How I Made My First $10 Million (COPY MY PLAN)

Summary

The speaker recounts his journey from financial ignorance to becoming a self-made millionaire by age 25. Through life lessons, he learned the importance of passive income, avoiding lifestyle inflation, and the value of time over material possessions. He shares his entrepreneurial ventures, the betrayal by a friend, and the pivotal moments that shaped his investment strategies, including the wisdom of diversification and the perils of excessive risk. His narrative is a testament to resilience, learning from setbacks, and the pursuit of financial education and mentorship.

Takeaways

• 💡 The importance of learning from life's ups and downs rather than formal education was highlighted as a key to success.
• 💰 The concept of 'passive income' was introduced as a way to achieve financial freedom and avoid a lifetime of work.
• 🚀 The speaker's journey to wealth was divided into five stages, each with a distinct lesson and challenge.
• 🔑 Early entrepreneurial experiences, like selling fish door-to-door, built foundational skills like confidence and salesmanship.
• 🛒 Awareness of 'lifestyle inflation' was identified as a financial pitfall where increased earnings lead to proportional spending.
• 🏁 The realization that material possessions do not equate to respect or admiration, which are better earned through competence and kindness.
• 💼 The value of having a budget to track and manage finances effectively was emphasized for building savings.
• 🔄 The speaker's experience with business setbacks, such as theft and natural disasters, underscored the necessity of risk management.
• 📈 Investment strategies like dollar-cost averaging and focusing on index funds were highlighted as effective wealth-building techniques.
• 🛑 The perils of investing in areas outside one's understanding were illustrated through the speaker's losses in penny stocks.
• 🔑 The application of the 80-20 principle (focusing on the most productive activities) was key to refining the business model and personal life.
• 🌟 The final stage of wealth accumulation involved focusing on relationships and giving back, emphasizing the importance of personal fulfillment over material success.

Q & A

How did the speaker make his first million at the age of 25?

The speaker made his first million by learning about investing from life experiences and not formal education. He was inspired to seek passive income after a conversation with a successful homeowner who emphasized the importance of making money while not actively working.

What is the concept of passive income as mentioned in the script?

Passive income refers to earnings generated with little to no effort by the recipient. It's a key component of financial independence, allowing individuals to earn money without actively working, as illustrated by the homeowner who advised the speaker.

What was the first entrepreneurial venture the speaker recalls from his childhood?

The speaker's first entrepreneurial venture was selling fish door to door. This experience helped him build confidence and sales skills, which he identified as crucial for his future success.

What is 'lifestyle inflation' as described in the script?

Lifestyle inflation is the tendency to increase spending as one's income grows. It's the phenomenon where an individual's new baseline of spending adjusts to their current income, often leading to difficulty in saving money.

How did the speaker's friend Paul change his perspective on luxury items like Ferraris?

Paul, who worked as a valet, shared that despite the admiration the rich might feel when driving luxury cars, he himself did not care or notice them. This made the speaker realize that people rarely give the driver a moment's thought, and that competence, intelligence, and kindness garner more respect than material possessions.

Why did the speaker decide to create a budget?

The speaker decided to create a budget to better manage his finances and to understand where his money was going. This was a step towards building an emergency fund and saving money for his future endeavors.

What was the pivotal moment that led the speaker to realize the importance of time control through passive income?

The pivotal moment was when the speaker was tasked with making wooden trash cans and felt deflated by the monotony and lack of passion in his work. He realized that having passive income could allow him to spend time doing what he loved.

How did the speaker's business idea get stolen by a close friend?

The speaker shared his business plans with a close friend and confidant, who then stole the idea and set up the business for himself before the speaker could do so.

What lesson did the speaker learn from the experience of his business being burglarized?

The speaker learned about the balance between risk and reward. He realized the importance of humility and fear of losing what one has made, and the necessity of proper business structuring and updating insurance to cover new assets.

What investment strategy did the speaker adopt after learning about the performance of active fund managers?

The speaker adopted a strategy of investing in the S&P 500 Index, a diversified basket of 503 stocks, to earn steady growth along with the US economy. He aimed to have enough money invested to withdraw up to 4% per year to live off his investments while still growing his portfolio.

How did the speaker's approach to business change after his experiences and learnings?

The speaker moved from a B2C to a B2B model, focusing on the 80-20 principle to increase numbers without dealing with as many individual customers. He also applied lean manufacturing principles to cut unnecessary aspects from his business and personal life to focus on what was most meaningful and productive.

What was the speaker's revelation that led to the final stage of his wealth journey?

