Why the Wealthy Don’t Focus on Increasing Revenue (They Do This Instead)

You're working harder than ever and you're earning more than ever, but you're not getting wealthier, at least not at the rate that you want. And there's a mathematical reason for this. Now, something changed and most people just haven't noticed, but Michael Saylor did. He's a billionaire CEO who worked 3,000 hours a year, 2,000 employees for an entire decade. He spent millions, flew around the world, tried everything, but his company, it stayed stuck. But then he figured out what actually builds wealth. And in 5 years, he went from $3 billion to $50 billion. So what changed? Well, he shifted his entire strategy and he used 3 tools, and you have access to the exact same tools. So in this video, I'm going to break down all 3. You ready? Let's go. All right. This is going to be a fun one. Let's just jump right in. And we're going to talk about, first of all, why you and I have the same problem. Our businesses have the same problem as Michael Saylor and his company, MicroStrategy. And that is that we're all working too hard and not getting the reward that we'd like to have. And the reason why is because revenue income has a ceiling. There's always going to be a ceiling at some point. And we've been told to hustle harder, right? The hustle culture today, you're not working hard enough. You're not grinding hard enough. Maybe you need to start a new business, a side hustle, work 2, 3 jobs. Whatever. But the point is, is that revenue will always have a ceiling. The amount of money we can make will always have a ceiling. So basically what we have is wages, the amount that you earn, are going up at about 3 to 5% per year. But the problem with that is that the cost of living is going up much faster. Here's a chart over the last 25 years. The blue line right here is the median income. And the red line is the rate of the monetary expansion. It's about 10% per year. It's not CPI inflation. Forget the CPI. This is the real rate of inflation. So the problem is this gap keeps getting bigger and bigger and bigger. So no matter how hard you work, no matter how many more hours or how many more jobs you have, it's not going to keep up with this. It's why you're always going to have a ceiling. Now, of course, you can go back to school and get another PhD, another master's. Of course, you can start another business. But at some point it's going to have a ceiling. You can only work so many hours in a day and your business at some point will max out its market size. And that's exactly what happens. And so because the rate of monetary expansion is going so fast, you're essentially going backwards. Now, this is the same problem again that you and I have, our businesses have, and Michael Saylor had. Now, his company is MicroStrategy. MSTR is the stock. And the blueprint that he left behind, the clues that he left behind, Well, they worked really good for him, and we could also borrow from them as well. It's a little dangerous, but I'm going to show you how to keep it safe. Okay, let's dive in. Now, the context. First of all, why did he shift? Let's talk about this for a second. As a matter of fact, I don't want to tell you about it. Let's hear it directly from Michael Saylor's mouth when he explained it to Jordan Peterson. What happened? Why he did it? Let's hear it real quick from him. And so for the next decade, I spent huge amounts of money on development. It didn't work. I spent huge amounts of money on marketing. It didn't work. I rebuilt every information system in the company. It didn't work. I obsessed over systems for HR, obsessed over systems for sales, for marketing. I spent huge amounts of money on digital advertising, everything you can imagine. I would fly around the world. I flew around the world for a month and I talked in every city everywhere. In order to get the message out. So I had tried every conventional thing imaginable, and 10 years later, the company was still about a $500 million company. All right. So you just heard from Michael Saylor himself. He tried everything. He tore it down. He rebuilt it. He deployed the capital. He was stuck. No matter what he did, he couldn't grow the revenue. So he was trying to grow the revenue, try to grow the sales, try to increase the income. That was the sticking point. He couldn't compete against Microsoft. He couldn't buy more companies, whatever. He couldn't grow the revenue of the business. Okay? Now to see what he's talking about here, let's just take a look at MicroStrategy. It's now called Strategy. We'll get into that in a second. But MicroStrategy stock, this is from 2010 to 2020. So for the decade that he's talking about, and we can see the valuation went from about $1 billion Up to about $2 billion and sort of back to $1 billion. And so for a decade, he stayed pretty flat no matter what he did, no matter who he hired, no matter how much money he spent. And so he had to try and do something. He had to shift the entire strategy of the company. And he did. And what we can see is after he changed the strategy of the company, he went from this flatline of about $1 billion to over $60 billion. So for a decade, for 2 decades, He, no matter what he did, he couldn't increase the revenues fast enough to get the value, the wealth, the market cap of the company from about the $1 to $2 billion. And with a new strategy, he was able to get it to $60 billion in only 5 years. Sound pretty good, right? It wasn't just that he got the revenue up. It wasn't just that he got the market cap up, but it became the best performing asset. So MicroStrategy stock outperformed Bitcoin. It outperformed the entire