YouTube Channel: @RyanDanielMoran

How much money do you really need in order to be financially free? When I'm working with entrepreneurs, one on one, one of the first things that I ask them is, how much money do you want to make from this? Or how much money do you really need in order for this to be a win? And the answers to that question are always very interesting because there's two modes to most entrepreneurial brains. There is the mode of I need to make enough money in order to be free. And then there is the projects that I want to pursue that I want to be really big, but I'll do later once I have enough money. These are two very different modes. And I've discovered that when the entrepreneur starts operating from this place of I want to build this thing, I'm good, I have enough money for me to go build the thing that I really want to, they end up making more money because they're not playing scared anymore, they're not playing hedged. They're pursuing something rather than trying to avoid working or avoid losing money. When you're no longer playing to avoid losing money, and now you're playing to win at something, you're a better entrepreneur. You think longer term, you do the things that you really want to do. You're more energized in your business. You're running faster, you're building relationships, you're doing the things that you should be doing as an entrepreneur. So the obvious question is, how much money do you need to make? And what do you need to do in order to switch from the I gotta get money mode to the I'm gonna create something great mode? The answer to that question might surprise you, because in many cases, it's less than you think.

So to answer this question, let's break down some numbers. First of all, what do you think you need to have in terms of net wor in order to be in the top 10% of America? Now, this isn't the world. This isn't a trick question. Like, if you live in America and you have a roof over your head, you're already in the top 1%. Hopefully you already know that if you don't, if you live in America and you have a roof over your head, you're already in the top 1%. To be in the top 1% in the world, you need to make about $30,000 a year. So, congratulations, you're probably already rich. But to be in the top 1% in America, what does your net worth need to be? And that includes houses, cars, the value of your business? Well, to be in the top 10% of Americans, you need to have a net worth of about $1 million. So if you've got a net worth of a million dollars, including all of your assets, even if you sold everything that you had, including your business, and you had a million dollars, you're in the top 10% of people. What about the top 5% of people? If you want to be in the top 5% of people, you need to have a net worth of about $2 million. In order to be in the top 2%, it needs to be about $5 million. And in order to be in the top 1% of people, it's somewhere between 5 and $10 million, depending on who you ask. Well, in my experience, if you're in the top 1 or 2% of Americans, then you've got enough to start playing aggressive. You've made it in terms of not having to worry about money. If you walk into a room of 50 average Americans, you're probably the richest person in the room if you've got about $5 million. So if we set $5 million as the target for net worth in order for you to be in the position to be able to sprint towards the vision you actually want, then we can start building toward a $5 million net worth. Now, of course, do you really need to have $5 million in order to start creating the businesses that you want? No. But if you follow the same plan to get to $5 million, you'll find that you achieve financial freedom very quickly, and I mean within a couple of years. And then you can switch your focus to playing more aggressively and building the types of dreams and visions that you actually want. Full disclosure, though, if you can make the switch now, even before you're following the predictable plan to having a $5 million net worth, you'll make the kind of money that you want to make and build the types of businesses that you want to build even faster. But most people need to feel like they're on some sort of financial plan until they really feel financially secure enough to start taking strategic risks that you need to take in order to be a really successful entrepreneur. So what does it take in order for you to have a net worth of $5 million? There are really two plans to get there. The first plan, anyone can do. Anyone. Yeah. You're working an office job. Yeah. You can be worth $5 million. You're just starting out in your journey. You're in college right now. Yeah. Guess what? You can be worth $5 million. The plan is real simple. You need to save about $15,000 a year and put it into long term assets that produce between 9 and 14% per year on average. That's about the average of the S&P 500 over the last 50 years. Over the last 10 years, the average returns of the S&P 500 have been higher than that. They've been more like 15%. So if you're getting anywhere between 9 and 14% and you're putting in $15,000 a year, you'll be worth about $5 million in about 30 years. So if that was all you did, if you want to be set up for retirement, if you want to have a time towards the second half of your life in which you have no financial concerns, simply save $15,000 a year into somewhat conservative investments and do that for a long enough time. Now, of course, that assumes that you don't buy dogecoin, or you don't put your money into crypto, or you don't win the lottery. You don't have one of your investments double next year. That's assuming you get a very conservative return over the next 30 years. And that's option one. And option one works. It works for everybody. It only has one problem, and that's that it takes 30 years. Who wants to wait 30 years to be rich? So. So if you're the type of person that wants to save about like maybe 25 years, then there's a second path that will get you to that target $5 million net worth. And