How to Be a Capitalist Without Any Capital Read online

  My point isn’t that dropping out of college pays (although it did for me). It’s that you, or I, or anyone can join the New Rich if we just decide we want to.

  So, do you want to?

  WEALTHY PEOPLE SOLD YOU THESE FOUR LIES

  There’s a secret many of the New Rich don’t want me to share: You don’t need to be Ivy League educated, have money, be creative, or even have an idea to reach their level of financial success. You just need to be willing to break the rules and start looking in the right places.

  To start, forget most of the business or money “rules” you’ve learned because they’re dead. It amazes me that a book like Rich Dad Poor Dad, which has sold twenty million copies, is no longer relevant. That book was my bible growing up, but it simply doesn’t work today because it gives old business advice that’s rooted in the old economy. One example: a big message in Rich Dad Poor Dad is that your home is a liability, whether you rent or own. Today, the New Rich would categorize their home as an asset because the few days they’re traveling each month, they can put it up on Airbnb and generate cash flow. When I was in college, I rented the most expensive apartment in town and lived there for free while earning $1,300 a month off the rental. Liability? My bank account didn’t think so.

  The New Rich baffle so many people because they don’t play by the old rules of business that the masses follow. You’ve been sold these rules by “mentors,” but you must forget them to join the New Rich:

  Focus on becoming an expert at one thing.

  Come up with a remarkable idea.

  Set goals and work toward them.

  Give customers what they want.

  I’ll unpack each of these in the chapters ahead and arm you with this new set of rules for joining the New Rich:

  RULE 1: Don’t Focus on One Thing. Your parents always told you, you’ve got to do one thing and do it well. College encourages us to do the same by picking a major. But this is a terrible strategy if you’re looking to build wealth in the new economy. Focusing on one thing gives you a single point of failure—whether it’s a job, an investment opportunity, or an entrepreneurial venture. When engineers design a bridge, they never want to have a single point of failure. If the wind picks up to two hundred miles per hour and a cable fails, the bridge still has seven other cables to back it up. Likewise, you’d never want to build your wealth around one endeavor. If that one thing fails, you’re destroyed, and you have to start again from scratch. Ignore the conventional wisdom that says it’s impossible to multitask. I’ll walk you through my Three-Focus Rule, showing you how you can always have at least three new ideas launched and brewing without spreading yourself too thin. (Most say “You’re doing too much!” because they’re jealous!)

  RULE 2: Copy Your Competitors. Every. Single. Detail. Have you ever thought, “Ugh, I would be rich if I’d only come up with XYZ idea that is making that other guy millions”? Are you kidding? Copy him. You don’t need your own idea. Launching a new idea is actually a terrible approach to gaining wealth—you have to pay for all the mistakes yourself. Why?! The way to get filthy rich is by aggressively copying others and then adding your own twist. Facebook very publicly copied Snapchat. When Snapchat released Snapchat Stories, Facebook rolled out Facebook Stories and Instagram Stories. When Snapchat released disappearing messages, Facebook added that to its messaging app. Facebook was ruthless—it went feature by feature and copied every one. Copying competitors isn’t revolutionary. It just seems outrageous because most people are scared to do it. In the late 1800s, newspaper tycoons Joseph Pulitzer and William Randolph Hearst were in a raging circulation war to win over New York City readers. Pulitzer published his paper, the New York World, with zero competition for more than a decade until Hearst entered the market with the New York Journal and copied every single one of Pulitzer’s strategies. Hearst copied Pulitzer’s newspaper layout. He stole Pulitzer’s top cartoonist. Hearst copied, and then he pushed each strategy a few notches beyond what Pulitzer was doing. When Pulitzer charged $.02 for an eight-page paper, Hearst charged $.01 for sixteen pages. By the early twentieth century, Hearst had solidified his spot as the top newspaper publisher in New York City. The best (or worst?) part: Pulitzer was actually Hearst’s mentor before they became rivals. Hearst clearly wasn’t sentimental about that. You have to copy to win, but I get that it’s hard to know what to do, whom to copy, or where to start. The key is to analyze a business and pinpoint a need it’s not meeting for its customers—and then meet that need yourself. I’ll show you how. Let go of the excuse that somebody is already on an idea. Unless you’re Elon Musk, Jeff Bezos, or already a billionaire, every idea that you can launch quickly and commercialize has already been thought of. You’re going to build yourself rich by copying one, making it better, and creating momentum. You can go invent brand-new ideas after you have a billion dollars. But it’s not efficient to try doing that from the start.

