0:01 You can follow all the right money rules
0:03 and still feel like you're never getting
0:05 ahead. You can save more and invest
0:07 early and work hard and still that
0:09 scoreboard never moves. I went from
0:11 being a janitor to building two
0:12 billion-dollar companies and managing
0:14 billions of dollars at Goldman Sachs.
0:16 And what I learned is that money doesn't
0:18 follow rules. It actually follows laws.
0:20 So here are the seven laws that will
0:22 help you understand how money actually
0:24 works. So here's a system to make more
0:26 money. It has three parts. The three
0:29 parts are momentum, structure, and
0:31 asymmetry. So what does this mean? The
0:33 job of momentum is to figure out how you
0:35 can actually compound money more. The
0:37 job of structure is to figure out who
0:40 controls the money and what outcomes you
0:42 get. And the job of asymmetry is to
0:45 maximize the upside and minimize the
0:47 downside. Starting with law number one,
0:49 money loves speed, but wealth loves
0:50 time. When I first got into real estate,
0:52 I had access to several real estate
0:55 agents who handed me offmarket deals and
0:57 I became a flipper, meaning I would get
0:59 the deal, I would rehab the property,
1:01 and I would sell it. I would flip the
1:04 asset. And this entire 5 years, I got
1:06 the deal, I put money in, and I flipped
1:08 it. I got more deals from our agents, I
1:09 put money in, and I flipped it. At that
1:11 same time, in that same 5-year period,
1:13 my friend did something different. He
1:15 started off with one single family
1:17 property. A couple years later, he
1:20 bought a forplex, meaning four units. He
1:21 waited for a couple more years. He
1:24 recapped money from it and he bought a
1:26 20unit complex. He didn't do any
1:28 flipping. He went from one property to
1:31 four units to then 20 units. At the end
1:32 of those 5 years, I had flipped a 100
1:35 homes and made some cash, but he owned
1:37 20 units. His net worth was five times
1:39 that of mine because I was working on
1:42 speed and he was working on time. So, if
1:44 money loves speed and wealth loves time,
1:46 well, what is speed? And what is time?
1:50 Speed is when you see an opportunity and
1:52 you act on the opportunity. It is the
1:55 shortest distance between seeing and
1:57 acting on an opportunity. The faster we
1:59 can shorten this distance, the faster
2:01 money moves. Well, what does wealth love
2:03 time mean? Wealth of time means you make
2:06 a good decision and you hold on to it
2:08 for a long period of time. But the crazy
2:10 part is for the first period that
2:12 actually looks like an okay decision.
2:14 You don't even know if something's
2:16 happening. As the time passes by, you
2:18 see the value of that decision. Often
2:20 times what most people do is they
2:23 confuse fast action with fast results.
2:25 Fast action is not equal to fast
2:27 results. You want to get the speed right
2:29 and you want to get the time right.
2:30 Warren Buffett at Burch Hathway
2:33 completely flipped this idea of holding
2:34 on to something for a long period of
2:37 time. He bought highquality companies
2:40 and he held them forever. From 1965 to
2:43 2024, Berkshire compounded at almost 20%
2:45 annually. They beat the S&P 500 by
2:48 double. Their total return hit 5
2:50 million%. So remember, speed is about
2:52 the shortest distance between seeing an
2:55 opportunity and taking action. Time is
2:57 about making a good decision and
2:59 allowing the time for it to compound.
