[Noah Kagan] How I Made My First Million Dollars

June 2011, I was 29 years old when I made my first $1,000,000. You can see it on screen here. The funny thing is it wasn't an overnight thing like most people talk about, and it's actually boring I realize. But the best part is that anyone just like you can become a millionaire, and in this video, I'm gonna show you my story so that you can create a game plan for yourself. Let's dive in. And before we get into the video, I have a small ask for you. I am never going to sell you a course to teach you how to become a millionaire, the only ask I have for you is that subscribe and hit that like button if you enjoy this video. After graduating college in 2004 from UC Berkeley, I got an exciting job at Intel.

It wasn't really my dream job, but it was the best thing and I wanted to be in technology plus bonus points for living at my mom's house. I made 50 $5,000 a year, and I had a job doing supply chain optimization and I hated it. It was a big corporate company. I worked in a cubicle, but there was a silver lining. I had a lot of free time to do a bunch of side hustles. Think of it this way, shitty jobs are great investors. So I did entrepreneur27.org, I did a lot of meetups, I ran ninjacar.com, a discount site, as well as I was blogging on okdoor.com. So if you hate your employer or you don't really like your job right now, that's a great opportunity to do mornings, nights, and weekends starting some side hustles.

I was about to quit my job at Intel where I totally randomly sent in my resume to facebook.com in 2005, and I somehow ended up getting the job. The main reason I was able to get the job is because I did so many things on the side that they were like, wow, this guy's a hustler and he's doing work that was relevant for the college market. I got paid a whopping $65,000 in 2,005, and there's some lessons learned from getting that job there. Number 1, if you don't know what you wanna do in your own life, go work at companies you love. Look at your browser history. Hopefully, it's not foreign. Look on your phone, see what apps you're using, and just go work for those companies. That was for it for me.

I was using Facebook all the time and if it wasn't that, I was gonna go start my own thing. The other thing about wealth that I think is a little bit confusing is that if I would have just been a good employee at Facebook, which I wasn't, I wasn't able to scale with them, I'd be worth over 9 figures today. Are they hiring? Can we look up their job applications? So you can get rich joining a rocket ship. You don't always have to be an entrepreneur to be really wealthy. And lastly, being around impressive people like I was at Facebook was one of the highest growth periods for my professional career. So if you get a chance to be around extremely smart people in any type of industry, go take it. Honestly, that really paid off later in my career because I had this knowledge plus some network, from being a part of that organization and a brand that even today people I'm still talking about I worked at Facebook. Like, can he can that guy just shut up? Okay.

It was 20 years ago, old man. So after I got fired by Facebook, I was living on my buddy's Johnny's couch in Santa Clara. So this is around 2006 and I said, well, I got nothing to do and I wanted to meet and talk to other people about social networks and no one else was doing it at the time. And so I never started a conference but I started communitynext.com and I just created the event I wanted to go to. Hawaiian food during lunch, drinks all day, free Red Bulls, and open happy hours, which most conferences were the opposite of that. So the first thing I did was I made a budget to figure out, alright, how much do I need to break even? And that was really my goal and I focused on that. And I didn't have a network. I literally cold emailed Guy Kawasaki, Max Levchin at PayPal, James Hong, suicide girls, and as it turned out I did this for the next year, year and a half and each conference ended up making $50,000 profit and I did it four times for about $200,000 in profit.

Events? You can it's something to think about for yourself. You can't actually make good money throwing events. So a few key lessons about making money from this part of my life. 1, you can actually make good money throwing events. 2, solve your own problems. This is something I talk about in a lot of my videos. I wanted to go to this conference and if even if it was just me and the audience and Guy Kawasaki talking, I would have loved it. As well, I would have done these things for free just for the network.

