Millionaires have understood some fundamental truths about wealth that other people still find difficult to understand.
I personally see at least ten of them:
1. Money makes money
Money makes money. You’ve heard this before, but you probably didn’t pay much attention to it. Yet it is the basic rule followed by all the ultra-rich. Money earned should be reinvested and not spent on useless things. This is the surest way to become rich.
It is often said that the hardest part is to earn the first million dollars. Once you have a million dollars, you can invest it and make even more money.
2. Wealth doesn’t come from your 9-to-5 job
You work hard every day in a 9-to-5 job. You work overtime. You give your all for your boss. You get bonuses from time to time, and a raise sometimes when the years are good.
So you think you can make a lot of money over time and get rich.
I’m going to disappoint you, but you’ll never get rich that way. The one who will become rich is your boss on the other hand because of your hard work, but also because of the hard work of all the other employees who act like you to earn a little more each year.
While working 9 to 5 is a great way to build up your initial capital, sooner or later you will have to find a way to create passive sources of income for yourself. As such, remember this quote from Warren Buffett:
“If you don’t find a way to make money while you sleep, you will work until you die.”
The ultra-rich have pierced this secret. They generate money while sleeping thanks to their wise investments in particular.
3. Being wealthy takes more money than you think
Becoming a millionaire is the goal of many people. It means having at least one million dollars. For many, it is the stage from which one joins the rich people group.
I have bad news for you once again. The wealthy people who live the lifestyle you dream about have much more than a million dollars. The real wealth starts now at $20 million.
That’s much more than many people originally imagined. Nevertheless, you have to get started, and that’s why my 4-step plan to earn $1M is a good place to start. As always, there are no guarantees here. Just the opportunity to put all the odds on your side by following a plan that has been proven for generations.
4. It takes time, there is no shortcut
The majority of people who want to get rich want to get rich fast. These people want it all, right away. This bad mindset will make them lose a lot of money and time because they will probably fall into the trap of get-rich-quick schemes.
In reality, getting rich takes time. There are no shortcuts. The story of Warren Buffett is there to remind us that patience is an essential virtue. Patience is your natural advantage. To that, you will need to add perseverance.
If you really want to get rich, you have to go step by step. Generate money, invest your money wisely, and be patient. Let time work in your favor.
5. Debt can be your ally
When asked for my opinion on the essential rules for managing personal finances, I explain that it is best to avoid debt. I even quote Thomas Jefferson, the third president of the United States:
“Never spend your money before you have it.”
If you really want something, save your money. Take the time to earn money. Debt gives you the false impression that the things you buy are free, and that’s a mistake.
This golden rule of not falling into debt has one major exception.
However, this exception only applies to people who already know how to manage their personal finances well. Debt is no good unless you use it to take advantage of the leverage it can provide. Going into debt to make an investment that will pay you more money later can be a good thing.
The ultra-wealthy know this and use debt to their advantage.
6. Wealthy people never look rich
Buying expensive smartphones, driving in luxury cars, wearing luxury watches are the dreams of poor or middle-class people. Rich people rarely look rich.
They are satisfied with their house and car. They do not try to impress others. The example of Warren Buffett is revealing in this regard.
Warren Buffett still lives in the same house he bought in Omaha, Nebraska in 1958. Purchased for $31,500, his lifetime home is now worth over $650,000. This often makes Warren Buffett say that the house he lives in today is the third-best investment of his life.
7. Money is not the most important thing at the end of the day
Money makes life easier. No one can say it doesn’t. However, at some point, you will realize that it is not what matters most. This brings us back to Maslow’s pyramid of needs.
When you have enough money so that it is no longer a problem for you, you will look for things that give meaning to your life.
Having ambitious goals to conquer is what makes life worth living. For example, it is what motivates Elon Musk or Jeff Bezos to get up every day when they are close to $200 billion in personal wealth.
8. The richest people often have very little cash
I just told you that Elon Musk and Jeff Bezos are approaching $200 billion in personal wealth. In reality, this fortune is virtual. It corresponds to the value at a given moment of time of all their investments.
The richest people often have very little cash in their bank accounts. The example of Elon Musk is even more striking. He has even less cash than other billionaires. His entire fortune is made up of his shares in Tesla or SpaceX.
The ultra-rich have long understood that “cash is trash” to use an expression of Warren Buffett. With the infinite devaluation of the U.S. dollar, you must invest your money or else monetary inflation will inevitably impoverish you.
Investing is therefore the key.
9. Money does not define you, your actions define you
Getting rich will never change who you really are. Many rich people get lost along the way. They let themselves be blinded by wealth and what it can offer them.
In reality, your money doesn’t define you. What defines you are your actions.
10. Money is a means to an end
Wanting to earn a lot of money is not a bad thing. Having more money is always better than not having enough. However, money is not a goal. Before you go on a frantic quest for more money, you should try to define what your goals are in life.
Money is a means to an end, it is never an end.
The ultra-rich have understood this. If you don’t understand it, you will spend your life chasing after more and more money, and you will never be truly happy. Take the time to define what your real goals in life are.
Then you will be able to have the contentment that allows you to be happy in life when you achieve those goals.
Having a lot of money and becoming rich are things to dream about. It’s even more dreamy if you don’t have enough money. To become a rich person, you must assimilate the truths I have just told you. In particular, you have to change your relationship with money so that you can use it to serve your life.
The ultra-rich show us that more and more money does not lead to happiness. What matters is who you are and what you will do with your money. Once you have defined your real goals in life, you can act in such a way as to earn enough money to achieve the contentment we all seek.
My answer is an excerpt from an issue of my newsletter with which I share such insights every day:
This post “10 Truths About Wealth That Non-Wealthy People Will Find Hard To Believe” is courtesy of Sylvain Saurel: