So You Want to Get Rich?

[TheFinalEpic]

To say that 75 MM in total assets is the cut off for rich is just plain ridiculous.
The figure for UHNW used by private banks/asset management companies is 30 MM.
And really, unless you are living in a major international city like NYC or London or SF or Tokyo, you are rich with a fraction of that.
After accounting for inflation and taxes, 10 MM in an index fund or other stable investment, should net you something like 500,000 a year to live off. That's a high class income in Manhattan, in many parts of Brazil or Peru or similar, it makes you part of the elite that is above the law.

I was told by not only people off this forum, but personal contacts that a person who has amassed 10m in assets is not going to settle for 5% returns per annum. It becomes a game sooner or later, you look for ventures to get in to, you look for other ways to grow that wealth. It is said the first million is the hardest. Like I stated, I'm not even content with 8 figures, but many and most people would be in dream land. To me, its a game, as long as I have a safety net of 40k a year, the rest is monopoly money to grow and grow many times over.

 

[TheFinalEpic]

I would also be careful when quoting the mainstream regarding 85% being self-made millionaires. Part of it is pure inflation, a lot of is increase of property value that the parents have bought and paid for, for women the majority is having married the right kind of man, for many it is having gotten a good job and earned six figures for decades, while in many more cases those millionaires have been guys who have started out with 500k to 900k and managed to increase it to over one mil. The number of real self-made success stories is way lower.

Now of course it can be done, it is just less common than the business magazines let you believe. In any case - almost all highly successful men I know did NOT make their money by just saving and blindly investing in a fund and waking up at 50 with high 7 digits in their stock accounts. Frankly I met in my former career at private banks quite a few successful MDs and lawyers who lost most of their money that way.

Most wealthy guys made their money by investing in something that they were very familiar with or they had the good fortune of getting to know someone who was an absolute top-notch expert at it. Some of them just needed to have the ability of being able to spot a winner.

Most men I knew opened their own business and made it into a success story. Sometimes it was something as humble as a hot-dog stand in a good location that netted the guy millions over they years. In other cases it was their 50th job he started out while being 45 and realizing that his passion and talent was being a damn good real estate agent and later real estate investor. Other guys were simple programmers who created small companies that were later sold to bigger ones at a major profit. Once I met a MD who started collecting paintings, because that was his passion - he was extremely good at it and his children and grandchildren inherited a collection worth close to one billion $ decades later.

What I want to say by that is that it is better to invest in one field you are an absolute expert at than to throw cash around where you don't know head from tail. That's why most people should rather not invest broadly in the Stock Market or any kind of fund. It is fine for diversification after you reached high 7-9 figures, but not when you wish to reach 7 figures in the first place.

Yes - there are funds that make sometimes 50%, 70% or even more per annum for a period, but you would have to know why their return is so high in those years. Some of them lose 45% in other years. Many of the best super-funds which have a consistent high return are often closed or only available to ultra-high-net-worth-individuals.

As far as the right investment skill is concerned - if your interests are not aligned with a field that can net a lot, then become an expert in one field that can potentially earn you some dough. Frankly - it is not really rocket science.

For all those here who wish to invest their hard earned 25k while trading, I would rather advise them to become an expert trader first. Studying, then virtually investing and succeeding and only later on starting trading with a professional money-management plan in place. It is easier said then done. My example with the simple worker made McDonalds millionaire is by far easier to attain.

I would wager that most guys who made their 7-figure+ cash here have done so via some kind of business or smart investments. Even if you did it via trading or real estate, then you have made those fields your business and you are an expert in it.

What you are saying is find your niche, and exploit your knowledge of that sector. I like it. Now, with the 85% of millionaires being self made, I will respectfully disagree, due to the growth of tech start ups, I believe it is totally fathomable with all the internet millionaires nowadays that a majority of millionaires are actually self made. I would suggest reading "the millionaire mind", as he interviewed 1000+ millionaires in the states, and compiled data that precisely showed that statistic.

The McDonalds idea is interesting, because if you study foreign cultures, sometimes introducing a new product or in this case franchise is just what it needs to gain huge strides financially. I will research this more.

 

[Simeon_Strangelight]

...
... I believe it is totally fathomable with all the internet millionaires nowadays that a majority of millionaires are actually self made. I would suggest reading "the millionaire mind", as he interviewed 1000+ millionaires in the states, and compiled data that precisely showed that statistic.

Yeah - but the statistics are basically this:

- average income 131.000$
- 57 years
- frugal
- 67% self-employed

Being a millionaire in 1980 was different than being one now. You could argue that they are self-made, but again it is not the number of internet-guys, but rather the high number of professionals - from welders, MDs, lawyers, etc. - anyone with a more or less decent job.

