➡ Despite working hard and earning more, you may not be getting wealthier due to a mathematical reason. Billionaire CEO Michael Saylor discovered that building wealth isn’t about working more, but about using the right strategy. He shifted his focus from increasing revenue to growing his company’s assets, using three tools: revenue, debt, and equity. This strategy allowed his company’s value to skyrocket from 3 billion to 50 billion in five years.
➡ The text discusses the importance of growing your assets rather than just increasing your income. It explains that while income grows at a slower rate than the cost of living, assets can grow much faster. The author suggests using available credit and equity to invest in assets that yield higher returns, like stocks or Bitcoin. This strategy, used wisely, can help you grow your wealth faster than just relying on income.
➡ This text emphasizes the importance of managing risks in life, particularly in financial matters. It suggests that all actions, including inaction, carry risks, and it’s crucial to understand and plan for these risks. The text also highlights the concept of leveraging assets and maintaining liquidity to protect wealth. Lastly, it encourages the reader to change their mindset, learn from successful people, and use their money more effectively to build wealth.

You’re working harder than ever and you’re earning more than ever, but you’re not getting wealthier. At least not at the rate that you want. And there’s a mathematical reason for this. Now something changed and most people just haven’t noticed, but Michael Saylor did. He’s a billionaire CEO who worked 3,000 hours a year, 2,000 employees for an entire decade. He spent millions, flew around the world, tried everything, but his company stayed stuck. But then he figured out what actually builds wealth. And in five years, he went from 3 billion to 50 billion. So what changed? Well, he shifted his entire strategy and he used three tools and you have access to the exact same tool.

So in this video, I’m going to break down all three. You ready? Let’s go. All right. This is going to be a fun one. Let’s just jump right in. And we’re going to talk about, first of all, why you and I have the same problem. Our businesses have the same problem as Michael Saylor and his company MicroStrategy. And that is that we’re all working too hard and not getting the reward that we’d like to have. And the reason why is because revenue income has a ceiling. There’s always going to be a ceiling at some point. And we’ve been told to hustle harder, right? The hustle culture today, you’re not working hard enough.

You’re not grinding hard enough. Maybe you need to start a new business aside, hustle, work two, three, whatever. But the point is, is that revenue will always have a ceiling. The amount of money we can make will always have a ceiling. So basically, what we have is wages, the amount that you earn, are going up at about 3% to 5% per year. But the problem with that is that the cost of living is going up much faster. Here’s a chart over the last 25 years. The blue line right here is the median income. And the red line is the rate of the monetary expansion.

It’s about 10% per year. It’s not CPI inflation. Forget the CPI. This is the real rate of inflation. So the problem is this gap keeps getting bigger and bigger and bigger. So no matter how hard you work, no matter how many more hours or how many more jobs you have, it’s not going to keep up with this. It’s why you’re always going to have a ceiling. Now, of course, you can go back to school and get another PhD and other masters. Of course, you can start another business. But at some point, it’s going to have a ceiling.

You can only work so many hours in a day. And your business at some point will max out its market size. And that’s exactly what happens. And so because the rate of monetary expansion is going so fast, you’re essentially going backwards. Now, this is the same problem, again, that you and I have, our businesses have, and Michael Saylor had. Now, his company’s MicroStrategy MSTR is the stock. And the blueprint that he left behind, the clues that he left behind, well, they worked really good for him. And we could also borrow from them as well.

It’s a little dangerous, but I’m going to show you how to keep it safe. Okay, let’s dive in. Now, the context, first of all, why did he shift? Let’s talk about this for a second. As a matter of fact, I don’t want to tell you about it. Let’s hear it directly from Michael Saylor’s mouth. When he explained it to Jordan Peterson, what happened, why he did it. Let’s hear it real quick from him. And so for the next decade, I spent huge amounts of money on development. It didn’t work. I spent huge amounts of money on marketing.

It didn’t work. I worked. I rebuilt every information system in the company. It didn’t work. I obsessed over systems for HR, obsessed over systems for sales, for marketing. I spent huge amounts of money on digital advertising, everything you can imagine. I would fly around the world. I flew around the world for a month and I talked in every city, everywhere, in order to get the message out. So I had tried every conventional thing imaginable. And 10 years later, the company was still about a $500 million company. All right, so you just heard from Michael Saylor himself.

He tried everything. He tore it down. He rebuilt it. He deployed the capital. He was stuck. No matter what he did, he couldn’t grow the revenue. So he was trying to grow the revenue, try to grow the sales, try to increase the income. That was the sticking point. He couldn’t compete against Microsoft. He couldn’t buy more companies, whatever. He couldn’t grow the revenue of the business. Okay, now to see what he’s talking about here, let’s just take a look at Micro’s MicroStrategy. It’s now called strategy. We’ll get into that in a second. But MicroStrategy stock, this is from 2010 to 2020.

