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Hey guys, I’ve been working on these thoughts and tips for over a year, and I wanted to share them now on the channel.
So, I'm relatively rich.... our needs are more than provided for... and I’ve spent a ton of time with rich people. I want to share with you my 11 principles to be rich and build a ton of wealth.
Now I know what I’d be asking - IS THIS GUY RICH? And to that, I’d say that I’m not a filthy rich person, but I’m a successful entrepreneur that helps other businesses in their taxes, wealth and business growth...
I’ve been lucky to have one thing that the average person does not - my first business was growing a tax and accounting firm that helped small businesses. I was a strategic tax planner and the core business developer for that tax firm, and after getting it to a great place, I stepped out as an owner and handed it over to my business partners.
So while I’m successful and have a decent amount of wealth for being 37 years old - my main advice here about being rich is coming from my experience being mentored by rich people, doing their tax planning, and the inside perspective I get as a consultant into wealthy people’s operations.
So with that I want to talk about the top ways to legitimately become rich, and this is deep stuff, and I came up with 11 earth shattering things... :)
I believe that it’s incredibly difficult to provide advice about how to become wealthy from the perspective of being an employee.
The first key to wealth creation is learning about the wealth quadrants.
I’ve worked with plenty of middle America people that have earned between 80 thousand and 250,000 a year - but I want to talk about what it would take to become really wealthy.
The clients I’ve worked with that are truly wealthy, are not employees of anyone, they are business owners and investors.
The first thing to do to become rich is to
Learn the cashflow quadrant and shift from being an employee, to being an investor and business owner.
Robert Kiyosaki has a book called the cash flow quadrant - There are four types of incomes - EBSI - Employee, Self Employed, Business Owner and Investor.
Employee - means you have a JOB - theres no leverage and this is where you trade hours in for dollars out. You have a salary or a wage, and you need to put in the work for the income.
Self Employed - no leverage - It’s still a time-in, equals money out - it’s basically a job with higher margins than being an employee.
Business owners: They use other people’s time, and money to work for them and to produce income. They create a system, and then organize others to use the system to create wealth. There’s big time leverage here because you’ll be using other people’s time and money to create wealth….
INVESTOR - your wealth again doesn’t rely on your own time - so it’s leveraged, but here you’re part of the investor class where they buy other systems to work for you.
LEVERAGE is when other people’s time and money start producing income for you. It’s a multiplier on your own resources of time and money.
The greatest wealth is held by investors and business owners. Not only do they hold the majority of the wealth in the world, but they also enjoy more freedom even at lower levels of wealth because other people's efforts are working for you.
if you want to be rich, your goal should be to become a business owner, and investor.
The richest people I know, are people that have shifted over into the business owner and investor quadrants, and they utilize other people’s time, money, and systems to create wealth for themselves They have reached a place where their system works for them, and they participate because they love it or they want to add value - not because they’re required to do all the work themselves.
So that’s the first thing - get leverage as a business owner and eventually an investor, but to get there you’ll have to climb what’s called the “entrepreneur ladder”.
The second thing that you’ll need to do to get rich is to climb the entrepreneur ladder.
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In order to head up to becoming a business owner - or an entrepreneur, you’ll need to climb the entrepreneur ladder.
You start out self-employed, then you get some people to work alongside you and you manage others, which provides leverage in your wealth building, and then you’ll need to develop SYSTEMS and empower PEOPLE around you, so that the business operations happen without you doing the work. The goal is to build a system that leverages other people’s time to accomplish the work - which is what the leverage is all about.
You’ll want to get to the point where you’re a true entrepreneur, but You almost always start out as the technician that’s self employed.
So the second part of getting wealthy builds on the first - you’ll need to shift into the business owner and investor quadrants, but you’ll need to climb the entrepreneur ladder in order to do so. That means building systems and teams of people or technology to accomplish things.
The third thing to do to get rich is to acquire the knowledge necessary to build a business.
Rich people build businesses and are investors, but they usually had to seek out that knowledge outside of the traditional education system.
