Most high-net-worth individuals (HNWIs) didn’t inherit their wealth, and most didn’t create their wealth overnight.
It took time, patience, and a little bit of courage for most. It wasn’t easy for any of them. Many probably failed down several paths before finding the right one. All of them learned lessons along the way that we could all learn from.
Here are six hard facts and realities about wealth and freedom:
Freedom Is Not Given.
Freedom to spend your time as you wish is not automatic and should never be approached that way. It’s not an entitlement, and it’s not a route promised or granted to you by your job, your business, or your social standing. If you take it for granted, you will never achieve it or lose what you have of it.
Freedom has to be fought for, has to be planned for, and has to be pursued wholeheartedly. Our founding fathers didn’t achieve freedom by halves. You can’t achieve financial freedom half-heartedly.
Boring Investments Are Best.
While the internet and social media constantly work themselves up into a frenzy over the next best thing, HNWIs are happy to stick with boring, tried, and true assets. While impressionable investors flock to cryptocurrencies, NFTs, and the Metaverse, smart investors stick with assets they can touch and feel.
Focus Less On Timing And More On Time.
Everyone wants to get rich quick. It’s all about timing for them. Jump on before everyone else does and get off before the price tanks. It’s a futile enterprise. Nobody consistently beats the market over time.
Building true wealth requires time. The true wealth-building assets – the boring ones like commercial real estate, cash-flowing farms, and businesses – take time to build wealth. If you take the cash flow from these assets and reinvest them in the same or other cash-flowing assets, your wealth will grow over time not only from the compounded income but also from the underlying asset. Income plus appreciation is why you should focus more on time and less on timing.
Buy Luxuries With Passive Income And Not Earned Income.
If you want financial freedom, you will need to find a way to generate income in your sleep. This passive income is what sets the wealthy apart from everyone else, and it’s what they focus their energies and capital on.
That’s why you’ll never see them using the income from their jobs or taking out consumer debt to buy luxuries. They’re more interested in cash-flowing assets. Only when they’re playing with house money (i.e., the profits from their investments) will you see them splurge once in a while on something nice for themselves or their families.
The middle class spends their income on luxuries with nothing left to invest. That’s why they work until they die. Smart investors don’t spend on luxuries until they’ve achieved their objectives and achieved financial freedom.
Partnering Is A Must.
You cannot go at it alone. Smart investors never go it alone. They’re always leveraging time or expertise from someone else. Otherwise, they’re just doing what they’ve always been doing – trading time for money. The savviest investors partner with experts in their respective fields to diversify in alternative investments. Why reinvent the wheel?
Smart investors would rather spend their time doing what they love than overcoming learning curves and building infrastructure to end up dealing with headaches. Selecting the right partners can eliminate all the barriers and hassles.
Choosing co-partners with expertise and a track record of success will allow you to invest in asset classes and markets you wouldn’t dream of doing on your own. Partnering allows you to create multiple passive income streams from a diversified portfolio insulated from downturns. Stick to what you do best and what you love and invest with the right partners who do what they make best and love what they do. Everybody wins in this scenario.
You Can Fake Rich, But You Can’t Fake Wealth.
Influencers and scammers can fake rich with rented mansions and exotic cars, but at some point, it comes time to pay the pied piper. The credit cards get maxed out, the pool of capital from new investors dry up, and they can’t pay their old investors (Ponzi), and so on.
Even the middle class can fake rich. They can max their homes, cars, and credit cards to give the illusion of being wealthy, but they’re not genuinely wealthy. True wealth says you can lose your job tomorrow, and your lifestyle won’t change. Only assets that generate passive income can create true wealth. All the fancy clothes, expensive cars, and dream mansions in the world can’t give you true freedom.
True wealth true financial independence can’t be bought, rushed, faked, or bought with credit cards. It takes time, not timing, and it usually comes from assets others consider boring or non-sexy.
That’s fine because only the investors who understand the seven hard realities of wealth and freedom actually achieve them.
