The majority of millionaires and billions in the world were not born into their level of wealth, they earned or they created it in most cases. Too many times the children of the wealthy are more consumers than producers. Here are 10 principles for wealth building that are primarily based on skill and some luck can help when you are doing the right thing at the right time in the right place.
- Your goal should be wealth not material things. The things you own should be cash flowing assets or things that grow in value over time and not things that burden you with large payments or go down in value.
- Understand wealth is not bad, capitalists do not steal money they create it through providing value. Capitalists create products, jobs, and businesses and are rewarded with money from what their creation is worth.
- Your goal should be wealth and not status. There are a lot of blue collar business owners that created businesses that are not glamorous but make a lot of money. There are a lot of millionaires driving paid off used cars and living in middle class homes.
- Wealth is not built by selling your time to an employer, real wealth is created through owning equity in companies. That is how the wealthiest people in the world got so rich owning huge stakes in their own company like Warren Buffett, Bill Gates, and Jeff Bezos.
- Wealth creation is equal to the size of value created for the most people.
- The path to wealth is easiest through creating a business about something you are already passionate about. It will take thousands of hours and you will quit if you don’t love what you are doing.
- The internet has removed a lot of the edges that traditional businesses use to have in the marketplace. The barrier of entry has been mostly removed for an aspiring capaitalist for production, distribution, and creation of their own products or services.
- The power of compounding can turn a small business into a big business or a small amount of capital into a large amount of money over time with consistent growth.
- Never stop learning, college can be the beginning of your education but it should never be the end of your learning and growing.
- Your financial returns and wealth are usually correlated with the amount of risk and uncertaninty you are willing to take on.