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How to Get 10x Returns Investing

I grossed $2 million over 6.5 years starting a new career from my girlfriend’s parents basement and I expect to be worth $10 million+ by 2030.

If you are like 80% of people you may be leaving 10x on the table investing.

When people think of investment they think of the stock market but for the majority of folks the stock market is a terrible investment. 80% of what I’ve made has been from my business. We are all a business; you sell a product — yourself as a service.

How do we define profit? Let’s keep this simple and use your federal tax return. If you don’t pay federal taxes you are not making a “social” profit as a business of one.

Here is the three steps to the top 1% I’ll go through in this post:

  • break into profitability
  • become excellent
  • scale your excellence

Step 1: Break Into Profitability

75% of the population pays little or no federal taxes. The bottom half pays about 2%. The next quartile pays in the ballpark of 10%. Roughly the top of the 3rd quartile makes about 75 k.

If you make less than this, read on.

You Are the Best Investment

Invest in yourself and forget everything else.

You will get an order of magnitude better return by avoiding the stock market and improving the services you offer for hire. I have personal knowledge of at least two programs that place ~99% of folks in six figure jobs to start. I’ve seen english majors, drug dealers, and deadbeats go from zero to high six-figures in a couple years. I’ve done it myself. And you can do it.

First, figure out why you are so poorly valued. The only difference between you and profitable businesses is that they sell services the market will pay well for.

So, look at what society values, compare that to what you enjoy, pick one, then get after it. Things like tech. Things like vocational jobs like welding or electrician.

Buy training. Excel and get promoted. Take a course. Go to a new industry.

My personal income went from about 100 k to 400 k in four years. You may not replicate this but you can definitely go from 37 k to 100 k!

The annualized returns of investing aren’t even close on a risk adjusted basis.

How to do it

Find a program and learn from experts. You don’t need money upfront. You just need courage and commitment to grind it out.

The number one failure I witness in the world is people oppressing themselves because they don’t believe in themselves.

If that is you, let me believe in you instead. If you have the normal amount of chromosomes you can do it. Trust me. Humans are practically clones of each other. Neurons are the same in brains everywhere. You and are 99.9% the same creature. Sure, you may be orange and I may be blue. You may be tall and I may be short but that is superficial.

On deep level our genetics, our minds, the times we live in, and, I hope, our mutual desire to better the human project make us the same.

Program recommendations:

  • For getting into code I recommend Launchschool.com
  • My wife used a program acquired by Chegg — Chegg has programs with no upfront tuition for design, data analytics, data science, project management, etc.
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Incentives are everything. You want to choose programs where THEY get paid when YOU get paid so that incentives are aligned.

There is no shortage of jobs or opportunity — that is a myth — but you are becoming obsolete every day you fail to grow. Become valuable to society and reap the rewards.

Anyone can do this. It’s simple but it takes sustained effort and courage.

Step 2: Build Excellence From Top 25% → 1%

If you are in the top quartile, great! You are somewhat valuable — smack in the median of taxpayers. Now, keep grinding and break into the top 10%, ideally 1% by income — that’s only 250 k. Then you know you are likely a rare excellence and you can level up to Step 3.

Investments

Double down on personal growth and go from breaking in to dominating your desired field. You may need to make some lateral moves, like from software to data science or X industry to Y industry. Your job is to search for your niche.

First, invest in a cushion, build up at least 6 months of runway for emergencies and then shovel everything into personal growth like:

  • more courses
  • mentorship
  • coaching
  • training
  • conferences
  • promotions

I would also invest in your health, buy an amazing bed like the sleep number, treat yourself like you are a precious genius because you are. Your sleep, exercise, diet, and mood will all impact your ability to think and provide value in the world.

I went from zero income to top 1% in 3 years. I spent tens of thousands upskilling from 100 k to 400 k when I was an employee.

Seriously, the stock market returns are garbage compared to upskilling yourself. The problem is most people are penny wise and dollar foolish. They can’t handle uncertainty and struggle to think about the future. Both are needed for investment. Spending 2 k on a conference feels like a lot when they can “safely” earn money in the market.

Now, let’s say you have 100 k in the bank. You are spending 25 k a year on upskilling but you are really hitting diminishing returns. Meanwhile your cash feels like it’s just rotting which feels bad.

At this point, when you are like, dude I can’t even spend all my money on training, then it’s worth thinking about one of two paths:

  1. Starting a company
  2. Investing in the market

Step 3: Scale Excellence Beyond the Top 1%

Here I recommend you stack powder then deploy it in your ventures. Your investment will now be in companies you own. The best return over your lifetime is to scale out and build businesses.

How? Take your exceptionalness that you developed in Step 1 & 2 and provide it to the world in a scaled up way. This is how you go from a few hundred thousand in annual income to something bigger.

Starting a small business, launching a startup, etc. There are tons of materials out there on how to do this.

If this is your path then forget about the stock market as an investment — it won’t give you the returns you can get from your businesses.

The problem is you will probably fail a few times before you figure it out.

So, safeguard your ammunition. Start stockpiling it in an inflation hedged cash account — this will be your nest egg for starting a company. This is my path.

My goal is to match inflation with my holdings, I don’t care about increasing buying power because I risk the 1000x+ gains my own businesses offer for marginal X% gains. For myself I hold cash or cash-like equivalents that are inflation hedged like TIPs, or in 2023/2024 a money market with 5% rates and total world market index (ticker VT). See below.

If you are going to scale yourself do whatever mix of VT and cash matches inflation indexes. Generally cash will be less and the world market will be more. Save your time and energy for the real returns — your businesses and direct investments.

Aside: Investing in Financial Markets

If you are in mid Step 2 and not interested in Step 3 then I recommend a barbell strategy.

You will have two pools of money:

  • X% is invested in the whole market
  • Y% is invested in startup and private equity

Effectively we do Step 3 by proxy here.

I say “X%” because this depends on risk tolerance. Whatever you want to preserve “safely”. If you don’t know then 80/20 is a reasonable ballpark.

How to do Whole Market Investing

It is unlikely you will beat the market. Even if you do, trading stocks is a zero sum video game and you are not a pro player — you are a professional who actually provides value in the world.

Allocate 90% into VT (the entire world market) and keep 10% in cash. Rebalance quarterly back to that 90/10 split. This means when stocks are up you take some off the table. When stocks are down you buy when they are cheap.

Then look for side action. If you have a friend or there is a company you truly believe in invest the remainder but only with money you are prepared to lose — because it’s likely it will be.

At this point you have enough cash that you can buy consultation time or buy into a fund. Almost always this is not a great use of time but if you can find someone with:

  • a track record that you trust
  • who makes money only when you make money
  • has a fiduciary duty to you

Then go for it.

Conclusion

You are a business.

Don’t get fixated on the stock market, there is a universe of options out there.

Once you are a stellar business of one, scale out, then think about diversifying into the stock market to protect your wealth.

You will then leverage that “piggy bank” to concentrate on big swings that net you 10x+ returns.