ALL OF WEALTH BUILDING Explained in 42 Minutes (No BS, No Fluff)

There's a great line from Warren Buffett that goes like this: someone's sitting in the shade today because someone planted a tree a long time ago. It describes exactly what wealth is. Wealth is what you own that pays you after you stop working.

You have to own assets that make you money while you sleep, that grow while you sleep.

So your paycheck, that's income. Your shares, your business, and your investments, that's wealth.

The rich don't work for money. So we learn to use debt to create assets, and assets keep putting money in our pocket.

You can earn a big income for 40 years and still have nothing left over and end up deep in debt.

You know, the idea of having a job and waiting for your 401 to save you, I think you're going to be sadly disappointed.

The Federal Reserve surveyed Americans in 2024 and found that 37% of adults couldn't pay a surprise $400 bill if it came up. They borrow it, put on a credit card, sell something, or they couldn't pay it at all. Let's make sure that's not you. Now, when I was in high school, the yearbook asked me what I'd like to be in 10 years, and I wrote VP at a bank because I liked making money and nobody around me talked about starting a business. Then at 19, I turned down a 6-figure path in investment banking to make $300 a month and 30% of a software startup in equity. I ate bean salad for lunch every day. I told my friends I was too busy to go out because $20 was too much of an expense for me. I got so embarrassed that I told my partner that I quit. That That night I couldn't sleep and I just stayed up thinking about how Bill Gates grew Microsoft through partnerships. I went back to my partner the next day, we switched to partnerships, and I closed my first deal shortly after for $13,500. I thought I was rich. At 22, we sold that company for 7 figures. I thought being a VP at a bank was a path to wealth and only luckily stumbled into entrepreneurship. So I wanted to make this video because nobody ever taught me how money actually grows. School taught me how to get a job and never taught me the difference between earning money and keeping it, or how a small amount of money can turn into a large amount if you leave it alone long enough. I had to learn all of it the hard way, mostly by studying people who had already done it. So if you learn how wealth actually gets built, you can stop trading every hour for a paycheck and start building something that actually pays you and your family for decades. Working harder alone won't get you there because there are only so many hours you can sell. And there are 10 rules of wealth building that are never taught in school, and I'm going to cover them today. If you've been here before, drop a hashtag #Believe in the comments below so I can feature you here in a future video. And if you're new, welcome to Believe Nation, the only channel that helps you believe in yourself daily, one video at a time. Believe. Number 1, spend less than you earn. Spending less than you earn creates the gap that you need to actually build wealth. That gap between your income and your expenses is the only money you can use to invest, to grow a business, to buy assets. If your income goes up but your spending goes up with With it, you won't get any richer. You don't want to let your lifestyle cost more just because you make more money. Warren Buffett is the best example of this rule. Even though his net worth is over $100 billion, he still lives in the same house in Omaha, Nebraska that he bought in 1958 for $31,500. He also eats a cheap McDonald's breakfast on his drive to work every morning. He didn't let his living costs rise to match his massive income. He kept his expenses low and uses extra cash to buy more businesses and stocks. Number 2, pay yourself first. Paying yourself first means moving money into savings and investments the exact moment that you get paid. You do this before you pay your rent, buy groceries, or spend money on fun. Most people do the exact opposite. They pay their landlord, the phone company, the restaurants first, then they try to save whatever is left over at the end of the month. The problem is that there's usually nothing left over at the end of the month. If you take 10% or 20% right off the top, you force yourself to build your wealth and figure out how to live on the rest of the money. So comedian Jay Leno is a famous, pretty extreme example Of this rule, when he started hosting The Tonight Show, his television salary eventually grew to $30 million a year. But he also still performed live stand-up comedy shows, and instead of spending his massive TV paycheck, he banked the entire Today Show salary. He didn't touch it. He lived completely off the smaller income he made from doing stand-up gigs. By saving his biggest paycheck before doing anything else, he built a massive net worth. Number three: Build an emergency fund. So save up three to six months of essentials living expenses. This cash protects. you from going into debt when unexpected costs pop up. Life will always throw surprise expenses at you. A broken car, a medical bill, sudden job loss. If you don't have cash saved up, you're forced to use credit cards or take out loans. That puts you in debt and ruins your wealth-building plan. So to figure out your number, add up your absolute basic survival costs for 1 month. That's your rent, that's your groceries, that's bills that you've got. That skips vacations and eating out. Multiply that number by 3 to 6 and keep that in a safe bank account. Bill Gates is a perfect example of how this rule works. When he was building Microsoft, he created a strict rule for his bank account. He insisted on always keeping enough cash on hand to cover the entire company's payroll for a full year, even if they didn't make a single dollar in sales. Having that massive safety net gave him total peace of mind to build