Mag 7, outperformed gold, S&P 500, real estate. and everything else. So it worked. It worked really well for him. So what is the shift that he made? So first of all, he changed the name of the company from MicroStrategy, and he dropped the micro because he's no longer a computer software company anymore, and now it's just Strategy. So the name of the company changed, Strategy, and he found a new strategy. What is the new strategy? He decided that instead of trying to grow the P&L, the profit and loss, instead of trying to make more revenue, Instead, the strategy would be to grow the balance sheet instead. So now we're going to create a treasury strategy company. We're going to build a strategy around our treasury, around our assets, around our balance sheet. And the goal is to now grow that instead of the revenue. So what he did is he played a game that he could actually win. And I'm going to break down the math of how this works. And he instead stopped chasing the revenue. that's the hardest way to grow. Again, you max out at some point. You can only get so many customers. You can only work so many hours in the day. So sure, you can make those hours more productive marginally, right? Of course, maybe you could try to open up a little bit more product line, but at the end of the day, you hit a plateau. So he decided to stop chasing revenue and instead start multiplying assets. Now, he of course didn't shut the software business down. The software business is still producing revenue, but the But the revenue was used differently. The revenue was used as fuel for the new engine that he had built. Let me show you what I'm talking about here. Okay? So what he did is he used 3 different tools to do this. And the good news is we have tools like this that we can use. I'm gonna show you what I mean. So the 3 tools are, number one, he used the revenue. So again, he didn't shut the software company down. The software company was still running and it was producing revenue. But what he did is he, instead of trying to buy more businesses, hire more people, instead he converted that revenue, that income into assets, and those assets started growing really fastly. Then what he did is he accessed the debt markets. So he issued debt, raising money, using debt to buy other assets. I'm going to talk about how this works for all of us in a minute. Then what he did is he used the equity that he had in his business and in his other assets to become collateral to get more assets. So he shifted the strategy, pun intended. He changed the name of his company to Strategy, from a revenue game instead of trying to make more revenue to an asset game. Okay. Using 3 tools. Again, let me break down how this all works for us. Now, when we start using assets instead of revenue, we can grow much faster. Again, I showed you some of the math. The reason why is that the revenue game is this treadmill That's falling behind, right? The revenue game, as I showed you, is growing at about 3 to 5% a year, but your cost of living is going up by 10% a year. So almost no matter how much harder you work, you won't be able to keep up. So let's see. So the cost of living is going up by 10% a year. My income's only going up by 3 to 5% a year, but my assets are going up by 20 to 50% per year, or they should be. I'll show you what I mean in a second. So if If my, if my growth of my revenue can't keep up with my cost of living increase, then wouldn't it make sense to start trying to optimize and build this instead? Well, that's, that's exactly what he did. Let me show you what our options are if we want to do this. Here's a list of some of the main asset classes over the last 5 years. And we can see that the homes, so if you like to play the real estate game, they're going up by about 8 to 10% a year, much better than your income. and about the same rate of your cost of living increase. The S&P 500 is going up about 11 to 12% a year. So now you're getting in front of it. Now you're moving further ahead. The NASDAQ, this is focused on the tech stocks. Tech moves faster than the S&P 500. Key piece, we'll come back to that. The NASDAQ moves faster. It's going about 13 to 15% a year. Now we're getting somewhere. Now my assets are growing faster than my cost of living. Gold has had an amazing run really this last year or so. And, but it's averaged out now over the 5 years, about 22 to 23%. And of course Bitcoin is about 50% per year. All right. So these are the types of assets. So if I could build my asset base like Michael Saylor at 50% a year, instead of trying to increase my revenue at 3 to 5% a year, you can start to see how much faster we can grow. Now, just to double-click on the Bitcoin numbers for a second, because you know I love Bitcoin. Over the last 2 years, it's averaged about that 50% number per year. If I go back to 3 years, it's about 75%. This is a compound annual growth rate. We call this a CAGR, compounding annual growth rate. That means it's compounding on top of the compounding on top of the compounding. 