Get Rich Quick. It is a search countless people perform on Google everyday. It is headline grabbing. A quick search on the topic will produce 1,480,000,000 results. That is a truly astounding number. It’s crazy how many people still fall into get-rich-quick traps even though there’s mountains of evidence that shows that they’re total scams. Getting rich quick shouldn’t be a solution to your money problems. Instead, focus on getting rich slowly.
Every person I have ever met or read about who has built real, long term inter-generational wealth has done so slowly. I am not talking about months or years. I am talking about decades.
Every person I have ever met who is constantly chasing the next scheme or way to get rich quick is broke. I don’t think my experience on this is unique. If I had to ask you this question, I bet your response would be the same. Get rich quick = stay broke forever.
Get rich quick schemes are bad for building wealth. You might get seduced by the overnight riches but more often than not it is going to leave you broke.
Here ere are some bad ways to build wealth: MLM schemes, forex trading (you are going up against the whales and sharks of the high frequency trading world), the lottery, cryptocurrencies,and pretty much anything else that makes you pause and think, “Is this too good to be true?”. It usually is.
And I’ve kept the best for last – day trading. During the lockdown, a lot of people have taken to day trading, especially with the use of options. With the advent of Robinhood and Freetrade (at least free trade doesn’t let you trade in options), opening up a stock brokerage account and trading on the stock market has never been easier. It seems many people have started day trading for entertainment, gambling and getting rich purposes. But this will not end well for the majority. You can’t treat day trading as a game. Sooner or later you will get burnt. Have a look at this article by Forbes to see where day trading could lead.
So what are the good ways of building wealth?
Here is the secret. Spend less money than you earn and invest the difference. The investing component can be in an array of asset classes. Quality companies. Dividend paying stocks. Index funds. Real Estate. But the key is to be persistent. Sock money away into your investments month after month, year after year.
It is that simple. Well I should say simple but not easy. Many people will not have the dedication to follow through with this process. Instead, they are more tempted by the quick rich schemes. And I get it. When you’re young, broke and hungry to build wealth the idea of a 10% return isn’t exciting. Put away a full £1,000 and wait a year and you have £1,100? What’s the point? YOLO. But if you put away £500/month and wait 30 years, that’s a MILLION DOLLARS.
This is true no matter what age you are. I often get questions like “Hey, I’m 40 and have zero, what’s the secret you’re not telling everyone else so I can get rich much faster?” The secret is there is no big secret. It’s simply spend less than you earn and invest the difference.
And if you’re 40, you still likely have 40+ years of life to look forward to! That’s a long time frame to invest! Don’t try to get there next year. Start building real, long term, generational wealth. You’ll be glad you did when you’re 60 and still feel like you’re 30.
So don’t rush. Don’t be afraid to get rich slow. I’m sure you future self will thank you for doing so.