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Mark Yegge, the Wealth Architect, has spent his entire life learning and teaching people about wealth and the importance of a success mindset. He started investing when he was 12 – and made enough to buy his first car at 16. Mark started, and later sold, his Wall Street software company – the company that ushered in after-hours trading. He then “retired” at the age of 39, but not before growing the company from nothing to a $30-million dollar enterprise.
In addition to his achievements in business, Mark has authored books and courses including: Hacking Money, The Cash Flow Machine, Negotiate To Win-Win, The Secrets of Business, and others. Today, Mark manages several investment funds, is a Wealth Architect for 7- and 8-figure investors and provides wealth education through his learning ecosystem.
Get a glimpse into the mind of avid investor Mark as he spills the beans on the fine art of diversification. His investment philosophy prioritizes cash flow and critical thinking, noting that success in the market is largely a mindset game.
Mark’s approach to financial planning revolves around one critical factor: cashflow. His strategies are meticulously crafted to optimize revenue generation in any capacity. In fact, Mark breaks down his innovative cash flow system, revealing the intricacies of his process.
Experience an exceptional episode with Mark Yegge as he reveals the powerful influence of mindset in investing!
In This Episode
- Mark Yegge’s background and what led him to start at a young age.
- Mark’s perspective about diversification.
- The impact of multi-dimensional Freedoms.
- Guidelines about liquidity.
- Mark’s Cashflow system and how it works.
- Mark’s piece of advice on how to accelerate wealth trajectory.
Welcome to today’s episode of Wealth Strategy Secrets. We have an incredible show lined up. Today, we’re joined by Mark Yegge, known as “The Wealth Architect.” Mark has spent his life learning about wealth and teaching others the importance of a successful mindset. He started investing at the age of 12 and had made enough to buy his first car by 16.
Mark founded and later sold a Wall Street software company, the very one that pioneered after-hours trading. He retired at the age of 39, having grown the company from scratch into a $30 million enterprise. Along the way, he earned awards such as Small Business of the Year, the Florida 100, and a spot on Inc. Magazine’s Fast 500. Beyond his business achievements, Mark is the author of books and courses, including Hacking Money, The Cash Flow Machine, Negotiate to Win-Win, The Secrets of Business, and more.
Mark, welcome to the show.
Wow, thank you! I’m not sure there’s anything left to talk about after that introduction.
I know, right? I was looking through the list of your books, and I love the titles. They’re aligned with everything I think about daily—hacking money, cash flow, negotiating to win. Great work there!
And I didn’t realize that your software company exited at $30 million. Coming from the tech space myself, I know that’s a huge accomplishment. Not everyone gets there, so congratulations! I’m looking forward to our conversation.
Thank you! Me too. It’s going to be a lot of fun. We’ve already chatted a bit, so this will be revisiting some of that. But let’s make sure we give your audience what they need, right?
Absolutely. So, while I gave a brief overview, could you tell us more about how you got into cash flow investing and your passive income philosophy? Was there an epiphany that led you to focus on this area? Maybe give our listeners some added background, especially for those who may not be familiar with your work.
Sure, it depends on where you want to start because there are a few threads that have run through my life. One is what you mentioned—starting to invest at age 12. My dad taught me how to invest when I was young, and I’m still active in the field today. I run three hedge funds and teach people about wealth, covered call strategies, and other financial principles.
The other thread is business. I come from an entrepreneurial family—my dad was an entrepreneur, and so was his dad. A common thread between both investing and entrepreneurship is the importance of critical thinking. You need to form your own opinions. You can listen to the information out there, but especially looking back now, I tend to question everything I hear until I can verify it. It’s about finding what makes sense to you.
Absolutely.
But don’t just accept something because it seems to make sense. Think it through. Look at all the angles, then decide for yourself what makes sense and what’s the right choice. At the end of the day, it’s not your broker or anyone else giving advice who has to live with the consequences—it’s you.
You’re the one who has to live with the decisions you make. And if you’re constantly allowing someone else to make the final call, it can be tough to live with that decision.
That makes sense. Do you follow a particular wealth strategy that you focus on?