Learning Outside of the Classroom is where most entrepreneur get the knowledge required to become wealthy
What do I mean here? Well, most rich people are participating in businesses that no teacher or k-12 education system gave to them, it was usually from on the job training and industry specific competencies. Read this article about On the Job Training vs. College education.
Most of the wealthy people I know built their business because they got an insider understanding of the sector, and obsessed about ways to do it better - and then ACTUALLY stepped out to do those things.
One of the major barriers you’ll need to push through in order to become rich, is to become aware, and acquire the knowledge of different sectors and industries that have entrepreneurship opportunities.
To become aware of the diverse sectors and industries in which people make money, don’t Rely on K-12 education or even college. Work experience and starter jobs in those industries is much more helpful, and you also need to find mentors that will help you become aware.
Work Experience & Mentorship are CRITICAL to acquire necessary knowledge
Entrepreneurship is a catch all term. People do BIZARRE Things for profits. The major problem that keeps people poor is that they never learn what sectors, businesses, or activities are possible to make profits!
I know very stupid people getting rich because they found a niche, or became aware of a sector where there was opportunity for high profits.
People make money in all sorts of services, brokering relationships, niche industries etc.
The riches are in the niches - and your k-12 education system is systemically INCAPABLE of helping you identify and learn about these things. They are teachers that walked the predictable, noble - yet bubble=encased career path. They teach to Get good grades, go to college, get teachers license, and they actually work in that in that self-perpetuating system. Again - it’s great at creating competent employees… but not helpful in building wealth or helping you become aware of the opportunities in entrepreneurship… you can’t rely on teachers or formal education - you need to get first hand experience in any industry you’re curious about, and you need to get perspective through books and mentors.
Educators are great people - but in America - they are FAR from being entrepreneurs, unless they use their summers and off-time to run a business or manage their investments.
Our education system is meant to equip you with the fundamentals, but the best learning will be done outside of the classroom if you’re intentional about it.
Many of the successful business owners I work with, were mediocre students - but they wanted to hustle and work with their hands. Rather than go to college, they took jobs in the industries that would provide them the experience and perspective to eventually run their own shop…. Now they have a fleet of tractors building homes, they have immense insurance brokerages, or they’ve built a rental real estate empire.
MY POINT IS THAT YOU WILL REMAIN IGNORANT Of what it takes to be wealthy so long as you’re relying on k-12 or even k-16 education
So rich people build businesses, they climb the entrepreneur ladder, and they acquire the knowledge they need
4 - The next thing that rich people do - or have done - is that they get intentional about mentorship and pursuing mastery in their crafts.
Rich business owners almost ALWAYS pursue mastery in their craft.
They try to Learn everything there is to learn, about everything in their field.
One of the keys in this is to find a mentor that can help you… A good mentor, formal or informal, will provide you with the perspective necessary to pursue mastery and even become aware of some of the secret niches and even industry secrets.
Make it your goal to find people that can be your mentor in a formal way, or even just as a acquaintance you take out for coffee periodically to gain wisdom.
Coffee appointments can serve as mentorship opportunities
Coffee appointments are what have provided me with the most valuable perspective and ideas EVER -
I never told them what I was doing - but by having coffee with hundreds of successful entrepreneurs over time, I’ve been able to render their advice and perspective into my own mind and become better…
Find a small business owner - or a leader at a company that’s in the type of business you’d like to become, and just ask them great questions.
Ask them for a 1 hour coffee appointment, and tell them that you’re fascinated with what they do - and you’d love to hear the story and learn more… Come prepared with questions, a note pad, and listen intently.
Remember - it’s NOT ABOUT YOU - it’s about them, so don’t be a tool and muck it up with your need for affirmation and attention… you want to find out their secrets!!!!
THE KEY HERE - don’t talk much - just ask questions - take GREAT NOTES - and try to get an understanding of the basics, and the nuances of their operations and industry.
IF YOU DO THAT WITH 2-10 people this year - you’ll be light years above where you are today.
IN FACT - there’s a huge difference between business owners that work hard to gain perspective from peers and industry experts, and those that think they know everything.
