The Untold Truth to Building Wealth
The Untold Truth to Building Wealth. We’ve been fed a script.
Growing up I followed the traditional path of going to school, getting a college education, and finding a 9-to-5 career. In my 30s, I finally realized that I’ve been fed a script. Teachers, parents, peers, and media all parrot the same idea that this is the path to the American dream. Get a college degree, get a job, and build your career working for someone else until you retire. From the paycheck you receive, you should put 30-50% towards rent, 30% towards other necessary expenses, and 20% into savings. Then when you finally have enough for a down payment on a house, you can take on a 30-year mortgage at 5-10% interest rate. Once you turn 65 years old, you can finally retire and live off your 401K and other retirement savings. This is how most people come to believe we should live because we’ve been fed this script throughout our lives. What if I told you that there is a better and potentially a more fulfilling way of life?
Investing your savings from paycheck to build wealth is a lie.
The truth is most people will not get rich or build true wealth following the traditional path of working a 9-to-5 job until retirement. You might ask, “What if I invest $200 from every paycheck into mutual funds, bonds, and growth stocks?” Yes, there is a chance you invest your money at the perfect time or dollar cost average overtime and eventually double or triple your investment. There’s a chance you even buy at the bottom and sell at the top. Congratulations, you’ve turned $100,000 into $300,000 when you finally retire at 65 years old. This is considering the stock market is doing well.
The fact is most people passively invest their savings and do not touch their retirement savings through the ups and downs. Even worse, some people will sell when stock prices are at the bottom during an economic downturn and buy at high prices when the economy turns around. Do you really want to bet your future on a volatile stock market and the economy doing well?
Become an entrepreneur and create a business to build wealth.
The truth is people who build real wealth do so by either solving problems, displaying a high level of talent or skill, or through innovation. They build a brand and capitalize on opportunities. In other words, unless you are an extremely talented musician, athlete, or entertainer, you need to become an entrepreneur and create a business in order to build true wealth. If you think about a lot of the multi-million-dollar companies such as Apple, Amazon, and Twitter, they all provide some sort of value to their audience. Furthermore, they have become what they are today by building their brand.
For instance, Apple can upcharge their products and people line up to buy them because they have a reputation for having the latest technology, ease of usability, and good quality. Now I’m not saying you need to build the next generational company. Not at all. In fact, there are thousands of small businesses and entrepreneurs that make six or seven figures annually. The one thing they all have in common is they bring some sort of value to their target audience. I will get into details in another post on how you can increase your chances of becoming a successful entrepreneur, but this post will focus primarily on what entrepreneurship can do for you.
Entrepreneurship brings more opportunities and greater chance of building wealth.
Entrepreneurship brings you opportunities you would never get by working a 9-to-5 job. When you provide a service or product that people are interested in, it will expand your network and organically turn interactions into more opportunities. Think about certain events in your life where you unexpectedly received opportunities whether it was through being proactive or by chance. Maybe you ran into an old colleague or friend at a café and eventually he or she became your business partner or even a romantic partner. Perhaps you were at a job fair at the perfect time and place, and a recruiter saw potential in you and offered you your dream job.
These are opportunities we encounter in our day-to-day lives that have potential to change the course of our lives and future. When you become an entrepreneur and build a business, you set your life up to increase your chances of these opportunities and one opportunity is all you need to successfully take your business and life to where you want to be.
Increase your income exponentially.
I’m sure you have heard of the phrase, “The rich get richer, and the poor get poorer.” There is some truth to this phrase and not because of any characteristic of the person, but because of how our financial system is set up. One of my favorite standup comedies is when Louis C.K. talks about being broke. He points out that when you have no money in your bank account, the bank charges you a fee for having no money. On the other hand, when you have lots of money in your bank account, the bank gives you money in the form of interest. The reality of the situation is that you need money to make money.
Building a business is not an easy task, but once you have invested and re-invested your time and money into your business and if you are doing the rights things, you will eventually see positive results. Furthermore, it will give you better chances of increasing your income exponentially where this is not possible in a 9-to-5 job.
Whether you decide to eventually sell your business or receive a big sponsorship offer, increasing your income exponentially is an important part of building wealth because money buys you time and freedom. In fact, when you have enough money, you can literally live off interest income. For instance, one million dollars at 4% interest rate earns you $40,000 annually. This may not be enough for most people depending on their lifestyle, but this amount is more than some people make in salary working at a job in one year and you just made this money by just having money sitting in a savings account.
Money gives you more time and freedom.
I ask myself every so often, “why do I want to be rich?” My answer is I want freedom from slaving away from things I do not want to do and to provide financially for my friends and family. Money to me is freedom. The one thing in this world that is finite and cannot be bought is time. Time is limited in this world and freedom means less time slaving away at a 9-to-5 job until you die. It is not how I envision an ideal life. I would bet most people would rather spend their time doing things that they love. Maybe some people are comfortable with the 9-to-5 lifestyle and that is totally fine. If you are satisfied that is all that matters.
Entrepreneurship is not for everyone. It takes a lot of risk, time, and hard work to build a successful business. Additionally, most people have obligations and responsibilities that steer them away from entrepreneurship. The one thing I don’t want to do, however, is look back at my life and think, “what if I did pursue entrepreneurship? Would life have been different for the better?” I hope that reading this provides you with a different perspective and perhaps encourages you to think about becoming an entrepreneur.
