237 Million: How To Make A Quarter Billion Before You Turn 70

Before we dive in today, I want to draw your attention to our new podcast called the road to 1 million. For those of you who have asked that we document the process of building a seven figure business by following the playbook that I share in my book, 12 months to 1 million. This podcast is for you. In this show we are documenting every step of the process from some of our students, from our own businesses inside of capitalism.com and also the businesses that I'm investing in. I'm working with these entrepreneurs, entrepreneurs, one on one, to document and to help them grow towards a seven figure brand. My one regret in my entrepreneurial career is that I didn't document the hundreds of seven figure case studies that I played a part in over the years. So better late than never. And on this podcast, we're going to document the highs, the lows, the wins and the losses and all the steps that these brands take to build a seven figure business. So if you want to see behind the scenes of what it takes to build a seven figure business, make sure you're subscribed to the road to 1 million on Spotify and Apple podcasts. And when you do, I hope you enjoy.

I'm Ryan. Daniel Moran. Thanks so much for hanging out with me today. I'm really excited to share an insight with you today that changed my brain once I realized it. There have been two moments in my life and a crazy career as an entrepreneur and as a capitalist where I realized how good this can get, how big you can play. Even if you're a small time entrepreneur or you're just starting out. When you run the numbers that I'm going to share with you today, you're going to see how much potential you have to change your entire family tree. There were two moments where I realized this. The first was when I heard the news that Apple stock had crossed $2 trillion in market cap. That was a big moment for me. It was a big moment for me because when I was a kid, I used to pretend that I was a trillionaire. I didn't even know how much money that was. I just remember my parents telling me that a trillion was a number that was so big it was unfathomable. So I used to play with my neighborhood friend, Jason Karloski, and we used to ride around our bikes and pretend that we were trillionaires. And the idea that anyone could be a trillionaire was completely out of the realm of possibility. It did not exist when I was a kid. So it took Apple 30 some years to become a 1 trillion dollar company, but only 2 or 3 years for it to go from 1 trillion to 2 trillion. Now you can say inflation and you can say all kinds of things. You can say whatever you want. The fact of the matter is that CEO Tim Cook generated a trillion dollars in value in two years. And I started to think to myself, okay, if Tim Cook can generate $2 trillion in value in two years, is it possible, is it reasonable for me to say I could be a billionaire in 30 years? For me, somebody who has my skillset, my abilities, my opportunities, is out of the realm of possibility that I could make a billion dollars in a few decades. Now, Tim Cook, way ahead of me. Tim Cook has way more opportunities than me, way more advantages than me, way more money than me, way more skilled than me. He probably works harder than me. But a trillion dollars is a thousand billion. So is he a thousand times smarter than me? Does he have a thousand times more time than than me? Nope. Does he have a thousand times more opportunities? Maybe, maybe 100 times, certainly 10 times, maybe even 500 times? Probably not a thousand times. And if he can do it in two years, then can I do 1 1000th of that over the next 30 years? And that really got my brain thinking differently. But the most recent time that I started to have this realization was when I started running the numbers of what my total net worth could be if I invested well for a very long time. Now, I come from a background where I grew up on the reduced lunch program at school. I came from having, you know, my parents separated when I was 12. Both of them were not well off, especially after they split. My mom had to go back to work. My dad was a school teacher for 30 some years.

I come from a suburb of Cleveland, Ohio. The only person that I knew that I thought was rich was a guy at my church who drove a Corvette, who turned out to be an a hole. So my list of opportunities was not like you would expect most millionaires to be. And so I was taught to save money. I was taught to, to live below your means. I was taught to seek security. These were things that were ingrained in us. And so I have always invested and I have always looked at the potential for where there was return on your investment. Very conservatively, trying to protect my money rather than grow my money. But one day I decided to run the numbers of what would it look like if I were to go on the offense, if I were to play to win rather than play to not lose, instead of playing defense with my money and my career, what If I went on offense and the numbers that I ran were very simple. It was, what's a million dollars worth if I invested it for 30 years at 20% compounded interest? So think about that for a second. $1 million at 20% interest, annual interest over 30 years. What does that come out to be? Well, if you saw the name of this podcast, you might be ahead of me. The amount is $237 million. $1 million.