Broadly, I believe in diversification—but “broadly” is the key word here because I think diversification is often overused. People say diversification is a “free lunch.” But here’s my take on it, David: I believe that diversification is a flawed strategy unless you’re diversifying across different asset classes.
I think everyone should have a mix—some real estate, gold, Bitcoin, stocks, maybe even some fixed-income investments, and business interests. To me, that’s true diversification. But take Warren Buffett, for example—I just read a statistic that 78% of his fund is in just eight stocks. He’s been doing this for decades, investing billions and billions, all concentrated in a few names.
If that approach works for Warren Buffett, why do we feel the need for the S&P 500, where we’re holding 500 different securities? What happens is we end up diluting the returns of the great investments with the poor ones, essentially averaging down our returns. And then, if we pay someone to manage that account, we’re paying them on top of an already diluted return. So, we’re over-diversified, shooting for an average return, and then getting less than average because of the fees.
I completely agree, Mark. In my view, the biggest issue with broad diversification is that you can’t truly learn about asset classes. You mentioned some excellent asset classes that wealthy and ultra-high-net-worth individuals typically focus on. Family offices, for example, often invest in operating businesses, real estate, and alternatives, with some exposure to public markets.
When you focus on fewer asset classes, you can gain expertise in them. You know how to spot good deals and avoid bad ones. But when you’re diversified across everything, you’re essentially just dollar-cost averaging and going with the lowest common denominator.
Exactly. And one of the things I’ve come to value over the past decade is the importance of cash flow. I learned this lesson the hard way when I was running my business. I had to lay off eight people, which was difficult because they felt like family. My CFO kept reassuring me that everything was fine—everything looked great on paper. But we were using accrual accounting, which shows money that’s expected to come in, even if it hasn’t been paid yet.
Our reports made it seem like we had the money. But if those clients don’t pay, you’re suddenly without funds—and can’t make payroll. One day, I got a warning that we might struggle to make payroll, and I was shocked. I thought, “Wait, we just reported $250,000 in revenue this month. What do you mean we’re short?” That’s when I realized that accrual accounting was painting a different picture than our actual cash flow. This was a hard lesson, and it taught me fast: you’ve got to learn to account and think critically as I mentioned earlier.
Letting those people go was incredibly tough, but now, in my fifties, I understand how critical cash flow is. That’s why I developed a program called the Cash Flow Machine, which teaches people how to use the stock market to create income through covered calls—it’s a modified covered call strategy. The goal is to generate income from those assets.
It’s similar to owning a rental property. You buy a house, rent it out, and you’re less concerned about the property’s value going up or down. You just want that tenant paying every month because eventually, they’ll cover the cost of the property for you. The same goes for apartments, strip malls, or multifamily properties.
Cash flow is king. I’d heard this concept early on, but it didn’t hit me until I had that experience with my business. Now, that’s what I preach. I’ve also had extensive experience in real estate, which I both love and hate. Real estate’s valuable in a portfolio, but it’s not passive income—you might find yourself dealing with a leaky toilet at 2 a.m. or replacing a water heater. True passive income is rare; even with real estate, you need to hire a manager to make it somewhat passive.
I own real estate and I run the Cash Flow Machine, which takes 20 minutes to an hour of work each week. But here’s the bottom line: assets that don’t produce cash flow, like raw land, can feel like liabilities to me because they don’t generate income. Cash flow is essential in investing.
Let’s rewind for a moment and dig a little deeper into the critical thinking part.
Absolutely.
It’s interesting—Keith Cunningham, who was Robert Kiyosaki’s mentor, was a huge proponent of “thinking time.” We’re also part of the Strategic Coach program, and Dan Sullivan calls it “thinking about your thinking.” It’s a powerful concept because, today, we’re constantly bombarded with information and data. How can anyone possibly process it all? The human mind runs through about 60,000 thoughts a day. If we don’t take time to process and prioritize those thoughts, we can’t focus on what truly matters or decide what’s worth pursuing.
