You know that moment in Aladdin when he first meets the Jeanie, and he’s surprised, Aladdin is not the usual kind of guy who gets a hold of this lamp and says this…
Jeanie: “He pretty much knows what he wants, and it generally has to do with, tons of money and power ha ha ha! Do me a favor, do not drink from that cup I promise you there is not enough money and power on earth for you to be satisfied, good so what’s your first wish?”
I know a lot of you say you want to be rich but what you really want is wealth, wealth isn’t this…
There’s a lot more to it, here’s why you need to get wealthy instead of rich, and here’s how to do it.
If you want to learn more about topics like this and how to build your next big thing be sure to follow me on…
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Now let’s talk about how to get wealthy…
First What Is Wealth?
Let’s get this straight, everyone talks about wanting money but that’s not all there is to it, Paul Graham says…
“If you’re in the middle of Antarctica where there’s nothing to buy it wouldn’t matter how much money you had, wealth is what you want not money.” – Paul Graham
But if wealth is the important thing, why does everyone talk about making money?
It’s kind of a shorthand, money is a way of moving wealth and in practice, they are usually interchangeable, but they’re not the same thing, and unless you plan on getting rich by counterfeiting talking about making money can make it harder to understand how to make money…
Here’s the philosopher Alan Watts in the early 1970s he was talking with some politicians who were convinced money is real this is what he said…
“Finally I said, the trouble with you gentlemen is that you still think money is real, and they looked at me and some of them said “Oh ha ha ha someone who doesn’t think money is real, because everybody knows money is money and it’s very important”, But it just isn’t real at all because, it has the same relationship to real wealth that is to say to actual goods and services that words have to meaning, that words have to the physical world, and as those words are not the physical world money is not wealth, it only is an accounting of available energy, economic energy.”
Again, money is not wealth it’s just a big integer in a row locked SQL database someplace owned by a bank sitting in a server farm somewhere in the world, as Paul Graham says…
“Don’t get hung up by the money it only represents wealth” – Paul Graham
If you’re focused on the money, you’re going to get stuck as a cog in the machine, you’ll end up focused on that next promotion, or the trappings of upward mobility.
What is far more valuable is to create and own that engine not just be a small piece of it.
Second Focus On The Skills, Not Looking Like You Have It
Now that the money myth is dispelled, let’s get into how to create wealth, the answer is skills, and people get hung up here and try hard to look like they have skills, instead of having them.
Paul Graham goes on to say…
“The people most likely to grasp that wealth can be created are the ones who are good at making things, the craftspeople who can create it” – Paul Graham
Being an engineer, designer, or product person, is the easiest way to be a craft person in modern society, these are the next generation of construction workers of our era and frankly the future, these are the roles that are the closest to the creation of the product.
I love blogging and over time I have learned to build my craft that’s a really big thing that you and I must talk about, and that is, not all skills are valued at the same price.
If you can do things nobody else can do, you will have skills that are priceless, and to be honest, this is one of the more brutal facts of capitalism. Venkatesh Rao says that…
“You can either live above the API or below the API” – Venkatesh Rao
API stands for application protocol interface, it’s how programs talk to each other and now it’s programs that are governing all aspects of how humans transact business and operate with one another.
As a driver for Uber, you end up having to follow the directions of the app which means you have to work below the API, it’s useful work to society but because there are a lot of other people who can drive too you are not using any special skills.
If you create Uber and own it, you’re above the API and you get to build and maintain the systems that give people what they want.
What is most useful is acquiring skills that nobody else has especially in rare combinations.
If you can rebound the ball and nobody else does it quite the way you can, you can be a hall of fame player, and that applies to all the things in your career and your life.
Robert Kiyosaki gets approached by a lot of people who want to raise money for their start-up, but you must know, investors are looking for founders who have the skills necessary to build that dream.
Why? It’s straightforward! 😇 If I give money to a founder who doesn’t have the skills, they’re going to lose against the people who have the real skills.
That’s why it’s so important for people to work on those skills before they raise money and before they start on their start-up, also this is why good investors look at the skills of the founders and the teams they fund, not just the credentials.
I hate to say it but there are definitely people who graduated from Stanford, Harvard, Cambridge, Yale, or any other fancy university or college you know, who are not good business owners, sorry to say.
And investors get tricked like that all the time, they lose money when they only look at the credentials in the resume, when they can’t tell if someone is genuinely good, all of these things point to the same place, the best way to look like a good startup is to be a good start-up.
It’s better to be able to build and have the skills of the craftsperson and a manager than to look like one.
