The Derek Moneyberg brand was born a bit over a year ago. For those of us who have been following along, we’ve witnessed his lavish lifestyle, seen all his Maybach trips to Home Depot, and heard his endless stream of wisdom-packed business lessons.
We’ve heard Derek say it time and again, “money equals freedom.” It equals the freedom to travel where you want, with who you want, and to answer to no one. It affords you the option to join the party at the world’s most exclusive venues and environments to mingle with the models, celebrities, and other successful business builders.
Today, we’ve caught up with Derek to uncover how he did it. How did he build the adventurous, jet-setting lifestyle that he’s become known for (all while running his coaching business and succeeding as an investor)? To find out, we dove incredibly deep into a concept we were intrigued by:
Welcome Derek, before we started, we were chatting on something interesting about “escape velocity” and how that concept pertains to building wealth. Can you go over that with us?
Absolutely, first off, understand that my clientele base is very different from any other coach out there. I don’t dumb down my message to attract a wide audience like everyone else does. I coach doctors, lawyers, engineers, highly skilled tradesmen, professors, musicians, military men, and a mob of other highly successful and intelligent people.
With that, every week I host live training calls with a group of the smartest people I have ever met. For hours, they hammer me with question after question, and I need to be nimble, focused, and able to relate my answer to the specific person asking it so it lands home.
So one day I got a question from one of the highly technical, and science-based thinkers in my group, and they were asking about the wealth-building process, so I related it to escape velocity.
Now, I’m sure I’ll get a ton of DMs saying that I am bastardizing this concept, but as I understand it, escape velocity is the speed at which an object or rocket or something needs to get to ESCAPE the earth’s gravity and reach space.
I think there’s an “escape velocity” when it comes to building your wealth too.
What would gravity be then in your “Escape Velocity of Wealth” concept.
I should come up with a cool name for this, but gravity would be any force that keeps you poor and prevents you from living the lifestyle you want to.
If we wanted to sit here for a day, we could come up with thousands of things that contribute to this force pulling you down and killing your progress and your future potential.
The force consists of every temptation in the world. The force is external and internal. It’s marketers and influencers trying to get you to buy new clothes or buy an energy drink. It’s the government raising your taxes. It’s inflation. It’s your rent. It’s your human nature and desire to impress others with signals of your success (like cars, travel, and jewelry). This force is omnipresent. It’s in the air. It’s in your bloodstream. It’s hardwired into your brain.
All day, every day, the temptation to spend your money on things you don’t need, and the routine expenses of being alive are like gravity pulling you down toward poverty and despair.
Most poor people never bother to notice these things. They keep drinking their 3-dollar bottled water. They keep cash in their bank account and not in equities or real estate. They just spend their money on useless things that they will forget about and throw away after a couple years.
Really, I think the only things young people should be buying are food, shelter, and assets that make you more money (like stocks, real estate, and education).
But the majority of people keep spending frivolously because they see becoming wealthy as this impossible goal with a lifetime of struggle between them and achieving that goal. Sadly, they think they’ll never get there, so THEY NEVER EVEN TRY. They work less and spend more because they believe trying would be futile.
They don’t grasp this concept because they’ve never experienced it. If you can get up enough SPEED, enough VELOCITY, where you are sprinting toward your goals so fast (you’re working 16 hour days, 100 hour weeks for a couple of years) you can break free from that gravitational force and launch into space.
Interesting, at what point do you think people reach the escape point?
I tell my clients that it is somewhere around when you are putting away $100,000 to $200,000 a year from your own entrepreneurial endeavor. That’s really the velocity you need to hit.
The ideal path is for you to get away from your “job” and start your own business. It is rare as hell for someone to get wealthy as an employee. Maybe you can do it if you are incredibly socially savvy and you can navigate your way into the C-Suite of a Fortune 500 company. But if that’s the case, I’d contend that you have the skills to win even bigger with a business of your own, and in a shorter period of time.
So, once you build a profitable small business, you amass your seed capital for investing, and you gain the foundational business knowledge you’ll need to know how to invest wisely, you can then shift your focus to being an investor in global markets and in real estate. After that, the velocity you’ve created will keep pushing your wealth up and up.
That’s when you can breathe, and when you can start to enjoy the fruits of your labor. That’s when you can blow $10,000 on bottle service, or $40,000 on a Rolex.
What did you mean by that? “The velocity you created will keep pushing your wealth up and up.” Can you give an example?
