Truth and Lies About Creating Wealth

In today’s essay, I want to tell you the most important things I’ve learned about building wealth. I won’t tell them in detail… but I’ll tell you the principles. And I’ll tell you how you can get all the detailed information you need if you want to emulate my experience.

Don’t Believe These So-Called “Facts”

Let’s begin with some of the lies about creating wealth. At one time or another in my wealth-building career, I foolishly believed in the following so-called “facts”:

• Wealthy people are stingy for a reason. The secret to becoming wealthy is to scrimp and save.
• The stock market is the most efficient way to invest. You can’t become wealthy unless you understand and master the stock market.
• Geopolitics determines investment outcomes. You can’t become wealthy unless you understand politics and economics.
• The general public is always wrong about economic and financial trends. The fastest way to acquire wealth is to invest as a contrarian (i.e. against market sentiment).

Do any of these “truths” sound familiar? Have you been following any gurus who advocate these “facts”?

If so, pay attention. I’m not the only person in the world who went from broke to rich. There are many, many people who have done so. And some of those people have written books about it.

I don’t read all the popular books on wealth-building, because I feel comfortable with the system I follow myself, through my own experience. I don’t follow the advice of others, except when it dovetails with my own experience.

But that’s not to say that my system is the only system that works. Nor do I want to argue that it is the right system for you. All I can do is to report my own experiences to you as honestly as I possibly can.

You are my surrogate siblings. I want you to succeed. The only way I can help you is to tell you what I know to be true. And this is what I know – from my own experience – to be true about creating wealth:

Truth No. 1

You’ll never get rich unless you understand some fundamentals about saving, spending, and investing.

Truth No. 2

The single most important factor in avoiding the spending spiral that kills wealth is to stay in the house you have now. Nobody else that I know of has made this simple point. But I can tell you that it is true.

Truth No. 3

Stock investing (or even bond investing) is an inadequate strategy for building wealth. It won’t get you rich or make you wealthy, however much you wish it would.

Even Warren Buffett, the world’s most successful investor, knows this. His wealth has come not from being an individual investor but from being the principal of Berkshire Hathaway. Keep that thought in mind every time you hear his name quoted.

Truth No. 4

The single most important factor in wealth-building is the size of your investible income. Investible income is what you have left over each month after you’ve taken care of your lifestyle expenses.

Actually, that’s the second-most important factor in building wealth. The No. 1 strategy is acquiring equity in a startup business. There are many ways to do this. The most commonly talked-about ways are downright foolish. But there are smart ways to do this, even if you are a novice to business.

Truth No. 5

Investing in rental real estate is unique – it stands halfway between active income and passive income. Next to entrepreneurship, it provides the highest return you can get from any financial endeavor.

Truth No. 6

The biggest mistake retirees make is giving up their active incomes. I know that this is exactly what you hope to do some day. But I’m warning you, it’s a big mistake.

If you are already retired, you are probably hoping you can replace that income with passive investment strategies. I’m here to tell you that they won’t work.

To keep your wealth for a lifetime, you need multiple streams of passive income. Your goal should be to build each stream of income to a level at which you can live on that and that alone.

Do these statements make sense to you? If so, how are you doing?

My Mission to Help the “Not Yet Wealthy”

When I first started out in the financial services industry, many of my prospects said the same thing: “I feel like I’ve finally found a trustworthy source of advice, but I’m not a wealthy person. In fact, I am worried I don’t have enough money to follow the advice that I’m being given.”

The first time when someone made this point to me, I thought, “Boy, isn’t that the truth?” It is so difficult to create wealth when you are essentially broke and feeling burnt out by following so many of the “lies” I mentioned at the beginning of this essay.

But then I thought, “What the hell are you going to do about this, Ray? Will you write a condolence letter? Will you ignore this common issue? What can you do or say to help people in that situation?”

And that’s when I came up with the idea of the Seven Years to Seven Figures blog.

The goal was very simple: A program that could help my blog readers and clients generate a seven-figure net worth in seven years or fewer.

That seems like an impossible goal. But I assure you it’s not. I’ve seen motivated and driven individuals do it time and time again

If you are motivated and follow some of the tips and ideas in this blog, you too can build up your net worth in a relatively short amount of time.$

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