Why The Wealthy Obsess Over Debt

Billion-dollar companies don't run on budgets. They run on balance sheets. And that one difference explains why they grow into giants while households doing everything they were told to do struggle just to keep up. You were trained to manage money like a consumer. Companies, they're trained to structure capital. Now, you can do the same thing. You may not get the same results, but you can learn to play the same game. And once you see how to play by these rules, you're never going to look at money the exact same way.

So, let's go. We're going to jump right into this one today because I have an exciting lesson for you. Uh it's going to change everything. Teach you how to go from a consumer to a company. Run a billion dollar company but for yourself. Now to really illustrate this before we dig into how you can apply this to your own situation. Let's use an example. All right. So this is the strategy and it's the strategy presented by a company called Micro Strategy. formerly Micro Strategy and now they've turned the name changed the name to strategy and Michael Sailor who runs that literally has the playbook the strategy and he's been going around to corporation to corporation to corporation and he's been teaching people the strategy on how to do it as well as you guys already know you've seen my interviews with Michael Sailor uh we'll link to some down below I've got to spend quite a bit of time with him I figured out how to take his strategy for corporations and apply it to our own personal situation but let's just look at how powerful this is first of So now strategy, which is formerly Micro Strategy. Their ticker is MSTR. This is not a commercial about that. I'm not telling you to buy it. But they were, you know, a software business. They've been a digital software business, a SAS business, uh, for a long time. The problem is that they weren't really able to compete against the big ones like Microsoft. And so while they were making a good amount of money in 2020, Michael Sailor was stuck. The revenues were flat, the stock wasn't going up. and he found himself at this crossroads where like they're making revenue and it's enough but he's not able to grow the business. He can't grow the revenue anymore. Maybe like your own personal situation. Um the stock wasn't going up and he didn't know what to do with his money. And so he decided to do something drastic with the company and he decided to build a financial architecture. All right? And this is what changed everything. I'm going to break this down for you. But by changing the financial architecture of the company from going from a revenue-based a P&L-based company to a treasury-based company, right? So it's a Bitcoin treasury strategy company. Treasury strategy being the key piece. So when he went from that P&L-based to a treasury-based, everything changed. How big did it change? Well, let's take a look at this. So what we can see um since they did that move in 2020, you can see their performance against a bunch of other assets. Micro Strategy MSTR stock is up 83% and it's beating everything else. You have Bitcoin way down here, the Magnificent 7, the MAG 7, 28%, gold, S&P 500, real estate, money, bonds, etc. So, it's been crushing performance over the last 5 years because of the shift in the financial architecture that they did. Let's take a look at a couple other charts real quick.

Now, how does it rank against some of the really big dogs? So this is Bitcoin's uh strategies, Bitcoin holdings versus the biggest corporate treasury. So you hear about the big companies, the Mag 7 and how much cash they have sitting on huge stock piles of cash. Birkshar Hathway, Warren Buffett's company is at the top of the pile right here, 344 billion. We have Amazon, Google, Microsoft, and then here we have strategy right here, sitting right here at number five. And just five years ago, they were like teetering on the verge of going out of business. And now they find themselves in the top five companies in the world with how big their strategy is. Their stock has been one of the best performing stocks in the S&P 500 because of the strategy. And you can take a look at this robust capital structure. So their enterprise value of strategy is basically a hundred billion $98 billion. Their market cap 83 billion and they have Bitcoin. They have $71 billion of Bitcoin. Also they have debt. We're going to get into how they do this so you can figure out how to do it for yourself. They have debt, but look how small the debt is. They got eight billion of debt and six billion of debt. So they have 13 or 14 billion dollars of debt against $100 billion of assets. I think we'll take those loan to values every day of the week and we can take a look and see exactly how they did this. So they've grown to 640,000 Bitcoin. They have again $71 billion of Bitcoin. their acquisition cost, not their debt, but their acquisition cost was 47 billion. So, they're sitting on, you know, roughly $30 billion of profit over their acquisition cost. And again, a lot of it they've used debt, but again, they're at about $13 billion of debt for a hundred billion of enterprise value. So, they've taken the market cap, and this is a key piece, they've taken their market cap, you and I might think of our net worth or our balance sheet, from 3.6 6 billion to 98 billion in 5 years by switching from a revenue-based P&L based company to a treasurybased company. And we're going to break that down for you.

