What are the secrets of wealth creation?

Transactions.

It’s actually a fundamental rule of economics, so it’s not really a “secret” per se.

When two people have things, their assets do not equal their wealth. It is only when they decide to compare the value of their things, by trading, that wealth is established. So therefore each transaction where people charge more for something than it costs them, more wealth is created. And so the more transactions you have, and the more you value your own assets, the faster wealth is created.

Now is where the “secret” comes in.

You know the group that has the most transactions per effort spent, and

Transactions.

It’s actually a fundamental rule of economics, so it’s not really a “secret” per se.

When two people have things, their assets do not equal their wealth. It is only when they decide to compare the value of their things, by trading, that wealth is established. So therefore each transaction where people charge more for something than it costs them, more wealth is created. And so the more transactions you have, and the more you value your own assets, the faster wealth is created.

Now is where the “secret” comes in.

You know the group that has the most transactions per effort spent, and per day? Corporation owners, investors, CEOs, board members, shareholders, venture capitalists. It’s all essentially the same thing (although there are differences). These people make the most wealth because, not only do they own companies that sell goods or services (and therefore make a transaction, generating wealth, every time they sell something), but they also employ people.

Every day an employee comes to work, there’s a transaction. They trade their time and effort for money, and wealth is created. Of course, a business owner will only employ someone if they’re making money off of them - so regardless of how much someone is paid, the business owner always generates more wealth than the employee. The more employees, the more wealth is generated. And for venture capitalists, who own multiple businesses, they multiply that multiplier by each business.

The trick isn’t even getting the business to continually increase revenue. The trick is to get a business running smoothly, generating enough revenue to be “interesting” to other investors (or better yet, buy a company that’s about to grow big, then mostly sit back while it succeeds on its own), then tear it to shreds. Gut the workforce, get rid of most of the middle managers, reduce the quality of the product or service, push a big marketing campaign about how well the company is doing - and fishhook another investor into buying your shares before it goes bottoms up. And if you can’t find an investor, and it crashes, sell it off for parts - patents, infrastructure, hardware, software, etc (although that’s typically much less lucrative).

That way you have transactions happening when you buy the business, as the workers are coming to work, as clients buy your product/service, you’re increasing wealth generated in the time between gutting the company and people realizing it’s not as good as it was, and you make another transaction to get rid of all of it - netting massive wealth gain.

I mean, potentially hundreds of people are out of a job, you’ve destroyed an otherwise effective business, you’ve screwed over a colleague, and you may or may not have done something illegal in the process to make it all work - but you will be vastly more wealthy at the end of the series of transactions, and honestly the investment industry isn’t huge, but it’s big enough to hide in until you’re ridiculously rich - and at that point people tend to care less about your business practices as they do about the wealth you can help them amass.

Of course, it’s difficult to buy a business unless you already have wealth amassed. And if you’re an employee, someone is making more money off of you than you are making in your paycheck every week. So really, the only way to start amassing wealth is to start a business, hire people on, then sell the company once it gets big enough to attract investors. They’ll likely follow the outline for “success” that I mentioned above, and the people that got you your first shot at wealth will likely be taken advantage of, but you’ll finally be in the wealth race.

Physical wealth is accompanied by worry of protecting it. Spiritual wealth is the real wealth that we need to be focusing on as this is what accompanies us in this life and also beyond this life. Another most fascinating thing is that the Bestower/God gives each one of us these treasures equally with out any differences at this time. How we use them makes us rich or poor in terms of spiritual treasures and the beautiful irony is the more of this wealth we use and spend for our self and others, the multi million fold we accumulate them for ages. These treasures are imperishable and cannot be st

Physical wealth is accompanied by worry of protecting it. Spiritual wealth is the real wealth that we need to be focusing on as this is what accompanies us in this life and also beyond this life. Another most fascinating thing is that the Bestower/God gives each one of us these treasures equally with out any differences at this time. How we use them makes us rich or poor in terms of spiritual treasures and the beautiful irony is the more of this wealth we use and spend for our self and others, the multi million fold we accumulate them for ages. These treasures are imperishable and cannot be stolen or destroyed by anyone else. They can only be nurtured/used by the self/soul. The more of this treasure we accumulate the more carefree we become, unlike physical wealth, which is accompanied by worry of protecting it.

Treasure of spiritual knowledge is the true wisdom about the soul/self that we receive from the Supreme source. With this treasure we are able to overcome feelings of sorrow and anxiety, free ourselves from negative, waste and sinful thoughts. We are able to accumulate the treasure of elevated thoughts on the basis of this treasure of knowledge.

These spiritual treasures make the soul self-sovereign and give eternal happiness. So, let us all invoke and accumulate these special treasures to become spiritually prosperous. I practise Brahma Kumaris Rajyoga meditation.

If you are interested in learning meditation and spiritual knowledge, you can do 7 days Brahma Kumaris Foundation Course in Rajyoga at you local Brahma Kumaris centre. This course provides a practical understanding of the relationship between spirit and matter, as well as an understanding of the interplay between souls, God and the material world. The series of classes in this course will facilitate your inward journey in an efficient and effective way. In this course you will learn about:

  • consciousness and self-realisation
  • connection and relationship with God
  • the Law of Karma
  • the Cycle of Time
  • the Tree of Life
  • a Spiritual Lifestyle
  1. Don’t chase money, learn to attract it (more on this later). Just look at all the people who chase money. They end up in jobs that might pay a lot, yes. But what is the cost? There living in a cage. Destroying their health and relationships. No thanks….
  2. Never depend on the stock market, some illusive CRYPTOCURRENCY SCAM or Forex Trading Shills to make you wealthy. The first sign of a low-IQ person who will never get wealthy? He’s looking for a short-cut. He’s looking for something that will make him wealthy without mastering skills. Dumb. Just dumb.
  3. You can’t get really stinkin’ wealthy (and fre
  1. Don’t chase money, learn to attract it (more on this later). Just look at all the people who chase money. They end up in jobs that might pay a lot, yes. But what is the cost? There living in a cage. Destroying their health and relationships. No thanks….
  2. Never depend on the stock market, some illusive CRYPTOCURRENCY SCAM or Forex Trading Shills to make you wealthy. The first sign of a low-IQ person who will never get wealthy? He’s looking for a short-cut. He’s looking for something that will make him wealthy without mastering skills. Dumb. Just dumb.
  3. You can’t get really stinkin’ wealthy (and free) selling your time. There’s only 24 hours in a day. Even if you got paid $300 an hour, like top attorneys do, time places a natural limit on what you can earn. Beyond a certain point you can’t scale time, without running into health & mental problems. You have to learn how to decouple time from earning money if you want to get wealthy and not just “rich”.
  4. Business is NOT going to make you wealthy, if you haven’t got the right skills. 84% of new businesses fail within 1 year of starting. 90% of new business are out of the market after two years. Only around 10% of businesses actually make a healthy profit. What are these business owners doing different? They have an unfair advantage. They have the right skills that help them grow a business fast.
  5. A business built on a strong foundation WILL make you wealthy. If you’re not making sales and are constantly attracting new customers…you don’t have a business….you have a time consuming hobby. So, make no mistake….If you want to get wealthy in business, build your business on a strong marketing and sales foundation.
  6. Learn high-income, high-leverage skills to earn money without investing time. If you know how to persuade and attract people to whatever it is that you’re selling, you’ll get wealthy. Period. You’ll have the Midas touch, as they say, because every business you get into is build on a strong foundation (see #4).
  7. You have to be a renegade and step on some throats to get wealthy really fast. This will piss many people off reading this, but if you want to become truly wealthy, you can’t go about life and business, the way everybody goes about life & business. Remember: 90% of attempts at creating wealth….fail miserably! I’m not saying this to depress you…I’m saying this to show you, that what the majority of people is doing…is shit. On a practical level this means….Stand against what everybody else in your market is doing, and you’ll automatically attract attention. Attention can always be refined into sales, if you know what you’re doing (see #5).
  8. Test the waters before you roll out big. Never ever, spend your life savings on a business idea without having tested it thoroughly. That’s why I’m constantly telling you to master persuasion, marketing and sales. You might think that you have a killer product, or service, that you’re sales message is persuasive as hell and that people would be stupid if they don’t buy….But as soon as you bring the product out….You hear crickets. No one buys your product, because something is off. Might be your product. Might be your message. Might even be where you advertised. Point being….You don’t know if you can make money, if you can’t at least attract 20 buyers on 1000 sent out sales letters, in the first 7 days of placing a new product or promotion in the market (This sentence alone can make you very, very wealthy….) Now, imagine you’ve put your life savings into this project? That’s what happened to me on my first attempt at business. Learn from my failures.

