The Illusion of Easy Wealth through Investing
Exploring the relationship between financial markets, personal development and wealth accumulation
In a world filled with "experts" promising the path to riches, it's important to be cautious. Many of these so-called experts have built their wealth not by following their own advice, but by selling products and services instead.
There are numerous stupid ways to lose money in the search of financial success. However, there is another approach that doesn't require exceptional market expertise or taking unnecessary risks. This essay explores the notion of investing in oneself and becoming a better person as a more reliable path to success and wealth.
There's a common question in investment subreddits, something like “Can I start investing with $1000?”. It very is unlikely that one would amass significant wealth by investing such amount. If we were to plot a graph illustrating a reasonable growth rate, such as 12% annual returns, with the aim of reaching $10 million, it becomes evident that achieving this goal within a practical timeframe would be highly impractical. Investing in markets alone with limited capital is not a feasible strategy for substantial wealth accumulation.
Contrary to popular belief, only a small fraction of individuals become rich solely through investing. Consistently outperforming the market is a challenging task even for experts. As Nassim Taleb argues, it is difficult to beat the market consistently due to its unpredictable nature. Therefore, it is essential to explore alternative avenues for wealth creation and use investing as means to maintain what you have.
One of the most consistent ways to achieve wealth is through entrepreneurship. By identifying and addressing relevant market demands, one can create substantial wealth. The Millionaire Fastlane, emphasizes the potential of entrepreneurship in accumulating wealth quickly. However, it is worth noting that entrepreneurship is a challenging endeavor and often comes with its share of failures and setbacks. I've recently tried to found a startup and it was a crazy experience, but this is a topic for another day.
Building a successful business is something that gets 5 to 10 years of really hard work and luck, you have to commit almost all your efforts and focus until it gets valuable.
While aiming for grand entrepreneurial ventures may be complex, investing in oneself remains a simple and often effective strategy, you don't have to be a market genius. The focus should shift toward personal growth and skill development. By mastering your craft and continuously improving, you can increase your earning potential. Becoming proficient in more than one area can offer a competitive edge and open doors to unexpected opportunities.
Investing in oneself extends beyond skill development. It involves seeking impactful experiences that broaden one's perspective and knowledge. Reading books, traveling, and embracing new hobbies are all forms of self-investment that can enhance personal growth.
Also, consciously placing yourself in environments frequented by high-net-worth individuals can provide valuable networking opportunities. In the money game, knowing the right people is often more important than being brilliant.
Another way self-investment is reclaiming time. This can be accomplished by outsourcing certain tasks, such as buying a dishwasher machine or frequently eating out at restaurants instead of cooking at home. The saved time can then be utilized for the most important and profitable stuff. It's hard to focus on improving yourself, when you have to take a lot of decisions and effort just to stay alive.
Developing strong personal connections and cultivating a positive reputation are often overlooked aspects of wealth creation also. By growing your network, you increase your chances of discovering good opportunities and receiving support from influential individuals. Being a truly reliable individual, demonstrating integrity, and exhibiting soft skills can attract both financial and non-financial rewards.
In a world where shady strategies promise instant wealth, it is crucial to adopt a different mindset. Instead of pursuing "easy money" ventures, the focus should be on personal growth and self-improvement. Investing in yourself, mastering skills, acquiring impactful experiences, and building strong networks can pave the way to success and financial prosperity. By becoming a better person, both socially and intellectually, wealth will naturally follow as a byproduct of genuinely contributing value to the world.