75% over 3 years, 70% over 10 years. It's key to understand these numbers. All right. Now let me show you some examples of ways that we can do this. Now, I just want to say real quick side note, this is only an example. This is for educational purposes. This is not financial advice. I am not your financial advisor. This is for educational purposes. All right, now real quick, there's a link down in the description down below. I'll put a QR code on the screen right here. Hopefully you can see that. And if you want to see how these types of strategies apply to your own specific situation, if you'd like my team to like walk through your numbers like I just showed here and help you build a personalized wealth operating system, just go ahead and scan that QR code on the screen right here or the link in the description, put it in your application, then come right back because I've still got more important parts of this video to get through. Let me give you an example. So let's say like Michael Saylor, I want to grow my asset base. And, you know, I, okay, I get it. I can't grow my income fast enough. I want to grow my asset base. And I too, as an individual, as a person, but also as a business owner, I too also have credit at my disposal. I have equity at my disposal. So let's say that I could get a credit line, a credit card, a business line, a home equity line. I have equity. So let's say I have equity in my business. I have equity in my home, right? So we have different types of equity and credit that are available to us. Here's one example. I could Let's say my house. Let's say that I have equity in my house. I have a million-dollar home. I have, let's say, $300,000 of equity in that home. Now the home is going up, as I showed you, 8% a year. But whether that $300,000 sits in the home or not, the home's still going up at 8%. So the capital that's locked in there is what I call lazy capital. It's only doing one job. So instead of me trying to go get a second job or a third job, I could take my money and have it go do additional jobs. So let's just say hypothetically, for educational purposes, I were to take, let's say, $250,000 out of that equity. It's at my disposal through a home equity line of credit, and I'm going to pay, let's call it 8% interest to the bank on that. Now, what I might— what I could do is I could take that $250,000 that was just sitting there doing nothing, and I could activate it. I could put it into an asset. In this example, STRK, S-T-R-K, and it's a stock that pays me a dividend, but it also has upside potential. So now it's paying me, let's say 9% or 10%. It sort of fluctuates a little bit. So now I borrowed at 8%, but I'm making 9%. So I have a positive carry. I'm making money from my money. There's a little bit more to this, but let's say it's paying me 9 to 10%. So it's making me $23,000 to $25,000 a year in STRK, but I have to pay my My payment for the HELOC, let's say that's 8%. So that's $20,000 a year. So I have a positive carry of $3,000 to $5,000 per year before taxes. Both of these are tax advantaged. So maybe it's a little bit more, but let's just call it $3,000 a year. I'm making positive while I'm waiting for the upside potential. Now, if this stock goes up to some of my targets, which I'm not going to give you right now, not here, if it goes up to some of the targets I think it can achieve over the next, say, 5, 6 years, it could have the potential to make me, I don't know, $500,000, $600,000. Again, if you want to see the full math, check out the link down below. I'll break it down in more detail for you. But this is an example of using credit and equity. And there's lots of examples of how you can do this, taking it out, activating it, and turning it into $500,000 or $600,000 in a few years of money that just sort of came out of nowhere. It's just sitting there. Doing nothing. And this is just one strategy that Michael Saylor has employed. Now, the key is, this is only an example. There's 100 ways this can be done. But the key is, is that instead of trying to earn more and get the side hustle and get the side job where you're doing 2 jobs, the key is, is to get your money to do 2 jobs or 3 jobs or 4 jobs. So instead of trying to earn more, what we want to do is we want to own more. This is completely different than everything you've learned because you were taught to, you know, buy low and sell high. And so if I need more money, I have to sell my assets. But this is a completely different strategy. It's a strategy around building up the assets, but then using the assets to pay for our life. We want to convert the income into the assets and then do, and then have the assets do the work. I like to say that the reason why you have to work so hard is because your money doesn't. But this changes this whole thing around. We convert the income, we own the assets, and then we delegate the work out to the assets. You're listening to this and you're like, Mark, this is crazy and this is super dangerous. And what you're recommending to people could put them in a lot of danger. First of all, I'm not recommending anything. It's for educational purposes only. But what we're understanding is how Michael Saylor was able to build his company that he couldn't increase the revenue and go from $3 billion to $50 billion in 5 years using 2 tools that we have at our disposal. We can think about how do we manage the risk. So the first thing I'd bring up is that when you go, This sounds extremely risky. What I'd say is, yes, there are risks to that, but I think we have to understand that there's risks in everything. There's risks whether we move or we don't move. Let me give you an example. If I go to the gym, I could get in a car accident on the way there. That's pretty risky. When I'm in the gym, I could drop a weight on my toe or on my chest. That's pretty risky. I could hurt my shoulder, which I've done many times lifting heavy weights. That sounds risky. So I could decide not to take those risks and not go to the gym at all. And I could stay at home on the couch and then I'm risking heart disease and cardiovascular disease and muscle atrophy. So everything has risk. It's just which risks do I want to optimize for and how do I mitigate or manage those risks? So a couple of things that we want to think about is volatility. Asset