Over time, I’ve changed my views on wealth. When I was in my early 20s, I wrote it off as something I would figure out later. When I started a company at 27, I figured that my stock as founder would be good enough. I was wrong on both. Here’s what I’ve learned…
“The three most harmful addictions are heroin, carbohydrates, and a monthly salary.” — Nassim Nicholas Taleb
FIRE (Financial Independence, Retire Early) changed my views on money. When your net worth is 25x your annual expenses, or when your passive income to expenses ratio is 2:1, you’re considered financially independent.
Why wait for Universal Basic Income (money to pay your living expenses) when you can create it for yourself? What would you do with the freedom and flexibility it offered you?
“If you don’t find a way to make money while you sleep, you will work until you die.” — Warren Buffet.
You can reach FIRE by minimizing your expenses and/or maximizing your income. Do both but focus your energy on the latter. It’s better to get paid for your ideas, instead of the number of hours worked. It scales infinitely.
When taking risks, limit your downside while having considerable upside. I like to go “all in” when the downside is limited/close to zero, which allows me to swing for the fences.
While the riskiest route, the biggest upside is by starting your own company. Most entrepreneurs have a 15-year career span before they get burned out. Take as many calculated swings as you can within that window. Opportunity cost is too high to work on things that go nowhere.
A less risky route is to create passive income aka the “side hustle”. @jwmares does a great job of highlighting the four different types of side businesses here: http://justinmares.com/the-4-kinds-of-side-businesses-you-can-start
Take concentrated bets, instead of diversifying across hundreds. “I learned that if I could have 10 or 15 uncorrelated bets, and they’re all about the same return, that I could cut my risk by 75% or 85%” — @RayDalio
Buying a house is a consumption expense, not an investment. After calculating taxes, upkeep, etc, you will get similar returns by investing in the S&P 500 with 99% less work: https://fabricegrinda.com/nontraditional-approach-to-wealth-management
You don’t have to be a billionaire to take advantage of the same strategies. For example, it’s possible to pay $150 in taxes on an income of $150K: https://rootofgood.com/make-six-figure-income-pay-no-tax
Success is not how much time you spend doing what you love, but how little time you spend doing what you hate.
The biggest regrets of those on their deathbed? The courage to live a true life to yourself, working so hard, courage to express feelings, staying in touch with friends, and letting yourself be happier.
The wealthiest people in the world value experiences, relationships, happiness, freedom, flexibility, and having a sense of purpose. This is the “new wealth” that we should accumulate in our lifetime.