How to Invest Your Money Like the Top 1%

Most investing advice starts in the wrong place. It tells people to focus on stocks, index funds, or real estate before they have built the capacity to generate excess cash or make high-quality decisions with it.

The top 1% do the opposite.

They follow a clear order of operations. They invest first in the foundation that allows them to earn more. Then they compound that advantage through skills, businesses, and only at the end through traditional financial assets. This sequence matters because each stage multiplies the effectiveness of the next.

This article explains how the top 1% actually invest their money, why the order matters, and how to apply the same framework whether you are starting with very little or already earning well.

Key Takeaways

Wealthy investors prioritize earning capacity before financial returns
Health and skills compound faster than any financial asset early on
Businesses are treated as the primary wealth engine, not side investments
Financial assets are used to preserve wealth, not create it
Investing out of order slows growth and increases risk

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Stage One: Invest in Your Foundation

The first investment the top 1% make is not financial. It is personal.

Health is treated as a non-negotiable asset. Mental clarity, physical energy, sleep, and nutrition directly affect decision quality and output. When health degrades, everything else becomes secondary. When health is strong, ambition and execution expand.

This stage also includes environment. Paying for better environments is not about luxury. It is about proximity. Being around disciplined, ambitious people raises standards and expectations automatically.

As stated clearly, “My best investment is in me because I will take me with me for the rest of my life.”

This is why high performers willingly pay for gyms, routines, and environments that force consistency. Paying creates commitment, and commitment creates leverage.

Stage Two: Invest in Skills and Knowledge

The second stage is investing in better thinking.

The highest return investment available early in life or business is learning from people who have already solved the problems you are facing. The wealthy pay for compression. They buy decades of experience packaged into books, courses, and coaching.

This learning is not random. It is just-in-time. Skills are acquired to solve immediate problems, not hypothetical future ones. That is why the return is measurable.

The top 1% also turn teachers into relationships. They engage deeply with ideas, apply them, and then reach out with proof of implementation. This often opens doors that casual learners never see.

A practical system used here is building a personal mentor stack that includes:

Authors who shape thinking
Operators actively running companies
Coaches who guide transformation
Peers slightly ahead on the same path

This stage increases earning power directly. When you become more valuable, income follows.

Stage Three: Invest in Your Business

This is where wealth acceleration happens.

The top 1% treat their primary business as the highest-leverage investment vehicle available to them. Instead of extracting profits prematurely, they reinvest to remove constraints and multiply output.

Key areas of reinvestment include:

Better tools and equipment to remove friction
Proven playbooks to buy speed instead of guessing
Coaches and consultants embedded into teams
Hiring to buy back the founder’s time

The goal is not growth for its own sake. The goal is leverage. Time is the scarcest resource, and buying it back allows founders to focus on the activities that produce the highest returns.

A disciplined reinvestment approach looks like this:

Set aside a fixed percentage of profit for reinvestment
Identify the biggest constraint in the business
Deploy capital to remove that constraint
Repeat quarterly

This is why many entrepreneurs see returns of 30-50% or more by reinvesting in their own companies. Few external investments can compete with that.

My best investment is in me because I will take me with me for the rest of my life.

Dan Martell

Stage Four: Invest in Financial Assets

Only after the first three stages are in place do the top 1% allocate meaningfully to financial assets.

Stocks, index funds, and real estate are not wealth creators at this stage. They are wealth stabilizers. Their job is to preserve and compound excess capital, not to replace a primary income engine.

Financial assets provide:

Long-term compounding
Collateral for borrowing
Peace of mind and downside protection

The wealthy keep this stage simple. Broad market exposure, long-term holding, and minimal emotional decision-making. Risk is taken in businesses where there is an unfair advantage, not in passive markets.

A common mistake is diverting focus too early into financial assets. Doing so limits growth by pulling capital away from higher-return opportunities closer to home.

Using Assets to Create Liquidity Without Selling

One advanced concept used by the top 1% is leveraging assets instead of liquidating them.

Rather than selling appreciated assets and triggering taxes, they borrow against them. This allows access to capital without breaking compounding or incurring immediate tax consequences.

