How To Make Your Money, Grow It, And Keep It For Life #TheOnePercent

I really live, I really define my lifestyle based on my passive cash flow, which is coming from the things that I purchase from the profits of my businesses. That's really the crux of my regular investment plan. It takes one free person to create change. One percent bold enough to bend the rules, curious enough to chart new territory. This is the show for them. While the other 99 watch their best opportunities, their potential, potential, their health and even their legacy slip away, we are different. We question the system. We create new possibilities, and we pursue the edges of every area of life. My name is Ryan Daniel Moran, and I'm an entrepreneur and an investor. I'm an independent, a father, a skeptic. I'm on a journey just like you. Others may watch us, question us, even blame us and tax us, but we press on in a relentless pursuit of freedom. Freedom. We are the creators of the free world. This is capitalism.com and we are the 1%.

Come on in, everybody. Welcome to the 1%. My name is Ryan Daniel Moran. I am the founder of capitalism.com and as a result, I have worked with some of the most successful people on the planet for many years. And in this episode, what I hope to do is package up and give you what I have learned up until this point in terms of what I think are the three areas of wealth. And that's generating, making money, it's growing your wealth, investing, and that is keeping your money, that's planning it so that you never run out and you don't have to give more than what's necessary to the government because ultimately I think you earned it and you make better decisions with it than any politician or government can. And you should take advantage of of those incentives as long as it doesn't mean that you go to jail. So what I hope to do is package up what I've learned from some of the best in the world. But I want you to know a couple things. First, I am not an accountant. I'm not an attorney. You probably shouldn't listen to a darn thing I have to say. I'm just a student. I'm just curious. I just own a cool domain name on the Internet. I am just a publisher, a very curious student who has benefited from being around some of the smartest and most successful people on the planet. And I have found a few interesting crossovers and I hope to give you those habits and those crossovers specifically on the topics of wealth and money in this episode. Now, I got into this game, I got into this world because I wanted total financial freedom. So that I could live out life on my own terms. And. And that requires money. And for many of us, that drives us to be curious to find weird and interesting ways to make a buck. It's always interesting to hear the stories about how people made their money, isn't it? If you want mine, I share it on other podcasts on capitalism.com specifically freedom, fast lane and Million Dollar Brands. You can find both of them over@Capitalism.com or by searching iTunes or wherever you listen to podcasts. The first area of wealth, of course, is making money. And so it's always an interesting thing and kind of a distracting, shiny object to hang out with other entrepreneurs or business owners or capitalists to discover how they're making money. Whether it was day trading, which was how I first got curious about making money, or real estate investing, or starting Internet businesses or tech companies, we're all fascinated with the ways that other people have made their money, because ultimately we want some, too. What I have discovered is those who are fabulously successful are those who create something in the marketplace. Whether that is writing a book or it is creating a song, or it's creating a product or it's developing an app. It's those who create something new. Because unique value is ultimately what people pay for, and unique value is ultimately unique. I work with a lot of entrepreneurs who are physical product owners, for example, and those who are really successful have some sort of a unique position in the marketplace. Whether they're first to market, or they've got the first head start on a new marketing strategy, or they're the first to bring a mark, a product to the market in a very specific way. That unique value is ultimately where those individuals get rich. There's a lot of temptation for other companies or other business owners to copy exactly what that entrepreneur did. And some people can be successful as a result of doing that. But by copying or modeling what somebody else has done, there's already a diminishing value to that because there's not a new creation of value. There's just a copying of value. Now, there's something to be said about going into new distribution models or new channels where there are customers or areas for expansion and there's money to be made there. But when we are taking advantage of somebody else's value, or we are hoping that the same model that worked for someone else can work for us, we're no longer creating value. We are simply picking up what's left over. There's plenty of scraps to be picked up, but ultimately the most Money is made by those who create. Creating value can also mean taking systems and applying them to places where there are no systems. For example, I have a friend who buys a lot of businesses and he has systems that have been shown to improve the profitability of those businesses. So the creation for him is not in the invention of a product or even the creation of a new business. It's simply the creation of systems that get applied to a business that did not have them. And as a result customers are served and they spend more money. I think one of the mistakes that capitalists and entrepreneurs make is that they forget that behind every purchase there is a person. And so we get kind of obsessed with systems or models or tools that can make money or make us rich while forgetting that people are subjective, people are selfish. People make decisions based on their own self interest and that we ultimately become rich by creating value for those people, for those individuals. So the first area of wealth is making money. And those who have been the most successful are those who create something. In order to do that we have to know what our unique value is. We have to know what unique skill or unique benefit to someone else we have that we're distributing to the marketplace and to amplify that. Now some people are not that, but they partner with the person who is. For example, I'm the crazy creative one and I'm worthless without being around people who can take that creativity and put it into the marketplace. Their creation of value is the distribution of whatever I invent. And so different personalities have to work together in order to bring that uniqueness to the marketplace. And and all parties aligned are what create that wealth. So money is made in the distribution and the creation of new and unique value. That's been my experience working with some of the most successful people on the planet. The second stage is expanding and growing our wealth. And that comes from investing and investing for the long term. I ultimately have a fairly simple strategy that has worked for me and of course this is just what I follow. I'm not recommending this as the end all for all individuals, but I take 10% of my take home pay every single month and I put that into long term wealth accumulating assets. My favorite is dividend paying stock when it comes to the market. Please show me a model. If there is one that outperforms Dividend Aristocrats that's worth a Google. If you're not familiar, Dividend Aristocrats are essentially businesses that have increased their dividend for at least 10 years and they increase it every year. Whether profits are going up or down, those long term increasing dividends have really substantial returns over time because there's several different ways that they compound. They compound in the amount of the dividend and if you're reinvesting the dividend into more stock, then you're compounding the number of shares that you own as well. That double compounding effect was I run the numbers beats the pants off of every other model that I have seen. So I put a portion of my money into long term dividend paying stock that I don't ever plan to touch. I track them on my phone, but I'm very rarely buying and selling unless there's a company that has a really big run and I want to maximize some of those gains. But for the most part that asset class is where I'm putting a portion of my portfolio. At the end of every quarter or at the end of every year, I take a distribution from the profits of my companies and that's where I buy more cash flowing assets. That would be real estate, it would be investing into private placements and funds, it would be buying into other businesses, it would be investing into one of my secret and very little known and under celebrated asset classes which is buying cash producing websites. We'll talk about all of these different strategies throughout the show, but every quarter or every year I take that distribution and I'm buying something that's going to cash flow, something that's going to give me passive income and that's ultimately what I live off of. I do take a very small salary from my businesses and I put a percentage of that into dividend paying stock. But I really live, I really define my lifestyle based on my passive cash flow which is coming from the things that I purchase from the profits of my businesses. That's really the crux of my regular investment plan.

