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Back when i was a broke college student who received zero financial education from his parents, the only question that bothered my mind was - How on earth do these rich people make billions of dollars. while the fed is raising the rates, the stock market is collapsing, the housing market is about to implode, but this (Bernard Arnault) made 32 billion dollars.
I mean, if i would make just 1/10th of that money, i would be the happiest person in the world. even 1 percent of that money is 320 million dollars. thats the kind of money that can buy you literally anything you want, not only you but your kids, your grand kids. thats it! congratulations! you are forever rich!
no one in your next 3 or 4 generation at least be poor. So do i make that kind of money? I don’t have rich parents. in fact, despite that I absolutely love my parents, they taught me nothing about money, not because they didn’t want to do that, but because they are financially illiterate, because if they have been, they would have taught me something or gave me a small loan of a million dollars and i wouldn’t be a broke college student.
What i didn't understand is that, most people on this Forbes list have made so much money from nothing. Some time in the past, when they young teenagers or adults, they might have been as broke as me. so the question that i have been wondering is - if these people with no money in their pockets made so much money, why cant i make at least 1 percent of that money?
before jumping into anything, i first have to figure out what i need to do. So, here are the rich people who don’t share anything about their lives or business so i am going to completely ignore them because its a waste of time but here the rich people who took the time to share what made them so successful.
one of them is Warren Buffett. I am not a fan of being rich where i am so old that i cant enjoy that money, whats the point of that money if i cant use while I am a young, handsome and strong. There is no point of making money if you are not going to use on yourself, your family, or a cause you believe in, doesn't matter, helping poor people, saving the planet or pay tuition for kids who cant afford it.
But if i can make a few million dollars while i am young following his advice, the rest, i will figure it out. so i bought a bunch of books about warren Buffett. I went online i started reading his letters, watching his interviews, speeches and whatever i could find. i was surprised that becoming rich is often not repeating stupid, dumb mistakes.
if you just avoid some fundamental mistakes in your life, you are going to be rich. its sounds so simple that it feels like a scam. I decided to give it a shot. surprise surprise, i did not become a billionaire. By avoiding these mistakes and focusing on my business, I actually built something that made me financially free.
So it doesn't matter how you planning to get rich, it could be by building a business like in my case or building a sold career, the advice is the same. you should avoid these mistakes at all cost. Number 1. According to Warren Buffett, the single biggest mistake that most people make is is “not learning the habit of saving properly.” It sounds boring, and you have heard it a million times.
but everything comes down to this. it doesnt matter how much money you make, you going to stay poor unless you master this habit. i know people who make way more money than I do, and yet every time i talk to them, they complain they cant afford this or that. they are worried if they are going to get fired or the economy will fall into a recession.
The only question that i have, what on earth did you do with all of that money that you have made the last 5 years. You could achieve easily saved up that money and no matter what happens you would have been fine. But no, you satisfied your urges and bought expensive crap that today holds no value. Here is how people become rich, its very simple.
you patiently save enough money that makes enough money that pays for your basic bills, you are financially free. now you can afford to do whatever you want to make a lot more money. you are not tied to anyone, you are not accountable to any boss, you are obligated to waste your time doing anything that doesnt satisfy you or make you even more money.
so from there you are going to make hundreds of millions if not billions of dollars. but thats not going to happen, unless you master the habit of saving money. the second mistake that most people make is trying to time the market. With all of this brain power, experience, wisdom, you name it. He never tries to time the market and then you have these 20 year old kids who barely saved up a few thousand dollars are trying to make millions of dollars by timing the market and calling the people who actually made billions of dollars - fools.
When there is a market rally they are laughing because everything is growing and then out of nowhere the market collapse and they lose everything, because they have bet everything they saved. They avoided the first advice, save money, don’t gamble that money, your job is to build capital and not play with it trying to time the market.
When I got into the stock market for the first time, I did this mistake multiple times. Although I did make some money, but I have also lost a lot of money. I didn’t even remember beak even. So the question is, what kind of stocks you have to buy. That takes us to the next point. “If you aren’t thinking about owning a stock for ten years, don’t even think about owning it for ten minutes.” Nowadays people throw their life’s savings on something just because everybody talks about it.
Just because it’s trending, just because its cool. Yo Man! You barely saved that money! How could you possibly throw it into something you barely know anything about!? Did you read its financial statements? Did you analyse its income statement? Have you seen their latest cashflow? Do you have any idea how the company plans to grow in the next 5 or 10 years?
You haven’t done any of those things, but you still decided to bet your life’s savings. ftx is a great example, its crypto of course. But it had exposed us! We are willing to throw our money blindly into something we have no idea about it and then blame wall street for everything. Where were your due diligence.
So, before you invest in anything. Are you confident enough to hold that investment for 10 years? be it a business, real estate, stock or crypto. Trust me the answer is going to be NO in 9 out of 10 cases. You have no idea how much money you are going to save. the next one is simple and yet people fall for it every single time - avoid debt at all cost.
Its true that debt can be pretty helpful in some cases, but a lot of people don’t have the discipline to handle debt. Leverage gives you all these options, but the number of people who actually go broke because the reality didn't match with the their plans. But because they have leveraged their positions, that single trade or that single deal destroyed whatever was left off their wealth.
If you’re smart, you’re going to make a lot of money without borrowing.” And I didn't even mentioned the credit card debts. If you are borrowing money at 18 or 20 percent. You are guaranteed to go broke. you are not going to make it. So, if you have any kind of credit card debt, the first thing you should do is pay off that debt.
And finally, Anything you invest in yourself, you get back tenfold. I hear this all the time. What stock should I buy? What properties should I buy? Where should i invest my money? let me ask you a genuine question - when was the last time you invested in yourself? i am not talking you buying one single book on financial education 3 years ago.
If we take out school and college, how much money you actually put into developing yourself? Thats the problems with most people. They are ready to throw money into the stock market without having any clue of whatever besides watching someone online telling them to do so and so, but they hesitate to go to a webinar to improve their social skills or accounting class to learn to read financial statements.
You are a project! you are a project of your own. What you make out of yourself at the end of the journey is what matters the most. So, don't ignore yourself. Start by investing in yourself, in your skills, in your comfort, in your peace of mind.
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