Now, a couple things we want to understand. First of all, most people they were and most of us as people have been playing the wrong game. And a lot of the reasons why we're playing the wrong game is because the rules changed. One of my favorite uh stories is of Einstein when he was a professor at college and every year he'd give out the same test and one year one of his assistants came up the teaching assistants came up to him and said Einstein you know kind of sheepishly um I'm not sure if you're aware but um you gave out the same test that you gave out last year and um Einstein's like yeah so and the assistant's like well I mean the students from last year will have the have the answers and they could share them and people could cheat and he said no the answers changed not the questions, the answers changed and so things change and so our financial system changed. We went from a debt from a equity based goal-based system to a debt-based monetary system and what schools are teaching you or lack of teaching you today don't equip you properly. So the wrong game personally we think about budget how much income do I have? What are my bills? How much budget do I have left? If I have anything left, maybe I can save a little bit. I need to work harder because my cost of living keeps getting more and more expensive. I'm not saving enough. I'll put in overtime. I'll try to get a side hustle. I'm going to work harder. I'm going to be extremely disciplined. I'm going to skip that coffee in the morning because if I, you know, five bucks a day that I'll skip at Starbucks, I can put in there. We're going to do all that and I'm going to try to pay down my debt as quick as possible because, you know, all these things are piling up. If I pay my debt down, I can get my expenses down. That's what people are thinking personally. And I get it, right? Like it's like it's like a drowning tide. the cost of living keeps going up faster than your income is going up. And no amount of budget thinking, no amount of working harder, no amount of discipline saving, and no amount of paying down your debt is going to solve that. You're sort of like in the micro strategy 2020 phase or pre2020 phase. On a corporate side, they use the balance sheet. We're going to break this down for you, don't worry. They learned how to apply leverage. They use those balance sheet and the leverage to grow their wealth. Micro Strategy went from 3.6 billion to a hundred billion. Imagine doing that in your own portfolio. And they did it with leveraging debt. Let's break all this down so you can see how this plays out. Okay.

Why this fails though, right? Like I said, the answers changed. So everything that we were taught, everything that we learned, like I said, through school or parents, however we learned it, it's wrong. And then there's a few reasons why. Number one, inflation is a structural force. Okay? So why this fails is you have the wrong frame. You have the wrong structure. All right? It's not that your intentions are wrong. It's not that your effort is wrong for sure, right? You're working hard, but you have the wrong structure and frame. Inflation is this structural force. Inflation is doing two things simultaneously. One, it is taking the value out. So it's making our our life get more expensive, but it's also um creating debasement and it's offsetting the discipline. So no matter how much more I work, no matter how much more I skimp on my Starbucks and I save, the debasement is greater than my discipline. The rate of debasement is is growing faster than I can save. And the problem that we run into is we find out that our cash flow because we're managing our P&L, right? Our budget, I need to make more income. I need more cash flow. Like Micro Strategy was trying to get more cash flow, but they couldn't. They couldn't grow against Microsoft. Sort of like you might be in your own personal finances. They couldn't get enough cash flow. the cash flow is fragile because the cash flow they got was earning less and less and less and less and less all the time. So what they learn is that the position that they take their assets in on their balance sheet, the position that they create is greater than any budget. Rather than trying to compete be be a better competitor against Microsoft to make more money, they just learned how to position their balance sheet better. And we can do the same thing. So, we want to stop managing money for short-term performance and we want to start to change our structure. Start structuring capital for the long-term advantage. I'm going to give you some illustrations of ways you can do this. I call it modern wealth alchemy. Uh you would call Michael Sailor a financial engineer, whatever you want to call it. I'll show you some exact examples of how you can do this on your own. All right.

So, in order to really understand how we mobilize our balance sheet, how we change the structure, we have to learn a new term. Might call it the balance sheet asymmetry. All right, it's asymmetric. We have assets and liabilities on our balance sheet, right? On your P&L, your assets minus your liabilities. But what you have to understand is that they react different to inflation. The inflation is the structural force that you weren't taught to manage, but it's there. It's powerful. It has power over your life. But the assets and liabilities don't react the same. They react differently. That's the asymmetry. Inflation, as I already told you, crushes your cash flows. Your cash flows that you're bringing in. You're working harder trying to get more customers, trying to get squeeze more money from your customers. But the inflation is stealing the power, the purchasing power from that cash flow. That's bad. It reacts differently. But the inflation destroys or decays. I like destroys destroys my fixed liabilities. So, if I have long-term debt, right, because the money is getting worth less and less and less. Right now, my payment, let's say I have a 30-year fixed note, I'm paying a,000 bucks a month. A,000 bucks a month today is one thing, but a,000 bucks a month in 20 years is hardly anything. So, the inflation destroys my income and it also destroys my debt. You see how those assets, they work differently. So, assets, you have assets and you have liabilities. We have to look at those different on the balance sheet. And then we have to understand the duration of those and then we can have the proper structure. I'm going to break all this down for you. But this allows the same person, homeowner A and homeowner B. It allows the same company Micros Micro Strategy or Strategy Strategy's main business model. They still sell the software. They're not out competing Microsoft. It's not a better company. They just went from Micro Strategy to Strategy. They started leveraging the treasury strategy. Same person, same company, but two wildly different outcomes. Two wildly different outcomes. Literally, Micro Strategy had $500 million. Not a small amount of money. Today, they have a hundred billion.