Hey, a quick note for you Amazon sellers and brands who want to be on Amazon and haven't made it a priority yet. I am often asked about changes with reviews or changes with Amazon terms of service or changes with what's working with ranking and all of that kind of jazz.

And I'm proud that I have partnered.

With one of our backroom members. His name is Jeff. He runs an agency that specializes specifically in optimizing your Amazon presence. So if you're a brand that is neglecting Amazon and you've heard me talking about it and you're like we know we got to get this together, or if you're an Amazon seller and you know you need to turn your attention to Audience building and funnels and the stuff that is really gonna grow your company. I would recommend that you give a quick shout to my boy Jeff at Turnkey Product management. They're@TurnKeyProductManagement.com and as I said, they're in the back room. They work with my team and the rest of the big companies and equity groups that are involved in our little circle. And they're usually ahead of everybody else in terms of what's working, what's compliant, what review strategies are cool and kosher and are actually effective. And they're not out there hawking a bunch of info products, they're out there actually doing it. So they're an implementation agency that just handles it for people and they run their own businesses, some of which they have built and sold, kind of like yours truly. So I feel really good about partnering with them and recommending the big companies and the brands that I work with to outsource their Amazon management over to Jeff and his team. So if you're looking to add some automation into your arsenal, I would recommend the good folks@TurnKeyProductManagement.com and Jeff and I are on speed dial with each other and are collaborating on what's working. So you're always getting what's the latest and greatest in the Amazon world. So contact those guys if you're looking to outsource automate and optimize your Amazon presence@TurnkeyProductManagement.com.

