Getting Rich Is Hard Until You Build This System — Transcript

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1. 0:00If you want to get rich, there's a
2. 0:01decent chance you're going about it
3. 0:03completely wrong. Somewhere along the
4. 0:05line, we lost the plot on what wealth
5. 0:07actually is. I know this because the
6. 0:09business I own makes $25 million a
7. 0:12month. And I still watch smart,
8. 0:13hardworking people get this backwards
9. 0:15every single day. Your whole life,
10. 0:17people have probably told you to chase a
11. 0:19higher net worth. What you'd be worth if
12. 0:21you sold everything on paper. But net
13. 0:23worth doesn't pay your mortgage. It
14. 0:25doesn't cover groceries or your kids'
15. 0:27tuition. something much more powerful
16. 0:29does. So, in this video, I'm going to
17. 0:32show you why you were trained to chase
18. 0:33the wrong number, the five businesses
19. 0:35that I'd start in 2026 to build a
20. 0:37different type of wealth, and one
21. 0:39question that I want you to walk away
22. 0:40asking yourself about every financial
23. 0:42decision that you make. I spent years on
24. 0:45Wall Street before I started filterby.
25. 0:47And the thing that I kept seeing was how
26. 0:48many people making genuinely serious
27. 0:51money were terrified every bonus season.
28. 0:54It wasn't because they were broke, but
29. 0:56because none of it was theirs to keep.
30. 0:57They were living off the next check, the
31. 1:00next bonus, the [music] next promotion,
32. 1:02or the next round of funding from
33. 1:03someone willing to pay a little more
34. 1:05than the last [music] guy. When that
35. 1:07expectation came in short, and it did
36. 1:09regularly, the whole picture started to
37. 1:12crack. I don't think these were reckless
38. 1:13people. I think they were playing the
39. 1:15game that they were taught to play. A
40. 1:17game where the scoreboard is net worth
41. 1:20and not cash flow. Where the goal is a
42. 1:22valuation, not a monthly check. where
43. 1:25you ask, "What might this be worth
44. 1:27someday?" instead of, "What does this
45. 1:29pay me right now?" Those two questions
46. 1:32lead to completely different lives, and
47. 1:34most people never stop to notice they're
48. 1:36answering the wrong one. Honestly, I
49. 1:38fell for it, too. When I was younger, I
50. 1:40thought that net worth was the
51. 1:41scoreboard. I thought the number on the
52. 1:43statement was the whole game. The older
53. 1:45I've gotten, though, the more I've
54. 1:47realized that the net worth number
55. 1:49barely matters. What matters is whether
56. 1:51the things you own are actually putting
57. 1:54money in your pocket to spend today.
58. 1:56People ask me all the time, "What number
59. 1:58makes you rich?" And honestly, I think
60. 2:00that question is flawed to begin with.
61. 2:02Picture two different people. One person
62. 2:04spends $5,000 a month and has $10,000 a
63. 2:07month coming in from things that they
64. 2:08own. The other spends $50,000 a month
65. 2:11and makes $60,000 at a job. On paper,
66. 2:14the second person looks 10 times richer,
67. 2:17but the first one is free. And the
68. 2:19second one, they're on a leash,
69. 2:21sometimes called golden handcuffs. If
70. 2:23you made me pick a number, I'd say
71. 2:24$20,000 a month after taxes coming from
72. 2:27assets that you own. That's about
73. 2:29$240,000 a year. For most people in this
74. 2:32country, that's enough to own a home,
75. 2:34raise a family, travel a little bit,
76. 2:36invest, and take care of the people that
77. 2:38you love, and still have a little bit of
78. 2:40room left over. But that $20,000 number
79. 2:43is [music] really just a headline. The
80. 2:45real formula for wealth is much simpler.
81. 2:47cash flow from things you own bigger
82. 2:50than what it cost you to run your life.
83. 2:52That's it. It's that simple. Here's what
84. 2:53I want you to do right now. Write down
85. 2:55two numbers. The first one, what your
86. 2:57life truly costs every month. Your rent,
87. 2:59your food, your car payment, cost of
88. 3:02your kids, all of it. And second, how
89. 3:04much money comes into your account every
90. 3:06month from things you own that are not
91. 3:08your job. The gap between those two
92. 3:10numbers, that's the game. People always
93. 3:12ask me which industries I'm excited
94. 3:14about. The truth is, I care way less
95. 3:16about the industry than about the
96. 3:18economics lying underneath it. I keep
97. 3:20running every business I look at through
98. 3:22the exact same filter. Does it pay you
99. 3:24month after month without needing a
100. 3:26miracle? A boring business with great
101. 3:28cash flow beats a sexy business with a
102. 3:30great story every single time. None of
103. 3:33the five businesses I'm about to walk
104. 3:35you through require a technical
105. 3:36breakthrough. None of them require going
106. 3:38viral. None of them need outside
107. 3:40investors to keep running. They just
108. 3:41need to be built correctly and run well.