3:01 There's one important reason for this
3:03 because the best partner that you have
3:05 in wealth creation is time. Once you
3:07 understand that wealth is built by time,
3:09 the next question is who actually
3:12 benefits from that time? Because in the
3:14 money game, the person who gives the
3:16 money controls the outcome. Which brings
3:18 us to law number two. He who gives the
3:21 money has the power. I've sold five
3:22 companies in the last 20 years. And the
3:25 buyers of all my companies made 10 to
3:29 100x more than I did because buyers and
3:31 builders have an unfair advantage. If we
3:33 analyze the Forbes 400 list, there seem
3:36 to be three types of people who make it
3:37 on the list. The first are people that
3:39 have made it on earned income, meaning
3:41 with their salary. The second are people
3:43 that have actually sold a business to
3:46 get on the list. And third, the people
3:48 who are buyers and builders who
3:50 continuously buy and build companies and
3:51 opportunities. Well, let's look at the
3:52 people who have made it on the list
3:55 because of earned income. Well, spoiler
3:57 alert, there's zero people that made it
3:59 on the Forbes 400 list on earned income
4:01 or on their salary alone. But what about
4:03 people who sold their business? There
4:06 are a few like Mark Lure sold jet.com to
4:08 Walmart and he made it on the list. Dan
4:10 Gilbert sold Quick and Loans and made it
4:12 on the list. But the folks that buy and
4:14 build are the vast majority. Take Elon
4:16 Musk or Jeff Bezos or Warren Buffett or
4:18 Mark Zuckerberg or Don Brent at the
4:21 Irvine Company. All of those who buy and
4:22 build constantly make it on the list. In
4:24 fact, Dan Gilbert who sold Quick and
4:27 Loans, he actually bought it back and
4:29 then he built it to take it public
4:31 again. So, he was an example who got on
4:33 the list for selling the business, but
4:36 then made it even more powerful by
4:38 buying and building overall because he
4:40 who actually gives the money has the
4:42 power. Facebook bought Instagram for a
4:44 billion dollars and it's worth over $45
4:47 billion today. Google bought YouTube for
4:49 $1.6 $6 billion and it's the core part
4:51 of Google's business and the second most
4:53 valuable search engine. Take Elon. Elon
4:56 bought Twitter for $44 billion. It is
4:58 about buying and building. This is even
5:00 more prevalent in the sports franchise
5:02 realm. Henry Samuel Elli, the owner of
5:05 Broadcom, gave $70 million to the
5:07 Anaheim Ducks in 2005. And today, the
5:09 Anaheim Ducks franchise is worth over
5:13 $1.6 billion. Mark Cuban gave $285
5:15 million to the Dallas Mavericks in 2000
5:19 and eventually sold 73% of it for 3.5
5:21 billion in 2023. Even if you take
5:23 something as simple as the real estate
5:25 market, if there are no buyers, there is
5:27 no market. And the main reason for this
5:30 is because buyers unlock value. And
5:32 however you slice it in economics,
5:34 buyers wield the power because they give
5:36 the money and they control the terms.
5:37 Let me break down what we do at
5:39 acquisition.com. We are a business that
5:42 builds businesses. We have a flywheel of
5:44 building more companies. We use our
5:46 brand to attract more businesses. That
5:47 business drives the advisory business.
5:49 It drives our education business. It
5:50 drives our ventures business. It drives
5:52 our private equity business. It drives
5:53 our real estate business. We have no
5:55 plans of selling acquisition.com. Our
5:58 goal is to buy and build for years to
6:00 come. And you know, whenever someone
6:01 says buy and build, you must be
6:03 thinking, man, I don't have all the cash
6:05 to go buy companies or buy real estate
6:07 or invest in private equity. What do I
6:09 do? This does not mean you need to have
6:11 all the cash. It just means you need to
6:13 understand the strategy. The massive
6:14 wealth is created by buying and
6:16 building. So just understanding the
6:18 strategy and being so obsessed with
6:20 buying and building will create massive
6:21 momentum for you. And when you are the
6:23 one giving the money, you'll notice
6:25 something immediately. The biggest
6:27 players aren't just using more effort,
6:29 they're using better tools. And the most
6:31 misunderstood tool of them all is
6:34 leverage. Next up is law number three.
6:36 Leverage multiplies everything. Let me
6:38 give you four examples of how leverage
6:40 plays a massive role in our daily lives.
6:42 Let's say you bought a house for all
6:44 cash for a million and in 3 years that
6:48 home went up 10% to $1.1 million. Well,
6:50 you got a 10% return on your million.
6:52 Yay, good job. But instead, if you
6:55 actually got a loan and that loan was
6:57 for $800,000 and you put $200,000 down,
6:59 it was the same exact house and it grew
7:02 by 10%. Now, compared to the $200,000
7:05 that you put down, you got a 50%
7:07 increase in your return. And that was
7:10 only possible because of leverage.
7:12 Because leverage multiplies everything.