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I know you're not going to like this, but most of us think that debt is bad. Debt's bad. That's de That's dangerous. I'm going to pay my debt as quick as I can. I'm going to try my try and pay my mortgage off faster. Uh if I if I put two extra payments a year, I can pay my mortgage off sooner, right? Pay off my credit cards, all those things. But we have to understand that debt is not bad. And it's not necessarily good either. Debt is a tool. That's it. It's not good or bad. Debt is a tool. And it comes down to how do we use the debt? How do we use the tool? Now back to the answers that changed because today we live in a debt-based monetary system. Let me write that here. Debt based. That means that money is created through debt. When you get a house, a car or boat loan, that money is created out of thin air. Meaning that the money, the dollars that you're given is the liability and the debt becomes the asset. The debt is the asset and is collateral for more debt. So if we're in a debt based monetary system, then the way to build wealth is with debt. And you can try to save your way to wealth, but you have the structural problem of inflation. So we have to understand that debt is a tool. And just like any tool, it can be misused. It can be dangerous. For example, a knife. A knife is very dangerous. Like you could cut yourself, you could kill somebody, you could really hurt yourself. Which is why you don't let little kids play with sharp knives. They don't really know how to handle it properly. and they could really do harm. As you get older and become an adult, you learn how to manage the knife. Once in a while, we might still cut ourselves a little bit while we're in the kitchen or something like that, right? But we've learned how to manage it good enough so it's not catastrophic for us. So, we learn to use the tool. Debt is a tool. Now, personally, most people are thinking about eliminating debt, right? So, I'm looking at my budget every month. I'm trying to pay off my debt as quick as I can. My goal is to be debtree. There's a whole rabbit hole I can go down on that, but companies companies aren't trying to do that. Companies have debt. All the mag seven, those companies I showed you, the top the all the companies that have more cash than Micro Strategy, they also have billions of dollars of debt. Why? Because they engineer wealth with debt. Again, this is the difference of the average consumer versus a company. All right? So, reframe your brain around that.

Now leverage is what redefineses our ability to restructure our balance sheet and engineer this wealth. Leverage we can talk about this from a bunch of ways but in this context the institutional definition is the ability to control assets greater than the equity base that I have. I only have $100,000, but I could probably go control a million property worth $100,000. My equity base is a h 100k, but I can control a million dollar asset. That's leverage. Now, why does that matter? Well, if I pay cash for a 100k property and it goes up, let's say 10%, that means it's now 110K. I made 10. If the same million dollar asset goes up by 10%. That's 100K. Now, which is greater, 100K or 10K? But what's even greater is the 100K on a 100K investment. That's a 100% return versus this person got a 10% return. Which is better? A 10% return or 100% return? You're starting to get it. Okay, we're we're just scratching the surface. Stick with me here. So, all companies are leveraged. They're all leveraged and it's not bad. And it's not because they don't have $300 billion dollars in the in the bank. Even though they have $300 billion in the bank, they still might have billions of dollars of debt because they're using it for leverage. You have to understand that fragility is the risk here. It's not the leverage that's the risk. The fragility of not being able to manage it properly, not be able to manage the knife properly. So rather than saying, "I'll never use a knife again," no, just learn how to use the knife. learn how to put in protection measures into the knife so we don't cut ourselves. Uh instead of not going in the pool, just take swimming lessons or wear a life jacket. Right? Okay.

Now, in order to take this to the next step, I'm going to show you some examples of how you can do this, but I need to lay down the framework and the groundwork for you. Okay. Structural arbitrage. My goal is to teach you the strategies, the principles. There's thousands of ways that you can apply these principles. And once you start to understand it, you're going to see opportunities everywhere and you'll be able to create money almost out of thin air. Financial engineering like what sailor's done, you'll be able to do that. So I'm going teach you the strategies, teach you the structure, teach you the principles. So now we want to understand arbitrage and we want to understand the structural arbitrage. Okay? So in this wealth engineering that we're doing trying to engineer our balance sheet, we want to understand the structure and we have to understand that arbitrage isn't the price of things that we pay. Arbitrage is not the value of our assets. Arbitrage is the structure that we create for our assets to move in so we can benefit between them. All right? So, we have to realize that parts of our balance sheet, so all the different things, the the buildings or the equipment or the whatever that you own on your balance sheet, they behave different. Different things are are different. And the reason why is some debt might be fixed. So 30-year fixed loans, some might be floating, you know, a credit card that adjusts monthly, for example. Cars are five or six or seven years, right? Um we have short duration versus long duration uh assets and loans and leverage assets adjust versus fixed liabilities. And so we have to understand that we have different assets. They work differently. A lot of times we can organize them to work differently, but we can get them to work against each other. What we want to do is we want to think about our balance sheet as liquid. So again, a balance sheet, right? You'd have all your assets, your house, your business, your um office space, your car, your uh you know, equipment that you have, etc. So this is your assets and then down here you have your liabilities and now I have my my house loan, my office loan, my car loan. And then down here you have your net worth. But what I want to do is I want to think about all these things here as liquid. I'm able to mobilize them. I'm able to move them. I'm able to leverage them because the idle balance sheets decay. What do I mean by that? Well, for example, one of the items on my balance sheet is my 401k, let's say. So, I have this money, this is in my 401k and it's in a mutual fund and it's making me whatever 8% a year. Okay? So, even though that asset is there and it's making the 8%, it's decaying. It's losing value. And so that's what happens when assets sit idle on our balance sheet. We have to learn how to mobilize them to get greater than the rate of debatement as we talked about earlier. Now cash is the fuel that allows us to do this. So when we start adding in the leverage, we start adding in the arbitrage. The cash is able to help offset that. But the cash is the fuel to the system. It's not the safety in the system because as we talked about earlier, the cash is also being destroyed by the structural inflation that we have in the system.

