Episode 194： Why The Rich Get Richer
Episode Stats
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Summary
In this episode, Pat Trebedev talks about why the rich keep getting richer and why the poor don t have money. He gives 10 reasons why the wealthy are getting more and more rich and why you should be worried about it.
Transcript
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Today we're going to talk about why the rich keep getting richer.
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So listen, the topic of rich getting richer is something you hear about on CNN, on Fox,
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on MSNBC, in schools, teachers, professors, parents, business, everywhere.
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These rich people, they control all the wealth, they're so greedy, all they want is power,
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And then on the other side, this is why the poor doesn't have money, because they don't
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And why don't you pick up a business book and find out how money works?
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Why don't you pick up some of their habits that they have?
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And so before I get into the 10 reasons why the rich keep getting rich, I'm going to give
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I'm going to give you some data for you to be looking at.
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And hopefully this will help out with the argument, because in my opinion, I believe the gap
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of rich getting richer is just going to get wider and wider and wider.
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And you'll find the widest as I go through some of these numbers.
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So if we were to take the top 1% richest people in the world, not America, in the world,
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top 1%, you would need to have somewhere around $753,000 to your name.
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Now having said that, data came out breaking down which country has the most people with
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And here's what the top 10 countries looks like.
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At number 10, Korea has 1 million people with $753,000 to their name.
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China, with 1.4 billion people living there, they only have 2.7 million.
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Number 1, America, 19.1 million Americans have a minimum of $753,000 to their name.
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If you take the rest of the countries on the top 10 list, and you add them up, they still
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don't have as many people that have $753,000 to their name as America does.
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By the way, most of the other countries run a socialistic economy.
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America still, till today, runs a capitalistic economy, which gives the average guy like
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me to go out there and make money, and hey, all of a sudden you have $753,000 to your name
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because the market allows people who bring value to go get that kind of money for themselves.
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If our wealth was divided based on U.S. land, here's what it would look like.
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20% would own that bottom part you see right there, it looks like Texas.
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And 40% of America would own that little red dot you look at the bottom.
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That red dot, my family, my mother, my sister, my dad, we were a dot of the red dot.
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We came to America with barely $5,000 to our name.
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I mean, literally, we were living with family, and then finally we found a place to live that
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I mean, I walked to school every single day from Broadway all the way up Chevy Chase to
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Wilson Jr. High School because nobody dropped us off.
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Everybody's kids, their parents would drop us off.
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I never got, as a matter of fact, I've never been dropped off to school.
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I've never been dropped off to school in America, ever.
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From seventh grade on, I've never been dropped off to school.
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I see these nice cars on movies with Tom Cruise.
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Or I'm watching, you know, Gordon Gekko, Buttbox, and all these cars, and these homes.
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And man, what if one day we can live in a big house?
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What if one day we can have a Ferrari, a Lambo?
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By the way, in a military at our barracks, one group would say, well, you know, these rich people,
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I realize the big 1% of America, the top 1% of America, they're curious.
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So just like I said earlier that the gap is going to get wider and wider, I am telling you
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that $90 trillion very soon is going to be $200 trillion, $500 trillion.
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And the only question you've got to be asking yourself in the next 5, 10, 15, 20 years,
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You'll see why I'm saying this as I go through these 10 points.
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By the way, this point alone is the reason why the gap's going to get wider and wider and
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This one point alone I've talked about in another video called 20 Rules of Money.
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This is why the gap's going to keep getting wider and wider and wider.
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I choose to put my $10,000 in an account that gives me 3%.
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You choose to put $10,000 in an account that gives you 12%.
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So meaning whatever you get, you should only be four times more than I should be, right?
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So let's take a look at what our money looks like 24 years later.
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24 years later, my $10,000 barely becomes $20,000.
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That's eight times more, even though the interest is four times more.
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Now let's continue to go 48 years and see what happens.
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24 years after that, my $20,000 becomes $40,000.
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You're only getting four times more interest than I am.
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You realize how much your money is going to be more than mine by 48 years from now?
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If I continue with the same habit of getting 3% for another 24 years, look what happens.
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And another 24, this is why the rich keeps getting richer.
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So unless education in high schools and junior high schools and colleges change and start
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teaching these kids about the basics of money, the disparity ain't stopping.
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And there is nothing anybody can do about it, including CNN, MSNBC, and half the professors
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at these universities, because they keep bitching about this stuff, but no one's talking about
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No one is talking about, let me teach you how to get 12%.
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Everybody just complaining, whining, without any solutions.
