WEBVTT

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The top 2%,

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they don't save the way you save. They don't invest the way you invest, and they don't retire the way you retire. The real difference, it's not really a secret asset, though. It's not a hedge fund, and it isn't an offshore account. It's one move. One single,

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repeatable,

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deeply, I don't know, unsexy move that the wealthy make and you don't. They never spend their assets ever.

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They issue credit against their assets. And today, I'm gonna show you what that actually looks like, what that means, why it changes everything, and why almost nobody outside of the top fraction of the percent are doing it. You ready? Let's go.

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Now before we can get into how they do this and maybe why you might want to copy them, other than why copying success is always a good thing to do, let's talk about what. Let's talk about what they're trying to save themselves from. So what happens is assets are hopefully growing if you make the right investment assets, and they have what's called compound annual growth. So they're compound. Compounding means that it's growth on top of growth. Now most people don't understand this. The human brain really is, uh, makes it difficult to even comprehend what this means. Now Einstein called the compounding

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the eighth wonder of the world. He said that those who know it earn it, and those who don't know it, they pay it. So what that means is there's no standing still in this life. That means that you're either growing your wealth or you're giving your wealth up. You're either earning it or you're paying it. And again, the human mind can't understand this, and the reason why is because the human mind thinks linear

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like this. So if I continue to save and if I continue to invest, I start with a 100,000

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and maybe I end up with a million over here. But that's not how the law of compounding works. The law of compounding me can be summed up pretty simply, and we use something called the rule of 72. So we take the yield that we earn, and we divide it by 72. So let's just say, hypothetically, Bitcoin's two hundred moving day average is about a 30% CAGR, compound annual growth rate, somewhere between 30 to 50.

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Let's just call it 20 just for easy numbers. So I have a 20% compound annual growth rate divided by seven two equals three point five years. So what that means is my wealth doubles

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every three point five years. So if I start with 1,000,000, in three and a half years, it's 2,000,000,

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and then it's 4,000,000, and then it's 8,000,000, and then it's 16,000,000, and then it's 32,000,000, and then it's 64,000,000, and then it's a 128,000,000.

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And my wealth starts going parabolic.

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What this means is at the same time it took me to go three years here,

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also took me three years here. That means in three years, I made $64,000,000

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in only three years. That's what the law of compounding does. And so the reason why the wealthy never sell their assets is let's say that I was able to turn 1,000,000 into two and I sell it. And I take this money and I go on vacation and I send my daughter to college and I buy a new house and I buy a new car. Well, that's cool. I take that extra million I made, and I buy these things that I wanted.

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But what I gave up is $64,000,000

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if I just would have waited another decade. That is the cost of you selling your assets, and that's what the wealthy know. So what we wanna do instead is if I want this million dollars right here, what I could do is I could take a loan out for the $1,000,000.

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Now, of course, I have to pay back this loan. This could cost me 7 to 10 percent. But, again, we've established this is going up by 20%.

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So if this is going up at 20%,

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but I have a loan at 10%, I'll take that deal every day. As long as this asset continues compounding

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faster than the rate of the debt that I have to pay, I'll wanna do that forever. Now one question that people would typically ask me, which is the same thing, at what point do I pay that loan off? And again, I'll reiterate,

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as long as the asset is continuing to go up faster

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than the rate of debt, why would I ever wanna do that? Now while this may sound foreign to you, that might just be because of the people that you hang out with or the advisers that you have. This is not an underground tactic that people don't know about. It's just a tactic that the wealthy use, the billionaires use, and you maybe don't hang out with that many billionaires. But let me point to the fact. Here's a Forbes article that I was recently reading where it shows that the richest people in the world can access billions without selling their stock. As a matter of fact, 50%

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of Fortune 500 CEOs, not a small number, half Fortune five hundred CEOs issue credit

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against their stock rather than selling it. Why is that? No. I've already told you why. Number one, we break the compounding, but it gets even worse. On top of the breaking the compounding, which could cost me 64,000,000

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in ten years, I'm also paying tax. So when I sell an asset, it's a taxable event. Meaning, if I sell an asset, it's taxable.

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If I make a profit, I pay the tax. If I take a loss, I could claim that back on my taxes. It's a taxable event. Debt is never a taxable event. So if I'm one of the wealthiest CEOs in the world and I want to have money to buy a new house or buy a new company, like Elon Musk did when he borrowed against SpaceX to buy Twitter, for example. If I wanna buy a company, wanna buy a house, I could sell the stock. But the problem is, let's say that I need a million dollars, I might have to sell $1,500,000

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worth of stock to get the million I need. Versus what I could do is I could issue credit against the asset that I have. So I could take a million dollar credit line against

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my stock portfolio. Now I pay zero tax on that because, of course, debt is not tax. Debt is not a taxable event. So I can access what I call renting the liquidity. I can rent the liquidity against the asset without giving the asset up. It allows me to save on the taxes, and it allows me to hold the asset to continue to compound forever. Alright. Now just a quick warning here. Sure. While 50% of Fortune five hundred CEOs do this, and the fact that other people can do it means that you can as well, the truth is that they have a system. They have a team. They have advisers that understand this and can put all types of risk mitigation strategies in place to make sure they don't blow themselves up. The problem is when you are smart enough to understand the problem but not smart enough to keep yourself out of danger,

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things can turn south for you. So for example, you're watching TV and you're watching some guys in Hawaii surfing these waves. You're like, shoot. I'd like to go surf those waves. But you're from the Midwest. You've never been in the ocean before. That's probably not the best thing. Now you might go, but they're doing it. I don't see anybody dying out there, but they've had to work their way up there over time. So before you just go jump in and do these dangerous strategies, make sure that you're mitigating your risk properly, making sure that you have the proper liquidity,

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making sure that you have your treasury doctrine in place and you understand what your parameters are, your risk leverage policies are, your LTV ratios. Make sure that you understand how you can protect yourself. The wealthy do another thing differently. They never think about how much money they can make on a winning investment. They always think about how much they could lose and how they protect themselves from it. That's why Warren Buffett said the number one rule to investing is don't lose money. Number two rules, don't forget number one. And so a hedge fund is literally called a hedge fund because they hedge

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every single position they make. And so while we certainly want to plan for growth and shoot for the moon, we make sure to hedge our position. So certainly,

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do what the success will do. Take a strategy like the success will do, but make sure you also put the risk mitigation strategies in that the success will do as well. So there's only one piece of the puzzle. If you wanna learn the entire system or how you can apply this system to yourself, then you might wanna go watch this video that I have right here, which breaks it down into even more detail, and I'll see you over there.