The inspiration for these columns comes from a number of places. It may be a question from a client, a piece of research I read, or a discussion with another industry professional.
This week’s topic comes straight from the readers.
Many of them have said they enjoy reading the information, but they wish I would unveil the secret to getting rich. To be fair, the comment is always made tongue-in-cheek. Nevertheless, if you have been waiting for this advice, wait no more. Today we will dive into the topic of striking it rich.
Believe it or not, there truly is a secret to getting rich. Many do not know it. The secret sits in plain sight, which makes it even more mysterious. Like the Holy Grail, people have desperately searched for the secret but came up empty-handed.
Today I will reveal what others have tried over the centuries to find, but inevitably failed.
Before I do, let’s first set a definition of ‘rich.’ When people talk about getting rich, what they typically mean is ‘financially comfortable.’ It is enough to alleviate any stress about money. It’s a level of wealth that allows them to do what they want, when they want — now and in the future. It may also mean enough to graciously give to children and charities. It’s not being the wealthiest person to walk the Earth.
With that definition in place, let’s get to the secret. It is, in fact, simple. Are you ready for it? Here we go.
The secret to getting rich is….that there is no secret. I know, it’s a let-down.
Lest you think you wasted your time reading this far, allow me to give you some valuable information about riches. If you study people with wealth, you will find similar patterns. They obtain wealth in many of the same ways.
From what I can tell, there are only three ways to get rich. They are practically imputable. If you think about it, these three methods are down-right obvious — but not easy, except for maybe one.
So, without further ado, here they are. Here are the three ways to riches: financial windfall, business ownership, and saving and investing. Let’s discuss each.
Financial windfall is the first. It is also the “easiest” of the three. This category entails things like gambling and proceeds from a lawsuit. But there is another, far more common windfall from which many people have benefited: inheritance. Receiving assets from someone who has died has been the path to wealth for many people over the ages.
In case you don’t have any rich relatives, though, do not fret. There are two other ways.
The next is business ownership. As the name implies, business ownership is owning all or a piece of a successful business. The profits from the business — or even an outright sale of the business — can produce substantial wealth. Of the three, this is the riskiest option. You may hit it big or you may lose your entire investment. But if you want to accumulate significant sums of wealth, business ownership is the way to go. It is extremely difficult to amass a net worth greater than $10 million outside of owning a business.
The last — and most reliable — way of achieving a tidy fortune is through saving and investing. This, unfortunately, is the most boring method. It takes discipline and time. It involves diligently working many years, spending less than you earn, and investing the remainder wisely. There are a multitude of landmines and ways to self-destruct along the way. For those who prevail, however, they can accumulate enough in savings to live a wonderful life.
I wish there were an easier path, a more surefire path, to riches. A windfall takes good fortune. A business takes skill. Saving and investing takes patience. If it were easy, I suppose, everyone would be rich.
The best advice I can give to readers wanting to build a fortune is to follow the second or third approach. Either build a business that generates meaningful value or save until it hurts and invest wisely.
There is no secret. There is no shortcut. But at least now, dear readers, you know your options.