There's a false narrative about becoming wealthy.
Many people believe that the only way to become wealthy is through getting lucky through some serendipitous event:
- The lucky meeting that a musician got with a famous music producer
- The lucky investment that helped change the day-trader's life
- The lucky viral video that catapulted an individual to stardom
- The lucky break of being born into an already wealthy family
- The lucky make up of your genetics that make you see things that others don't
We hear stories like the ones listed above all the time. If we're an optimist, we think, "it's only a matter of time before I get lucky too" and if we're a pessimist we think, "I'll never get lucky like they did, so why even try?"
Regardless of how you view the world, becoming wealthy in today's landscape takes a keen understanding of certain viewpoints and strategies. It also requires certain philosophical viewpoints and the need for continuous learning.
The myth of wealth
Why is it that wealth is so elusive to some but can be caught with what seems like little effort for others?
Furthermore, what even is wealth? Merriam-Webster defines wealth as:
1 : abundance of valuable material possessions or resources. 2 : abundant supply : profusion. 3a : all property that has a money value or an exchangeable value. b : all material objects that have economic utility especially : the stock of useful goods having economic value in existence at any one time national wealth.
But really, when we talk about wealth, it has a more personal meaning to it. Some people think that being wealthy is having a happy and fulfilling family and the means to support it. Some people believe it having a lofty bank account and the ability to spend one's money on the material things they desire.
For the purposes of this article, we're going to define wealth as,
"Wealth is the ability to generate assets that earn money while you sleep."
Now compare that definition to the idea of being rich. You could have $1,000,000 in the bank. Sure you are going to have accrued interest with that sum, but the money in the bank doesn't yield assets that generate more money.
The only true way to generate wealth is to have ownership.
Ownership includes ownership of a business, ownership in a product or service, ownership through equity/investment of someone else's business.
How to gain ownership
For many of you reading this, it might seem like gaining ownership is an insurmountable task. Gaining ownership of an enterprise takes both time and money. You are currently trapped in a job that demands 40 hours (at least) of your time and keeps you satisfied with a nice salary.
A nice salary is just that: nice.
And what is it when something is nice? When you're really excited about something, do you relay that the event in question is nice?
- When you just gave birth to your first child do you describe the experience as nice?
- When you kiss a new found love and hold them in your arms for the first time is the experience nice?
- When you develop a new app that has the ability to profoundly impact a community to you describe the app as nice?
Something that can have a positive impact on your life is generally not nice. It offers more and thus needs a better adjective to describe it. Trading your time for a nice amount of money via a salary isn't sufficient enough for building wealth.
“Salary is the price you pay to compromise on your dreams.”
― Nitya Prakash
Getting a comfortable job that allows you to trade your time for a salary is the old model of making a living.
Fortunately, there is a new model for a making a living and it also is the most streamlined way of creating wealth in your life. How? Well the new model both minimizes the time bandwidth required to scale your efforts and it also creates ownership of an enterprise.
Furthermore, it will help defend you against the technological changes that gloom over the horizon. A study conducted by McKinsey notes that by 2030, 73 million jobs are projected to be lost due to automation. Most of these jobs will be monotonous, repetitive and "boring" jobs.
On the bright side, jobs that are going to be in demand in the future, automated economy are going to be jobs that illustrate human creativity. Creative work such as:
- Visual/performance art
- Mental health professional
- Dance/yoga/physical health
- Podcasting/audio communication
- Youtube/visual communication and broadcast
Are going to remain in demand. Why is this? Because when repetitive jobs are automated, we are going to still find a need to innovate as a human species. In the past, we've had technological advances that replaced jobs (think of the printing press) and as a species we overcame that (the need for more editors, writers for more content, paper supply companies etc).
So how does this figure in for you?
With modern technology — the internet being the main technology — the barriers to entry of starting your own business are magnified.
Take for instance the idea of 1,000 True Fans. Wired Magazine creator, futurist writer, conservationist and photographer coined the terms 1,000 True Fans more than 10 years ago in his groundbreaking blog article that shares the same name.
In the article, Kelly notes how in the future (but it's really already here today) in order to create a viable business your company, product or service really only needs 1,000 True Fans to be sustainable (though he goes further into the article noting 1,000 can be modified depending on your widget/service price).
A true fan is someone who will keep coming back and purchasing from your business whenever you release a new product or service. They will follow your narrative on social media and email and will support your overall endeavors.
His math is simple:
If you have 1,000 true fans (people that will for sure purchase your product or service) and you offer that product or service for $100. You are looking at an income for the year at $100,000.
He also dispels the nature of being lucky when it comes to the 1,000 true fans with his idea of the "Long Tail" economics.