The simplified logic works like this:

Accumulate assets you do not plan to sell
Use them as collateral to borrow
Deploy borrowed capital for lifestyle or opportunities
Maintain ownership and long-term growth

This approach reinforces the core principle of the framework. Assets are tools. The goal is control and flexibility, not constant transactions.

These do not make you rich, they keep you rich.

Dan Martell

Common Investing Mistakes the Top 1% Avoid

The framework works because it avoids predictable traps:

Investing in assets before building income capacity
Hoarding cash without deploying it productively
Chasing complexity instead of leverage
Investing outside areas of personal advantage

Money sitting idle loses momentum. Capital should either be learning, building, or compounding.

Conclusion

The top 1% do not win by picking better stocks. They win by investing in the right order.

They build the foundation first, sharpen their skills, scale their primary business, and only then lock in gains through financial assets. This sequence reduces risk, increases returns, and creates flexibility over time.

If investing feels slow or confusing, the issue is rarely effort. It is usually order. Fix the order, and the outcomes change.

Frequently Asked Questions

Do I need a lot of money to invest like the top 1%?

No. The framework is order-based, not income-based. It applies at any level.

Why do health and skills come before financial investing?

Because they increase earning power and decision quality, which multiplies all future investments.

When should I start investing in stocks or index funds?

After you have stable income and are actively reinvesting in yourself or your business.

Is reinvesting in my business always better than the stock market?

When you have control and clear leverage, returns are often higher than passive markets.

How much should I reinvest versus save?

Set aside a base amount for long-term stability, then aggressively reinvest surplus where returns are highest.

