In the late 90s, the internet minted millionaires at a speed no one had ever seen before. By 1999, 7,000 new millionaires were being created every week. Between 95 and 2000, the stock market was absolutely on fire. The Nasdaq alone soared by over 400%.
Venture capital hit record highs, more than $100 billion invested in a single year. Early Amazon investors saw 257,000 returns, and Jeff Bezos personally turned $10,000 into a fortune, now worth over $170 billion. And all of it happened in just five years. Now most people missed it.
They sat on the sidelines, they told themselves they'd jump in, when it was safer, but by the time it felt safe, the gains were already gone. The blunt reality is that if you're not in the market during a boom, you stand to lose a decade's worth of compounding, and you'll never get that back. You've got to be in the market when the magic happens. Now the good news today, it's happening again, but faster.
The internet revolution took seven years to reach 100 million users. The new revolution we're going to cover today did it in just two months. And if history repeats, millions are going to get rich, while the vast majority get left behind. So the only question is which side of history are you going to be on this time?
In times of technological innovation, America has a rich history of making a lot of people rich, but major innovations are rare. When they happen, they change everything, but most people sleepwalk through it and miss the boat. Consider this, despite the fact that anyone can invest in the stock market, a near 10% of the US population owns nearly 95% of all the assets. That is insane.
But for it to change, people have to learn about the most profound vehicle for wealth creation available to the average person, the stock market. And it's never been more important than right now, because we are living through what is almost certainly the single most important technological revolution we will see in our lifetimes. This is one of the moments where a lot of people are going to make an absolute fortune and a lot of people are going to get left behind. Artificial intelligence.
It's the most rapidly adopted technology in human history, and it has the potential to be as foundational as electricity. It will infuse everything we do as humans. It is critical to understand that our extremely broken financial system makes it impossible to get ahead unless you own assets. This is precisely why the rich yet richer and the poorer get poorer.
If you do not own assets, you will grow poorer over time. It is a matter of the physics of money. Without an entirely new monetary system, this is a guarantee. You cannot afford to sit on the sidelines right now.
That's why today, in five easy parts, I'm going to walk you through exactly how to capitalize on this moment. And you do not want to skip part five, because that is exactly where you're going to learn how to win. So welcome to part one. Why this moment is too big to ignore?
As of 2023, AI-related companies already accounted for over one third of all gains in the S&P 500. And that number is growing. All AI investments are projected to grow from $67 billion in 2023 to over $1.8 trillion annually by 2030. And worldwide, there are already over 1 billion people using AI.
And given its utility, you can expect AI to be integrated into virtually every area of our lives from refrigerators that track your produce and order for you to medicine bottles that know if you've taken the medicine or not. And we are at the very, very, very beginning of that transformation. That's why this moment is too big to ignore. AI is going to become a trillion dollar sector.
Just a start. It's going to be a foundational layer of our entire economy, the way that electricity, the internet, and smartphones have done before. Only this time it really is going to be bigger. The last time we've seen something this transformational, it killed all of the dinosaurs.
And it is moments like these that rewrite everything because they are such a massive leap forward in capabilities. Few people understand just how important innovation is to the economy or how massively innovation is rewarded. But every time we get a massive technological breakthrough that's this innovative, like what we're experiencing with AI, all kinds of new possibilities open up before us and anyone who understands assets and investing is going to have an opportunity to win big and people that don't get it are going to miss out. Historically, an investor would only see one or two opportunities of this magnitude over the course of a very long career.
So when they happen, you'd better position yourself to capitalize on the moment. Historically, if you invested in the S&P 500 and reinvested your dividends, it would take about seven to 10 years to double your money. That's the compounding effect of steady predictable growth. But during the internet boom, entire portfolios were doubling every 12 to 18 months, sometimes faster for those holding the right text box.
In fact, between 1985 and 1999, the NASDAQ nearly quadrupled in value, meaning it doubled not once, but twice in less than five years. If you're not familiar with investing, it can be hard to wrap your head around the magnitude of those kinds of gains. But if you've ever wondered why the rich get richer and the poor get poorer, this is why. But unless you're going to abolish the Fed and stop stealing people's money through inflation, which is probably never going to happen, and it's certainly not going to happen before millions and millions of people make their money off of AI, you're stuck with dealing with the situation that we have right now.
