When envisioning attaining an above-average net worth, one might imagine years of hustle and grind, sacrificing freedom and enjoyment for a prosperous future.
We’ve all been there at some point. Giving our souls away in hopes of something easier later on. However, the notion of toiling away for 60 hours a week, feeling like you’re living paycheck to paycheck with no end in sight, is becoming outdated. Instead, people are recognizing that there are more fulfilling and healthier paths to building wealth that don’t require sacrificing everything and wasting precious energy and time.
Today, wealth manifests in various forms, but achieving above-average wealth typically involves one of four avenues:
- Investing in real estate and earning high rental yields while expanding one’s real estate portfolio
- Consistently investing in the markets through Dollar-Cost Averaging (DCA), living below their means, focusing on low-cost ETFs and index funds instead of timing the market, and maximizing retirement accounts like 401k and Roth IRA
- Climbing the career ladder with multiple “lucky breaks” and advancing to higher positions faster than expected
- Pursuing entrepreneurship, owning some sort of business, and generating passive income from intellectual property
What unites all these methods of accumulating wealth is the power of compounding and taking risk.
Compounding is a force in the markets, multiplying efforts and results over time. Over time, it works for you if you stay the course. There’s no secret formula for getting rich other than hard work, consistency, and a fair share of luck and timing. I can credit a lot of my success in the various roles I hold as an MBA student, entrepreneur, employee, writer, and many more to luck, timing, and good connections. It never hurts to be good with people because at the end of the day, business is personal.
Top 10%
Those who excel in their field are often not the smartest but the most strategic and resourceful, willing to take calculated risks for future rewards. Most people aren’t willing to realize this but it takes a lot more than good grades and book smarts to make it.
To achieve outsized wealth, one must diverge from the norm. Fortunately, in today’s economy and world, building something from scratch is more feasible than ever before. Creating something isn’t the challenge, sticking to it through thick and thin is when most people break.
There’s no need to rely on lucky market timing for successful trades or make crazy bets. Instead, leverage the knowledge you’ve acquired and utilize the tools at your disposal through dollar-cost-averaging and being consistent.
While reaching a net worth of $1 million may seem daunting, remember that the first $100k, earned debt-free, is often the most challenging. After that, compounding begins to work its magic, with dedication and patience being the ultimate winner.
As the saying goes, “never fail due to a lack of effort because effort requires no skill.”
Understand that overnight success is rare, but the small steps taken today pave the way for future success. Whether you dream to be in the top 10% income bracket or top 10% happiness level, to be above-average in anything, get into the mindset of creating more and consuming less.
Once I hit $100k as a net worth, that instilled in me the confidence that becoming comfortable with rejection, taking on opportunities with a backup plan, and reinvesting as much as I can made a significant difference. At the end of the day, it’s about understanding what’s in your control, gaining perspective, and taking action through building reliable habits to set you apart.