More Resources

Full Transcript

How to Invest Your Money Like The 1%
https://www.youtube.com/watch/2WEMhpDOnsw

00:00:00.160 How do the top 0.1% actually invest
00:00:02.960 their money? Most people think they
00:00:04.480 prioritize stocks and real estate, but
00:00:06.319 that’s completely wrong. I bought my
00:00:08.240 first stock at 19, a rental property
00:00:10.320 when I was 21. I was voted number one
00:00:12.240 angel investor in all of Canada. I’ve
00:00:14.160 even invested in companies alongside
00:00:15.759 founders of Google and even Jay-Z. And
00:00:18.240 here’s what I’ve learned. The top 0.1%
00:00:21.039 follow a completely different strategy
00:00:23.119 than you’d think. So, in this video, I’m
00:00:25.199 going to break down the four stages of
00:00:26.960 how the wealthy actually invest their
00:00:28.880 money, even if you’re starting from
00:00:30.640 scratch. Stage one, invest in your
00:00:32.960 foundation.
00:00:34.800 The best thing you can do is invest in
00:00:37.280 getting ready to receive. This is a
00:00:40.079 non-negotiable. First off, we need to
00:00:42.800 prioritize your health, essentially your
00:00:44.800 mental and your physical, because that’s
00:00:46.480 the baseline. Once you get rich, the
00:00:48.879 only thing you care about is that you
00:00:50.640 feel good about yourself having that
00:00:52.800 money. If you’re healthy, you have a
00:00:54.719 thousand goals and dreams. If you’re
00:00:56.559 unhealthy and sick in the hospital,
00:00:58.480 you’ve got one goal. So, we have to
00:01:00.239 prioritize our fitness, our sleep, and
00:01:02.879 our nutrition. All of those will impact
00:01:04.959 your brain. My best investment is in me
00:01:08.000 because I will take me with me for the
00:01:10.640 rest of my life. You want to make sure
00:01:12.560 you, this body, this vehicle is dialed
00:01:15.200 in. Here’s a great hack. Go to an
00:01:18.159 expensive gym. Pay. When you pay, you
00:01:20.960 pay attention. you prioritize. The best
00:01:23.280 part is if you go to that expensive gym,
00:01:25.280 you’ll also be there with other people.
00:01:26.960 They got money. See, cheap people don’t
00:01:29.200 go to expensive gyms. If you want to
00:01:31.200 elevate your life, get around other
00:01:33.040 people, other CEOs, entrepreneurs, and
00:01:34.960 folks can actually support your dreams,
00:01:36.560 pay to get access to the best gym, and
00:01:39.040 be sure to say hello to people. But
00:01:40.560 that’s just the baseline. The next stage
00:01:42.320 is where you’ll see things start to turn
00:01:44.000 for you financially, which is stage
00:01:45.680 number two. Invest in your skills and
00:01:48.079 your knowledge. The best investments,
00:01:50.799 the best ROI is to just buy better
00:01:53.439 thinking. Pay to get access to learn
00:01:55.840 things. Pay for the blueprint. Pay for
00:01:58.159 the answer on the test. Pay to have
00:02:00.240 somebody that spent 20 years learning a
00:02:02.719 topic to give you everything they’ve
00:02:05.200 learned in a compressed format. That
00:02:07.439 will sharpen your skills to make you
00:02:09.440 more valuable, to get paid more. And
00:02:11.760 then once you pay to get access to those
00:02:13.440 teachers, turn those teachers into
00:02:15.520 relationships. My 12-year-old son the
00:02:18.480 other day bought his first digital
00:02:20.400 course. He realized that for him to
00:02:22.720 become more valuable, he has to pay
00:02:24.640 people to teach him things so he doesn’t
00:02:26.239 spend all his time trying to do
00:02:27.599 research, maybe finding the answers that
00:02:30.000 he’s looking for. You got to find the
00:02:31.599 people that have the courses. Maybe
00:02:33.040 they’ll tell you what tools of the trade
00:02:34.480 to use so you can save yourself all this
00:02:35.920 research. [music] My top two
00:02:37.519 investments, coaches and books. I’ve
00:02:40.640 studied and I use that language
00:02:42.239 specifically over 1,600 business books,
00:02:45.120 integrated them into my life. I’ve
00:02:46.720 taught them to other people so I could
00:02:48.319 really understand them. Coaches are some
00:02:51.200 of the most powerful ways for you to
00:02:52.879 upgrade your skills to make investments
00:02:54.720 in yourself because often times we get
00:02:56.959 coaches to help us with the
00:02:58.319 transformation. Guess what? The