Now, if that doesn't already have you sitting up straight, I want you to hear this. Some AI link stocks have already doubled in value in less than six months, six months. Nvidia's market cap alone jumped from $360 billion in January of 2023 to over $1 trillion by August of 23. It leaps so fast, it shattered records for companies of that size.
Now, I know there is a lot of doom and gloom in the world right now, but there is also truly unprecedented opportunity. So if you've ever told yourself the next time something truly spectacular happens, I'm going to move fast. Congratulations. This is that moment.
Now, I've learned one immutable truth, not everyone is going to care about the potential opportunity here. There are two types of people in the world, those that move towards things and those that move away. So if you're a move away from paying type of person, consider this. The American dream is dead debt deficit spending, money printing endless wars and bank bailouts have guaranteed the American dream is dead.
Housing is out of reach for most. And that's the only asset that the average person understands intuitively. And in a world where the government is deficit spending, it's roughly $37 trillion in debt and putting money like mad, you must own assets if you're going to avoid the devastating financial consequences of inflation. Now, I know government propaganda has convinced you that inflation is no big deal, but it is the reason that houses are unaffordable and the American dream is that inflation is man made.
And the single most destructive economic force that there is and there has been 25% inflation in the last five years alone. So if $100 bought you $100 worth of stuff in 2020, that same $100 now buys you $75 worth of stuff. The government took the rest via inflation. That's how the system is rigged against you.
There's no getting around it. If the government wants to tax you more than you're willing to vote for, they simply use inflation. And the worst part, our financial system is broken by design. It's designed to allow banks to gamble like mad with our money and then get bailed out with our tax dollars when something goes wrong.
This is one of the many ways that inflation has created. They try to keep it at 2%, but that's impossible when they're adding $1 trillion to the national debt every 100 days. That's real. Want to know how they fund endless wars or foreign aid, covert relief, inflation.
Hence, the 25% the last five years. The dollars you hold and are paid in are worth less and less every single day. Over 40% of all US dollars that have ever been created were created out of thin air between 2020 and 2023. What was the knock on effect?
Housing prices jumped 45% in just three years. Housing affordability in the US is at its worst level in nearly 40 years. The cost of food is spiked over 20%. And meanwhile, the average savings account paid less than 1% interest.
You're getting eaten alive by inflation. And guess what the solution is? Own assets. Assets are the only thing that goes up in value as debt goes up and money is printed.
And right at the time when you need an amazing asset class that you can afford and that stands a chance of doing well, what comes along? The AI revolution. Thanks to the stock market and fractional shares, you can literally get into assets. AI or anything else you think is going to go up in value for very little money.
Now, you should be mad as hell that you're being forced to gamble in the stock market and it is gambling. But at least you have a way to escape the devastating effects of inflation. If you've ever looked back at the internet boom and thought, man, if only I had bought Amazon or Microsoft or Google early, this is that moment for AI, except the growth could be even bigger. It could also, of course, be a bust.
But that seems like the least likely outcome. Just keep in mind, just because it's accessible doesn't mean it's safe. This is where the system works against you in a different way. And if you don't understand it, you're going to make the same mistakes most people made during the last gold rush, the internet boom.
Most people got greedy, thought they were smarter than they were, and went bust. That's why, before we talk about how to capture this opportunity, we have to talk about what happens when you miss it and just how wrong things can go if you're not very, very careful. Big round will be right back after this. Let's talk about the most powerful force in wealth building compounding.
There's a reason that people have talked about this forever. You put an asset to work, it generates more of itself. Over time, the curve bends way in your favor. Every serious wealth builder knows how compounding works.
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And storage and insurance are included, by the way, so hidden fees don't eat your yield. The average person is passively absorbing inflation. This is how you compound your way out of it. Click the link in the show notes or visit monetary-metals.com slash impact to learn more.
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Let's get into it. So welcome to part two, the risk of missing out on this opportunity. History is littered with people who had the chance of a lifetime and let it slip through their fingers. Buckle up because you are going to hate these stories.