prices go up and down. So if I'm borrowing money and I'm putting in other assets that are volatile, That could be a problem. Now, some assets are more volatile than others. So for example, a home is like typically a 30-year fixed loan. There's not a lot of volatility there, unlike Bitcoin, that's much more volatile. We want to think about the leverage. So if I'm borrowing, I'm using leverage against the asset. Now, simple rule of thumb, if we buy, if we both buy 1 Bitcoin and it goes up by 5x, who makes more money? If I were to use a little bit of debt and buy 1.5 Bitcoin and you had 1, who makes more? I did because I have leverage on it, but leverage cuts both ways. So we want to make sure, just like a knife, we're using it in the proper way. And then finally, liquidity. We have to understand that liquidity is what allows us to use leverage and manage the volatility. So I like to think of my liquidity in 4 layers, and we want 1, 2, and 3, the first 3 layers of liquidity protect all my wealth in layer 4. We don't pretend that there's no risk here. We just manage for it. For example, again, if you wanted to go into the ocean and you don't know how to swim, that's very dangerous. You could easily drown. So you could learn how to swim. You could learn how to swim and you could also put on a life jacket. You could learn how to swim, put on a life jacket, and also take a float with you in the water. You could put on a— you could learn how to swim, put on a life jacket, take a float, and Make sure there's a lifeguard swimming with you. You see, there's all types of ways that we can take the inherent risk of something and de-risk it by planning strategy around it. So now what is the risk of not doing something like this? Well, the risk of not doing something like this is your income is growing by 3 to 5% a year, but your cost of living is going up by 10% a year. Traditional financial analysts will tell you that what you should do is sell 4% of your stocks per year. So the law of compounding works against you. And most people will probably run out of money, unfortunately, before they die. That's the other risk. So you can choose which one you want. Now, again, we want to not pretend there's no risk. We just build a policy around it. So for example, I think about all the different types of failures, the potential risks that could happen in this scenario. What failure points do I see? What that would actually look like, how that would damage me. And then I can build a plan or a fix to mitigate each one of those. Again, if you don't know how to swim, put a life jacket on. And so we identify the failure points, what they would look like to us, how we mitigate against those, and we build a policy to protect our wealth, sort of like what Michael Saylor's done. So now he has $2 billion of cash sitting on this island. That's his liquidity so he can cover his payments. He also has more liquidity. So for example, he can sell more stock. He also has more credit. He could borrow more if he needs to. And so we build a policy to protect our wealth, not pretend that there's no risk there. Instead, we learn to manage the risk. All right. So the key thing to take away from this video is we want to change what we want to change the question that we ask. I like to say the quality of your life will come down to the questions that you ask. So let's change the question. And we want to shift from thinking about revenue And instead think about how could we build wealth faster using tools at our disposal like assets? How could I play the asset game like other successful people have done? Now, of course, this requires a brand new operating system. It requires a new set of thinking, a new set of tools, what I call the wealth operating system. You need a new operating system and then you have to learn how to manage risk because, well, I want to learn to manage my risk of losing everything and dying broke. So then I have to learn how to build wealth, but I have to learn how to manage the risk of that as well. And then finally, we want to think about activating lazy capital. The reason why you have to work so hard is because your money doesn't. Your money's doing one job sitting in one asset, your 401, your retirement, your home, but it could be doing 2 or 3 or 4 jobs instead of you doing 2 jobs. So it just comes down to changing your mind. Follow what I've always called follow successful steps. Find someone else who's done it. Like Saylor set an example and learn what are the steps that we could learn and we could potentially duplicate. The rich don't work harder than you. They just use money differently. Now, most people invest once, but the 1%, they use the same dollar 3, 5, and even 10 times without working more. I know because I've been on both sides. I built multiple businesses, sold them, and put everything into real estate at 28 years old thinking I was set for life. But when the 2008 great financial crash happened, I lost almost everything. That's when I learned the hard way how the wealthy actually use money. And once I applied their strategies, my wealth grew 5 times, even 10 times faster. So today I want to show you exactly how they do it so you can start stacking your wealth just like the top 1%. I'm going to break down the math. I'm going to show you real-world examples. That you could do this year to make 500% more on your money with just 3 simple moves. And by the end, you're going to see exactly why most people stay broke while the top 1% keep getting richer. Now, this is not about working harder. It's about using your money differently. But before I show you the system, you need to understand the 3 money