Transcription
You can follow every money rule they ever gave you. You can save more, you can invest more, you can work hard, and you can still feel like the scoreboard, it's never moving. You make more and somehow you're not getting any closer.
I've spent 20 years inside this game. I've built and sold multiple companies. I've invested through every boom and bust cycle since 2008. Today, I'm a partner at a leading Bitcoin venture fund. Now, I advise public companies and we talk about this exact thing.
Now, what I figured out is that money, it doesn't follow rules, it follows laws. Now, the rules are what they teach you. But the laws are what the wealthy actually use. And there's six of them. Now, most wealthy people, they follow all six without ever being able to explain why they work. Now, the strangest one, the rich don't actually buy their assets. And by the end of this, you're going to see why everything you were taught about money had the rules backwards.
Now, these six laws aren't random. They stack into three parts. The first two change how you think about money. The next three, they change what you actually do with it with the money. And the last one, the last one is the single asset that does all six of these at once. So, let's start with the very first one.
Now, law number one is the one that everything else is built on top of. So, I need you to actually understand this. Okay? So, here it is. The entire system, the money, the credit, the taxes, all of that was built by people who own things for people who own things. And if you're not one of them, then you're the other thing. You're a consumer. Now, the system treats those two completely differently. Okay?
So, look at the three pipes that run the whole game. All right? So, this right here illustrates the owner versus the consumer right here. So, there's an owner game right here. And there's a consumer game. By the way, this is not about how you make your money. Whether you're W2, 1099, you own a business or not, it doesn't matter. But, we have the owner game versus the consumer game. And notice that there's three pipes that run the whole game. What are they? We're talking about credit right here. We're talking about taxes right here and we're talking about inflation. Okay, those are the three that connect the whole game.
Now, credit first. When you own assets, the bank lines up to lend you money, right? When you have assets, when you have collateral, the bank wants to give you money. Why? Because your stuff, the stuff that you own is the collateral. So, that means that you get the cheapest money. You get the cheapest money in the entire economy. But the consumer over here, well, the consumer, they get they get a credit card to say 24%. The same bank, but they're different sides of the table.
Okay, what about taxes? Well, taxes, the system taxes what you earn and what you sell. Wages get taxed. Sell something at a profit, you get taxed. But the stuff that you own, that just sits there and it grows and it compounds and it's not taxed. You see, the owner holds. The consumer earns and sells. and then they pay on every single move. But the owner, the they just hold.
Now inflation, everyone hates inflation. Everyone thinks inflation is a bad thing, which it is. You know, our our cost of goods is going up, but it also works for us, right? The inflation right here is the money line. It's the money supply. The money supply is growing against the cost of living. And what we can see is that M2 has been growing faster. Okay? So M2 is basically the money supply. We can see it right here. Now, it's been growing faster than CPI, which is the cost of living. Right here, we have the money supply growing at about 6.2%. While CPI, what's consumer prices inflation, the the number the government gives you, is only about 2.6%. Now, what we can see is this gap right here, this gap is the debasement. So, what this means is that the money, it's being watered down. What this means is that your money is being diluted. And that also means that if you're holding cash right here, then you're losing purchasing power.
Now, of course, you already know that, which is why we want to own assets because when you own assets, you're holding the thing that's actually catching all the new money. But the thing is is that doesn't happen at the exact same rate. Let me illustrate this for you. So, we have up here M2 growing about 62 uh 6.2%. We have the S&P 500. Let's draw that out. S&P 500 is growing at about 6.5% during the same period. So you're beating it by about 0.3%. That's really all you're making. So on paper, it looks like you're getting wealthy. Looks like you're making a lot of money, but you're barely outpacing the rate of money um increasing. Okay. Then we have homes. We have real estate. Everybody's favorite right here, real estate. That's growing about 4.6% during this period. So, while it looks like your home is going up on paper, the reality is you're losing almost 2% on that money, meaning the money supply is growing faster than the rate of your home going up. Okay?