00:03:00.000 transformation happens at the
00:03:01.360 transaction. I turned my teachers into
00:03:03.840 mentors. Most of the authors who are
00:03:05.760 still alive that wrote the books that
00:03:07.599 impacted my life the most I’ve emailed.
00:03:10.239 Would you be surprised to find out that
00:03:11.840 most of them write back, many of them
00:03:13.680 I’ve met in real life now. All because I
00:03:16.159 decided to take the knowledge they
00:03:17.840 shared with me, acknowledge that, tell
00:03:19.920 it how it impacted my life. And it turns
00:03:22.000 out if somebody’s taken 25 years of
00:03:24.000 their experience, put it into a book,
00:03:25.440 sold it for 20 bucks, and somebody
00:03:27.200 emails messages them to let them know
00:03:28.640 how it impacted their life, they
00:03:30.239 appreciate that. Most people won’t make
00:03:32.640 this decision cuz they can’t see the
00:03:34.640 ROI, but it’s because they’re not
00:03:36.319 learning the right things. I call it
00:03:37.840 just in time versus just in case. Most
00:03:40.560 people learn just in case they need it.
00:03:43.200 That’s like going to university. I read
00:03:45.360 books for things I need to solve in my
00:03:47.040 life today. Almost 20 years ago, I read
00:03:49.360 a book called Never Eat Alone by a guy
00:03:50.799 named Keith Farazzi. I was an
00:03:52.400 introverted software programmer. I
00:03:54.319 didn’t want to talk to people, but I
00:03:55.760 knew I had to learn how to network. So I
00:03:57.599 read his book and he taught me these
00:03:59.280 crazy strategies like you should use
00:04:01.439 meals to connect with people. You should
00:04:03.200 invite people to work out with you. Your
00:04:05.040 network is your net worth. Turns out
00:04:07.680 wildly right. If you look at my life
00:04:09.760 today, I don’t meet with people new
00:04:12.319 without bringing them for a workout. I
00:04:13.920 do it on a founders hike. I do it on a
00:04:16.079 run. I’ve done it on the back of my
00:04:17.759 boat. Like that’s just my rule. I even
00:04:20.238 emailed Keith and kept in touch with
00:04:22.079 him. And almost a decade later, I meet
00:04:24.800 up with him in LA. and true to his
00:04:26.720 character and what he wrote about in the
00:04:28.000 book. He invited me for a workout and
00:04:29.680 then for brunch to meet some of his
00:04:30.960 friends. When you invest in your skills,
00:04:33.040 in your knowledge through coaching
00:04:34.960 courses or any other format like books,
00:04:37.759 then you become more valuable. And
00:04:39.919 here’s the best part. Investments don’t
00:04:42.320 always require cash. Most authors,
00:04:44.560 including myself, usually have a
00:04:46.000 newsletter where they share strategies
00:04:47.840 like mine is the Martell method where I
00:04:50.000 teach you my top mindset,
00:04:51.280 entrepreneurship, and growth tactics. If
00:04:53.040 you want that, just click the link below
00:04:54.639 in the description and join the
00:04:56.160 community. It costs nothing. If you’re
00:04:58.160 still stuck on this point, I want you to
00:05:00.080 consider this. If I already knew what I
00:05:02.639 needed to know to be successful, then
00:05:04.479 the success would already be in my life.
00:05:06.400 The fact that it’s not means I have to
00:05:08.320 go learn, develop my skills, develop my
00:05:10.240 habits, develop my mindset so I can
00:05:12.320 become the person who can easily bring
00:05:14.560 those outcomes into my life. You got to
00:05:17.199 keep investing. So, here are some very
00:05:19.199 tactical ways that you can go about
00:05:20.720 investing in your skills and knowledge.
00:05:22.080 The first one is build what I call a
00:05:23.759 centurion council. Essentially, it’s a
00:05:25.600 100 mentors list. I like to make it 25
00:05:28.320 authors, 25 operators. These are people
00:05:30.560 actually running companies. 25 coaches,
00:05:32.720 people that teach people, and then 25
00:05:34.880 peers, folks that are one or two years
00:05:36.479 ahead of where you want to be. Once you
00:05:38.240 do that, read everything about them.
00:05:40.080 Read their books, watch their content,
00:05:42.240 test their methods, see if it works for
00:05:44.320 you. I call that bathing in the
00:05:46.080 waterfall of their knowledge. Once
00:05:48.160 you’ve done that and you’ve gotten some
