You don’t become wealthy by saving. It happens through investing.
That was a big psychological shift I had to have in my wealth creation journey. So to do the same & get started, you’ll need some investing strategies to follow as rule of thumbs. Here are the best (legal) ones I’ve found.
Double down in bear markets
In recent times we’ve been through a brutal bear market and recession.
All the smiling Lambo bros have gone to Wreck City. There are no more laser eyes on social media. People have been pessimistic about the economy.
One thing history tells us (without fail) is that after hard times there are good times again. So if we’re in hard times now, you should be investing more money than ever before to take advantage of the discounts.
When the next up-cycle happens and the bulls return, your investments will grow nicely. What’s weird is people often do the opposite.
They invest once markets are already going back up again and optimism has returned. And then they get FOMO because they feel like they haven’t invested enough. This is how they pay top dollar for their investments.
During this latest down cycle I’ve aggressively bought all my favorite assets. Since the start of 2023 those investments are already way up.
Lesson: don’t wait until it’s too late to invest. Make investing a habit and do it in good times and bad times. And double down in bad times.
Don’t take no for an answer
To invest money you need to have money.
Money is made from your skills. All of us are selling something to someone to earn a living.
When we ask people to take action, support our idea, or back our career and hire us … there’s a good chance we’ll get a no or be ghosted. Most people stop here. Or they don’t follow up.
I came across a man who had a different wealth mindset.
He was born in Africa and had to work in a quarry at age 10. His village tried to get him to join dangerous gangs to survive.
He tried to move to Europe 12 times and got rejected. When he went to Spain he got arrested and went to jail for 2 months for illegally entering the country. He went to Paris and became homeless.
There he met a man who saw his talent for street fighting. The man convinced him to join MMA. In a few short years, he’d sign on to join the UFC and become a fighting legend. He won the heavyweight title in 2021.
Then he landed a $7M fury fight.
Francis Ngannou achieved all of this because his strategy was simple:
Never take no for an answer. Just keep breaking down walls that get in the way of your financial freedom. You can do the same.
Make more money
I often hear people say “I’ve got no money to invest, pal.”
And I get it. I’ve been there too. The answer isn’t to be upset or give up because you don’t have excess cash to invest. No. The answer is to reduce expenses and then make more money.
It sounds so simple because it is. Maybe you start a business. Maybe you consult to other employers similar to your current one. Maybe you start a side hustle. Or maybe you write a book and put it on Amazon.
There are a million ways to make more money. And when you do, that will give you the money needed to invest.
Follow rich people into their bedrooms and watch the action
(Okay that sounds naughty. Ooopsie.)
What I mean here is most of us don’t have genius investment strategies and that’s okay. I didn’t either. All you do is watch what the rich people do.
They often mention it in interviews or on their social media. One word of warning though — don’t just blindly follow anyone’s investment strategy.
Do your own research.
And that’s where this next tip comes in: get a financial education. Read books like “The Psychology of Money” or “One Up On Wall Street” and learn the basics of investing. It’s not hard to do and it’s your financial future we’re talking about here.
Reading one investing book is worth ten times more than watching another useless episode of Game of Thrones on HBO. Harsh but true.
Add some growth to your investment portfolio
Some of you are investors. High five.
But you make one big mistake: you take hardly any risk. Your investment portfolio has one investment property or a stack of cash sitting in US Treasury Bonds.
Your money can’t grow without risk. Read that again.
That doesn’t mean you bet your life savings on some meme stock or crypto to get wealthy. All it means is you want to dial in some risk.
I like the idea of 5–10% of my investment portfolio being high risk. That way if a high risk investment goes bad then it doesn’t wipe me out. But if one of them goes well then it lifts my entire portfolio.
One of the high risk bets I took was Bitcoin and Ethereum. Prices have had wild swings in both directions. Overall the market for these two cryptos is up by a lot over the last 5 years.
By having a bit of risk from crypto in my portfolio, it’s taken average returns of 7–8% and made them more like 20%.
I didn’t come up with this idea. I learned it from a hedge fund manager I saw on the Real Vision Youtube channel. No reason you can’t adopt a similar approach to risk.
Just do a lot of research on what you choose.
Consider an unprofessional business
Business is legal and so is capitalism.
Investing in a business you own is one of the most underrated ways to get wealthy. What’s changed is you don’t need to run a full-time business.
It can be part-time.
You can take money from your main income and use it to grow a side income. It may not make you a millionaire, but it can certainly raise your income over 2–5 years.
A business can also help you become more tax efficient. That’s important because your biggest living expense is tax. Most people forget this. In my hometown of Australia I pay 50%.
So having a business to offset some of this is a survival skill — and it’s legal. You can also set up a company designed to do nothing more than invest. This helps further reduce tax and stop people from getting your assets in the event of bankruptcy.
The reason many people stay away from this legal investment strategy is because they fear the label ‘entrepreneur.’
They think you need an MBA or a permission slip. LOL.
You don’t. Once you realize we are all one-person businesses this fear goes away. A boat anchor is taken off your shoulders. And suddenly, you start to realize your potential is so much bigger than just a single-employer life that takes you to 65 years old.
Dare to start a side business.
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.