“To get rich is glorious,” said Deng Xiao Ping, the late leader of the Communist Party Of China. Let's talk about the key ways to become rich and stay richer for the rest of your life.
Ever since I was 12 years old, I've wanted to be rich. I went to my rich friends' house parties and were amazed by their pools and views. I loved being picked up in a Mercedes Benz 280 SEL from our quaint little home. I religiously watched Lifestyles of the Rich & Famous all the time. It was wonderful!
Given my desire to be rich, I focused heavily in school, studied my ass off in college, and then got a job in finance at Goldman Sachs in 1999. I knew I had won the lottery, so I saved and invested 50% – 80% of my wages until I finally crossed the million dollar net worth mark at age 28.
Now that I'm 42, I've never stopped wanting to be rich despite. The reason why I want to stay rich is because of freedom and time. I want to have the freedom to spend time with my family. My boy is only two and I know he will grow up fast. I want the freedom to travel and do what I want with the time I have left.
If you want to be rich, then I suggest following these tips.
1) Build A Brand
When you build a personal brand, a company brand, or a brand for a product, you gain PRICING POWER. Once you have pricing power, you can drastically improve your income and revenue, thereby boosting margins.
We only have so much time in this world. You need to build a luxury brand in order to charge as much as possible. Then you've got to scale your brand for further achievements.
Scale is why having an internet presence and an internet business is so powerful. Financial Samurai reaches over 1 million visitors every month due to scale.
Hermes can sell a Grace Kelley handbag for $12,000 to some people because Hermes exudes luxury. Whereas Fossil can only sell a similar handbag made with the same materials for $120 because nobody cares.
See: How To Build A Brand For Your Work, Business, Or Blog
2) Save Time And Stress
The more you can save someone time and stress, the more you will be valued.
Excellent service is a godsend to your clients, especially rich clients. Your clients want to feel secure knowing the job is being handled by the best professional possible. The more you can minimize the rich person's worries and headaches, the more you will get paid.
Think about if you have children. Wouldn't you pay a premium for someone who you know will do everything possible to look after and protect your children from harm's way? Of course you would.
One of the best ways to build a brand is to start your own website.
3) Make Sure They Know How Good They Got It
Your clients want to know how much value they are getting, no matter how rich they are.
In my general contractor's case, he has a lovely portfolio of remodeling work he's done at different price points. No matter how expensive the price you're considering paying, there will always be an even more expensive price someone else has paid. Your strategy is to show the even more expensive job to make your client feel better about his less expensive job.
For example, spending $60,000 will get you a very nice kitchen in San Francisco. But when some clients balks at this price, my contractor shows them the $150,000 kitchen he built and suddenly, the $60,000 kitchen seems like a bargain!
So long as your clients know that other people have spent an equal amount, if not more, then you will be able to keep on charging a premium price.
4) Focus On The End Game: A Better Life
When you are selling a product or a service at a high price point, your end goal is to always sell what the product or service is ultimately buying e.g. going on amazing dates with beautiful people versus the quality of the gym equipment.
In my post, Watch Out For The Illusion Of Value, I used an example of a $5.9 million house in Honolulu to warn readers about how excellent marketing can cause buyers to overpay.
I adamantly thought the house wouldn't sell for more than $4.85 million because the luxury Honolulu real estate market has softened since it last sold for $4.85 million in 2016. Inventory is up double digits and other properties in the neighborhood have been sitting for years.
Well, guess what? After 160+ days on the market, the house finally sold for a whopping $5.3 million! Yes, it sold for $600,000 less than asking price. But it still sold for $450,000 more than what it was originally purchased for and for what I believe is about $750,000 more than what it should have sold for.
A realtor in the know who vigorously defended the sale wrote in the comments section, “Go back and take a look at this in home in 5 years. They will most likely make money. But that is not their motive. Living in a beautiful home with their family is more important than a financial incentive. Some people actually still believe in that. I have never met the buyers and do not know them at all except they are apparently very happy people now.“
This overpriced home is a perfect example of making the buyer envision the amazing lifestyle they'll have, even if they are overpaying by $450,000 more.
5) Always Give Maximum Respect
Whether you're speaking to the janitor or the CEO, you must treat another with maximum respect. Rich people are usually in positions of power or have been in positions of power for a very long time. Therefore, rich people are actually more sensitive when others don't give them respect because they are so used to getting love.
Respect goes beyond being punctual and responsive. Maximum respect involves anticipating what problems or concerns the rich person has and addressing these problems before they even come up.
I know some of you might think that giving maximum respect might be more like kissing ass. But it's really about recognizing what the other person has done to achieve his or her accomplishments. The importance of recognition is highly underrated. Everybody wants to get acknowledgement for a job well done.
Maximum respect and recognition creates maximum trustworthiness. Once you have a rich person's trust, you are well on your way to becoming a rich person yourself.
6) Always Invest In Assets That Have A Potential To Appreciate
Of course, no article about getting rich will be complete without the classic advice of saving aggressively and investing wisely.
You must have the discipline to live within your means and invest for your future. Stocks and bonds have appreciated by 4% – 8% a year over the past 20 years.
You can follow my asset allocation guide between stocks and bonds. But ultimately, you have to decide what is the best balance according to your own risk tolerance.
Real estate, my favorite asset class to build wealth, has also appreciated steadily over time and have made a great many people rich. I firmly believe everyone should at least get neutral real estate by owning their own primary residence. If not, you are a renter, and are essentially short real estate.
The most interesting investment opportunity right now is real estate crowdfunding. I've personally invested $810,000 in real estate crowdfunding because I want to take advantage of buying commercial property in the heartland of America before all the big corporations. Valuation is much cheaper and net rental yields are much higher in non-coastal cities.
Fundrise is my two favorite real estate crowdfunding platform. It is the oldest and most well-run company today in the space. Fundrise is free to sign up and explore what it has to offer.
I'm personally targeting a 8% – 10% annual return with no hassle that comes with maintaining a property and dealing with tenants. Getting to invest in real estate in a hands off manner is one of the biggest reasons why I like real estate crowdfunding.
One Final Way To Get Rich
There's one final important component of becoming rich and staying rich everybody should know about: a positive money mindset.
You must believe you deserve to be rich. Eradicate any weak mentality that tells you that you don't deserve to be rich as someone else who is smarter, faster, or more connected. There are janitors out there hustling making $250,000 a year!
There is so much wealth out there for the taking. If you believe you have the right to some or a lot of that wealth, you will find yourself heading in the right direction.
You're not going to get every investment or professional decision right. But the more you learn and take calculated risks, the better your likely outcome.
About the Author: Sam worked in investing banking for 13 years at GS and CS. He received his undergraduate degree in Economics from The College of William & Mary and got his MBA from UC Berkeley. In 2012, Sam was able to retire at the age of 34 largely due to his investments that now generate roughly $250,000 a year in passive income. He spends most of his time playing tennis and taking care of his family. Financial Samurai was started in 2009 and is one of the most trusted personal finance sites on the web with over 1.5 million pageviews a month.