➡ Inflation reduces your purchasing power, making your income worth less over time. To protect your wealth, you need to invest in assets that increase in value faster than inflation. Instead of focusing on assets that yield immediate income, consider those that appreciate over time, like Bitcoin or the S&P 500. You can then borrow against these appreciating assets to fund your lifestyle, avoiding taxes and keeping your assets intact.

➡ This text explains a strategy for growing wealth by borrowing against an asset that appreciates (increases in value) faster than the debt. This method, called positive carry, works if the asset’s growth rate is higher than the borrowing rate. However, it’s important to understand the risks and have a mindset focused on investing, not just spending. The author also mentions an upcoming event to learn more about these strategies.

It’s not your imagination. The middle class is dying. But what the system won’t tell you is that there’s an escape plan because the game has changed. And while technology erases middle class jobs, government inflation is silently stealing your wealth. But while most people are getting crushed by this new reality, the rich, they play by a different set of rules. I’ve built my wealth through three of these economic cycles. And today I want to give you the exact three step escape plan. Now at the end, I’m going to give you the number one strategy that the rich are using to escape this crisis so you can too.

So let’s go. All right. Now, before I lay out the exact blueprint for you to follow in order to break free, escape the rat race, I want to use this game to give you an illustration first to break something first before I can give you the strategy. Okay. So this is a game called cashflow. My good friend, Robert Kiyosaki, my mentor, my friend, he created this game called cashflow. Now, first of all, I highly recommend that you play this game. If you play this game once a month for a year, I promise you it will change your entire life because it’s not just the tactics you need, it’s the mindset.

But here’s what I want to illustrate for you. What happens is this is sort of like the game of life. This is much more advanced, much more developed, and you basically have to go around the wheel, the rat race until you can break free out of the rat race. And what happens is you start out sort of like the game of life and you draw a career card. And so there’s a whole bunch that are in there and each one of them, a career, pays you more or less money. You have income expenses.

And as you go around, you can use that income to buy assets. You can buy stocks, real estate, businesses, things like that. Now, to illustrate my point here, again, this is a much more advanced version of the game of life. What I typically have done with my kids, they don’t really love playing the game because it’s pretty in depth and it takes a long time, is when you draw these job cards, they have career. So for example, a doctor, an MD, is one of the highest paying job cards that you can get.

If you draw the doctor, your total income is $13,200 per month. Your total expenses are $9,650, which means you have a monthly cashflow of $3350. Now the lowest paying job card is a janitor. The janitor has a total income of $1,600 and they have expenses of $950, which means their cashflow is only $650. So on the high end, you can be a doctor with $3,500 a month of free cashflow, or you can be a janitor with a free cashflow of $650. And the reason why I’m illustrating this to you real quickly is because this is very similar to the videos that I make.

Regularly, in the comments down below, I see people, can you make a video for people that make less money? And what I’m about to break down for you, the blueprint to get out of the rat race, you’re going to say this only works if you’re wealthy. But what I want to illustrate for you is in this game where we can illustrate getting out of the rat race, you can make a lot of money or a little money. And what I do with my kids on a regular basis is I say, you just take the highest paying job card, and I’ll take the lowest paying job card.

And I can still beat them every single time. Why? Because it’s not about the amount of money that you make. It’s about the strategy that you apply to the game. All right. Now that you understand that, let me give you the strategy. So there’s two different mindsets that you have to play the game of cashflow or the real game of life with. Now, what most people have, unfortunately, is a consumer mindset. The consumer mindset thinks about money. I need to make money. I need to earn money. The reason why I earn money, everything around money is so I can spend it on liabilities that lose value.

I need to buy a car. The car is going to lose money, right? I need to go buy new clothes. I need to go on a vacation. I need all the things I’m buying. They lose money, liabilities. They think about debt. The consumer mindset uses debt to increase their life, to get a bigger house, a bigger car, go on a vacation. And they look at debt as something that’s dangerous, and it should be eliminated. We shouldn’t really use it, but I will use it, again, to get the bigger house or get the bigger car.

