Today, people are put off by advice that is older than a couple of years.
They say, “it’s no longer valid, it’s outdated, or that was then, this is now.”
That may be true if you are talking about marketing products on the internet, but wisdom is not outdated when it comes to wealth accumulation.
Wealth accumulation has happened by using the same principals for thousands of years.
To prove this, I’m going to quote from the Torah (Christians call these five books the Pentateuch) in the book of Deuteronomy.
Let me set the context.
If you don’t believe in God, it won’t change the wisdom in the instruction.
If you’re offended, run to your safe space, I don’t care, stay broke.
This post isn’t going to be religious, so relax. Read the title; it’s about building wealth.
Moses has led the people out of 400 years of slavery in Egypt.
The Israelites have been wandering in the wilderness for 40 years.
They are about to cross the Jordan and go into the promised land.
Moses is giving the people advice, how to live when they get over the Jordan.
Unfortunately, Moses does not get to go with them because he had a bad attitude toward God, but that’s a story for another time.
Moses tells the people to obey God and his laws, which can be summed up as, Love God, love others.
The verse I want to call your attention to is Deuteronomy 15:6 where Moses says, “For the Lord your God will bless you, as He promised you, and you shall lend to many nations, but you shall not borrow, and you shall rule over many nations, but they shall not rule over you.”
There is a lot to be unpacked, but first, I’ll start with this, “as He promised you.”
What the people were told is that blessing is a promise of God if you obey his laws, Love God, love others.
The next statement, you shall lend to many nations, but you shall not borrow, and you shall rule over many nations, but they shall not rule over you.
Moses was setting up the banking system around 3,300 years ago.
He was telling the people to loan money to others, not to other Israelites, but rather to strangers.
There is risk in loaning money, but when you accumulate wealth and assets, the risk is just part of the business.
Secondly, he was very strict, telling them not to borrow money or they would become slaves again.
Not necessarily slaves like they were in Egypt but slaves or indentured servants to the lender.
By being the lender, they would rule over others and not the other way around.
These laws hold true today.
Recently Grant Cardone has been talking a little trash about Dave Ramsey.
Grant Cardone is notorious for promoting lifestyle and a bust your but mentality to accumulate wealth.
“It’s ok to borrow if your cash flow pays for your debt.”
It’s the “good debt” vs. “bad debt” mentality.
Dave Ramsey believes you eliminate your debt, build reserves, and purchase cash-flowing assets.
Who’s right? Both methods work, but there is enormous danger in Grant’s approach.
There is only one Grant Cardone, and what he has done is truly unique and enviable.
One out of ten million people might be able to follow in his footsteps, but he’s extremely good at convincing the other nine million nine hundred ninety thousand people to pay him for his wisdom.
Grant tells you it’s ok to go into debt to purchase cash flow. Does it work? Yes.
But Dave Ramsey and I know what it’s like when the cash flow changes or dries up because of outside forces that you nor I control.
Those forces can be a change in the economy; banks stop lending, which is a massive problem if you are in multi-family real estate.
Most multi-family loans force you to refinance every five years.
When the banks stop lending, like in 2009, it all comes crashing down.
You can be forced to borrow at outrageous interest rates where all of your cash flow is gone. Then what happens? The lender usually ends up with the property at 75 cents on the dollar.
As Moses said, the lender always wins (a bit of a paraphrase).
Dave, on the other hand, is not worried about the lender because he doesn’t need them.
He lives his life as a free man because he has wealth, his own wealth.
He may not look as wealthy on the surface, but keeping up with the Joneses never made anyone happy.
What Dave owns is his.
He still has to render to Caesar, but that’s a small price to pay for freedom.
I show people how to find purpose and use their business as a tool to build wealth.
If you’d like some guidance, schedule a call with me. Here’s a link to my calendar.
To your prosperity,
David Mulvaney