00:05:49.600 value from them, then I want you to
00:05:51.120 reach out to connect or hire them. But
00:05:53.440 you got to use the pack script. P is
00:05:56.320 open with proof you’ve used their
00:05:58.560 content. Tell them, hey, I read this
00:06:00.240 thing. You taught me this. I did that.
00:06:02.000 It had this impact on my life. That’s
00:06:03.759 the proof that you read it. The A stands
00:06:05.840 for ask. Ask one specific tight
00:06:09.680 question. C is close. If you ask
00:06:11.919 somebody for 7 minutes, you might go 10,
00:06:14.240 but close the call. Wrap it up. It also
00:06:16.720 shows that you’re busy doing things, not
00:06:19.039 just a talker. And trust me, if someone
00:06:20.880 gets approached by a lot of people
00:06:22.160 wanting my advice, knowing that I’ve
00:06:24.080 been helpful and they moved on and then
00:06:25.759 they can message me later, the impact,
00:06:27.600 that’s how we start to build a
00:06:28.800 relationship. Once you do this and make
00:06:30.560 it a habit, we can move on to the next
00:06:32.479 stage to invest your money like the top
00:06:34.319 0.1%. Stage three, investing in your
00:06:37.600 business. The top 0.1%,
00:06:40.960 they don’t guess. They buy speed and
00:06:43.199 they reinvest in the machine that
00:06:44.960 multiplies cash. And for those people,
00:06:47.680 it’s their business. But there’s
00:06:49.440 different ways to look at investing in
00:06:51.120 your business. The first thing I’m going
00:06:52.560 to tell you is you got to look at the
00:06:54.080 gear. I can’t tell you how often I’m
00:06:56.479 with a friend and he’s pulling up his
00:06:58.080 phone and the phone is slow or his
00:07:00.160 computer’s crashing. And I’m like, "Bro,
00:07:02.560 there’s only a handful of places you
00:07:04.160 spend a lot of time. You want to invest
00:07:06.240 in that. Spending money on gear is the
00:07:09.599 fastest, quickest way to get a return on
00:07:12.000 your capital. It’s like being a roofer
00:07:13.840 and manually nailing all the roof
00:07:15.919 shingles to the roof when you could buy
00:07:17.759 a nail gun and get like literally 10
00:07:20.800 times more productivity. The other one
00:07:22.479 is blueprints or playbooks. Like I
00:07:24.240 mentioned, paying for shortcuts instead
00:07:26.400 of trial and error is a pro move. All
00:07:28.720 the richest people do this every day.
00:07:30.800 They pay for consultants. They pay for
00:07:33.039 mentorship. They will pay anybody for an
00:07:35.520 hour of their time. I’m on Instagram all
00:07:37.120 the time messaging all of you or
00:07:38.720 chatting with people or trying to find
00:07:40.479 new people to follow. And if I see
00:07:42.479 somebody sharing something really cool,
00:07:44.560 my go-to is, "Hey, what would an hour of
00:07:46.800 your time cost?" Most of them look at my
00:07:48.479 profile and go, "Well, I think it’d be a
00:07:50.240 fun conversation. How about free?" I’m
00:07:51.680 like, "Sounds good to me." Sometimes
00:07:53.120 they’ll go, "30 grand." Guess what? For
00:07:55.120 the right person, 30 grand for an hour
00:07:57.120 of their time. So, I can learn
00:07:58.800 everything that they’ve learned in the
00:08:00.319 last 20 years is the best investment I
00:08:02.960 can make to unblock an area of my life.
00:08:04.720 Another one is coaches and consultants.
00:08:06.800 And yes, we talked about this in skills
00:08:08.639 and knowledge, but this is way different
00:08:10.319 because now we’re talking about the
00:08:11.280 business. See, most entrepreneurs will
00:08:13.840 hire coaches or consultants for
00:08:15.280 themselves. I’m talking about hiring
00:08:17.360 more specialized people for the
00:08:19.280 departments, for the people leading
00:08:21.360 their department so that you get the
00:08:23.280 right person inside the company helping
00:08:25.680 develop the people. Because when you
00:08:27.199 build the people, the people build the
00:08:29.360 business. Too often all the knowledge
00:08:30.960 and information is bottlenecked by the
00:08:33.279 CEO. Push it down to the people that are
00:08:36.320 doing the work. My favorite recent
00:08:37.919 example of this is helping my creative
00:08:39.599 director create a mastermind of
00:08:42.320 incredible people that were also
00:08:43.839 creative directors or video editors or
