial $200,000
16:37go to waste.
16:39This is the biggest mistake
16:41in economics,
16:42sunk cost fallacy.
16:45The $200,000 you spent
16:47is in the past.
16:49It's a sunk cost,
16:51not a current cost.
16:53What you face now
16:54isn't that past loss,
16:56but that if you run
16:57the gym yourself and fail,
16:59you'll lose another $100,000
17:01plus your $100,000 annual salary.
17:06That's your real current cost.
17:09A gambler's path is similar,
17:11you lose $100 at the casino,
17:14then put in another $100
17:15hoping to break even,
17:18then borrow to keep playing,
17:19trapped by sunk costs.
17:22Investing is similar.
17:25As I said,
17:26when a $10 stock falls to $5
17:28and you refuse to admit the loss,
17:31instead pouring in more money,
17:33you end up learning
17:34a harsh lesson from the market.
17:37My method would be
17:38to close the gym,
17:40accept the $200,000
17:41as a hard-earned lesson,
17:43because money has a time value.
17:47Even if I invested
17:48another $100,000
17:50and earned $100,000 profit
17:52in a year,
17:53I wouldn't net any gain,
17:56that $100,000
17:58would go into equipment
17:59and renovations,
18:01the investment capital.
18:03The $100,000 profit
18:05only lets me break even,
18:07you can't sell gym equipment
18:09to recoup it,
18:10they're useless without a gym.
18:13If I close the gym
18:14and keep my $100,000 salary
18:17plus the $200,000
18:19I still have,
18:20I've preserved capital
18:21to invest elsewhere.
18:24That's why I choose
18:25short-term trading
18:26over long-term holding
18:28for stocks,
18:29a liquid asset.
18:31When a stock falls,
18:33I cut losses immediately,
18:35at most 5%,
18:36and quickly free up capital
18:38to invest in other
18:39exploding stocks,
18:41the fourth major
18:42investment principle
18:43is to maintain
18:44adequate liquidity.
18:46Could a company
18:47earn $100,000,000
18:49a year
18:49yet still go bankrupt?
18:51In that case,
18:53it's usually acquired,
18:55not because of poor operations,
18:57but because of temporary
18:58cash flow problems.
19:00For example,
19:01if you owe $200,000,000
19:03but only earn $100,000,000 annually,
19:07you could pay
19:07if the debt is amortized.
19:10But if creditors
19:11suddenly demand full repayment
19:13and you have only $100,000,000
19:15on hand,
19:17you must declare bankruptcy.
19:18Similarly,
19:21in 2008,
19:22housing prices plummeted
19:23in many places,
19:25some homeowners
19:26were forced to sell.
19:28Others were not.
19:31Why?
19:32Some lost jobs
19:33in the financial crisis
19:35and couldn't pay mortgages,
19:37so banks foreclosed.
19:39Other homeowners,
19:41though distressed
19:41by falling prices,
19:43had paid off their loans
19:44or at least collected
19:46enough rent
19:46to cover interest,
19:48so banks didn't force them
19:49to sell
19:50and they held on.
19:52Some had bought homes
19:53outright with cash,
19:55so their cash flow
19:56wasn't disrupted.
19:58They survived
19:59the housing market crisis.
20:02Today,
20:03housing prices
20:04are many times higher
20:05than the 2008 peaks.
20:08Those who back then
20:09didn't face
20:10cash flow interruptions
20:11would now be
20:12financially free.
20:13But note,
20:16real estate
20:16and stocks
20:17are different.
20:19Real estate
20:20is an essential,
20:21illiquid asset,
20:22so I hold long-term.
20:25Stocks are liquid
20:26and a company
20:27can fail.
20:29So I trade
20:30short-term.
20:32However,
20:33both require
20:33a concrete plan
20:35before investing,
20:36design risk management
20:37strategies
20:38to avoid
20:39cash flow disruptions,
20:41in sum,
20:41the four great principles
20:43of investing are,
20:44one,
20:45become an insider,
20:47two,
20:47activate the correct
20:48investment method,
20:50know when to seek
20:51price difference gains,
20:52when to generate
20:53stable cash flow,
20:55or both,
20:56three,
20:57deploy capital
20:58most efficiently,
20:59and four,
21:00avoid cash flow
21:01interruptions.
21:04Before investing,
21:05ask yourself
21:06whether your plan
21:07meets these
21:07four principles.
21:09If it does,
21:10proceed with confidence.
21:14If not,
21:14don't risk it,
21:15your losses
21:16will be the hard-earned
21:17money you worked for.
21:20Time is limited,
21:21so I'll end the video here.
21:24I share these
21:25free insights
21:26on becoming wealthy,
21:27an entrepreneur,
21:29an investor,
21:30and achieving
21:30financial freedom.
21:33If you don't want
21:34to miss out,
21:35subscribe to my channel,
21:37turn on notifications,
21:38and share this video
21:40widely.
21:41I sincerely wish
21:43everyone who liked
21:44this video
21:44an early path
21:45to financial freedom.
21:48If in today's video
21:49you found even
21:50one or two
21:51useful takeaways
21:52that help you
21:53live better,
21:54I'll be satisfied.
21:56Goodbye
21:57and see you next time.
21:58I'll see you next time.
22:00I'll see you next time.
22:01I'll see you next time.