Now, here intent matters more than the size. So, you don't have to think that I have to go be as big as Micro Strategy. You can just start really small. And I'll give you some examples. Actually, I'll give you one that you could probably do. Most people could probably do right away. Uh, but real quickly, here's how we would apply this if we're a personal like a homeowner, a consumer, or if we're a business. So, number one, if you're a person, you know, you probably see what Sailor has done with Micro Strategy, and you thought like, well, that's cool that he was able to turn 3.6 six billion into 100 billion. But I can't do that. I mean, I don't have a public company. I can't go tap into the public equity markets and the public debt markets. Okay, you probably can't. If you don't have a corporation, you or I'm sorry, a publicly traded corporation, then you probably can't tap into the public credit debt markets, but you can still get debt. You can still get credit. You still have equity. So, what do I mean by that? So, personally, you have a balance sheet, right? I mean, at least you should a home, a car, uh a business, right? Some sort of assets of stocks, right? So, you have something on your balance sheet. And if not, start working on that first. Uh secondly, you should have credit available to you. Um if your credit's bad, clean it up. Go on CHBT, figure out how to clean up your credit. Start applying for credit cards. Go down to your bank, apply for a personal line of credit, start applying for credit cards. I know a lot of people who are getting hundred,000 sometimes $200,000 credit cards with like 0% APR for 12 months and then you can just like roll the balance. Um and then again you may have equity. So maybe you have a home with some equity in it, a car with some equity in it. So you have both credit and equity available to you. Now that's if you're just a consumer person, you know, personal, etc. If you're a business, you have the same three. So you also have balance sheet, credit lines, and equities both personally and on a business standpoint. But now you also probably have business financing available to you. So now through your bank you can probably get like business lines of credit. Also you have the business equity as well. So even if you have a small entrepreneurial you know soloreneur type business sometimes you can sell equity to a private investor. You have a million-doll business sell 30% for 300 grand. Bring the 300 grand forward. That's what Michael Sailor is doing with Micro Strategy when he sells the common stock the MSTR stock into the market. Now you might say well but I can't get it near as cheap as he can. I'm gonna pay way more on my credit line or my credit card, etc. Well, one of the ways that he's raising money right now is through selling the preferred Strike, Strife, Stride, and Stretch. So, you buy Stretch and he gives you a coupon payment. So, for example, Stretch is paying about 10.75%. I think Strife is about uh 12 12%. So, I'm pretty sure you could probably get credit for less than 12%, which is what he's paying. Those are ways that you can do that. But let's break down an actual example so you can see how this works. So again, I'm teaching you the the principles. I'm teaching you the strategy. You can apply this a thousand different ways. But here's one that most people could probably take advantage of. So let's say that I have a home and for easy numbers, let's say that I uh I owe a h 100,000 on it, but it's worth 200,000. So I have a 100,000 of equity. Okay. Now, you might say, "But Mark, I don't have a home." Okay. Well, then figure out another way to get equity. Like I said, go apply for some credit cards. go to your bank, uh, get a loan against your car, like figure it figure it out. But you're going to need some equity. Okay? So, I'm pulling out equity. I can get a home equity line of credit. I can refinance my house. And I'm going to take this money that's sitting here. It's in the house. It's on my balance sheet, right? It's on my balance sheet, but it's decaying because it's not keeping up with the rate of debasement. So, I can unlock what I call lazy because it's not working very hard or dormant capital. So, I take the 100,000 and I bring it over here. What do I do with it? I'm probably going to pay, you know, I don't know, seven or eight percent interest on that. So now I've taken 100 grand, but I owe seven or eight percent. What am I going to do? How am I going to afford the seven or 8%. Let's engineer that. Okay, so what if I took the 100K and I put it into a product like Micro Strategy has STRK and that's paying me about 9.5%. Well, now I have about a 1.5% what we call positive carry. That means I'm actually getting paid for taking money out of here and holding it here. But it gets even better because this can be, if you set it up properly, tax deductible. And this is also tax deferred, which means instead of 1.5, I'm probably making closer to 4% for sitting on that 4%. Money that was just sitting there doing nothing, now I'm making 4%. gets better because what Strike does is it's convertible to shares of MSTR once it gets to $1,000 a share. So, if if it gets over that, then it converts up. So, not only am I getting 4% for waiting, I have the potential upside. What does that mean? Well, currently, let's say Micro Strategy has 650,000 Bitcoin. They'll probably have a million by 2030 in the next four or five years. Bitcoin is probably going to hit a million in the next four to six years. So, a million Bitcoin at a million dollars is a trillion dollars. Uh, let's say right now they're at a 1.1 times MNAV. I know this is a lot of lingo for you, meaning they're trading a little bit more than their net asset valuation. Um, but historically, it should be around two, but let's just say it gets back to like 1.25. All right? So, that's a a 0.25 multiplication multiple on their net asset value. That would put it at uh one share of Micro Strategy around $3,000, $3,100. I'm getting paid 4% for doing nothing just for making a couple moves. And then in four or five years, this could turn, you know, I'm buying stock and it's going up big time. I have this big capital gains. Now, don't get caught up in the weeds on this. This is just one strategy where I can unlock dormant capital, lazy capital, doing one job, decaying on my balance sheet. I can leverage my balance sheet. So, hey, look at the bank. I have these assets. They'll give you credit because of the strength of your balance sheet. Then I can apply it, make a positive arbitrage, and then I can apply in something that provides the positive arbitrage and gives me more upside. So in four or five years, maybe I have enough to retire. Depends on all of these functions here, but hopefully you understand that.