00:08:45.680 people creating content that he could
00:08:47.519 learn from. Both provide value sharing
00:08:50.080 with them and them providing value back
00:08:52.000 with their lessons learned. Masterminds
00:08:54.080 is a powerful strategy that I think that
00:08:56.640 every CEO should ask their leaders to
00:08:58.800 build for themselves cuz proximity
00:09:01.040 equals acceleration. What’s crazy is for
00:09:03.760 7 years I tried to build a business. Two
00:09:06.720 companies backtoback failed. It wasn’t
00:09:09.040 until I hired a business coach, his name
00:09:11.360 was Bob, to teach me business. And I
00:09:13.600 know it’s like I’m an entrepreneur. I
00:09:14.959 know business. Guess what turned out? I
00:09:16.560 didn’t understand how to actually do the
00:09:18.560 business stuff. I was good at writing
00:09:20.000 code. I could build software. That’s
00:09:21.760 like 10% of the overall business in the
00:09:24.320 first year. Bob mentored me and coached
00:09:26.320 me to do almost a million dollars in
00:09:27.920 revenue. That was wild. Two failed
00:09:29.600 companies over 7 years. In the first 12
00:09:31.839 months, almost a million in revenue. The
00:09:33.760 power of people giving you the blueprint
00:09:36.720 so you don’t have to sit there and
00:09:38.080 figure it out yourself. Is a massive
00:09:39.519 investment. Some people are stuck
00:09:41.200 wanting to learn everything themselves.
00:09:42.959 That’s slow. All these are examples of
00:09:44.800 like outside help. But guess what?
00:09:46.640 Inside your business, you can learn to
00:09:48.320 buy back your time. making investments
00:09:50.480 in bringing people in to take time out
00:09:53.120 of your calendar so you don’t become a
00:09:55.440 slave to your own business so that you
00:09:57.120 can re-energize and invest your mind and
00:09:59.440 your talent [music] in the thing that
00:10:01.120 makes you the most money that lights you
00:10:02.959 up. That is the ultimate investment.
00:10:05.839 This is the buyback principle. You don’t
00:10:07.839 hire people to grow your business. You
00:10:09.760 hire people to buy back your time. So,
00:10:11.519 here’s a framework that I use to
00:10:13.120 reinvest in my business. First off,
00:10:15.200 every quarter, I want you to set aside a
00:10:17.360 fixed percent of profit. Let’s say 20 or
00:10:19.839 30% that you earmarked for reinvestment.
00:10:22.720 Then you have to redeploy that capital
00:10:24.800 into the most leveraged category of
00:10:27.200 opportunities. Then you take that
00:10:28.880 capital and you reinvest it in either
00:10:31.040 marketing, sales or delivery, unblocking
00:10:33.839 where the constraint is in the business.
00:10:36.160 If that means you got to pay for other
00:10:37.680 people’s playbooks, you might need to
00:10:39.360 hire a person to lead it. You might have
00:10:41.120 to build some systems or you just have
00:10:43.200 to grow the team or build more capacity
00:10:45.600 in that area of the business. But the
00:10:47.600 theory of constraint to is the right way
00:10:50.880 to analyze where you should be
00:10:52.399 reinvesting. And finally, don’t let your
00:10:54.720 cash pile up just in case. A lot of
00:10:57.120 people hear, "Oh, you should have 8
00:10:58.959 months of cash in your bank account just
00:11:00.959 in case." Move it to your holding
00:11:02.560 company. Leave it there. Invest it out
00:11:05.200 of there. And guess what? If you need it
00:11:06.880 back, you liquidate it and you invest it
00:11:08.800 in the business. That strategy of taking
00:11:10.800 the cash out and keeping that as an
00:11:13.120 investment forces the business to grow.
00:11:15.360 The other thing about investing in your
00:11:16.880 business is most entrepreneurs will get
00:11:18.880 a 50% return on their investment in
00:11:22.079 their business. Then taking the money
00:11:23.600 and investing in other places. And
00:11:25.040 everybody’s like, "Oh, I got to invest
00:11:26.160 in index funds. I got to invest in the
00:11:27.760 market. I got to invest in private
00:11:28.880 equity. I’m an angel investor." Guess
00:11:31.200 what? Not a good move. So, you’ve built
00:11:33.120 the foundation, leveled up your skills,
00:11:35.440 and reinvested in your business. Only
00:11:37.760 after doing all that is when you start
00:11:39.839 looking at other financial assets. Stage