the business. He didn't have to panic when bad things happened, and he could make smart long-term decisions instead of desperate short-term ones. You can apply this exact same strategy to your business and your personal life. Rule number four: Invest early and consistently. Investing early and consistently uses a mathematical trick called compound interest. Compound interest means you earn money on your original savings, and then you earn even more money on the interest that those savings already made. Because of this snowball effect, time is actually more important than the amount of money that you put in. You don't need to start with a massive amount of money because a small amount saved in your twenties will grow into a much bigger pile than a huge amount saved in your forties. Ronald. Warren Buffett is one of the best examples of this rule. He worked as a gas station attendant and a janitor at a JCPenney store in Vermont. He didn't make a big salary, but he started buying stocks in companies that he understood, like Johnson& Johnson and Procter& Gamble, and he held onto them for decades. He reinvested the dividend payments that he received back into buying more stock. And when he died at age 92 in 2014, everyone in this town was shocked to find out he had built a fortune of $8 million. His secret was pretty simple. He just bought small amounts consistently. Consistently over a very long period of time. Also, if you want to take real action after this video, I made a free worksheet just for you. It has the top lessons from this video, space for your own takeaways, and a simple action plan that you can start on today. Click the link in the description below and grab it now. Number 5, wipe out bad debt. Bad debt is any money you borrow that charges high interest, like credit cards, payday loans. When you carry a balance, the math works against you pretty hard. The bank charges you compound interest on your purchases, so you can't Outinvest a 24% credit card fee with a 10% stock market return. You have to kill the bad debt first. If you don't, the banks will get rich while you stay broke. Billionaire Mark Cuban is a great example of someone who teaches this rule. So before he started his first successful company, he was broke. He was sleeping on the floor, struggling with his own bills. He quickly realized that the high interest rates were trapping him. So today he tells everyone that cutting up your credit cards and paying off the balance is the absolute best investment you can make. He points out that if you pay off a card that charges you 18%. 18% interest, you just earned a guaranteed 18% return on your money. You will never find a guaranteed return that high anywhere else. Rule number 6, stop lifestyle creep. So lifestyle creep happens when you start making more money and you immediately buy a nicer car, move into a bigger house, or buy expensive clothes. Instead of building wealth, you're just adding to your bills. When your business brings in extra cash, you shouldn't let your lifestyle get more expensive. If you keep your daily living costs exactly the same, you can pour all that new profit directly into your investments. Sam Walton, the founder of Walmart, is a perfect example of fighting lifestyle creep. Even after he became one of the richest men in America, he completely refused to upgrade his life. He didn't buy the fancy sports cars or the mega yachts. He kept driving his old 1979 Ford F-150 pickup truck to work every single day. He knew that buying flashy things wouldn't make his business grow, and by keeping his personal expenses incredibly low, he kept his wealth focused on building his empire. Rule number 7, take free money. An employer match is when your company puts money into your retirement account every time you do. If your company offers a 5% match, and you invest 5% of your paycheck, they add another 5% for free. That instantly doubles your investment before the stock market even does anything. If you don't take the match, you are literally refusing part of your salary. It's the only guaranteed 100% return you'll ever get on your money. Personal finance expert Ramit Sethi says getting your full employer match is the absolute first step to building a wealthy life. He points out that the average worker misses out on $1,000 to $1,500 every single year in unclaimed matching funds. He teaches that you shouldn't worry about other investments until you hit that match completely. Once you secure that free money, then you can focus on building the rest of your portfolio. Rule number 8, 8, give every dollar a job. Giving every dollar a job means you don't leave any money sitting around without a purpose. So if you make $4,000 a month, you write down exactly where all $4,000 will go before the month even begins. You assign it to rent and food and paying off debt and investing until you have exactly $0 left. This is called zero-based budget. If you leave money in your checking account without a specific job, you'll just spend it on random things that you don't actually need. Personal finance expert Dave Ramsey is one of the most famous teachers of this exact rule. He built a massive business teaching people how to get out of debt and build wealth using a zero-based budget. He tells his listeners that if they don't tell their money what to do, they'll always wonder where it went. He even created a popular tool called the EveryDollar app just to help people give every specific penny a specific job before the month starts. Rule number 9, build multiple income streams. So relying on just one paycheck can be dangerous. If you lose your job or your business, your income drops to zero instantly. Wealthy people don't rely on a single source of cash. They build multiple streams of income so that if one stream dries up, the others keep the money flowing in. Now you can start small by taking on freelance work or starting a side hustle or buying stocks that