In 1976, a guy named Ronald Wayne joined Steve Jobs and Steve Wozniak as one of the three co-founders of Apple. Just 12 days in worried the company would fail. He sold his 10% stake back to the boys for $800. Today that stake would be worth over $200 billion, a sum that would make him one of the richest people in the world.
In 1962, Decker Records passed on signing a scrappy little band from Liverpool because it was obvious that and I quote, guitar music was on the way out. That band was none other than the Beatles, one of the highest selling bands of all time. They went on to sell over 600 million records. In 1998, Yahoo had the chance to buy Google for $1 million but they passed because they didn't think the company was worth it.
They were wrong. Google's market cap today is over $2 trillion. In 2005, Blockbuster was offered the chance to buy Netflix for $50 million. That actually laughed at the price.
Whoops, Netflix is now worth over $250 billion while Blockbuster has but one remaining store at left in Bend, Oregon that sells merch. There are so many more of these stories. I could literally go on for days but the point is simple. It's not enough to live during a revolution.
You have to recognize it and take action before it becomes obvious to everyone. With AI, that window is getting more narrow by the day. It is already terraforming the technological and professional landscape. By 2030, AI is projected to eliminate or transform up to 800 million jobs worldwide.
That's nearly one in five workers on planet Earth. In 2023 alone, the number of corporate earnings calls mentioning AI surged over 360% compared to the prior year. AI-related IPOs in 2023 raised over $11 billion, the highest total for any sector that year. The average AI-related ETF gained over 50% in 2023, more than quadruple the S&P 500's 10-year average annual return.
Over the last couple of years, if you weren't invested in AI, odds are you missed the boat. Goldman Sachs estimates AI could drive $7 trillion in global GDP growth over the next decade. And yet, most households own zero AI-linked assets. That is insanity.
As inflation robs, they're purchasing power. They are sitting on the sidelines. Here's the harsh truth. No one wants to face.
Opportunities like this have an expiration date. Once adoption hits a certain point, the upside collapses and whoever owns the right basket of stocks wins and everybody else loses. History shows this time and time again. When the personal computer revolution took off in the 1980s, early investors and Microsoft 50,000% returns over two decades.
But if you bought after 2000, you were looking at single-digit annual growth. The rocket fuel was spent. During the Internet boom, Amazon went from $0.7 adjusted IPO price to over $3 within two years, a 4,000% gain, and much, much more if you held longer. But by the time the average investor felt safe to buy in, those gains were history.
Latecomers both missed the upside and take the inflationary hit of holding their money in cash or best case underperforming assets. Now, layer AI on top of that same pattern and you get moving at warp speed. AI's adoption curve is so steep that the window for massive early-stage gains is being measured in months, not decades. Companies are hitting valuations in one year that took Internet giants a decade to reach.
The AI chip market is projected to more than 5x from 2022 to 2032. More than half of Fortune 500 companies are already integrating generative AI into their core operations. In 2024, Google, Meta, Amazon, and Microsoft collectively invested over $400 billion in AI infrastructure surpassing the US government spending on social services. And for 2025, Big Tech is planning to spend over $300 billion more on AI infrastructure.
Things are moving so fast, you need to do your research now. If you don't formulate a national plan quickly, which is what I'm going to help you with today, the exponential growth phase is going to be over and like so many before you, you're going to be buying at the top, fighting for small gains, while early adopters reap the benefits of moving fast. And while I'll talk about this more later, the goal is not to try and be the smartest or most informed investor on the planet. Most people simply do not have time for that.
Find a broad way into the sector and avoid getting seduced by headlines. And in the market is better than trying to time the market. This is the world we live in. If we kill the Fed, we harden money, balance the budget, and only use debt to spur outside growth, then you can go back to just saving your money.
But until then, you need to remember that the middle class is being torn in half. Half are being yanked down into the poor and working class, and half are being propelled up into the upper class. The thing that determines which way you go? Assets.
