How the 1% Make and Manage Their Money

Bonjour, all you beautiful people. So we are here, still in Italy, still kind of look at that. Isn’t that just a gorgeous morning walk? Absolutely lovely. Hopefully the audio quality is good enough for you guys. You’ll. You’ll give me a little bit of grace here, as we not in the usual confined office for recording. But I thought this would be kind of beautiful. Take you guys for a little morning walk with me.
So let’s talk about how the top 1% make and grow and manage their money. It’s very simple. It’s very simple formula. Now, for the longest time, I thought finance and money was a very complicated thing. And the reason for that is because there are very smart people who are incentivized to make it feel overwhelming and complex and to make it feel as though you need to trust an advisor, a professional, somebody who knows what they’re doing with your money, with your financial decisions. And so what a lot of people end up doing is they advocate responsibility for learning the rules of money and for learning the winning strategies of money. And they just follow in the footsteps that their parents told them, which was go to w two or go to school, get your degree, get a w two, work a good job, right, then put your money into a. Invest it with this hedge fund dude, and get your life insurance and all this stuff, right.
So they’re just taking the most well trodden advice. But the problem with that is if you do what everybody else does, you get what everybody else gets, and generally, everybody else is doing pretty dumb things that are meant for the average person. But you don’t want to be average. You want to be a top one percenter, right? You want to make your fortune, you want to live life on your terms. And I totally support that. But to be an exception, you have to do something exceptional. You have to be an exception. You have to do something different than what most others are doing.
So what is it that the 1% are doing, and how can we emulate this? I’m going to keep it real simple. I’m going to give you the winning strategy that I’ve seen both in my own personal life to build a multiple seven figure net worth. And I’ve seen countless times now and just having the honor of being around some, like, way bigger hitters, people who are, you know, high nine figures, ten figures of net worth, seeing how they played the game. And I’ve just been a student of this ever since I was back in that van, $80,000 in debt, and being like, I am tired of playing the game and losing like this. I want to. I want to win this thing. I’m tired of feeling the stress and anxiety every time I fill up the van with gas, wondering, is it going to overdraft or not? So here’s the simple strategy. It’s very simple.
You have to have. It’s a two part strategy. Strategy number one is you have to learn how to make the money. Strategy number two is you have to learn how to manage the money, the making the money. This is the part that a lot of people never figure out. And they jump straight to trying to manage their money, and they start worrying like they’re working their w. Two, they’re making 75, $80,000 a year, and they’re wondering, how do I manage this money effectively? And they’re looking at in different investment vehicles, and they get really deep into the weeds of investing. Because you’ve heard if you don’t invest, then you’re going to die poor.
Like Warren Buffett said, if you can’t find a way to make money and you’re sleeping in work to your until you’re dead. And the way that you make your money work for you is by investing it. But the problem is, investing only really works under two circumstances. Number one is if you have a large sum of money that can earn interest and that’s a meaningful then. So if you wanted to have enough money to, uh, comfortably finance your lifestyle, if you’re making 50, $60,000 a year, if that’s how much you’re making or putting out in expenses, you’re going to need a solid, you know, million dollars, million and a half dollars kicking off like a five, 7% interest rate for you to be able to hit those numbers. So that’s a. That’s a not inconsequential chunk of change, right? Almost got hit by a car there. Italy is going to be the death of me.
So that’s not an insignificant chunk of change. So that’s problem number one. To get meaningful outputs of cash, of capital, you got to have a pretty big nest egg working for you, and you’re gonna have a difficult time accumulating that without the second thing that makes investing effective, which is time. Lots and lots of time. Now, if you’re making $50 to $80,000 a year and you’re putting away a couple hundred dollars every single month that you’ve heard these stories, you do this, you know, for 40, 50 years, it’s going to compound, you’re going to look up and you’re going to have a couple million dollars there. That is true. That is definitely true. If you want to get to multimillionaire status and you just want to play the 50, 60 year game, you could do that by putting away little bits of money.
If that’s the game that you want to play, cool. You know how to play it, keep doing it. But if you want to be a top one percenter, which means you get there a lot sooner, you can’t do this. You can’t just put a couple hundred dollars away every month and you can’t have a 40, 50, 60 year timeline. You got to figure out, how can I compress decades into days, and how can I move faster towards my goal? Presumably the question we have to ask ourselves is, how can I make, say, a million? We’ll just use that as a baseline. That’s not a ton of money, but it’s a good baseline for a lot of people. How do I make a million dollars in the next ten years? Right? And so the way that the wealthy people that you’ve probably met or have seen, or people like me, that you’re consuming content from the way that 99% of us have done it isn’t through a w two job. You can do it through a w two job.
Like that’s totally possible, but it’s very unlikely the vast majority are going to do that through building a business. Now, the reason that building a business is such a high leverage way for building wealth is because your inputs are more directly correlated to your outputs. And the more inputs that you put in, the more they compound, the faster that flywheel spins and the more likely you are to get really big returns at the back end. When you compare that to a w two, you can put in the same amount of work. You could even bust your, you could be working even harder in a w two than you do in your business. But the flywheel is only ever going to go so fast. It’s only going to go up linearly, unless you are one of those positions in the business that is compensated as a result of your input. So like a sales position, that is a great way to make a lot of money.
But I consider salespeople to be entrepreneurs as well, because if you look at the way that their base, their compensation is structured, it resembles a lot of an entrepreneur’s model. So the truth is, you got to build a business, and it doesn’t have to be a product business, doesn’t have to be an overly complicated business. I’m a big fan of service businesses because they require so little to get going except for your domain knowledge and whatever it is that you’re already pretty competent at. Take that and figure out how can you share that with the world? How can you use that to bring people value? You then have to solve for the marketing issue. But you just got to watch podcasts like this. I’ll teach you. I’ll show you. That’s pretty simple.
That’s nothing to get too stressed out about. But that is the first part of the plan. If you want to make money like the 1%, you have to own a business. Now, you could say another part of owning a business is investing and co owning other businesses with other people. Remember, every, every business needs three things. It needs people who have the time, people who have the knowledge, and people who have the capital. Right? The time is to go do the work. The knowledge is to know what the work that needs to be done should be.
And capital is to fund the work until the work can fund itself. That’s what you need for any business, is those three things I want you to think through. How can you leverage that in your own life, your relationships, to go start a partnership or start a business. And then once you do that, once you’ve started to make a good bit of money. Now we have to solve for the managing the money issue. But in my experience, if you really want to win the money game, I wouldn’t worry about the managing part until you have already won. Generally, you won’t win the money game through the managing part. You want to solve that.
When you have so much money coming in from your business and your income is so high that you’re suddenly like, I don’t know what else to do with this. And I didn’t necessarily live this out. I started investing a whole lot sooner on my journey. But I look at, like, the amount of marginal return that I’ve gotten from those early day investments. It’s not that great. And in a lot of ways, I would have been better off taking that money, investing it into myself, my skills, my my abilities, my to a coach, into a community. I would have been way better investing into myself, investing it back into my business for growth. It would have made a lot more money than just throwing it into s and p 500.

So take that for what it’s worth. Learn from my mistakes, do what I say, not as I do, so to speak. So that’s going to do it for me. All you beautiful people, I’ll see you in the next episode. But until then, ciao Bella.