And they have a fear based thinking. So they’re fearful of what happens if I don’t make the money. I’m fearful if I use the debt, because it could be dangerous and burn my house down, right? And they play the game to not lose the game, right? So they’re not being optimistic. They’re not aggressively playing. They’re in a defensive position all the time, a scarcity mindset. All right, the other type of mindset that you can have, not a consumer, is an investor mindset. Now, an investor mindset thinks in abundance. Why? Because they create abundance.

They look at money completely different. They look at money as a tool not to spend on liabilities that lose value. They look at money as a tool to buy assets for income. Key piece. Not liabilities that lose value, assets that go up in value. Then they use debt also as a tool, not as something dangerous to be ignored. They use it as a tool. They use it as leverage to get more, like a lever, get more output for less input, leverage to acquire faster, acquire what? Not liabilities faster, assets for income faster.

They use strategic thinking. So they’re not fearful thinking, not always afraid of what could happen. They think strategically about thinking. And then instead of playing not to lose, they’re playing the game to win. They’re playing offense. They’re playing aggressively, strategically, but they’re playing to win. This is the mindset. So regardless of the job card that I draw in the game, regardless of I’m a doctor or I’m a janitor, regardless if I have 3000 or $600 of cashflow, it comes down to the mindset and the way that I approach the game. Again, if you really want to change your life, go play that game, go buy it.

I don’t have an affiliate link. Robert, you should hook me up with one. Let me give you the framework now. So this is the escape the plan framework. We’ll call it escaping the rat race because of cashflow. He calls it escaping the rat race. So number one, we must defend our dollars. I’m going to break all this down for you. We have to defend our dollars. Number one, number two, we have to escape the rat race. That’s the first part of the game. And then number three, we can create our own. I’ll come back to that in a second.

Okay, let’s break these down for you one by one. So you can get this dialed in. Step number one, we must defend. We have to defend our income and we have to defend our wealth. What are we defending them against? We’re defending them against the in game mechanics that steal it from us, which are number one, inflation and number two, taxes. All right. So we have to, we have to protect our income and our wealth from those things. What am I talking about? Well, number one, taxes. The best way to lose most of your money is taxes.

This is the top tax rates around the world, depending on where you’re at. So in the United States, it’s a 37% top federal tax rate, pretty high, but not as bad as some of the rest of the world. For example, Canada, 53%, Denmark, 56%, Australia, or I’m sorry, Austria, 50%, the UK, 45% and Australia, 45%. So depending on where you’re at in the world, about half, let’s just call it about half of your money goes to taxes. Well, I need to defend my wealth against taxes for sure, because half is going to get lost there.

I also have to defend it against inflation, because even after you pay your taxes, whatever you have left, the government continues to steal it from you by stealing the purchasing power by printing more money. Here’s just the United States money supply right here. You can see these trend lines of how they continue to increase the rate at which they’re debasing the currency. Look at these lines. Keep getting faster and faster. Since 2010, you’ve been losing about 7% of your money per year to debasement. So they tell you the CPI consumer price inflation is about 3%, the Fed’s at a target of 2%, whatever.

The real number is the rate of monetary debasement. It’s about 7%. So I have to protect it against that. Now, we also have to understand how inflation really affects us. Again, it doesn’t take the dollars out of your bank account. What it does is it takes away the purchasing power. So here we have a chart. This is what your income looks like on paper. I used to make $8 an hour and I make $15 an hour. Great. But when you adjust it for inflation, this is what it looks like. The real rate of your wage is going up.

It’s barely moving, not compared to the rate of everything else going up. It’s not keeping up with the rate of homes going up and state going up. And then if you put that into the S&P 500 every two weeks and your paycheck goes into your 401k, your IRA, whatever it is, is just keeping up. The S&P 500 is just barely keeping up with the rate of monetary expansion. And so we have to protect our income and our wealth from taxes and from inflation. That’s what we have to do. We have to defend it from that.

Then step two, once we’ve figured out a way to do that, we have to escape. Escape what? Escape the rat race. So how do we do that? Well, number one, we need to buy assets. That’s the difference between the two different mindsets. The consumer doesn’t buy assets that go up in value. The consumer buys things that go down, liabilities that lose value. What the investor mindset does is they buy assets that go up faster than the rate that they’re losing. So we want to buy assets, but we need to rethink what income is.