In The Wealth of Nations, Adam Smith gave tips on wealth-generation:

  • Build or spend for capital, not expense
    • Capital is anything that produces value for society. It can be a physical thing like a machine that produces a valuable product or a metaphysical thing like skill, knowledge, relationships, trust, and integrity.
    • Expense is spending that does not return any value. An example is consumption (watching a movie, eating junk food).
      • If your work involves computers then buy a fast laptop to increase the value you create. In this case, the laptop will be your capital.
      • But if your work involves baking

In The Wealth of Nations, Adam Smith gave tips on wealth-generation:

  • Build or spend for capital, not expense
    • Capital is anything that produces value for society. It can be a physical thing like a machine that produces a valuable product or a metaphysical thing like skill, knowledge, relationships, trust, and integrity.
    • Expense is spending that does not return any value. An example is consumption (watching a movie, eating junk food).
      • If your work involves computers then buy a fast laptop to increase the value you create. In this case, the laptop will be your capital.
      • But if your work involves baking, then buy a good oven instead. In this case, buying a laptop will be an expense and not a capital.
      • If your work involves sales, then you might treat your potential customers to dinner because your business relationship is your capital. But in other cases, treating people to dinner would be an expense.
  • Save your time and money or resources to keep on building your capital
    • Skill is a type of capital. Instead of going out and having fun, try improving your skills. A lot of young people do the opposite.
  • As much as possible, do productive labour, not unproductive ones
    • Once you secure your capital, use it to create high quality value for as many people as possible. Productive labour produces results that persist in existence while unproductive labour does not.
    • Manufacturing is an example of productive labour while services is an example of unproductive labour. Agriculture is productive labour, but is very slow. Elon Musk became wealthy because he chose to manufacture cars instead of staying as a janitor at a lumber mill. Most rich countries have a healthy manufacturing sector. Most poor countries rely on services or agriculture.
  • Be a risk-taker first, then be risk averse later
    • To get started, everyone has to take risks whether auditioning for American Idol or starting a business. But after some steady revenue is attained, you should take care not to lose that revenue. A good example is the financial crisis which caused a lot of wealth loss.
  • Build your character (Trust, Integrity, Respect)
    • Trust and respect is the most important foundation of wealth. The Roman Empire became wealthy because contracts were honored. In ancient China, the leaders were respected. This is a person’s most important capital. Even if you lose all your money-capital, you can bounce back more easily if you are trusted and respected by many.

It took me over a decade to learn the real secret. I had a typical income after graduating from college but was always broke, deep in debt, and living paycheck to paycheck. I couldn’t seem to make any progress.

I had no mentor or role models in my life to help guide me so I became a vociferous reader of financial success books. But so much of the advice seemed alien to my life and nearly impossible to achieve. How am I going to save 6 months living expenses when I am barely treading water? From my rough calculations, it would take me many many years to make a significant dent on saving my emerg

It took me over a decade to learn the real secret. I had a typical income after graduating from college but was always broke, deep in debt, and living paycheck to paycheck. I couldn’t seem to make any progress.

I had no mentor or role models in my life to help guide me so I became a vociferous reader of financial success books. But so much of the advice seemed alien to my life and nearly impossible to achieve. How am I going to save 6 months living expenses when I am barely treading water? From my rough calculations, it would take me many many years to make a significant dent on saving my emergency fund. And some unexpected expense seemed to always come up pushing the goal post further into the future. Then on top of that challenge the typical financial advice is I am supposed to pay off all my debts. Seriously? Using any number of techniques such as snowball, highest interest first, debt consolidation, etc. would still require 5 or 10 years.