Becomes $237 million when it's invested over 30 years at a 20% annualized return. Now, of course, we could continue to poke holes in this. We could say inflation. We could say, where are you going to get 20%? We'll talk about that in a second. You could talk about capital gains and all of that stuff. The fact of the matter is that $1 million, if increased by 20% per year over 30 years, becomes $237 million. I'm going to say even if you don't have a million dollars, even if this does get taxed, even if there is inflation, even if you don't quite get 20% every year, these numbers are exciting. These numbers are enough for me to pause and think, how much money can I sock away? How much money can I store away for 30 years because I want that type of a legacy? And of course, these numbers assume you're not putting any additional money into your portfolio. Can you imagine if you were to add an additional 10,000, 50,000, $100,000 a year into that portfolio at the same annualized return, and you continue to compound that over decades? What if you're listening to this and you're 25 years old? If you're 25 years old and you can begin this process now, you can begin investing in that way now. In 30 years, you'll be 55. You'll be a young buck. You'll be at halftime. Maybe not even most of us who are listening to this podcast, if you are under 65 years old, are going to live to be 100. Advances in technology, advances in healthcare are going to continue to increase, and a lot of us are going to live into the hundreds, which means we got time. I think about myself 30 years from now and how I'll be 63 years old at the time. This recording I'm 33. 30 years from now is I'll be 63. That's enough time to start an entire new life. My buddy Tom Burns just retired and is starting an entire new business. At 63, he still travels the world and hikes and Spends time with his kids. You got a whole third of your life left. That's really exciting to me to think that I could have that type of net worth, that type of impact, that type of wealth creation without ever doing much. You just have to modestly manage your portfolio and, and ensure that you're making good bets. And we'll talk about those here in a second. $237 million. That really boggled my brain. It's a nice down payment on the Cleveland Indians, whatever they'll be called in 30 years from now. So I started asking a couple of questions. First of all, I started asking, okay, where would you get a 20% return per year? Number two, I started asking, how could I communicate this to somebody who wasn't starting out with a million dollars, somebody who was starting out with a few thousand dollars? What path could we put them on in order to cross the first million but also be investing along the way? So I'm gonna answer that question first, because if you're listening to this podcast and you're on the beginning of your journey, $237 million sure sounds nice. But hey, why don't we get the first hundred thousand or the first million first? My background is helping entrepreneurs build seven figure businesses and doing it in a way that you have a business that you can sell. So my favorite strategy is to start a physical products brand that is built around a specific person. A specific person who buys multiple things. So if you are targeting runners, runners buy supplements and they buy knee sleeves and they buy recovery drinks and they buy shoes and they buy running gear and all kinds of stuff, right? And I like to map out four products that I can sell to one person. And if I can get 25 sales a day at a $30 price point, that's a million dollar business. This was the entire thesis of my book 12 months to 1 million, which has sold over 50,000 copies at the time of this recording. So when you have those four products selling 25 sales a day at a $30 price point, you've got a million dollar business. Now, if you did only that, if that was all that you did, you could then move on to step two in the freedom formula, which is to invest the profits. Step one is build a business. Step two is to invest the profits. That's financial freedom. That's the freedom formula. That is how you build long term wealth. That's how you create the life that you want financially on your own terms. You have to own a business. It can be a part of somebody else's business, that's fine. But you have to have ownership in something. And if you own your own business, it has to be around serving a specific group of people for the long term. And if you do that, you create profit. So that's how you build a million dollar business. That's how you build any business at all, even if it's not a physical products brand. Your path to freedom is to have a very clear person that you're serving and to release products and services that help that person achieve their goals. Oftentimes, when we get on this path for wealth, when we get on this path desiring something different for ourselves, we ask the question, what can I get out of something? How much money can I make? What can I get out of this business? What can I get out of this relationship? And those people fizzle out. And they're usually coming at