  RULE 3: Quit Setting Goals—They’re Keeping You Broke. Setting a goal is like saying, “I want that golden egg.” It can be a Rolex watch, Beverly Hills mansion, $500M private jet, $2K dinner at your favorite restaurant. Whatever. If you build your life around a goal, the second you achieve it, it seems like there’s nothing left to achieve. And you end up bored. You’ll have to remotivate yourself to come up with another golden egg to chase. It’s much better to invest your energy into creating, feeding, and nursing a system that pumps out golden eggs every day. That way, no matter where you are in the world, whether you’re working or not, whether you have twenty kids or no kids, you’ll have a golden goose that keeps making golden eggs for you. Systems make the rich richer, and goals make the poor poorer. Those are the culprits behind the saying you hear often: “The rich get richer, and the poor get poorer.”

  RULE 4: Sell Pickaxes to Gold Miners. The essence of this rule is to let others cut a trail through the thick jungle so you can then peacefully walk in and capitalize on their hard work. That’s what people did during the gold rush. The gold miners went west, hunting, searching, sweating, bleeding, killing, and dying just to make it out there. After they arrived they realized they needed pickaxes to mine more efficiently. Well, then others just traveled over on the paths already created to sell those pickaxes to the gold miners. They got rich without any of the risk, sweat, or bloodshed. In today’s world this translates to siphoning revenue from a hot market that others put the effort into building. So if you’re creating a tool for people to use on top of Facebook, you’re essentially capitalizing on the money Facebook has already spent by selling into the market they created. Pay attention to what’s blowing up today. If weekly food delivery is big, don’t try to compete with HelloFresh and Blue Apron. Rather, figure out the infrastructure that those businesses rely on and offer it to them. Food delivery companies need last-mile delivery from warehouse to consumers’ homes. I’ll help you discover your own pickax to sell to your local gold miners—the people going after the hot thing in your space, geography, or niche. When you do that, your business is much more likely to succeed because you’re piggybacking off of a giant.

  FAQ: WHO THIS BOOK IS FOR, AND NOT FOR

  This book is for you—you with the debt, the four kids, the $1K to your name, and without any business ideas. Don’t worry if you’ve never launched a business, or if you don’t know the first thing about running a company. I’ll walk you through every step and system with real-life screenshots, tax returns, and email exchanges that landed six-figure business deals. By the end of this book, you’ll know how to:

  Build a business that runs itself, with no start-up capital.

  Get that business to tap into an established customer base that you put no effort into creating.

  Buy real estate at below-market value that is cash flow positive from day one.

  Make off-the-beaten-path investments with instant returns that are double what you’d wait 10+ years to get out of the stock market.

  Work up enough momentum to consistently build (or buy) and sell companies every two years at a seven-figure profit.

  But don’t worry about any of this yet. You’ll just start by turning every one of your liabilities into assets using the sharing economy, which will erase most of your expenses. This probably sounds impossible, but the New Rich found a way to do it, and I’m going to let you in on their secrets. Once the cash starts to flow, you’ll use that money to build, buy, invest, and sell your way to wealth.

  Joining the New Rich has only two requirements: a desire for more free time to do what you want while making money on your terms, and ambition. I can’t teach ambition, so you’ll need to bring your own.

  If you have these two things, you’re probably the type who does not want to cement your life to the “hustle 24/7, get no sleep, and work your ass off for the empty promise of retirement” mentality. Good. That will get you far. The motivation to design your own life—whether it’s a life traveling the world or building a log cabin in the woods—is all you need.

  I also want to be clear about whom this book is not for. This book is not for you if you love getting advice like “follow your passion”—because that’s the most reliable way to stay poor. If you’re looking for someone to give you permission to follow your dreams, even if it means being too broke to afford health insurance, you’re not going to get that from me. Yes, you’ll be living your dream life if you follow my advice, but your dreams won’t make you money. Passive income first. Then you can dream bigger than you ever thought.

  This book is also not for the person who is intimidated by those who love to compete. You’ll have to copy, negotiate, undercut, and outperform others at every turn. If
the thought of doing these things doesn’t give you a thrill, you won’t last long.

  Finally, this book is not for anyone who dislikes the 1 percent—because after you’re done following the advice here, you’re going to be part of the 1 percent, with an eye toward joining the .01 percent.

  If all this sounds improbable, remember that the New Rich are people you hang out with every day. They’re the cube mate you sat next to for years who finally said, “I’m sick of working so much and only making $90K a year. I’m quitting.” Maybe your private reaction at the time was, “Oh my God, I could never quit my job. I have health benefits and security, and I have two kids to take care of. I’m never quitting.” Well, your coworker has three kids and was her family’s breadwinner when she quit. Fast-forward five months and you see her taking her family on vacation. You run into her at the coffee shop with friends and you overhear her saying she’ll pay for the whole order. She hangs out with whomever she wants and does what she wants more often. The next time you meet up, she’s telling you that her business is doing $30K a month. Guess what? She doesn’t have any more intellect, talent, or hustle than you do. Stop asking how she does it and start now, with the tactics on the next few pages.

  YOUR NEW RICH PLAN AT TEN THOUSAND FEET

  Here’s an aerial view of what your journey to wealth might look like if you follow the advice in this book:

  Start at zero. No start-up capital. No trust fund check from Grandma. No high-earning spouse contributing the cash to get your ventures off the ground.

