Latest / Money Grows on Trees / #316 - I’m a Millionaire. If I had $10,000, Here’s How I’d Invest It

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#316 - I’m a Millionaire. If I had $10,000, Here’s How I’d Invest It · Money Grows on Trees

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  If you gave me $10,000 right now and told me I had
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  to invest it, not save it, not spend it, but invest it
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  to build real wealth, here's exactly what I'd
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  do. And I can guarantee you, it's not what you think.
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  Most people would chase the hottest stock or throw it into crypto or follow
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  whatever their mate at the pub told them to buy it. That's how
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  you lose money. I've spent years helping people save tens of
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  hundreds of thousands, millions of dollars. And the one thing I've learned is
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  this. The people who build wealth aren't the ones
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  chasing returns. They're the ones who protect what they have first and
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  then grow it strategically. I'm going to walk you through exactly where
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  I'd put the $10,000 right now. Not theory, not textbook
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  advice, the actual allocation I'd use to protect wealth first
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  and generate income and position myself for wealth building over the next few
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  decades. This is real money, real strategy, real
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  wealth protection. The first thing, assuming you don't have
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  one, before investing, before business, before anything, I put $1,000 away
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  into a high-interest savings account as a starter emergency fund. Why?
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  Because you cannot build wealth while constantly in survival mode. This
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  covers a surprise bill, a car repair, a medical
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  gap, an urgent expense that you can't foresee. If you
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  don't do this first, every unexpected cost will force you to sell investments or
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  use a credit card and go backwards and be stuck in fear.
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  It's just a little buffer. So set aside $1,000, boom, it's
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  just there. So you've got nine left. I mean, what's the point in investing and
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  so forth if a flat tire can wipe you out? And it can. The other day I
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  got, may or may not have got a ticket and double demerits.
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  But that's another story. You got to pay a fine you
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  can't see, right? It's not about return, it's about stability. Wealth
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  is built from stable financial peace, not from financial
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  chaos, okay? Step two, here we go. What
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  I would do is open a brokerage account, and I'd invest $1,000. I'd
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  open a low-cost brokerage account outside Super, and I'd just put $1,000 into
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  one of the broad-based index funds. Okay, I've done lots of reels and episodes
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  in the past as to what an index fund is. I would just do that. It's not
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  to get rich, it's just to begin. is to begin. There
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  are three things that that does. One, it gets me in the market, so I
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  know psychologically I'm investing, I'm putting my money to work. The
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  second thing it does is teach me how investing works. If you haven't understood it,
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  $1,000 is a great place to start. It actually gets you learning it,
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  you're committed, you've got skin in the game, so to speak. And then third,
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  it removes the fear barrier. And you don't need to pick individual stocks, you
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  can just be smart by buying the economy. Simple,
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  diversified, tracks the multiple great businesses
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  in the market. Over a long period of time, it has done very well and
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  will continue to do very well. So if the global economy keeps
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  expanding over the next 20-30 years, do you want zero exposure to it
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  or do you want some? So it's about just getting started. It's not
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  about the size, it's about the habit. It's about the investing behavior
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  before the strategy unfolds. That's the first step to do when it comes to investing.
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  So, so far we've used $2,000. $1,000 for emergency, $1,000 to get
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  you started investing in other assets outside Super. Now,
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  here's part three, the real play. This is about amplifying your income.
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  I would take the $4,000 and I'd invest it into starting
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  a business. Now, $4,000 or $5,000, what's interesting
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  about that number is we actually bought our laundromat with a $5,000 down deposit. So
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  you can actually buy a business with $5,000 down.
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  Sometimes you can have no money down and buy a business. But for the sake of this exercise,
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  we've got some cash, let's use it. So you could put $5,000 down
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  or $4,000 down as a small deposit and buy a small business. It
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  might be a gym, a laundromat, some sort of small business that's got a recurring income
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  stream to it, a subscription style income. That helps a lot. and I
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  would start small and I'd either build or buy a business. And
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  building, you can still start out with zero. Our first business we
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  built is now put in about $2 million in profits. I was in
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  network marketing, we started with $500, so we started that with $1,000. So
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  you can start small businesses and grow them, either buy them
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  or build them with as little as $4,000. And to
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  this day, you can still do that, right? Why would I do that? Why
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  don't I just put it all into an index fund? Here's why. Because the fastest
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  way to increase your net worth isn't market returns, it's
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  increasing your income. I know Alex Formosy has joked about it before and he said, I don't
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  want to invest in the S&P 500, I want to invest in the S&ME 500. Part
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  of that is, before you even invest in yourself, is to actually have a vehicle. And
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  most people just don't have a vehicle to increase income. Their vehicle's their
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  job. It's the worst vehicle ever, because in that vehicle, all you are is a time prostitute.