While you think about that, remember what I said earlier. The internet boom created a million millionaires in five years. AI is moving 10 times faster. If you do the research and decide it's not for you fair enough, but don't fail to at least evaluate the opportunity and burn this idea into your soul.
In an inflationary environment like the one we're all living in, owning assets is not an option. Find what's right for you and make your move. But doing nothing is the same as guaranteeing that you're going to get eaten alive by inflation. It really is that big of a problem, no matter what anyone has told you.
And on top of that, no matter how well any of us think we understand what's coming, the only thing I can guarantee you is that we are going to be surprised. So welcome to part three. AI is guaranteed to surprise us all. In the past year alone, AI has resurrected the direwolf, which hadn't walked the earth for more than 10,000 years, mapped 2.2 million new crystalline materials for use in next gen semiconductors and batteries, discovered a powerful new antibiotic effective against a known superbug designed enzymes that break down plastic in days instead of centuries, synthesized 41 entirely new chemical compounds using robotics and machine learning, mind-extinct animal DNA to find new peptides capable of killing drug-resistant bacteria detected cancers years earlier than any of the best doctors, and yet, despite breakthroughs like these, some of the brightest minds remain publicly unconvinced, arguing that AI is overhyped, constrained, or won't live up to the promise.
History is full of experts just like this who thought they knew the future and were spectacularly wrong. In the last few years, tech founder Ken Olson famously said, there's no reason anyone would want a computer in their home. In 1903, a famous banker said, the horse is here to stay, but the automobile is a novelty of fad. Legendary film producer, Daryl Zanuck said, television won't last because people will soon get tired of staring at a plywood box every night.
Steve Ballmer, the former CEO of Microsoft, said, there's no chance that the iPhone is going to get any significant market share. Well, it's easy, they were all wrong. Or, and this one's my favorite, the 1995 quote from the brilliant, literally brilliant technologist Robert Metcalfe. The internet will soon go spectacularly supernova and in 1996, catastrophically collapsed.
He was so wrong that he later literally printed out a version of that column and ate it to acknowledge just how wrong he'd been. My point is, you're going to hear a lot of people tell you that AI is over-height, that it's going to hit a wall, that it's not going to be as disruptive as people are saying. And that runs the risk of lowering you into a sense that there's going to be plenty of time to react or that there's not going to be anything to react to. And that's exactly how you end up missing this opportunity.
Now no one can see the future clearly, certainly not myself, but the reality is that AI is already changing every aspect of our lives and the depth and rate of change is accelerating. The only promise I can make is that AI is going to surprise us. It's going to do things that we can't even yet imagine. So if the stuff it's already doing is phenomenal, imagine what the future holds.
As both a video game developer and investor, I am trying to see around the corner to figure out what's actually coming and I know my predictions are not going to be literally right, but as long as you're tethered to the laws of physics, you really can start to get a pretty good idea of what's possible, at least by way of general direction. So here's a snapshot of what I think is coming. Talking teddy bears that help teach kids and alert parents of danger. Okay, that one's already real.
Self-driving personal helicopter. No, wait, that's also already real. How about drone delivered food, drone warfare, movies that are prompted and not shot, robot personal assistance and so much more. Actually, sorry, those are all already real.
None of them are perfect. AI movies are pretty awkward and so much of it isn't commercially available yet, but they are coming and I assure you there will be a slew of things that we can't even dream up yet. Futures never quite what we expect. It was predictable.
Everyone would get rich, but that's not how the game works, but that doesn't mean you shouldn't try to build a mental map because you absolutely should. And a big part of that mental map should be that AI is guaranteed to take a surprise. Famous Go player, Key G, once said that playing against AI was like playing against an alien intelligence. That's the right framing for AI.
It's like an alien intelligence. The only question is how smart is this alien going to get? And because it's impossible to know the answer to that, as you approach investing in AI, do so with a massive amount of humility. No one has a crystal ball.
There are no guarantees. You're trying to predict an alien intelligence and it is possible that the naysayers end up being right, but nonetheless building a rough mental map of where you think things are going to go will be very useful for thinking how to best position yourself in AI as a sector. Here's a quick rundown of the different avenues of opportunity for AI investments that are already available. Think of this as your quick start guide to the different AI sectors that you could invest in.
One, compute an infrastructure. Data centers power. Why does it matter? AI models run on GPUs, memory, cooling and megawatts.
This is the steel and track of the AI railroad. Things to consider in this part are our chip makers selling out, our new data centers and power projects breaking ground is cooling tech actually advancing or are we stalling out? Two, foundational models and supply chains. Why does this matter?
LLMs, vision and multimodal models power basically everything right now. Winners dominate via cost and ecosystems. The things you want to consider when looking at this part, are they getting faster, cheaper, safer, who controls distribution and integration and how's that going to play out in the winners and losers? What are the integrated AI?
Why does this matter? Because AI is going to drive revenue and workflows like healthcare diagnostics, legal contracts or manufacturing quality. People are going to be putting AI basically everywhere they can. Ultimately, AI is going to drive outcomes.
Things to consider when you're looking at this, can you point to clear ROI? Dollar saved, errors reduced, more sales or is this one just hype? Every company is going to be claiming that they're using AI in some novel way but very few of them actually are. Four, agents and workflow orchestration.
Why does this matter? Because right now we engage with AI as something that we have a backboard dialogue with but in the future, we're going to ask AI to do something and it's just going to go off and do it. It is going to be an absolutely transformational moment. Things to consider, do agents actually complete work without human help or is this something that right now is more hype than reality?
Right now, this one I would say really is more hype than real but in the future, I imagine as we begin laying all the infrastructure for digital interactions that AI is going to be able to do things that right now just isn't possible of doing and that is going to pick some massive winners and losers in the space. Five, safety, security and governance. Why this matters? Because enterprises need audits, red teaming and compliance to deploy AI safely as well as going up against black hat hackers that are going to be using AI.
Right now is a bit of a free pass but in the future, AI is going to be weaponized aggressively and it isn't just going to be calling up your grandmother and using an AI that sounds like you. It is going to be things behind the scenes are using AI agents to try to hack systems. It is going to get very sophisticated, very fast and they're going to be very large companies to get very good at doing this thing. Things to consider as you look at this, our new laws creating must have tools that people are forced to implement and is there growing demand for safety checks using AI and what companies are positioning themselves well to be at the forefront of that?
Analytics data, labeling data, creating synthetic data and then leveraging that to train. Why does this matter? Because models thrive on data. The better the data, the more copious the data, the better the AI gets at navigating the real world.
As we integrate AI into more things, it's going to need an inhuman amount of data and the companies that identify how to train AI with synthetic data are going to be the ones that push forward. Now things to consider who owns the most valuable data sets. This is exactly the battle that Elon Musk is trying to win by buying up Twitter and having all of that data by generating so much data from Tesla cars as he's hoping to build an insanely valuable data set and deploy that against robotics in the future. Seven, embodied AI and robotics.
Now why does this matter? Because this is going to change everything. As AI allows us to drive energy costs down, labor becomes the next biggest cost that it can disrupt. When you have warehouses, farms, elder care, all of it being staffed by robots, it is going to be an incredibly different world.
And there are many people right now looking at robotics saying that that is going to be the biggest product line that has ever been built. Some people are estimating that there will be more robots by orders of magnitude than there are humans. Things to consider are pilot robotics being turned into actual scalable deployments and at what rate can they be manufactured? Who's doing it well?
What robots put humans in danger? Which ones can be integrated safely? And what legislation is going to be passed to slow replacing humans with robots? That is almost certainly coming.
Eight, media, design and synthetic content. Why it matters? Because the way that we engage with entertainment is going to change radically. AI slash cost for ads, video storytelling, 3D assets is going to change video games, commercials, film TV, things to consider.
What are the legal protections in place? The future of AI generated content has not been fully litigated yet. There is still a lot of uncertainty. So the odds that people start out with a skeuomorphic version of what entertainment is going to become, mimicking what we have now, but just made with AI, is probably eventually going to give away to a totally new form of entertainment that right now we can't even imagine.
So be careful not to over-esteem your ability to predict the future. 9, Edge AI, autos, Internet of Things, on device. Now why does this matter? Because AI is going to be integrated into everything.
