Earning Vs. Owning 💰🏠

Brock's newsletter | AUGUST 29, 2025

Earning Vs. Owning

How do the rich get rich?

Well, they used to be super-earners. That’s our parents’ generation - the top guys (and it was all guys) became doctors and lawyers and made the big bucks.

Many of us still think that’s how it works. Thus, we still give our kids the same advice: go to college, get a good degree, and get a steady, high-earning job.

But almost every part of that equation has been upended: college is wildly expensive and no longer exclusive; a good degree only goes so far; and employment is at the whim of employers and wages haven’t nearly kept up with the cost of living.

So who are the rich now? It’s not the super-earners anymore: it’s the super-owners.

I don’t know many wealthy guys whose money comes from a salary, but I’ve met many who don’t seem to go into an office every day, but sure own plenty of real estate, businesses, and stocks.

Crucially, these ultra-rich often get money to live by borrowing against their assets. Borrowed money is not income, and thus not taxed. Ask Beyonce, who recently pulled a $60mil second mortgage on her Bel Air mansion. She didn’t need the money - she’s going to invest it and grow it.

She'll likely never pay it off either. It’ll get washed out in her estate taxes. This wealth strategy is known as “Buy, Borrow, Die” - explained here.

You might think this is all well-and-good and it doesn’t apply to you. But it does.

Most of us won't become super-owners, but we can become plain old owners. The bank might not lend you Beyonce money, but they'll lend you 80% of your home value. And let me just say, the bank is a fabulous partner.

Here's all the math you need to know: the stock market returns around 8% a year, on average.

That means your money will TRIPLE in 15 years. Any dollar amount you have at 50, you’ll have three times that amount when you retire at 65. How much will you have at 50? Triple whatever you have at 35.

This is how compounding works, and the main principle of compounding: Start as early as you can.

Coincidentally, SoCal real estate has grown around 8% a year (on average, with wild fluctuations) over the last 30 years.

That means, if all goes according to plan, your house value will TRIPLE in 15 years, making the return on your 20% down payment around…1,100%.

That's 11 times your money in 15 years. The math of the earner class is incremental. The math of the ownership class is exponential.

Asset classes are like escalators—different speeds, heights, and angles. Your job is simple: get on as many as possible, as early as possible. Start small, start messy, but start.

-Brock