It would have been so valuable, meaning people like Eric from chest.com who I gotta hang out with recently. For the viewer right now, you, how can you start planning these active seats to either build your network or do events or businesses like this that you would enjoy for yourself? Plant the seed today. So while I'm doing these events, I'm also doing a little bit of consulting, not really making a ton of money besides the conferences. I ended up getting a job at mint.com in 2006. So how I actually got the job at mint.com is a little bit crazy, my friend David McClure brought me into Mint and said, hey, check out this product, I saw it and I fell in love with it. I asked the CEO Aaron Patzer if he hire me, he said no. Okay. So I said, well, let me come back to you with the marketing plan because I was hiring a director of marketing, which I've never done in my career before.

Said I'll come back to you with a plan and if you like it you can hire me as a contractor to execute the plan. There's no risk for you. I'll work on the plan my own. So I spent a whole week working on this plan. I came back to them and, you know, kind of the rest is history. I got a job there, I ended up getting paid a $100,000 a year, which I thought was crazy at the time, working for Mint. And that marketing plan that actually helped me get the job is what we executed and also helped Mint to get about a 1000000 plus users, I think within the 1st year. Leave a comment below if you want me to actually make a video about that marketing plan which is still relevant today.

One other funny thing about the Mint experience, I did not get my equity there. I did not get my equity if I stayed at facebook.com, but I did get a referral bonus, which was funny. They were offering $5,000 if you help them hire anyone. So I ended up hiring 2 people Jason and my buddy Ash, and I made $10,000. The reality is is that most recruiters charge $30,000 per employee. That's how it goes. So a few key lessons that I learned from this experience in growing my wealth and in my career is, 1, I knew I wanted to start my own thing. I liked Aaron.

I loved Mint.com. I loved that we were able to help people. People but my plan ever since I was in high school was to be my own boss and this was not that. The next thing that was interesting while I was at Mint.com is I saw a tidal wave of an industry coming which was the Facebook apps marketplace. So I don't know if you guys remember this with Farmville and all those kind of annoying things, but I saw it launch really early on and I said, hey, I know Facebook really well and it's gonna be gigantic. Maybe I could be a part of this tidal wave. So if you were starting businesses, try to think about what things are becoming tidal waves. And even if you get your little surfboard in it, there's a good chance you're gonna make a lot of money like I did from that.

So during the mornings and lunches and nights and weekends, I started building Facebook apps. I built, like, hockey fan and soccer fan and basketball fan. And at one point I was the number one Facebook app developer online. And that's actually how I built a Facebook game business and got funding from Naval Ravikant, who's pretty famous today. There's another story about how Kabam almost bought me for $100,000 which would have been worth about $10,000,000 today, but we'll save that for another video. So while I was building these Facebook games, my goal was to get them to make $35100 a month so I could actually quit my job at Mint. It ended up happening, I left mint.com, and I went on to build a Facebook game business. Now, what's interesting about this is we built a lot of Facebook games, my 1st year salary was $40,000 and this is coming down from the $100,000 I was making at mint.

And then my 2nd year salary was $75,000 So, again, if you do the math, over 2 years I made almost less than if I just stayed at mint for 1 year. But for me, the the goal was to be my own boss and travel the world which, you know, you gotta decide for yourself what's important for you. So what was fascinating about this time was that I didn't play games, I didn't like Facebook because Mark fired me, and I didn't really like a lot of customers that were playing our games. So go try a lot of things out and be clear about, hey, I don't really like this to go find things that you actually do enjoy doing. Few other breakthroughs I had during this experience is that I love selling pickaxes and shovels during gold rushes. So during the games business, we were doing all the games but we noticed that some of the people that were doing really well were the payment providers for some of these games. So like OfferPal, Tapjoy, and so we kind of realized, hey, what if if we focused on the payments level of these games without actually making games ourselves which honestly we're not that good at, and then that next business exploded which I'll talk about in a second. Another giant takeaway from this is put put your career around cool categories.