The one that makes everybody a little squeamish, but I think this is absolutely brilliant. Imagine a toilet that can read what's going on inside your body based on the samples that you give it. It will be able to detect disease early. It will be able to give you feedback about whether they're sugar in your urine, whether you're in ketosis.
There are going to be all kinds of things that you will be able to detect from the things that you leave in the toilet. It is going to change things in a way that we can't even begin to understand everything you interact with is going to be intelligent. Things to consider are privacy, what industry are people really going to care about making something intelligent, and where is it that people will actually be willing to pay for that level of intelligence. There are certainly going to be winners and losers, things that are hype, and things that are actually advantageous.
10, Defense and National Security. Why this one matters? AI is going to be weaponized. The great battle that's happening right now behind the scenes is the AI war between the US and China.
Whether it is cyber warfare, cyber defense, AI drones, threat analytics, all of this stuff is going to matter and the stakes are going to be incredibly high. The companies that are most effective at winning government contracts for protecting their nation are going to see the kind of returns that we have typically seen in the military industrial complex. 11, Sustainability and Climate AI. Needless to say, this is one of the most hot button issues of our time and people are going to be using AI to figure out exactly what's happening to build enough data that we can build predictive models.
Climate systems aren't unknowable, they're just incredibly complicated. Exactly the kind of thing that AI could be used to improve. Things to consider, how complicated is this? How long into the future are we going to be before we start seeing results?
What are the companies that are going to be able to bridge the gap between this is a great idea all the way to actual profitable monetization? And that is a huge chasm that a lot of companies are going to fail to cross. Now while I have done my best to be exhaustive here, assume I have missed something and conduct your own research and know that for sure this is going to change over time and we're all going to need to stay engaged with the space to avoid missing something important. Also don't try to master every aspect of the AI industry.
My real advice is to remain diversified across the entire field of AI as a future is guaranteed to be shocking. If you really want to start going deep and gaining a level of mastery in the space, follow the following playbook in the early days. Pick two or three segments that interest you the most. For each zero in on two or three companies doing the most interesting work and that have strong fundamentals that indicate they're going to be able to cross that chasm into profitability.
If they're already turning a profit, that is a very strong signal. Start identifying core metrics that drive their business. Ironically, you can work with AI to do that. We're talking about public companies here, so they're going to be required to report a ton of data.
Start using AI to dig through all of that data to find out what matters and why. Build a map of the risk factors that could slow or kill growth in the particular segment of AI you've decided to focus on and only start picking individual stocks when you feel you have an unfair informational advantage over the vast majority of other investors. And remember that you're going up against professionals who often use AI to trade and care about how many milliseconds it takes to transact. So don't get cocky.
And speaking of not getting cocky, hold tight. We're going to take a quick break. All right. Let's dive right back in.
Welcome to part four lessons from the dotcom boom and bust between March 2000 and October 2002. The NASDAQ lost 78% of its value, wiping out more than $5 trillion in market capitalization. That's calm, raised $82 million in its IPO in February of 2000 and was bankrupt just 268 days later. Web Van burned through $1.2 billion in funding before collapsing in under just three years.
Amazon, yes. Amazon lost over 90% of its value between 99 and 2001, trading at just $6 a share. Now it would go on to become one of the most valuable companies in the world, but not before it would wash out all of the people who panicked or bought in on leverage. There are ways to do a boom right and there are ways to do it very, very wrong.
Believe me, of the thousands of internet companies founded in the 90s, less than 50 still exist today. Everyone thinks they're smart, but most active traders get wiped out. The dotcom boom may have been to millionaires overnight, but it also erased fortunes just as fast. AI is a new gold rush.
But if you think every player in this game is going to win, you're ignoring history, it's tempting to look back now and think Amazon was obviously going to make it. There are no guarantees in 2001 analysts were predicting Amazon's bankruptcy and it certainly could have happened. You don't have to be stupid to get something spectacularly wrong. That's why it's humility, especially in the face of so much uncertainty that civilization has tried to teach every generation of kids from time immemorial.