109. 3:44Cash flow machine number one,
110. 3:46manufacturing. A good manufacturing
111. 3:48business can earn 10 or 20% on the money
112. 3:50you put in year after year and it builds
113. 3:53a real moat. Once a customer is buying
114. 3:55from you regularly, switching to someone
115. 3:57else is a headache that they don't want.
116. 3:59So, they stick around and they pay you
117. 4:01every month. That friction becomes your
118. 4:04moat. Now, do you need to go buy a
119. 4:06factory to start? I see this story all
120. 4:08the time on my podcast, Boring Money.
121. 4:10There are small shops out there doing
122. 4:12500,000 to a couple million dollar in
123. 4:14revenue that you can buy for a few
124. 4:16hundred,000 down with the seller
125. 4:18carrying the rest. You pick a product,
126. 4:20get someone else to make it for you,
127. 4:22learn who actually buys it and why, and
128. 4:24only then start thinking about owning
129. 4:26the machines. Cash flow machine number
130. 4:28two, distribution. One of my favorites.
131. 4:30Distributors don't make huge margins,
132. 4:32but they barely need any capital for the
133. 4:35size of business that they run. And once
134. 4:36you're wired into a customer's ordering,
135. 4:38you're almost impossible to rip out. And
136. 4:41that becomes the magic. They pay you and
137. 4:43they really don't want the hassle of
138. 4:45switching. The first move here isn't
139. 4:46renting a warehouse. It's getting
140. 4:48customers. Start as an independent sales
141. 4:50rep. Carry a little inventory and build
142. 4:52a book of people who buy from you on a
143. 4:54schedule, then maybe go buy a small
144. 4:56distributor or slowly grow into one.
145. 4:59Once customers are ordering every month,
146. 5:01the business mostly carries itself. The
147. 5:03[music] thing that kills distribution
148. 5:04businesses is competing purely on price.
149. 5:07If the only reason someone buys from you
150. 5:09is that you're the cheapest option,
151. 5:10you'll spend your whole career defending
152. 5:12that position. The distributors that
153. 5:14hold up over decades become genuinely
154. 5:16hard to replace because of service,
155. 5:19reliability, or carrying something niche
156. 5:21that customers can't find elsewhere.
157. 5:23Cash flow machine number three,
158. 5:25essential home services. If I were 22
159. 5:27today with no money, this is probably
160. 5:29where I'd go. HVAC, plumbing,
161. 5:31electrical, pest control, just pick one.
162. 5:33People need these no matter what the
163. 5:35economy is doing. So whether it's a
164. 5:36recession or a boom, your toilet still
165. 5:39breaks and your AC still dies in July.
166. 5:42The customers come back year after year
167. 5:44is boring and reliable, which is exactly
168. 5:46what you want. The mistake that most
169. 5:48people make is trying to build one of
170. 5:50these from scratch. That's the slow,
171. 5:52painful path. Doable, but it takes time.
172. 5:54My favorite move here is to go work in
173. 5:56the trade first and get paid to learn
174. 5:59it. Then go find an owner who never
175. 6:01really built a business. He or she built
176. 6:03himself a job with an LLC staple to it.
177. 6:06He's doing the sales, running the crew,
178. 6:08and fixing every problem himself. If
179. 6:10that sounds like a mess, that's exactly
180. 6:12the opportunity for you to go and chase.
181. 6:14A local HVAC shop doing a half a million
182. 6:16to a million dollar in revenue might
183. 6:18generate 75 to $150,000 a year in owner
184. 6:21earnings. With seller financing or an
185. 6:23SBA loan, you can often buy it with very
186. 6:26little down. Instead of starting from
187. 6:28zero, in this case, you're buying the
188. 6:30customers, the reputation, and the years
189. 6:32of trust that that owner built up. Then
190. 6:34your job is very simple to explain and
191. 6:37hard to do. Turn his job into an actual
192. 6:40business. Put the systems in place, hire
193. 6:42the people, and get serious about
194. 6:44marketing. I truly believe that a kid
195. 6:46who learns a trade at 22 and buys one of
196. 6:49these in their 30s can outear earn 90%
197. 6:52of people walking out of top business
198. 6:54schools. While their friends are taking
199. 6:56on student debt, this person is getting
200. 6:58paid to learn. While their friends are
201. 7:00starting at the bottom of some corporate
202. 7:02ladder, this person already owns the
203. 7:04ladder. Cash flow machine number four,
204. 7:06industrial services, filtration,
205. 7:08testing, inspections, compliance work,
206. 7:11specialty cleaning, repairs. The cost of
207. 7:13skipping the service is higher than the
208. 7:15cost of paying for it. The decision gets
209. 7:17made for you by regulation or by what
210. 7:20happens when you don't comply. The
211. 7:21playbook is the same as home services.