So I was at Facebook, so I got to meet a lot of interesting people in social networking. Then I did mint.com with finance, And I got to meet a lot of interesting people around that. And then I did games. And so I got to meet a lot of really interesting people who I'm still friends with today, being in these new categories. So if you can go find industries or categories that are really hot and just be a part of it, it'll be really great for your career and honestly it would be pretty interesting. If you're liking this video so far and want my net worth template, yes, yes, how I calculate how much I'm worth today which is in the 8 figures, make sure you subscribe and hit that notification bell so you can get it for free on the community tab of my channel. You go to the channel page and you click community, we'll be posting it there for subscribers. We turned that Facebook games business into Gambit, which is payments for Facebook games.

That business exploded. Within 1 year, we did around $30,000,000 of top line revenue, which is exceptional. That was a great year. Money. Money. Gonna make some money. But the reality is is whenever you hear these YouTubers or people talk about the revenue, at the end of the day, what's actually most important is how much they're really taking home. My 3rd year doing again my own business, I only made $40,000.

So a lot of this was just like keep going after it and keep going after it, and I'll talk about how I kept my cost of living low a little bit towards the end. But the big breakthrough was the 2nd year of running Gambit. We finally paid ourselves a lot of money and I made around $360,000 that year because the payments company, finally exploded and we made a lot of money. So one of the key things about this stuff is that 1, be a part of Tidalgo as I've already talked about. And secondly, is that I didn't care about games nor did I care about the payments for games. Plus a lot of the partners that we were doing payments for hated us. This is when they hate us they were just like, oh, you're just a payments guy. I don't care about you.

So I realized I wanted to work in my next business stuff. Very important problems where I really liked our partners and that's where App Sumo was born. How did Gambit actually end and why did I keep making 360,000 or a lot more money over the years? Well, one day Facebook banned us and our largest competitor, OfferPal, sued us on the same day. And it was one of my favorite days of the company. That's a story for another video, but the point being is that at that time, I didn't wanna be doing games or payments for games and I didn't have a great relationship with my partners, so I actually gave them the company. I walked away and just started consulting for speedday.com. So So I never think people should just quit their jobs and go start businesses. That's not my style.

So I got a consulting gig at speedday.com. Thank you, Simon. They paid me 5 k a month to do product consulting, and they love what I did. I think I did a great job of it, but that gave me the flexibility to actually go and try a bunch of business ideas out. And that is how AppSumo dotcom, which is this is one of our early shirts was born. I got started with it, doing a software deal for imjr.com. I think a lot of you guys are familiar with it's photo hosting software. So I did a deal with them, it actually sold a lot on Reddit and I was like hey, maybe software deals is gonna be a big business.

My first year of doing AppSumo dotcom, I made $0. The consulting gig paid me $60,000 so I was able to have a good salary and not have to really worry about making any more money. So some takeaways for yourself with that experience is, like, what's a flexible job that you can get or day job that will give you more time to start your side hustles. Maybe it's like speed date dot com they're not around maybe it's driving for Uber whatever that is figure it out whatever it is so you can have the ability to start a side hustle. Next up, I've actually paid myself the 1st year of starting AppSumo but today I pay myself over $1,000,000 a year from it. So that's 11 years later. It does take time to actually start making significant money as well. Go find some work that you really like working on.

I was excited to promote software. I love deals myself and I love marketing. This is the beauty of all the things I get to do in one every single day. I love you, AppSumo. And lastly, at this time as I started AppSumo, I moved to Austin, Texas. I wanted lower cost of living, less taxes, and better looking people. So AppSumo year 2, I did pay myself $70,000. That plus investing, which I'm gonna talk about in a little bit, is what put me over to the $1,000,000 net worth.

I believe after so long, I was able to do it. I hope you guys are able to do it sooner than I am. Just do it. Don't let your dreams be dreams. So the moment I hit $1,000,000, I don't even really remember, which is kind of surprising, and I thought fascinating. I didn't know if I was 25 or 35, but I did know that it was a long ass journey. And I think one of the best parts about that journey is not actually making the $1,000,000. It was that leading me to a place where for AppSumo, I found work and people and things I can do for the rest of my life.

