How To Be Rich and Successful In Life? 9 Shocking Truths About Becoming Rich
When people think about getting rich they tend to go straight to driving expensive cars and taking the fanciest vacations and while these certainly are perks of having significant wealth, no one ever talks about the harsh realities that come with building a sizeable net worth this is unfortunate because there will always be roadblocks and obstacles. When trying to become successful in anything you do and in this article I will share with you 9 shocking truths about becoming rich and if you’re new to the channel then hit the subscribe button below for more a life-changing content.
Truth number one:
Your income is capped as an employee when you’re an employee you typically get increases in compensation in three ways promotions raises and bonuses while these boosts and pay are always welcomed. The reality is that they will never make you rich the trouble with being an employee is that you will never be paid more than someone else decides what you’re worth that’s why in return for less freedom less control and less fulfillment every day you work for someone else your upside is always capped and your downside is always unlimited since at any moment someone could come and take away your income this is a harsh reality that all rich people realize early on in their careers which prompts them to reassess their means of income generation and often leads them to start their own businesses where your income is only limited by you.
Wealthy people know that the only way to become extremely rich is to start a business by writing a business you get to leverage other people’s talents and time and can skill much more than you ever could as a single employee and the best part is that you’re the one who sets the price and not your employer meaning you can make the money you want as long as your business is thriving now keep in mind that you don’t have to quit your job to start a business in fact you probably shouldn’t one of the best ways to minimize your risk is to keep your full-time job while you build your foundation for success then once your business income is reliable and sufficient you can quit.
Truth number two:
No one cares about your success as much as you do whether becoming rich has always been your dream or if it is just another goal you want to attain during your life no one will care about you achieving this success more than you sure your friends and family may offer their best advice at times but when it comes to people outside your inner circle you need to understand that people are out to make money from you not for you, for instance, college isn’t there to help you get a job. It’s there to charge you X orbiting tuition fees financial advisers aren’t trying to make you money but instead are trying to collect commissions on the money you give them ultimately during your path to wealth you need to be the one who is looking out for your best interests.
Truth number three:
Borrowing is quick repayment is slow if you have good credit and sufficient income you could borrow a hundred thousand dollars and buy a fancy sports car if you have no credit and no income you can borrow a hundred thousand dollars or even two hundred thousand dollars and buy a degree if you have the right connections you can borrow thousands to start your own business simply put borrowing money is easy it’s paying it back that’s hard.
If you don’t believe me just ask recent college graduates with the average college student debt in the United States sitting at just over $37,000 the repayment of this massive amount takes time especially a salaries failed to raise his fastest tuition rates do the average debt repayment period for a student alone of between 20,000 and $40,000 is 20 years or five times longer than it took to get the education in the first place the rich know that borrowing can lead to financial trouble which is why they always borrow with an intended return in mind for instance.
They may borrow money against a mortgage to take advantage of low-interest rates which they can then invest in the market for greater returns or they will take advantage of short-term borrowing to free up the cash flow in their business borrowing money. Isn’t always a bad thing but it can be a scene in the college tuition example prior to taking on any loan ensure that you have a plan for repayment of the principal of the loan and the associated interest costs so that you can make borrowing money as painless as possible.
Truth number four:
People will try and over-leverage you sticking with the topic of borrowing money when you were on your path to riches there will be people who will try and take advantage of your aspirations and one way they can do this is by offering you more debt than you need many people who suffered dearly during a 2008 recession know this firsthand as the massive mortgages they assumed became impossible to maintain with thousands of people losing their homes the same situation can happen when it comes to building the business that will make you rich lenders will try and offer you more money than you need to maximize the interest they earn and while this is sad it is a reality that you need to be aware of only borrow what you need and pay it back as soon as you can.
Truth number five:
The simpler the better when investing as I previously mentioned many people think that those who become rich invest in very complex assets and use intricate investment strategies but the shocking truth is that the rich invest as simply as possible even the richest investors in the world practice the art of investing minimalism as Warren Buffett says the business schools reward difficult complex behavior more than simple behavior but simple behavior is more effective this is why people like Warren Buffett only invest in companies they truly understand for instance it’s easy to understand how Coca-Cola makes this money given people’s love for the drinks however understanding how a biotech product can cure a newfound disease isn’t as easy, therefore, don’t make investing harder than has to be if you want to realize the same successes of rich people you look up to.
Truth number six:
It’s all about assets those who aspire to become rich or have already achieved significant wealth know that assets are essential to growing your net worth they understand that while it is good to earn a large income whether that’s through a job or a business it’s the items we own that will propel us to new financial heights this is whether rich focus all their efforts on building an asset base that will support them over time from rental properties to investment portfolios these assets will appreciate with some even providing cash flow at the same time and by leveraging these items you can ensure that you continue to grow your wealth whether you are working or relaxing on a beach in Mexico in fact many people consider themselves rich once they’ve reached financial freedom and assets are the primary way of achieving this financial milestone when you’re financially free your assets produce enough cash flow to cover your living expenses and by accumulating enough assets this can cease being a dream and instead be your reality.
Truth number seven:
The most important investment you can make is in yourself poorest people believe that the rich become as financially successful as they do through picking wise investments but these aren’t the investments you would typically think of they know that you’ll get the biggest return from investing in yourself through improving your skills improving your connections improving your health and fitness and the list goes on consistently relentlessly investing in yourself will produce better long-term results than any other investment you can make the best part about investing in yourself is that your results are totally in your control whereas investing in real estate or stocks is out of your control due to the volatility of the respective markets.
Truth number eight:
You must capitalize on free money whether you are using a job or a business to earn the income that will make you rich you need to make sure you capitalize on free money with 401k matching contributions make sure you contribute whatever it takes to max out will your employer will match otherwise you’re passing up thousands of dollars in free cash which only makes it harder for you to become rich the same is true if you own your own business set up a 401k and match 100% of your contributions that way you’re contributing pre-tax dollars and so is your business as an employee you can contribute 19 thousand five hundred dollars to a 401k this year or 27 thousand dollars if you’re over 50 and total contributions employer match and profit-sharing can add up to more than 55 thousand dollars that’s a lot of money you can sock away this matches yet another reason to start your own business even if it’s just a side hustle designed purely to help you put away more money for retirement.
Truth number nine:
You have to lay your own path to riches some of the time it pays to consider what other people think but not if it stands in the way of living the life you really want to live don’t buy a house just to impress other people buy the house that’s right for you don’t buy a car just to impress other people buy the car that’s right for you make spending choices that are right for you make investment choices that are right for you pick your career your school your business pick everything because it’s right for you not only will you make better decisions about your money and finances, you’ll also be a lot happier because you get to live the life you want to lead which ultimately is what money is really.
Regards.
TMS