That’s essential, and I’m trying to teach my kids that as well. As they go out into the world, I keep telling them: that you need to become critical thinkers and strong problem solvers. These are truly the skills of the future. So, I love that you emphasize this. I also know you’re a big proponent of having a strong mindset. Could you share your perspective on mindset?
You mentioned a few things that tie directly into mindset, especially in investing. Mindset is about 90% of the game. You can learn all the technical indicators, like MACDs, and dive into fundamental and technical analysis, but at the end of the day, it comes down to your mindset and emotions. I make poor decisions when I’m emotional, but I make much better ones when I’m logical. When emotions go up, intelligence goes down.
As you said, we have so many thoughts running through our minds every day—about 99% of them are the same thoughts we had yesterday. If we don’t take time, as Dan Sullivan suggests with his concept of free days, focus days, and buffer days, to think about our thinking, we’ll just keep repeating the same patterns, sometimes even with the same mistakes. So, it’s essential to think about our thinking and to focus on our mindset.
You also need a framework for how you think about wealth, money, and even other aspects of your life. I believe that life is like a formula: if you do X, and add Y, you’ll get Z. It’s a repeatable formula if you keep X and Y consistent. But so often, we end up “winging it” in life. We wing our relationships, our health, our finances, and our time.
I’m guilty of it too—scrolling on social media or binge-watching Netflix, only to realize I’ve lost an hour or even five hours. Then, we might wonder why someone else is writing a book while we feel like we don’t have the time. The truth is, if we don’t take time to think critically about our goals and what we truly want, we end up drifting.
I think we need to slow things down, step back, and create systems for what we do. Systems have rules and parameters, which help us repeat successful formulas in the future. By learning from people who’ve gone before us and created proven systems, and by adopting the right mindset, we can accelerate our progress. That’s how I see it.
That’s a great perspective. In our practice, we talk about wealth strategy, and we believe that building wealth is a process, much like following a formula or system. It’s similar to training for an Ironman—you wouldn’t expect to reach the outcome immediately. You’d have different training routines, work on your diet, and commit to daily efforts over a few years to achieve that goal. It’s all about putting in the process.
In my experience over the past 20 years, I believe there’s a formula for wealth. It’s a combination of your financial IQ, your mindset IQ, your physical capital, and your relationship capital. When these elements come together, they start to compound.
And then, when you put them into a strategy, you get that snowball effect. How do you measure those, Dave? I love that there’s a formula for it, but how do you measure some of those individual components?
That’s a great question, and it brings up some other concepts. Dan Sullivan talks about the “4 Freedoms”: freedom of money, freedom of time, freedom of purpose, and freedom of relationships. Some of these are a bit harder to measure, but from a wealth perspective, in our family office mastermind, we’re documenting the ROI of this process. We look at everything from tax savings to new relationships that create opportunities—ones that could potentially be 10x your investment.
When you focus on those metrics and understand where you’re heading, you start to see that wealth at the next level is really about achieving those freedoms and minimizing fears by creating financial security.
Recently, I went on two back-to-back cruises. North Carolina can get a bit cold, so I headed to Florida and down to the Bahamas. When I got back, people asked, “Did you have fun?” Most people go on cruises to have fun—they drink, participate in contests, and lay in the sun. But that’s not what I do. I can work from anywhere, so for me, it was just a floating hotel room where I was warm, around interesting people, with a beautiful view. Next week, I’m taking a transatlantic cruise to Rome from Florida, which will be two weeks long.
To me, this is freedom—location freedom and time freedom. Most people don’t realize how much freedom they give up by the choices they make, or don’t make. About 6 or 7 years ago, I decided I didn’t need a lot of “stuff.” I’d rather have relationship freedom, the opportunity to be around great people and share deep ideas, and travel the world to keep learning.
I didn’t want to be tied down by car payments, a mortgage, or any of those material chains that Western culture often promotes. Now, this approach isn’t for everyone, but for me, location and time freedom are what matter, and wealth enables me to pursue that.
That’s so valuable, Mark. It’s challenging because we’re constantly bombarded by messages—from social media, the government, corporate America, and the $30 trillion financial services industry—telling us how we should think and that we need things like a certain car to be successful.