If you've ever wondered why you're still not rich, even though you work hard, you save money, you do everything you're told to do, this video will show you exactly why. And even better, it's going to show you how to fix this without having to work harder, without having to work longer. Because wealth doesn't just happen, it's engineered. And the people who understand how to engineer it never play by the rules that you were taught. Real quick, my name is Mark Moss. I've built and sold multiple companies. I'm a partner at a leading Bitcoin venture fund. I've coached over 6,500 people on these exact wealth building strategies. So, let's go.

Okay, so from the time you were a kid, right, they gave you this script. You know, the one uh go to school, get good grades, go to college, get a job, buy a house, save money, retire someday, right? That was the plan. That was the American dream. And that script, it used to work. Now, that used to work when we had sound money, when we had low inflation. But that world, it no longer exists. Today, that script's not freedom anymore. Now, that script is a trap, right? It doesn't create wealth. It creates dependency on a system. It creates workers. It creates taxpayers. creates debtors but not owners. Right now, this this system wasn't designed to make you wealthy. It was designed to make you predictable. It was a system built to produce employees who show up. They show up on time. They pay their taxes. They spend their paychecks, right? They're they're consumers. They never question the rules. And most people, they never realize they're following this script. So, here's what you have to understand. You're either building this system or the system is building you. You either design your own life and your wealth engine or you get designed by somebody else's. That's why my mantra is build or be built. You see, most people are being built. They have no plan. They have no strategy. They have no control. Now, I've coached thousands of people and they're all exhausted. They're all working harder than ever. They're doing everything right. But the problem is they're getting nowhere. And the answer why is pretty obvious because they don't know they're even playing a game. But the billionaires, they know exactly what game they're playing. They know the rules. They know the players. They know the objective. They have the strategy. And more importantly, they have the cheat code. How do you expect to win a game when you don't even know you're playing it? The answer is you can't. Right? So, I'm going to show you the game. I'm going to show you the rules, how the system is engineered to keep you poor so you can flip the script and you can win it. All right. So, if this system is engineered to keep you poor, then wealth has to be engineered. It has to be engineered specifically to set you free. But first, you need to understand exactly how the trap actually works. Because once you see it, then you can avoid it. And more importantly, you can flip it. All right? The system keeps you poor through four specific traps. The crazy part is that most people fall into all four without even realizing it. Let's break them down. Trap number one is something called the debt trap. Now, the system teaches you to to use debt the wrong way or not use it at all. All right? Now, it does this on purpose. They teach you to borrow money for things that lose value. Borrow money for cars, for weddings, for degrees, consumption, lifestyle, right? You finance the life that you can't afford. You end up with you end up working for decades to pay off things that are already gone. But if we're going to use debt, we want to use debt for things that last, that turn into something productive. Let me give you an example. Earlier this year, I bought my daughter a brand new uh car. It was a Ford Bronco. It's like $50,000. So, I went to the Ford dealer and I was prepared just to pay cash for the car. But then the dealer says, "Hey, Mark. Um, do you want to look at some finance options?" And I, "Sure. What are the finance options?" He says, "Well, we can give you 4.99% financing for six years." Now, most people would say, "Mark, if you've already got the cash, why would you take on the debt?" Well, the answer is very clear. Because my money can make 50% a year if I put it into Bitcoin. So, I'll gladly pay the dealer 4.99%. And keep my money and put my money into Bitcoin making 50% and I make a 45% difference. But the question that poor people would ask is, "Mark, but what if I can't afford the payments?" and that but the thing is I have the money right you see the poor mentality is that people borrow for things they can't afford middle-class people borrow to upgrade their lifestyle right they buy the Cadillac the BMW the six-bedroom house the boat whatever but wealthy people wealthy mindset they borrow because it's cheaper to use someone else's money than it is to use their own that's the difference the system teaches you debt is bad but the thing is if it's used correctly debt is the wealth building tool. Now, the wealthy know this. You don't. That's by design. All right.

