by Bill Edgar |
Have you ever wondered why some people are so wealthy, even though they’re not any smarter or harder working than most other people are?
Seems unfair, right?
How did they get there? Do they have better connections? Did their parents give them money? Did they take out a huge loan and gamble on starting a business? Is it from illegal or shady activity?
While these situations may be true for some wealthy people, for the most part, getting wealthy is pretty simple. It comes from having the right “strategy.”
What is this secret strategy, you ask?
Diversified Investing + Small Deposits of Money + Time = Wealth
I’m calling it the “six-year stretch,” and it relies on your ability to find ways to earn money while you sleep. It’s this little kernel of knowledge that forms the strategy that the wealthy use to get richer and richer. Let me explain.
You see, most people work for money. Wealthy people have their money work for them.
Most people go to a job and trade their time for money. They go to a job, sit at a desk, take orders from a boss, and then on Friday go home for the weekend with a paycheck. No more worries until Monday. No investment is required. The owner of the business they work for is fine with this, too. He uses the worker to grow his business, and he’s willing to pay for that service in cash. He takes the financial risk, but he gets to keep all the reward.
Rich people don’t think like employees. Rich people don’t trade time for money. They invest money to get a return without having to do any of the work. They find a good investment, put their cash in, and, if they’ve chosen well, they get more money back than what they’ve invested. They keep doing this over and over, until they wind up with A LOT of money.
The Employee Strategy requires lots of time and effort, and you don’t get to decide the rules. The Investor Strategy requires little time and effort and often you get to make the rules up. Sounds pretty cool, right?
So, if getting rich is so simple and obvious, why doesn’t everybody do it?
Your beliefs in money are passed down from generation to generation or inherited from your friends or culture. If your parents were poor, chances are you’ll be poor, too. If your parents were rich, chances are you’ll be rich, too. People tend to stick to the beliefs and strategies they were raised with.
So, if your dad worked construction all his life for someone else, chances are you’ll end up working for someone else your whole life, too. If your mom owned a furniture store, chances are you’ll grow up to own a business, too. We tend to do what we’re familiar with, without even thinking about it.
But take a minute and go to the Forbes Richest List. I doesn’t matter what year you look at. Just go look. You’ll see one thing in common with all of them — there are no employees! Not even a world-renowned heart surgeon or a top-paid, super lawyer! All of the richest people in the world invest to make their money work for them, because they know their earnings are capped, if they just trade time for money.
So, which group do you want to be in?
This post is an excerpt from “The Minimum Wage Millionaire: How A Part-Time After School Job Can Change Your Financial Life,” by Bill Edgar.
[via Business Insider]