In the 1960s a completely untrained worker fresh off the boat European immigrant made 40k per year discounted inflation - but that 40k bought almost as much as 88k now. Millionaire nowadays seems often to be somone in the upper middle class who had kept his finances in order.

Forget that shit - what worked for 90% of those guys who came up through the 1970s-90s WILL NOT WORK for the current generation! You need a different strategy for the current times and austerity decades coming up.

 

[TheFinalEpic]

...
... I believe it is totally fathomable with all the internet millionaires nowadays that a majority of millionaires are actually self made. I would suggest reading "the millionaire mind", as he interviewed 1000+ millionaires in the states, and compiled data that precisely showed that statistic.

Yeah - but the statistics are basically this:

- average income 131.000$
- 57 years
- frugal
- 67% self-employed

Being a millionaire in 1980 was different than being one now. You could argue that they are self-made, but again it is not the number of internet-guys, but rather the high number of professionals - from welders, MDs, lawyers, etc. - anyone with a more or less decent job.

In the 1960s a completely untrained worker fresh off the boat European immigrant made 40k per year discounted inflation - but that 40k bought almost as much as 88k now. Millionaire nowadays seems often to be somone in the upper middle class who had kept his finances in order.

Forget that shit - what worked for 90% of those guys who came up through the 1970s-90s WILL NOT WORK for the current generation! You need a different strategy for the current times and austerity decades coming up.

You speak of having a job, something that I stated is a one way ticket to middle-classdom. Unless you are using that money that you earn in the job to build wealth through investments and smart business decisions.

Being a millionaire in todays world is easy, we're talking RICH though, 8 figures and up. I would consider anyone with a net worth of less than $5 million to be upper middle class.

Edit: I'm loving the book so far!

 

[berserk]

Are you rich OP? Good post, but like with game advice, it carries more weight if you walked the walk and not just talked the talk.

I know a couple of people who are well off, one is 'rich' by relative terms already (in private banking levels) and one is only well off, but stacking enough aside to be a millionaire by 40.

One is an investment banker who worked extremely diligently and goal oriented since 18 to be exactly that and who never missed a day of work unless very sick, extremely disciplined and confident in own ability, most would say with a bit of a chip on the shoulder. Smart guy too, but not genius level.

The other is an early entry IT guy, journalist by education, but extremely smart, succeeds at just about everything. Is a chess grandmaster, published several books, scrabble champ, poker champ, avid runner, got into all kinds of new tech and mastered it very quickly and able to move quickly because of financial freedom already. Very high IQ.

The point is, all these self improvement books aside, you need to be exceptional to get rich. A guy with average intelligence and average creativity can't just will his way to wealth. You need to figure out what you are exceptional at and then work like a madman at that until you look around and you don't see many who are as exceptional as you.

I'm talking 'rich' here, not just 'well off' or 'doing ok'.

You had me until Kiyosaki's name showed up. That man is an abject fraud and lies about everything from his military record, his real estate deals to the very existence of "rich dad." This guy breaks it down the best.

But the rest of those books are solid.

The problem with Kiyosaki in my opinion is just that while he is a very good teacher for the layperson in thinking right about money and investments, his entire teachings could be taught in about 10-20 pages and not multiple books.

 

[TheFinalEpic]

Are you rich OP? Good post, but like with game advice, it carries more weight if you walked the walk and not just talked the talk.

I know a couple of people who are well off, one is 'rich' by relative terms already (in private banking levels) and one is only well off, but stacking enough aside to be a millionaire by 40.

One is an investment banker who worked extremely diligently and goal oriented since 18 to be exactly that and who never missed a day of work unless very sick, extremely disciplined and confident in own ability, most would say with a bit of a chip on the shoulder. Smart guy too, but not genius level.

The other is an early entry IT guy, journalist by education, but extremely smart, succeeds at just about everything. Is a chess grandmaster, published several books, scrabble champ, poker champ, avid runner, got into all kinds of new tech and mastered it very quickly and able to move quickly because of financial freedom already. Very high IQ.

The point is, all these self improvement books aside, you need to be exceptional to get rich. A guy with average intelligence and average creativity can't just will his way to wealth. You need to figure out what you are exceptional at and then work like a madman at that until you look around and you don't see many who are as exceptional as you.

I'm talking 'rich' here, not just 'well off' or 'doing ok'.

You had me until Kiyosaki's name showed up. That man is an abject fraud and lies about everything from his military record, his real estate deals to the very existence of "rich dad." This guy breaks it down the best.