7:14 Leverage actually introduced an entire
7:17 industry for us. Private equity is where
7:20 investors can invest in companies that
7:22 you and I know about, the laundromat,
7:24 the restaurant, or the roofing company,
7:26 and actually unlock value in the company
7:28 for them. So what these investors do is
7:30 that they bring cash to buying this
7:32 business but own just like you would
7:34 buying a house and then they get the
7:36 bank to finance the rest of the debt as
7:38 leverage and because of that the company
7:40 gets to grow and also the founders and
7:42 the owners get to take some money off
7:44 the table. This entire trillion dollar
7:47 industry would not even exist without
7:48 the existence of leverage because
7:50 leverage multiplies everything. This
7:51 also happens in the commercial real
7:52 estate world. So if you think about
7:54 buying a 20 unit multif family apartment
7:56 building there's multiple things that
7:57 happen there. The first is you only
7:59 probably have to bring a third in equity
8:02 or cash to close a deal. The rest can be
8:03 used in bank financing, which is
8:04 leverage. And there's two amazing things
8:06 that happen with it. Number one, because
8:08 this is a commercial property and it's a
8:09 business, the leverage is based entirely
8:11 on the value of the collateral, which is
8:13 the building. And you don't even have to
8:14 do a personal guarantee to it. But the
8:16 most important part of all of this is
8:18 you get so many tax advantages for doing
8:20 this big a deal. So this leverage not
8:22 only unlocks several personal advantages
8:24 but it also gives you tax advantages
8:26 which is why it is such a active
8:28 strategy for many investors. But I will
8:29 tell you the one strategy that many
8:31 people use that don't realize the
8:32 leverage behind it. Let me show you how
8:34 billionaires save money on taxes by
8:36 using leverage. Take Elon Musk for
8:39 example. Elon recently bought Twitter
8:41 and instead of just selling all his
8:43 equity holdings in Tesla or any other
8:45 company and buying Twitter, he borrowed
8:47 against his Tesla stock. And when you
8:48 borrow against your Tesla stock, your
8:50 Tesla stock became the collateral. So
8:52 the bank tell him, "Sure, go ahead and
8:53 borrow against his Tesla stock because
8:54 if you default, we'll just take your
8:56 stock." And he was then able to take
8:57 billions of dollars of his Tesla stock
9:00 and then go and buy Twitter. He was able
9:01 to do two things. He was able to
9:03 leverage his existing position in Tesla
9:05 without kicking off any taxes for
9:07 himself and then use that to buy an
9:09 asset that was significantly bigger over
9:12 time. What you're seeing is examples in
9:14 our daily lives of how leverage
9:16 multiplies everything. A lot of people
9:18 talk about how debt and leverage are
9:20 bad, but there is a wrong way to do it
9:22 and a right way to do it. I want to give
9:24 you four ways to think about how you can
9:26 use leverage to multiply everything.
9:27 Number one, you have to know that
9:30 leverage is the number one economic
9:32 growth engine because if leverage
9:34 stopped in the world, everything would
9:35 stop in the world. Number two, you have
9:37 to educate yourself on what kind of risk
9:39 is available to you. Number three,
9:41 leverage is a game of collateral. When
9:42 you get a mortgage, your house is the
9:44 collateral. When you borrow against a
9:46 stock, your stock is a collateral. When
9:48 you're investing in a building, the
9:49 building is a collateral. And that makes
9:52 the leverage much more manageable. And
9:53 number four, since we know that taxes
9:55 are the number one drug on wealth
9:57 creation, leverage does not provide any
9:59 income. And since there's no income,
10:01 there are no taxes as well. So, it gives
10:03 you a massive tax advantage. But
10:04 leverage by itself doesn't make you
10:06 wealthy. It just magnifies what you've
10:08 already built. Which is why we have to
10:09 understand the difference between cash
10:12 flow and equity. Law number four, cash
10:14 flow keeps you alive and equity makes
10:16 you free. Cash flow helps fund your
10:18 current lifestyle. It pays your bills,
10:19 it pays your house, it pays your car,
10:22 and it pays your vacations. It is the
10:24 money that you need today. But equity is
10:26 the wealth that you create tomorrow. So
10:28 you may say, well Chiron, what is the
10:32 best way to own equity? Well, the best
10:35 way to own equity is to own your
10:37 business. But that may not be a strategy
10:39 for every one of us. There has to be a
10:41 second best way. And the second best way
10:44 is to own a piece of someone else's
10:46 business. Now, what does that mean?
10:48 There's a lot of companies in the world
10:49 right now that are publicly traded.
10:52 You're talking Amazon, Tesla, Google.
