How To Get Rich: A guide to becoming wealthy in today’s world.
How To Get Rich is a podcast produced by The Tim Ferriss Show and iHeartRadio.
The world has changed dramatically over the past 25 years, yet the advice for how to get rich – save money, cut back on lattes, and invest in a portfolio of index funds – remains largely the same. It’s outdated advice that simply doesn’t work.
In this podcast, Tim Ferriss shares strategies and stories from some of the world’s top performers – investors, entrepreneurs, athletes, poker players, musicians, and more – to give you the tools you need to live life on your own terms.
“It is easier to suppress the first desire than to satisfy all that follow it.” – Benjamin Franklin
If you want to get rich, you need to understand the difference between an asset and a liability. An asset puts money in your pocket. A liability takes money out of your pocket.
The problem with most people is they spend their lives acquiring liabilities they think are assets. Their house is a liability. Their cars are liabilities. Their boats, their RVs, their “toys” are all liabilities. They work and work and work, trading their time for pieces of paper called dollars, and then promptly turn around and exchange those pieces of paper for liabilities that do nothing but drain away their dollars.
I was once like this myself. I spent my twenties buying stupid shit I couldn’t afford with credit cards I didn’t have the income to pay off. It took me a long time—like half a decade—to figure out what was going on. But once I did, I made a conscious decision to stop doing what everyone else was doing and start looking at the world differently than everyone else did.
In this article, I’ll teach you the foundational principles that are required to become rich.
Now, I don’t consider myself rich. But I have been able to accumulate enough wealth over the years to be considered “financially free” because my passive income exceeds my expenses.
I’ve earned my wealth through the following channels:
1) Creating online courses
2) Selling online products
3) Investing in real estate and stocks
4) Starting a consulting company
5) Doing freelance work
6) Writing books and articles like this one that you are reading now
The only way you can get really rich is by being an owner. The reason is simple: an owner gets the entire profit, but an employee only gets a wage. An employee’s wage tends to rise with inflation and with the employee’s skill, but a profit is potentially much higher than any wage and rises faster than inflation.
One way to think about it is that being an owner is like being an entrepreneur and a shareholder in your own business. But instead of starting your own business, you focus on becoming a big shareholder in someone else’s.
How do you become a big shareholder? By buying stock. There are two ways to make money from owning stock: dividends and capital gains. Dividends are cash that the company pays you for owning the stock; they usually come out of profits, so they are mostly a reward for having chosen good companies. Capital gains are when you sell the stock for more than you paid; again this is money that came out of the company’s profits, but now it’s going into your pocket instead of someone else’s, so it’s even better than dividends. Both dividends and capital gains can be substantial.
If you spend just fifteen minutes a day reading books and magazines about investing, within a few years you’ll know enough
Here’s how to get rich: Don’t.
It’s not that easy, but if it were, everyone would be rich.
If you want to be rich, you need to see wealth in a different way. You can’t just think about the number in your bank account. There are three things that determine wealth: income, expenses, and lifestyle.
A lot of people focus on their income, thinking that if they can just make more money, they’ll be wealthy. Because they always imagine themselves spending the same amount of money regardless of how much they earn, when they do eventually get a raise or a bonus or whatever, all that happens is their expenses go up and their savings stay the same.
The only way to become wealthy is to reduce your lifestyle and spending habits so that you’re saving and investing money at every level of your income—whether you make $50k or $100k or $200k per year. If you live below your means and invest wisely, you will build wealth over time. If you spend everything you earn (and maybe even more), then you will remain poor forever.
The first step is to get a job.
If you’re not working, that’s your problem right there. You need to get a job. It doesn’t have to be a great job; it probably won’t be. But it should be a real job, at a real company, doing something they actually want done. If you can get that, you have some leverage.
The next step is to take stock of your situation: what do you have going for you? What resources are at your disposal? And in particular, what time do you have?
You might think the answer is “not much.” If you’re like most young people, you’ve got almost none. You’re working full time, and between waking up early, commuting to work, working long hours, commuting back home late at night, eating dinner with your family (if you’re lucky enough to see them) and getting some sleep so you can do it all over again the next day… where is the time for anything else?
The short answer is: there isn’t any. But if you look more closely, there are lots of little ways to free up time. Think about how much time (and money!) you spend commuting each day. Or think about
I don’t think of myself as a poor deprived ghetto girl who made good. I think of myself as somebody who from an early age knew I was responsible for myself, and I had to make good.
Born in the American South in 1918, Franklin was the daughter of a poor sharecropper. When Franklin was young, her family moved to Buffalo, New York. Her mother raised her children as a single parent after their father left when Franklin was 12 years old.
Franklin began singing gospel songs at church when she was 10 years old. When she was a teenager, she began to perform at local clubs. She dropped out of school at age 16 to continue pursuing her career as a singer.
