notably this information was not super sexy you're like mary but i wanted to know how do
i get rich super quickly well if you want to get scammed feel free to google that
hi my name is mary and while i am not uber wealthy myself because of my job i do spend a lot of time
with people who i would consider uber wealthy and let's say let's call that like 20 million dollars
in plus in net worth and at first i was really hesitant to make this video because i am not
trying to promote our society's really rampant obsession with money um and certain individuals
being super rich but i do think there's a lot of misinformation and a lot of opacity around like
how do people build true wealth and so i've come up with these five steps that a apply to everybody
regardless of where you are in your financial journey and b i hope explain how some people
actually like build true wealth okay so step one out of five which is the most foundational step
is having a strong education as well as network so when it comes to education i mean a few things
the first is actually being educated about how you handle money or personal finance
unfortunately this isn't rarely taught in schools it's mostly taught through families but nowadays
you can also find a ton of information online about personal finance and that
is very important when it comes to becoming wealthy in the long run um the other thing
is essentially being able to think critically and trust in yourself and your decision making skills
that is a very important foundation of being able to build wealth and then finally it's
actually having differentiated skills that people will pay you for such that you can have an income
um when i say this i don't necessarily just mean like hard skills like computer science
or like electrical engineering or something like that but you could be really knowledgeable about
tomato plants or you could be an amazing dancer or just some set of differentiated skills that people
are willing to pay for such that you have an income such that you can start building wealth
when it comes to network this is i think really undervalued but it is really true that you are
like the sum of the five closest people around you which is why having a network um having a strong
network is very important now one thing i want to emphasize is that doesn't mean that if you're not
you know friends with like elite society or something that that that's a horrible thing
the people in your network should be based on the values that you hold so for example if you really
value kindness in people if you really value empathy in people then having a plus people
with those qualities be your friends will be infinitely important and foundational for building
a good life okay so step two of five is being able to earn money you'll note that there are a lot of
personal finance videos about like budgeting and debt and all of that stuff is super important but
note that its effectiveness in building wealth is capped by how much money you earn so for example
if you save a huge percentage of your income but you make a very very low income it's still
nevertheless going to cap how much wealth you can build which is why earning income is important um
the second thing i would say here again is if you invest in yourself and invest having having
differentiated skills that that will eventually help you earn a larger income again it doesn't
have to be like investment banking or anything so specific like that but just having different
skills that people will pay you for and finally when it comes to how you earning income you'll
notice that people who are really really really wealthy often own things and that's just because
kind of regardless of how much you get paid like let's say you pay you get paid a six-figure salary
like over 100k a year the math doesn't check out to go from 100k to 20 million dollars in
your lifetime it just essentially doesn't which is why if you own a business let's say you own 50
of a business businesses are often worth a lot more than individual salaries can be
so a business let's say can be worth 10 million dollars and you own fifty percent of it well
that's how you got five million dollars um that is a very very common method by which wealthy people
have become wealthy so step three is to save money now you'll be amazed and shocked and horrified by
how many people make a lot of money and then spend all of their money such that they are actually
living paycheck to paycheck building the habit of saving a percentage of your income towards these
future financial goals is an extremely extremely important habit for building wealth now something
really interesting is that you know chinese people have as a whole i think a very strong culture of
saving money but not all chinese people are super wealthy now why is that that is because saving is
not enough that's why you need steps four and five but let me demonstrate why saving is not enough
let's say you make 100k a year for 25 years and you retire at 65 at the end of that time if you
do not invest or do other things with your money you will have less than a million dollars and
because of inflation you will actually lose like three percent or more nowadays in terms of your
actual purchasing power or how much that money is actually worth and how much you can actually
spend and buy with it over that time so as you can see like how is it possible that someone
we're making six figures over 25 years doesn't have enough money for retirement that's because
they haven't done steps four and five which is what we're gonna get to okay we are now on to step
four which is invest and also probably the most important step importantly though you need to have
gone through the other three steps in order to be able to do step four correctly and effectively
if you are not in a strong financial situation and someone comes up to you and is like
buy this cool new cryptocurrency it's kind of thousand x in like the next week or something
