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The Reliable Path to Wealth Has These Eight Components

by | Sep 12, 2022 | Financial Freedom, Money

The path to wealth buys you freedom.

Not the freedom to buy a Lambo, but the freedom to do whatever you want without anyone telling you what to do.

As a banker, I saw many people generate large amounts of wealth that they used to buy back their time and get us bankers off their backs.

This is the reliable path they showed me.

They spit in the face of luxury

Even if they could afford luxury they didn’t indulge. The reason isn’t obvious.

Luxury is a form of heroin.

Once you get a hit it’s hard to kick the habit. Luxury shows status and humans are addicted to status, also. We want to look rich. We want to look like we’ve got it all together. The problem is it’s never enough.

Luxury is a game of monopoly where there’s no winner. Soon as you buy one luxury, there’s a better version tomorrow. Or there’s someone with more money who has a more impressive form of luxury, or a one-of-a-kind house that you can’t replicate or buy.

Wealthy people trade luxury for time wealth.

They own this one investment

The path to wealth (often) is associated with buying stock market index funds or investing in risky assets such as cryptocurrencies.

In my banking days I noticed a different trend.

Most wealthy people owned businesses that consistently produced cash flow. Now, not all of you want to be full-time business owners or consider yourself grandiose entrepreneurs.

But these wealthy people showed me you don’t have to.

Many of them had good jobs and businesses on the side that made them money. Too many people say “I can’t start a business.” You can.

And owning a business is a timeless way to achieve a modest level of wealth that requires much less risk than stocks/crypto/gold/real estate.

Start a small side business. Work on it after hours.

They take on a lot less debt than you might think

There’s this misconception every wealthy person takes on enormous debt.

It comes from the real estate spruikers who spread the message “own real estate or have fun staying poor.”

I’m sick of these idiots.

Real estate can be a good investment, providing you know what you’re doing, buy in the right area, and don’t get scammed into buying apartments that have no land (or come with a body corporate that’s a nightmare).

Right now I’m trying to buy a home. The amount of bullsh*t is undeniable. The real estate agents are commission-hungry mongrels who’d rob their grandmother if it made them a dollar.

They keep telling me how real estate never goes down. Yet, in Australia, real estate prices are plummeting and the recession is getting worse.

Then there’s the construction quality. Because the laws around building quality are so flimsy in the west, builders take the piss and build low-quality houses they can flip for enormous profit.

Some schmuck always gets left with the repair bill a few years later.

I’ve had multiple building inspections done on a few properties that look great to the eye. But when you dig a little deeper there’s bad wiring, illegal building materials (asbestos), and even highly flammable foam walls that are dangerous if there’s ever a fire.

Yet the real estate industry keep saying “everything is fine.”

Wealthy people are skeptical about most properties. And if they find a good one they don’t just keep loading on the debt to infinity. No.

They buy a good property and then pay off some of their debt before considering another investment. They also don’t have their entire net worth tied solely to real estate.

Wealthy people invest in multiple asset types in case one goes down for a few years or a huge Wall Street scandal (like 2008) gets exposed that they can never recover from.

Real estate always goes up.

Until debt bubbles burst and it goes right down again. Always diversify and only take on a modest amount of debt.

They drive Toyotas

Most of them look below average.

They don’t roll up in a BMW that’s got 6-figures of debt on it and costs the same as a Rolex watch to service.

Luxury cars are a magnet for the wrong type of people, too.

If you want to be surrounded by Jersey Shore show ponies then go for it. Although be prepared for a lot of drama and loads of shallow relationships that will see your inner circle become nothing more than blood-sucking vermin.

If you want to attract high-quality connections then drive a Toyota so humans are attracted to your personality and what you can teach, rather than how big ya exhaust is.

They know what to do in a recession

Wealthy people don’t panic in recessions.

They chill the heck out. They invest for the long-term, so what happens in the next 180 days is irrelevant to them. When prices of assets plummet they see it as a fire sale and start investing in opportunities they’ve carefully researched beforehand.

Recessions steal from the impatient and give to the patient.

Invest for 5+ year timeframes.

Markets always recover. And if they don’t, it’s probably the end of the world and you should hide in a bunker.

They make money then get out of the spotlight as fast as possible

Some of these wealthy people I met made enormous amounts of money.

Some had to be in the public eye to do so. What fascinated me is once they made their wealth they disappeared from social media. They went ghost. What they valued more than their money was their privacy.

I feel like that a lot as an online writer. It’s good to be quiet and not have anyone know who you are or what you do.

Don’t let wealth lead you to the fame trap.

They know this subtle difference between wealth versus income

To earn a high income you have to say yes to lots of ‘asks.’

Many people get a high income by saying yes a lot and then stay that way for the rest of their life.

The wealthy people I met in banking said yes a lot to get opportunities, then they said no a lot to buy back their time and achieve wealth. Because real wealth is measured in free time, not money.

Say yes to build income. Say more noes to turn income into wealth.

They focus on the proven strategy used for centuries

People who have a good income think they’re wealthy.

Really, they’re one step away from bankruptcy if they don’t own assets. Why? Income can easily disappear. HR can fire your ass and take away your paycheck. The market can get so ugly that it’s hard to find a new income.

But when you own assets, even if you do lose your income, you have assets that store your time. Assets can be sold for money. And assets can generate income without you having to lift a finger.

The assets you own determine your level of freedom.

Without freedom there’s no wealth. So invest in assets the way humans have since the beginning of time. That’s the most reliable path to wealth.

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.

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