One of the secrets to wealth creation is education. If you can take the time to learn the Hidden Strategies and Investment Secrets of the Ultra Rich, then you stand a better chance at creating lasting generational wealth than those who don't.
There are numerous threats to creating and retaining wealth that we all face every day.
The biggest and most avoidable threat though is lack of knowledge.
Over the last century or so, the lifelong dream of most people has been to become a millionaire in order to achieve financial freedom. Although that was once considered to be a lofty goal by most previous generations, it is now becoming apparent that $1,000,000 will not get you very far in retirement for those born of the current generation or beyond. Now, a multi-millionaire status is what is going to be required to survive in an inflationary world based around fiat money debt. For some truly ambitious people, the new paradigm is to become a Billionaire.
Currently there are approximately 7 billion people on the planet.
In all of the masses of people striving to achieve basic financial freedom, the concept of a billionaire seems entirely out of reach.
At present there are an estimated 1645 billionaires on planet earth.
In fact, the 85 richest people on earth have the same wealth as the bottom 3.5 billion people combined.
We must ask, “what is their secret.”
Well, first off, the rich think differently than the rest of the population. They invest in broad and deep knowledge in all areas such as finance, business, politics, law, and real estate. Having a broad experience and knowledge base allows them to more easily spot opportunities when they arise, recognize and mitigate against risks, and plan their strategy for success.
Second, the rich know the rules. They utilised the law of the land to their full legal and financial advantage. They understand business law, tax law, and corporate law, or they at least hire the experts who do, so they can take their advice to maximise their bottom line. In business it's not how much you make but how much you keep what you make that really matters. The Super wealthy hire the experts who can advise them best on how to keep as much as possible and not lose it to such threats as lawsuits, inflation, taxes, geopolitical upheavals, regulatory changes, and outright theft.
Third, they are decisive. Lee Iacocca once said, “If I had to sum up one word that makes a good manager, I'd say decisiveness. In the end, you have to set a timetable and act!”.
In other words, those who can make a quick decision, and then take action, are much more likely to have greater success in life than those who don't. In fact, one of the unique qualities of the rich are that they tend to make up their minds quickly and change their minds slowly, whereas the poor make up their minds slowly and change their minds often. Although the rich will make mistakes, one of the greatest mistakes one can make is missing out on an opportunity because of procrastination. One missed opportunity could be a life changing mistake. Sometimes the right opportunity does only come along once in a lifetime.
According to the Forbes 400, the net worth of the richest people in America is about $1.7 trillion. Collectively the group’s net worth is worth one eighth of the entire US economy, which was $13.56 trillion at the time of writing.
Also, according to Forbes, the net worth of the richest 1226 people on the planet is about $4.6 trillion.
In fact, 95% of the world's wealth is owned by only 5% of the people. And 400 of the world's richest people have more wealth than the rest of the world combined! It's been said that if the money was distributed evenly amongst the entire population, within 5 years the 95:5 ratio would be restored back to the very same hands. This is because once one learns how to make money, and how to keep it, when I could literally start over and redevelop the wealth from scratch. Whereas those who have never learned how to build wealth or manage money, when given it freely, will not have the skills required to retain that wealth and will therefore lose it in relatively short order. This is often the case with people who win huge lotteries without having the understanding how to manage their newfound wealth. Most lottery winners are worse off within 5 years then they were before they won the lottery Because they don't know how to think like the super rich.
Therefore, what we need to ask is “what is their secret to creating wealth on a massive scale?”.
The first secret is their mind. The wealthy think differently and invest into their minds to maintain financial fitness. The invest 10 to 20% of their annual income into educational seminars and training courses like this in order to learn the secrets to wealth creation that they did not learn in school, in business, or from a personal mentor.
The second secret of the rich is the power of leverage. Leverage can be defined many ways, such as:
- the ability to improve or enhance
- a strategic advantage
- the power to act effectively or
- to have a favorable position.