And you’re trying to keep up with the Joneses and all that. But in reality, as you just defined it, if you look back on your life, what is the real contribution you want to make and leave behind as a legacy? I think it revolves around these freedoms—these multidimensional freedoms. What if everything you thought you knew about investing was wrong?
How much of an impact can you make on the world? By freeing your mind to explore where it needs to go, you’re able to help others in a meaningful way. For instance, in this stage of my life, I’m now focused on giving back. I didn’t think much about it in my 30s, but now, in my 50s, I’m asking myself how I can contribute.
I truly believe my purpose is to help people understand cash flow, and that’s what I do in my program. Spreading the word is a different part of it, but it’s how I help others. I think people sometimes look at the life I lead and think, “I’d like some of that.” And maybe you have a lifestyle others aspire to as well. How can you help them achieve it?
If you look back on your life, what is really the contribution you want to make and leave behind as a legacy?
Peter Diamandis calls it your “Massive Transformational Purpose.” When you zero in on that, it’s incredibly powerful. So, Mark, let’s dive into some tips for the audience—things that will help them understand cash flow a bit better.
I’m enjoying this conversation about thinking deeply about what these things mean. It’s not just a specific product or a one-dimensional solution—it’s about what these principles represent.
In my journey, I’ve found that managing cash flow is essential. When you’re running a business, for instance, you’re looking for recurring revenue. You want that income to be reliable, which gives predictability to your business. It means you’re not having to lay off employees unexpectedly and allows you to build and scale.
On the personal side of investing, as you mentioned, you have multiple streams of income that support your lifestyle and goals. But there are a lot of nuances to cash flow. Just two weeks ago, we saw the collapse of SVB Bank, which revealed exposures even within the banks. Once you establish cash flow, managing liquidity becomes crucial—you want to stay ahead of inflation while maintaining safety. What are your thoughts on that?
I recently read a report saying there are around 200 vulnerable banks. The whole fiat currency system feels like a Ponzi scheme at times—maybe that sounds a bit conspiratorial, or maybe it’s realistic. I’m not sure. But I do know that every fiat monetary system in history has eventually collapsed. I’ve studied over 700 of them. I don’t think any fiat-based banking system—whether in Europe, Japan, or the U.S.—is going to survive long-term. In this information age, news spreads fast, and it accelerates these issues.
There was a risk at SVB, Silicon Valley Bank, where if you were one of those Silicon Valley companies needing to make payroll—say, $250,000—you might have heard through Twitter or some other social media that your bank might not have that money. So, you went to withdraw as much as you could, and there was a run on the bank.
It’s similar to the bank runs in the 1920s and 30s, but it happened much faster. This situation highlights vulnerabilities in our banking system, and it means that, first and foremost, savings are effectively dead. I’m moving money around like crazy to minimize risk, even though there’s supposedly FDIC insurance covering up to $250,000 or maybe even more.
But so what? If they cover everything, that money will likely lose significant buying power. So to me, you’ve got to be in hard assets. What are hard assets? Real estate, gold, and for me, Bitcoin. Whatever it is for you, your money can’t just sit in savings. The banks are only ticking up savings rates from a quarter of a percent to maybe 1%, which doesn’t keep up with inflation. Keeping your money in the bank or cash means you won’t be able to buy as much next year as you can today.
So what does that incentivize the average person to do? Spend. This leads to a spiral of spending more and saving less, with investments not growing because people prefer to spend. Most are spending on things like trucks rather than investing. But it’s essential to invest in assets that appreciate faster than inflation.
Agree. When you understand that’s the formula, it does multiple things. By buying assets—especially tax-efficient ones—you’re offsetting the income you’ve made, which is critical. This helps grow your passive income, expanding your base. As your passive income and asset portfolio grow, it eventually becomes exponential.
Mark, do you have any thoughts? There are many opinions out there about liquidity and capital reserves. Do you have guidelines or SOPs for your finances, like keeping six months of emergency funds or capital on hand for new opportunities? How do you manage liquidity?