So, that's the three engines working right there, right? You can see what inflation's doing. Inflation is pointing the um everything in the same direction, but what you can see is they reward the owner and they drain the consumer, but they reward the owner differently. And you can cross the line from consumer to owner anytime you want. As I was saying, it doesn't matter how you earn your money. A W2 paycheck doesn't make you a consumer. The spending is what makes you a consumer. When you spend the money, buying and holding, when you own assets, it makes you an owner. All right? So, it's not how you earn the money. It's what you do with it. Now, the line isn't again how you make it or even how much you make. It's which side you put your money on. But there's a catch here, right? And it's the catch that runs the rest of this video. The moment that you sell, you cross back over, right? The moment you sell, you go back from an owner back to a consumer in one move. Which is why the wealthy almost never sell. They found another way to do this. And that's where we're going next. So that's law number one. Own don't consume.
Okay. Now law number two. This one fixes the question that you've been asking your whole life. Because most people think they've they have a money problem. They think they don't have enough of the money. That's the problem they have. If I just made more, I'll be fine. But that's not the real problem. The problem is time. You've ever heard that, right? Time is money. Money is time. Well, watch this. Okay, let me let me illustrate this for you. Let's say that you make a million dollars, which sounds great, right? Uh but it's not the million dollars that's so great. It depends entirely on one thing. That one thing is how long it took. Let me give you an example. So, if I make a million dollars over 20 years, that's about 50k a year. It's not so great, is it? If I make a million dollars over five years, now we're talking about 200k a year. Okay, now we're now we're doing pretty good. If I make a million dollars in one year, obviously it's a million dollars a year. Pretty good. But what if I make a million in a month? Well, that's a completely different life. So, it's not the amount of money, but rather the time or the speed in which we make the money. So, this illustrates it's not a money problem, right? That's a completely different machine. the same million dollars, four totally different time frames, which means four totally different lives. The only thing that changed was time.
So, the rich don't ask, "How do I make more?" They ask, "How do I make it faster? How do I compress the time?" More importantly, how do I speed up the velocity of my money? Because the amount was never the lever. The speed was always the lever. And once you understand that, it flips everything that you know about money. you stop hunting for bigger numbers and you start asking how hard is each dollar you already have working. How much of it is actually moving? Now, most people's money is sitting still, right? It's parked. One dollar is doing one job. I have money sitting in this asset. I have some money sitting in this asset. They're doing one job or maybe some's doing no jobs at all. But the wealthy, they get the same dollar doing several jobs at once. That's the whole game. And it's law five. So, hold that thought. But we're going to come back to that when we get there. The math is going to look impossible until you see how it's actually done. So that's law number two. It's a time problem, not a money problem.
Now we'll go to law number three. Law number three is about what you actually buy because there's two kinds of money and almost everybody chases the wrong one. Now the first kind is cash flow. Money that comes in and it pays your life. Mailbox money, the dream that everybody has. Uh that that could be for some of you your paycheck. Maybe some of you have like rental income. You have stocks that pay dividends, things like that, and it feeds you today. That's fine. It feels like it's wealth coming in, but it's not. It's the kind of money that keeps you alive, but it's not the kind that makes you free. The second kind is equity. The second kind is equity, and equity is ownership. The thing itself growing in the background that you never have to sell in order to benefit from. Now, cash flow is rented. But you see, equity is owned. And the wealthy, they're obsessed with equity with the second one.