pay out cash dividends to you. Arnold Schwarzenegger is a perfect example of this rule. Most people think he got rich just from acting in his movies, but long Long before he was a Hollywood star, he built several different income streams. When he first moved to America, he started a bricklaying business with his bodybuilder friends. He also ran a mail-order business selling fitness booklets. Then he took the profits from those side hustles and bought apartment buildings. By the time he landed his first big movie role, he was already a millionaire from his real estate and small businesses. And rule number 10, automate your finances. Automating your finances means setting up your bank account so your money moves without you touching it. On the exact day that you get paid, your bank automatically sends a portion of your money straight into your savings and investment accounts. If you don't see the money in your checking account, you won't be tempted to spend it. You don't have to remember to save and you don't need any specific willpower. It just happens automatically in the background. Basketball legend Shaquille O'Neal is a great example of this rule. He got his first $1 million endorsement check when he was 20 years old, right before he started playing in the NBA. He He spent the entire amount in less than an hour. Here's exactly what he bought with that million dollars. So he got a black Mercedes-Benz for himself for $150K. He got a matching black Mercedes-Benz for his father for $150K. He bought a smaller Mercedes-Benz for his mother. He bought expensive jewelry, earrings, and an Alpine car stereo. He bought custom tailored suits for the NBA draft. He didn't realize that taxes take a massive chunk out of your pay. So his $1 million check was actually closer to $600,000 after taxes because he didn't budget for taxes. He actually ended up $80,000 in debt that day. His bank manager had to call him and warn him that he was going to go broke if he kept spending like that. That phone call changed his life and forced him to learn how to manage his money. Shaq completely changed up his system. He set up a strict rule to automatically lock up 75% of his income. His team immediately moves that money into investments and savings before Shaq can even look at it. He lives completely off the remaining 25%. By automating the process, he removed the temptation to spend and built a massive net worth. Start building your wealth today. So it's easy to look at wealthy people and think that they were just born to be rich. But remember that wealth gets built by following a few simple rules for a long time, and anyone can follow them starting from wherever you are. So spend less than you earn, pay yourself first, build an emergency fund, invest early and consistently, wipe out your bad debt, stop lifestyle Take free money, give every dollar a job, build your multiple streams of income, and automate your finances. Those are the rules of wealth building that school never taught you, and now you know them too. You know when the best time to start is? Right now. So pick one rule and start it this week, because every year you wait is a year that your money isn't growing for you and your family. And congratulations, you're one video closer to who you're meant to be. Believe. Now let's meet the young billionaires getting rich off of AI. 3 22-year-olds became billionaires by paying doctors and lawyers to grade AI answers for OpenAI and Anthropic. The money is going to whoever spots what AI still gets wrong and sells the fix to the people building it. The Federal Reserve reported that AI adoption still at only 18% of American firms at the end of 2025. So more than 8 out of every 10 companies around you still haven't really implemented it, and their customers are sitting there waiting for someone who has. So here's how the young billionaires get rich off AI actually did it, and none of them invented a chatbot. Brendan Foody runs a company called Merkur with 2 friends he met on his high school debate team, and all 3 of them are worth about $2.2 billion each. It started with something they heard in a meeting with OpenAI. Foody, Adarsh Harmath, and Surya Mitta grew up in the Bay Area and competed together on the speech and debate team at Bellarmine College Preparatory. In 2023, they started a company and dropped out of college to run it. The first version was nothing to do with artificial intelligence. At a hackathon in São Paulo, they built a way to match skilled engineers overseas with American companies that needed them. They handled all the paperwork and the payments, and they took a small cut off every deal they made. It was a recruiting business. It was boring on purpose. They took meetings with OpenAI and xAI, and they heard the same problem twice. The labs had all the computing power money could buy and all the internet internet text there was to read. What they didn't have was people who could tell them whether an answer that AI gave was actually any good. If a model, an LLM, writes a contract, you need a lawyer to say where it's wrong. If it writes code, you need an engineer to catch if there's a security hole. If it gives medical advice, you need a doctor to make sure that it was correct. So they pointed their recruiting business at that. Mercur hires real doctors, lawyers, investment bankers, and engineers to grade what the LLM LMS produce. The expert they hire marks the output and then writes the scoring guide that the lab uses to grade the next 10,000 answers. Mercore finds those people, runs the workflow, handles all the payments in dozens of countries, and charges their fee on top of that. There's no breakthrough algorithm in any of this. They found out that a lab with billions of dollars of computers was short on cardiologists, and then they went and they hired them for that. The experts get paid $75 to $150 an hour, which is real money for a few hours a week on top of an existing day job. A radiologist reads scans all day long, then spends three evenings a month telling an LLM where it got a scan wrong. And by October 2025, Mercore was managing about 30,000 contractors and paying out roughly two million dollars a day. Its customers included OpenAI and Anthropic. That same month, investors valued the company at ten billion dollars. Each of the three founders owns about 22 percent of it, which puts each of them at around two point two billion dollars. They were all 22 years old. Forbes says they're the youngest self-made billionaires ever to make the list, younger than Mark Zuckerberg, who got there at 23. 