How To Get Wealthy
Where will your future wealth come from?

My previous blog post was based on the Book-Of-The-Day, "A Few Lessons For Investors And Managers: From Warren Buffett"
Tai Lopez Nov 12, 2014
But that was only the foundation. You must always move on to more advanced concepts.

Einstein said, "Make everything as simple as possible, but not simpler."

It's insane how many people oversimplify wealth creation.

The world is awash in weird schemes trying to get you to buy gold, flip houses, build the next big iPhone app, and create supposed 'automated income.'

You will be the next sucker if you are not careful.

Forget the shortcuts. They are actually just 'long shots.' 

Lottery tickets...

Mirages...

So what will actually make your bank account grow exponentially?

If you look at the research, it most likely will come from you owning your own business, aka being an entrepreneur.

Barclay's Bank studied 2000 high net worth individuals. 
 
750 of them were entrepreneurs.
 

(Here is an interesting article that says in the future nearly EVERYONE will have to become an entrepreneur). 


But just starting your own business is the easy part.

80% of small businesses fail in 18 months.

Building something that lasts is trickier. 

You will need to know things.

Many things.

This is the main reason that I built the Mini-MBA business academy - to let you learn from self made millionaires.

I'm doing a free seminar where I'll be talking a lot about that. Check it out here

Knowledge in your brain is the only sure-fire approach to wealth.

Double down on yourself.
 

You don't want to fail. 

Life is too short. You don't have enough years to fail often. 

You won't be able to recover.

In today's book, Warren Buffett lays out the path to you actually building something that lasts.

The 3 vital points to understand:

1. Ideal Business Model: "The best businesses by far for owners continue to be those that have high returns on capital and that require little incremental investment to grow."

Remember your business growth is usually constrained by the need for more growth capital. Find businesses that are like a boulder rolling down a hill - once they get going they roll on their own. If you always need huge sums of money to grow, you need to innovate and pivot the business model.

2. The REALLY great business: "High returns, a sustainable competitive advantage and obstacles that make it tough for new companies to enter."

This is the holy grail - your business 'castle' surrounded by a protective 'moat'. If you can't think of your competitive advantage then you're probably in trouble. Adjust and tweak until you could honestly stand on a stage with the top 20 people in your industry globally and hold your own. One of the best competitive advantages is massive levels of skill in your business.

3. Pricing Power: "A great business has pricing power or the power to raise prices without losing business to a competitor."

Buffett says you have to create the "economic franchise" effect for your business by creating a product or service that:

A. Is in demand
B. Where customers don't know how to easily replace you
C. Has no governmental regulation regulating the price you charge

The reason Ferrari is a fun businesses to own is not just because you get to drive fast cars. 

You have pricing power. That's the important part.

If times get tough you can just raise the price by $10,000 per car and no customer will really care. 

If a customer wants one of your Ferraris, they simply want one. They aren't very price sensitive or likely to switch to a Toyota over $10,000. That's the "economic franchise" you must build for yourself.

Remember, it doesn't matter if you are reading this as an employee or an entrepreneur, you must gain mastery of these concepts.

If you operate in a business that violates any of these 3 tenets your financial future is precarious at best.
 
Build something that lasts.
 

Leave your mark on life while you have time.

You don't want to be like John Keats when he wrote, "And if I had had time I would have made myself remembered."

You have time today.

As the Proverb says, "It is good to bear the yoke in your youth."

No matter your age, today's the youngest you will ever be so pick up the 'yoke' and build wealth.

Lasting financial freedom...

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