Why I'm ALWAYS broke by the end of the year…$300,000 gone

What's up, you guys? It's Graham here. So, this is this weird investment strategy and mindset I've been practicing since 2011. Now, maybe it's a little bit weird, and maybe it's a little bit risky, and maybe it's a little bit stupid, but this has been working really well for me so far, and this is why I'm constantly broke at the end of every single year and why I've spent over $300,000 this year just for the privilege of being broke.

So, this all started in 2011 when I began buying real estate. At the time, I used my entire savings to buy some real estate, fix it up, and rent it out. By the end of 2011, I was broke. I spent every single cent I had towards the property and renovating it, and I think at the time I was banking on the rent that I was going to be getting to pay some bills that I had coming up. I also knew I had to work my ass off selling real estate as a real estate agent to be able to save up some more money because I was pretty much just flat broke.

But what I found is that nothing motivates you more when you have no buffer between the bills that you have to pay and what you have to earn to pay those bills. So, at the time, I was super motivated to start making more money, and I did. The same thing happened in 2012 when I began buying even more real estate. At the time, I actually had to sell my dream car, which was a 2006 chrome orange Lotus Elise. It was like my child. I ended up selling my child to use that money towards buying a triplex that came up, and then just like 2011, by the end of 2012, I was completely broke again after buying these properties and spending the extra cash I had fixing them up.

I think at the time too, I actually had to borrow $1,500 from my grandma because I didn't have enough money to finish off a property before the tenant moved in, and then, of course, once the tenant moved in like a few weeks later, I paid her back. But like that’s how close I was cutting all of this. When I look back, without even thinking about it, I've noticed that since then, every single year by December, I end up completely broke. It's not even like this is a conscious decision on my end, or something I'm thinking about, or something I'm planning. It just tends to happen that way.

Some years, I’ll max out a retirement account, or some years I might buy another property, or some years I might renovate something, or some years I might reinvest back into my real estate business. But there's always something going on that leaves me broke, and I'm sitting here now in the middle of October thinking to myself, at this rate, I'm going to be almost completely broke by December 31st like every other year.

But here's how I view it: Money by itself is completely useless if it isn't being invested to make you more money. Unless you spend it on something useful, or you're saving up for a certain special thing, other than that, it's kind of sitting there and almost just like wasting away. I mean, sure, having a big savings is definitely peace of mind in case of an emergency or something comes up, and it's also really important to be smart about it, not make stupid decisions, and only take risks that you're comfortable with.

But at a certain point, money that you have just sitting in the bank just ends up losing money to inflation. It's also a massive opportunity cost to have your money just sitting there, not working for you, losing money to inflation versus what it could be making if you invest it somewhere. So for me at least, I make sure I invest as much money as I can every single year. I like to invest every single dollar I have and just stash it away in investments and let that money continue to grow and work for me.

I get that this is a weird mentality for me, but I feel like if my money isn't being invested, it's just being kind of wasted. To me, I view every dollar as though it's an employee, and its only job is to go out there in the workforce and bring back more money. And by workforce, I mean being invested. So you invest your money, it goes out there, it works for you without you really having to do anything, and it brings you back some more money. If the dollar isn't out there making more money, then it's just being a bum and it's useless.

Besides buying the essentials, like a roof over your head, food to eat, and stuff like that, I just see money as a tool to use to go to invest that will pretty much provide a stable cash flow for the rest of your life. My entire goal in doing this is just to increase my passive income and grow my net worth year after year. Maybe I'm sick in the head or something, or maybe I'm just a little bit weird, but I actually get way more enjoyment from saving my money, investing it, and growing it than I do going out on weekends and just balling really hard, stuff like that.

By doing this and being almost completely broke by the end of every single year, that is amazing motivation to go out there and start making more money. This for me is the best motivation I've ever had. This whole thing ties back into the principle of burning the ships, where you're literally left with no other option except to make it work and accept to win. This concept actually originated in 1519 by a Spanish explorer named Fernando Cortez, who wanted to ambush the Aztecs and steal their treasure. He took 500 soldiers and 100 sailors to the shores of the Aztecs.

Now, despite having 600 people under his command, he was still no match for the great and powerful Aztecs that have been around for over 600 years, and their army was much bigger and much stronger than his. Some of his men were not convinced that they would win, so they planned an escape. Once Hernando found out about this, he wanted to make sure that the rest of his men were 100% committed to winning. So what he did was completely insane to all of his people: he burned all of their boats so they had absolutely no escape.

All of his men were terrified, and they were speechless. They asked him, "How are we gonna be able to get home?" And he said, "If we're gonna make it home, we're gonna make it home on their ships." So the path was pretty clear at that point—it was all or nothing. This made sure that his men were 100% committed to winning; otherwise, they died. At that point, there was zero option to fail—you basically have to win.

By doing this, his Army's commitment to winning this and getting home was extreme, and they actually won. They had no other choice but to win if they wanted to get home, and they did. I guess the same could also apply to income: when you have no other option other than to make it work, you find a way to make it work. At least I find, for me, it's very easy to get complacent when you have money coming in every month from rental income, where you don't necessarily need it. But you know, obviously, it helps to have more money invested.

So, by doing this, I almost ensure that I don't lose that motivation to continue to go out there, to continue to make more money, to continue to buy properties, continue to rent them out, and continue to make even more money. Because of this, you guys, is why I end up completely broke by the end of every single year. If anything, I look forward to being broke by the end of every single year because that means I've invested pretty much everything I've made back into a business. I've invested it into real estate, into stocks, and it's something that ends up making more money and being able to grow.

Because the way I see it, money sitting in an account doing nothing is almost wasted. Like I said, unless you're saving up for something in particular, it's worth it to have your money work for you, make you more money, and continue to grow it. I think it's very important to mention not to be stupid over this. There's a very fine balance between the risks that you're willing to take and the reward, and what you're comfortable with and what you're not comfortable with.

So never put yourself in a situation where you risk being homeless at the end of the month or starving or something extreme like that. For me, I could afford more risk because even if I have zero dollars in the bank, I know at the very least the next month I'm going to be getting about four thousand dollars a month from rental income. And if all of those become vacant and I don't get any rental income, then I have retirement accounts to fall back on. If those for some reason, something's weird with those, I have over a hundred thousand dollars of available credit. So, I have other little things to pull from where I'm not going to be completely screwed if something goes wrong.

I also make sure to keep my living expenses down. I own my Lotus Exige outright. I own three of my properties outright. I have very little debt compared to what I own, so I have a lot to fall back on just in case something hits the fan. So, because of that, I could afford to take a lot more risk than the person who maybe has like three kids to support and a wife and a mortgage and, you know, is living paycheck to paycheck. Obviously, that's an entirely different situation, and I recommend just doing whatever you're comfortable with with the risks that you're willing to take.

That's the big difference here—just end up being smart about it. Don't just invest it all if that means that you can lose your house or put yourself in a very uncomfortable, tight position. So, as always, you guys, thank you so much for watching. I really hope you enjoyed this. I'm just going to go for the full ask here. I'm gonna ask everything, and if you decide not to do any of this, that's totally cool. I don't really care either way. But like, if you did this, it would be pretty cool.

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I was really happy for them, and anything I find, by the way, that I like, I like to share it with you guys. This company and this lamp work pretty cool, and I'm happy with it. And yeah, I hope you guys like this lamp as much as I do!