How to Get Rich
So you want to get rich do ya? You and everybody else in the world! The question is:
What is going to set you apart as one of the few who make it?
Below are the three most likely ways you will get rich in life, each has their own unique pros and cons. On this page we'll go over each of these possible paths to "getting rich" as well as things that definitely don't work.
1. Build a Business
The first way to get rich is to start a business. Think of it like this:
Building a business is like building a money making machine.
To build this machine will take a lot of time, a lot of effort and a lot of hard work. Never having built a money making machine before you will probably make many mistakes. There will be setbacks, setbacks which will cost you money. It may even cost so much money that you'll be unable to go on.
Building a business is probably the most common way people get rich. It's risky though and you will probably fail in your first attempt. Even if you don't fail the amount of work you'll have to put in is tremendous.
However, if you succeed in building one of these machines of yours then the potential rewards are tremendous.
Is this for you?Building a business is for people with high tolerances for risk. It's also for people who are independent thinkers and for people who have a specific passion in life that will help pull them through the long hours required to run a business.
2. Get a high paying Job
There is nothing wrong with going the job route instead of the business route, it just depends on the kind of life you want to have.
Getting a high paying job involves planning ahead - way ahead. This means first determining what career or field you'd most likely be good at, then finding out if there are any high paying jobs in that field. If so you will have to chart your course to get to that point.
Most likely finding a high paying job means you'll be in school for a long time (for example: doctors, lawyers, MBA's) and then you'll be climbing the corporate ladder for a long time after that.
Is this for you?Going the job route is for people who want a sure thing, and to have security and certainty in their life. Even if you don't make it all the way to the top you'll always have money, a house and the other things people traditionally associate with having a good life.
3. Invest in Real Estate
Believe it or not, many of America's millionaires are rich not from a high paying job or building a business but instead from prudent real estate investments.
The beauty of real estate is that you're buying money making machines instead of building them. With each property you buy the income you generate each month should cover the mortgage + all other expenses + another 30% (your profit). This may mean you need a substantial down payment to make your investment work. Anything less than that and you risk going negative each month, which is a quick way to go into foreclosure.
Once you have paid down enough equity in your property you can sell it or refinance and move up to a larger property. In this way your real estate empire will slowly grow, and it will likely take decades to truly "get rich".
I have two relatives, one who basically went bankrupt investing in real estate and one who now pulls in over $400,000 a year from his apartment buildings, so it's definitely not a surefire thing.
My suggestion if you don't want to end up being the one to go bankrupt is to start slowly by first doing research for at least several months, then buy a single a small investment property. Once you have mastered the art of being a landlord you can try to move up.
Is this for you?Investing in real estate is for people with lots of patience. The good thing about it is that you can still invest in real estate while building a business or pursuing that high paying job.
Smart money management
Any business owner knows that you always have to take in both income and expenses when calculating profit. What I'm trying to say is that we've only covered how to generate higher income so far. But we need to talk about expenses.
If you want to get rich sooner you will need to keep a tight leash on expenses. Here a few suggestions for how to keep your expenses low while also getting the most out of life:
What doesn't work
Get rich quick schemesAhh... the "get rich quick scheme", I know it well. Usually it begins with a tv commercial or a seminar. Some guy up on stage promises that if you would just follow his system you'll be a millionaire in no time. And it only costs $10,000 to attend his boot camp! What a deal!
Unfortunately the only people who ever get rich from these schemes are the people who run them. You never will.
Why? Because in most cases you're not producing anything useful for society. Give something useful to society and it will reward you with wealth. Most get rich quick schemes are about taking from society and other people.
This is how a MLM (multi-level-marketing) scheme works. You don't produce anything of real to benefit society, instead you spend most of your time begging your friends and family to give you money.
Don't waste your time with MLM's and $10,000 boot camps, instead spend your time building a real business which gives some thing to society instead. Plus any $10,000 boot camp can be replaced by a few books and a simple willingness to act.
Gambling & the lotteryWhen I was in college I took a class on probability, I learned about something called "expected value". Expected value is basically the result of a particular action repeated over and over and then averaged.
For example, the expected value of a coin toss is 0 (if you assign a +1 to heads and a -1 to tails). This means if you bet on a million straight coin tosses you would be expected to be right where you started when you're done.
Expected values for all forms of gambling are ALWAYS LESS THAN 0 and playing the lottery is especially low. This means the more you gamble the more certain it is you will lose. Casinos of course know this, and they're counting on you not knowing this. The only way to achieve a positive expected value gambling is by counting cards. Unfortunately the expected value is still VERY LOW and it also takes a team of people and hundreds-thousands of hours to practice, and it's outlawed by casinos.
Want to get rich? Spend your time on something productive instead.