So, let’s say you are really disciplined, no major setbacks occur and you are able to accomplish both of these goals in 10 years. Great! Now you have zero debt and $10k or $20k in a 0.1% savings account. That only took 10 years of effort. Feeling super rich yet? And remember, you are not allowed to touch that money except in an emergency. So that money contributes absolutely nothing to your wealth building.

According to most financial gurus you now finally have permission to start building wealth from a starting point of zero. Take 5% or 10% of your paycheck, play it safe and buy a balanced stock index and bond fund. But wait! You just lost 10 years of your early critical earning years focusing on the other 2 financial goals. That is a lost decade that will take tremendously more money to overcome compared to if you had started on day one.

The secret: Automatically take as much money as you can from your income, divert it to your investment accounts and start investing aggressively for yourself now - not tomorrow, not next year, not when you have your financial life cleaned up - start today. Prioritize this over everything else.

Corollary: No matter how desperate you are, never touch your building wealth fund and assets for any other purpose.

I am ruling out those methods that rely on luck, such as being born with a silver spoon. I am also not going to discuss about marrying someone rich. The 7 secrets of wealth creation discussed below are the ones that most people, regardless of their situation, can use to create wealth for themselves. Please note that true wealth is one that is sustainable and enduring for generations.

Here’s 7 ways that anyone can use for their road to wealth.

  1. Live below your means: It does not matter how much you earn. If you are not saving at least 20% of your income, you are not creating long term wealth creat

I am ruling out those methods that rely on luck, such as being born with a silver spoon. I am also not going to discuss about marrying someone rich. The 7 secrets of wealth creation discussed below are the ones that most people, regardless of their situation, can use to create wealth for themselves. Please note that true wealth is one that is sustainable and enduring for generations.

Here’s 7 ways that anyone can use for their road to wealth.

  1. Live below your means: It does not matter how much you earn. If you are not saving at least 20% of your income, you are not creating long term wealth creation.
  2. Learn how to invest and manage your own money: There are far too many scams around when it comes to investing your money. Either that, or there are a lot of wrapper fees which will eat into your returns.
  3. Accept your outcome: Every financial mistake is a learning lesson. Be responsible and never stop learning in your road to wealth.
  4. Set long term financial goals: Be bold and set big goals for wealth creation. This will also focus you to think harder about your current situation and the next steps to change your current situation.
  5. Ability to Focus: Having the ability to focus on your long term goals helps you make better financial decisions.
  6. Faith In yourself : Believe in the power of manifestation by listening to a wealth guided meditation MP3. Just 15mins a day improve your subconscious mind to wealth creation ideas.
  7. Social Indifference: You do not need the next Prada or LV bag to become fashionable or cool.

Do let me know if you have any other ways to wealth creation by leaving a comment below!

Money is like water, it follows very simple rules that, if you understand them, you can profit from.

Like water, money has no morals. It does not matter if you are a “good” person or a “bad” person. If you live in the money desert you will have none, if you live near a money lake you will have plenty, and if you live near an ocean you’ll be rolling in it.

Thinking of money this way, teachers for example, live near a dessert that is always close to running dry - not cuz teachers don’t “deserve” money but because it is a fact that money does not flow there. No matter how good you are or how hard y

Money is like water, it follows very simple rules that, if you understand them, you can profit from.

Like water, money has no morals. It does not matter if you are a “good” person or a “bad” person. If you live in the money desert you will have none, if you live near a money lake you will have plenty, and if you live near an ocean you’ll be rolling in it.

Thinking of money this way, teachers for example, live near a dessert that is always close to running dry - not cuz teachers don’t “deserve” money but because it is a fact that money does not flow there. No matter how good you are or how hard you work there ain’t no money in them thar hills.

Conversely, Wall Street is an ocean. Even though the multi-billion dollar merger between Company A and Company B will probably lead to loss of jobs for many employees, probably less competition and poorer product quality - a Clear and predictable net negative for society at large - lots and lots of money will flow to the shareholders and the deal makers because they live by the ocean.

Not cuz they are smart, not cuz they are better people, but just because they understand and accept the simple laws of money and decided to live by the ocean and play by its rules.

