How to Get Rich

Bill Gates, Warren Buffett, George Soros - these are just a few of the names that everyone associates with large amounts of wealth. So what does it take to get rich? Not only that, but how do you define being rich? Does it mean having a million dollars in the bank? Two million? Fifty million? Firstly, let's make a distinction between being asset rich and cash rich. Owning a house worth a million dollars might be something worth aspiring to, but once you have it, how will you survive?

You still need income to pay the rates, maintain the house, pay the power bills and buy groceries. Owning an asset that has no income doesn't make you rich. So what if the million dollars was in the bank, and you made regular withdrawals to provide an income to support your lifestyle. How long would the money last? Five years? Money in the bank means you are rich only for as long as the money lasts.

There are three ways to get rich - the most unlikely way, the hard way and the easy way. Let's deal with them in that order. The most unlikely way to get rich is through a windfall of money - for example an inheritance, a lottery win, or a legal settlement. The problem is, that unless this money is used in some way to create a sustainable income, a windfall will only make you rich for as long as the money lasts. Not many of us are ever going to get rich this way. Another way to get rich is to earn lots of money through hard work and to spend less than you earn. Over a period of years, through carefully saving and investing your money, you will eventually have enough wealth to enable you to retire comfortably. This is the hard way to get rich.

The problem with this approach is that by the time you have enough money to consider yourself rich, you are too old to enjoy your wealth and you have spent most of your life working hard and doing without! That just leaves the easy way to get rich. Take another look at the list of names of people on the rich list. Add to that list the names of any other rich people that you know of. Now think about how they got rich. Without exception, you will find that rich people got rich through creating, buying, or selling growth assets - that is, businesses and properties. Setting up your own business is not difficult to do if you focus on something that you are passionate about and which meets a need in the marketplace. Do your research first, and don't give up your job until you're sure you are onto something that will be successful. If this sounds too risky, learn about buying property - after all, its something that most of us do several times in a lifetime, so why not do it as a means of creating wealth? You might not make it to the top 50 on the rich list, but if you invest in growth assets, you will create a sustainable income that will allow you to have the things in life that you want, and that's what it means to be rich.