00:11:42.160 four, investing in financial assets. As
00:11:45.120 I said at the beginning, most people
00:11:47.040 make their investments backwards with
00:11:48.959 stocks, index funds, real estate, all
00:11:50.880 that stuff. But the truth is, these
00:11:53.040 don’t make you rich, they keep you rich.
00:11:55.279 That’s why the 0.1% treat financial
00:11:57.920 assets as the last stage, not the first.
00:12:00.480 If you look at 90% of the people that
00:12:02.800 have become really rich, I’m talking
00:12:04.560 like 100 million plus, they made it by
00:12:06.959 having a primary operating company that
00:12:09.600 generated cash. They took that extra
00:12:11.600 cash and then they started doing what
00:12:13.120 I’m about to share with you. And don’t
00:12:14.399 over complicate it. You’ve built wealth.
00:12:16.399 This is just a safety net. And one of my
00:12:18.240 mentors, Ken, he said it best. He said,
00:12:20.160 "Making money, that’s easy. Keeping it
00:12:23.279 super hard. This is about keeping it."
00:12:25.360 So, now that we’re at this stage and
00:12:26.639 you’ve gone through each one of those,
00:12:28.320 just make sure you don’t over complicate
00:12:29.760 it. Stocks, S&P 500, real estate
00:12:32.560 investment trust, they’re all great,
00:12:34.079 safe options, but just keep in mind
00:12:36.000 they’re for a long-term play.
00:12:37.680 Essentially, it gives you peace of mind
00:12:39.200 so you can focus on growing the business
00:12:41.200 knowing these assets will compound. I
00:12:43.279 want to take the risk in my primary
00:12:44.959 business where I have an unfair
00:12:46.160 advantage, not in my investments. Here’s
00:12:48.560 what not to do. Late 20s, I get an
00:12:51.360 opportunity to invest in homes. This was
00:12:53.519 during the great financial crisis and
00:12:55.440 banks were trying to sell and liquidate
00:12:57.279 anything on their balance sheet as fast
00:12:58.639 as possible. So, you could buy homes,
00:13:01.200 for example, in Detroit for $8,000. And
00:13:03.519 I bought a ton. I thought I was smart. I
00:13:06.079 thought I was a real estate guy. And all
00:13:07.839 of a sudden, I find out the homes I buy
00:13:09.839 are essentially were rotten and not
00:13:12.399 livable and there was homeless people in
00:13:14.480 them and I should have never got
00:13:15.600 involved them in the first place. That’s
00:13:16.959 when I realized I got to stick to what I
00:13:19.279 know best, software. If your primary
00:13:21.680 business is real estate, go nuts. It’s
00:13:23.440 not mine. Whatever you’re best at, do
00:13:25.839 that. If money is just sitting on the
00:13:27.600 sidelines not working, it’s just wasted.
00:13:30.480 I consider dollars as little workers and
00:13:33.200 they need to be put to work. Here’s the
00:13:35.200 best part. You can actually leverage
00:13:37.360 your liquid assets, these investments
00:13:38.880 that I’m going to talk about, to buy
00:13:40.399 things without paying taxes.
00:13:42.240 Essentially, rich people that have stock
00:13:44.240 in their primary business, think Elon
00:13:45.839 Musk with all his equity tied up in
00:13:47.279 Tesla, he can use that stock to borrow
00:13:49.920 money, essentially a loan backed by the
00:13:52.560 stock, not pay any taxes because it’s a
00:13:55.440 loan, and then just take out an
00:13:57.440 insurance policy to pay back the loan if
00:13:59.760 he dies. It’s called the buy, borrow,
00:14:01.839 die strategy, and a lot of people use
00:14:03.680 it. The first part is you have to buy.
00:14:05.519 That’s why rich people buy stocks and
00:14:07.199 they never sell them. They literally
00:14:08.560 say, "This is a portion of my portfolio
00:14:10.480 that I’m never going to sell. I’m going
00:14:11.760 to own them forever. And often times
00:14:13.760 they’ll put them in a family trust so it
00:14:15.760 can be transferred in a more
00:14:16.959 taxefficient way to future generations.
00:14:19.600 Second is they borrow money from the
00:14:21.680 bank using that portfolio, that stock as
00:14:24.480 collateral. Again, borrow the money.
00:14:26.480 There’s no taxes when you borrow money.
00:14:28.240 So they can pay for personal assets. And
00:14:30.160 then third is when they die, the life
00:14:31.839 insurance pays back the bank for the
00:14:34.079 money they borrowed that was secured
00:14:35.360 against the stock. So the stock never