Trap number two is the inflation trap. They tell you to save your money, right? And on the surface, of course, that sounds like good advice, right? Except there's one problem. The money that you save loses value every year because inflation is not a bug. It's a feature. It's engineered into the system to move wealth upward. Now, Wall Street tells you to save maybe in index funds, uh, you know, mutual funds. just put your money in the S&P 500 and wait for 30 years. But here's what they don't tell you. Since the year 2000, the S&P 500 hasn't made a new all-time high. When you adjust it for the money supply, when you adjust it for the amount of money that's been created, as a matter of fact, it's actually down about 20%. So, yeah, like your account, you look at it and you feel rich. It looks rich. It says, you know, 200 grand or whatever, but you don't feel any wealthier. That's because inflation stole your gains while Wall Street collected their fees. You see, you're getting richer in numbers, but you're getting poorer in purchasing power. If you're saving dollars, you're saving ice cubes like in a sauna. Trap number three is the tax trap. So, when you trade time for money, like W2 income, salary, wages, you're taxed first. Depend on your income level, sometimes up to 50% goes to the government before you even see it. But when your money makes money, like passive income or capital gains or business income, you're taxed last or maybe not taxed at all. You see, the tax code's not broken. It's working exactly as designed. It favors builders and investors, not consumers and employees. Because the government needs people to build businesses, create jobs, provide housing. So if all you do is work your 9 to5, you spend your paycheck on Netflix, you're a consumer. and consumers pay the most. Trap number four is the income trap. And the truth here is that salaries cap your upside. You see, whenever you're trading time for money, that's going to equal linear growth. That means you have to work more hours to make more money. But if you're always limited by the hours in a day, then how can you really grow? You see, the wealthy, they don't chase money. They chase time freedom. Because once you have the time freedom, making money becomes easier. But most people are stuck trading time for money. And time is the one resource you can never get back. You can always make more money. You can never make more time. That's why employees are capped at linear growth. But owners, they build systems that run without them that exponentially grow. So the wealthy are then not trading time for money. They're building these engines that run on their own. Now, the reason you have to work so hard is because your money doesn't. So do you see the pattern here? Every trap that we went through is designed to keep you in motion but going nowhere. Working hard but getting nowhere. Earning more, feeling richer but not actually being richer. It's like being on a treadmill. Now, most people spend their entire lives on it without ever realizing that they could just step off because if the system's engineered to keep you poor, then wealth has to be engineered to set you free. And that starts with understanding these five rules that the wealthy know, but almost nobody does. So, let's break them down. All right.