mindsets, because if you don't get this part right, you'll never build lasting wealth. So let's go. Okay, most people follow the same broken formula for money because we've all been taught the same wrong things. You know, go to school, get a good job, save for retirement, you know, for 40 years, and then hope that there's enough money to retire one day. Well, unfortunately, we can see that this doesn't work because today half of the baby boomers that are facing retirement have no savings. And of those that do, the average balance is just about $100,000. Now, $100,000 is not going to be enough to retire. The problem? That's not how the 1% build wealth. The traditional model tells you, you know, to work hard, save money, invest in your 401, you know, invest in your house, which sounds smart, right? That's what Dave Ramsey tells us. But here's the problem. Your money only does One job. You put a dollar into the stock market, it's locked up. You buy real estate, the money is tied down until you sell the house. But the rich, they don't let their money sit. They put it to work in multiple places at the same time. That's why they get rich faster and they stay rich longer. Now, if you're only using your money once, you're already going to be behind. It's why most people spend their entire lives working only to end up broke anyway. Now, Let me show you why that happens and how the 1% do it differently. Okay, so here's what most people don't realize. It's not how much money you make that matters. It's how you use the money. Now, you can make $10 an hour, you can make $10,000 an hour. And if you have the wrong money mindset, you're still going to end up broke because at the end of the day, there are really just 3 types of people and only one of them builds lasting wealth. Now, the first group is the poor mindset group, and they see money as something that they need just to survive, right? They work, they get paid, and then every dollar they make just disappears immediately. And that's just to cover their rent, their food, and their basic expenses. And then the way they use credit is differently, because when they don't make enough money, then they rely on credit just to survive. Now, the problem with this is it creates a permanent cycle because every month they're starting at zero. Or worse, they're falling further into debt. Now, this isn't an income problem. It's a money mindset problem, because even if they suddenly make more money, they'd still be in the same trap, spending every dollar as soon as they get it. Now, the second group, this is what I call the middle-class mindset, and it's different, right? But it's just as dangerous. Now, they don't think about wealth. They think about comfort. And here's why this is dangerous. No matter how much they make, they're still stuck because every time their income increases, their spending increases with it. This is why 60% of those making a $100,000 salary report still living paycheck to paycheck. They look rich, but they have no real wealth. All right. Now, the way they use credit is also different as well. So they use credit to increase their lifestyle, buy the bigger houses, buy the bigger cars. All right, now that we understand that, let's talk about the third group. All right, this is the wealthy mindset. Now, these are the people who actually build wealth instead of just looking like they have it. The biggest difference? They don't work for money. They make their money work for them. So how do they do that? Well, they don't make money to pay for their living expenses. Instead, they make money to pay for assets, and they use the assets to then pay for their life, right? So it's a different way to do that. Now what happens is these assets appreciate over time and they can be leveraged into more wealth and allows those investments to pay for their lifestyle. And the way they use credit is completely different as well. They don't use credit because they don't have the money or they can't afford things. They use credit because it's cheaper to use somebody else's money than it is their own. Now you can see that the way that they use money and the way they think about money and the way they use credit is completely different, which is why they end up in a different in place. Now, I tell you all this because if you want to build wealth in layers like the 1%, then you have to understand one thing, because we're going to be using debt, we're going to be using leverage to build wealth. And that means that you have to have the right mindset. If you're still thinking about credit the way a poor or middle-class mindset does, as something, you know, to avoid, then you're never going to be able to use money the way the wealthy do. But if you start thinking like an investor, if you start seeing credit as a tool, not a trap, then you'll finally be able to unlock the true power of wealth building. All right. Now, let me tell you how I learned this the hard way first, and then I'm going to break down the math. All right. Now, I had to learn this the hard way, and I don't want you to because I didn't even— I didn't always understand this. In fact, I learned the really hard way. Now, back in 2008, I thought I had it all figured out. I'd built up a couple businesses. I had sold a couple businesses. I made a lot of money. I just turned 28 years old. I thought I was set for life. So I did what I thought the wealthy did, right? I took all the money and I poured it all into real estate. Now I was in Southern California. I was fully invested into the market. And I thought it was pretty smart. I had like a 65% loan-to-value ratio, which I thought was pretty safe. I had the properties, I had the