All right, let me show you the cleanest example on earth. And uh everybody knows this company. You think you know this company, but you don't. What am I talking about? Check this out. So, let's talk about McDonald's. Everybody knows McDonald's, right? Even if you don't eat there. You probably did as a kid. Um and you think they sell burgers, right? Hamburgers, uh quarter pounders with cheese or whatever, right? Big Macs. But they don't really. Now, of their 27 billion in revenue, 27 billion with a B in revenue, how much of that comes from the restaurant itself? You might be surprised to find out that only 9 billion actually comes from the restaurants. Well, actually about 9.7 billion comes from the restaurants. The other, what is it? Uh 16.5 billion, where does that come from? It comes from franchising. H from the franchises. And that 16.5 billion, it splits into two different pieces. Uh, of that, we have about 6 billion in royalties. Not too bad. But then check this out. We have 10 billion coming in rent. Now, if you notice this number, the 10 billion in rent is more than their entire restaurant makes. McDonald's biggest business is being a landlord. They own the land under more than half the stores and the buildings on 80% of them. The burgers are just the cash flow. The real estate is the equity and the equity is where the wealth actually lives. So when you look at McDonald's, you're not looking at a restaurant. You're looking at one of the biggest real estate empires in the world. And they just happen to have a drive-thru attached.
Now, let's bring that home. The cash flow is the part that you can see. It's the part that you can spend. But the equity is the part that actually makes you wealthy while you sleep. Now, most people spend their whole life optimizing for the first one, right? Chasing a bigger paycheck. They chase, you know, better dividends, more cash flow, and they never build the second one. They never own the thing. Now, you don't want to be the guy that's flipping burgers for cash. You want to own the land underneath. So, that's law number three, equity over cash flow.
Okay. Now, let's move on to law number four. Law number four is the one your financial adviser is going to hate. All right? Because it's the exact opposite of what they tell you. Now, you've heard it your whole life, right? Don't put all your eggs in one basket. Diversify. Spread it all around, right? You got you got to stay safe out there. And for most people, that's fine advice, right? But it's not how anyone actually got rich. It's how you protect your money a you know, after you've already made it. Maybe it's how you protect money that you already have. But it's not how you build wealth.
Now, what your financial adviser, what what Wall Street will never tell you is that diversification is a hedge. A hedge against what? A hedge against not knowing what you're doing. Now, we can just get it directly from Warren Buffett himself. He said, quote, "Diversification is protection against ignorance. It makes little sense if you know what you're actually doing." That's Warren Buffett. Let's let's say that again. So, what he's saying is that if you don't know what you're doing, then diversify. But if you do know what you're doing, then you want to concentrate. Now, why is that? Because when you don't understand what you own, then you spread it out, right? because now you're guessing, right? Now you want to spread it all around. But when you understand what you own deeply, then you want to concentrate into it. You go all in on the thing that you know really well.
Let me give you an example. Let's look at the people who actually made it to the top. We're going to use two examples here. We have Bill Gates and we have Elon Musk. Two of maybe the richest people in the world. Right now, Bill Gates at uh he owned Microsoft MSFT, right? So at the IPO, he owned 45% of the stock of the company, right? Not a diversified portfolio. Half of his wealth was in this one company. Now today, he sold most of it. So now today, he still owns Microsoft, but today he went from owning 45% to today where he only owns about 1% of the company. Why? Because he diversified, right? He's got his wealth fund. He's buying all kinds of things. He's buying farmland. He's buying who knows whatever. So, he diversified out of Microsoft. Sounds responsible, right? Except for here's what the decision cost him. If Gates had held on to his 45%, if he held on to the original stake that he had, he'd be worth today about $1.4 trillion, $1.4 trillion, if he would have just kept what he owned. But today, I mean, don't cry for him, but today he's only worth 117 billion. Don't cry for him. 117 billion. But what this means is that he diversified away from more than $1 trillion. That's what being responsible cost him. More money than almost anyone on earth will ever make unless you're Elon Musk. He lost a trillion dollar because he diversified out of that.
Now let's take Elon Musk and look at the same thing. Now right now Elon is uh his net worth is about what is it about $1.2 trillion after he just did the SpaceX IPO. He's got tea Tesla. He's got SpaceX. He's got a whole bunch of other things. But those two companies right now, he didn't spread that 1.2 trillion across, you know, whatever 500 stocks. No, no, no. Two companies. That's it. Two companies. Two companies that he has some control over. Two companies that he understands. And neither one of them did he sell those things. All right. And that's the pattern that we can see over and over and over. Elon Musk doesn't have 500 companies, right? He's got two companies that make up this entire net worth. So that's the pattern. Every single person at the very top, just like Warren Buffett said, is brutally concentrated in one or two things they understand, things they understand deeply. So did they diversify their way to wealth? No. They concentrated into it.