2 years from a hackathon project all the way to that. No degree. They didn't have a patent. They didn't create an algorithm that nobody else could write. Now you might be thinking, okay, those 22-year-olds, they're geniuses, they're from Silicon Valley, they have Peter Thiel in their contacts, and you might be 45 with a business that sells something a lot more physical than them. What they actually did wasn't a technical breakthrough. And that's what I'm trying to model here for you guys. They sat in a room with a buyer, they listened to what the buyer couldn't get anywhere else, and they went and they solved the problem for them. A $10 billion company, and that's all it does. You can do that inside your industry right now, this week, with the phone that— the phone that you're holding right now. Let's go back to that Federal Reserve number. Only about 18% of American companies are implementing AI effectively. That means the race is wide open in your town, in your industry, and the 82% who haven't really touched any of it yet this year. So here are the 6 young billionaires getting rich off AI, where each of them came from, and the one move that made them rich that you can learn from as well. Edwin Chen never took a dollar. Edwin Chen is 37 years old. His parents came over from Taiwan and ran a restaurant, and he worked in the family kitchen as a teenager before the boarding school and before MIT. At MIT, he studied math, computer science, and linguistics. Then he spent about 10 years as a research scientist inside the biggest names in the industry. So Google, Facebook, Twitter. He also did a stretch at Clarium, the hedge fund Peter Thiel ran. But he walked away from all of it and moved out of the Bay Area. He had always hated the Silicon Valley status game. In 2020, he started Surge AI on his own out of an apartment with the money that he had saved from those 10 years of working. He didn't have a co-founder. He had no pitch deck. He had no outside investors. Surge finds the doctors, lawyers, and engineers who can tell an AI lab where its model went wrong and grades the output. By 2024, it was doing $1.2 billion in revenue with around 110 people, and Google and Anthropic were both paying customers. No company in history has reached $1 billion of revenue faster without raising outside money. Chen owns about 75% of it now. Forbes puts him on the list of the 400 richest Americans as the youngest person on that list, and you'd probably never even heard his name until watching this video here. So what you can't What you can do is copy the order that he did everything in, revenue first from a customer for work that you can already do. So think about 3 things that you can sell right now to somebody who has paid you before. Then message those 3 people tonight and ask what they're working on and see if you can help them. Alexander Wang took the job nobody wanted. Alexander Wang grew up in Los Alamos, New Mexico, the town where America built the atomic bomb. Both of his parents were weapons physicists at the laboratory there, and they had come from China. He entered his first math contest in 6th grade For one reason, the prize was a trip to Disney. He won it. Then he made the Math Olympiad program, the United States Physics Team, and the finals of the National Computing Olympiad twice. As a teenager, he was always trying to automate restocking his own fridge when he worked out the thing that later made him rich. What was holding AI back wasn't the algorithms; nobody had labeled any of the data. So he went to MIT to study machine learning, and that lasted about a year. At 19, he dropped. His first company wasn't the one that actually made him rich. In 2015, he and a designer he knew from Quora, Lucy Guo, built an app for booking doctor's appointments, and it went nowhere. Guo said, we couldn't focus on product dev because we were just calling doctors all day. Then a roommate joked that what they really needed was an API for humans, and that joke became Scale AI. Scale labels data. Real people sit down and draw a box around every car, every stop sign, Every pedestrian in a picture so that a model, an LLM AI, can learn what it's looking at. Millions of boxes, one at a time. Every lab needed that work done, and none of them wanted to be the company that did it. In June 2025, Meta paid $14.3 billion for 49% of Scale and made Wang its chief AI officer. He's 29 now, worth about $3.6 billion. So find the job in your industry that everybody needs and nobody wants to do. Think about the last time a client apologized before asking you for something. Sorry, I know this is a pain, but could you, you know, whatever comes after that, That's the job. Call the client this week and offer to take it off their hands every month for a flat fee. Lucy Guo left in 2018 and got rich in 2025. So Lucy Guo was studying computer science at Carnegie Mellon when Peter Thiel's foundation offered her $100,000 to quit. That's what the Thiel Fellowship does, if you didn't know. It pays people under 20 to leave school and go build something. She took it. She designed at Snapchat where she was the first woman in that job, and then at Quora Where she met Alexander Wang. She was in the doctor's appointment app with him too, the one that failed. Guo said, "We wish there were