So for the decade that he’s talking about, and we can see the valuation went from about $1 billion up to about $2 billion and sort of back to one. And so for a decade, he stayed pretty flat, no matter what he did, no matter who he hired, no matter how much money he spent. And so he had to try and do something. He had to shift the entire strategy of the company, and he did. And what we can see is after he changed the strategy of the company, he went from this flat line of about $1 billion to over $60 billion.

So for a decade, for two decades, no matter what he did, he couldn’t increase the revenues fast enough to get the value, the wealth, the market cap of the company from about the $1 to $2 billion. And with a new strategy, he was able to get it to $60 billion in only five years. Sound pretty good, right? It wasn’t just that he got the revenue up. It wasn’t just that he got the market cap up, but it became the best performing asset. So MicroStrategy stock outperformed Bitcoin. It outperformed the entire MAG 7, outperformed gold, S&P 500 real estate, and everything else.

So it worked. It worked really well for him. So what is the shift that he made? So first of all, he changed the name of the company from MicroStrategy, and he dropped the micro because he’s no longer a computer software company. And now it’s just strategy. So the name of the company changed strategy, and he found a new strategy. What is the new strategy? He decided that instead of trying to grow the P&L, the profit and loss, instead of trying to make more revenue, instead, the strategy would be to grow the balance sheet instead.

So now we’re going to create a treasury strategy company. We’re going to build a strategy around our treasury, around our assets, around our balance sheet. And the goal is to now grow that instead of the revenue. So what he did is he played a game that he could actually win. And I’m going to break down the math of how this works. And he instead stopped chasing the revenue. It’s the hardest way to grow. Again, you max out at some point, you can only get so many customers. You can only work so many hours in the day.

So sure, you can make those hours more productive, marginally, right? Of course, maybe you could try to open up a little bit more product line. But at the end of the day, you hit a plateau. So he decided to stop chasing revenue and instead start multiplying assets. Now he, of course, didn’t shut the software business down. The software business is still producing revenue, but the revenue was used differently. The revenue was used as fuel for the new engine that he had built. Let me show you what I’m talking about here. Okay, so what he did is he used three different tools to do this.

And the good news is we have tools like this that we can use. I’m going to show you what I mean. So the three tools are, number one, he used the revenue. So again, he didn’t shut the software company down. The software company was still running and it was producing revenue. But what he did is he instead of trying to buy more businesses, hire more people, instead, he converted that revenue, that income into assets. And those assets started growing really fast. Then what he did is he access the debt markets. So he issued debt, raising money, using debt to buy other assets.

I’m going to talk about how this works for all of us in a minute. Then what he did is he used the equity that he had in his business and in his other assets to become collateral to get more assets. So he shifted the strategy. Pun intended. He changed the name of his company to strategy from a revenue game instead of trying to make more revenue to an asset game. Okay, using three tools. Again, let me break down how this all works for us. Now, when we start using assets, instead of revenue, we can grow much faster.

Again, I showed you some of the math. The reason why is that the revenue game is this treadmill that’s falling behind, right? The revenue game, as I showed you, is growing at about 3 to 5% a year. But your cost of living is going up by 10% a year. So almost no matter how much harder you work, you won’t be able to keep up. So let’s see. So the cost of living is going up by 10% a year. My income’s only going to go by 3 to 5% a year. But my assets are going up by 20 to 50% per year, or they should be.

I’ll show you what I mean in a second. So if my growth of my revenue can’t keep up with my cost of living increase, then wouldn’t it make sense to start trying to optimize and build this instead? Well, that’s exactly what he did. Let me show you what our options are if we want to do this. Here’s a list of some of the main asset classes over the last five years. And we can see that the homes, so if you like to play the real estate game, they’re going up by about 8 to 10% a year.

Much better than your income and about the same rate of your cost of living increase. The S&P 500 is going up about 11 to 12% a year. So now you’re getting in front of it. Now you’re moving further ahead. The NASDAQ, this is focused on the tech stocks. Tech moves faster than the S&P 500. Key piece will come back to that. The NASDAQ moves faster. It’s going about 13 to 15% a year. Now we’re getting somewhere. Now my assets are growing faster than my cost of living. Gold has had an amazing run really this last year or so.

But it’s averaged out now over the five years about 22 to 23%. And of course, Bitcoin is about 50% per year. All right, so these are the types of assets. So if I could build my asset base like Michael Saylor at 50% a year, instead of trying to increase my revenue at 3 to 5% a year, you can start to see how much faster we can grow. Now, just to double click on the Bitcoin numbers for a second, because you know I love Bitcoin. Over the last two years, it’s averaged about that 50% number per year.