Now look, I'm not telling you to bet everything on a single stock. I'm not doing that. The opposite. The whole point is understanding. You concentrate where you have an edge, right? where you actually know about the thing, right? And you stay diversified everywhere that you're just guessing. The wealthy don't spread out because they're scared. They go deep because they're sure about what they're doing. So that's law number four. Concentrate where you have the edge.
All right. Now, let's move on to law number five. This is the one I told you to hold. All right. This is the one that looks impossible until you see the math. Now, back in law two, I said that the rich don't ask how to make more money. They ask how to make the same money move faster. Right? This is what they meant. It's called velocity. It's the difference between a dollar that works once and a dollar that works three, four, five times. Now, here's the idea that most people never get, right? You think a dollar can only be in one place at one time, right? You buy the asset and then you hold the asset and so the dollar sits there, right? It's in that asset now. But that's not how the wealthy use it. That's not how they think about it. All right? So, watch what happens to your dollar. You see, most people will take a dollar and then they're going to put, you know, let's say 30% of that dollar into an asset like the S&P 500. And then they're going to put, you know, 20% of that dollar into something like bonds. And then they're going to put 5% of the $1 into something like Bitcoin or whatever, right? And so they're dividing up the $1. And so instead of multiplying the dollar, getting $1 to do, you know, two, three, five, 10 jobs, they're not doing that. They're splitting the dollar up and so what they get is the average between these which is about 8% if they're lucky. Okay, but that's not how the wealthy do it.
What the wealthy want is they they want $1 controlling multiple assets at the same time. So now I get the multiplication of these assets. Maybe I can get it doing five jobs. Maybe I can get it doing seven jobs. How do we do that? Well, what we can do is instead of investing horizontally as I talked about where I'm fractionalizing my dollar, what I want to do is I want to invest into layers where I put $1 into an asset here. So, asset one. And then using this asset as collateral, I use the collateral for liquidity, which then allows me to buy asset number two. Now, $1 is sitting in asset one, and $1 is also sitting in asset two at the same time. And then I use this asset for collateral and I get liquidity to buy asset number three. And now $1 is in this asset, this asset, and this asset. So now instead of splitting the dollar between a bunch of assets, I now have $1 controlling multiple assets at the same time. That way the dollar is in two, three, or five places at the same time. But again, the slow investor, they do it differently. One dollar does one job at one time. The fast investor takes that same dollar and runs it through the system again three, five, seven times, the same starting money several times the assets working for them at the same time. That's how we get the velocity. That's how we get the money moving faster. It's the same way the government measures the health of the economy. It's what's called the velocity of money. It's the single metric the government looks at for the health for the growth of the economy, the velocity of money. We want to think of it the velocity of our wealth. How fast can we get our money moving? because it's not a money problem, it's a time problem. We want it so to the point where our dollar never stops moving and it never gets sold. Okay? And this is the whole reason some people pull away and they never come back. It's not that they make more money. I mean, some of them do, but it's that every dollar they have is doing the work of $5, right? You've got money sitting in a savings account doing nothing, right? You got the same money working in three places at once. So, here's the real question. not how much money do you have. The question is how fast is the money you already have actually moving because that number your velocity is a thing that decides whether you ever close the gap between where you are and where you want to be. And that's a thing that I can't fully do for you in this short YouTube video, right? I can show you the laws. I I can't run your actual numbers. But here's what I do. I run a live workshop about once a month where we do this thing exactly. We find out your number, what you actually need to earn every single year to hit your goal. We find your gap. We find the space between what the market gives you and what you actually need. And I'll walk you through the entire system that closes this gap. The same one that I use. Now, it's all free. I'll put a link in the description down below. We'll put a QR code right here. If you're serious about closing that gap instead of just hearing about it, go sign up and I'll see you over there.