So here's some game plans for you about trying to get to your own $1,000,000 and beyond. First off, boring. Did you notice anything in the story that was like a gigantic crazy experience? No. Like, yeah. Okay. They made a little bit on the Facebook game stuff. The conferences did well. But it was a pretty slow and steady pace to actually get there.

It was that with a lot of savings over 10 years. So think about your compounding efforts of what you can do that'll keep building over time versus some of the other people like, oh, I hope I'm rich. I hope I'm rich. It doesn't happen that way for most people that actually end up becoming millionaires, billionaires, and beyond. Number 2, saving. So we didn't talk a lot about in this video. I talked more about, the income that I was generating. But what's just as important is how do you keep that income and actually have that income grow for you? So what I'd recommend for yourself is to start saving as much as you can today.

So I was saving as much as I can. I call it the 50 50 investment strategy back then, which 50% was in cash and 50% was in vanguards. If you look at the stats about every 7 years, your money will double if it's in the stock market. So a lot of times I was like just take the money I don't wanna have to worry about it. Put in something generally safe like index funds and leave it alone. What I would actually recommend today and this is what I do with my own portfolio is I have about 10% in cash, 40% equities which is the stock market. I generally don't try to pick stocks even though it's kind of funds. I do mostly Vanguard index funds.

I have 30% in real estate like houses and properties I own, and about 20 to 25% depending on the percentages in risky like crypto, investing in a bar, investing in a church, but things that could go really well. A lot of times as I've gotten older, I'm really trying to maximize my time in my active stuff which is AppSumo. And this passive stuff like all the things I'm talking about here, I don't really wanna have to worry about. I wanna set it on autopilot as much possible. I can talk about that in another video. Number 3, keep your cost of living low. Cool. So I lived on my mom's house for 2 years.

I lived in my aunt's basement for a year. I lived on couches for a year, and I could have afforded rent, and maybe I'm just a real big cheap ass. But that's something I've even struggled with this today is that I was just living so frugally so I could save and just try to invest that money and not have to really have to have a job. So for yourself, the more that you can reduce your flashiness, reduce your actual living inflation, the easier it is for you to actually get a $1,000,000 and then be able to choose how you wanna spend your time. Surprisingly, here's another surprising one for your game plan. You can actually become a millionaire in a day job. I do recommend starting a company because it also gives you the dial so if you wanna make more money you have more control over it. But if I wasn't fired at Facebook, if I didn't quit at Mint, I could have actually ended up making many 1,000,000 of dollars having a job.

And I think if you guys saw the income levels I was doing, if you just have your day job that pays just 6 figures eventually and you keep your cost of living low, after maybe around 10 years you'll be a millionaire and beyond. I think that thing I wanna encourage you though is find work you actually enjoy doing. Maybe it's at sumodot com. We're hiring. Whatever else the business it is out there. If you're starting your own company, find something people want. I can't tell you. I talk about the $1,000,000 weekend, which is how do you get 3 customers, make a $100 within 48 hours.

I can't tell you how many businesses I've started that I begged people, please buy this product, please use it. They're like no no no versus AppSumo I was like hey does anyone want good deals on software and instantly people wanted it. So it's the same amount of effort to work on a business so just find something that people are actually excited about. And lastly, this is one that I I gotta encourage you on. I call it the 10 year rule, but really it's about keep going. Persistence beats resistance. So don't be a degenerate crypto gambler, but keep working on things. Like, if you wanna be your own boss, if you wanna be a millionaire, if you wanna be able to work remote, if you wanna be able to ski most year and not even have to worry about making money, all you have to do is keep persisting.

Don't give up. The most successful people that are out there have also failed the most, like Elon Musk. Everyone talks about him today. Does anyone talk about how many rocket ships have actually exploded? People talk about how often and how close Tesla actually got to failing. So if you wanna be successful in any part of your life, just in relationships and money or whatever that is, keep going. If you love this video, you're gonna love these other 2 videos about how I make over $1,000,000 a year and how I spend over $1,000,000 a year in Austin, Texas. I'll see you out there and I love you. Pew Pew.