an API that could call the doctors for us every time somebody made an appointment in the app." So in 2016, the two of them went and built that instead and called it Scale AI. She was 21. Two years later, she was gone. They had some disagreements about how the company should be run, and in 2018, she left the company that she had co-founded. Meta's $14.3 billion was still seven years away at that point. Point, but she kept her shares for the next 7 years. She had no job there. She didn't have a title. She didn't have a say in any of the decisions that Scale made. But in April 2025, Forbes named her the world's youngest self-made woman billionaire at 30 on a stake worth about $1.25 billion. In December 2022, she launched Passes, where creators sell directly to the people who follow them, and she raised around $50 million for it. Olivia Dunne and Bella Thorne are both in on So start your next thing before you know how the last one goes, right? Guo had no idea in 2018 what those shares would be worth, and she didn't wait to find out. And you can write down the one thing you'd build in business if your current company went away, and then give yourself 2 hours on the weekend to start making progress on it. Michael Troll sold his company to SpaceX. So Michael Troll is 25. He wrote his first code at 11 so he could build his own mobile games, and at 14 he built a programming game. He was a National Computing Olympiad finalist, and at MIT he co-created Highlight, An AI programming competition that pulled in more than 10,000 entrants. In 2022, he and 3 MIT classmates started a company called AnySphere. One of them, Aman Sanger, had sat in his high school classes in New York. Troll was 21 when he raised their Series A. Then he spent almost a year building the wrong product. They went after mechanical engineering software, tools for designing actual physical parts, in an industry that none of them knew anything about. Troll has called that year wandering in the desert. So they went back to the one job they understood completely, which was writing code all day with tools that were too slow, and they built Cursor. Now, it nearly didn't work as a business. They charged $20 to $40 a month while paying out more than that to OpenAI and Anthropic to run it, which left them with a gross margin of around 30%. In April 2025, their AI support agent invented a login rule that didn't exist, and a wave of customers canceled before a human could even step in. But in November 2025, Cursor passed $1 billion in annual revenue faster than any business software company had ever done it at a $29.3 billion valuation. Then on the 14th of August of 2026, SpaceX bought the whole company for $60 billion in stock, the largest startup acquisition anybody has ever recorded. Each of the 4 co-founders walked away with about $2.4 billion of Elon Musk's rocket company. So Build for the job that you already do all day long. They lost a year on an industry that they didn't understand, then built the tool for the one thing they really knew completely. So write down the three parts of your own work that waste most of the time this week, and pick the one that you could easily describe to AI to start building. Ervin Trinivas quit OpenAI right before ChatGPT. Ervin Trinivas grew up in the middle-class part of Chennai. His father. worked at a bank and his mother stayed home. She used to point at the IIT Madras campus near their house and tell him, this is where you're going to study. He got in, then he missed a computer science seat by a fraction of a grade point and he fell into a depression. He taught himself Python at night, competed on Kaggle, and graduated in 2017 as the top student in his dual degree. Berkeley came next, a PhD under Pieter Abbeel. His internship at DeepMind in London came with housing so bad that he slept at the office, and it was there he picked up a book about how Google was founded. At OpenAI in 2018, he stopped believing that he was good enough. He said, I went to OpenAI and I felt like really bad because people were so much better than me. It was a big reality check. He finished the PhD in 2021 and went back to OpenAI full-time. He was 27 on the research staff at OpenAI doing the exact work he had trained his whole life to do. But he quit in August 2022, weeks before ChatGPT came out, when nobody outside the labs knew it was coming. That same month, he and 2 other engineers, Denis Yarats and Andy Konwinski started Perplexity. He had wanted to build a better way to search since he read that book in the DeepMind office. It didn't start as a search engine. The first product was a tool for searching Twitter in English. The answer engine came after that, and Jeff Bezos put money in. By 2025, Perplexity was valued at $20 billion with 100 million people using it every single month. Srinivas is 32 and worth about $2.5 billion. Google made $63 billion from search in the last 3 months of 2025. Every dollar that is advertising. A search that answers your questions and sends you on your way earns Google nothing. So Google will always give you a page to try to stay on. Perplexity answers the questions and shows you where the answers came from. And Google can't copy that without giving up how it gets paid. So for you, you can write down the biggest company in your market at the top of a page tonight, and underneath it lists 5 things that it can't do for a customer without costing itself money. One of those 5 things is a business that you could start. Brendan Fouty skipped his finals. So Brendan Fouty, one of the 3 that I talked about at the top who we opened this video with, grew up in the Bay Area and both of his parents are software engineers. His mother works on Meta's real estate team and his father started a graphics company in the 1990s. At 16, Fouty ran his first business charging his friends $500 each to get them Amazon Web Services He met Adarsh Hiremath and Surya Mehta in rhetoric class