There are several ways to cut down a tree for example. One could use a handheld saw, a small hand axe, or a gas-powered chainsaw. Although they may all get the job done, the difference will be in how long it takes to do the task with the tool in hand. Obviously, the chainsaw will be much quicker and more effective than the hand saw but it does come with significantly more risks to the operator. Because it offers more leverage, it is inherently more dangerous. If you don't know how to use that leverage safely, you could get seriously hurt.
The same concept applies in the world of finance. The rich use financial leverage to their advantage but they also are skilled in the knowledge of how to use it properly.
The wealthy use leverage in 3 ways. First is Time.
- For example, the 80/20 rule. The rich spend 80% of their time on the 20% of the tasks that make the most difference; whereas the poor will spend only 20% of their time on the 80% of things that could make the biggest difference.
- Another way the rich leverage time is by using OPE - Other People's Experience. For example, business owners leverage other people's skills, time, and effort by hiring them as employees. They also utilize strategic partnerships and human networks to expand their influence and leverage time. Warren Buffet, one of the richest men in America, owns hundreds of business and employs tens of thousands of people. He is a multi-billionaire because he leverages other people’s time and earns a percentage of what they help to generate for the company. Henry Ford once said, "I'd rather of 1% of 100 people's efforts than 100% of my own".
Another way that the wealthy leverage is through Money.
- The rule of 72 is a concept that applies to calculating compound interest. The rule says to take 72 and divide by the rate of return on investment, and that will give you the number of years it takes to double your money. So, if you take 72 divided by the current interest rate in a bank account, let's say 2%, it would take 36 years of leaving your money in the bank to double the principal through the magic of compound interest. This is one form of money leverage.
- Now, if you were to start at age 25 with $25,000, what would it look like if you could double your money every 5 years rather than every 36? Well, by age 30, your capital would have grown into $50,000. By age 35, $100,000. By 40, $200,000. By 45, $400,000. At age 50, $800,000. At 55, $1.6 million. Age 60, $3.2 million, and by age 65, you would have a staggering $6.4 million through the magic of compounding. Thus, if you can manage to earn a rate of return of 72 divided by 5 (the number of years it takes to double your investment), then your effective interest rate would be around 14.4%. How many of you may be thinking where can I earn 14% rate of return in the current financial world today? This is in fact surprisingly easy to do for the super rich, and those financial secrets will be revealed partially in this course and in others on this e-learning platform. But suffice it to say, there are numerous ways to earn rates of return far in excess 14 percent, if you learn how.
Third method of leverage that the super wealthy utilize involves Timing, particularly through a concept called wealth cycles.
- There are essentially 3 broad categories of assets that one can invest in: Commodities (precious metals, oil, agriculture, gemstones); Paper Assets (as stocks, bonds, mutual funds, and derivatives); and Real Estate (commercial, residential, industrial, vacation). History has shown that these 7-15 year long wealth cycles often move in opposing or overlapping directions at any given time where one asset class is over-valued, one is fairly valued, and one is undervalued relative to the other classes.
- We've all heard the expression, "buy low and sell high". The trick is to know what cycle we are currently in and which asset class(es) is(are) out of balance. If one can correctly identify the market cycle and asset, one can sell the over-priced asset and move the proceeds into the underpriced asset through a process called asset allocation. We will not go into detail about this topic in this course but you can see our other courses on this platform to learn more about these concepts.
So now that you have a basic understanding of how the wealthy think, we need to conduct a financial reality check and then look into some other critical areas of understanding that will help prepare you to comprehend the critical importance of starting your own business from home.
Once your mind is prepared, THEN we can delve into more specific content regarding business ownership, one of the favorite undertakings of the super rich. It is a fact that, unless they inherited it from their super wealthy parents or relatives or won a massive lottery, very few billionaires, if any, achieved their level of status without owning some kind of business. Thus, it makes sense to look into the concept of business ownership to understand the why and how of entrepreneurship, the economic engine and main driver of a capitalistic free market economy.