How To Get Rich “Without Slinging Crack Rock Or Having A Wicked Jump Shot”
This video’s title quote comes from the movie Boiler Room and a Notorious B.I.G. rap. I like this clip because even though it is a movie it illustrates a certain sentiment towards getting rich that is prevalent among many people today.
Everybody wants to get rich but very few want to to do the hard work required. People choose to take shortcuts like the young brokers in the movie selling worthless dogcrap stocks to the schlubs and shoeclerks. In the end they give it all back and get busted by the FBI.
Others do what I did for many years, subscribe to every newsletter guru that offered a way to “beat the market”. I wasted a ton of time and money and got sub par results. I even tried some different MLM plans and many other “get rich quick” schemes even though deep down I knew it was all BS and they wouldn’t work. Like most uninformed people I wanted it fast and easy.
The Concept Is Easy, The Work Is Hard
Understanding the concepts of how to get rich is easy. Like most endeavors in life, the secret to success isn’t really a secret or that difficult. Want to lose weight? There is a $60 billion dollar industry waiting to take your money and deliver disappointing results. How do you successfully lose weight? Eat less and move more.
Why aren’t people successful in losing weight? Because they are lazy and do not want to do the work. They rationalize skipping a workout or stopping at Taco Bell instead of preparing a healthy nutritious meal at home. One missed workout turns into two and quack quack…they are back on the couch watching a Game of Thrones marathon and telling themselves tomorrow they will start again. Of course they never do.
Getting out of debt is the same mindset as losing weight. Earlier in my life I was in some serious credit card debt of over $40k. I was making minimum payments and not making head way financially. As can be imagined I was frustrated and pissed off.
I followed this plan and got out of debt in a couple of years. Like losing weight getting out of debt is simple; adopt an austere lifestyle, cut unnecessary expenses and apply the funds to debt reduction. No big secret but people don’t want to do it because it means living an austere and minimalist lifestyle for a couple of years.
I find the same thing when discussing investing with people. They say, “Hey, I always see you reading the Wall Street Journal or Forbes”. “Got any stock tips?” They want a hot tip like one of those degenerate gamblers you see hanging around at the dog track. Just give me a tip and I can thoughtlessly dump a couple of grand into the name and hopefully it will go up. That is not investing.
How Do People Get Rich?
Most wealthy people I know started and grew a business that they were passionate about. This means providing a product or service that people are willing to pay for. Then day after day, month after month, year after year growing the business and reinvesting time and money into the business. Hopefully, people will actually pay for the product or service you are offering at a price that nets you a profit. If they are good at what they are doing after many years they have accumulated a nice sum from their profits or they sell the business and walk away with a good chunk of dough.
Another way to get rich is real estate investing. There are plenty of people that bought a duplex or apartment building. They may have even lived in one of the units when they started out in order to save money. They then used the equity from that property to buy additional properties which they rented out to working joes. Rinse and repeat.
Notice the common denominator: work, save up a grub stake,invest, time, reinvestment of profits, compounding, consistency, and most of all patience
How I Am Getting Rich
How do I create wealth? I use the various public markets (stock, commodity, bonds, options). The same thing applies to these markets as applies to the above examples. You think Warren Buffett is a genius. He really is not. Go back and read the early annual reports of Berkshire Hathaway. The original Berkshire Hathaway was a textile manufacturer in New England that was struggling.
Buffet was struggling massively to turn the company around. He eventually figured out that the way to make big money was to buy parts of solid businesses that are gushing cash. Buy the business at a low valuation and then sit back and let that business compound wealth over time.
He then was consistent in ignoring market cycles and investing additional cash when other market participants became irrational and sold their pieces of businesses (stocks) during times of emotional stress such as bear markets or crashes (2008)
It Is All Work
Anyone can do it. Don’t believe me read about the janitor that accumulated an $8 million dollar portfolio. However, like losing weight or getting out of debt it takes work, commitment, and time. That is the real issue for most people. They would rather watch TV, dick around on Facebook, or play hours of video games than create a product or service.
I answer questions on Quara based on stocks and investing. I see countless questions like; “How can I turn $1000 into a $1 million in a year?” or “What is the easiest way to make money?”. These type of questions indicate a poor mindset. These are people that are ignorant of what must actually be done in order to get rich.
Not only are they asking the wrong questions they do not even know the right question to ask.
There is no fast and easy way to getting rich. It is all work. Take a guy like Warren Buffet. His average annual return on Berkshire Hathjaway is about 22% per year. That is combining all up years and all down years. He is one of the best investors in the world yet someone thinks that it is realistic to turn $1000 into one million dollars in a year. That mindset is wrong.
What is worse is that people waste time trying to act on a poor mindset. Time is the most valuable currency a person has. It simply cannot be wasted if a person wants to get rich.
Time Is Your Most Precious Commodity
In conclusion, if you want to get rich you need to think realistically about what your strengths and weaknesses are. What are you passionate about? This is important because if you do not have a passion for something than you will quickly lose interest and you will not progress.
For me I love the financial markets. I love discovering new companies that are creating new businesses and making money. I love reading about famous entrepreneurs and the techniques they use to build their businesses.
When talking to people about stocks and financials I have found they are not interested. Their eyes glaze over and they get bored quick.
That is fine, each person has to discover what they are interested in and then figure a way to turn that into a product or service. That is if they want to get rich.
Start for free by creating a blog, Facebook group, whatever. Determine others interest level and then determine whether a product or service can be created around that interest.
Make sure you think about things before you jump in with both feet. I have seen time and again people that I call “serial suckers”. They are always chasing the shiny new thing. One week they are selling juice and next week they are an expert on bitcoin. These are the people that never make any progress towards becoming rich.
Don’t do this as it wastes time and energy. Think, plan, than execute. There are no shortcuts to getting rich.
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