Wealth Creation: Part 3
When friends,or strangers, hit me up for wealth building advice, I always lead with the same qualifying question. I ask this:
What is your primary source of wealth?
Two truths arise from asking this question.
One, this simple question creates a LOT of confusion. It typically gets answered by a blank stare or a lot of incoherent rambling.
Two, you know what answer I never hear?
CASH 💰 💰 💰
But isn’t the whole ‘earning and saving your way to wealth strategy’ based on having more of this one thing and holding onto it? Isn’t this the game almost everyone is playing? If this strategy actually worked, wouldn’t we all be sharing awesome savings strategies over drinks?
“Hey Tammy, I hear that you saved twice the national average of 8.9% net income last year. How on earth did you do it? Do tell and the next round is on me!” said nobody at a bar ever!
I can share with you what people do talk about when I ask this question.
From the employed, the most common phrase I hear is, “I just do my job to pay the bills.”
And from entrepreneurs? I hear endless business ideas on how they might be able to generate more revenue if they just had more…….wait for it…….. 💰!
So, I ask again, but with more guidance:
Based on your net worth today, what has the most value percentage wise?
Once the question is actually understood, the answers are typically as follows:
- 80% say their home
- 19% say stock in the company they own or work at
- 1% say Crypto
Interesting enough, 1/3rd of all wealthy people became wealthy through inheritance. Yet, never once has this been given as an answer. I’m strangely kinda proud of this. I prefer friends who focus their energies and thoughts on working for what they get in life! No offense trust funders!
Since 80% answer their home, I ask them to elaborate. Most of the time I hear stories of what I consider astounding success.
Couples proudly share that they bought their first home for a few hundred thousand and now it’s now worth twice that amount in just a few years.
My next question is always the same. I ask:
Was that hard?
This produces a confused look. So I lead the witness with questions like these:
Did you do it all yourself or did you hire a realtor?
How long did it take you to find your house?
How hard was it to come up with the down payment to close?
At closing, did your arm get tired signing all the documents?
I’ll trust your imagination as to the answers typically given.
Then, once I have the evidence revealed by the witnesses themselves, I start asking questions about their jobs or companies.
Do you find your job hard?
Is running your company hard?
Do you worry about losing your job or your company going out of business?
Do you feel that you are fairly compensated for your job?
Do you trust your employer?
Do you trust yourself as a business owner?
Do you enjoy your job?
Do you wish you had a different career?
I don’t need to share these answers cause chances are that they are self-reflective.
This line of questioning creates an opportunity for me to frame a very important question. I say:
It sounds like your job, or running your company, is really hard and that you may be just getting by financially from it. Yet, you have overwhelming evidence that the purchase of your home created the majority of your wealth, and by comparison to your job, was quite easy to actually pull off. So, dare I ask,
Why haven’t you done it again?
I’m going to let you all ponder this for a day or two, before we dig deeper.