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Once you get out of college, once you get out of high school, you have a choice on what
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You change your, you trade your work for hours.
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I make 15 bucks an hour, 20 bucks an hour, $30 an hour, and that's fine.
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And what they don't realize is that's not how you create wealth.
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There's got to be an element of you saying, I know for a fact if I position myself here
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and if I can become an entrepreneur or if I can get equity or if I can get ownership
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and how do I get that part, this can lead into something bigger for myself.
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If you keep trading hours for a dollar that you're getting paid, you're going to be limited.
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There's got to be a part where you go out and position yourself properly.
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And in these wealthy communities, everybody I talk to, I ask them, how did you make your
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You know, I made my money because I started a business.
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I made my money because I was part of a startup.
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Five years that the company was bought by this company for a billion dollars, I got my
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So wherever you're working at, ask yourself, the positioning of the environment you're in,
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is it constantly going up where there's a possibility for a bigger upside, or is it linear?
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And if you choose not to change it, then don't be surprised if you don't have $753,000 because
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The best example of long-term thinking is one of the richest men in the world, and that's
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I want you to look at this chart that I'm going to put up, and the part I want to look
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at is how his wealth grew from 18 years old to his $81 billion today that doesn't include
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the billions of dollars that he's given away to charity.
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So let's take a look at this guy named Warren Buffett, one of the richest, wisest, smartest
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So at the age of 19, he had $10,000 to his name.
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The first million dollars he made, he was 32 years old, give or take.
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Fast forward to the age of 40 years old, you'll notice he had a $34 million net worth, right?
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The next year or two, it goes from $34 million to $19 million.
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I think as much as we spend time talking about how rich this man is, we forget to talk about
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Do you know how many people in the world, when they drop from $34 million to $19 million,
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that's 50% of the wealth that's gone, what do you think most people do?
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They cash out, they take their money out, they listen to news.
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The news is saying the world's coming to an end, war is coming through, this is what's
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going to happen, that's what's going to happen.
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Price of oil, oh my gosh, panic, panic, panic, panic, panic.
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This guy says, I trust my discipline because I'm a long-term thinker.
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He goes from $19 million to $67 million to $1 billion at 56 to $81 billion today.
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Let me compare his net worth to some of the countries in the world.
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Costa Rica, Luxembourg, Slovenia, Serbia, Tunisia, Ghana, Uruguay, Kenya, Ethiopia, Lebanon,
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Bulgaria, Uzbekistan, Croatia, Lithuania, Warren Buffett is beating those countries.
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I wanted to go back to Forbes 400 list back in 1982 when it first got started.
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So the total net worth back in 1982 of Forbes 400 was $93 billion.
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You took all the 400, added it up, it was $93 billion.
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And the richest man on that list, Daniel Keith Ludwig, he had a net worth of $2 billion.
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Daniel Ludwig wouldn't be on today's Forbes 400 list.
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And out of the 400 names back in 1982, only 36 names are still on the list today, 35 years
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So now, let's take a look at what the total net worth of today's Forbes 400 is.
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It gives you $2.5 trillion, which tells us 35 years from now, by 2053, the Forbes 400 list
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So the only thing you ought to be thinking about is the following thing.
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If 35 years from now, that number's going to be $80 trillion, what piece of that $80 trillion
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Because think about it, if that $80 trillion is only 400 people in America, what do you
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think the entire net worth, the entire wealth of America, 330 million people, is going to
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For the right person watching this, if you listen to point number three and you say,
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If you turned off the video today and you didn't watch the rest, those three principles
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is what makes these guys the kind of money that they make.
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So can you really think long-term or immediately something that goes wrong, you disappear and
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you go panic and you go back to your corner and say, oh my gosh, I can't believe this is
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But for those of you that are watching this that are saying, I'm going to be disciplined
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to be a long-term thinker, you're going to put up numbers, experience certain things
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This one I'm not going to spend a lot of time on because it's very self-explanatory.
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When you look back, you don't want to be able to say, I messed up here with drugs.
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So many dumb mistakes I made that you could have prevented yourself from making.
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For some of you that are saying, I feel bad because I just went through a divorce three
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Our current president is on his third marriage.
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Just minimize the amount of regrets that you're going to have because it doesn't stunt the momentum
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Your best friend in accumulating wealth is momentum.
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Water it so it gets bigger and bigger and bigger.
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You got to figure out something that you specialize in.
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Communications, selling, finance, real estate, hedge funds, stocks, bonds.
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Most of the guys that we talk about, they specialize in a skill.
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Warren Buffet investing, Trump, wealth, real estate.
