So you want to be rich? Glad you're here. Financial Samurai is focused on getting rich and staying rich.
If you want to get rich, you must practice predicting the future.
If you want to stay rich, you must continuously invest in real assets that hold its value.
Finally, if you want to live freely, you must build a large passive income portfolio to pay for your desired living expenses.
So You Want To Be Rich
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. Getting rich is relative.
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.
Get Rich By Beating 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.
Use Leverage To Get Rich
“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. Think about how many people had to give up their homes during the 2008-2009 financial crisis or perhaps during the 2020/2021 global pandemic.
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 20 years.
Today, 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.
Getting Rich Is A Mindset
How do I plan to get rich? By trying and trying again. As for leverage? Absolutely. It's all about building your own platform / website. I never thought in my wildest dreams I'd be able to retire at age 34 in 2012 and just run Financial Samurai full-time.
But now I'm having more fun than ever while also making more online than I ever did at my day job working 50-60 hours a week!
Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.
Archimedes, the mathematician.
Even if you can't get rich, here's how to feel rich. If you can feel rich without having to grind for decades to become a multi-millionaire, you're good to go! It's like a short cut for the true purpose of being rich: to be happy and not worry about money.
Invest In Private Growth Companies
One way to get really rich is to invest in private growth companies. Companies are staying private for longer, as a result, more gains are accruing to private company investors. Finding the next Google or Apple before going public can be a life-changing investment.
Check out the Innovation Fund, which invests in the following five sectors:
- Artificial Intelligence & Machine Learning
- Modern Data Infrastructure
- Development Operations (DevOps)
- Financial Technology (FinTech)
- Real Estate & Property Technology (PropTech)
Roughly 35% of the Innovation Fund is invested in artificial intelligence, which I'm extremely bullish about. In 20 years, I don't want my kids wondering why I didn't invest in AI or work in AI!
The investment minimum is also only $10. Most venture capital funds have a $250,000+ minimum. You can see what the Innovation Fund is holding before deciding to invest and how much. Traditional venture capital funds require capital commitment first and then hope the general partners will find great investments.
Recommendation To Build Wealth
The best way to become financially independent is to get a handle on your finances by signing up with Empower. They are a free online platform which aggregates all your financial accounts in one place so you can see where you can optimize.
Before Personal Capital, I had to log into eight different systems to track 25+ difference accounts to manage my finances. Now, I can just log into Personal Capital to see everything in one place.
The best tool is their Portfolio Fee Analyzer which runs your investment portfolio through its software to see what you are paying. I found out I was paying $1,700 a year in portfolio fees I had no idea I was paying!
They also recently launched the best Retirement Planning Calculator around. It uses your real data to run thousands of algorithms to see what your probability is for retirement success. Once you register, simply click the Advisor Tolls and Investing tab on the top right and then click Retirement Planner.
There's no better free tool online to help you track your net worth, minimize investment expenses, and manage your wealth. Why gamble with your future?
Get Rich Through Real Estate
Real estate is a core asset class that has proven to build long-term wealth for Americans. Real estate is a tangible asset that provides utility and a steady stream of income if you own rental properties.
Given interest rates have come way down, the value of rental income has gone way up. The reason why is because it now takes a lot more capital to generate the same amount of risk-adjusted income. Yet, real estate prices have not reflected this reality yet, hence the opportunity.
I think it's a good idea to get rich through real estate. Take a look at my two favorite real estate crowdfunding platforms:
Fundrise: A way for accredited and non-accredited investors to diversify into real estate through private eFunds. Fundrise has been around since 2012 and has consistently generated steady returns, no matter what the stock market is doing.
CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations, higher rental yields, and potentially higher growth due to job growth and demographic trends.
Both platforms are free to sign up and explore.
I've personally invested $954,000 in real estate crowdfunding across 18 projects. My goal is to take advantage of lower valuations in the heartland of America. My real estate investments account for roughly 50% of my current passive income of ~$300,000. Real estate has been a key factor in getting me rich over the years.
About the Author:
Sam began investing his own money ever since he opened an online brokerage account online in 1995. Sam loved investing so much that he decided to make a career out of investing. He spent 13 years after college working at Goldman Sachs and Credit Suisse Group. During this time, Sam received his MBA from UC Berkeley with a focus on finance and real estate. He also became Series 7 and Series 63 registered.
In 2012, Sam was able to retire at the age of 34 largely due to his investments. They now generate roughly $300,000 a year in passive income largely thanks to real estate crowdfunding. He spends time playing tennis and taking care of his two young children.
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