“I’m rich! I’m making tons of money!

“You may feel rich, but you will never be wealthy!” I interrupted Pete who was
expressing his joy after getting a new job.

“What does that mean?” he asked with eyes wide open.

I returned his question with a question. “What are you working for, Pete?”

“Uhh, Hector! Obviously I’m working for money! I want money! Show me the money! I
want to have lots and lots of money!”

“Well, Pete, if you’re working for MONEY, if your goal is accumulating MONEY, you
will NEVER be wealthy!” I said.

“WHAT? You are wrong, Hector! I’m accumulating MONEY! I work, for money, that’s why
I work really really hard!”

“Pete, you are confusing money with wealth,” I answered in a calm voice to get his
emotions under control. “Let me ask you something. How much do you make per hour?”

“I got a raise from $120 dlls/hour to $200 dlls/hour! I’m making huge money. Last
week I celebrated by buying a Mercedes for my wife. She was so happy. I’m so happy
that I can afford all her dreams.”

“You can’t afford it, Pete!”

“What do you mean I can’t afford it? I just did! I have the car at home now!”

“How much did you pay for the new car?” I asked.

“Ohh, you need to see it to believe it! It’s that SUV, with all the gadgets you
could ever imagine. It’s a $90,000 beast!” Pete said proudly. He couldn't contain
his emotions. It meant success for him!

“How much cash did you pay?” I asked.

“That's the best part! The financing was unbelievable! With my new payroll, I
qualified in a heartbeat! I charged my credit card with a small 10% down payment,
just $9,000!”

“You couldn't afford it, Pete! That was a bad decision!”

“I deserve this! I worked hard for this! I make $300,000 a year! I’m rich, Hector!
I can buy all my gadgets. I love my boat, my motorcycle, my cars … and when you
visit my media room at home, and listen to that audio, your pants will drop!”

“No, Pete, your pants will drop the moment you realize that you are working for
money. You are working to accumulate stuff and you will never accumulate wealth!
The moment you lose your job, you will be living in hell!”

“Shut up, Hector! Don’t even mention it!” he quickly replied.

“Pete, wealth is only found in assets, not a job. People who own assets are
wealthy. Assets increase their value over time or better yet, the best assets make
money for you. That is what real wealth means.”

I continued.
“I invite you to see money through a different lens. Money is a tool, a medium of
exchange. Money is simply a unit of measurement used in the act of giving and
receiving. Money is just a source of energy.”

“I don’t get it, Hector!”

“Pete, you make $200 per hour. That’s amazing! But have you noticed you owe
hundreds of hours of work to pay for your lifestyle? How much do you owe today?”

“About $500,000, including the mortgage on my house. I am not worrying about it

because today I am able to make much more!”

“Do the math, Pete. Convert your debt into labor hours! You make $200/hour. Good,
but take away taxes, around 30%, take away cash invested into your IRA, 401K, etc.
Effectively, you have available around $130/hour.”

“Correct …” Pete said attentively, trying to find something to prove me wrong.

“Let’s divide $500,000 / $130. That’s 3,846 hours of work you owe. You don’t owe
money, you owe time! You are hooked! You don’t have the assets to cover your debt.
You are the only source of income. Your work, your labor, your time.”

“That can’t be right!”

“You can’t afford all those things! You must start accumulating assets!”

To answer your question: What’s the best money advice I have ever received?

Think of money this way: Spending more money than you earn, is consuming more value
than you produce. It isn’t money owed; it’s a deficit of your TIME.
If you don't own any assets, your TIME is the only source of VALUE you have!

DEBT = PRODUCED VALUE - CONSUMED VALUE

Pete has a debt of $500,000. This means he has consumed $500,000 more value than he
has produced. The debt that Pete has with the Mercedes is a promise of future
production of value!
This is why COLLEGE DEBT is so dangerous!

Debt is modern slavery — young generations attached with student debt require
future work to pay back — even if they can’t find work!

Invest your hard work wisely — invest and accumulate assets, not junk!