So what’s the real reason most people are broke in the world?
It’s a controversial subject. I’m here in my other library. I was picking up this “50 Success Classics,” just quotes by great people throughout history. Pardon the hair, it’s early in the morning. But you know, most of us operate under what I call a pain avoiding delusion, right? It’s one of the 25 cognitive biases. And when it comes to the subject of money, nothing brings out delusion more. So one of the common things you’ll hear people blame, I had somebody, I was talking with somebody the other day that was broke, and she said you know, but it’s not my fault. And there’s a little bit of truth to that. There’s a little bit of truth that problems in the world come from government and taxes, that’s one of the things you’re going to hear. You know? The government’s messing things up. There was the State of the Union speech the other day by the President of the United States, and he talks about many things. And a lot of those goals are noble. I’m not knocking completely the place of government, but I want to put it in perspective by reading you something that Benjamin Franklin said many years ago, in the 1700’s.
Somebody came to him and said, the taxes are too high. That’s why I’m not making any money. And he says, “The taxes are indeed very heavy, and if those laid on by the government were the only ones we had to pay, we might more easily discharge them. But we have many others (talking about taxes) and much more grievous to some of us. We are taxed twice by our idleness, three times by our pride and four times as much by our folly. And from these taxes, the commissioners cannot ease or deliver us by allowing an abatement.”
What his point is, is he was a man who mastered not only getting over pain avoiding delusion, but also the mis-waiting bias. Most of us miss prioritize those things that are actually holding us back in life. The main thing holding back the world is not government taxes. Look, if you change the tax rate, I’m reading here Mankiw, the famous Harvard professor, his book on economics. For sure, taxes matter. They cause shifts in demand curves and shifts in supply. But you know what will have the biggest bang for the buck? Optimized brains in 7.3 billion people around the world. That trumps everything.
What keeps us from having an optimized brain? Well, he says right here, we’re taxed doubly worse than the government tax by our own laziness, by our own idleness. He says we’re taxed three times as much by our pride. If you’re in the 67 steps, what’s one of the foundational steps? I talked about it in my TEDX talk, which is out now. Hopefully you’ve seen it. I talk about Sam Walton, who became the wealthiest businessman of our generation. He did it by being the most humble. See, we’re taxed three times as much, not by the government income tax, not by Social Security tax, not by FICA tax, not be estate planning tax, all these taxes that people are talking about. We’re taxes by the latent and unused human potential within your brain. That’s more powerful than any supercomputer that’s out there right now, even if your IQ is not Einstein’s.
It says we’re taxed four times as much by our folly. What’s our folly? Making too many mistakes because we don’t listen. Because we’re too lazy or we are too proud to realize the answers aren’t always within. See these books behind me? These aren’t something I brag about. These are things I want to keep me from my folly. I want to be not idle, not lazy. Every morning I wake up, you know, people talk about lifting weights. Lift weights for your brain. Your brain is a muscle. I mean, technically it’s not a muscle, but it is a part of your body, a physical part of your body that can be worked out. We know this. All scientists would agree. That’s why people, my grandma, you know, she’s 96 and very sharp. Now some of that’s good fate and good genes, but some of it she’s been playing backgammon and chess her whole life. Keep the brain stimulated. Movement of the brain. These are the things that you must work on first.
Like Steven Covey talks about in “Seven Habits of Highly Unsuccessful People.” Focus on the things you can control. Unless you are a politician, and I hope some of you become politicians and change government for better, but for most of us who are not within the realm of politics, we cannot control those things except with a vote. And a vote is good, but it’s not nearly as good as voting with your feet, voting by what you do.
Sit yourself in a room. Read more. Don’t be proud, don’t be lazy, don’t have a lot of folly. These are the things that will bring you poverty. But if you invert them, these are the things that when you remove them will bring you wealth, much more wealth than any government cut in capital gains or income tax, OK?