it from a perspective of scarcity. If somebody has a mentality in which they're worried about money, if somebody is coming at an interaction in which they are trying to get something, it is often based in fear of not getting money in the future. And so the brain is hearing no money, no money, no money, no money over and over again. And when you show up to that negotiation or to that business conversation, conversation in your brain, you are fearing loss of money rather than the creation of something new. And we as human beings intuitively pick that up from one another. Now here's the beauty of this. When we realize that we don't need that much money to start, when we realize we don't need to serve that many people in order to create a million dollar business, when we realize that the path doesn't need to be a long one, and as soon as we get things lined up correctly, we don't have to think in scarcity anymore, we don't have to think in fear. When you think about the fact that when you're in your 60s or your 70s, you could have $100 million if you simply build a business now and you invest the profits in that business for a very long time. If you knew, if you knew in your bones that you would have $100 million or $500 million or whatever amount of money shocks you right now, if you knew that that was going to be in your possession 30 years from now, would you be so worried about this business deal going well? Would you be so concerned about this business venture that you're starting being the right one? Or would you be in a hurry to test new ideas? Would you be in an excited frame of mind? Going through different products and different opportunities in order to sort out which going to be the one. We put so much pressure on ourselves because we expect this next business to be the one. We expect this next thing to be the one that makes us free. We expect this next idea or this next breakthrough to be the thing that makes us a bunch of money. And if it doesn't, then we have the reinforced fear of we're always going to be failures and we're always going to be poor. That is why we stress, it's why we overwork, is why we worry so much about things going south. And that fear becomes self fulfilling because when you are fearful in your decisions, you end up hedging, you end up holding onto your money. It's the Parable of the Talents. I went to school to be a pastor and so I draw a lot of my examples from some of the teachings in the Bible. And Jesus tells the story of the parable of the Talents in the Parable of the Talents. I'll just fast forward to the end. The master rewards his servants who have invested their money and brought a return. They were good stewards of the master's capital. But he's very hard on the one who hid his money, the one who was fearful, the one who got protective of his money, and so he hid the money in the ground. The master in that story is very, very harsh on that person. And it's a story about being a steward of capital.

It's a story about being optimistic, about the dangers of living in fear, the dangers of hedging your bets, the dangers of not managing oneself and not managing the opportunities given to us. And we are all given those opportunities. So when you can flip over into the growth mindset of I'm going to be bullish on myself and on my decisions, you can go in the direction of making the bets and the investments and the businesses that take you to that nine figure wealth. If that's something that you want, or if you just want to be financially free, we can get you there really, really fast. Again, the playbook is simply to build a business and to invest the profits. And we've talked a little bit about what my preferred way of building businesses are because I've seen it be the most predictable, I've seen it to be the most scalable, and I've seen it work for most of the entrepreneurs who have decided to give entrepreneurship a shot. Because you don't need to be super smart in order to identify that one person that you're going to serve and Figure out what four products they buy on a regular basis. Then we just need to market them in a way that gets 25 people a day to buy those products and four products at 25 sales a day at about a $30 price point is a million dollar business. Now check this out. I specialize, I focus on building businesses that you can sell. I took a business from a $600 investment to a valuation of $16 million. I sold that business in 2017. And I love building businesses to sell them. Now I work with clients, hands on. I work with our students in a program called the Capitalism Incubator to help them build the foundation of a seven figure business that they can sell. And we call it the eight figure exit. But what if you didn't have an eight figure exit? What if all you did was sell a business for a million dollars? If you did most things wrong and you got a business to just over a million dollar run rate, if you spent three years building a business and instead of 12 months, it took you 36 months to build a million dollar business, in some cases you can sell that same business for about a million dollars. Now a million dollars.

