So You Want to Be Rich? Here’s The Secret

secret to become richHere’s the question I get asked most often when people learn that I write this blog: “So how can I become rich?”

Here’s the answer: “Do what you already know.” That’s the secret. Your already know everything you need to know to be rich. The problem is, even though you know, you probably aren’t going to do it.

Let’s be brutally honest. Anyone who is writing about personal finance will be writing about something that you already know (but probably aren’t doing) 90% of the time. There will be a small chunk of knowledge here and a new service there that you may not have heard about, but for the most part, personal finance really is straight forward and easy to understand. You don’t believe me? Here is the formula to get rich:

1. Start saving early
2. Spend a minimum of 10% less than you make.
3. Invest the money you don’t spend.

That’s it. No secret formulas or hidden gems. If you want to be rich, it’s as simple as that. Of course, there is some tweaking that you have to do. You can’t invest in any old thing, but even that isn’t difficult to figure out and you already know where you should invest the money (401k with matching funds, Roth IRA and stock index funds being the most obvious – see, you knew that too).

In reality, I shouldn’t have a job (and I would gladly look for another one if everyone would do what they already know they should do) helping people with their finances. Somehow I don’t think I’ll have to worry about changing professions in the future. While it is easy to understand how you become rich and you know what you should be doing to achieve that wealth, it most certainly isn’t easy for a lot of people to actually follow what they know they should be doing.

I blame it all on the lottery attitude. If you aren’t rich (or aren’t moving in that direction), it’s simply because you have decided to ignore what you already know in favor of pursuing easy money. The problem is that even though some people do get lucky and win the lottery, the odds are better that you will die from a flesh eating bacteria than you will striking it rich that way. You have decided to go after the quick buck because you aren’t willing to put in the work that you know needs to be done. You may think you have a valid reason for this, but it’s nothing more than an excuse.

So there you have the secret. Once again you know exactly what you need to do to become wealthy. Odds are that you will once again ignore the obvious and see if there is an easier way, but I’m hoping that you prove me wrong…

This entry was posted in Investing, Making Money, Personal Finance, Saving Money. Bookmark the permalink.

16 Responses to So You Want to Be Rich? Here’s The Secret

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  2. Steven James says:

    Hey, i’ve started saving money and investing it wisely as well.
    I really thank you for your valuable advice and love reading your blog.


  3. Steven L says:

    I think this makes sense to a degree, but in theory what is the point of being rich if your plan is to live well below your means? To save a lot of money, to have it in the bank to continue living cheaply?

  4. fractalbrothers says:

    yep, people that live paycheck to paycheck crack me up. They have a brand new SUV but have to take out a loan if something breaks on it.

  5. Steve says:

    What I have noticed is that most people dont value their skills highly and they talk down their abilities.

    Do what you know is one part… second part is value what you know and then invest.

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  8. Ruby says:

    Excellent post! You have broken down every thing into 3 simple steps:

    1. Start saving early
    2. Spend a minimum of 10% less than you make.
    3. Invest the money you don’t spend.

    Implementing these steps however requires hardwork and sacrifice (such as not spending money right now and saving it) which is why many of us have problem getting rich. Good post!

  9. davis says:

    Nice to see someone put it into such basic terms. But I don’t think those who have money problems will see quite that way

  10. Dirk Diggler says:

    To StevenL:

    The point of “being rich” is independence. Have you ever seen 55 year old grown men who are afraid of being laid off because they have mortgages and kids in college? I have, and it wasn’t a pretty sight. Being rich means you won’t have to take shit. I think this is a worthwhile goal.

  11. Terry says:

    I started saving early and had more than $4,000 by the time I graduated high school in the early 1970s. Then I blew all that money on college and ultimately took out two student loans. Today I earn my state minimum wage and am still paying off my student loans. How am I supposed to save anything on this income and debt load?

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  13. Amos says:

    I must agree with the statement we have what it takes to get rich; and it is up to each one of us to use it.

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  15. QH says:

    As with many things in life there are multiple ways to achieve your goals. With money – you have to be in control not the money. By this I mean you have to know what you are earning, what are you speaning and on what, how much do you want to save & very important WHY ? Then you work out a savings plan – not from what you have left at the end of the month but right at the start.

  16. Toby says:

    ovcourse you aleady know what to do, with that 10% buy assets that make you money and then reinvest the earnings in more assets. money makes money. either shares, property or any other investment it doesnt matter so long as you do your homework. invest in knowledge and you will spot good investment opportunities ond getting rich should follow

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