It's only in hindsight that Google, Amazon, Apple, Netflix and Meta are obvious. Google was a small search engine in a crowded field. Apple almost went out of business. Microsoft didn't even really believe in the internet at first.
And for years, Meta wasn't even sure what its business model was going to be. The survivors had two things in common. They solved real problems and burned that into your soul. When I'm teaching entrepreneurs, the one point I beat home endlessly is that companies that grow are the ones that solve a burning problem in a really compelling way.
The best companies are going to be the ones that solve problems painful enough that customers will eagerly pay for the solution. The companies that survived were also the ones that created a self-sustaining economic engine. They just made more than they spent and they managed capital ruthlessly, cutting burn rates, focusing on core offerings and grinding through what is often years of uncertainty. That same pattern is almost certainly going to play out again.
Right now, we're in the AI equivalent of 1999. The market is super frothy. Valuations are almost certainly inflated. And money is pouring into every conceivable idea, even the bad ones.
Some of the ideas are going to be foundational to our future. Others are going to simply vanish and take investors' money with them. The keys to remember that the winners aren't obvious. They were.
There'd be no money to be made. Some look at it as an overvalued car company. Others look at it as a data company that's going to make its real money off of robotics. Only one of them is right.
The other will miss the opportunity or just outright lose money. Everyone thinks they're right, but they're not. And that's the most important lesson from the dot-com bubble. Be wary of trying to pick individual winners.
If you invest in this space and I'm talking about with your money or your time or even your career, you have to be prepared for volatility and massive uncertainty. While it is absolutely true that the biggest fortunes are made by making a single concentrated bet that everyone thinks is crazy and then being right, the flip side is also true. Mainly, the biggest fortunes are lost by making one concentrated bet that everyone else thinks is crazy and then being wrong. Remember, in every gold rush, more money is made selling picks and shovels than chasing gold directly.
Because you reduce your risk. The goal is to bet in a way where you win no matter who wins. After the dot-com crash, analysts discovered that diversified portfolios recovered significantly faster than the people who had placed concentrated bets. A balanced fund returned to its pre-crash high in under three years, while tech heavy indices took over a decade.
A sobering study of 30 companies from 95 to 01 shows financial fundamentals mattered the most. Total sales, net income, and manageable debt were positively linked to stability, while sheer asset size was not. So be very wary of hype with no sales and remember that growth demands financial discipline, not excitement. In short, remember these lessons from the dot-com media.
Number one, play the long game. This isn't about fast money. A balanced portfolio will recover even if the road is rocky. Two, don't trade on leverage.
Excitement will make it seem like you can't lose, but you most certainly can. Three, distinguish hype from a business that solves a real pressing problem. Growth without a path to profit is a path to nowhere. Four, diversify.
You'll make less money for sure, but you'll also take on way less risk. Alright, with these lessons in mind, welcome to part five, how to move forward and take advantage of this incredibly unique opportunity. If you had put just $1,000 into Amazon's IPO in 1997 and never sold, today you'd be sitting on over $2 million, that's the power of getting an early picking right and holding on while everyone else bales. If that doesn't have you locked in, how about the fact that missing just the 10 best trading days and the S&P 500 over the last 20 years would cut your total return by more than 50%?
10 days? Piece? It counts for half the gains over 20 years? Or one more?
In the first six months of 2023, just seven AI-link stocks were responsible for 100% of the S&P 500's total gains. Without AI, the stock market wouldn't have even been flat, it would have been negative. AI is the game, you ignore it at your peril, because you live in a world with inflation, your purchasing power is being stolen from you, and you absolutely must find a way to fight back. That's what this is all about.
But what now, right? What should you actually do? We've covered this AL of the AI opportunity. We've looked at the risks of missing it.
We've mapped the sectors most likely to win and examined the brutal lessons of the dot comp boom. Now I want to walk you through how to take intelligent action. The first thing to understand is this. There's no single correct way to win.
In every technological revolution, fortunes have been made by people who built companies, by people who worked for equity at the right companies, and by people who invested early in the companies that went on to dominate. Investing isn't the only path forward. If you're a builder, focus on solving a massive burning problem that people are willing to pay to have solved. If you've got an AI skill set, you're a business.