My two cents.

Here are my top 10.

I’ve been poor and rich. Rich is more fun.

  1. There are secrets. The bad news? Luck isn’t it. The good news? You can learn them. You can chase luck or the real secrets. No one has enough time and money to do both. It’ll change your life.
  2. Visualize wealth. What does wealth look like for you? The answer is not “more.” Seriously, take time to picture your wealth. You can only achieve what you see. The rest is fantasy.
  3. Dream out loud. Refine and visit your vision often. Experience it in your mind. Say it out loud. Probably best when you’re alone. One day you’ll wake up surprised that

Here are my top 10.

I’ve been poor and rich. Rich is more fun.

  1. There are secrets. The bad news? Luck isn’t it. The good news? You can learn them. You can chase luck or the real secrets. No one has enough time and money to do both. It’ll change your life.
  2. Visualize wealth. What does wealth look like for you? The answer is not “more.” Seriously, take time to picture your wealth. You can only achieve what you see. The rest is fantasy.
  3. Dream out loud. Refine and visit your vision often. Experience it in your mind. Say it out loud. Probably best when you’re alone. One day you’ll wake up surprised that it’s no longer a dream.
  4. Become more valuable. When you become more financially valuable people will pay you more. Yeah, your mom told you you’re the best. Sorry, to disappoint you. Now become the best.
  5. No magic. People want, “Quick, easy and sure.” I tell them, “Pick two. Three is a magic box. And magic boxes don’t exist.” Given enough time even I accomplished it. You’re a snap.
  6. Little steps. Just keep moving forward. One step towards your goal every day. You don’t need home runs. Singles are perfect. If you get a double have a beer and celebrate.
  7. Contentment. Learn to be happy with what you have. If you want more then earn more. Finance only your house. Then your money will go towards building your wealth rather than someone else’s.
  8. Enjoyment. Enjoy the journey. Enjoy learning. Enjoy experimenting. Enjoy successes. Frankly, if you’re not happy now you won’t be much happier when you’re wealthy.
  9. Sharing. Discover the joy of sharing. Help others who aren’t as far along as you. Thank those who help you. I don’t know how, but I believe it all comes back around. Try it and see. Let me know.
  10. Love. Love the ones you share the journey with. If you gain wealth and lose your loved ones you lost. If you forgo some wealth yet have a life filled with love you win. Be a winner.

That’s what I’ve learned. And believe me I’ve tried a lot of freaking stuff that didn’t work.

Thankfully, I’m not smart enough to quit.

There are secrets to building wealth. Just not the ones everyone is looking for.

Greetings,

There are not many secrets, but one that can make you wealthy.

We all know about this secret. Renowned scientist "Albert Einstein" who studied the mysteries of the universe for most of his life, choose to label it as the 8th wonder of the World.

We are talking about the Magical formula of “Compounding.”

Compounding is not very complicated; still, there are a lot of queries today on quora. In fact, in this part of the world, most of you, like us, must have studied the compound interest when we were 12 years old. So you understand that if you invest Rs 100 at 20%, you will get Rs 120 at t

Greetings,

There are not many secrets, but one that can make you wealthy.

We all know about this secret. Renowned scientist "Albert Einstein" who studied the mysteries of the universe for most of his life, choose to label it as the 8th wonder of the World.

We are talking about the Magical formula of “Compounding.”

Compounding is not very complicated; still, there are a lot of queries today on quora. In fact, in this part of the world, most of you, like us, must have studied the compound interest when we were 12 years old. So you understand that if you invest Rs 100 at 20%, you will get Rs 120 at the end of year 1. However, in the second year, the amount you start an investment with Rs 120 (Rs 100+ 20 interest), so 20% on Rs 120 will be 24. This makes your investments in the second year Rs 144. Unfortunately, that’s where the teacher stop!

Here is the secret for wealth creation they don’t teach you.

If you continue to invest that same Rs 100 at 20% compounded for 50 years, you will end up with more than Rs. 9 lakh. You do that for 100 years; you would end up with a whopping Rs 828 crores in your account. Isn’t that magical?

