Hey folks,
You may know that I am an avid fan of Quora. I usually like to answer questions pertaining to Personal Finances (ranging from Real Estate to stocks), generic Life Advice, and more. I recently came across the question “What would you do different if you could go back in time?” (the question was later changed to “How do people get rich?”), in the category of Money and Personal Finance.
My answer has gotten around 70k views; I think that my vision is somewhat peculiar, and I’ve gotten positive feedback, so I thought about extending it a little bit here on my blog. So, without further due, if I’d either go bankrupt or 10 years back in time, here’s what I would do, now that I know how people get truly rich:
- I would never do a PhD or even get a degree (I’ve graduated from a top European University and have got a PhD from another as my readers know). That was a very bad financial decision (especially in the US, where tuition is damn high*) for a number of reasons. First, its simply too expensive. Second, statistically speaking, chances are you’ll become an employee instead of a business owner, thus limiting your salary (you trade your time for the dollars, but your time is limited, no matter how well you’re paid). Third, you lose way too much time studying (and a lot of that is simply irrelevant… sorry its my opinion); you could use that time to make money instead.
- Improve my financial IQ as much as possible. Read about business, money and how to use is and make more of it. Today, I know that Rich Dad Poor Dad by Robert T. Kiyosaki and The Millionaire Next Door by Thomas J. Stanley, William D. Danko are the killers in this category. If I would have started say 4 years before, I believe I my net worth would be at least 3x what it is now. I would had understood before that money is a tool, which I should use (and not be used by). I would have understood the power of compound interest and I would have started to use leverage a long ago.
- I would start a business that could scale, and hustle. You know why lad drugs are among the best businesses in the world? Unlimited clientele, unlimited profits. Knowing what I know now, I would certainly have Real Estate in the equation, but I would also have a highly salable business (for example, selling good-quality products at low prices via drop shipping).
Research shows that about 50% of small-business owners in the US fell very satisfied and successful, as shown by a Wells Fargo/Gallup survey. I am pretty sure that the figures are different for employees around the world… - Build a very large, healthy social network. At the end of the day, the more people you know, you can reach and you can use to your favor (not in a bad way, since I truly believe this should be bidirectional) the easier you make money. That is the cold hard truth. Sometimes is not even what you know, is who you know. I would have read the book How to Win Friends & Influence People by Dale Carnegie and apply the concepts therein.
*In Europe, tuition is considerably lower than in the US. In Portugal and Italy, tuition is around $1000 a year at public (which are typically much better than private) universities. In Germany, you pay marginal, administrative costs.