Used to be a lot of money. It's still a life changing amount for plenty of people. Especially when you factor in the idea, the concept that a million dollars invested at 20% annualized return over 30 years is $237 million. So if we only built a million dollar business, if we only sold that business for a million dollars, could we still change generations? Could we still be the part of our family tree that changed the trajectory of all of our descendants? I happen to believe that our generation, and by our generation I mean people living today, this hundred year period is the last era of scarcity, financial scarcity specifically. If you look at the advances that we have made in the last 50 years and then you project what that is going to mean when Africa gets high speed Internet, when Southeast Asia comes online, when the parts of the world that are mostly untapped, only half the world has Internet today.

Most of the advances that you and I take for granted are unique to us. Most of the world hasn't had them yet. So when you start to project that momentum over the next 50 years, I believe that we will have enough abundance where everyone's basic needs will be set. We will not have scarcity, we'll still have desire, we'll still have new things that we want to pursue. But I think that our generation, people alive today, are the last era in which there will be financial limitations and Specifically, what this means is that you and I are ushering in a new era. We are the ones who have the opportunity to take advantage of all of the advances happening in today's world. And if we get only a few things right, we have the ability to change our family tree. And if we don't, someone who comes after us will. Because there's more and more opportunity coming all of the time. And the opportunity continues to expand, the opportunity continues to get bigger. There's more and more new businesses, there's more and more things to invest in. And because of that, we can either participate in it or we can hold ourselves back from it. Someone in our family tree is going to be the one who creates something and who participates in this great expansion that we're all seeing right now and over the next hundred years. So it might as well be us. It might as well be us so that we have the opportunity to enjoy it while we are still alive, to see how it changes our children and our grandchildren and our neighbors and the people that we care about. So we have the opportunity to usher in that new era because we're part of this very unique time in which is the greatest economic expansion era ever. And after that, what will be after that? It'll be creative pursuits. It'll be defining your own reality, defining your own path. We get to usher that in and we can do that even if we have the modest success of building a $1 million business, selling it, and then investing that over the long term. Now it even be before that, when we're building our business and we're operating our business, when we're taking a portion of those cash flows and we're putting them into other long term assets, they're going to grow and produce passive income, are going to increase. Our net worth are going to continue to compound. We can, we might cross that $1 million net worth even before we sell our business. That's pretty beautiful. My friend Alex Hormozi put out a podcast recently in which he ran the numbers of what does it actually take in order to be in the top 1 to 5% of people in the world. And his calculations were that if you are, if you have a net worth of $2.6 million, you're in the global 1%, you're in the 1% of the entire world. And when you hear that $2.6 million, I mean, we just ran the numbers of what it would take to have $237 million. So if you want to be in the 1%, you only need 1/100th of that. We can get there quickly. We can get there without being a genius. We can get there without getting everything right. We can get there simply by having a business and investing the profits. And if you do that for long enough, you'll hit pay dirt. You'll at least get into the top 10% because most people are not even willing to create something and even fewer people are willing to bet on somebody else and invest their money well. So all we need in order to be in the top 1% is about $2.6 million. If you live in the States and you want to be in the top 1% of the states, it's more like 5 or 6 million. If you look at the world, it's 2ish million dollars. So if you're okay being in the top 1% of the world, our barrier to entry is fairly low. We need to do something well for a few years and invest the profits. And if you do those things, you'll also have built an asset that you can sell for a life changing amount of money and you can continue to invest those money at compounding returns. Isn't this exciting? Isn't this fun? In fact, if all you did was invest $15,000 a year into S&P 500 index funds, which have an annualized rate of return over the last 50 years of about 9.6%, that alone would bring you into the top 1% in the world. You don't even need to have a business to do that. You just need to be able to take about $1,000 a month and put it into asset classes that you're never going to touch. So I'm telling you all this, I'm