People are throwing around billion dollar salaries. This is wild. You've ever seen anything like this. But if you're neither an entrepreneur nor one of the most skilled AI engineers on earth, you still can't afford to sit on the sidelines.
Your focus is going to have to be investing. And if you're investing, here's the playbook. It's very simple. One, start now.
Even small amounts count. Waiting for the perfect entry point is how you miss decades of compounding. Even $50 to $100 a month into the right assets adds up over time. Fractional shares mean you don't need thousands to start.
You can buy a piece of NVIDIA or Microsoft today to build a diversified AI portfolio. Open buckets, not single stocks, infrastructure, ships, cloud, data centers, companies, group up like NVIDIA, AMD, TSMC, et cetera. You can find them in clusters. Core AI models, the company's building foundational AI models like XAI, OpenAI, Google DeepMind and Anthropic, and all of the other players that may come into the space.
Integrated application layer, EG companies that are integrating AI into high value industries like healthcare, manufacturing, and finance. Again, not one, the whole space. Picks and shovels, cybersecurity as a whole. Governance and developer tools that every AI company are going to need.
You could also easily be broad and spread your money across multiple buckets. That way, even if an entire bucket flops, the other buckets will still carry you forward. Three, avoid leverage so you can play the long game. Margin and options make people feel like a genius on the way up because you're using somebody else's money.
But it will wipe you out. If there's even a temporary dip, you have to be so careful with leverage, just like you would never take out a loan to gamble. At a casino, don't ever take out a loan to gamble in the stock market. Now that is not going to become an advice.
A lot of people are going to tell you to do it on margin. But baby, oh baby, I'm telling you, that is how you get yourself in trouble. Four, use dollar cost averaging. Invest a fixed amount on a regular schedule, weekly, biweekly, monthly, whatever, regardless of the price.
This removes the need to time the market and keeps you buying even during dips, which is when the best long term gains are made. Five, reinvest your gains. Dividends and profits should be reinvested into your positions or into other AI opportunities. By all means, balance it out.
So if you've got one that's just absolutely crushing it, you want to spread those wins to other areas just in case. Do it. But by doing that, you accelerate the compounding, the single biggest driver of long term wealth. Six, keep a cash buffer.
Never invest money. You can't afford to leave alone for five to ten years. Having three to six months worth of expenses in cash keeps you from panic selling when the market inevitably dips. Seven, commit to staying in.
Booms come with volatility. AI stocks are bound to have massive drawdowns as we move into the future. The companies that ultimately win will recover and surpass their previous highs. But that only helps you if you didn't panic sell.
Eight, remember the number one rule of investing. Buy low, sell high. Now this has become a joke, but the truth is most people buy high and sell low. They get in on hype and then they sell on fear.
Dollar cost average in. Hold for the next decade plus. No matter what's happening. That's the play.
Time in the market versus trying to time the market. If you follow this, you're not going to be trying to predict the next video or Amazon. You won't expect or need the winners to be obvious. You're going to own a broad slice of the entire AI economy and let the leaders emerge naturally in your portfolio.
Because in the end, in an inflationary world, owning assets, even in an uncertain market, isn't optional. This is your moment. Pick your lane. Get in the game and stay there long enough to let the compounding work its magic.
Moments like this really do not come around often and when they do, they don't last. The last time we saw a shift this big, a million people became millionaires. Not because they were the smartest, but instead because they were in the game when the market boomed and they didn't have the panic cell when the market got rocky, they rode the wave all the way to the shore of Wealthy Island. And now it's your turn.
AI is the new wave. It's bigger and moving faster than anything before it. You can watch it pass you by and spend the next 20 years wishing you take an action or you can take a position now, whack your board and get in the water. You probably swallow a couple of mouthfuls of seawater along the way, but if you avoid debt and let time and compounding work their magic, you'll likely come out ahead.
The future is going to belong to the people who move wisely today because by the time it's obvious, it's already too late. Alright guys, if you haven't already, be sure to leave a five-star review and until next time, my friends, be legendary. Take care. Peace.
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