Give Me 8 Minutes, And 24% Returns Will Start To Look Reasonable

Most people don't approach their wealth from an engineering mindset, which is how do I engineer the return I need to make sure I have enough money when I'm ready to retire? So in this video, I want to break down how you can make 3, 4, 500% more wealth by using wealth engineering, a simple system that takes you from a traditional horizontal investor, which is never going to make it for you, to investing vertically in an engineered format. Now, this is all one big piece of what I call the Wealth Operating System. It's a program that I've taken over 500 high-income earners, professionals, entrepreneurs through. And it's completely changed the trajectory of their investing outcome. And it's going to do the same for you. You ready? Let's go. All right. So let's first start off by where you're at right now. Most people have a financial advisor. You have a plan administrator. You're investing through your 401, through your business. You have some sort of a pension. You have someone at Charles Schwab, whatever. You have somebody helping you with your wealth. At least hopefully you're doing something with your wealth. Now, typically what's going to happen, mainstream financial advice, Dave Ramsey financial advisor, is they're teaching you how to invest horizontally, and that's all wrong. That's why most people are making it. We want to invest vertically. I'm going to explain what that means, but they're teaching you how to invest horizontally. Let me show you what this means. So if you were to take your money, let's call it $100. We're going to take that $100 and we're going to put it into different assets. They teach you how to do asset allocation. Now, if you're following something like Ray Dalio teaches, like what's called an all-weather portfolio, a lot of financial advisors use that. They're going to have you asset allocate up to 17 different, what they call uncorrelated assets. 17 different assets that you don't know anything about. You have no expertise in, no edge. I'm going to divide that $100 into 17. Here, I'm going to give you an example, only 4 different buckets. In this example, your financial advisor is probably having at least 60% of that go into what we call a 60/40 portfolio. That's 60% stocks, 40% bonds. That's been the bread and butter of all financial advisors for the last several decades. And that's to offset volatility. Uncorrelated assets like Ray Dalio talks about. The stock market goes down, the fixed income in the bonds holds up. Well, as for the old world, that doesn't work anymore, but let's go with that. So let's say that I have my fund administrator, my pension manager is putting me, my 401 plan is in that, and I'm making, let's say, 6.5% return on that. That's about the average return of a 60/40 portfolio. But then I also have a home. So I'm building my wealth in my home and my home equity is growing. You know, I've been in this home for a long time. Obviously that's compounding. And let's say that about 30% of my net worth is in my home. Now, historically, the US median home goes up about 5% a year. Over the last 5 years, it's gone up by about 10% a year. So we're going to be generous here. We'll put 10% there. So I have about 30% there, $3 in this example. Now, one piece before I move on, I want to say about this is it's great. Like you're building wealth in your home. It's like a piggy bank. Cool. But what do you do with it? Because like you get older, it's worth a lot of money, but you can't sell it because you need a home. So while on paper it shows it's wealth, it's not really money that you can use. We'll move past that. Let's say that you're— you love Bitcoin as much as I do. Well, you don't love it as much as I do because you put 5%, which is a pretty strong conviction for most people that allocate to Bitcoin. It could be 2, 3, 4. Call it 5%. Now, Bitcoin has been going up by 30 to 50% per year. Depends on when you measure it. Let's just call it 20 here, which is less. Let's be conservative here. So 5% is in Bitcoin, going up by 20% here. And then of course, I'm holding cash. I need some cash, operating expenses. I want to offset some risk in my portfolio. So let's say that I have 5% allocation to cash and that's growing, of course, at 0%. So I have $1 is now split out. It's fanned across, it's invested horizontally across asset allocation that Ray Dalio and everybody else talks about. All right. So when I add this together, together, we can see that each of these assets are doing different things. Obviously, Bitcoin is growing faster. My home's growing faster than the 60/40 portfolio. But when I average those returns out from the horizontal stack, I have a blended return of about 8% return, which is great. Better than what I'm getting from my Ray Dalio portfolio, I'm getting from my 60/40 portfolio, but it's an 8% return. The problem, the rate at the— of the monetary expansion is about 10% a year for the last 5 years. That's the real rate of inflation. So while my wealth is growing at 8%, unfortunately, the money supply is growing at 10%. So I'm still losing money. The Wealth Operating System goes off of a completely different method, one that you've