Building wealth is only limited by your mind.
The challenge is many of the obvious ways to get wealthy, so you can buy back your time back, are complex.
Complexity stops many people from achieving the goal. Let me give you a simple formula I discovered.
1. Create a high income (like this)
When you see this heading it probably makes you want to scream.
I’m not here to shame you. If money is a problem or some dumb boss owns all of your time, the answer you already know is to make more money.
Earn more money, get a higher income. How?
Add new skills to your skill stack.
If you’re not making the money you want then it’s skills that are missing. The good news is online education can help you get more or upgrade the ones you have. It’s why self-education has become a cult on LinkedIn.
The key is not just to add skills to your skill stack but to choose the right ones. Learn new skills like these:
- Web design
- Basic coding
- Social media
- Video editing
- Zapier automation
- Persuasive writing
- Content marketing
- Launching a newsletter
- Artificial intelligence uses
- Online community management
On their own, none of these skills are amazing. But when you start to layer skills it differentiates you in the free market and that’s how you get your income up.
2. Lower your expenses to the floor
There are people making $100K a month that live paycheck to paycheck.
No joke. It’s not how much money you make but how much you keep. It’s why I rent a basic house in an area full of government housing. I don’t need a fancy house to live the good life.
I just need four clean walls to shelter my family.
Maybe you don’t want to cut back on housing like me. Perhaps you could trade the expensive car for a good second-hand Toyota. Or maybe go through all your subscriptions and cancel most of them.
Tadah! Expenses gone.
3. Invest all your extra money
Now you’ve got extra money from a higher income and lower expenses.
The next step is to invest the money to buy financial assets that build wealth — unlike consumer assets that depreciate (cars, luxury bags, iPhones, etc).
The mix of assets you decide to buy (also known as asset allocation), differs for everybody. It depends on your age, net worth, and risk tolerance.
I prefer to invest my money in cash, stocks, real estate, and Bitcoin/Ethereum. And yes, cash is an asset. It gives you optionality in a recession to spot discounts and get an unfair advantage.
To invest properly you either need the help of a professional, to get yourself a financial education, or a combination. Choose wisely.
4. Become a badass tax-efficient individual
This last one is mostly forgotten about.
It’s not about tax avoidance, like what billionaires do. No, it’s about tax efficiency. Let me give you an example.
I used to earn money, have it get deposited into my personal bank account, pay 50% tax, then buy financial assets.
Now I earn money, have it deposited into my business bank account, then invest the money in financial assets. One day when I sell those financial assets I will still have to pay 50% tax. But in the meantime, I get to invest most of my income, which buys me more assets.
If I want to delay the tax further, I can use those financial assets as collateral (like a security deposit) and get a loan against them. Then I can buy whatever I want that way.
Understanding tax efficiency can make you 3x wealthier in the next 5 years. Read about it and hire quality accountants and tax lawyers to help.
How this strategy differs from conventional money advice
What’s different about this cheat code to wealth strategy you’ve just read may not be obvious.
First, it’s based on optimism. There’s no scarcity mindset or debate about equality that belongs in a deadbeat’s tweet in the Utopian land of nowhere. The basis is if you have an internet connection, equality can exist for you.
Second, it takes into account inflation and money printing. Every year government-issued currencies are worth less. Currency melts like an ice cube. When you focus on owning quality assets, it stores the time you gave up to make the money a lot better.
Because true wealth is a store of time you can use whenever.
Third, it doesn’t require a genius to execute. You don’t need to be an entrepreneur running a 5000-person Silicon Valley tech company. You don’t need to have rich friends or special access.
All you need to do is focus on execution and stick to the plan.
Fourth, you don’t need to sell out or be above average. Anybody can do this with a little time, patience, personal finance books, and some good ol’ fashion positive psychology.
So take my 4-step formula and try it out. It’s unlikely to make you poorer.
Because if you have a valuable skill stack, and lose all your money, you can always make it back again. I’m living proof.
This article is for informational purposes only, it should not be considered financial, tax or legal advice. Consult a financial professional before making any major financial decisions.