Now, go back to the laws because we just figured out how to make the dollar move. But the next one is how you make it move without ever selling the asset. and it's the one that almost wiped out Elon Musk. Let's wrap up law five. That was velocity. Make every dollar work more than once.
And law six is the mechanism. It's how everything that we've talked about actually works in real life. And it's the one thing that the wealthy do that you were specifically told never to do. They never sell. And they use assets as collateral for liquidity. I call it renting liquidity or sometimes I call it harvesting appreciation depending on what we're trying to do with it. But think about what we've built so far, right? You own the assets. Those assets have equity. Um, it's concentrated in something that you understand. It's going up, but now you need cash. You need cash for another asset. You need cash for a house, a business, or just for your life. Now, the consumer move is to sell. Buy low, sell high, right? Take the gain, pay the tax, and now you're out on the you're out of the asset. So, you're back to a consumer. The owner move is completely different, right? The owner doesn't want to sell. I don't want to stop being an owner. So, we harvest the liquidity by issuing credit against it, just like a bank does. All right. This way the asset stays. It keeps growing. It keeps compounding. I don't pay the c I don't pay the tax and I get the cash that I need anyway. Again, no sale, no tax. And you're never and you've never left the owner side of the table. Okay?
So, this is the whole game. The rich don't buy their assets and sell them. They buy them and they never let go. All right? But there's a there's a right way to do this, of course, and there's a very wrong way. There's a way that destroys you. And the best example of both is the same guy in the same deal. So let's look at Elon Musk. We've already used him once before. Why not? He's the richest guy in the world, right? So when Elon Musk bought Twitter, he had he had a plan, right? The plan was is that he was going to use he was going to buy it for $44 billion. An insane amount of money. Uh he saved the world with it, but whatever. That's a different story. 44 billion. Now, the smart piece of it was that he was going to issue credit against 12.5 billion in Tesla stock to do that, right? He didn't want to sell the stock. He wanted to use it as collateral. Issue credit against it to get the liquidity, the the 12.5 billion to go buy Twitter. All right? That's the owner move. That's what we're talking about. Don't sell Tesla. Rent the liquidity against it and then keep the upside, but get the cash for that what you need, right? So, that was his plan, but the plan didn't work out. So here's what actually happened during that time he was doing this. Tesla stock started falling, right? And because Tesla stock started falling, the valuation was going down. The lenders, they wanted more collateral. So instead of getting more collateral, what Mus decided to do was to just go ahead and sell the Tesla stock instead, right? So he was going to do the owner move, but instead he did the consumer move and he sold it. Okay? So then he sold it. He sold some of his Tesla stock. um the richest man in the world had to sell stock and he was forced to become a seller, forced back to the consumer side of the table and he was forced by his own collateral. Now, of course, don't cry for Elon. Uh he's still the richest man alive. But that Tesla stock that he was forced to sell, if he didn't sell it today, it'd be worth about $24 billion. All right, that's how much he lost. Every day Tesla continues to climb, he lose more and more. that number that he lost gets bigger and bigger because Tesla's stock keeps going up, but he doesn't have it anymore. It's not compounded anymore. It's not growing anymore. And of course, he's the richest man on Earth. But imagine what it does to you, right? He can afford to lose 24 billion. I can't. Uh neither can you.
Which leaves one question. The question this entire video has been walking towards. If never selling assets and using them as collateral for liquidity is the move, then what's the perfect asset to use as collateral? something that you could concentrate in, something that moves really fast, something that you never have to sell. But let's lock in law number six. Uh don't ever sell your assets. Use them as collateral. Issue credit against them to get the liquidity. Never sell.