This is a key piece I want to hit on. What is income? Let’s think through this in like a first principles level. Now, most of us think of something like yield. So for example, I have to buy something that yield, like Warren Buffett says, I wouldn’t buy gold or I wouldn’t buy Bitcoin because there’s no yield. And so there’s an entire crypto asset category called DeFi around getting yield from crypto assets, or I have to buy a dividend paying stock, or I have to buy real estate because I need that yield.

But let’s just think through this for a second. So if I buy a dividend paying stock, so I’m going to buy an IBM or AT&T because I want it to give me a yield. I want to give me a dividend. I want to give me monthly income. What we can see is since 2010, the average yield, the average percentage of dividend paying stocks has fallen off of a cliff. It’s gone from about 2% yield down to about 1.5% yield. So that’s not really enough. I’m not really going to make a lot of money there.

I would have to have an enormous amount of money to get by there. We can see that this is a big problem because of course the baby boomers are the largest segment of the population. Anybody that doesn’t want to work needs fixed income, but we save for retirement one day and then hopefully that retirement, that savings can give us that yield. So we can see that this is the entire fixed income market. We know it’s about $150 trillion are sitting in this fixed income, corporate bonds right here, 25% of it, government bonds like US Treasuries right here.

It’s a big chunk of it and all these other little things that are in there, but I want you to rethink of what yield is for a second. So this is Investopedia and what they’re telling us yield is. So they’re saying that yield is the earnings generated and realized, so not unrealized, but actual earnings that are generated or realized, on an investment over a particular period of time. What time? A particular. So for example, if I bought a house, a rental property, and it gave me $100 a month, is that yield? Is that income? Sure.

I bought the house. Let’s say I bought a $100,000 house. It gives me $100 a month. That’s yield. That’s income, $100 a month. What if I bought a $100,000 house? It didn’t give me $100 a month, but in a year from now I sold it for $200,000. Is that income? Is that yield? Certainly. It’s just a different period of time. Instead of monthly, it’s now annually. What if I bought it for $100,000 and three years later sold it for $500,000? Is that income? Is that yield? Yes, it is. And the reason why I want to point that out is because the way that we win the game is by thinking differently and approaching differently.

So instead of going, well, I need to get into fixed income. I need to put my money into treasuries at 4% or dividend paying stocks at 2%, we can start to think about assets differently. We can start to think that capital gains, meaning I bought the house for $100, sold it for $500, could lead to where I want to go. Now, this opens up the door for us on ways to get the income. So remember, we have to defend our income against taxes and inflation. That’s the very first part. To defend against inflation, we have to beat at least 7%.

We really need to beat 10%. So then what assets can do that? We can see Bitcoin can do that. It’s averaged 80%. We can see the NASDAQ 100 can do that. It’s averaged about 17%. This is for the last 10 years, by the way. We can see the S&P 500 has averaged 14%. The Russell 2000 is right at 10%. Most of these other assets, they’re not working. We can see gold and REITs are just around the borderline of where they might keep up with the cost of debasement. All right, so now we have more options.

I can go into S&P 500, I can go into Bitcoin, et cetera. All right, so now we have to think this a little bit differently. Let’s go to step number three. Now we can become our own bank. What do banks do? They hold assets, they provide loans, they make the difference. So here’s what we want to do. As the bank, we want to hold the assets. So you hear Michael Saylor say, you never sell your Bitcoin. You hear me say, you never sell your Bitcoin, but you never really want to sell any of your assets.

Why? Because the assets are compounding in time. It’s something called we call Kegar, compounded annual growth rate, which means over time they start doubling. So we want to hold the assets that are going up in value. We don’t want to sell them. Why don’t we want to sell them? Well, because if I sell them, half of it goes to taxes. We have to defend against taxes. So I hold the assets to defend against inflation, but I don’t sell the assets because I want to defend against taxes. Okay. Well then how do I fund my lifestyle? You said that you said that I’m supposed to buy assets to give me income.

That’s what you said. So I thought I had to buy dividend stocks or two S treasuries or real estate. No, it’s not what I said. We can harvest this appreciation using debt. All right. So we have two options. One, we bought an asset down here. Well, let’s say, let’s say that we bought an asset for one and the asset over time has gone two, five and 10. So it’s defending our income against inflation and it’s going up in value. But if I sell this asset right here, half of this is going to go to taxes.