leverage. I had the plan and then the market collapsed. It's what Mike Tyson said, everyone has a plan till they get punched in the face. And I got punched in the face overnight. My property values collapsed. I had a few big developments that were going on at the time. I was trying to sell those and they fell through. And I had mortgages to pay. But here's the real kicker. I had sold my businesses. So I had no active income. So that same leverage that had made me feel rich was now squashing me. Now, I remember sitting there, I remember staring at my numbers, realizing I can't afford this, but I was stuck. I had tens of millions of dollars of real estate, but I was broke. Everything I had worked for was slipping away. And it took years to unwind everything, to get everything dealt with with the banks. And then I swore that I would never touch credit again. And maybe, I don't know, 5, 6 years, I did everything in cash. I refused to borrow. I told myself, You know, leverage is too risky. And for a while, it felt safe, right? But here's what I didn't realize at the time. I wasn't actually building wealth. I was just avoiding risk. Now, my business luckily was making plenty of money, but I was still stuck in that scarcity mindset. So instead of making my money work for me, I was playing defense. But then one day, as I was always investing into my own education, I joined a high-level mastermind group. I met someone who completely changed the way that I thought about money. And he showed me how the wealthy actually use leverage. And that's when I saw it. I'd been doing it all wrong. I had thought about it all wrong. See, I wasn't supposed to take on debt to buy assets. I needed to structure my wealth in layers. I needed to build cash flow. I needed to learn how to leverage it correctly. And then I had to learn how to make every dollar do multiple jobs. Now, look, I don't look back with any regrets of that today. All right. Because I believe that unfortunately, We only learn from our defeats and our mistakes. And it's because of that experience, the pain of 2008, the crash, that's why I make these videos today. Now, during that time, I vowed to myself, I vowed to my wife, that we are never going to get caught offsides again. So I spent the next decade studying financial system, macroeconomics, and how the wealthy actually build and protect their wealth. I invested hundreds of thousands of dollars into my own education, my mentors, the masterminds, because I was never going to let that happen to us again. And that's why I started making these videos to help you learn from my mistakes and avoid the same pain I went through. So now let me show you what I learned and how you can structure your wealth just like the 1%. All right. So you know why the traditional system is broken. You know why most people stay stuck and, you know, the wealthy use money differently. So let me show you exactly how they do it. Now, remember, we talked about the wealthy mindset and how they use their income to buy assets, and then they leverage credit strategically instead of fearing it right now. That's important because this entire system that we're going to break down is built on that mindset. So if you think about credit like the poor or the middle class does, as something to avoid, then you're never going to be able to build wealth the way the 1% do. But when you learn to control leverage, every dollar you earn can do multiple jobs like the wealthy. And here's how they do it. They don't just invest randomly. Again, they build it in layers by stacking assets strategically so their money moves, it multiplies, and it never sits idle. Now, before I break all this down, understand this. This is not a one-size-fits-all system. All right? You don't need to use every single layer right away. Some of you might already have, you know, one or two of these in place. Others might be starting, you know, completely from scratch. Some of you may not even like the layers I suggest, and you can make your own. But the goal here is simple. Make every dollar work multiple times in different ways. All right. So these are the layers that I personally use and I recommend. But again, don't use these, use whatever, mix and match them however you want. But this is what I do. Okay. So we start number 1 with layer number 1, which is the foundation, which is liquidity. Let me show you how I do this. Let's start with the base layer. So for me, layer number 1 is life insurance. So let me just go ahead and lay that out here. Now, the first thing the wealthy do differently is they don't keep cash in a bank. Why? Because it does 2 things your bank never will. First, it compounds tax-free over time. Second, you can borrow against it without stopping the growth. Now, most people don't realize this, but when you put money in a bank, the bank immediately lends it out to make money off of you. Meanwhile, they pay you almost nothing. But the wealthy, of course, they flip the script and they store their cash in a properly structured life insurance policy where it earns interest. And they can borrow against it. Now let me give you an example of how the 1% do this. So let's say that you have this life insurance policy and you put, let's say, $100,000 into this account. Okay, that's a high cash value life insurance, and it's— let's say it's compounding at 5% per year. So I'm going to put it in there and they're going to pay me 5% a year. Now it's compounding at 5% a year, and that is tax-free. All right. Now then what can happen is I can borrow, I can take that $100,000 out and I would borrow and I would pay 5% to borrow it. Now you might go, wait a minute, if I borrow, if