But the rest of those books are solid.

The problem with Kiyosaki in my opinion is just that while he is a very good teacher for the layperson in thinking right about money and investments, his entire teachings could be taught in about 10-20 pages and not multiple books.

I am not "rich" by any means, but see the path and taking the steps to become what I envision for myself, this post was to help others get into the right mentality that working for others, while you can make a large salary, you will not create wealth by doing it unless you plant the seeds to grow more money for yourself.

As for the comment on "it takes an exceptional person" you are correct. But, intelligence is not a key factor in people getting rich. There is no correlation between a person's grades and their lifetime income. It takes something else that many people do not have, this being discipline, creativity, seeing what other's do not see (market opportunities), ability to solve problems, and drive/motivation. Self improvement books will only do so much, they become mental masturbation if you do nothing about what you've learned.

The first step, however, is an undying belief in yourself and what you can do. After that, it's up to you what you do with that belief. For me, I don't just dislike the idea of working for someone else, but I loathe it, it use it as the fire to never sell out into a corporate position or the like. It takes much harder work than working for someone else, I'm up 16 hours a day, I take weekends to continue to build what I'm working on. Its much harder to do what I am suggesting as opposed to living off an income from a job, but in my eyes, its worth it.

 

[CaptainChardonnay]

You guys can forget McDonalds unless owning and managing a bunch of McDonalds is all you want to do. I interviewed a McDonalds manager who owned 5 McDonalds locations several years ago for a college paper and he told me that owners of McDonalds are required to work at and manage the McDonalds they own completely. They are not allowed to just invest in opening a McDonald's location and letting day to day operations go by. This makes sense for McDonalds as a company as the owner's restaurants will be his sole concern.

I'm currently going through Felix Dennis' book right now, almost done. One thing that stuck out to me was to pursue the industries where the money is coming from. Do not blindly think that just because you succeeded in real estate that that is your calling. His example was when he wrote the Bruce Lee biography instead of focusing on capitalizing on Bruce Lee's death, he was more concerned with his magazine business and that ended up costing him a lot of money.

"The point is, all these self improvement books aside, you need to be exceptional to get rich. A guy with average intelligence and average creativity can't just will his way to wealth. You need to figure out what you are exceptional at and then work like a madman at that until you look around and you don't see many who are as exceptional as you."

I dont agree with this, I think you need to just hire the people with the intelligence to do those tasks for you... and read books

Another great book would be The Millionaire Fastlane

 

[Simeon_Strangelight]

You guys can forget McDonalds unless owning and managing a bunch of McDonalds is all you want to do. I interviewed a McDonalds manager who owned 5 McDonalds locations several years ago for a college paper and he told me that owners of McDonalds are required to work at and manage the McDonalds they own completely. They are not allowed to just invest in opening a McDonald's location and letting day to day operations go by. This makes sense for McDonalds as a company as the owner's restaurants will be his sole concern.

...

I would not recommend opening a McDonalds in the West as of now. Only in EE, FSU, SEA, China. And there you can hire a general manager after having opened 4 or 5. And even before that you can hire people who do more administrative work. I know 2 guys personally who own 2 & 4 McDonald's restaurants in Poland. They work very little & one is preparing to hire a general manager now. In the beginning they worked way more, but both of them are low to mid-level $-millionaires now.

And yes - McDonald's wants investors to have skin in the game and be their main business & work. It's not the most sexy work, but it helps you reach the goal.

 

[TheFinalEpic]

McDonalds is not a franchise I'd personally get in because I don't believe in the product. But the fact is that if you can find a product to introduce into a foreign market that works well, it can be worth it.

"The point is, all these self improvement books aside, you need to be exceptional to get rich. A guy with average intelligence and average creativity can't just will his way to wealth. You need to figure out what you are exceptional at and then work like a madman at that until you look around and you don't see many who are as exceptional as you."

I dont agree with this, I think you need to just hire the people with the intelligence to do those tasks for you... and read books

Now yes, hiring the right people is imperative, but the drive to get into the position to hire the right people is required. A smart employee will need a manager (aka. you) to motivate them, to give them a reason to work their ass off every day for you and your company. Its all part of the equation.

 

[Vitriol]

Regardless, all men trade the most valuable resource of all: time. I would even argue that you could have all the money in the world, but if you don't have the time to do the things and be with the people you love, you are not wealthy.

So in all reality, even though you are seeking the almighty dollar, it is really the all powerful grandfather clock you are working against, with hopefully enough time left to really live your life. What the masses do not understand is that being an employee is slow suicide. But the manosphere gets this notion, so I needn't delve much deeper.