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You know, you look at Zuckerberg, social media.
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Look, I can take my business back to 1999 when I went to a man's house who was a millionaire.
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And he had a big party and I made a lot of relationships.
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After the relationship, two years later, he introduced me to a guy that introduced me
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That contact is what led me to making $30 million just off of one sale.
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You know, I went to an insurance conference a few years ago.
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I'm talking a five-minute call that was horrible, horrible call.
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He came back saying, I still want your business.
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Fast forward, he's the one that ended up putting me in contact with De La Hoya and a couple
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other guys that raised $10 million for a business.
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He goes to Harvard, meets a kid named Edward, meets the Winklevoss brothers that leads to
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You look at Warren Buffett who networks and meets a guy named Charlie Munger who he thinks
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is smarter than he is and that bring those two together to build the empire that they
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Everything's about networking in your contacts, especially if you want to increase your wealth.
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It is very difficult for a billionaire to befriend somebody that's worth $20,000.
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Because the experiences are different and the level of thinking is different.
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If you hang with a billionaire, you're $20,000, somehow, someway, it's going to get higher.
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Somehow, someway, this thing gets higher because you're borrowing their thinking.
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So, if networking is an area you struggle with, I made a video titled, How to Network
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Go click on the link below and watch that video, How to Network Like Casanova.
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Everybody watching this leverages other people.
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A father watching TV or football on a Sunday leverages son and says, son, get me a beer.
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A person who goes to a restaurant and sits to have food with another friend leverages
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the waiter or the waitress and says, can you please give me a Diet Coke and a bone and
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ribeye and lobster mac and cheese and that's for me.
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You leverage the waiter or the waitress and in return for the leverage, you pay 20 points,
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The hardest working person in the world is limited to 24 hours in a day.
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But they realize, if you really want to leverage time, if I want to work 2,000 hours in a day,
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200,000 hours in a day, I need 25,000 employees.
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And they keep leveraging over and over and over and over again and it gives them an unfair
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However, there's not a single person watching this that can't apply that concept idea because
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Number eight, this next one is about reinvesting their money.
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Meaning, they make their money work for them 24-7.
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I did a video titled, How to Double Your Money.
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This is the area where they master on how to double their money constantly over and over
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And if it is, it's intentional because they believe a downturn is coming around the corner
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or they buy puts because they believe the market's about to go down.
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It doesn't just sit around, you know, allowing the bank to use that money to make money.
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You know, his poorest kid today is worth $39 billion.
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So, is this something where, you know, the media comes back and politicians come out and say,
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it is not fair for a kid to get all the money from his daddy or his mommy.
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If your mom or your dad was worth $160 billion, would it be unfair if she gave you $40 billion
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Would you say, mom, it's not fair for you to give me $40 billion?
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It's always unfair if it's the other guy's kid, right?
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Why don't we position ourselves better so our kids get the wealth?
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A guy was in, you know, southern part of Chicago, a bad community, was teaching all these guys
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He was teaching them the fact that life insurance transfers wealth to their families.
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So rich people buy as much life insurance as they can because when they die, their kids
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get $10 million, $8 million, $6 million, $5 million.
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And the kid has an opportunity and advantage against everybody else that he's competing against.
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This is why you see families that become richer and richer and richer because the wealth keeps
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transferring to the next generation over and over and over again.
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I've been talking about this word in a lot of videos lately, whether it's with Arthur
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Laffer, the former economist for Ronald Reagan, George Bush, Jack Kim, Arnold Schwarzenegger.
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We talk about this topic a lot, whether it was with the mayor of Frisco, how they took
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the city from 5,000 people back in 1990, 1991 to 180,000 people.
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Or whether it was Jerry Springer or Dennis Prager, we talked about this topic and that
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I'm going to keep talking about taxes until you pay attention to taxes because it's a
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In the state of California, if you got a million dollar bonus, they tax you at 50%.
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If you're a realtor, you make a million dollars in the state of California as a realtor, they
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All of these guys in Silicon Valley who say, tax everybody, tax the people, this is in,
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this is that, all the stuff that they say about raising taxes, they only give tax 22%
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How you position yourself to pay the lowest amount of taxes possible.
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To the realtor in California that pays 35%, guess what?
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If you were in Nevada, you would have saved yourself 13.3%.
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If you were in Texas, if you were in Florida, you would have saved yourself 13.3%.
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You can have six kids if you want and you can still afford to send them to that best school
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And by the way, if you haven't already subscribed to Valuetainment on iTunes, please do so.
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And if you have any questions for me that you may have, you can always find me on Snapchat,
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