In “How Do You Become Rich?“, Finance Fox pens a 1,200 word post on what it takes to reach the promised land. I immediately checked out the post because I’m always fascinated about how others define rich and how others plan to get rich. Eddie’s definition of rich is “having a fortune over $1 million bucks.” $1 million bucks is a good amount of money, but at what age? At 35, that’s pretty darn rich. At 70, not so much.
Eddie then goes on to ask what is the secret of successful rich people? My answer is almost always, PERSEVERANCE. The ability to solider on and not give up even in the worst moments. Every single wealthy person I know has had some tremendous disappointments in their lives, but they don’t stop trying.
The more critics there are, the greater the wealthy person’s fire is to succeed.
FEAR OF FAILURE
I’m absolutely afraid of financial failure, which is why I have a tendency to build up enough income buffers so that in the case a business idea fails, I won’t be left completely distraught. I also find money to be very manipulative. As a result, if I can do things NOT for the money, I feel I will produce a better product, which may ironically bring more money in the future.
Just the other week, I got my butt whipped 0-6, 1-6 in tennis because I entered a level higher than where I usually play. It was slightly embarrassing losing in front of so many people, but I came away invigorated. I put to rest I cannot play that level of singles, and refocused my efforts on doubles instead. My opponent is ranked #1 in his age category and I was proud to at least try.
My mantra is, “I’ll never know unless I try.” I don’t mind whiffing badly. At least I’ll learn from the experience so I can continuously make the product better. The educational aspect of failure itself is something of great value.
AND THEN THERE’S LEVERAGE
“Rich people leverage everything – time, technology, and money.” To that point, I agree completely. Leverage is a beautiful thing on the way up, but a disaster on the way down. Hence, back to the word, perserverance. If people can hang on to their leveraged assets for a long enough period of time, chances are, they will make money back and then some.
US housing in the 1980’s is a fantastic case study where those who sold during that downturn severely kicked themselves in the nuts when the housing market rocked higher for the next 20 years. Their leverage would have enriched them greatly had they held on. It’s the same thing for forced sellers of housing and stocks in the past four years. 10-15 years from now, we are going to look back at the period between 2008-2011 as a wonderful time to buy. Things have already begun to heat up in 2012.
How do I plan to get rich? By trying and trying again. As for leverage? Maybe. I prefer to use the word scalability.
Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.
Archimedes, the mathematician.
Recommended Actions For Increasing Your Wealth
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Photo: Palace Of Fine Arts, San Francisco,