Many people dream of becoming rich, but they often equate wealth with money and status. In reality, wealth is about having assets that generate income while you sleep. It is possible to create wealth ethically, but it requires a mindset shift and a willingness to pursue your passions and give society what it wants, but doesn't yet know how to get.
Ignore the Status-Seekers and Focus on Building Wealth
To create wealth, it is important to ignore those who are focused on gaining status through social hierarchies and instead focus on building wealth through equity ownership in a business. Renting out your time through employment will not lead to financial freedom. Instead, it is necessary to own a piece of a business and give society what it wants, on a large scale.
Choose an Industry and Long-Term Partners
The internet has expanded the range of potential careers, and many people have not yet realized this. To build wealth, choose an industry where you can play long-term games with like-minded individuals. It is also important to select business partners who are intelligent, energetic, and, above all, honest. Avoid partnering with cynics and pessimists, as their negative beliefs can become self-fulfilling.
Acquire Specific Knowledge and Build Your Skillset
To be successful in business, it is necessary to acquire specific knowledge that cannot be learned through formal education or training. This type of knowledge often comes from pursuing your genuine passions and curiosities, rather than chasing whatever is popular at the moment. It may be technical or creative in nature, and it cannot be outsourced or automated. To acquire this knowledge, seek out apprenticeships rather than relying on traditional schools.
Embrace Accountability and Seek Out Leverage
To build wealth, it is important to take risks under your own name and embrace accountability. This can lead to greater responsibility, equity, and leverage in your business endeavors. There are two types of leverage: permissioned and permissionless. Permissioned leverage comes from capital and labor, and it requires someone else to grant you access. Permissionless leverage, on the other hand, can be created through code and media, which can work for you while you sleep. If you are not skilled in coding, you can still leverage the power of the internet through writing, recording videos and podcasts, and other forms of media creation.
Develop Strong Judgement and Work Hard
Leverage is a force multiplier for good judgement, which comes from experience and can be accelerated by learning foundational skills such as microeconomics, game theory, psychology, persuasion, ethics, mathematics, and computer science. To build wealth, it is important to work hard, but also to choose your projects and partners wisely. Aim to become the best in the world at what you do, and keep redefining your skillset to ensure that this remains true. Don't waste your time on get-rich-quick schemes, as these are usually just opportunities for someone else to get rich off of you.
Be Frugal and Invest in Your Future
To build wealth, it is important to be frugal and invest in your future. This means setting and enforcing an hourly rate for your time, outsourcing tasks that pay less than this rate, and ignoring problems that will not save you enough to justify your time. It also means investing in yourself through learning and skills development, and investing in your business through marketing and other efforts to grow.
Be Patient and Persistent
Creating wealth takes time and effort, and it is important to be patient and persistent in your efforts. Don't get discouraged by setbacks and failures, but instead learn from them and use them as opportunities to improve. Surround yourself with supportive individuals who share your goals and values, and stay focused on your long-term vision.
Take Care of Your Health and Happiness
In addition to building your wealth, it is important to take care of your overall well-being. This includes maintaining good physical and mental health, as well as finding happiness and fulfillment in your personal and professional life. Prioritizing your health and happiness will not only improve your quality of life, but it will also help you to be more productive and successful in your wealth-building endeavors.
Building wealth is not about getting lucky, but rather it requires dedication and hard work. It requires a shift in mindset, a focus on equity ownership and specific knowledge, and a willingness to embrace accountability and leverage. It also requires patience, persistence, and a commitment to personal and professional growth. By following these principles, you can build a foundation for long-term wealth and financial success.