9 Money Rules To Go From Broke to Multimillionaire, According to Dan Martell

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9 Money Rules To Go From Broke to Multimillionaire, According to Dan Martell

Today,

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is known as a serial entrepreneur who coaches over 1,000 business owners, but he wasn’t always on track to

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At 17, he was arrested and later went to rehab, where he turned his failures into personal growth and success. He taught himself to code and launched tech businesses, earning his first million at 27.

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Along his journey, he learned nine money rules that helped him go from broke to multimillionaire and recently shared his tips on

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According to Martell,

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The first rule the entrepreneur learned is that your wage doesn’t make you rich; spending habits do.

“A long time ago, my dad said this: It’s not how much money you make; it’s what you keep. 33% of millionaires never earned more than 100,000 a year it meant they knew how to invest their money.”

After a financial mistake at 21, Martell walked away from the experience, understanding that to make money, he had to live on a small percentage of his income and not above his means — which meant driving a 12-year-old car even though he made millions a year.

To maximize your income, live on the smallest amount of money possible and invest.

“You can’t save yourself to wealth, but you can spend yourself there either,” he noted.

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Martell lives on 10% of his income, and while that might not be possible at the start of building wealth, that’s the goal to work towards. Living on a small portion of your income frees up funds to invest.

“Learn to live off very little and start accumulating. Then decide at what level you’re going to start investing in other things,” he said.

Martell said his third money rule is “controversial” but believes that “broke people” make a living just to buy things, while the middle class earns money to “get loans to buy things,” and the rich invest in things that generate an income.

“Some of you guys are like one inch away from opportunities that could actually make you money to cover the payment on something, but instead you take that money and you put it into a depreciating asset,” he said.

Instead of working more to maintain your lifestyle, invest in yourself and learn new skills that will earn you more money or pick up a side hustle and use that extra money to invest.

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Unexpected things in life will happen, and having a few months of expenses saved can help you get through tough times. You don’t want to sell a business or things for much cheaper than you should because there’s no emergency fund.

Martell lives by the rule of having at least six months of expenses in a savings account that he can access quickly if need be. Six months can sound like a lot, but he explained in the event of an emergency or job loss:

“You’re able to stay calm and make good decisions without being emotional; it allows you to operate from a place of abundance, not *****.”

When you take on consumer debt, you’re making money for banks and credit card companies by paying high interest rates — and that will delay building your own wealth.

Don’t finance a lifestyle you can’t afford. Martell learned this lesson by buying furniture with a loan that took him much longer to pay off than expected.

“If you can’t afford it, go make more money to get it,” he said.

When you invest in your skillset, you can advance in your career, create more opportunities, become more valuable, and potentially make more money. Delay the extravagant lifestyle and invest in your skillset and yourself.

Martell was broke when he hired a business coach. He only had two months worth of funds to pay him, but it was a year-long commitment. He thought if his coach was good enough, he would learn what he needed to make more money and have the ability to pay him. In that year, he made over $1 million dollars.

“What I’ve learned over the years is that if I take all the money I’ve invested in coaches and seminars, it’s about $1.7 million. If I would have took that money and invested into the S&P 500 it would have made me some money, but when I look at the income that that knowledge produced in my life it’s like a 1,000x return,” he shared.

Investing always has an element of risk, but investing in something you don’t know makes it riskier. When investing, most often, the biggest return happens when it’s something in your wheelhouse. “When you invest or do things outside of your area of competency you’re putting the whole thing at risk for you,” Martell said.

His strategy for investing now is to find “situations where there’s asymmetrical reward, meaning that I can invest or buy a business with some level of upside that’s guaranteed because I know what I’m doing and the fixed downside because it’s an industry that I know better than most. He added, “I don’t personally guarantee it so I’m not putting my whole personal net worth at risk and then I take that thing and I can add value to make it ******* that’s win-win.”

The eighth rule Martell lives by is having a personal profit and loss. At work, the goal is to manage your workload effectively, and it’s the same with your household.

It’s important to ensure you’re not paying more taxes than you should, your portfolio is diversified, your investments are profitable, and everything is running smoothly financially.

“Treat your house like a business,” Martell said. Have someone oversee your finances and review your investments to eliminate the stress and burden.

“The wealthiest people aren’t managing their own estates,” he explained. “They have estate managers. They have people that run their personal life just like a business. How do you do that? You have a P&L. You have your income, you have your expenses, you create budgets. You do the same thing you would in a business — just do it with your personal stuff.”

Martell practices this strategy by having a house manager who takes on the responsibility that he or his wife would have.

“If having nice things stress you out, you are a prisoner to those nice things,” he said.

Life isn’t just about making money, but rather using wealth to “create, expand and to serve other people,” Martell said about the final money rule he lives by.

To be truly successful, it’s about personal growth, according to the multi-millionaire. Along his journey, Martell learned, “it doesn’t matter if you have $1 million or $10 million, it’s who you become in the process.

Put your money to work by investing in yourself to become more valuable, growing personally, putting energy into meaningful relationships, and taking on fulfilling projects. Otherwise, having wealth is “lonely,” Martell said.

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