So you want to be rich, huh? I receive many messages from people via LinkedIn and Facebook Messenger asking for my advice on getting rich. Most of these questions come from young men aged between 15 and 25. I decided to answer you all in one go, and create something that I can refer future inquiries to. Let me get started on riffing about wealth.
First of all, you have to get specific. How much wealth do you want, and when do you want it by? I recommend focusing on net-worth: total assets minus total liabilities.
You should regularly calculate and track your net-worth in a spreadsheet. When you do this, you take a fully inventory of everything you own, including liquid assets like cash and stock and non-liquid assets like real estate and even your vehicles (which are depreciating assets, by the way). You also take an inventory of all your liabilities, whether short term, like a balance on the credit card, or long term, like student loans.
The spreadsheet where you calculate your net-worth—by subtracting your total liabilities from your total assets—is that same thing as a company’s balance sheet. You should learn to read and understand corporate balance sheets. By creating and maintaining your own personal balance sheet, you’re treating your personal financial health like a business. I check my net worth on a regular basis, often once per month, and you should too. Peter Drucker, the father of modern management, famously wrote “what gets measured gets managed.” This fact can work for or against you. People who keep track of the ways that other people have wronged them tend to figure out more ways to get themselves shafted. On the other hand, people who keep track of some metric that they want to improve tend to get better on that metric.
Lay out a timeline. By date W you will have a net-worth of X. By date Y you will have a net worth of Z. I have net worth goals stretching out a decade into the future. I review these goals regularly.
Now you have specific net-worth goals, we can dig in deeper. Think of one of these specific goals and ask, “what will having that much money by that date do for me?” Imagine as clearly as possible what you think your life will be like when you have that net-worth. Now pick the most important aspect of that future reality, perhaps you own something, or are doing something, or have some kind of relationship. Ask yourself again, “what will having that do for me?” This will lead to more and deeper visualization. For each of these experiences, you can ask yourself, “how will I know when I have this?” Discover what you will be seeing, hearing, smelling, touching, feeling, and thinking that will let you know that you are having the experiences that you are choosing with your net-worth goals. You may find that what you really want is completely unrelated to your net-worth. You may also find that, at least in some small way, you already have what you wanted. You can get extensive training in this kind of inquiry, into self and others, from NLP Marin.
Often, when you discover what it is that you truly want, you not only find that you already have some of it, but you also find that the pathway to more of it is often very clear and very easy. For example, you might choose a goal of having a net-worth of one million dollars in three years, and you might discover that by having this you will be able to retire and spend your time doing what you love. It’s often true that you’re already doing what you love, and that there are ways that you can do more of that, and also monetize it so that you can spend even more of your time doing that. In this case, net-worth is just a symbol of a deeper, more compelling, and perhaps easier to accomplish goal.
That’s pretty much it. Once you have a clear and specific goal, and you review it regularly, believing that you will have it, choosing it again and again, and you allow reality to unfold without resisting it, you will have what you choose. According to me, this is how life works.
People will call me names, and attack and abuse me for writing what I just wrote. They’ll claim that, “It’s easy for you to say this because …,” and they’ll give all these reasons. Usually the reasons don’t even match my reality. When people do this, they’re reflecting internal limiting beliefs. Other people can become reflections of the things in us that get in the way of us having what we really want. I’ll talk more about that later.
If you do what I told you above, then over time you will discover all the blockages in yourself and you will overcome those blockages to create a free flow of wealth into your life. In the process of overcoming those blockages, you will discover some tools. I don’t even really need to list any of those tools here, but I’m having fun, so I’ll continue. Here are some useful tools.
Become aware of limiting beliefs
Whenever you find yourself feeling shitty, and telling yourself things that feel shitty, or when others are telling you things that feel shitty, know that you’re suffering from limiting beliefs. A belief is an emotionally charged thought about yourself or the world. Pretty much all beliefs are limiting, but some are more extreme than others. Learn to catch yourself nursing a limiting belief. The most effective way to become aware of beliefs is to meditate regularly. Go on a ten-day Vipassana retreat to learn how to meditate effectively. In the meantime, I show you how to watch your breath in the following video. This is a foundational meditation practice.