GET PERSPECTIVE, GET A MENTOR, and become obsessed with learning everything there is to know from wise people that have already gone down business owner path.
Alright, SUMMARY SO FAR:
ALRIGHT - let’s shift gears a little bit…
The rich people I’ve met, don’t spend their time on wasteful leisure.
Sure they refuel and recharge, but they spend their time wisely because they understand that time is the only truly finite resource we have.
You want to be rich? Don’t SPEND your precious time on nonsense! Rich people don’t typically waste their precious time on leisure, or if they do, it’s only AFTER they’ve accomplished all they need to do or it’s once they’ve sacrificed to get their business to where it needs to be.
Spend your time wisely, and put it to work by dreaming and planning! Rich people are constantly scheming, planning, and being curious about their operations!
Make strategic and tactical planning your new video game.
Wealthy people, and business owners, that I know, entertain themselves by working on problems, thinking through plans, and then working at it.
WHen other people are vegetables in front of a television, rich and successful entrepreneurs are reading productive books, listening to a speaker or an audio book, problem solving, side hustling, training, planning, or writing.
Think about a video game - you’re solving problems and puzzles for the most part.
Make it a game to wrap your mind around problems, and to map out strategic plans…
DON”T WASTE TIME AND MENTAL ENERGY on wasteful leisure.
Of course you need leisure to relax, and get some margin time.
But to become rich, you should be writing down, and making permanent, your business plans - and then tinkering with it CONSTANTLY to make it better.
If you have a family, and you’re a business owner that’s trying to grow and become a true entrepreneur, you have to sacrifice. Put your family above the business, but realize that if you want to be rich, you need to utilize as much of your time and thinking as possible to be productive.
You know, I place huge value on execution, in other words, JUST GETTING THINGS DONE - but strategic and tactical planning is tremendously important.
Time is the only resource that’s FINITE - and if you want to be rich, learn to redeem TONS of your leisure time from mindless entertainment, to problem solving and business planning - OR even gaining new competencies…
You need margin time - but too many poor people dump their lives into wasteful leisure.
So - if you want to be rich - don’t spend your precious time on wasteful leisure - you need to put your mind towards “upward and forward” things like problem solving or planning.
Alright next, here's the sixth thing you need to do, to be rich…
To be wealthy and a great business owner - you’ll need to develop your Leadership & management abilities.
Your abiltiy to create a business- and develop this leverage we keep mentioning, is hinging on your ability to be a great manager, and a great leader.
Remember that E-Myth ladder? You’re going to try to assemble a team, and a system, to accomplish work and build wealth for you, which means you’ll need the skills to accomplish that, and become the type of person that others want to follow.
Wealthy people are entrepreneurs - they’re not usually self-employed. The difference is that they organize other people, with resources, to accomplish work.
YOU CAN’T LEVERAGE up the entrepreneur ladder unless you’ve developed the management and leadership abilities to move a team along with you.
Management is Accomplish things through other people and resources
Leadership - is influencing people towards a preferential future - a compelling vision, moving forward.
Leadership is influence - and great leaders move people towards a compelling vision.
To be a great leader, you need a compelling vision, and you need the integrity, love, and John Maxwell type skills to unleash people and make them want to be on the team alongside you…
A great leader creates vision, and manages properly, so that everyone on the team comes to work to pursue this vision…
If you want to be wealthy by utilizing other people’s time and money to create profits for your company, you need to invest in your leadership and management - so listen to audio books by the greats like John Maxwell, Henry Cloud, Jim Collins, Ken Blanchard - and host of others..
YOu want to be rich - you’ll get there faster if you’re a great leader.
If you want to be a great leader, you need to listen to books and get perspective, and you need to get mentors.
7 The 7th thing to do to be rich:
Rich People Know that Success comes from: Execution x Persistence x Continuous Improvement
It’s about GETTING IT DONE, doing that persistently, and then just like becoming an amazing basketball player - you need coaching, feedback, graded feedback, drilling, analysis, and critiquing, you need to pursue continuous improvement in all areas of your life and business.
If you work at these three things - execution, persistence, and continuous improvement,, you’ll be acting like the rich.