It’s tough to describe for someone who has never been there but when you are running full-speed for years, and working like a maniac, you feel it. Your money in the markets keeps compounding because you did your research and invested prudently. Your business starts running efficiently because you put in a soul-destroying amount of hours to iron out all the kinks, and to make the right hires.
That’s really what poor people don’t understand and what they will never experience. They will never work up the speed they need to escape. Maybe they’ll work hard for a month or two, but then they go back to their 40 hour work week and lose all their momentum.
You can’t do that when you are building a business and building your wealth. You need 40 hours just to maintain your regular tasks. The real business-accelerating progress is made in hours 50 – 130 of your work week. Those are the hours where you can build new revenue engines, hire quality people, streamline your processes, and refine your brand identity.
So essentially, there’s an effect you’re creating for everything in your financial orbit. You’ve worked so hard for so long that you now have a wealth-building tailwind pushing you forward. The magic of momentum is on your side.
What advice would you give to someone who is putting in the hours, but isn’t happy with their progress?
Well first off, I would congratulate them. I think that being unsatisfied is one of the key traits someone needs to be wealthy. So you’ve got that going for you.
There’s an old Charlie Munger quote, where a young person at a Berkshire annual meeting asked about building up their net worth, and this person wasn’t satisfied with their progress.
And Charlie replied, “The first $100,000 is a bitch, but you gotta do it.”
For me, the wisdom in that one sentence is massive. He’s helping the person who asked the question understand that early on, you gotta push like crazy, you need to go all out to get that 100K, and after that, Charlie implies with his response, that it gets easier.
And from my own experience, and from the experiences I’ve had helping thousands of clients, that is true.
Really, to answer the question, I would need to get to know that individual person. I’d dig to the bottom of it, figuring out: Are they really putting in the work? Does their brain work well? And if I find that those two things are true, then they are likely just trying to execute a bad business model. If that’s the case, I can help steer them in the right direction, easy.
That’s what I do with my Moneyberg Mentoring program covering entrepreneurship. I set my clients up on the right path and guide them along the way.
So you focus on Entrepreneurship in your coaching, but you make most of your money as an investor?
Moneyberg Mentoring focuses on helping my clients become entrepreneurs and grow their own small businesses. Transitioning from being an employee to being a successful entrepreneur is step one of that process, then I teach them how to put that capital to work as an investor.
For me personally, I’ve navigated the entrepreneurial path several times before, and today I make the majority of my money as an investor. I run the Moneyberg coaching brand as a fun hobby.
For my clients who want to learn about investing, they take my Markets Mastery program focusing on global financial markets, or my Moneyberg Real Estate Riches program focusing on real estate investing.
Through this Trinity of programs, I push my clients to focus and work their ass off for a couple years so they have enough momentum and velocity to ESCAPE poverty and the middle class in every sense of the word.
By the way, when I say poor or poverty, I include the middle class in that. In my mind, anyone with mediocre money who is aiming for the middle class is poor and not someone who should learn from me.
During these courses I teach an incredible amount of knowledge that my clients can use to build their businesses and their portfolios as well as align them with a new group of ambitious and educated individuals whom they can connect with and utilize as a valuable resource along their wealth-building journey.
The goal is to start an entrepreneurial venture that provides them with a stream of capital that they can invest. Then the aim is to make enough income from dividends and appreciation that it can finance their whole life and more.
That’s real freedom. That’s when you are rocketing around outer space.
Once you have a business running and an investment portfolio built, you can give yourself permission to ease off the gas for a bit, you can throttle down, AND YOUR WEALTH STILL KEEPS GROWING.
Interesting… When do you encourage your clients to take their foot off the gas financially?
NEVER. I would never encourage a client to do that. I said that YOU can give YOURSELF permission.
I’m going to keep working until I’m dead. I’m going to keep working after I’m dead. That’s no lie, my team already has the game plan for postmortem Moneyberg profits.
I keep pushing and I always encourage my clients to keep pushing, no matter what level they are at.
Everyone must make their own choices in life. My clients must weigh the trade offs between how much money they want to have versus how much leisure time they want.
I do remind them that momentum is elusive. Once you grab ahold of it and start riding it toward the elite levels of wealth and success, don’t stop until you get there. Push harder.
If you’ve already broken through, keep accelerating, and let’s see how far we can go.
For more Moneyberg wisdom, trainings, and future event announcements, follow him on his Instagram: @derekmoneyberg