I'm earning 5%, but then I borrow at 5%, like, isn't that a wash? Well, no, not even close. Because let's say, let's say I borrowed this for a, for a car, $100,000 car. So let's say over a 6-year loan, let's say times 6 years or 72 months, let's say. Well, let's, let's do the math and see what actually happens during this time. What I would pay interest, this 5% on $100,000 is about $15,955. So let's call it $16,000. All right. But during that same time period, this earning 5% compounding on the $100,000 is $34,009. So you can see that's quite a bit difference. As a matter of fact, the difference is my positive difference here is about $18,000 that I'm making positive during this time, even though I'm earning 5% and I'm borrowing 5%. And the reason why is because of the law of compounding. So the $100,000 is compounding every year while the loan is getting paid down. And while that sounds cool, that's not even the crazy part yet. Right? If you had this extra $18,000 now over the life of that loan and you put it into an account and it continues to compound at 5%, let's say over 20 years, that turns into some real money. As a matter of fact, that turns into $47,902, almost $50,000, which is more than some people save. As a matter of fact, as I said, most baby boomers today don't even have any money saved. And you can do that just by one simple trick of putting the money in first, taking it back out, buying whatever you were going to buy. That alone could get you $50,000. Now, what would you do with this money? Well, you can do all types of things. You could invest it into real estate. You could invest it into Bitcoin. You could invest it into businesses or whatever. We're going to talk about how you can layer that next. Okay. So now that we've got Layer 1 taken care of. And now that we have liquidity, let's talk about the next wealth layer. And for me, that's real estate. So let's go ahead and put that out here. So now we have layer 2, real estate. And let's break down the math of how this works for a second, because most people don't understand this. Now, of course, the wealthy love real estate, but it's not for the reasons that most people think. They don't just buy houses. They use real estate as a financial tool to build wealth. Through leverage and most importantly, tax efficiency. Now, why is real estate so powerful? Because it builds wealth in multiple ways at once. So the first way is we get cash flow. So we buy the piece of real estate and it generates cash flow rental income. Number 2, we get the appreciation. So the property is going to go up over a long period of time. Number 3, we get leverage, we get loan leverage so we can buy a property for 10% down or 20% down. But my favorite one, the wealthy's favorite one, most people don't even think about, they don't even understand, is the tax advantages, depreciation. It's the write-offs. This is why the wealthy get richer, because their money is working in multiple ways at the same time. And this is where leverage becomes a game changer, because this is where the layered stacking begins. So let me give you an example of how the wealthy use leverage in real estate. So let's break it down. Okay. So we first started with $100,000. in layer 1, and we put that into our high cash value life insurance policy, right? And, and we're getting compounded at 5%. Then we take that $100,000 back out. We don't let it sit there. We borrow against it, and we use that money now— let's say the $100,000— as a down payment on $500,000 worth of real estate. So that's $200,000. So we take the $100K that we got from our life insurance, and we put it into an apartment complex or a series of houses or whatever. worth about $500K, let's say, right? That's 20% down. All right. So now we have the money doing 2 jobs. One job over here in life insurance, the second job over here in real estate. That's pretty good, right? This is the first $100,000. Now, over here in life insurance, layer 1, it's still compounding, right? So just during the time of this, let's call it 20 years during the life of this, that money compounding is going to add $47K Right here, just because I left it there in the meantime while I have also have the house. Now think about that, $47K on my $100,000. That's almost a 50% return right there just by having to do a second job. All right. Second, over here we have this $500,000 property and the tenants are paying down the real estate loan for me and it's giving me cash flow. It's giving me equity growth at the same time. Also, the property is going up in time. Now, We don't always plan for appreciation, but of course it's going to appreciate. Let's call it super conservative. Let's say it's going up at 3% a year. Okay. So 3% a year. What happens is now at $500,000, let's say times the 3% over the 20 years means that this property is now worth $903,000. That means that if we take the new value, $900,000 divided by the $500,000 means my Equity is now $403,000 on the original $100,000 I put in. That means I've now made a 400% ROI. So over here, my $100,000 is sitting here and I've earned $47,000 over here. It's about a 50% return. And then I took that $100,000, put it over here into this $500,000 property growing at 3%, and it's made me a 400% ROI, not to mention the cash flow that I've made over time. Not to mention the equity that I've gained over all time. But we are still not done because not on top of all this, you also get up to $500,000 in tax write-offs even against W-2 income if you structure this correctly. So let's say that you're a 35% tax bracket. That's about another $175,000 of tax savings that you get. So let me total all this up for you. Let's, let's