at an all-boys high school in San Jose, and the 3 of them ended up on the debate team together. Hiremath and Mehta had known each other since they were 10 from elementary school debate tournaments, and Hiremath was only put into debate because his parents worried that he was too quiet. Those 2 became the first team ever to win all 3 national policy championships. Foodie is dyslexic. Competitive debate runs on enormous volumes of reading. He got good at the other side of it instead, listening to a person and answering exactly what they said. Years later, that's what he did when he was in the room with OpenAI. In August 2023, as college sophomores, they started Merkur out of their dorm rooms. Foodie skipped his finals. HireMath left the Harvard program where he was taking a bachelor's and a master's at the same time. And the next year, the Thiel Foundation handed all 3 of them $100,000 each to stay out of university. Merkur didn't start as an AI company either. It matched software engineers in India with American companies and interviewed them with an automated video avatar. Then OpenAI and xAI told them what they were actually short of, and they pointed that same business at finding doctors, lawyers, and PhDs to grade what the LLM models were producing. 2 years later, Mercore was valued at $10 billion and each of them was worth $2.2 billion. At 22 years old, Foodie said, it's definitely crazy. It feels very surreal. So think about 3 conversations this week with people who already sell to your customers and ask what their clients keep asking that nobody else is supplying. The door is open right now. Foodie and his friends, they didn't have money, they didn't have a degree, they didn't have a product that anybody wanted yet. What they had was a hackathon project and the nerve to ask a customer what they felt was missing. Again, only 18% of companies are really using AI effectively. You're early even though it doesn't feel early, and it will never feel early. The best time to start is right now. Pick the one thing that you're already best at and have a deep passion for, mix it up with what you already know about AI, and then go ask 10 customers who need help and go work with them. Them. Now let's learn the business finance mega masterclass before you start your company. The money decisions you make in your first 90 days will decide whether you still have a business in 5 years. The SBA's Office of Advocacy puts the first 5-year survival rate for new business at 49.2% and the 10-year rate at 33.9%. You're gonna end up in one of those 2 numbers, and the money decisions you make in your first year are what puts You there. In the 1980s, Patagonia was the business that everybody wanted. Yvon Chouinard's company was compounding 30 to 50% a year. The clothes sold themselves. The culture was famous. Yvon was a climber who started by making pitons out of a chicken coop in Burbank, and now he was running one of the most admired brands in America. So he did what a business does when the line goes up: he planned for another huge year. Patagonia loaded up on inventory. Expanded the staff and leaned on a bank line of credit to carry all of it. Then 1991 arrived. The recession hit, sales went flat, and the profit went down a cliff. All that inventory had to be dumped below cost, and the bank, looking at a company that had bet everything on growth that stopped, clamped down on the credit line. On a day the company still calls Black Wednesday in July of 1991, Patagonia laid off 120 people. That was about 20% of its workforce. Of everybody who worked there. Yvon had to look at people who'd built the place with him and tell them that there wasn't any money. He later said the company had been on a suicide course. This is the most important part here. Patagonia wasn't a bad business. The products were great, the customers loved them, the brand became iconic. The finance was the problem. They funded fast growth with borrowed money and inventory, and when one quarter went sideways, the borrowed money is what nearly finished them. So Yvon rebuilt the company around the growth rate it could actually pay for out of its own pocket. And Patagonia is still here 35 years later because of that decision. Now, you might be thinking, okay, Evan, I mean, I don't have inventory and I don't have a bank line. I've got a laptop and an idea for a business. This doesn't apply to me. And I'd say it applies to you more because you have less room to be wrong. Patagonia had a decade of profit banked before it got into trouble. You have your savings and some patience, and both of those can run out faster than you think. This pattern with finances repeats at every size. A company with 500 employees and the person with a laptop both die the same way on the same day of the month for the same reason. The only difference is how big it is when it happens. Every business that dies, dies usually for the same reason. It runs outta money before it figures itself out. Everything else is just a story that people tell afterwards. Bad idea, bad market, bad timing, bad partner. Underneath all of them is a bank balance that hits zero on a Tuesday. So I'm gonna give you the money rules I'd want somebody to sit me down and explain before I had started. Not accounting, not spreadsheets, the decisions that decide whether you're still standing in year 5. Rule number 1, your first 90 days belong to one paying customer. Everything you want to spend money on right now is a way of avoiding the thing that's actually hard. You want to do the logo, the website, the business cards, the LLC, the branded notebook, the studio. All of it feels really productive, right? You're starting the business the day someone hands you money and And not one day before. So for the first 90 days, the rule is pretty simple. Talk to people and get a customer. That's the job. You can spend $70,000 on beautiful thought leadership content and finish the year