That’s an interesting question. Years ago, when I taught live seminars on money management, I talked about having enough money so you wouldn’t lose sleep if you lost your job or income. I called it your “sleep money.” How much do you need to feel secure? For some, they have a higher risk tolerance—like me. I don’t need as much because I believe I can go out and generate income. But if you don’t have that ability, what will make you feel secure until you find another job?
I don’t have a strict rule of thumb. For some, it’s six months of expenses; for others, three months. You have to figure it out based on what helps you sleep at night. Sometimes I get over-invested and don’t sleep well. Ideally, I think everything should be in investments, so I keep very little cash on hand. Most of my assets are in cash flow investments, so I always have income coming in.
And that brings us back to mindset. If you have a scarcity mindset, you’ll want to stockpile cash. And if you’re listening to media today, you might be worried about things like the collapse of the banking system.
We’re worried about the war in Ukraine, along with other geopolitical events happening worldwide, and these things can start to consume your thoughts and mindset. This constant worry fosters a scarcity mindset, whereas we really want to be living with an abundance mindset. As you pointed out earlier, if you can generate income, you can always create it, in whatever form that may be.
Just before this call, I went to the eye doctor, so my pupils might still be a bit dilated—I can’t even see clearly; you’re just a fuzzy, angelic figure on my screen right now! Anyway, I was talking with a young doctor who just finished optometry school. We started chatting, and she asked what I did. Then she said, “Can you help me?”
As we talked, it became clear that she wasn’t trained in money management—she was trained in medicine. Her first thought was, “I’m just trying to pay off my student loans.” So I asked her, “What’s the interest rate on your student loans?” She kind of mumbled, indicating she didn’t fully know. I asked for a range: “Is it between 1-5% or maybe 3-8%?” She guessed it was around 5%. Then I asked, “If you wanted to borrow money to do something else, like buy a house, do you know what that would cost you?” She didn’t know.
We had a little educational session, but the bottom line was, first, she didn’t know her loan details, and second, her mindset was focused on paying off debt without considering that it’s relatively cheap money. She hadn’t thought about using that money to invest in something with a higher return, which could be a simple shift in mindset. How many things like this are there in our lives that we just don’t know enough about?
Exactly, 100%. So, Mark, can you tell us more about your specific cash flow strategy, the “Cash Flow Machine”? How does the business model work?
Thanks. The Cash Flow Machine is part of a broader investment strategy that I mentioned at the start of the conversation. I believe it’s the best system I’ve found in 45 years on Wall Street for creating fairly safe, conservative income. That’s my goal now because income serves two purposes: it plays defense by lowering your stock’s basis, and it plays offense by generating income. It’s an income and growth strategy.
To simplify, it’s based on covered calls. Essentially, you own an asset and sell someone else the right to buy it from you at a predetermined price. Imagine real estate as an example: if there’s a lot across the street for sale at $100,000, someone hears a rumor that it’ll be worth $1 million because a big hotel might go up there. But they don’t have $100,000 to buy it outright. So, they approach the owner and say, “I’ll give you $10,000 to hold it for me for six months at that price.”
What could happen if the developer builds the hotel, the person who paid for the option can exercise it, buying the lot for $100,000 and selling it for $1 million, making a huge profit. But most of the time, it’s just a rumor, and no hotel is built. That $10,000 option fee then goes to the lot owner, who took on minimal risk in the deal.
When someone defaults on the option because the hotel doesn’t go up, the seller of the lot keeps the $10,000. This is similar to how it works with stocks. For example, if you own a stock like Amazon, Tesla, or Apple, you can sell someone the right to buy your stock at a set price, and they pay you for that right. In about 80% of cases, just like in the real estate example, the options expire worthless, meaning they’re not exercised. So, 20% of the time they have value, but 80% of the time they don’t. That 80% works in favor of the seller.
So what we do is take an asset in the stock market and generate income from it every week or month. We aim for about 2-4% monthly returns, and we often achieve it. It’s relatively safe because if you already own Amazon, for example, why not sell someone else the option to buy it? If the stock doesn’t go above your price, you keep the premium. That’s our strategy.
Got it. And is there a “who, not how” component here, or do people need to learn and execute the strategy themselves?