This is my main motivation to get out of my current job eventually and either be self-employed or own some kind of business. I was in school for my whole life until about 3 years ago, and after having to go to someone else's office and work for them every day, something started to bother me, but I didn't realize what it was until recently. It just doesn't feel right to commit yourself to a boring routine where you trade off most of your waking hours just to get a paycheck. I finally realized that I can't do something like that long-term, I feel too restless and unfulfilled.

At this point I would be totally happy if I could make a similar income to what I have now, but be self-employed so it wouldn't take up as much of my time. I'm just getting started in trying to make it on my own, but from what I've read, the path of investing small amounts and hoping you're rich in 10-30 years is really a bad idea. There's too much of an opportunity cost to your lifestyle if you're always trying to pinch pennies, and you never know how those investments are going to turn out.

I think what would be ideal would be to have enough expertise in some niche that you could command very high wages for your services and pretty much work as little or as much as you wanted.

 

[TheFinalEpic]

There is a difference between passive and active income however. This is another case of "different strokes for different folks", in that you may be satisfied with working for yourself and having time for other things. But I'm talking about your money making more money all by itself. Now, taking 1/10th your income and saving it to place into investments and things that will generate more is not a bad idea, it is the road to financial freedom.

A wage is never going to lead to substantial wealth. If you trade time for money, you are wasting your time on Earth. Time is the most important resource of all men, generate money, then let that money become your employee.

 

[SlickyBoy]

You had me until Kiyosaki's name showed up. That man is an abject fraud and lies about everything from his military record, his real estate deals to the very existence of "rich dad." This guy breaks it down the best.

But the rest of those books are solid.

I don't disagree, and have read many places that he is indeed a fraud. However, the book gets you into the correct MINDSET. It is truly the mind that can make you rich, and the first thing you have to do is unplug from being an employee to looking for opportunity on your own.

He gives you the correct mindset by what? Lying to you and charging for a book to deliver all of the lies? No thanks. His books are chock full of flat out wrong tax advice, inane platitudes and contradictions. BTW, he declared bankruptcy after a 23 million dollar lawsuit from his business partners back in 2012 - not the guy you should be taking advice from when it comes to mindsets on how to get rich. I would never recommend his books to anyone, even as paperweights.

 

[SlickyBoy]

The problem with Kiyosaki in my opinion is just that while he is a very good teacher for the layperson in thinking right about money and investments, his entire teachings could be taught in about 10-20 pages and not multiple books.

The problem with Kiyosaki is he pretends to be in the finance/investment line business when in reality he is in the show business. Avoid.

 

[Peregrine]

A wage is never going to lead to substantial wealth. If you trade time for money, you are wasting your time on Earth. Time is the most important resource of all men, generate money, then let that money become your employee.

Earning a wage is a viable way to generate initial capital, and it's not necessarily worse than running a business. Everyone should choose the best option available to them.

 

[Travesty]

From guys I know that have made over 7 figures in a year or from second hand stories from friends that know them, they do it through expertise first.

They either get to the top of their field or on the way to the top they notice faults in their respective industry and go out and sell a solution to that fault.

I know on Shark Tank you see people come up with consumer products like a new a window screen patcher or an alcohol bottle designed cover, or guys run a service and hustle in a market where there is alot of competition etc...

I think those are longer shots in general.

Find what you are good at, spend time to network and learn that industry. Find a problem with that industry and solve it. I think that is the most surefire way to starting a successful and lucrative business and the guys that made a lot of money without family help etc... (or how their rich dads/grandfathers did it for the ones that got help) seem to do this.

 

[TheFinalEpic]

You had me until Kiyosaki's name showed up. That man is an abject fraud and lies about everything from his military record, his real estate deals to the very existence of "rich dad." This guy breaks it down the best.

But the rest of those books are solid.

I don't disagree, and have read many places that he is indeed a fraud. However, the book gets you into the correct MINDSET. It is truly the mind that can make you rich, and the first thing you have to do is unplug from being an employee to looking for opportunity on your own.

He gives you the correct mindset by what? Lying to you and charging for a book to deliver all of the lies? No thanks. His books are chock full of flat out wrong tax advice, inane platitudes and contradictions. BTW, he declared bankruptcy after a 23 million dollar lawsuit from his business partners back in 2012 - not the guy you should be taking advice from when it comes to mindsets on how to get rich. I would never recommend his books to anyone, even as paperweights.