10:54 They're all companies you can buy shares
10:57 in. So, the job there becomes how can
11:00 you use your cash flow to buy a piece of
11:02 someone else's company? Because at the
11:04 end of the day, you either have to own
11:06 your own business and the equity in your
11:07 business or you have to own a piece of
11:09 someone else's business. Either way, we
11:11 need the equity to make you free. Let me
11:13 tell you how McDonald's makes all its
11:14 money. Most people only think that
11:17 McDonald's sells burgers and fries, but
11:18 there's a lot more to it. Their burgers
11:21 and fry business makes a lot of cash,
11:23 but their real wealth comes from a
11:25 different part of their business, which
11:27 is the royalties that account for $1.6
11:30 billion of McDonald's franchises all
11:33 around the world. And even more is their
11:34 real estate, which accounts for nearly $45
11:36 $45
11:39 billion. While the cash flow makes you
11:42 rich, the equity makes you wealthy.
11:44 Here's where most high earners still get
11:47 stuck. They chase the stability and they
11:49 call it wealth. But real wealth shows up
11:52 when you understand that risk and reward
11:54 don't scale evenly. Law number five is
11:57 that risk and reward are nonlinear. Most
11:59 companies that are backed by venture
12:01 capital actually never make it. So let's
12:02 say you take a venture capital firm and
12:05 it's making five investments. It puts
12:07 $100,000 each into each of the five
12:09 investments. That is the maximum amount
12:12 of money it can lose, $500,000. But
12:14 let's say the first investments goes to
12:16 zero. The second investment goes to
12:17 zero. The third investment just breaks
12:19 even. The fourth investment goes 10x.
12:22 And the fifth investment goes 100x. Just
12:25 by these two investments, they recapture
12:26 all the profits that is necessary for
12:29 the portfolio from a $500,000
12:32 investment. So they invest $500,000 and
12:34 they make 100x that amount. This is
12:36 called portfolio theory where you have
12:38 asymmetric riskreward where the risk and
12:40 reward are not linear. They are not
12:43 betting $500,000 to gain $500,000.
12:46 They're betting $500,000 to get 10 to
12:48 100x more. It's easy to think that risk
12:51 and reward are linear, meaning you put
12:53 $100 in and you may only get $100 worth
12:55 of return. But we want to be in a game
12:57 where you can put $100 in and you can
13:00 get $10,000 worth of return. Our job is
13:02 to maximize the upside, which is the
13:04 reward, and to cap the risk, which is
13:06 the downside. That's exactly what they
13:07 do in venture capital. That's exactly
13:08 what you do with leverage. That's
13:10 exactly what you do when you buy a home
13:13 with a loan. So, if you hear asymmetric
13:16 upside and think go allin, that's how
13:18 people blow up. The goal isn't to win
13:20 one big time. The goal is to never lose
13:22 the game. That brings us to law number
13:24 six. Don't bet the empire for a pot of
13:26 gold. My friend bet his entire life
13:29 savings on one deal and lost everything.
13:30 He and his wife had systematically saved
13:33 a little over $700,000 in life savings.
13:35 And then they got introduced to an oil
13:37 and natural gas deal. Every part of the
13:39 deal was extremely attractive. It had
13:41 tax advantages. It had great return
13:44 profile. And his friend was actually
13:46 promoting the deal. It was almost a
13:48 no-brainer. He took his entire life
13:51 savings, almost $700,000, and he
13:52 invested it in this deal. As you can
13:55 imagine, the deal did not go well. And 2
13:57 years later, the entire investment
13:59 collapsed. over 15 years of savings
14:00 instantly vanished. There's a lesson
14:02 here to be learned. It's not about
14:04 evaluating the investment or evaluating
14:06 the friend that brought it to them or
14:07 evaluating what they should have done or
14:09 not done differently. It's about sizing
14:11 the bet. You don't risk the empire for a
14:14 pot of gold. You don't risk 15 plus
14:16 years of savings all on one deal. And
14:19 that is the sizing investment that we
14:20 should learn today. So, if this was your
14:23 entire empire, our job is to size our
14:26 investments correctly. We need to size
14:29 our bets and sizing bets is a very
14:31 important part of investing. The best
14:33 lesson I learned about sizing bets was
14:35 to manage risk because the entire idea
14:36 of doing this is to manage risk. I
14:38 learned this idea of managing risk from
14:39 Ray Dalio and I want to break it down
14:42 for you. He talked about risk
14:45 and return because every investment has
14:47 some risk and every investment has a
14:48 return. Let's say you have an investment
14:51 that has a risk of 150, which is a
14:54 random number, and it gave you a 15%
14:55 return. Or you had an investment that
15:00 gave you a risk of 100 and a 12% return.