it's this. It's build a business first and then invest the profits. Build a business and take the profits from that business and invest it in the same exact way into long term things that are going to compound over the next several decades. The only difference is you'll be making more cash and you'll be able to put more in there, which means you'll have your financial nut taken care of. And that sets you free to be able to take bigger swings for the fences, build bigger businesses, take bigger risks, and be more aggressive in building the type of business that you want. So the only difference in these two options is that if you want to go faster, build a business first and then invest the profits. And in order to build a business, you really just need something to sell. Either your own product or somebody else's product. And your own product, that is physical products, which is a lot of the stuff that I talk about with my students and clients. It can be a digital product, it can be a YouTube channel where you're selling advertising, which is what all the cool kids are doing these days. You can sell art as an nft. You can sell, sell your time on the side to clients and have a few thousand dollars extra per month and simply put that into long term investments. You just need to have something of your own to sell. And if you're selling somebody else's product, that's affiliate marketing, that is selling ads on a podcast, that is being part of a multi level marketing company, or that is having a side job in sales where you're getting commissions for selling things for those companies, all of these will work. But you don't get rich simply trading your time for dollars. You need to own something or at least have a stake in which you're rewarded for your own performance. Take the profits from that and put it into long term assets that compound over time. Now, here's the kicker to all of this. We're assuming that as you're investing the profits, you're getting very conservative returns. But what if you were a little bit more aggressive with your strategy? What if you were putting money into crypto and you expect for it to go up 30% or 50% per year? What if you were to do some of the investing strategies that we talk about here on the channel inside of our membership called the 1%, where we're putting a minimum target investment of 20% per year. What if you're a little bit more aggressive in the way that you do things and you're also having a business that is producing $50,000 a year in extra cash for you to invest? Let's run those numbers. If you made an extra $50,000 a year from your side thing and you were getting 25% return on your money, that over 15 years is almost $7 million. So you shaved off half the time and you've actually got more net worth than had you done it the slow way over 30 years? Of course, 15 years is still longer than most people would like, but in my experience, once you get the side thing going, it becomes 50,000 and 75,000, then 100,000 and it continues to grow. And eventually after three to five years, it's making enough cash flow to support your lifestyle style and to allow you to invest the profits. And that's when you have the permission to start swinging for the fences and going for bigger entrepreneurial ideas. The real pivot point for you to make is when you can comfortably be in a position to really pursue something that is a vision for you. That's when you're an entrepreneur. An entrepreneur is somebody who has a vision for something and they're sprinting towards that vision. Most people think entrepreneurship is just not having to work for somebody else. But then that would include people who deliver for Postmates or drive for Uber. And by the way, hats off to all you people who are hustling on the side, driving for Uber and delivering for Postmates. Please take that money and put it into investments. Because over the next several years you could become a millionaire. And that sets you free to be able to do the things that allow you to create the change that you want to see in the world. Real entrepreneurs have the willingness to take a risk in order to create something that's bigger than themselves. And the way you give yourself permission to do that is to have enough cash flow or enough net worth to support you in the event of things not working out. And that simply requires you to build a business or have something on the side, invest the profits. If you'd like some help doing either of those. We help entrepreneurs get on the path to building a 1% net worth and we help them do that by building a business and investing the profits. We help them build a business by going through three stages. We call it the grind, the growth and the gold. The grind is getting clear on your product idea, getting your initial sales, getting. Getting clear about what it is that you're trying to do. The growth is growing your sales, it's growing that business, it's getting more awareness, it's increasing the profit of your business. And then the gold is the investing part of that where we're helping people build passive income portfolios and being able to grow something that builds into real net worth over time. That's our process for helping people join the 1%, that top 1% of net worth earners in the world. If you want to be a part of our community that helps people do that, you can join the 1% over at capitalism.com1. Hey, thanks for watching this video. I'm curious, what do you have on the side that if you invested in for long enough, would make you a millionaire? Are you driving for Uber? Are you flipping shoes and sneakers? Are you selling NFTs? Are you delivering for Postmates? Because I'll tell you, 15 grand a year extra invested conservatively makes you one of the richest people in the world over time. I really believe anybody can do it. The only difference is if you want to go faster, build a business first and then invest the profits. Thanks for watching this video. If you found value in it, please let me know in the comments. I'LL see you on the next one.