00:14:36.800 has to sell. So it doesn’t trigger any
00:14:38.320 capital gains, which means they don’t
00:14:39.519 have to pay taxes. their kids get the
00:14:41.279 stock tax-free at today’s value. This is
00:14:44.079 very technical, but understand this.
00:14:46.399 Step one, go get money. Step two, invest
00:14:49.920 in your health. Step three, invest in
00:14:52.079 your knowledge. Step four, invest in
00:14:54.079 your business. Then five, do this stuff.
00:14:56.880 The real question that I get asked all
00:14:58.639 the time is what percentage of my income
00:15:01.440 should I be investing in what? First
00:15:03.760 off, put some aside long term. if you
00:15:06.959 want to like lock in into index funds
00:15:09.440 and just have really tax efficient low
00:15:11.839 fee type of investing just so that you
00:15:13.760 start to build the base again that you
00:15:15.519 can use as leverage and collateral for
00:15:17.360 your first home for a business loan
00:15:19.440 whatever it is you at least have that
00:15:20.880 there I’m not saying you’re going to get
00:15:22.320 rich off of it by any means but at least
00:15:24.320 you’ll build a foundation and savers are
00:15:26.720 growers so you need to learn how to save
00:15:28.399 invest a percentage call it 10% is a
00:15:30.720 good amount I like to give to charity
00:15:32.880 because I think you get what you want
00:15:34.240 for other [music] people so if I want to
00:15:35.760 give my money to people that need it
00:15:37.199 most, I’m going to get more. So, I think
00:15:38.800 giving, tithing, 10%. Smart strategy.
00:15:41.600 Then the other one is, what percent do
00:15:43.600 you think you should reinvest in
00:15:44.800 yourself? The other day, I was talking
00:15:46.160 to one of my sales guys. He makes 35,000
00:15:48.399 a month. He’s 20. He’s never made that
00:15:50.399 much money in his life. He goes, "Look,
00:15:51.759 I put 5,000 in stock. I’ve got this
00:15:53.839 great apartment. I got a great car. I
00:15:55.360 got a great life, but I still have extra
00:15:56.720 money. What should I do with it?" I
00:15:57.920 said, "Tell me how you’ve invested in
00:15:59.440 yourself. Did you hire a coach? Did you
00:16:01.199 buy a course? What books are you
00:16:02.560 reading? What seminars are you planning
00:16:03.839 on going to?" He didn’t have an answer
00:16:05.360 for that. My rule is if you have
00:16:07.600 capital, invest in you and then you
00:16:09.920 invest in your team and then you invest
00:16:11.680 around people around you so everybody
00:16:13.440 gets better. You have to invest in you
00:16:15.759 to be that person. It’s not about having
00:16:18.480 it. So here’s my question for you. Out
00:16:20.560 of everything I shared, it doesn’t
00:16:21.920 matter if you have no money or you have
00:16:23.440 a lot of money. What’s the one thing
00:16:25.120 that you’re going to make a commitment
00:16:26.320 to? Is it deciding to put your health
00:16:28.079 first? Realizing that being rich and not
00:16:30.639 being healthy is a bad proposition? Is
00:16:33.040 it deciding? Maybe you’re 35 and you
00:16:35.120 haven’t invested in a stock cuz you put
00:16:36.560 it off someday. Maybe. Whatever it is, I
00:16:39.120 want you to make a commitment today to
00:16:41.519 start anything to be a better investor
00:16:44.480 because the more you learn how to
00:16:45.759 invest, the better your returns are
00:16:47.279 going to get. The better those returns
00:16:48.800 get, the more you’re going to have. And
00:16:50.320 remember, if you want to learn more from
00:16:52.240 me, just click the link below and
00:16:53.839 subscribe to my newsletter. Every week,
00:16:55.839 I send out three emails to teach you how
00:16:58.240 to upgrade your mindset, your skills,
00:17:00.160 all for free, no cost. So, even if you
00:17:02.399 have no money to invest, that’s the best
00:17:04.000 way for you to start.

Dan Martell

Dan Martell is the bestselling author of “Buy Back Your Time” and the #1 executive coach for founders and CEO’s in the world. He was named Forbes Top 10 Business People to Follow on Social Media and is a highly sought-after speaker, including events by Tony Robbins and John Maxwell. He’s a husband and dad of two boys, and when he’s not in family mode, he’s competing in Ironman races and supporting troubled youth.

How to Invest Your Money Like the Top 1%