Now you all must be wondering that if this compounding is makes money, then why most of us fail to make massive corpus with their investments.

The answer lies here:

Compounding works like magic in the long term, while a lot of investors focus on “Returns” component in the compound interest equation, the real element that they should focus more on is “Time.” Mr. Warren Buffett, the greatest investor of all time, is the perfect example who understands this equation very well.

He started investing at the age of 11, and he invested $ 114.75 he had saved since his 6th birthday. Today, his net worth is more than $84 billion. He did not wait to earn his first million dollars to start investing. He started investing early and continued with their investments for a long time; in fact, the real money he earned after his 52nd birthday.

So, the moral of the story is, if you want to get wealthy, you should not focus more on the return part and instead focus more on time.

Hope this helps!

To know more about how you can manage your investments and money better, follow our Quora space: All About Money

The `secret` is quite simple. But in the same way that common sense isn't very common, the common sense approach is to read the evidence and implement it.

However, most people prefer to ask their friends, family and other people who often aren’t experts in their domain.

I would say, avoiding these mistakes is key:

  1. Bad spending habits

The reality of wealthy

The fantasy of wealth: Why the wealthy spend less on luxury: the 70/30 rule in finance

2. Speculation - Get rich quick schemes. Buying individual stocks, currencies and other financial instruments.

3. Home bias

  • Indians and Vietnamese buying gold
  • Brit

The `secret` is quite simple. But in the same way that common sense isn't very common, the common sense approach is to read the evidence and implement it.

However, most people prefer to ask their friends, family and other people who often aren’t experts in their domain.

I would say, avoiding these mistakes is key:

  1. Bad spending habits

The reality of wealthy

The fantasy of wealth: Why the wealthy spend less on luxury: the 70/30 rule in finance

2. Speculation - Get rich quick schemes. Buying individual stocks, currencies and other financial instruments.

3. Home bias

  • Indians and Vietnamese buying gold
  • Brits buying property
  • Everybody buying only their home market

4. Underestimating how expensive retirement can be - underestimating future retirement costs and inflation

5. Not following and reading the evidence:

Basing decisions on emotions instead. Read some of these books.

6. Confusing volatility and stability - completely different concept.

7. Trying to get rich fast - get rich slow is easier.

8. Trying to DIY - unless you have the self-discipline of this man and can stop yourself speculating every day for 40–50 years, it may be best to outsource.

9. Not writing down goals - you feel obligated to achieve them if you right them down.

10. Taking out more than 4% - in retirement it isn’t safe to withdraw more than 4% per annum.

Some reading:

  1. 6 Steps to Financial Freedom and Passive Income Investments
  2. 4 things which separate the wealthy from everybody else
  3. Stock Picking vs Index Funds: Is Stock Picking Ever Rational?

Wealthy people know how to use their money and how to earn money. Most people simply spend their income as it comes in. The wealthy know to put aside a portion of their income every month. Over time this builds up and the money can be used to make more money. In the meantime, they have learned how to live on less than they earn - a valuable skill.

They also know to use businesses instead of trading their time for money. In a business, you can build wealth far more quickly than you can by trading time for money. Trading your time for money will always be limited because there is only so many hou

Wealthy people know how to use their money and how to earn money. Most people simply spend their income as it comes in. The wealthy know to put aside a portion of their income every month. Over time this builds up and the money can be used to make more money. In the meantime, they have learned how to live on less than they earn - a valuable skill.

They also know to use businesses instead of trading their time for money. In a business, you can build wealth far more quickly than you can by trading time for money. Trading your time for money will always be limited because there is only so many hours in the day.

Whatever your hourly rate is, you still have to keep turning up for work in order to keep making money. Wealthy people learn how to use some leverage in their money making pursuits. Owning a business is one way to do this. In business you can ‘leverage’ the time of others. One of the best businesses to use is an internet business. With an internet business you can learn how to use digital products and scalable marketing strategies to reach a global audience.

Some wealth basics are:

  • Eliminate debt quickly
  • Live below your means
  • Pay yourself first (put aside money every month)
  • Build capital
  • Pay off mortgage early
  • Use leverage somehow (business)

See also Wealth Secrets Of The Affluent