with $0 in sales if there's no path from that content to a transaction. And people do this every single year. I've seen entrepreneurs drop $1 million on a studio before they ever pressed record. Now, some of them can afford it and awesome, good for them, but if you're starting from zero, Copying a billionaire's opening move is how you go broke in 8 months with beautiful lighting on you. CB Insights went back through hundreds of startups postmortem and found that 38% of them died because they just ran outta cash, not because the product was wrong, because the money ran out while they were still figuring the product out. So here's your actual first 90-day budget, whatever it costs to reach humans and nothing else, right? A phone, a calendar link, a way to take money. Maybe $200 in software. Then you go have 100 conversations, not 100 posts, conversations. If 100 real conversations with your ideal customers produce zero sales, you just save yourself $70,000 in a year of your life and you learn something that no branding agency could have told you. Rule number 2, start at the top of the market and work your way down. So everybody starts cheap because cheap feels safe, but it's actually the most expensive decision that you make. So look at how Tesla did it. They opened in 2008 with the Roadster. That was a $109,000 sports car. Built for people who could write that check without flinching. Those buyers funded the engineering, the factory, the supply chain. Then came the Model S, then the Model 3 at around $35,000 for everybody else. High end first, then down the ladder with the rich customers paying for the learning curve. So do the same thing at your scale. If you're a consultant, don't launch a $49 course. Launch a $5,000 done-with-you engagement with 3 clients. You'll learn more in 90 days serving 3 people closely than you'd learn in 2 years selling 400 people a video library, and you'll actually have money coming in while you learn. And there's a second reason why this works, and it has nothing to do with just the money. 3 clients paying $5,000 will tell you the truth. They'll call you, they'll complain to you, they'll tell you exactly where your service is breaking because they've got real money on the table. 400 people who paid $49 will just stop opening your emails and you'll never find out why. Now let's look at the math. To make $10,000 a month at $50 a customer, you need 200 customers. 200 support emails, 200 chances to get a refund request. At $5,000, you need 2. You already know 2 people who might say yes. You don't know 200. Rule number 3, put a bigger number next to your number. Price is a comparison. So nobody knows what $15,000 means just on its own in a vacuum. They only know what it means next to something else. So I run my own business this way. My top offer is a $50,000 YouTube mastermind. Underneath that sits a $15,000 Growth Strategist package. When you see the $50,000 first, the $15,000 stops sounding expensive and starts sounding like a, a smart choice. That's not manipulation. Both are real, both deliver, both have lots of value, but, and plenty of people choose the $50,000 mastermind, but the $50K makes the $15K easier to say yes to. So build 3 tiers, a premium one that you genuinely wanna sell, a middle one where you expect people to land, and an entry point that can get somebody in Always show the expensive one first. Now, one warning on the entry tier, keep it small and keep it simple because a cheap product with heavy delivery is the worst business on earth. A $650 a year service that takes 40 hours to deliver is not a business. It's a hobby with a lot of paperwork. If your low tier can't be delivered without you, then it doesn't belong on the menu. And understand what you're really selling at any price. What they're buying is confidence in a result. If you can't explain your price with without, you know, your voice going up at the end, they won't be confident that you'll deliver because you just told them that you aren't confident. Rule number 4, charge for the result you deliver. So the hour is the worst unit you could possibly sell because it caps your income, right? It punishes you for getting faster and it invites your clients to compare you against anyone else who is billing by the hour. I coached a therapist who was once doing life-changing work with kids and charging $250 an He was terrified to raise it. I told him, go to $400 and to start with the clients he liked the least. So the downside was small. He did. Nobody blinked. Not one person left. That's the pattern almost every time. The price just lives in your head far more than it lives in your customer's head. So ask what the outcome is worth to them. If you save a business owner 10 hours a week, that's 500 hours a year. If their time is worth $200 an hour, you just handed them $100 grand in value. So charging $2,000 a month for that is not expensive. It's a it's a deal. It's a bargain. It's a rounding error in what they're getting. So run the test that he ran. Take your next three prospects and quote 40% more than you charge today. Not your existing clients, your next three. If all three say yes, you were too cheap and you just found out for free. If one says no, then you're probably priced right. If all three say no, you've learned something real about your market in a week instead of guessing about it for a year. Rule number five: Pull your money forward. You can be a profitable business and still go bankrupt. And people don't understand that at the beginning, and it's killed more companies than bad products have. It happens when your expenses come faster than your payments do, right? So if we walk through an example, right, a dance studio, that's about $100,000 a year. On paper, that could be a healthy business, and the owner feels great about it, but the money doesn't arrive in 12 equal pieces. Maybe October is $5,300 in the red because the annual insurance premium