15:02 Now, what Ray Dalio says is our job is
15:05 to keep this return the same, but reduce
15:07 the risk. What if you could then get to
15:09 a risk of 80, but still get a 12%
15:11 return? Or get to a risk of 70, but
15:13 still get to a 12% return? or get to a
15:17 risk of 60 and maybe get to 11.5% of
15:19 return. This becomes the best
15:21 investment. Our job is to figure out how
15:23 we can reduce the risk and keep the
15:25 return exactly the same. The number one
15:27 mistake that people make is that they
15:28 try to increase the return without
15:30 paying any attention to the risk. The
15:32 best of the best, the greatest of the
15:34 greats figure out how to reduce the risk
15:36 while keeping the return exactly the
15:38 same. There are two big learnings here.
15:39 Number one, protect the machine that
15:41 produces the opportunities, which is
15:43 your empire. And number two, swing for
15:45 the upside when your downside is capped.
15:47 And once you size the bets to survive,
15:49 the next protection is really simple.
15:52 You diversify only where you don't know.
15:54 Law number seven, diversification is a
15:56 hedge against ignorance. Wall Street
15:58 tells you to spread your money across
16:00 everything. But every wealthy person I
16:02 know does the exact opposite. Here's
16:04 why. Because when you don't understand
16:06 something or you don't control
16:08 something, then you're just hoping that
16:09 it works out. Here's a formula for
16:11 investing in companies and it has two
16:13 vectors. Number one, risk and the second
16:16 is control. When you understand risk and
16:18 you have control, it tells you whether
16:20 you can concentrate or diversify. So in
16:21 this case, when you understand risk and
16:23 you have control, you get to put all
16:25 your eggs in one basket because you know
16:27 everything about the business, which is
16:28 your business. But what if you
16:30 understand the risk, but you don't have
16:33 control. It's Apple or Google or some
16:35 other company. That means it's okay, but
16:37 you still invest in the business because
16:38 you understand the risk. If you don't
16:40 understand the risk, but you have
16:42 control, you have ownership control,
16:43 then it just means you're missing a key
16:45 operator. So, all you need to do is get
16:47 a key operator in the business. But
16:48 last, but not least, if you neither
16:50 understand the risk nor you have
16:52 control, that's the time where you
16:54 actually spread your bets out. That's
16:56 the time where you completely diversify.
16:57 This is why most entrepreneurs and
16:59 investors have their entire net worth in
17:02 their business. Take Bill Gates or Elon
17:04 Musk. And if you remove their equity
17:06 from Microsoft and Tesla, they
17:08 dramatically drop in the Forbes 400
17:10 list. That's why operators like Elon
17:13 Musk or Jeff Bezos or Mark Zuckerberg
17:15 understand the risk so deeply in their
17:17 business that they don't diversify from
17:19 it. They own all their stock and all
17:21 their equity because they have the
17:22 insider information. They have the
17:24 insider plans. Then they have the future
17:27 control and influence of the risk to
17:29 build and grow their business. Now,
17:31 knowing these laws isn't enough. You
17:33 have to know how to use them as a system
17:35 to make you money. Here are the five
17:36 questions to ask before investing in
17:39 anything. Number one, can this compound?
17:40 Meaning, is this a good long-term
17:43 investment? Number two, who has control?
17:45 Is it you or someone else? Number three,
17:47 what happens if it fails? Do you get
17:49 some or all of your money back? Number
17:51 four, is the upside meaningful and
17:53 larger than the downside? And number
17:55 five, do you understand the risks?
17:57 Meaning, can you clearly explain how the
17:59 business works and what could go wrong?
18:01 Now that you understand the laws that
18:03 decide whether money compounds or
18:05 disappears, the next step is knowing how
18:07 to apply them in real decisions. Watch
18:09 this next video and I'll show you the
18:10 exact decision system that tells you
18:13 what to do even when the answer is not obvious.