If I go back to three years, it’s about 75%. This is a compound annual growth rate. We call this a CAGR, compounding annual growth rate. That means it’s compounding on top of the compound and on top of the compounding. 75% over three years, 70% over 10 years. It’s key to understand these numbers. All right, now let me show you some examples of ways that we can do this. Now, I just want to say real quick side note. This is only an example. This is for educational purposes. This is not financial advice. I am not your financial advisor.

This is for educational purposes. Now, if you’d like to see some actual real numbers, put in the stuff that you could actually use, where we can provide the full context, because this could be a little bit dangerous if you don’t know what you’re doing. I am going to have a live presentation where I’m going to break all this down for like an hour. There’s a link down below if you want to check it out. It’s all free. Come hang out. I’ll show you several examples like this. We’ll do all the live Q&A, because this is dangerous if you only get a small piece of it.

So check out that link down below. But let me give an example. So let’s say, like Michael Saylor, I want to grow my asset base. And, you know, okay, I get it. I can’t grow my income fast enough. I want to grow my asset base. And I too, as an individual, as a person, but also as a business owner, I too also have credit at my disposal. I have equity at my disposal. So let’s say that I could get a credit line, a credit card, a business line, a home equity line. I have equity.

So let’s say I have equity in my business. I have equity in my home, right? So we have different types of equity and credit that are available to us. Here’s one example. I could take, let’s say, my house. Let’s say that I have equity in my house. I have a million dollar home. I have, let’s say, $300,000 of equity in that home. Now, the home is going up, as I showed you, 8% a year. But whether that $300,000 sits in the home or not, the home’s still going up at 8%. So the capital that’s locked in there is what I call lazy capital.

It’s only doing one job. So instead of me trying to go get a second job or a third job, I could take my money and have it go do additional jobs. So let’s just say, hypothetically, for educational purposes, I were to take, let’s say, $250,000 out of that equity at my disposal through a home equity line of credit. And I’m going to pay, let’s call it 8% interest to the bank on that. Now, what I could do is I could take that $250,000 that was just sitting there doing nothing, and I could activate it.

I could put it into an asset, in this example, strike, S-T-R-K, and it’s a stock that pays me a dividend, but it also has upside potential. So now it’s paying me, let’s say, 9% or 10%. It sort of fluctuates a little bit. So now I borrowed 8%, but I’m making 9%, so I have a positive carry. I’m making money for my money. There’s a little bit more to this, but let’s say it’s paying me 9% to 10%, so it’s making me $23,000 to $25,000 a year in strike, but I have to pay my payment for the HELOC.

Let’s say that’s 8%, so that’s $20,000 a year. So I have a positive carry of $3,000 to $5,000 per year, before taxes. Both of these are tax advantage, so maybe it’s a little bit more, but let’s just call it $3,000 a year. I’m making positive while I’m waiting for the upside potential. Now, if this stock goes up to some of my targets, which I’m not going to give you right now, not here. If it goes up to some of the targets, I think it can achieve over the next, say, five, six years, it could have the potential to make me, I don’t know, $5,600,000.

Again, if you want to see the full math, check out the link down below. I’ll break it down in more detail for you. But this is an example of using credit and equity, and there’s lots of examples how you can do this, taking it out, activating it, and turning it into $500,000 or $600,000 in a few years of money that just sort of came out of nowhere. It’s just sitting there doing nothing. And this is just one strategy that Michael Saylor has employed. Now, the key is, this is one example.

There’s 100 ways this can be done, but the key is, is that instead of trying to earn more and get the side hustle and get the side job, where you’re doing two jobs, the key is, is to get your money to do two jobs, or three jobs, or four jobs. So instead of trying to earn more, what we want to do is we want to own more. This is completely different than everything you’ve learned, because you were taught to buy low and sell high. And so if I need more money, I have to sell my assets.

But this is a completely different strategy. It’s a strategy around building up the assets, but then using the assets to pay for our life. We want to convert the income into the assets and then have the assets do the work. I like to say that the reason why you have to work so hard is because your money doesn’t. But this changes this whole thing around. We convert the income, we own the assets, and then we delegate the work out to the assets. You’re listening to this, and you’re like, Mark, this is crazy, and this is super dangerous.

And what you’re recommending to people could put him in a lot of danger. First of all, I’m not recommending anything. It’s for educational purposes only. But what we’re understanding is how Michael Saylor was able to build his company that he couldn’t increase the revenue and go from $3 billion to $50 billion in five years using two tools that we have at our disposal. We can think about how do we manage the risk. So the first thing I’d bring up is that when you go, this sounds extremely risky. What I’d say is, yes, there are risks to that.