Now there's a couple things that I have shored up, a couple things that I have in place in order to maximize my total investment portfolio. For example, I have a one time setup of something that I call a capital warehouse. I use a company called Wealthpoint. They're@wealthpoint.com they often sponsor the show and I let them sponsor the show because I work with them personally. And the company essentially sets up a life insurance plan that exists to be tied to the market. So it goes up in value, but it never goes down in value. So I have a pretty substantial plan that if anything happens to me, my little girl is going to get a big old payday. That's my life insurance policy. But the real value of that policy is that it's tied to the market and it's going up in value, hopefully over time, but it can't go down. So if there's a crash, I'm not losing any of the value of that asset. The second benefit is it's kind of like another bank account. I can just throw money in There it will grow along with the market. I can keep throwing money into it and access it. I can pull it out of that policy whenever I want, just like a bank. But it'll keep going up in value and it grows tax free. The other benefit there is I can borrow against it. So in the event that an apartment building comes up or I have a website I want to buy, or I want to invest into a business, then I can borrow against the value of my life insurance and go buy that other asset and both assets will continue to perform. I've done a couple episodes with Sam because his model is really interesting. Sam is the founder of wealthpoint. He's also my rep on this policy. He has a really, really interesting model and I keep that as a piece of my portfolio. So just to quickly recap, I make my money in business, which is by creating things in the marketplace, creating content, creating products, creating businesses, creating systems, creating new areas of distribution, creating unique value for unique people. That's business 101. Number two, I have a percentage of my income going into dividend paying stock and the profits of my business are going into other areas that will give me passive cash flow. Real estate, private placements, websites, funds, things that I can expand my lifestyle on because they're performing really well and paying me passive checks every single month. I also keep a life insurance policy that will continue to be tied to the market so it will perform. If the market performs, it won't go down in value and I can borrow against it to buy additional assets when the time is right. If the economy goes off a cliff, I don't lose any of my value, but I have access to buy other assets as they go down in value. And that's the position that I want to be in. I am in a heavy cash position right now and I have that life insurance policy because I want to be very liquid right now. In the event of a crash, I want to buy up everything. If there is another crash, and in my opinion we're overdue, doesn't mean it's going to happen anytime soon. But ultimately it's going to happen again and I want to be in the position to buy up everything when that happens. Now let's talk about keeping it. Let's talk about keeping as much in your pocket as possible because you do better things with it than the government can. And there are things that you can do that are legal, ethical that allow you to park cash in a tax free way or maximize your write offs. And again, oh my goodness, please. How can I stress this enough. I am only a student. I know nothing about the legal or accounting side of this. I'm just sharing with you what I have learned over the years. The first thing that we obviously have to do is maximize our write offs. And most of the time we do that through business. Obviously we want to run as many legitimate expenses through our business as possible so that if something can be written off and we don't have to pay tax on it, we will. That's one of the benefits of being a business owner. But there are other purchases that can, especially right now, serve as expenses which can really benefit us. So for example, as of right now, under the fairly new tax law, there are. Again, I am only sharing what I know. Please check with someone smarter than me on all of these rules. But there are provisions for equipment. Equipment can be things like SUVs, so if you want to go buy a fancy vehicle, you can write the thing off under the new tax bill. Equipment in some cases could be websites which can also cash flow. We'll talk about that on some upcoming episodes. Equipment can be investments in your company that previously were not able to be written off. These are the types of things that can save you a tremendous amount on your taxes, but increase your lifestyle or even increase the amount of money that you take home. For example, I think buying a website as equipment, if that makes money, oh my goodness, to buy an asset and have it be a write off and it produce cash flow, that's absolutely crazy. What a cool thing that we can do. Now of course these are available to everyone, but as somebody who cares about this stuff, it's something that we 1 percenters tend to practice more than others. There are other certain entities and structures where we can either grow our wealth or we can invest our wealth or at least reserve some of our wealth so that it grows or sits tax free. My opinion is that the government usually finds their way to get their money. But if it's possible, I think the best time to pay taxes is later. Always later. Because if we can defer taxes, then we can buy more depreciable assets later. For example, real estate depreciates, right? And real estate depreciates at a fixed rate and an increased rate since the new tax bill. So we can save more in taxes if we own more real estate. So if we defer more taxes, it means later we can purchase more real estate and ultimately keep that money rather than give it to the government. So I'm of a different opinion than most people when it comes to things like IRAs, I believe in traditional IRAs rather than Roth IRAs. Roth IRAs, you pay the tax now, but it grows tax free. I'm a proponent of traditional IRAs where you get the write off now, but you pay tax on the earnings because that means I pay the tax later. So I can use the money that I've kept to buy more assets that will give me more write offs so that I can limit the amount that I will pay the government. There are also other entities I mentioned before the life insurance policies that grows tax free and I can borrow against it so my wealth will grow and I can borrow against it to go buy more depreciating assets so my wealth grows tax free. I increase my cash flow by buying more assets and I'm hopefully going to buy something that depreciates so I keep more of it in my pocket. There's also something called captive insurance. Captive insurance is a way to insure your own business and invest the money that you insure into other asset classes. Now we're going to get a little technical here, if you are not familiar with this, but a captive insurance plan is a separate entity that you would own that insures your other businesses, but the money that comes into that entity is not taxed in the traditional way and you can use that money to buy again other assets and that can grow at a tax favorable rate. Now this is a more advanced strategy and there are individuals more qualified than me to be able to discuss this, but I have peers who save hundreds of thousands of dollars a year just by installing a legitimate captive insurance plan into their overall portfolio. These are all strategies that we'll dive into deeper here on the podcast. There are also different ways that you can set up entities, trusts, corporations, and to essentially create a flow of businesses that maximize the different write offs for each. And we'll dive into these topics with subject matter experts who can dive into the specifics here on the podcast. We'll also be going into exploring different ways of making money and investing the money, as well as different ways to keep more of it in your pocket. My expertise has always been working with entrepreneurs on both creating the wealth and growing the wealth through investing. I am recently much more interested in keeping as much of it as possible because I'm making more money than I have ever made in my entire life. So I will continue to document those journeys. We also talk about these at our live events and our workshops, which are usually here in Texas. We do an event each year called the Capitalism Conference where we talk about these subjects in depth and we do more intimate workshops where we create custom plans or give you the tools and the abilities to be able to start doing this. We also talk about these inside of my group called the Back Room, where we open up some of these opportunities and we open up my personal Rolodex so that people who make these things happen are in your Rolodex as well. We'll continue to dive into these topics, but I wanted to give you a taste of the overall strategy of making money, growing it over the long term and keeping as much of it as possible because it will serve as the foundation for everything that we talk about here on the 1%. And what we'll do with that money is we'll continue to explore and pursue other areas of life like the edges of health and fitness, the edges of expansion, the edges of relationships, and will ask questions that only one presenters tend to ask. I believe that capitalists and entrepreneurs create the change we want to see in this world and that you do more good for the world than the other 99. Thank you for being a part of this movement. Keep on changing the world.