you probably don't have strong enough foundation to actually make an intelligent investment
and this is also probably a scam so that's why i'm warning there's actually an order to these
steps and the order matters because you're building foundations for a wealthy life now
when it comes to investing um i can make like tons of videos about this but i think the list from
like easiest or most beginner friendly to most complicated goes something like this the first
is you have target funds that essentially say i want to retire in like 2050 or something like that
and i don't know what you're investing in but you're going to invest in a diversified portfolio
of index funds which are passively managed which means it's not individual people picking
stocks but rather kind of algorithms that pick stocks and have a very low expense ratio
um and i'm not going to look at it but i'm going to grow my money and let that grow over
many years that i think is the easiest entry point the step above that would be if you were to pick
index funds yourself yourself so for example you have the s p 500 index fund which is the most
popular which tracks the top 500 biggest companies in the u.s and buys them in the percentage that
they occupy that list it does it automatically most of these have a very very low expense ratio
and you personally might say i won't invest in this index fund and i also want to invest in
an index fund of asia and one of europe or whatever like you can come up with your own
um pool or portfolio the next step on this list if you want to be more risky or if you're more
more comfortable with investing is picking individual stocks
from there you might once again as you become more financially literate and more comfortable with
investing you might invest in derivative products like options or futures if you start to understand
what that is and then you might invest in other types of assets beyond stocks so for example you
might invest in real estate and if you go past all of this you then start investing in alternatives
which is what a lot of really wealthy people do they have a very diversified portfolio across
all sorts of assets so other types of assets that wealthy people may have is they may have
you know farmland they may invest in private equity firms which essentially often invest and
get returns from small businesses across the world they might invest in venture capital which invests
in startups hoping that they become big companies they might become angel investors which means
they put very small or they put small checks into companies super duper early on in hopes that they
become big companies they might invest in films they might invest in art they might invest in wine
they might invest in a whole variety of these alternative assets that are available to people
usually with quite a high net worth at minimum i would say a million but like most of these op
good opportunities actually are given to people with let's say 10 million plus in net worth
now an important thing to note is that another reason as to why your network really matters is
because you hear about these opportunities through your network so wealthy people
will talk to their friends who are investing in various things and exchange information this way
but if you are not uber wealthy like myself you might get a lot of bad information about oh
invest in this like cool cryptocurrency or invest in this thing or this asset that you might not
really understand um and that is something that you have to be super duper duper careful about
by the way just because i'm picking on crypto doesn't mean i think crypto is a scam it just
is often very scammy or there's a lot of scams within it um and so i'm just telling people to
be extra safe about that but okay we are on to step five which is leverage um uh harvard
business school professor once told me and it really stuck with me that the most important
thing that you should learn from his finance class was leverage because leverage gives you the right
to own assets you previously had no right to now the easiest example of leverage is if you
think about a mortgage for a house let's say you're trying to buy a 500k house you put 50k
down and you borrow 450 and now you get this house that's an example of leverage because
you didn't have that money in full to be able to buy that house so you technically had no right to
the asset but you're living in this house you own this asset because you used leverage that
is the power of it note that the reason the bank makes money or is willing to lend you that money
is because they get interest payments from you which are let's say like three to five percent
um a year over the lifetime of the house that's why they're willing to lend you the money
but the power of leverage is to take assets that you have and multiply it by multiple-fold into
assets you really had no right to own but suddenly you get the ability to own because of leverage
um so for example let's say you have a million dollars of net worth maybe use that for collateral
you take on some debt and then you're able to buy an almond farm that returns 11 a year or something
that is the last step of how wealthy people take their money and make more money out of it
notably this information was not super sexy you're like mary but i wanted to know how do
i get rich super quickly well if you want to get scammed feel free to google that
but this i think is actually a very accurate framework for how people become really wealthy
they get educated they have a good network they earn money they know how to save that money
they know how to invest that money and then finally they leverage that money in order to get
more assets um that is actually how people become wealthy i think in a very transparent manner
and yeah within this there's a lot of information that i'd love to break down around you know debt
and budgeting and credit cards leverage and things like that and i'll talk about that in
future videos which is why you should like comment and subscribe okay cool see you in my next video