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  You're prostituting your time. You need a vehicle that can create money while
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  you're not there. That's a business, okay? So an
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  index fund might, you know, average long-term growth, it'll help build
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  assets, that's why we have to begin it, because you're going to add to that over time later. But
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  your earning capacity can grow exponentially, which is
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  why the $4,000 today can, you know, either buy a
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  business or launch a business, you can build a digital offer, affiliate funnel, as I said
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  before, network marketing is how we did it initially. You can write and scale a
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  book, you can build an online brand, you can become an influencer. I've got a friend of
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  mine, he has like 20 vending machines. I mean, there's just so many things
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  you can do, right? It's about building a cash flow machine. Cash flow feeds
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  investments. Even Warren Buffett, if you look back at his history, he
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  actually started out, he would do a paper route. That was not really a
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  business, but then he took some of that cash and he created
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  two businesses. One is where he got someone else to fish out golf balls and he
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  sold them to the local golf pro shop. He delegated someone to fish him
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  out of the pond. That's so good. He was like seven then. And
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  then he had this pinball business where he put pinballs in barbershops and
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  people would go and put money in and he'd collect the money. So he had a recurring income stream. So
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  he was into these small cash flow businesses early. So
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  if you could double your income in two years, Would that matter more than
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  squeezing an extra few percentage points out of stocks, right? That's the objective. It's
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  about big moves. Better to hunt antelope than mice,
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  okay? Then the fourth part to this. Where does the other $4,000 go?
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  Because so far, we've had $1,000 into an emergency fund, just
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  so you can take the fear out of everything. And then we've allocated $1,000 to
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  an index fund and a brokerage account, because you can add to that later when
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  you scale your income. And of course, to scale your income, you need a vehicle. And
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  that's a business, you're either gonna start one or buy one with that
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  4,000. Now, where does the next 4,000 go? Here's where it goes. Just quickly,
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  if you're ready to take control of your finances but feel stuck on where to
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  start, I have a solution. My book, Money Buys Happiness, simplifies
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  investing and wealth building with practical steps to help you achieve financial
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  peace. Get your copy via the link in the show notes and let's get your
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  money working for you. Now back to the episode. Now, where does
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  the next 4,000 go? Here's where it goes. If you're new to the vehicle,
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  which is what I did, I've done this all the time. Every time I got a
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  vehicle and don't know what I'm doing, which is most of the time, I
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  need to find out who has done it before me. Okay, so when we got into our network
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  marketing side hustle, it cost us $1,000 to start. In fact, it was
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  $500 each. We pretty much immediately spent $4,000 on
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  coaching and mentoring on how to do it. I remember there
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  was an event we went to, there was an auction. It was $2,000 to spend
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  an hour with one of the fastest builders in the industry and no one
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  put their hand up. I was in Sydney in a room, I was like, No one's putting their hand up.
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  This is the cheapest investment ever. I was like, I'll do that. And we sat with
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  him, incidentally, in the Gold Coast Hospital here for three hours. And we went through the
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  details of it. And they were the fastest millionaires in the country at the
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  time to go to millionairehood in this business vehicle. And we sat
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  there for three hours. What was an hour turned into three hours for 2,000 bucks? This is
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  years ago. This is 10 years ago. But that one
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  thing led us to scale our business a lot faster. And I've
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  done that with every business vehicle, whether it be coaching, consulting, whether
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  it be even what we're doing with our YouTube channel here. I know that it's
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  about learning what others do so you can go faster. So the
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  $4,000 is on mentoring and coaching on how to use
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  the vehicle. Even when I was learning to drive a car, I even paid
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  for some basic lessons on driving a manual car back then. I was like, you
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  need to learn how to use the gear shift. You pay someone to learn
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  to teach you to drive even. It's like anything, anything I want to
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  get better at. The other day, I want to get better at chess and some of
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  you guys out there are playing me on chess because you've discovered that I'm on chess.com
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  and I've had a few of my subscribers hit me up and play chess, which
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  is cool. But I want to get better, so what I do, I had a coaching session
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  and I instantly improved my 10-minute chess by 300 points. So,
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  this is where it goes to, okay? Because speed matters. Most
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  businesses fail not because of lack of effort, but lack of direction. A
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  coach compresses time. They help you avoid expensive mistakes.