There are different ways to look at it. I run a couple of hedge funds for people who are busy, accredited investors without time to manage it themselves. But many people are tired of giving away control. I have a saying: “Never give up your power in your health, wealth, or time.” Over the years, a lot of people have given up control over their wealth and haven’t seen great results. If you’re not going to see great returns, at least don’t pay someone else for it, right?
Learning a strategy and a system is valuable. That’s what we offer with the Cash Flow Machine program. It’s not just a course; it’s a full ecosystem, including a mastermind community, chat groups, and a support group to help people through the learning process. As people go through different market cycles, they gain more knowledge and can eventually help others new to the strategy. Yes, most people want to take control and learn to do it themselves, and we’re here to support that.
Makes sense. Are there any Wall Street axioms that you think hold people back?
Absolutely. How much time do we have?
How about your top three?
One I heard recently is, “You never go broke taking a profit.” I grew up with this one—my dad always taught me that. He’d say, “Mark, if you’re making a profit, take it; you’ll never go broke.” But this approach is like growing an apple tree and picking the fruit as soon as you see a bud. The fruit isn’t ready yet, and if you pick it early, you won’t get to enjoy it. Similarly, if you pick a flower just as it’s starting to bloom, it will never reach full beauty. You have to let investments mature.
Often, we’re so afraid of losing our profits that we cash out early. But sometimes, those are the investments that go on to soar. Ask yourself: why don’t you still own Apple from 2003, Amazon from 2010, or Microsoft from the 1980s? Most people don’t hold these stocks long-term because they take a profit early on.
The mindset here is to protect the profit because “you never go broke taking a profit.” But if you don’t let your investments grow, you miss out on massive potential. So that’s one big axiom to reconsider.
The second one is diversification, and the third is the notion of “safe money.” People have been talking about a 60/40 portfolio for the last 15 years—60% in equities and 40% in fixed income like bonds. The bonds are supposed to be your “safe” money, while the equities allow for growth. But last year, in 2022, both the bond market and the stock market went down 25%. They were supposed to offset each other, but they didn’t.
As a result, a lot of people lost money. Some of my accounts went down as well. But if you thought your money was safe and then lost 25% while earning only 2% interest, that doesn’t serve your financial interests. So, be cautious with terms like “safe money” and “diversification.” It’s essential to question what they truly mean and whether they align with your financial goals. Those are three good ones to think about right there.
Good insights. And if you could give one piece of advice to our listeners on accelerating their wealth trajectory, what would it be?
I’d say it’s about learning. Let me share a story. A couple of years ago, a friend posted a New Year’s challenge: “Do 100 push-ups a day and watch one TED Talk a day.” I was the only one who raised my hand and said, “I’m in.” By the end of the year, I had to catch up because I started a bit late, so I had to do around 700 push-ups to stay on track.
The first few days were tough—doing 100 push-ups even in sets of 10 takes effort. But after a week, I could do 20 at a time, then 30, and I saw an incredible transformation. At the end of the year, I had done 36,500 push-ups and watched 365 TED Talks, each about 15 minutes long.
That’s a lot of learning—opening your mind to different perspectives that can enhance whatever field you’re in, whether it’s medicine, engineering, law, or finance. When you learn from others’ expertise and integrate their systems into your own, it elevates your entire life. So, if I had to sum it up, I’d say: keep pushing, keep learning, keep growing.
Awesome. And if people want to learn more about you or connect, where’s the best place to reach you?
The best place is my website, cashflowmachine.io. There, we have resources like a free guide called Regular Paychecks on how to take regular income from the stock market. It goes into more detail about generating income from the market. You can also find me on Twitter at Mark Yegge, and on YouTube as “The Wealth Architect.” Just search for “Mark Yegge Wealth Architect” on YouTube, and you’ll find all my videos. I also have a podcast called The Wealth Architect Podcast.
Awesome. Mark, we appreciate you coming on the show and sharing such valuable insights with the audience. It’s always a pleasure, and we look forward to next time.
Let’s do it again soon. Thanks, Dave.
Thanks, Mark.