Ray Crock - the guy who took the Mcdonalds brothers from a high quality burger joint, to the largest restaurant franchise in teh universe, put particular value on persistence…. Here’s one of his quotes: He said:
" Nothing in the world can take place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. "
If you want to be rich - that means you need GRIT, you need persistence, you need to push through failure, rejection, and depression and fatigue.
But notice I’m saying its three things? I think persistence is not enough - you need also need high levels of execution, persistency and then continuous improvement if you’d like to become rich.
Toyota famously embraces what’s called Kaizan - the method of continuous improvement. Toyota and the lean six sigma movements should teach us - we need to strive at every moment to make things better in our businesses.
If you want to be rich, and you’re building a business, you need to embrace this continuous improvement, or Kaizen approach, which is obsessed with making improvements every year.
So that was number 7… if you want to be rich you need to EXECUTE, be persistent, and pursue continuous improvement.
IF you want to be rich, you need to get along with people, while executing.
Life can be boiled down to two core things; How you relate to people and how you get things done.
We all leave a wake as we go through life, just like a hot leaves a wake as it travels across the water.
Henry Cloud is an author and psychologist, and he suggests that as we go through life, we’re leaving a wake behind us… on one side it’s how we leave people feeling and the other is our ability to accomplish tasks.
This is about becoming a great person. Richness here is sustained, and often created at a faster rate, when we’re able to leave those around us feeling uplifted, good, and valued.
If you want to be truly rich, seek to leave a great wake as you relate to people and get things done.
SEEK REALITY - fight your need for affirmation and seek out the reality about how things really are.
Rich people push past bull-crap.
What bull-crap am I talking about?
The other day my wife and I went out to eat, and the food and service was no good. The owner came up after and said “how was everything” we nicely said “fine” and we went on our way.
We won’t go back - and that owner thought things were fine. But in reality, they missed the mark completely.
It’s fine to have that occur to you if you’re the waitress, but if that restaurant owner wants to be rich, he needs to fight through and discover the REALITY of what’s going on.
That’s my final non-money peice of advice about how to get rich.
Succesful people don’t need affirmation, and they don’t have thin skin. IN fact, they relentlessly pursue the truth about things and identify all the warts that need fixing in life, and business.
This means that a great business owner finds creative ways to get authentic client feedback, or they survey people to get honest feedback.
If there’s one thing that rich people know, its that living in bull-crap land isn’t helpful or profitable, so they’re ruthless in their pursuit of the truth, and they take complete ownership of everything - and try to improve. This is actually part of the continuous improvement side of things.
You shouldn’t coddle yourself, you shouldn’t allow yourself to stay unaware of how you leave people feeling and how you get things done.... take an awareness exercise, get some books about emotional intelligence, and help yourself operate in reality when it comes to yourself AND your business.
10 - Avoid debt at all costs, and only use it for calculated leverage to produce income.
Rich people Use Debt ONLY for appreciating assets or income producing assets. DEBT IS DUMB
Rich people know that there are two types of people in this world, those that pay interest, and those that earn interest.
Rich people don’t use debt stupidly, they only leverage themselves when they’ll use it to produce more income.
Poor people go into debt for new furniture, too big of a house, or vehicles they don't need.
Borrowing $10,000 for a boat…Vs… Borrowing $10,000 to get an excavator to transform your lawn service business into a landscaping business… is what I’m talking about.
Borrowing $10,000 for an ecommerce website & inventory, vs. toys and a home remodel.
If you want to be rich, get out of debt and stay there.
And here’s the last thing rich people do...
Give, Save Spend - and embrace compounding interest.
Rich people dont’ spend everything they have. They save a percent, they give a percent, and they live on the rest.
They control their spending, they generously give to those in need and causes that are greater than themselves, and they understand the power of compounding interest.
Every rich person I know has investment accounts filled with investments that will take advantage of compounding interest. Open up a vanguard account, and start buying s&p 500 or dividend based mutual funds and get the compounding interest math working in your favor!
That’s what I’ve learned about getting rich, and I hope this helps you out!