think about this real quickly. Okay, so let's total this up so we can compare. Let's compare 2 different people. So person 1 over here has their $100,000. All right. Person 2 over here has $100,000. Okay. Now, over here, person 1 saves the $100,000. All right. Over here, person 2 Stacks. So let's just put that here. Person 1 saves, person 2 stacks. Now, option 1, I leave the $100,000 in savings. The final balance times, let's say, 20 years is, you know, earning at what, 0.5% interest ends up with about $110,000. Good job. So we went from $10,000 to $110,000. So we made about $10K over 20 years. Okay. Option number 2 over here. Option number 2 does something a little bit different. Number 1, they stack their wealth in layers. So they first put the $100,000 into a life insurance policy. Number 1, then that right there makes them about $47K. Number 2, they take that same $100,000 and put it down into $500,000 of real estate. Okay. And then with the appreciation, they get about $400K from that. All right. Then they get the tax savings and the write-off. So let's just say at a 35% tax rate, they're going to get another $175,000 in tax breaks right there. So we'll add that up here, $175,000. So now the total wealth created here is $612,000. So person 1 saved the money. They made $10,000. Person 2, same money, the same dollar, same $100,000, ended up $612,000. It's a pretty big difference. This is why wealth isn't built by working harder. It's built by using money the right way. And we're still not even done. All right. That's only 2 layers. Imagine 3 layers, 5 layers. Imagine 10 layers. All right. Next, let's add another layer. I'll show you what I like to do now. Now that we've stacked our whole life insurance policy, and we've now stacked it into layer 2, which is real estate. Let's take it to the next level. Let's take it to level 3, which for me, that's Bitcoin. All right, now most people buy Bitcoin the wrong way. They treat it like a lottery ticket. They, uh, you know, hope that the price is going to go up so they can cash out for a quick profit. The wealthy, they don't sell Bitcoin. They hold it, and they hold it forever, because just like real estate and life insurance, it's not the asset, it's also a financial tool. Now, why is Bitcoin so powerful in this way? Well, one, Bitcoin is a scarce asset, right? There's only 21 million that's ever going to exist. Number 2, it's, it's a high-growth investment. Bitcoin's outperformed every other asset class over the last decade. Uh, 3, it's easily, uh, something that you can just borrow against, right? You can take a low-interest Bitcoin-backed loan without selling your Bitcoin. And this is exactly how the wealthy multiply their wealth with Bitcoin. Okay, so here's how we keep stacking our wealth layers. All right, so let's go back to the stacked example. Okay, so number 1 over here, we had the life insurance, right, with $100K in it. Level 2, we had real estate, right? And now we have about $500K in real estate here. All right, and then level 3, we're going to put some Bitcoin here. Bitcoin right there. All right. Now remember, we started with $100K in the whole life insurance, right? We borrowed against that to get the $500K in real estate. Now remember, as that grew, as it appreciated, it gave us $400,000 in equity. It gave us $175,000 in tax depreciation and write-offs, meaning that we earned more income to invest into Bitcoin. If you don't have to pay tax on your income because you have write-offs, that gives you more money to invest into Bitcoin, right? So instead of spending that $175,000, we can invest that $175,000 in tax savings into Bitcoin. Now let's say that Bitcoin goes up by 25% a year for the next 20 years. Now that number is half of its most recent, like, 5-year average. So it's half of that. So I'm trying to be conservative here. So let's say that it goes up, that $175,000 goes up at 25% a year for the next 20 years. Times 20 years. That number, ready for it, is going to be $15.18 million. All right. Now we can borrow against that. So let's say that I borrow at a 50% loan to value, which means I can pull out about $7.5 million. And total interest paid on loans, let's say that's at 10% interest. per year. So that's about, you know, $1.5 million in interest that I'm going to have to pay. Now, that's even after borrowing against it. The Bitcoin is still growing exponentially versus if I had sold it. All right. So now instead of just holding Bitcoin, we take the borrowed money, the $7.5 million, and we reinvest that over again so we can go to a 4th layer. Where do we go? Well, we can go into real estate, and that gives us more tax write-offs so we don't have to pay any more taxes. We can invest it into businesses. We can invest it even into more Bitcoin. Okay. This is how the wealthy play the game. They layer the assets. It compounds the wealth. They write off their taxes so they keep more money and they keep that money in motion. Now you can see how powerful this is, right? And we've only stacked 3 layers so far. But the real secret, the wealthy don't just do this once. They do it over and over again with all different types of assets. Now, in 5 years, that same dollar could be doing 5 jobs easy, 10 jobs, even 15 jobs, each one compounding your wealth faster and faster. I mean, this is the real money game here. You keep stacking, you keep multiplying, and then you just watch how fast you can escape the rat race. And once you've got the system running, the next wealth layer is business ownership, because now you're in a position to create a high cash flow business that keeps feeding this system so you never run out of capital to invest.