212. 7:24You learn the industry, you build the
213. 7:25relationships, and then you buy a small
214. 7:28operation. The customer stays sticky for
215. 7:30years, sometimes decades. The risk here
216. 7:32is customer concentration. If one
217. 7:34customer is 40% of your revenue, you
218. 7:37don't own a business. You own a contract
219. 7:39that can disappear with one phone call.
220. 7:41Get that number down before you start
221. 7:43congratulating yourself. Cash flow
222. 7:45machine number five, vertical software.
223. 7:47I almost left this one out because most
224. 7:49software businesses are exactly the trap
225. 7:51that I keep warning you about. They're
226. 7:53built to be sold, not to pay you. But
227. 7:55the right kind of software is hard to
228. 7:57beat. Period. Once it's built, serving
229. 8:00the next customers cost you almost
230. 8:02nothing, and it pays you every single
231. 8:04month. Don't raise a pile of venture
232. 8:06money and pray someone buys you out
233. 8:08someday. I build software that fixes a
234. 8:10problem I already understand from
235. 8:12running a real business. Find the
236. 8:14painful repetitive thing in an industry
237. 8:17you actually know and you solve that.
238. 8:19Get a handful of customers paying you,
239. 8:21then feed the cash back in. The barrier
240. 8:24to building it has fallen through the
241. 8:25floor. If you know an industry well, but
242. 8:27you can't code, the tools available now
243. 8:30get [music] you a lot closer to a
244. 8:31working product than they did even 2
245. 8:33years ago. Heck, even 2 months ago.
246. 8:36Before I tell you what all this is
247. 8:37really for, I want to point out the
248. 8:39unfair advantage you might have right
249. 8:41now that nobody had 5 years ago, and
250. 8:43most people are using it completely
251. 8:45wrong. When people hear AI, they think
252. 8:47about AI companies, [music] about which
253. 8:49stock to buy. I don't think about it
254. 8:50that way at all. I think about what
255. 8:52these tools do for the boring businesses
256. 8:54that already exist. Let me show you what
257. 8:56I mean. My dev team spent months
258. 8:58building an Amazon bidding tool. I
259. 9:00recently rebuilt most of the core
260. 9:02functionality myself in a few hours
261. 9:04using claude in our internal data. I'm
262. 9:06not a better developer than my team, not
263. 9:08even a little bit. The work available to
264. 9:10a single operator with good judgment has
265. 9:13expanded enormously. Pricing analysis or
266. 9:15catalog management, ad management,
267. 9:18financial reporting, all of it is
268. 9:20getting faster, cheaper, and more
269. 9:23accurate. That means a small team
270. 9:25running a boring [music] business today
271. 9:27can do the output of a much larger
272. 9:30organization just a few years [music]
273. 9:31ago. That combination of a cash flowing
274. 9:34business plus the modern tools is a
275. 9:37better setup than most people
276. 9:38understand. The four cash flow keys.
277. 9:41After years of buying and building these
278. 9:43things, I boiled down what separates a
279. 9:45great cash flow machine from a mediocre
280. 9:47one [music] to four things. First, you
281. 9:50want recurring demand where people buy
282. 9:52again and again instead of just once.
283. 9:54You want high margins so you keep most
284. 9:56of what you bring in. You want low
285. 9:58reinvestment so you're not shoving every
286. 10:00dollar you make back into [music] the
287. 10:01business just to stand still. And and
288. 10:03probably most importantly, you want
289. 10:05operator leverage where a small team can
290. 10:07do the work of a big one. Most
291. 10:09businesses hit one or two of these. The
292. 10:11great ones hit all four. And [music]
293. 10:13when you find one of those, you stop
294. 10:15hunting for the next shiny thing and
295. 10:16just let it compound. Which brings me to
296. 10:18the part that nobody talks about. What
297. 10:20does cash flow actually buy you? People
298. 10:23ask me what filter buy is worth all the
299. 10:25time. And the truth is I really don't
300. 10:27care. You could tell me it's worth a
301. 10:29million dollars or a billion dollars.
302. 10:30I'm not selling and it wouldn't change
303. 10:32one thing about how I run it tomorrow
304. 10:34morning because the business gives me
305. 10:36something a valuation never could. It
306. 10:38gives me options. I can hire someone who
307. 10:40needs a shot and not ask anybody's
308. 10:42permission. I can move on and
309. 10:44acquisition the same week that I find
310. 10:45it. I can take care of my family and not
311. 10:48flinch when we have a bad month. None of
312. 10:50that comes from an investor being in a
313. 10:51good mood and paying a high price one
314. 10:53afternoon. All of it comes from the
315. 10:55simple fact that the business pays me.
316. 10:58Most people spend their whole lives
317. 11:00chasing a number that can't actually buy
318. 11:02them anything. Don't be one of those
319. 11:04people. Stop asking what you're worth.
320. 11:06Start asking what pays you every month.
321. 11:09For more businesses that generate cash
322. 11:11flow every month, click my video