Most viral and successful products fall into the "short tail" of economics: they are products that radically change the landscape and are so successful that few competitors come into the market. Think Facebook, Google, Amazon etc.
The "long tail" is more of the niche market products or services that enter the market place. While they aren't industry or total-marketplace disrupters, they do service a need and are searched out by a specific group of people.
Now with the world being comprised of almost 8 billion people — this bodes well for you in your enterprising, wealth-generating endeavor…
Think about what you are passionate about.
- Do you like to write?
- Do you like to have long-form conversations with people?
- Do you like to draw/paint/create visual art?
Chances are there are thousands of people that are passionate about those things as well.
And the beauty of all of it?
No one is able to relay that creative work like you can. Everyone is unique and has their own gift to share with the world.
The gift you share with the world is your ticket to wealth
Like stated above, the barriers to entry in getting your gifts to the world have been thoroughly beaten down.
- The means for getting video content to the world used to be controlled by a few firms that had the means of distribution through only a few channels on broadcast television. Now, those barriers have been destroyed by Youtube.
- The means for getting radio broadcast out to the masses used to be controlled by local radio stations that would only put certain content out due to the contingencies of their advertisers. Now, those barriers have been knocked down due to podcasts
- The means for getting your writing work shared used to be mandated by a few established publishers that would either accept or decline your work, use their distribution channels to spread the work and then take a giant cut of the sales. Now, those barriers have been blown up due to Amazon self publishing and blogs.
- The means for starting up your own fashion line used to take an insurmountable amount of bandwidth to design the clothes, purchase inventory space, find established means of distribution and own a brick and mortar to sell the clothing. Now, those barriers have been removed due to drop shipping services, e-commerce sites and amazon.
While you may be like many other people and fall into a specific niche or industry with this new model of generating wealth, you won't be competing necessarily with the others in your field the same way people used to compete.
As human beings, we make sense through story and narrative. As more and more of our lives become automated, we are going to find a need to exchange our resources with companies and individuals that share a common narrative with us. We are going to need to find our tribe and do business with them.
That's where the success of your wealth generation comes into play.
"Everyone is not your customer" — Seth Godin
You have a unique gift to offer the world and no one is going to be able to offer that gift the way you can.
In delivering that gift, the only way you can, you remove luck from the equation.
What if I don't know what my gift is?
It's a valid question…
A lot of people don't know yet in their life what their gift is. If this is your case, take inventory of what the people around you say about you.
“When you’re good at something, you’ll tell everyone. When you’re great at something, they’ll tell you.”
― Walter Payton
Listen to the important people in your life and notice what they say about you.
- Maybe people say you're great at holding a conversation
- Maybe people say your doodling is amazing
- Maybe people say you are great at relaying and teaching information
Once you open your ears and actually listen to the people around you in your life, you'll uncover things about you that can have a profound change in your life.
In order to become wealthy in the future, you don't need to be "lucky." You have to have a well-defined strategy that aligns itself with what is going on in reality and the economic forces at play.
Wealth is the ability to create freedom in your life:
- Freedom from financial stress
- Freedom to travel where you like
- Freedom to live where you like
- Freedom to meet with and build relationships with who you like
Wealth is created through ownership
In order to create wealth, you need ownership in an enterprise. This can be through entrepreneurialism (the most recommended method with today's technology at your disposal), investment, and ownership of a product or service.
A salary is never going to be a means of generating true wealth.
Millions of jobs are going to be lost due to automation and a salary and banking on a job that might have existed 10 years ago will leave you far behind in the pursuit of wealth.
Creating ownership is easier in today's economy:
Ownership is easier today mainly due to to the internet. With the internet, you are able to scale your message to millions of people with affordability.
In fact, you actually don't need to scale to millions of people. According to Kevin Kelly's 1,000 True Fans you are able to generate wealth and create a viable business by capturing only a small percentage of the marketplace.
With a true fan (tribe) base, you can tap into like-minded individuals who are looking to buy-in (literally) to your narrative.
Your gift is your ticket to wealth
As we move more and more into an automated world, we are going to need to fill a human-creativity void.
What that means is we are going to move from an routinized, industrial world into a creative and gig-based world where creative projects will propel us towards innovation.
We are going to need to use human creativity to fill this void.
Every human being is creative — it just depends on finding what that creativity is and how you can use it.
Once you find that creativity, there will be other humans that are drawn to the way the story is being told. This is true of all humans. Stories provide meaning in our lives. Whether it be the story we tell ourselves or the stories we glean from the people around us.
Once you find the story you can tell, you can use the technology that has completely knocked down all of the barriers to entry to share that story with the tribe that is looking for it.
From there, you will start to generate wealth. You will create assets that generate money automatically — even when you sleep.
And what comes out of that is freedom. Freedom is what we are all looking for.