And the last question, what's the perfect asset? Well, that's where all six of these laws finally come together. Okay, so let's answer the question. What's the perfect asset to own, to concentrate in, and use as collateral that uh you never have to sell? Well, go back through the six laws, right? Build out a checklist for yourself. It has to be something that you own, um, not cash flow, that you rent, right? That's law three. It has to be something that you can concentrate in because you can understand it, right? That was law number four. Um, something with velocity that moves and compounds fast, right? That was law number five. And something you can issue credit against without ever having to sell it, which of course was law number six.
Now, there's one asset that checks every single box. And if you watch my videos regularly, then you already know what I'm going to say, and that's Bitcoin. Now, stay with me because this isn't a a price prediction video. It's not me telling you uh to go gamble on Bitcoin. It's that Bitcoin is the cleanest version of every law that we just covered, right? It's pure equity. It's pristine collateral. There's no cash flow to tax. Uh it's it's just an asset, right? You can concentrate in it because there's nothing to understand about a, you know, there's no competitors. There's no CEO or there's no quarterly earning calls. It's just an asset. It moves fast. And here's the part that that closes this entire loop out, right? You can use it as pristine collateral 247, 365 days a year, anywhere in the world instantly and any small amount or large amount that you want, all without having to sell it.
Now, this is the exact move that Musk tried to make with Tesla, except the entire system is being built right now to let you do it with Bitcoin. Issue credit against it, get the liquidity, never sell it, never trigger the tax. And this is where the tax code does something that most people never find out, right? There are three legs holding the entire thing up. Now, we have leg number one right here. All right, leg number one, you hold it, right? Nothing's taxed because nothing's realized. Uh only gain is taxed, right? when you realize but you don't oversell. Leg number two over here is that we can issue credit against it. Okay? Now, debt isn't income. So, there's no tax on the cash that you pull out. You're spending money, right? Loan is a liability. It's not income. So, there's there's no sale. There's no realization. The collateral stays invested, right? The only cost we have here is the interest. And because the debt isn't income, right? There's no tax on the cash you pull out. You're spending money you never paid tax on. And you're doing this all legally. And of course over here we have leg number three. All right. Now you die holding debt. Buy, borrow, die, right? You die holding it and your heir is inherited at the new value. Um via the new value. Lifetime gain is wiped out and we call this a step up basis. So what that means is that your heir is inherited at the new value. The entire lifetime gain, the tax on all of it, it all disappears. It's called a step up basis. Right? Like I said, it's the the buy, borrow, die, or I'll call this the hold, borrow, die strategy, right? That's the actual game. The wealthy have been running this for generations with stocks, with real estate, and Bitcoin is just the cleanest asset they've ever been able to run with it.
So, that's all six laws, right? One asset that satisfies every one of them at the same time. And that's not a coincidence. That's the answer the whole video's been walking towards the entire time. So, that's the game. Six laws. One side of the table owns, the other side of the table pays. All right. And now you can see which side you've been standing on or working towards.
Now, none of these six laws require you to be rich first. Right? You don't need a trust fund. You don't need to already be wealthy. You uh you can use a W2 paycheck. It works fine. Right? The only thing that's ever separated the two sides of this table is whether you knew the rules. And well, now you do. But knowing the laws and running them are two different things. Now, I showed you the six laws. What I didn't show you is how they all fit together into one single machine or system. Now, the order that you build them is important, right? How the accounts are actually structured, which asset goes in where, and where you issue credit against what, right? That's not a it's not a YouTube video. That's an entire system. But that's exactly what I want to walk people through in my live workshop. We take these six laws. We build your actual structure, your number, your assets, the exact sequence to put them in. And I'm going to do the workshop. It's all for free. I'll put a link in the description down below. Put a QR code on the screen right here. And if you've gotten this far, you're not a casual viewer, right? You're the kind of person this was built for. So, go ahead and sign up right now and I'll see you over there. And if this changed how you see the game, even just a little bit, please take the time just subscribe to the channel real quick because everything on this channel is about the same thing, helping you get to the side of the table that owns. All right, that's the six laws. Now, go use them.