Destroy limiting beliefs
As soon as possible after discovering that you’re harboring a limiting belief, address it; the simplest way is to question it. For example, “I’m going to have to work really hard to become a millionaire, and I don’t like working hard.” This contains two limiting beliefs: (1) “I have to work really hard to become a millionaire,” and (2) “I don’t like working hard.” For each of these, ask yourself if they’re really true and what evidence you have for them being true. Maybe you have evidence that they’re not true. I made millions in a few years. The people who created Instagram became billionaires after working on it for a few years. Many people make masses of money in short periods of time. Also, even though you might think that you hate working hard, I bet there are things you do that you throw yourself into wholeheartedly, which you just haven’t been thinking of as work. In time, you’ll learn to get less cognitive about this; as you realize that all limiting beliefs are basically just bullshit, you’ll get more and more skilled and just letting them go as soon as you realize that you’re holding them.
There are some really powerful tools available for dealing with limiting beliefs. One that I recommend is The Work by Byron Katie, described in her book Loving What Is. I also recommend learning to use Emotional Freedom Techniques (EFT), as described in the The EFT Manual by Dawson Church. In the following video, I show you how to do the basic recipe of EFT. I found EFT to be so powerful that I focused my doctoral research on it.
Welcome what comes
You have to set clear goals and then choose, and re-choose, them every day. As Esther and Jerry Hicks keep telling us in The Law of Attraction, it’s equally as critical to allow what is actually happening after the choosing. This means that you choose what you would like and then you let reality take care of it. You have no control over how anything happens beyond your choosing.
Many people trip-up here because they try to second-guess reality. When it seems like people are not experiencing what they chose, when they cannot see how what they have chosen is manifesting, they get disheartened and cynical. They start to complain and resist reality. When you do this, you stop the process dead. When you resist reality as it is from-moment-to-moment, instead of sending out a signal of choosing what you want, you are sending out a signal of choosing what you don’t want. By pushing things away, you draw them to you more strongly.
When you don’t like what’s happening, it’s your inner self informing you that this is not quite what you were looking for, and you can calmly choose again internally. The more clearly you know what you want and don’t want, and the less your choosing is polluted by limiting beliefs, and the more calmly and excitedly you choose what you want, the more it will be drawn to you and you to it.
Sometimes people argue with me and say, “it’s easy for you to say this when your life is so perfect.” First of all, most people have no idea what my life is actually like, or what I have been through, and secondly, why the hell is everyone so attached to fighting with reality? By learning to not fight with reality, we come into sanity; we stop suffering, and we get a clear perspective on how to move forward. Until we reach that point of peace, we are just needlessly playing the victim. To escape from victim mentality and to get better at surrendering to reality, I refer you back to meditation (see above).
Below is a video I made, while I was in hospital, about welcoming what comes.
Create and maintain a budget
Over time, your net-worth will be a reflection of the difference between the amount of wealth flowing in minus the amount of wealth flowing out. Assuming that you’re taking care of increasing your income (or letting reality take care of it), the other important factor is your expenditure. Tracking and managing expenses is an important part of running a business, and is connected with the cashflow statement and the profit-and-loss statement, two more aspects of business that you should become familiar with.
The personal budget is an important tool to make sure that you allocate your expenditure appropriately and also have a clear picture of where your money is going. This enables you to plan in the short-term to make sure that you don’t run into cashflow problems, and it also enables you to clearly see how each month your net-worth is changing as an result of your income and expenditure.
I have a google spreadsheet document which contains a sheet for each month. Each sheet has a row for each main category of expense, and a column per day. I have monthly targets for each item, and every time I spend some money, I add it into one of the cells. The sheet contains equations that automatically sum and compare values. I can see how much I have spent in each category, and how well I am within budget on that category. I can also see how much I have spent for the whole month, and how far inside or outside budget I am.
