The 4 Paths To Mega Money | Ep 975
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What are the four paths to mega money?
Poor people stay poor because they want a fast way to get rich.
How can bootstrapping a business lead to wealth?
And instead, the richest people that I know pick one of these four paths, play it for a decade, and then end up with more money than everyone else that is just chasing shortcuts. And just as a fun reminder for you, no president, no economy is going to make you rich. You have to do that for yourself. So in this video, I'm going to show you the four paths to mega money. and I'll show you how to pick the right path at the right time for you.
What does raising capital involve and who should do it?
Let's get into them. You've got your money and your business. You've got other people's money and other people's businesses, and then permutations of those. And so your money, your business, right, is a bootstrapped business. If you have other people's money and your business, now you're raising capital.
How does investing in other people's businesses work?
If you have your money and other people's businesses, now you're investing. Finally, you have other people's money and other people's businesses, which is fundraising. Now to give you some proof points around this, I actually looked up the top 11 richest people currently on the Forbes list, and I'm gonna tell you where they are. So you've got Elon Musk, he's a raised capital guy. Almost every single company he's had, he's raised outside capital, and then he's continued to fund it and grow it.
What is fund management and how does it maximize leverage?
Larry Elson, who's number two, raised capital. Mark Zuckerberg, raised capital. Jeff Bezos, raised capital. Larry Page, raised capital. Sergey Brin, raised capital.
How can one attract capital by finding exceptional deals?
Steve Ballmer, bootstrapped. Microsoft was bootstrapped. A lot of people don't know that. Underneath of that, you got Jensen Wang, raised capital. Warren Buffett, investing. Michael Dell, bootstrapped. The Waltons, as in Walmart, bootstrapped. And so that's the top 11 wealthiest people in the world. Now you might've noticed that fund management wasn't there.
What are the risks associated with each wealth path?
If I go like six deeper, you'll find people who did fund management. Now, one of the interesting things about each of these constructs is there's a little bit of risk and there's a little bit of trade-off with each of them. And I personally have done one, two, three, and four, believe it or not. And so I'll actually walk you through my own examples and which one's right for you. So let's start with number one, bootstrapped. Bootstrap just means that you fund the business from your own savings and cash flow. You have no outside investors and you grow through reinvesting your own profits. You have a website and you've got a cell phone and you've got skills and you start trading one for the other, get a little excess money, take that excess money and then continue to build.
Now, typical examples for this are usually low cost businesses to start.
How do you choose the right path to wealth for yourself?
A lot of times that's services. So agencies, home service businesses, B2B services, professional services, things like that. Sometimes nowadays you can actually do this with software. It didn't used to be that way, but now it kind of is. Education businesses, e-comm brands, if you do drop shipping. If you don't do drop shipping, you'll have to front some capital in order to get the first inventory started. Local businesses, most normal companies. Now to be fair, that scope has continued to broaden because the cost of entering business is gonna continue to drop. Now, for me personally, my first brick and mortar business was a gym, and so that was bootstrapped. I used the profits from that to start Prestige Labs, which is a supplement company, which is bootstrapped.
I started Allen, which is a software company, which is bootstrapped. And so all those companies were bootstrapped. Today, acquisition.com is taking some of that capital, investing it into other people's businesses. while also having some companies that we start de novo from our holdco, which is kind of semi-bootstrapped and also kind of reinvesting our own capital. So you can see how some of these boxes merge. Now, who is this right for? So if this is your first business, I recommend starting with bootstrapping. And the main reason is just that you want to pay off ignorance.
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Chapters
8 chapters
1
What are the four paths to mega money?
0:00–0:03
2
How can bootstrapping a business lead to wealth?
0:03–0:22
3
What does raising capital involve and who should do it?
0:22–0:39
4
How does investing in other people's businesses work?
0:39–1:04
5
What is fund management and how does it maximize leverage?
1:04–1:11
6
How can one attract capital by finding exceptional deals?
1:11–1:27
7
What are the risks associated with each wealth path?
1:27–2:08
8
How do you choose the right path to wealth for yourself?
2:08–25:04