breaking this down in such detail because I really want you to get that anybody can do this. Anybody can create financial freedom fast. Anybody can get there. Now, most people don't want to wait 30 years. It's why we call this freedom fast lane. Because the fast lane, instead of just taking part of your earnings and put them into long term 9% index funds, is to build a business and to invest the profits that way is much faster. That way we'll get you much bigger numbers much faster so that you can enjoy it and watch the change that it creates in the people around you. So we talked about the business side of this. Let's talk about the investing side of this. How in the world do you get 20% return per year? There's actually several ways. And I do not claim to be an investment guru on this. In fact, I Like to give my standard funny disclaimer where I say I'm an idiot on the Internet who is just figuring this stuff out. So you probably shouldn't listen to a thing that I say. It's all for fun and games and not even educational purposes, mostly entertainment purposes only. But there are a few ways that I like to look for that type of potential without taking on undue risk. The most conservative way, in my opinion, is by buying dividend paying stock. Now, dividend paying stocks only pay 3 to 4% per year in yield. But in certain sectors, in certain companies, they reinvest into raising their dividend every single year. So it may only be 4% the first year, but the next year it's 4.5% and the year after that it's 5% and then it's 6% and 8%. And it continues to go up depending on what happens in the company and depending on what happens in the overall economy. But there are plenty of businesses that have raised their dividend every year for the last 20 or more years. They're called dividend aristocrats. And you may not get a 20% per year return in your first year, but as the dividend goes up, you get there eventually. Now you may not get to 20% dividend yield, but when you factor in the growth of the stock as well, we're getting pretty close. So the most conservative way and the foundation of the strategy that I teach to entrepreneurs is to wait for dividend paying stocks to come down in value to buy ones with attractive yields. And since you bought them at a discount, they're hopefully going to go up over time. So if you run the numbers where a stock is going to go up 9% per year and you're getting a dividend on average of 6 or 7% per year, which you can do, we're now in that 15 to 17% range. Now, we're not going to get that every time, but that's a decent target for us to shoot for. And there's other things that we can layer into there in order to juice up the returns even more. And we talk about this pretty in depth inside of the 1%. But there are things like call writing and naked puts which all can juice up those returns well over 20%. It can get us closer to 30% sometimes. In fact, inside the 1%. When we go through our strategy, our target minimum rate of return is 20% per year. And it starts with the foundational strategy of investing in profitable companies that, that pay a regular dividend. That's going up over time. The second thing that I personally like to do, and this is just me, this is not me necessarily recommending it, but I like to look at famous investors with really good track records. My favorite right now is Cathie Wood. Cathie Wood runs the Ark Investment etf. And basically what she does is she looks at emerging companies that she thinks are going to double over the next five years and. And she very publicly makes bets on them and talks about why. And she's fascinating to listen to. I also like her because she's 65 years old and she's just hitting her prime. Gives me a lot of hope for my future. That's 30 years from now for me. I could hit my peak. I could hit my. My stride at 65 and be just like Cathie Wood, which is totally cool with me. So I like to look at her portfolios and. And the types of businesses that she's investing in, because Kathy says that her minimum rate of return is 15% per year. So I like to look at the stocks in her portfolio and the ones that she's being very, very aggressive on, and then I like to wait for them to pull back. And I kind of guarantee that by selling naked, puts on the stocks that she likes and recommends. If you don't know what that is, we talk about it inside the 1%, but it's basically a way to get paid to wait to buy the stock at the price that you want to pay for it. It's a really cool way to generate income while you're waiting for the stocks to come down at the price that you want to pay. My favorite strategy to invest. So that's the second way, and then the third way is through private investments, or what we call private placements. For example, I run an investment fund, and I know that sounds super fancy to some people, but it basically means that I have a group of individuals who have entrusted some of their money to me, and my job is to invest it in businesses that come from the capitalism.com community. When I see an entrepreneur who has a great idea and I think that I can help and that my team can help support that business, then I want to put my capital there because I can control the growth of that business.

