How to Become Wealthy: The Path to Creating Wealth
How to Get Rich? The ultimate purpose of money is to free you from having to do anything you don’t want to do, at a place or at a time that doesn’t suit you.
1. Avoid living beyond your means; your lifestyle shouldn’t upgrade too quickly.
People whose cost of living is far below their income enjoy a freedom that those busy upgrading their lifestyles can’t even imagine. Just don’t keep raising your lifestyle. Once you start earning a little money, still live as you did before. Don’t go out and upgrade your house or lifestyle—that way, you’ll save money and gain a kind of freedom others will never understand.
2. You must be able to play a long-term game. Long-term games benefit not only compound interest but also trust. Essentially, if you want to succeed, you must work with others.
You need to figure out who you can trust and who you can trust in the long run, people you can keep playing the game with. Compound interest and high trust make the wealth-building game easier. When you do business with someone and become friends over ten, twenty, or thirty years, it only gets better because trust makes it easy. Friction drops away, and you can do bigger and better things together.
Also, everything you do is an iterative game. All the rewards in life—wealth, relationships, knowledge—come from compound interest. Compound interest is simply iterative upgrades that keep paying off.
3. If you can do both at the same time, you’ll be unstoppable: learn to sell, and learn to build.
One side is building a product. This is hard and involves many variables. It can include design, development, manufacturing, logistics, procurement, or even designing and running a service. There are many definitions for it.
The other side is sales. Similarly, the definition of sales is very broad. Sales doesn’t necessarily mean selling to individual customers; it could mean marketing, communication, recruiting, fundraising, motivating people, or doing PR. It’s also broadly defined.
In short, it means you can build a product and sell it for profit. (If you’re a solo entrepreneur, you need this ability; the same goes for a team.)
4. Leverage is crucial.
Luck requires leverage. Business leverage comes from capital, people, and products that have zero marginal cost of replication.
Products and media are new forms of leverage. The most interesting and important type of leverage is this product-based idea that has no marginal replication cost. It’s a new form of leverage.
If you care about creating wealth, it’s best to use code and media as leverage, because everyone has equal access to these tools compared to trying to create wealth through labor or capital. (Weren’t the wealth creation stories of recent years all about the internet and the new-media creators beneath it?)
5. The ideal business model has network effects, low marginal costs, and economies of scale.
In other words, the more you produce, the cheaper it becomes to make—approaching free—while its value grows as the customer base expands, quietly achieving natural monopoly.
The original article is quite long; it will take about 1 to 2 hours to finish reading. We suggest finding a block of uninterrupted time to read it, as it can effectively help you build a deeper understanding of how to accomplish something worthwhile. (Tip: it loads fastest on mobile data.)