The Third Big Principle Is Look For Leverage, Don’t Only Sell Your Time
You must transcend your constraints as a limited human being, most importantly this means getting leverage on your time, the Apple computer started almost by accident here’s Steve Jobs being interviewed by Japanese TV network NHK in February 2001, after Macworld Tokyo.
Interviewer: “And there was no personal computer in 1975 which is very hard to believe”
Steve Jobs: “Well, that’s what we made 1, we made 1, because we wanted 1, and there wasn’t 1, so we had to make 1”
Interviewer: “Did you know that when you made the personal computer that this would become a major industry?”
Steve Jobs: No, it took about a year before we started to sense that, I had a partner named Steve Wazniak who’s a brilliant guy, and he did most of the engineering on the original Apple 1 and Apple 2, and after about a year, we showed it to our friends and they all wanted one, and so we were busy making these computers by hand for our friends and it was taking all of our life and all of our spare time and so we decided we better manufacturer 100 of these so we don’t have to spend the rest of our lives making them for our friends, and that’s how we got into this, we didn’t think about starting a company we were just doing it for ourselves. and then our friends, and then the circle got bigger, and bigger, and bigger, and now this 25,000,000 people.”
They were making computers for their friends, and then it took more and more time to create them, so they looked towards creating a company to save time.
This brings me to the point that Naval Ravikant says…
“Wealth is about positive some games” – Naval Ravikant
And that’s about getting out of this sort of finite game like selling your time, when I got my first job, I was happy getting paid a few dollars per hour then gradually over time my income would increase more, and more, and more
But what I wish I knew earlier was that I have a finite number of hours in the day and in my life, you can get to 60 or 70 hours per week of work but beyond that, you run out.
But if you make a product, that can make money for you while you sleep that’s leverage, you can be a creator instead of a consumer, most people are looking to mainly only make themselves happy by fulfilling various perceived wants that they think they have.
But to be truly fulfilled I now realize you must generate and create the path to wealth which is through making others happy, making products, finding leverage, and solving their problems.
Fourth Creating A Wealth Machine By solving Other People’s Problems
I want you to visualize a wealth machine, you put money in and you turn the crank, and that machine spits out more money than what you started with.
A machine like that is incredibly valuable because you can take the money that comes out and feed it back in, you can reinvest that money to create wealth, that’s a wealth engine,
A wealth machine is different because it provides both money and wealth, now this is in contrast to a get rich quick scheme which provides you money, but no way to get more, there’s no wealth, these are one-time things.
Ferrari’s can be bought with money, but they can’t be converted into even more money, it’s money without wealth.
If you have a business transaction that is a one-time thing that you can’t repeat that’s money without wealth.
There are also people who play start-up, and that’s when you can’t make any money and you can’t have any wealth, these are a waste of time.
Usually what happens is you hire a bunch of people, you spend a bunch of money, and it’s all a waste, investments are supposed to pay back, wasting money by definition doesn’t pay you anything back.
A special form of this is when start-ups decide to sell $20 bills for $10 or even give them away for free, you got to be careful of those.
A truly great startup is both money and wealth, money goes in, it can be reinvested, and you get back not just more money but also more of the thing that makes the money that’s wealth, you can couple this capital virtuous cycle with 2 others
Talent and Customers, the more talented your team is, the more likely more talented people will come to work, with you, and when customers and users love you they tell everyone else who could use you that they should.
And that’s another virtuous cycle more customers, and then all of that together allows you to raise more money to put that back into the machine, that’s what product-market fit is, and that’s the key to this whole start-up thing
3 virtuous cycles work all together talent, customers, and capital, don’t focus on the money, focus on the wealth the thing that people want, the problem, and the solution.
Here is Steve Job’s being interviewed by Japanese TV network NHK in February 2001, after Macworld Tokyo.
Steve Jobs: “And sometimes people come to me and say I want to start a company, and I say why? And they say oh I want to make lots of money, and I say forget it that’s not a good enough reason, most people who start companies because they want to make lots of money, I haven’t seen very many of those succeed, the ones that succeed are people that come sometimes they don’t even want to start a company, they just have an idea that they want to express out into the world and often, they have to start a company because nobody else will listen to them.”
Well, that’s all folks thank you for coming here, I’m super glad you found me, and I want you to know if you’re learning about this, you’re doing the best favor for yourself and the world.
The world needs more people who are solving problems and I know you can do it, it’s simply going to take some time, if it’s not happening right now, trust me when I tell you, success is not linear, it’s exponential.
If you keep putting in the consistent effort every single day, things will change for you, I promise you, it’s not a matter of if, it’s a matter of when.
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