I can build relationships that help that business, and I might not be the majority owner of that business, but if I'm working closely with that founder and I can help them double every year for the next four or five years, that's a really sweet rate of return. And that's Often common with new businesses, businesses that cross that million dollar threshold, I've seen them double for the next five years. They go from 1 million to 2 million to 4 million to 8 million to 16 million. And then it can kind of diminish in returns at that point. But to double every year for four or five years creates an amazing return on investment. And if I can do that a few times, then I can just blast through the 20% target that I want in order to be worth a quarter of a billion dollars in 30 years. Now that's all unique to me, right? Except for buying dividend paying stock and maybe betting on Cathie Wood or Warren Buffett, who I think does average 20% per year over the last 30 years. You might want to fact check me on that. But I think that if you were to just copy Warren Buffet, then it's like it's something like 18 or to 22% per year. Go ahead and Google that one and let me know. But these strategies are somewhat unique to me. I like looking at what famous investors are doing. I like e commerce businesses and Internet businesses. I like working with entrepreneurs and using the capital that I have available to me to help them grow and hopefully grow way more than 20% per year. It's going to be a little bit different for you because your skillset is going to be a little bit different. Your network is going to be a little bit different, your opportunities are going to be a little bit different. But remember, even if you only got this partly right, if you built a business that only did okay, if you built a business and you sold it for less than it was worth, which by the way happened to me, I way undersold on my last business. I sold it at a 16 million dollar valuation. I probably could have gotten at least 25 if I knew what I know now, I could have gotten way more money than I did. But I'm not complaining. We did fine. But if you settle for a number less than what's available to you or less than what's possible for you, if you get scared and you sell your stocks too early, right, you can make all kinds of mistakes. But all you need is to do a few things really well, a few things modestly well, and you can break into that top 1% at the very least, if you do well, you're breaking into the very, very, very rich. And I believe that's possible for you. Now I tell the story about my buddy in Austin, Aubrey Marcus, who started a company called Onnit. Onnit. He Started with, I believe he raised $80,000 from a friend of his in order to finance his inventory. That investor got a good rate of return on his investment because Aubrey took this little startup that was one product and he ended up selling it at in the beginning of 2021 to Unilever for a nine figure amount of money. My friend Moises Ali started a deodorant company with $500 and that, that little deodorant company in two years was acquired by Proctor & Gamble for $100 million. It's called Native Deodorant. Now these are extraordinary stories, right? They're extraordinary, but they're also everywhere. Look at the founder of Bumble, look at Sarah Blakely. Look at all of the companies that are in their infant stages but doing cool things. Look at all the entrepreneurs inside of our community@capitalism.com. listen to the people that we welcome to our yearly event called the Capitalism Conference. There's success stories everywhere and they're no different than you. Sometimes it's just numbers like $1 million times 20% return for 30 years is $237 million. And sometimes it's a little bit of luck. But it's all available to you and I hope after listening to this podcast you get the permission to just go for it because you could lose for the next five years and still have plenty of time to go out and kill it. So you don't need to worry about where the opportunities are going to come from. You don't need to fear what if this decision goes south. You got lots of time and there's lots of opportunity and you sit in the very unique position to usher in an era of abundance for everyone that comes after you. My name is Ryan Daniel Moran. If you want to work together a little bit closer, you can join our community which is called the 1%. This is where we help entrepreneurs build businesses and invest the profits and follow the strategy that we talked about in today's episode. I'd love to see you in there. You can join us@capitalism.com 1. Thanks so much for listening to today's podcast. I'll see you guys in the next one. Take care.

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If you found value in this podcast and you're ready to go Deeper, here are three resources where we can help you. One, you can grab my book 12 months to 1 million on Audible or Amazon. It has over a thousand reviews and it's the playbook to building a seven figure business. Second, you can join our community of entrepreneurs who are following a plan to build a 1% net worth by building businesses and investing the profits. You can get plugged in@capitalism.com 1 and third, if you're looking to go deeper and build a seven figure business that you can sell, you can work closely with us inside the Capitalism incubator and you can get on the waiting list and find out what we do over@capitalism.com inc. That's capitalism.com incident.