Brad Sugars

It's called capitalization.

If you don't sell, your equity is doing very little work for you.

So, for example, why is Elon Musk the richest person in the world?

Because he sold his first business.

If he hadn't capitalized and raised a couple hundred million dollars, he couldn't have started those three companies that got him to the next phase and the next phase type thing.

But so the milkman...

You run your business one year, you make one year's profit.

He was buying and selling a business every year.

He'd buy a bad area, build it up, sell it at the end of the year.

So at the end of the year, he was getting a five multiple for his business, right?

So he was making six years profit in one year.

Capitalization.

If you're not capitalizing, I teach it to my two oldest daughters.

They're both now investing in their first homes.

And I say to them, here's how you make money as a young kid, right?

Do you care if you have roommates as a young kid?

No, Dad, I don't care.

Great.

You're going to buy a house with five bedrooms, OK?

It's going to be a rundown house in a nice neighborhood.