  Leverage the four tactics I used to generate over $10K in cash and start funding my own ventures by the time I was twenty-one years old.

  As money comes in, you will:

  Spend it however you want to make sure you’re living a happy, healthy life. Go on vacation. Get a mocha every morning. Buy that Anthropologie dress even if it’s not on sale.

  Invest it back into your current ventures in unique ways.

  Invest it in real estate using very little capital.

  Outright buy other companies for pennies on the dollar using the negotiation tactics I teach.

  Build a war chest to fund any next business venture you want as you see fit.

  I will show you how to do all of these things.

  Is it simple? Yes.

  Is it easy? No.

  In music, there are only seven notes. Anyone can know them. So why do some people create hit songs while others can barely sing? The answer is in the combination of those seven notes.

  Business is even simpler—it only has four notes. This book will teach you the unique ways to combine those four notes, or principles, to create masterpieces that put money in your bank account. You’ll also see how I’ve combined these four principles, which are the four rules I recommend breaking, to create incredible wealth. The journey starts now.

  Flip to the next chapter to learn how I made my first $6,400 from my podcasting company.

  PART

  1

  RULES TO BREAK,

  RULES TO EMBRACE

  1

  RULE 1:

  DON’T FOCUS ON ONE THING

  A single point of failure (SPOF) is a system that, “contains only one component to do a job . . . if that single component fails, there is no alternate one to take its place.”

  —PC Magazine

  Our parents and professors were wrong. Most of them pushed us to focus on one thing and get really good at it. Pick a major. Become an expert. Be the go-to person everyone calls when they need whatever skill you’ve mastered.

  That’s fine if you aspire to become, say, the world’s top neurosurgeon. But it’s terrible advice if you actually want to get rich and work less.

  I already mentioned one problem with this approach: it gives you a single point of failure. If you put all your trust and resources into one thing, and that one thing fails, you’re screwed. This is true whether you’re talking about a day job, a new business, or anything in which you invest your time and money. You’re forever vulnerable to the competition. Even if you do become the world’s—or your region’s—top neurosurgeon, or marketer, or software engineer, someone can always replace you. It’s just too easy these days for people to move around and get new jobs. Employers can find better talent quicker than ever; customers are constantly trying new ideas and canceling on businesses. Your one thing is always under attack—and so is your livelihood.

  I’m sure this sounds familiar. We’ve all been told at some point that we shouldn’t “put all our eggs in one basket.” But what’s the counterstrategy? The cliché fails to tell us that part. If you want to get rich, you need a strategy beyond just keeping your options open. Yes, focus on more than one thing. But you also need to know what projects are worth chasing, how to split up your time, and how to make the ventures you do pursue work for you.

  Let’s put strategy aside for a second, though. It helps, but strategy plays a small role in success. The two biggest factors in success are actually timing and luck. (Don’t believe anyone who tries to tell you their success has nothing to do with luck.) You can’t control either of these things outside of setting yourself up to get lucky and positioning yourself at the right time. And the only way to do both is by taking more chances. You may have heard this expressed as “fail more.”

  HOW A COLLEGE SIDE PROJECT MADE ME $6,400

  There’s also a more subtle reason you won’t win big by focusing on one thing, and it’s potentially the most powerful: it keeps you from ever being able to multiply your income. I’m not talking here about just adding up income streams. Multiplying is when you find the patterns that link different projects and then leverage those connections so each venture makes way more than it could have on its own. Multiplying is the epitome of working smarter, not harder. And it’s what separates the round-the-clock hustlers from the umbrella drink sippers.

  Luck and multiplying are the reasons my podcast, The Top Entrepreneurs, has ten million downloads and earns me $50K a month.

  When I started the podcast in 2016 all my revenue came from sponsorships. My first sponsor actually reached out to me a few months after the podcast launched:

  From: Justine Smith █████████

  Date: Wed, Feb 24, 2016 at 10:47 AM

  Subject: Podcast Sponsorship?

  To: ████████████████

  Hi Nathan,

  My name is Justine and I represent ██████ the cloud accounting solution for small, service-based business owners with over 5 million users worldwide.

  As a full-time business owner, I’m a big fan of your podcast and was wondering if you’d be open to exploring a sponsorship from ██████. We think it would be a great fit on both sides and are eager to learn more about partnering with you.

  If yes, I’d love to know:

  What sponsorship rate you charge per episode?

  How many downloads each episode gets?

  Thank you,

  Justine

  This turned into a $6,400 deal to run a software company’s ad on the podcast for two months:

  Three months later I signed on my second sponsor, who paid me $5K to feature them on the podcast for thirty-five consecutive episodes.

  All of my podcast revenue still comes from sponsors, only now I’ve figured out how to leverage one of my other companies, The Top Inbox, to grow sponsorship income way beyond what the podcast earned on its own. How the magic happens: