Tag Archives: Real estate

How to Get Really Rich!

BEVERLY HILLS, CA - JANUARY 15: Real Estate t...
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I hate just about all the articles and most of the books about “How To Get Rich in 6 Ridiculously Easy Steps” and everything remotely related to that genre.  Usually, on the Net at least, there’s a photo of a  24 year old in front of a glamorous swimming pool or standing on a beach in Hawaii, Diamond Head peaking up in the distance.  Of course, there’s no telling if the young man is simply occupying a room in the hotel with the swimming pool and the beach. ( Or even a waiter or busboy there.)

And a lot of you may have seen John Chow.com, self proclaimed “dot com” mogul, whose limitless ads about “making money online” look pretty cheesy to me.  But that’s just me.  His video on his website, The Dot Com Lifestyle, shows Chow, an ordinary looking guy in average clothes, walking his baby in an ordinary stroller to an ordinary park against a very average landscape.  Pretty unimpressive stuff. Certainly not the stuff of which dreams of vast wealth are made.  But who knows?  He just doesn’t seem like the kind of guy to downplay whatever he may have since he runs an ad proclaiming “Learn How I Went From Zero to $40,000 A Month By Blogging and How You Can Too!  Hmmm…….

At least when Donald Trump tells you he’s rich you may argue about the details….. a couple of hundred million?…..a billion? …..a couple of bankruptcies?…..no, those are just his casinos, “less than 1% of his net worth“……. at least he’s got the flash and gaudy, gold plated grandeur to back it up.  He has real buildings and real hotels and beauty contests and employees to authenticate he’s worth a lot of something.

So, imagine my surprise when I came across this post by someone who actually seemed to have some life experience revealing how many people actually do get rich.

From what I know, author Paul Sloane really has it nailed. He doesn’t mention inheriting money, or marrying for money but I’m not going to quibble because I think he’s talking about how to go about making money if you have to work for it. ( Marrying for money could be considered work but we’ll save that for another post.)

Sloan starts off The Six Best Ways to Get Rich” by saying:” We tend to assume that if we work hard and save money then one day we will end up wealthy. This is wishful thinking. We are more likely to end up with some modest but useful savings. If you want to accumulate serious wealth then there a number of approaches you can use and some are much more effective than others. The best ways are as follows:”

I’m not going to detail all 6 ways.   I’m going to give you the two I think most likely for the majority of people.  But you can always go to Sloane’s post if you want to read the rest:

  1. “Start your own business and eventually sell it.This is the most effective and proven way to become rich. If you can find a new approach to a customer need and build a profitable business that addresses that need then you have created real value. It could be a cleaning business, a hairdresser’s, a consultancy or an investment bank. It will probably take years of very hard work to build up the enterprise. Most new businesses fail so the risks are high. You need all the skills, dynamism, perseverance and diligence of an entrepreneur. But if you can pull it off the potential rewards are huge. This is how many of the seriously wealthy people did it.” Of course most people don’t have the risk tolerance to start their own business and many lack the tenacity to stick with it, so this will be the minority.  But many believe it to be a happy minority because they are doing what they want and at the very least, have their independence.
  2. Join a start-up and get stock. Odds are low.  But if you think you might be lucky, go read Sloan’s post.
  3. Exploit your skill as a self-employed expert. Takes a lot of discipline to develop expertise. So, statistically, odds are low
  4. Develop property. Here’s a real winner.  Many people do it with their homes, just by buying in the right neighborhood and continuing to scale up at every opportunity.  Sloan says:”Buying, developing and selling property is a well-established way to build a significant capital position. One of the key elements is that by borrowing money you can gain leverage on your investment. Say you borrow $200,000 and put in $50,000 of your own to buy a property for $250,000. Then you develop the property and sell it for $400,000. The property has increased in value by 60% but your $50,000 has now grown fourfold to $200,000. You have to select the right properties in the right areas and develop them wisely. You are at risk from booms and busts in the property market. However, in the long term this remains a proven way to accumulate wealth.”  I can authenticate for you that this works.  It’s not as fast as winning a lottery but it’s a sure thing.  And you don’t lose all the friends who want to borrow money from you, if you win the lottery.
  5. Build a portfolio of stocks and shares. Many don’t have the discipline to accumulate a portfolio of stocks and hold on to it through wars and recessions.
Oh.  Now that I look at this post again I see that Sloan actually did mention the two I thought he’d forgotten  Number 6 is:
  • Inherit wealth. It helps if you were born to successful or wealthy parents but failing that, you could marry fortuitously!
But the first you have no control over and the second is not as easy as one might think.  So you may want to aim for starting your own business and buying a house you can afford in a great neighborhood, then putting a lot of energy into improving it over the years.
Do you have some other ways to get rich?  Or do you have some examples we can learn from? Send them in..
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