He declared corporate bankruptcy, which is a tool of all businesses to restructure and build again in a different direction. Donald Trump declared bankruptcy 4 times, the mans worth well over 2.5 billion. Now in terms of mindset, he teaches the very basic ideals of working to create businesses and become an investor, which are true, and how so many people have reached financial freedom in the past.

Edit: I agree that the man is an author, not a business tycoon that he claims to be. That being said, the mentality he teaches is the correct one.

 

[TheFinalEpic]

From guys I know that have made over 7 figures in a year or from second hand stories from friends that know them, they do it through expertise first.

They either get to the top of their field or on the way to the top they notice faults in their respective industry and go out and sell a solution to that fault.

I know on Shark Tank you see people come up with consumer products like a new a window screen patcher or an alcohol bottle designed cover, or guys run a service and hustle in a market where there is alot of competition etc...

I think those are longer shots in general.

Find what you are good at, spend time to network and learn that industry. Find a problem with that industry and solve it. I think that is the most surefire way to starting a successful and lucrative business and the guys that made a lot of money without family help etc... (or how their rich dads/grandfathers did it for the ones that got help) seem to do this.

Precisely. The guys that really blow up and do well for themselves are problem solvers of much larger industries, or find a niche that is not being exploited by many others. In another thread on starting a successful business, its noted that looking for markets with A.) less than 200mil market cap or B.) industries with no clear frontrunner, or a clear #1 and no concrete #2 are the best places to look when starting a new business.

 

[SlickyBoy]

McDonalds is not a franchise I'd personally get in because I don't believe in the product....

This is going to hold you back more than anything else.

It isn't like you have to eat at McDonalds yourself or feel bad for the fools who do. The heir to Baskin Robbins had a similar outlook and let it all go, saying he just couldn't promote butterfat to the masses. Well, that's great for someone who was probably seen off with a sizable trust fund and a spot in daddy's will, but if you do not and you still want it badly enough, you'll take the opportunities as they present themselves and make hay while the sun shines.

If you're still feeling down about it after you're rich, at least you'll be able to afford therapy, push some political action committee or whatever else - you'll have options.

Now is not the time for self limiting behavior.

 

[SlickyBoy]

He declared corporate bankruptcy, which is a tool of all businesses to restructure and build again in a different direction. Donald Trump declared bankruptcy 4 times, the mans worth well over 2.5 billion. Now in terms of mindset, he teaches the very basic ideals of working to create businesses and become an investor, which are true, and how so many people have reached financial freedom in the past.

Edit: I agree that the man is an author, not a business tycoon that he claims to be. That being said, the mentality he teaches is the correct one.

He declared bankruptcy because the LLC did not have enough money in it to pay the judgment rendered against him. The LLC shields him from losing his house over it, and for all his talk about wealth, Kiyosaki's actual net worth is something of a mystery.

Now that you mention it, I was seriously disappointed when Trump - a real businessman - agreed to do a book with Kiyosaki. But over the years Trump has become even more of a showman. He was probably well compensated to sell his name to Kiyosaki, someone not even in the same league.

What, specifically, does Kiyosaki teach about getting rich that you find so compelling, and where in his book? I'm curious. The best description I've heard of praises from the cult is this:

I think these “made me think about finances” comments are inarticulate at best and dishonest at worst. What is really going on is a lot of people are schlepping along doing a half-ass job of managing the financial aspects of their lives. Rich Dad Poor Dad slaps them up side the head and tells them to clean up their acts. That’s good, but the book goes on to deliver a pack of lies that make getting rich seem much easier than it really is and make education sound much less valuable than it really is. Basically, people want to get rich quick without effort or risk. Kiyosaki is just the latest in a long line of con men who pander to that fantasy.

 

[TheFinalEpic]

McDonalds is not a franchise I'd personally get in because I don't believe in the product....

This is going to hold you back more than anything else.

It isn't like you have to eat at McDonalds yourself or feel bad for the fools who do. The heir to Baskin Robbins had a similar outlook and let it all go, saying he just couldn't promote butterfat to the masses. Well, that's great for someone who was probably seen off with a sizable trust fund and a spot in daddy's will, but if you do not and you still want it badly enough, you'll take the opportunities as they present themselves and make hay while the sun shines.

If you're still feeling down about it after you're rich, at least you'll be able to afford therapy, push some political action committee or whatever else - you'll have options.

Now is not the time for self limiting behavior.

I have worked in sales in the past, and the #1 rule is to believe in the product that you are selling. I don't believe in fast food, and thus, I wouldn't sell it. There are plenty other sectors you could bring into a foreign country, but thats not one I personally could. It has to do with your integrity and if its not something you love, you're going to hate it regardless of it doing well or not.