This approach allows me to look back and see how much I spend each month, which allows me to plan and set short-term income goals. It also allows me to easily figure out how much net-worth I need or how much passive income I need to live my current lifestyle without having to work for money.
An aside here: one measure of wealth is how long you can live your chosen lifestyle without having to work for money. I measure this in days, and I work on increasing that number each month. You can increase that number by living a less expensive lifestyle, increasing your net-worth, and/or increasing your passive income (these are all connected). At some point, you will accumulate so much net-worth that it will grow faster than you can spend it. At this point, you will have achieved financial escape velocity. In aeronautical engineering, escape velocity is when your spacecraft is going fast enough to escape from the gravitational pull of the planet that it is leaving. In this analogy, the planet is the slavery of having to work for money, and space is financial freedom. To learn more about this, I recommend reading The Simple Path to Wealth. In my twenties, I personally made so much money that I was able to live a reasonably normal lifestyle for ten years (3,650 days) without working. I used up all of my money and had to go back to work, but in the process I learned a valuable lesson: from now on, I don’t quit until I have reached escape velocity.
I actually like working, and I don’t think that the goal should be to not work, although it could be. Most people, including myself, would prefer to not have to work. When you don’t have to work, then work is a choice, and what you work on is more likely to be your life’s purpose.
Start (or buy) a business
I’ll often say crazy shit to my wife like, “This guy asked me how to become a millionaire, as if it’s a difficult thing.” or “People talk about a million dollars as if it’s a lot of money.” A million dollars is not that much money. It’s 1,000 chunks of 1,000 dollars. A thousand dollars is much less than one month’s income for most people living in developed countries like the USA. Most people in those countries can feel what a thousand dollars is.
The problem with a job is that, even if it’s really highly paid, the salary or wage is effectively capped. Employees are selling their time and skills on the open market in exchange for money. Don’t get me wrong, you can command a massive salary; I have done this. If you’re not foolish enough to just increase the luxuriousness of your lifestyle, then you can accumulate the difference between that salary and your expenditure, your personal “profit,” and rapidly increase your net-worth. However, if you really want to make tons of money easily, then you need to understand business.
When you own a business, you own a machine that makes money. When your money-making machine is making money, you’re doing something else. You might be sleeping, or lying on a beach, or writing a book. You might even be at work. This is not some kind of get-rich-quick scheme, this is just how business works. There is no upper limit to how much revenue a business can draw in, nor how much profit it can generate. As the owner of the business, you essentially own that profit.
Whether you buy a business or create a business, or both, you can become a business owner. When you buy stock in a business, you become an owner of that business. As the business generates profits, it either distributes that profit to the shareholders (you) or reinvests it into the business, making the business more valuable.
You can become a business owner today. You can buy just one share in a business today. You can start a business today. No matter what your salary or wage is, you can start creating or investing in these money making machines today; anyone can.
It’s very easy to make a million dollars with a small business. A few iterations of growth in revenues will get you to hundreds of thousands or even millions of dollars of revenue per year. Over a relatively short period of time, that will convert into a net worth in the millions. To learn more about the difference between an employee mindset and a business-owner mindset, read Rich Dad, Poor Dad by Robert T. Kiyosaki.
Now, a billion dollars: that’s a different story. That’s harder. Actually, is it? Thinking that it’s really hard to obtain a billion dollars is another limiting belief. In fact, it has been said that it’s actually harder to dream small and to succeed in a small way. Big ideas are more compelling and motivate more effort. It was no harder to build Facebook in the early days than it was to create a product like Basecamp, which is from a small company that chooses to stay small.
If your business is not working out, then you can carry on working like normal. One of the tricks of billionaires is to always have a plan B, and a plan C.
There are a ton more tools and techniques that you will acquire as you continue to calmly and happily choose your wealth goals. I hope that you can thoroughly utilize the ones I’ve given you above.