People who are wealthy do three things:
They create value – yes, you can be wealthy as an employee in the right type of job, but the majority of wealthy people made their money by owning one or more businesses. They create value in the form of products or services for others and sell it at a profit.
They leverage
We all have only 24 hours per day of which we typically work eight in total of which only about two to three hours are productive. So, if I work on my own I can be productive for three hours, but if I have three people working with me, we can suddenly turn that into 12 productive hours in the same day.
I need $1m to bring a new product to market that will make massive profits. But I only have $500k. So I get investments from other people to make that happen and increase their net worth as their shares in my company increase in value.
I am tired of working long hours and want to relax with my family. I notice somebody needs $1m to get their highly profitable product to market, and I have $250k to invest. They take my money, make a success and I get $350k back after selling my shares.
They spend with a focus on growing their net worth – truly wealthy people always spend less than they earn because they are very aware of the risks of overspending and abusing their credit.
It is not the flashy cars or gold jewelry that makes one wealthy, it is your net worth.
If your need to show off costs you more than you have, you may be driving a cool car, but you are technically poor.