I only end up with this much, but even worse than that, I no longer have the asset to continue going up in time. And because of the law of compounding, those last doubles are where it makes all its money. We want to hold the assets. So what we do instead is we buy an asset for one, we hold it two, five and 10. And instead of selling the asset, paying tax and no longer have anymore, we can take just this little bit right here and we can harvest that appreciation using debt. How do we do that? We borrow against the asset.

So for example, this is stock. Let’s say it’s a mag seven stock, Tesla, Apple, Google, it’s in my stock broker account. I could message my stock broker account and they’ll give me a loan against my assets in there. If I have assets in a 401k, a lot of your 401ks will give you a loan against it. If I have a piece of real estate, I can refinance it. I can do a home equity line of credit. If I have Bitcoin, I can borrow against it. And so what I do is I borrow against a little bit of it, 10% of it, and I harvest the 10% of appreciation.

Why? Again, because I defend against the taxes. I don’t want to sell it and I need to defend against the inflation by holding the asset. So I’m arbitrage into spread. Does that make sense? Let me give you a couple examples of how this works. Let’s use Bitcoin, one of my favorite assets to do this with because it’s compounding at an annual rate of about 50%. It’s about 85% in the last five years, about 60% in the last three years, but let’s not use 60%. Let’s just use 30. So let’s use a hypothetical example here.

And let’s say that this blue line is Bitcoin going up at 30% a year, about half of what it’s doing right now. What you can see at year two, at year five and year seven, it’s starting to separate itself, but you see what the law of compounding does. Year 10, year 12, year 15, year 20, look at the difference of the growth. Now what I’m doing all along here, this orange dotted line is the, is the debt that I’m putting on it. I’m harvesting some appreciation off of the top over time.

So I still have the asset going up at the full rate, but my debt is also growing. So you can see this orange line is also going up, but just barely, if we can zoom in on that for the, for the audience to see the amount of debt is growing way slower than the total valuation of the assets. And so we want to, if we sold the asset here, we miss out on all this growth and we lost half of that to taxes right off the bat versus if I harvest a little bit of debt here, I get to continue enjoying the asset appreciation all the way up and it grows way faster than the rate of my debt.

Now this works on pretty much any asset, as long as you understand how the mechanics of this work. So what are the things I have to master to make this work? Number one, I have to understand positive carry. So if I can borrow against an asset for cheaper or for less than the rate of appreciation, it works. If Bitcoin’s going up at 50% a year and I can borrow at 15% a year, I can do that forever. If my real estate is going up at 10% a year and I can borrow at 5% a year, again, that works, but we don’t want to do it the other way.

I wouldn’t want to borrow against Bitcoin at 15% to buy an asset going up at 5%. That doesn’t work. So we have to understand a positive carry. We have to go back to the mindset. Remember, we have to think like an investor, not playing not to lose, not thinking about money as something to buy assets that go down in value, but rather think about buying assets that go up in value and play the game strategically and to win. We have to have the mindset, we want to think about positive carry, and we also want to think about the potential risks.

Everything in life has risks. We want to think, what is the potential trouble that we could get in? Well, maybe we couldn’t make our payment one time. Well, we have the asset, so we could sell a little bit more of the asset to cover the payment. And so there’s ways that we can mitigate these things if we want to win. All right. Now, the big shift is that this strategy, it is the framework. Number one, I have to get my mind to shift from a consumer mindset to an investor mindset. One of the best ways you can do that is by playing this game cashflow.

I have to shift my mindset. I have to go from becoming a victim mentality to understanding I am the architect of my own life, and I can architect the way that I play the game any way that I want. Now, if you want to know more about this, if you want to learn the blueprints for building your own wealth operating systems, I’m going to have a live three day event where I’m going to go live right from the stage right here. I got about 15 different tools I’m going to give to you.

I’m going to go deep into how you apply all of these into your own specific circumstances. I’ll put a link down below if you want to come check out the wealth operating system accelerator. It’s only the second time I’ve ever done this event. It’s an amazing time. So check it out. I’ll put a link down below, put a QR code right here. And if you want to know more about how to build out these own strategies, you might want to watch this video right here and I hope to see you over there. [tr:trw].

See more of Mark Moss on their Public Channel and the MPN Mark Moss channel.