EP265: The #1 Wealth Killer School Never Taught You

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According to recent studies, more than half of Americans earning six-figure incomes—51%—live paycheck to paycheck due to rising living costs and debt pressures.

Among those earning over $200,000 annually, 36% are in the same situation (Kiplinger, LendingClub, PYMNTS). 

The fastest path to financial freedom is to be a businessman, not just a “business”, man. This means gaining equity in a business rather than just being the worker bee. 

This isn’t some theory that we read from a book, we’ve done this ourselves. 

We didn’t follow the traditional corporate route. 🤓🤓

➡️ Instead, we ventured into multifamily apartment investing in Aug 2018.

Through strategic partnerships, we’ve acquired equity in a multifamily portfolio worth over $300 million. 

This move was the best decision for our financial future.

Our net worth has increased more than tenfold and continues to grow rapidly. 

Gaining equity in this business has transformed our financial landscape and set us on a path of exponential growth. 

And it can do the same for you.

By the end of this episode, you’ll leave knowing how to earn an ownership percentage of a company using your skills.

Learn how to separate your income generation from time.

Set up business structures that pay you for the work you do today for years to come.

This strategy will change your life and make you more money than anything else. How does that sound? 

Here’s the thing: let us break it down for you clearly. Working for someone else is like being a forager in the wilderness.

Your job is to go out every day, searching for edible fruits.

But here’s the catch: you have no control over the variables. Maybe the tree was diseased, didn’t get enough water, or lacked proper fertilizer.

Similarly, in a W-2 job, you can work hard, but many factors are outside your control.

Now, compare that to owning an apple orchard.

As the owner, you control how much water each tree gets, the type of fertilizer used, and the overall care of your orchard.

Once you plant the apple seeds, you reap the benefits year after year because you own the trees. That’s the power of equity. 

While foragers face feast or famine, those who own the orchard enjoy abundance.

They plant the seeds, nurture them, and then continuously harvest the fruits of their labor.

This is the stark difference: it’s about controlling your destiny.

Those who understand how to plant, grow, and nurture their own assets are the ones who achieve lasting success, today and in the future.

The owner knows that seeds always produce a harvest.

You reap what you sow.

Remember this: you don’t reap when you sow, and you always reap more than you sow.

Sowing and reaping is the way to multiply.

Therefore, owning assets is key to building wealth.

By seeking equity or a share of the profits, you create an income stream that continues to benefit you long after the initial work is finished.

Working for a 9 to 5 W-2 salary means that your worth and compensation are dictated by someone else.  😓😓

Your hard work often goes towards building someone else’s wealth, leaving you vulnerable to their decisions and the market’s fluctuations.

In the past, many believed that a stable job provided lifelong security, but today’s reality is different.

Layoffs are now extremely common, and studies show that 40% of Americans have been laid off or terminated from their jobs at least once in their careers​ (DemandSage)​. 

This means that even high-performing employees are not immune to job insecurity, despite their dedication and hard work.

Imagine climbing the corporate ladder, putting in long hours, and sacrificing personal time, only to find out that you’re climbing the wrong ladder—one that leads to someone else’s success. 

When you rely solely on a salary, you’re essentially trading your time for money with a hard cap on your potential earnings. There’s only so much you can achieve on your own, and this finite relationship between work and income limits your financial growth.

In contrast, owning a piece of a business provides significantly more upside.

Business ownership allows you to leverage various resources—teams, tools, time, taxes, and debt—to grow your wealth exponentially.

This scalability means that your financial growth is not limited by the finite nature of your labor; instead, it expands as the business grows.

For example, in our experience with the apartment business, we recognized the importance of having real stakes and tangible equity from the start. We didn’t want to be just employees; we aimed for ownership. 

Now, in each of our multifamily apartment complexes, we earn at least seven figures in equity for every project we undertake.

While it didn’t start this way, we’ve reached a point where if a deal doesn’t promise substantial returns, it likely isn’t worth our time.

This approach ensures that your wealth grows independently of your labor and time, providing a robust financial foundation that is far more secure and lucrative than a salary alone. 

By focusing on building equity and owning a piece of the business, you create opportunities for scalable and sustainable financial growth.

This path offers true financial freedom and stability, allowing you to control your schedule, decide when to wake up, when to go to sleep, and when to go on vacation.

In our multifamily apartment business, we maximize all five levels of leverage, this has allowed us to grow at a quantum leap speed because we are no longer stuck with the limitations of figuring out and doing everything ourselves. 

We have a highly experienced team working hard on our behalf in every aspect of our business. The key is to seek out a business that can provide this level of leverage.

So how do you do this? 

By growing the three pillars of wealth. The three pillars of wealth—active income, passive income, and legacy building—are essential for achieving financial stability and long-term prosperity. 

Each pillar plays a unique role in creating a robust financial foundation that can withstand economic fluctuations and provide lasting security.

Focusing on all three pillars is crucial because each one addresses different aspects of wealth creation and security.

Active income provides the necessary capital and quick returns to fund other investments. 

Passive income ensures ongoing financial stability and reduces dependency on continuous work – instead of trading a lot of your time for a little bit of someone else’s money, it allows you to enjoy a more relaxed lifestyle.

Legacy building creates a sustainable financial foundation that benefits future generations, ensuring that your wealth endures beyond your lifetime.

Many people, however, fail to focus on these three pillar!

This oversight leaves them vulnerable to economic fluctuations and job insecurity.

So what are these three pillars?

The Three Pillars of Wealth: Analogy and Explanation

Again, the three pillars are active income, passive income, and legacy building. For us, we are fortunate because all three pillars are found in multifamily apartments, but let’s explore examples from different fields to illustrate each pillar.

Imagine you’re playing a game show, and after a series of intense rounds, you finally win a huge cash prize.

That thrill and immediate reward are akin to active income.

This type of income can come from consulting fees, commissions from sales, or job bonuses. 

It’s the money you earn directly from your efforts, providing a crucial financial foundation.

For instance, a tech consultant might work on a significant project and receive a substantial fee upon completion, instantly boosting their earnings. 

This active income leverages your skills and efforts to maximize returns and provide immediate financial benefits.

Now, imagine a business model where money keeps rolling in every month without requiring much or any additional effort from you. 

This represents passive income. 

Examples of passive income include dividends from stocks, royalties from books or music, and rental income from real estate.

Unlike active income, passive income continues to flow even when you’re not actively working.

Consider a musician who writes a hit song; every time the song is played, royalties are earned, providing a steady stream of income that covers everyday expenses and beyond.

It’s a lifestyle business that pays you repeatedly for work you did once.

Lastly, think of planting a tree that will provide shade and fruit for generations to come. This symbolizes legacy building. 

This pillar involves creating long-term wealth that benefits future generations, achievable through investments in businesses, real estate, or trusts that grow over time.

Take, for example, a family-owned winery.

Passed down through generations, it not only provides income for the current owners but also ensures financial security for future descendants. 

By continuously investing and expanding these assets, you build a financial fortress capable of withstanding economic downturns. 

By focusing on these three pillars—active income, passive income, and legacy building—you create a balanced and resilient approach to wealth that surpasses the limitations of traditional employment.

This comprehensive strategy leverages the power of diverse income streams to achieve financial freedom and long-term prosperity.

If you are done trying to earn your way to wealth with your W-2 salary, go watch 🎥 this episode, so you can learn how to use other people’s money to become truly wealthy