Rule number one, never borrow for anything that won't make you richer. Right? So, basically, don't finance status, finance growth. You see, most people use debt to buy things that go down in value. Furniture, vacations, weddings, lifestyle upgrades. But the wealthy use debt to buy things that go up in value. Real estate, business equipment, productive assets, Bitcoin, my favorite. But here's the golden rule that I live by. Always use debt. Always get a loan when that borrowed money is cheaper than what your own money can earn elsewhere. You see, that's arbitrage. That's how the wealthy use debt as a tool and not a trap. Like the story I told you earlier about buying my daughter's Bronco, right? I had the cash, but I could borrow the money from Ford at 4.99% and then I could use my money to go make 50%, which allowed me to make 45% net gain. Right? So that's what we call smart debt. But if I didn't have the cash, if I was borrowing because I couldn't afford it, then that would be dumb debt, right? That's the trap. So here's the rule. Borrow for things that make you richer, like real estate, right? Real estate generates cash flow, equipment that increases revenue, assets that appreciate, but don't borrow for status, right? Never borrow for consumption. Rule number two, save at least 40% of what you make, but save in real assets. Not the way that they taught you. What do I mean by that? You see, most people again, they're saving in dollars, right? We we just talked about that. That's like saving ice cubes in a sauna, as I said, right? But the wealthy, they save in real assets. So, they're saving in real estate, in Bitcoin, in gold, in businesses. Now, most people consider that investing. And I'm just using a different word here. I'm thinking about I'm earning my money in my business, which we're going to come to another rule. And then I'm saving it in these other assets, real estate, Bitcoin, gold, businesses. These are things that hold their value. These are things that appreciate over time. Now, I know what you're thinking. Let's go back to the beginning, Mark, because you said to save 40%, I can't even save 10%. Well, here's how you do it. You plug the financial leaks. You optimize your income. You stop paying more in taxes than you have to. and you shift from a spending mindset to an investing mindset. Most people think their money's only job is to sit in this bank account like for like this just in case. But like I said earlier, the reason you have to work so hard is because your money isn't. See, I want my money doing two jobs or three jobs or five jobs. Every dollar should be working multiple shifts, compounding, generating cash flow, creating tax write-offs, appreciating in value. That's what I call the velocity of wealth. Your money should be in motion, not sitting idle, right? not losing value to inflation. So you need to save aggressively but save in assets not dollars. Now rule number three is important to achieve number two and that is get onto the revenue side of a growing business. You see you're never going to get rich with that cap salary. As I said if you're trading time for money that's linear growth. See the wealthy are not getting paid on time. They get paid on growth. So if you're trading hours for dollars, you're playing a losing game, right? There's only so many hours in a day. Your upside is capped. So what the rich do is they focus on equity or leverage or ownership, all of those to get infinite upside. While employees focus on hours with a capped upside. Now, this doesn't mean that you have to go start a business or own a business, right? You can do this even with a job. But here's what you have to do. go and get a job on the revenue side of a small to medium-sized business, maybe specifically in a growing part of the economy, maybe in a major city, and then make sure your income isn't capped. Now, typically this means you need to look for positions in sales and marketing or in maybe product development, something like that, right? Where your pay is then linked to the growth of the business through commissions, profit sharing, royalties, equity. Now, in order to do this, you're going to have to trade a lower salary, but for higher performance pay, because say like a $60,000 salary with 20% commission is probably worth way more than an $80,000 salary with no upside. See, one caps you, the other scales with your results. Here's the road map I learned, and I this is the one that I followed when I was building out and building my own wealth. Your 20s, they're for learning, right? This is when I worked for other people. Your 30s, this is for earning. This is when I started to build and started to scale my businesses. Your 40s, that's for owning. This is when I started expanding my business portfolio. This is when I started opening up my investment funds. This is when I started um expanding into other assets. You see, most people try to start a business way too early in my opinion. They do this before they have the knowledge. They don't have the network. They don't have the capital to succeed. Now, I'm not talking about side hustles. I mean primary means of financial support. Now, if you execute your career correctly, you won't have to work anymore by the time you're 35. And I say have to work. Now, you'll probably be able to live any way you want by the time you're 45. But each of these steps is important. You have to learn, earn, and then own. All right? Now, a lot of people, they have a hard time walking away from the earn part, right? They get comfortable. They get that nice salary. They get the title. But you're never going to be completely independent until you own your own means of income, your business. Because ownership is where the real wealth is built. Not in hours, not in salary. Ownership. And once you own it, then you can start to implement other systems like one I call the fast method. Focus for the F is basically eliminating everything that doesn't move the needle. You see, most people are busy but not productive. So, we want to focus on the 20% that drives 80% of the results. The A in fast stands for automation. We can build systems that run without you. Use AI, use software, use tools. The goal is to basically try to remove yourself from the day-to-day operations. The S is shift. Move from being in the business to being on the business, right? Working on strategy, not the tasks. Be the architect, not the worker. And then finally the TN fast is time. Then we can reclaim our most valuable asset. Time. Time freedom. That's the goal. That's the ultimate goal for everybody because once you have time freedom, wealth becomes inevitable. All right.

Now, rule number four is uh so important. It should probably be rule number one, but we're going to put it here. Number four, and that is to accumulate real money. I'm not talking about dollars. Dollars are paper. Paper is the money of slaves. Gold is the money of the free. Bitcoin is the money of the future. So when you look throughout human history, gold's been money because it's scarce, right? It's durable. It can't be inflated away by central banks. But Bitcoin, Bitcoin takes everything gold does and then it makes it even better. You can't carry a million

dollars in gold across a border, but you can carry a billion dollars in Bitcoin in your head with 12 words.

Now, Bitcoin isn't just an investment. It's the ultimate opt out. It's money that can't be inflated away. It can't be confiscated. It can't be controlled. It takes the foundation of their system, money, but it gives it back to us. But we don't need permission. We don't need any central control and no inflation can take it.