But I think we have to understand that there’s risks in everything. There’s risks whether we move or we don’t move. Let me give an example. If I go to the gym, I could get in a car accident on the way there. That’s pretty risky. When I’m in the gym, I could drop a weight on my toe or on my chest. That’s pretty risky. I could hurt my shoulder, which I’ve done many times. Lifting heavy weights, that sounds risky. So I could decide not to take those risks and not go to the gym at all, and I could stay at home on the couch.

And then I’m risking heart disease and cardiovascular disease and muscle atrophy. You see, everything has risk. It’s just which risks do I want to optimize for and how do I mitigate or manage those risks? So a couple of things that we want to think about is volatility. Asset prices go up and down. So if I’m borrowing money and I’m putting in other assets that are volatile, that could be a problem. Now, some assets are more volatile than others. So for example, a home is typically a 30-year fixed loan. There’s not a lot of volatility there.

Unlike Bitcoin, that’s much more volatile. We want to think about the leverage. So if I’m borrowing, I’m using leverage against the asset. Now, simple rule of thumb, if we both buy one Bitcoin and it goes up by 5x, who makes more money? If I were to use a little bit of debt and buy one and a half Bitcoin, and you had one who makes more, I did. Because I have leverage on it, but leverage cuts both ways. So we want to make sure just like a knife, we’re using it in the proper way.

And then finally, liquidity. We have to understand that liquidity is what allows us to use leverage and manage the volatility. So I like to think of my liquidity in four layers. And we want one, two, and three. The first three layers of liquidity protect all my wealth in layer four. We don’t pretend that there’s no risk here. We just manage for it. For example, again, if you want to go into the ocean and you don’t know how to swim, that’s very dangerous. You could easily drown. So you could learn how to swim. You could learn how to swim, and you could also put on a life jacket.

You could learn how to swim, put on a life jacket, and also take a float with you in the water. You could learn how to swim, put on a life jacket, take a float, and make sure there’s a lifeguard swimming with you. You see, there’s all types of ways that we can take the inherent risk of something and de-risk it by planning strategy around it. So now, what is the risk of not doing something like this? Well, the risk of not doing something like this is your income is growing by 3% to 5% a year, but your cost of living is going up by 10% a year.

Traditional financial analysts will tell you that what you should do is sell 4% of your stocks per year. So the law of compounding works against you, and most people will probably run out of money, unfortunately, before they die. That’s the other risk. So you can choose which one you want. Now, again, we want to not pretend there’s no risk. We just build a policy around it. So for example, I think about all the different types of failures, the potential risk that could happen in this scenario, what failure points do I see, what that would actually look like, how that would damage me, and then I can build a plan or a fix to mitigate each one of those.

Again, if you know how to swim, put a life jacket on. And so we identify the failure points, what they would look like to us, how we mitigate against those, and we build a policy to protect our wealth, sort of like what Michael Saylor’s done. So now he has $2 billion of cash sitting in this island. That’s his liquidity. So he can cover his payments. He also has more liquidity. So for example, he can sell more stock. He also has more credit. He could borrow more if he needs to. And so we build a policy to protect our wealth, not pretend that there’s no risk there.

Instead, we learn to manage the risk. All right. So the key thing to take away from this video is we want to change what? We want to change the question that we ask. I like to say the quality of your life will come down to the questions that you ask. So let’s change the question. And we want to shift from a thinking about revenue and instead think about how could we build wealth faster using tools at our disposal like assets? How could I play the asset game like other successful people have done? Now, of course, this requires a brand new operating system.

If it requires a new set of thinking, a new set of tools, what I call the wealth operating system, you need a new operating system. And then you have to learn how to manage risk because I want to learn to manage my risk of losing everything and dying broke. So then I have to learn how to build wealth, but I have to learn how to manage the risk of that as well. And then finally, we want to think about activating lazy capital. The reason why you have to work so hard is because your money doesn’t.

Your money is doing one job sitting in one asset, your 401k, your retirement, your home. But it could be doing two or three or four jobs instead of you doing two jobs. So if it just comes down to changing your mind, follow what I’ve always called follow successful steps. Find someone else who’s done it, like Sailor said example, and learn what are the steps that we could learn and we could potentially duplicate. Now, again, this is risky, but so is doing nothing. If you want to come and find out how I’m doing all this, the tools that I use, the three layers of liquidity I use to protect it, how I divide my assets into four different categories so I can understand what the true purpose is, and maybe more examples of like that strike convex trade.

There’s a link down below. You can come hang out for free. I’ll break it all down for you. We can do live Q&A. It’s going to be fun either way. But either way, there’s risk. You got to do something. Hopefully you choose wealth. That’s what I got for you today. To your success, I’m out. [tr:trw].

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