probably never heard of. Instead of investing horizontally, we want to invest vertically. What we want is our money to work way harder than we do. The reason why most of us don't have enough money is that our money is not working hard enough. Not you. You don't need a second job or a side hustle. You don't have to start a new business. Just get your money doing multiple jobs. Let me give a visual example of how we do a vertical investing strategy or investing in layers. So as you can see here on the screen, the same $100 as we had in the horizontal example, the same $100. But now I put the $100 into real estate, a productive asset. That real estate is giving me tax depreciation. It's giving me leverage from the loan. It's building wealth. No different than I was on the horizontal side. But the difference is I put the $100 there and then I take 50% out of that. I issue credit against the home and I take $50 out and I put that into Bitcoin. Now I also have Bitcoin, but not horizontally, vertically. And it also grows at the same 20%. No different than it was on the other side. In this example, I'm now going to issue credit against my Bitcoin, 50%, and that means I'm taking $25 and I'm going to put it in the Nasdaq. Why the Nasdaq? Well, the Nasdaq is the tech stocks. The Nasdaq gives me exposure to the AI boom that's going on right now. I want exposure to that. And so now I have $25 in there and that's going at 15% a year. I could keep going. I could issue 50% credit against that, move into asset 4 or 5. I can engineer whatever return I want. But let's just stop here. 3 different layers. The same $100 is now growing 3 different assets at the same time. Now, when I look at the blended return of this, the same returns I showed you on the horizontal side, we can see our engineered returns are now 24% instead of the 8%. Now, hopefully that's shocking. Hopefully that sounds like a lot of money. But if you see what happens when that amount compounds for 5, 10, 20, 30 years, you wouldn't believe me. You'd think I'm crazy. You think I'm a psychopath because you can't understand— our human brain can't understand compounding. We think linear. But the return difference from 8% to 24% over long periods of time is the difference of generational wealth where your grandkids never think about money to you struggling and hoping that you die before you run out of money. Now, I'm sure that you can see this example and I've walked you through it. It's easy enough to understand, but I can already hear what's going on in your head and I can already feel the comments filling up below this video and you're saying, but Mark, that's risky. You want me to leverage my assets? You want me to take loans or issue credit against assets? Are you out of your mind? Let's address this. I've already told you that 8% is losing money to the rate of monetary debasement. You want to talk about risk? You're guaranteed to end up broke. How's that for risk? You want to take that risk? Now, if you want to increase those returns, you have to do what the traditional path is, which is go way out on the risk curve. Now I have to start doing day trading or option strategy I don't know anything about. I have to find crypto pump and dumps. I have to go into meme stocks like GameStop or something like that to try to get some returns. Maybe I lock my money up for 10 years in venture capital and I hope and pray That's what you have to do. You have to take on way more risk to get that return up. On the other side, we're just using traditional assets that, you know, like and trust. You have knowledge on, you have edge on, and yeah, sure, we'll issue credit against them. Are you so adverse to that? We talked about you owning a home. Did you buy your home cash or did you get a loan for your home? Most people think that buying rental real estate or short-term property, short-term rental properties is the key to building wealth. Are you going to pay cash for those apartments and that rental property, or do you get loans for those things? Do you pay cash for your car or do you take loans for those things? You see, we use leverage in every area of life. The problem is, for most of us, we use it completely wrong. We didn't really learn what Robert Kiyosaki taught us 25 years ago in The Rich Dad Poor Dad, which is there's a difference of good debt and bad debt. Good debt is productive debt. Good debt makes me money. Good debt buys assets that compound over time. Bad debt is what gets me in trouble. Bad debt on vacations and clothes and cars is what gets me in trouble because the asset or the money disappears. You see, I don't have to worry about being out of money because I bought the asset. So if I borrowed money and bought an asset that's compounding and I can't afford it, well, I have the asset. Now it gets deeper than this. I don't want to— I don't, I don't want to make light of this. As a matter of fact, I use 4 layers of liquidity, a system I've designed specifically to make sure I never get burned in a system like this. And if you want to learn exactly how to use the 4 layers of liquidity, you should probably go watch this video where I break the whole system down for you right here, and I'll see you over there.