lands in October. And December runs another $900 negative because enrollment maybe drops over the holidays. The year is fine, but 2 months out of it are not. And you only need one of those months to catch you with an empty bank account that crushes your business. Then September comes in and is strong and the owner wants a $15,000 speaker system, right? That one purchase made in the best month is what runs the business out of money by December. So profit is, you want to look at it on the year, but cash is a fact. Like right now today, you can be right about the year and still be unable to make payroll. Payroll on the 15th of the month, and that's the one that ends you. So here's the rule: pull your money forward and push the expenses back. Sell an annual instead of a monthly, or offer a discount for paying quarterly or upfront. Get a deposit before you start work, not after you finish. And before you spend a dollar of a great month, map out your next 12 months on one page with every lumpy expense you might have on there, right? So think insurance, taxes, uh, software renewals, the slow season. Cover those first. First, then you can spend what's left over and only what's left over. And separate your money physically because willpower loses, right, to the bank account. So run 3 accounts: an operating, tax, and profit. Every time money comes in, move the tax portion out of the same day and never look at it again. The number in your operating account then is the only number you get to spend, and it's finally telling you the truth of what you have. Rule number Number 6, keep your equity. I worked in venture capital, so let me save you some time. Do not go raise money for this. Somebody with an idea and no revenue goes looking for $50K and the investor takes half the company because at that stage you're pure risk and they're pricing it honestly. Now you own 50% of something that you have to spend the next 8 years building, and the day it gets hard, you look at that number and lose your motivation. That's the actual danger, and it has nothing to do with just numbers on a spreadsheet. There's a second cost too that people don't often warn you about. Raising money becomes a full-time job. You'll spend 6 months building a deck, taking meetings, following up with people who were never gonna say yes anyway. And every one of those hours was an hour that you weren't building your business and selling. Businesses die that way while looking extremely busy. Only take outside money under one condition. You already have a machine that works where every dollar in reliably produces several dollars out, and you just wanna run it hard. If you don't plan to go public or get acquired, finance the whole thing out of your own sales. Your customers are the best investors you'll ever have, and they never ask for board seats. Now, there's a version of funding that doesn't cost you anything, and almost nobody uses it: your customers. A presale, a deposit, a founding member price for the first 10 people who'll pay before the thing exists. That's capital in with no interest, no equity. No board seats, no meetings, and it proves the demand is real for your thing before you build it, which is the one thing that no investor check can do for you. Rule number 7, hire late and hire green. Payroll is the fastest way to turn a flexible business into a really scary one. Every hire converts variable cost into fixed costs, and fixed costs are what turn a slow quarter into an emergency. Go back to Patagonia in 1991. Hire when you're genuinely bottlenecked Necked by low-dollar work that's blocking you from selling. Not when you're tired, not when you'd feel more legitimate if you have a team. When you do hire, think about green over pedigree. Young and hungry beats a 20-year veteran in a field that's changed three times in the last five years because you can teach skills, but you can't untrain habits. And run a real process. Write a long, messy job post and bury one specific instruction in the middle of it. Something like having your favorite entrepreneur in the first line of the message. Anybody who misses it is out, eliminated, because you just tested attention to detail for free. Then pay your shortlist for a small trial project, up to 5 hours of real work. Pay everyone, even the ones who don't make it. You'll learn from those 5 hours paid than from 5 interviews, and you'll find the person who catches a mistake that you didn't. I know what a bad hire actually costs you because it's never just the money. It's not just a salary. It's a salary, but plus 3 years spent training them, plus the work that didn't get done, plus the customers who had a bad experience, plus the 6 weeks it takes to hire again on a $60,000 role, that's easily a 6-figure mistake. So hiring slowly isn't cheap. It's the only version of this that you can't afford to get wrong. Now, one last thing. If you hate managing people, don't build a team that needs 50 people. That's useful information, so use it. Build a version of this that actually fits the life that you want to live. Start before you're ready. You don't need a perfect model to You need a customer, a price you can say out loud confidently, and enough cash to still be here in 12 months. So don't wait for permission. Don't wait to feel ready because ready shows up after you start and never once before. The paper airplane here, right on my logo, isn't supposed to break the sound barrier either. And doing the impossible is exactly why you're here. To learn how private equity actually makes money, check the video right there next to me. I think you'll love it. Continue to believe, and I'll see you in the next video. Bye. See you there. Private equity buys companies with borrowed money and makes the company pay the loan back. On top of that, they charge the same company fees for being bought.

When you commit the money, in the case of private equity, often they don't take the money.