A Guide to Multiplying Capital and Growing Your Money

Whether you’re an investor, entrepreneur, professional, or W2 employee, the goal is the same: to make money and find ways to grow it. Real estate investing is one way to generate passive income, while others opt for stocks, bonds, or mutual funds that provide long-term returns. However, building wealth requires a structured framework that can guide us in achieving our financial goals. Recently, I spoke with M.C. Laubscher, the president and chief wealth and investment strategist of Producers Wealth and founder of Cashflow Ninja, about this framework. In this blog post, I’m excited to share some of the key strategies from his approach and offer a fresh perspective on how to multiply capital. As an entrepreneur and investor, M.C. Laubscher has firsthand experience with the challenges of creating and protecting wealth and is now helping others to do the same. Be sure to listen to the full podcast for more insights.

What is “The Business of Multiplying Capital”?

M.C. Laubscher, the president and chief wealth and investment strategist of Producers Wealth and founder of Cashflow Ninja, has developed a framework called “The Business of Multiplying Capital” based on his two decades of studying and interviewing over 500 successful investors, billionaires, multi-millionaires, and business owners. This framework comprises four fundamental pillars that can guide individuals in growing and multiplying their wealth. According to M.C., regardless of whether someone is a business owner or real estate investor, they are essentially multiplying capital to get into the real estate game, where “capital” also includes intellectual and social or relationship capital.

The Four Pillars of Multiplying Capital

According to M.C., multiplying capital involves leveraging your skills and resources to increase what you already possess. He further explains that the four fundamental pillars of his framework serve as a strong foundation, and any missing or misplaced pillar can result in the collapse of the entire structure. By understanding and applying these pillars, individuals can improve their capital multiplication skills significantly.

Pillar 1: Cash Creation

The pillar of cash creation involves generating income by providing value through products, services, or unique abilities. This can be achieved through employment, possessing high-income skill sets, or owning a business. Intellectual and social capital are two important elements that contribute to a person’s ability to produce value. M.C. emphasizes the importance of continuous learning and upskilling to build intellectual capital. He advises individuals to seek out opportunities to expand their network of social connections and find potential business partners, mentors, or coaches who can complement their strengths and improve overall capital. In summary, the more problems one can solve and people one can serve, the greater their potential to earn income.

Pillar 2: Cash Capture

The second pillar of wealth creation, as identified by M.C., is cash capture, which involves utilizing sustainable strategies to manage and make money earn more. M.C. emphasizes that merely having a savings account is not enough, but instead, one needs to capture the value generated by leveraging and collateralizing their money to create assets. This involves positioning capital efficiently to protect it from wealth destroyers such as taxes, inflation, and fees, and also to prevent the big opportunity cost of losing its value by doing nothing.

According to M.C., collateralizing is a useful strategy for combating opportunity cost by using one asset to purchase another. He gives examples of how insurance contracts and business assets can be collateralized to invest in real estate or receive a loan from the bank for business operations. M.C. encourages people to think creatively about their resources, such as certificates of deposit or cryptocurrency, and consider how they can be positioned correctly to yield more capital for investment in cash-flowing assets.

Pillar 3: Cash Flow Creation

The third pillar in M.C.’s framework is about creating cash flow, which is closely linked to the second pillar of capturing cash. By efficiently positioning and investing the captured capital, more opportunities for investment arise, resulting in a self-sustaining flow of cash. There are many asset classes and investment vehicles to choose from, and one’s relationship capital can help in making informed investment decisions. Due diligence and understanding the advantages and disadvantages of each investment option are critical in determining the best fit for one’s investment profile. Once the cash starts flowing, it creates synergy and can become self-sustaining, providing a sense of true financial freedom.

Pillar 4: Cash Control

The fourth and often overlooked pillar is cash control, which is all about safeguarding the wealth created through the previous three pillars. According to M.C., it involves implementing strategies such as insurance, estate planning, and tax planning to protect the capital you’ve captured and the assets you’ve invested in to create cash flow. By putting a protective wall around your wealth, you can ensure that your vision for it remains intact even in adverse circumstances.

Estate planning is one of the most effective ways to exercise control over your money, even after you’re gone. M.C. recommends options such as creating a will, purchasing whole life insurance, placing money into trusts, and using insurance to protect your real estate and other assets. In addition, M.C. stresses the importance of tax strategy, as taxes can be one of the biggest threats to your wealth. By understanding tax provisions and taking advantage of legal tax benefits, you can reduce taxes and reinvest the savings.

M.C. warns about the potential for taxes, lawsuits, and transferring wealth between generations to erode your wealth. Therefore, it’s crucial to take measures to protect your wealth and ensure that it stays intact for generations to come.

FINAL THOUGHTS

Although the journey towards financial independence is not the same for everyone, by following this framework and taking intentional steps, one can achieve success. Utilizing this framework, along with our individual strengths, we can develop actionable plans to reach our financial goals.