So here's what I do. I stack a little bit of gold. I stack even more Bitcoin. And I don't think of them as investments. As I said earlier, I think of them as my savings account. All right? This gives me a it gives me a more passive mindset, uh, a more long-term mindset.

And finally, rule number five. Borrow in bad money and invest in good assets. All right, this is what we call a speculative attack. It's what separates what the wealthy do from everybody else. Here's how it works. Inflation punishes savers, but it rewards borrowers. If you borrow at say 4%, but your money compounds at 12 or 20 or 50%, getting paid to borrow.

Let me give you a historical example of this. In the 1920s back in Germany during the Weimar Republic there was massive inflation. It was like the textbook example of hyperinflation right and there was this guy named Hugo. Now at that time hyperinflation was destroying the German mark their currency at the time. So what he do? Well he borrowed as much of the failing German market as he could get his hands on. And then he used that that those loans to buy factories to buy gold to buy commodities to buy businesses assets that were going up in value. He became one of the richest men in the world at the time.

Fast forward to today, we can see Michael Sailor's basically doing the same thing with Micro Strategy or now Strategy, right? He's borrowing dollars at five to 10% and then he's buying Bitcoin that's appreciating at 50% per year. Since 2020, he's turned his company, Strategy, into one of the most profitable companies, one of the um best performing stocks in the world. He'll probably become one of the richest men in the world doing this.

Now, you might be thinking, Mark, I'm not a billionaire. I can't do that. Yes, you can. Here's how. Buy a rental property. Maybe get a 30-year mortgage on it, say at 6 or 7%. Use the tax depreciation, write off your income, so you can keep more of your money that you would have given to the government. And then you can use that money to buy Bitcoin, right? Then you can let the tenant pay off the property, use the cash flow that you're getting to dollar cost average into more Bitcoin. Then you can refinance, pull equity out tax-free, and you can do it again. Right? That's how I used real estate to buy 10 times more Bitcoin than most crypto investors ever will. You're borrowing in dollars that are losing value, and you're buying assets that are gaining value. You borrow weak, you buy strong. That's the whole game.

So, there you have it, the five rules. Rule number one, never borrow anything that won't make you richer. Rule number two, save at least 50% but save in real assets. Rule number three, get on the revenue side of a growing business. Rule number four, accumulate real money, gold and Bitcoin. Rule number five, borrowing the bad money, invest into good assets.

Now, once you understand these rules, maybe I should say once you actually implement these five rules, you stop being a pawn in the game, you start becoming the player. But knowing the rules isn't enough. You have to apply them. And so now that you know the rules, now you know how the system keeps you poor. And now you know what the wealthy do differently, right? You understand that this isn't just about money. It's about the game of money. You see, as I said earlier, most people are playing a game they don't even understand, right? They follow the rules, they work harder, they pay their taxes, and they wonder why they can't get ahead. But the game was never meant for you to win the game. The only way to win is to change the game entirely.

Now, that's what I call building your wealth operating system. You see, in life, uh, sort of like your phone, your iPhone, right? Your phone has this operating system that's built into it, and that manages all the apps and keeps everything running smoothly. But most people, they're running their life with no operating system. There's no plan. There's no system. There's no strategy. They're just reacting to whatever comes their way. The wealth operating system is your personal engine that flips the rules into your favor. And it has three core engines that work together.

Engine number one is the time engine, right? This is where you reclaim your time using the fast method, right? Because if you don't control your time, you don't control your life. Engine number two is then the income engine. This is where you optimize how money flows in, how you eliminate financial leaks, how you restructure debt, how you engineer tax efficiency, how you make every dollar coming in work as hard as possible. And then engine number three is then the wealth engine. And this is where you multiply wealth using the velocity strategy. Making every dollar do two jobs, three jobs, five jobs. And when you have all three of these engines, when they're all running in sync, that's when wealth becomes inevitable.

Now, I learned all this the hard way, right? In 2008, when I was 28 years old, I had already built and sold multiple companies, right? I I thought I was set. Multi-million dollar real estate portfolio. I was rich. Then the market collapsed and overnight, I went from feeling rich to being in the hole, being broke, right? I had no cash flow. I was overleveraged. I had no exit plan. I basically burned my entire financial house down. It sucked. But that taught me the most valuable lesson of my entire career is that I need a system. I need diversification. I need cash flow. I need an exit plan. That's why I built the wealth operating system. You don't have to learn the hard way like I did.

And so while we certainly want to plan for growth and shoot for the moon, we make sure to hedge our position. So certainly do what the successful do, take a strategy like the successful do, but make sure you also put the risk mitigation strategies in that the successful do as well. So this is only one piece of the puzzle. So, if you want to learn the entire system or how you can apply the system to yourself, then you might want to go watch this video that I have right here, which breaks it down into even more detail. And I'll see you over there.