If you've been listening to the last few episodes of the show where we featured entrepreneurs who have crossed the seven figure mark and are on their way to eight figures, then you undoubtedly have heard us talk about the Back room. The Backroom is a group mentoring program where we cast the vision for getting to $10 million a year and beyond and being ready to sell your company because ultimately that's where the big payday is going to come from. We also open up investment opportunities so that you can put your profits into places that give you more wealth and potentially more cash flow or even help you save on taxes. We have some pretty cool places where we put cash that give you sometimes all three. Plus you're in a room with people who are the best in the world at what they do. We bring in my team of advisors that help people get into retail. They help people clean up their systems, they help people clean up their books, they even help them reposition their companies so that they can be sold for more money. We also talk about what's working right now on Amazon and on other channels. But the focus of the group is on casting the vision to get to eight figures and beyond and clearing all bottlenecks that stand in your way while also opening up other opportunities for you to enjoy a life of freedom. Because that's what we're after here. We're not just after this to work hard and work 16 hours a day. We're doing this so that we can have freedom and we get freedom by making enough money so that we can invest into places that allow us to never have to work again and then building empires with people that we love doing business with. And that's what we're doing inside of the back room. And I could also tell you that we're looking to buy and buy into some of our students businesses through something else that we're doing pretty cool in the back room. But I will save that for another day because that is still in process. But if you have an idea that you're not sure how to bring to the marketplace, if you've got an audience that you know could be the fertile ground for a really profitable seven figure physical products brand, or if you're selling enough product to be able to say, you know, I could step on the gas here if you've got that million in sight, or you're beyond the million and you know that it's time to accelerate the process to get to that eight figure mark. Because you're playing the review game, you're playing price wars. You're tired of sacrificing profit margins. You're working way too long for too little result and you want to clear those bottlenecks so that you can grow faster and have a sellable company. So one day you can have that ideal freedom lifestyle. We can help you inside of the back room. It's one of the more expensive things that we do. It's also the highest ROI thing that we do. So it is application only. You need to be ready for it and you need to be ready to move when you join. So you can go to freedomfastlane.com, click on backroom and see the application, see all the pricing details from there. Working with me one on one starts at about $100,000. Joining the back room is a little bit less than that. So just know going into it that it's a serious investment and it is only for people who either have funding, have sales and are ready to go once they join. So if that's you, go over to freedomfastlane.com, click on the back room and you'll see the application and full details there.