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  They help you focus on revenue generating actions. A lot of my students, particularly
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  in our elite program, which is business coaching and consulting, Some
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  of the things that I've taught them in there, they'll have access to me and I can say one sentence and
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  all of a sudden, bang. It allows them to refocus on what's going to
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  produce income and avoid expensive mistakes. Like, yeah, I
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  wouldn't go down that road. There's a big pothole there and you're not going to come out of it. Okay, thank you,
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  right? So it keeps them focused, keeps them focused on revenue generating
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  activity, keeps them stay accountable, builds confidence, right?
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  The right mentor can shave years off your journey totally. And
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  time is the most valuable asset you have. I wrote a book about it
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  called Become Time Rich, right? So here's some context. Almost
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  every high performer, even Michael Jordan, there's a book about it, right? I
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  forget his name, Tim Grover, his name, he coached Michael Jordan. So
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  even Michael Jordan had a coach, a mentor, or some sort of structured guidance,
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  right? Elite athletes do, CEOs, entrepreneurs. So
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  if guidance increases your odds of success by 20% to 60%, is that
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  worth the investment? I remember when we first got our first business coach. I
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  paid, we paid, my wife Alicia, and I paid him $20,000 for
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  90 days. This is again, over 10 years ago. This is quite a while ago. Back
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  then it was before inflation, so it was quite a bit. And I
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  still remember some of those lessons. I still use them today. Because when you get mentorship and
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  coaching and some cheat codes as to how to accelerate, you
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  never lose them. you maintain them and that's what you're buying. You're buying
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  knowledge quickly, right? But it only works if you put it into action,
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  okay? So why I wouldn't put all of the 10K
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  into stocks, if you've been following my channel and our podcast for a long time, we
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  just went past our 300 episode, come on. And you
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  would know that I'm all about investing. I love it. I love deploying capital into shares because
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  it's a wonderful way to build passive wealth and passive income. I love it. If
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  I could just spend all day, all night, Reading 10K
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  reports and annual reports and stocks and companies, I do it. But there's
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  other things to do in the world too. You know that you might think I'd put the
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  whole 10,000 in shares, right? But the reason I don't is because capital without
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  skills has limits. Capital without skills has limits. Your
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  return on your personal development can far exceed market
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  returns. How do I know that? Because I've done it. If
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  coaching helps you build a business that produces 2 grand a month, 5 grand
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  a month, 100 grand a month. I've got friends that make 200,000 a
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  month. I've got a student that last the other month, hundreds of thousands in a
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  month. So you're building assets consistently, sure.
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  And compounding is very powerful, right? But what would you
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  rather chase? 10% returns compounded annually or build an
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  engine that increases your income by 50%, 100%, 2000%? So
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  I feel that investing is so important. That's why I bang on
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  about it. But people are trying to get ahead on $100 a month or something
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  like without a business vehicle. So if you're in a job, the
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  next step is a business vehicle. Then amplify your
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  income, then invest in stocks. I
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  know it can feel a bit weird doing that, but that's how you do it, right? I
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  rest my case. So, here's the bigger framework. There's
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  a real structure behind this allocation. First, stability. That's
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  the thousand emergency fund. Second, exposure and
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  a future strategy, which is the thousand dollars into an
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  index fund. The third is income growth, right?
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  That's accelerating your income growth. That's the four thousand into some sort of business vehicle.
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  Either buy it or build it. And four is acceleration, which is the
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  coaching. Okay, how do I drive this car better? Yes? That
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  make sense? So this creates a few things. It creates one, protection,
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  two, participation and scale and passive income, three,
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  production, producing more, and four, acceleration and
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  speed as to how to even get it there faster, okay? Because time's more valuable
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  than money. And that's how you turn $10,000 into a platform,
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  not just a portfolio, okay? So
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  $10,000 is not enough to retire on, but
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  it is enough to change your direction. Most
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  people either consume it on one handbag or a trip. They
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  speculate with it, chuck it in crypto, or they sit on it and
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  do nothing. I would deploy it deliberately, protect the
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  downside, start investing, build income and accelerate the growth of the income. That's
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  how you build wealth. That's how I've done it. That's how you can do it too.
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  That's how most people who have done it have done it. That's why they did it. So
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  if someone hands you $10,000 today, what would you do with it? And
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  if you want more practical, no nonsense, no
• 12:50
  BS, money frameworks like this one, hit the subscribe channel,
• 12:54
  grab one of our books and get started. But most importantly, stay
• 12:57
  smart. See you in the next episode. Thanks for listening to Money Grows on
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  Trees. If you enjoyed the episode, leave a five-star review on Apple Podcasts
• 13:04
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• 13:08
  miss an episode. And if you're serious about building wealth, make sure to
• 13:11
  check out the links in the show notes and follow me on all social media
• 13:14
  platforms at LloydJamesRoss for more. See