The speaker realized that the most important investments in life are relationships with family and friends. He started focusing on passing on his knowledge, teaching his son about finance, and using his platform to educate and inspire a younger generation.

Outlines

00:00

💼 The Path to Financial Freedom

This paragraph introduces the speaker's journey from making his first million to joining the top 1% of earners. He emphasizes the importance of passive income and shares his five-stage plan for financial success. The speaker's early life was marked by entrepreneurial ventures, such as selling fish door-to-door, which built his confidence and sales skills. He learned about lifestyle inflation and the superficiality of material possessions from his friend Paul, who worked as a valet. The speaker also discusses the pitfalls of quick wealth schemes and the importance of a budget, leading to the realization that financial independence is about having control over one's time.

05:00

🚀 From $20,000 to $100,000: The Hustle

The speaker recounts his journey from $20,000 to $100,000, detailing the challenges he faced, including having his business idea stolen by a friend. Despite this setback, he secured a loan and reinvested earnings to expand his business. He learned valuable lessons from mentors in the business world about scaling a business, improving sales, and managing people. However, he also experienced significant setbacks, such as his stores being damaged, which taught him about the balance between risk and reward. The speaker emphasizes the importance of not taking excessive risks and the need to adapt to changing times by moving operations online.

10:01

💡 The Realization of True Wealth

In this paragraph, the speaker transitions from making $100,000 to $1 million, reflecting on the dangers of turning a passion into a money-making venture that becomes a prison. He discusses the challenges of scaling a business and the realization that he was the biggest bottleneck. The speaker explores investment strategies, including the benefits of diversification and investing in the S&P 500 for steady growth. He shares his strategy of dollar-cost averaging during market crashes, which allowed him to accumulate shares at lower prices and grow his wealth significantly.

Keywords

💡Passive Income

Passive income refers to earnings derived from a variety of sources that require little to no effort to maintain or grow. In the video's theme, it is the secret to financial freedom that the narrator's boss imparts, symbolizing the shift from active work to leveraging investments and business models that generate income with minimal ongoing effort. The narrator's journey is driven by the pursuit of this concept, as seen when the boss tells him, 'if you can't make money while you sleep, you'll work until you die.'

💡Lifestyle Inflation

Lifestyle inflation is the phenomenon where an individual's spending increases in tandem with their income, often leading to a lack of savings. In the script, the narrator acknowledges this as a trap, explaining that as earnings rise, so does the spending, which can hinder the accumulation of wealth. The example given is how the narrator's earnings were quickly spent on fast food and dating, illustrating the challenge of maintaining financial discipline.

💡Hustle

Hustle, in the context of the video, represents the drive and effort to work hard, often in entrepreneurial ventures, to achieve financial success. The narrator's early memories of selling fish door to door exemplify this concept, showcasing the early development of confidence and sales skills, which are fundamental to the hustler's mentality and essential for the narrator's later success.

💡Risk Management

Risk management is the process of identifying, assessing, and prioritizing potential risks to minimize or avoid negative impacts. The video script discusses this in the context of the narrator's business being burglarized, highlighting the importance of having proper insurance and structural safeguards in place. The narrator learns the hard way about the balance between taking risks to make money and managing risks to keep it.

💡Diversification

Diversification is an investment strategy that involves spreading funds across various financial instruments, industries, or other categories to reduce risk. The narrator mentions reading about the benefits of investing in the S&P 500, a diversified basket of 503 stocks, to achieve steady growth aligned with the US economy. This strategy is part of the narrator's approach to mitigate risk while pursuing financial growth.

💡Accreditation

In the financial context, being an accredited investor means meeting certain income or net worth criteria, which allows one to invest in a broader range of opportunities, including those not available to the general public. The narrator describes becoming an accredited investor as both exciting and dangerous, as it opens doors to higher potential returns but also to higher risks, such as penny stock investments.

💡80-20 Principle

The 80-20 principle, also known as the Pareto Principle, suggests that roughly 80% of the effects come from 20% of the causes. In the video, the narrator applies this principle to his business, focusing on the most impactful activities that generate the majority of income. This principle is a key strategy in streamlining efforts for maximum efficiency and profitability.

💡Lean Manufacturing

Lean manufacturing is a methodology aimed at minimizing waste within a production system without sacrificing productivity. The narrator's trip to China and Japan inspired the application of lean principles to his business and personal life, emphasizing the elimination of non-essential elements to focus on what adds the most value and meaning.

💡Philanthropy

Philanthropy is the act of promoting the welfare of others, typically through the donation of money to good causes. In the script, the narrator discusses the final stage of his wealth journey, which involves giving back to society. His form of philanthropy includes educating the younger generation about finance through a YouTube channel, reflecting a desire to contribute positively to others' lives.

💡Dollar-Cost Averaging

Dollar-cost averaging is an investment strategy where an investor consistently buys a fixed dollar amount of a particular investment, regardless of its price. The narrator mentions using this strategy during market downturns, such as the .com crash, to accumulate more shares at lower prices, which can be beneficial during market recoveries.

💡Wealth Accumulation

Wealth accumulation is the process of increasing one's net worth through various means such as income, investments, and business ventures. The entire video script revolves around the narrator's journey of wealth accumulation, starting from his first million to becoming a multimillionaire, highlighting the strategies, mindset, and lessons learned along the way.

Highlights

Made first million at age 25, emphasizing the importance of passive income.

Learned about investing from life experiences rather than formal education.

Inspiration from a successful homeowner to join the top 1% of earners.

Journey divided into five stages, akin to levels in a video game.

Early entrepreneurial ventures included selling fish door-to-door.

Developed confidence and sales skills from early business attempts.

Learned about lifestyle inflation and the financial trap of increasing consumption with income.

Realized material possessions do not equate to respect or admiration.

Acknowledged the difficulty of distinguishing truth from marketing in wealth advice online.

Started budgeting and building an emergency fund as foundational financial steps.

Experienced a moment of realization about the value of time and control over it.

Identified a passion for radio control models and saw business potential in the industry.

Shared business idea with a friend who then stole and implemented it.

Learned the hard way about the importance of updating business insurance.

Understood the balance between risk and reward in business and investing.

Transitioned business operations online to adapt to the digital age.

Realized that turning passion into a money-making venture can become a trap.

Learned about the 80-20 principle and focused on high-income producing activities.

Adopted lean manufacturing principles to streamline business and personal life.

Achieved multimillionaire status but found it somewhat empty, leading to a life revelation.

Identified relationships and investing in others as the most valuable investments.

Started a YouTube channel to educate and inspire the younger generation about finance.

Emphasized the importance of enjoying life's little moments and fostering quality relationships.

Reflected on the journey and the desire to share knowledge and inspire others to success.

Transcripts

At the age of 25, I'd made my first million.

It wasn't school that gave me my education about investing.

My teacher was the rollercoaster of life.

It came to me one day when my boss asked

if someone wanted to help install a staircase.

When we got to the house, I was shocked, he had it all.

Granite countertops, Persian rugs

and a collection of super cars.

I'd look out the window

and see the owner relaxing or practicing his golf swing.

When I talked to him, he only chatted

about his personal hobbies and never his businesses.

I asked him, what's the secret to your success?

He tapped me on the shoulder and said, Mark,

if you can't make money while you sleep,

you'll work until you die.

This is now known in the modern day as passive income.

That was the moment I decided I needed to join

the top 1% of men.

I'd like to retread my journey with you today.

It's very clearly broken into five different stages,

just like a video game and at each individual stage,

I learned something imperative to my future success.

You'll learn what I focused on as a hard-nosed businessman.

What I obsessed about in the world of investing

and most importantly,

the many mistakes I made along the way

that have made me the successful person I am today.

Stage one, the awakening.

This is when I went from 0 to $20,000.

My journey started as I emerged from my mother's womb

and my first words were, which stocks should I buy?

Just kidding.

Like most people, I was pretty clueless

about financial education as a kid,

but I had the spirit of hustle in me.

One of my earliest memories of entrepreneurship

goes back to when I was selling fish door to door.

Just imagine wiping the sleep dust

out of your eyes at four in the morning,

heading down to a freezing pier and sitting for hours

until you'd caught enough mackerel to sell for a profit.

Not only that

but grabbing a slimy fish from a bag, ringing a doorbell,

looking a person straight in the eye and pitching to them.

This built up my confidence and sales skills.

Two of the earlier skills I needed to learn

to be successful.

As I earned,

I soon found that any money I made wasn't really mine.

Instead it would go places like McDonald's

and the girl I happened to be dating.

I always seem to have just enough.

This is called lifestyle inflation,

the tendency to spend more as you make more.

Whatever you earn,

it becomes your new baseline, and that's the trap.

But being a car fanatic,

I've always dreamed of owning a Ferrari.

I felt as if they sent such a strong signal

to others that you've made it.

I'd often speak to my friend Paul

who worked as a valet parking cars for the rich and famous.

He once told me something

that changed my perspective on luxuries.

He said, when people would drive up to the hotel

in their Ferraris, they would watch me gawk

and love every moment of it.

I'm sure they felt admired, important, even respected

but actually, you know what, Mark?

I didn't care about them or even notice them.

Instead, I thought, wow, if I had that car,

people would think I'm cool.

And I wonder how many people buy these cars

without realizing that people rarely give the driver

a moment's thought.

I learned

that no one would be as impressed with my possessions

and luxuries as much as me.

People want to be respected

and admired by others, but competence, intelligence

and kindness will bring you so much more respect

than horsepower ever will.

With all the information out there on the internet

about how to make money or get rich quick,

it can be hard to separate the truth

from the marketing.

Internet gurus have been getting wealthy for the past decade

telling other people how they can get rich

and there's a whole industry out there based on fantasy,

but the truth is wealth is not always what you see

but what you don't see.

I decided instead, I'd quietly follow my own path to wealth,

but in order to do this, I needed a budget.

A budget is knowing where your money will go

versus where it went.

Little by little and for the first time,

I started seeing my savings account go up.

I started building an emergency fund,

basically money for a rainy day.

I didn't know exactly when or why it would rain

only that one day it would.

One day my boss approached me

and ordered me to start making wooden trash cans.

I made trash can after trash can,

the hours would just crawl by so slowly.

I went to my boss

and asked him how long I'd have to keep doing this.

Until the order stopped coming in

which is probably never, he said, and I felt so deflated.

Although I was saving money, I didn't feel passionate

about what I was doing, but I wasn't thinking big enough.

After all, I didn't care about luxury,

so why would I need more money?

Then it hit me.

I realized that control over your time

is the greatest thing money can buy.

If I had passive income,

I could spend my time doing the things I really loved.

The problem is it takes a lot of time

or money to start making enough passive income

to become financially free.

We spent thousands of hours every year working

in the pursuit of money,

so I asked myself what was I truly passionate about?

I had a burning passion

for radio control models and I noticed many people

in this industry were making a lot of mistakes.

I saw the true potential and the ways that I could improve

on what had come before me.

I once read in a book that if you could identify a problem

and you had a better way of doing things,

you could turn it into a business.

Stage two, the hustle.

This is when I went from $20,000 to $100,000.

So I got to work.

I was so excited about my business plans

that I shared them with a close friend and confidant

and to my shock, the unimaginable happened.

He stole my idea and set up my entire business for himself.

But before I get into that,

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Anyway, back to the story.

The reality is that I needed some money to pursue my dream

but my savings just weren't enough.

I wasn't about to give up.

I drew up a business plan, went to the bank

and applied for my first loan.

It wasn't easy and I had to visit multiple banks.

However, eventually I secured the money I needed.

While some people were

in their wealth investing in the stock market,

I reinvested the earnings from my businesses

to open more stores and even buy back my original idea

from my old friend.

I started to know more

and more people in the business world.

A lot of these individuals became my mentors

and would teach me things

like how to build a business that scales,

how to improve sales and how to manage people.

As my income grew and I solved problems,

I was not only growing my net worth

but becoming a top 1% man as well.

As the good times continued,

I increasingly bet on them continuing,

which led to one of my most significant life crashes

and moments of despair.

I remember it like it was yesterday,

walking into the shop

that I had initially started to give my father a job

in his later years

and instead of being greeted by the magical emporium filled

with all the toys that I could have only dreamed of having

as a kid, I was met with a smashed roof, empty shelves

and my products laying broken, thrown across the floor.

This hit me so hard

that the memory has been seared into my subconscious

and I sometimes still see it when I close my eyes.

You may think, it's all right Mark, I know you.

I bet you had insurance.

Everything was okay, and you bounced back.

Well, in fact, I'd grown so fast

and I was making so much money

that not everything was correctly structured

within my business.

Although we were insured, I'd forgotten to update it

with all the new stock that we'd acquired since the opening

of the store, but the disaster doesn't stop there.

It gets even worse.

I got a phone call a few days later

and one of my staff informed me

that another two locations had been hit.

Luckily, one of these attempts was unsuccessful

on my flagship store

as they couldn't break through the door.

However, they'd driven a truck straight through the side

of the store that was responsible

for serving the entirety of London,

and the damage was horrendous,

let alone the stock that we lost.

That's when I learned

about the balance between risk and reward.

See, making money requires taking risks,

operating quickly and putting yourself out there,

but keeping money requires the opposite.

It requires humility and fear

that what you've made can be taken away

from you just like that.

Once you lose 95% of your money,

you have to gain 1900%

just to get back to where you started.

Taking too much risk can bury you so deep

in a hole it can be nearly impossible to get out of.

I even started to move my operations online

to adapt to the changing times.

Stage three, the trap.

This is when I went from $100,000 to $1 million.

I realized that one of the biggest problems

people face is when they turn their passion

into a vehicle to accumulate money.

They are now reliant on it to fund their lifestyle,

leading to their passion becoming their prison.

I mean, the biggest bottleneck

in my business was actually the business owner, me.

As the business got bigger

and as we tried to move it online,

so did the number of problems, complaints

and things to worry about.

It always seems like as soon as I solved a problem,

another one would soon follow.

Don't get me wrong, owning and running a business is great,

especially if you are passionate about it,

but it isn't as easy or as passive

as a lot of people make it out to be.

I've read a lot of books on investing,

studied the techniques of Warren Buffet

and come across John Bogle's book

about common sense investing.

It shocked me when I learned

that 80% of active fund managers actually underperform

the S&P 500 Index.

Diversification is important and buying and investing

in the S&P 500, which is a basket of 503 stocks,

I could earn a steady growth that grows

along with the US economy.

My goal was to have enough money

in the S&P 500 that in the worst case scenario,

I could withdraw up to 4% per year in order to live

off my investments while still growing my portfolio.

By sticking to my guns, I was able to avoid suffering

from the internet stock crash of 2000.

Early on in my journey,

I learned that the losses felt massive

whereas a profit seemed so, so slow.

There's an old saying, stocks rise

like an escalator and crash like an elevator,

and this couldn't be more true.

I kept dollar cost averaging

and adding to my stock portfolio,

even as the .com crash continued.

I was getting more and more shares of the index fund

at better and better prices.

As a qualified pilot, I draw this parallel,

hours and hours of uneventful flight

followed by moments of sheer terror,

but it's these moments of sheer terror

that make up the majority of your returns.

The way I conducted my finances during the .com crash

and the 2008 financial crisis gave me more returns

than any investing I'd ever done before.

Stage four, the refinement.

This is when I went from $1 million to $10 million.

As my wealth grew, it seemed like the matrix

was creating more and more temptations

to take my money away from me.

Having savings gives you a lot of options

like going to a buffet where you can have every dish

you've ever wanted.

In the previous stages,

once I'd surpassed a $100,000 in yearly earnings,

I was considered an accredited investor,

which is both an exciting and a dangerous place to be.

I fell into the trap of investing in various penny stocks

which initially was very successful.

However, I went on to lose $30,000

with a couple of bad trades.

After this, I created a rule for myself

to only invest in things that I fully understand,

unless it's an experiment with a small amount of capital

that I'm not afraid to lose.

It doesn't matter whether you are investing

in NFTs, stocks or a relationship,

I learned to always do my homework

and take the time to understand every opportunity.

The thing I understood more than anything was my business.

I wanted to really push forward, so I flew out to America

on a bit of a whim to see a friend on the promise

that he would help me to restructure my business,

from serving customers B2C

to servicing other businesses, B2B as well.

He taught me that by focusing on selling to businesses,

I could increase my numbers

without having to deal with so many people.

This is known as the 80-20 principle.

I learned that I could focus

on the 20% of things that produce 80% of my income.

I traveled abroad to China and Japan where I learned

about the idea of lean manufacturing,

which I related to my everyday life.

I started cutting anything unnecessary outta my business

and personal life so I could focus on

what gave me the most meaning and results.

Through this, I'd finally achieved multimillionaire status

but it felt kind of empty, and that's when

I had a revelation that changed my life forever.

Stage five, the revelation.

This is when I went to $10 million and beyond.

This brings me to where I am today.

I thought about which investments were most important

to me in my life, and I realized it was the relationships

with my family and friends.

You'll be the same person in five years as you are today,

except for the people you meet and the books you read.

I started thinking about how to pass the torch

and I taught my son Curtis about finance.

We started this YouTube channel together

as a way to educate the younger generation

from the perspective, not of some rich influencer,

but as a guy who did it with passion

and a bit of elbow grease.

I started spending more time enjoying the little moments,

appreciating what I have and what I've worked for

and fostering quality relationships.

The final stage for a lot of people

later in life is philanthropy.

Some people like Bill Gates start foundations.

Others like Ray Dalio, write books.

This is my form of giving back.

When I reflect on my journey getting here,

I'm proud of everything I've done.

I still hustle hard,

but what is really meaningful to me is being able to share

my knowledge and inspire a younger generation

to go after their dreams and achieve success.

So I'm gonna leave the next video right up there

but don't click on it just yet.

Make sure to subscribe if you wanna grow your wealth.

Okay, I'll see you over there.