Road rules for building wealth
A wealth-building insight from a recent road trip
“So, what’s our audiobook this time?” my Mom asked.
This week we went on a little family road trip.
I carpool with my parents to visit my sister and her family around Thanksgiving every year. It’s become a bit of a tradition that we pick out an audiobook to listen to on the road. (We rarely fly for various & sundry reasons.)
Since we’ve started doing this, we’ve gone through quite a few books:
The Millionaire Next Door
Lord of the Rings: The Fellowship of the Ring
Rich Dad, Poor Dad
Chronicles of Narnia (1, 2, & 3)
Steve Jobs
How to Win Friends and Influence People
The First Tycoon: The Epic Life of Cornelius Vanderbilt
The Almanack of Naval Ravikant
That last one was this trip’s book. (We didn’t finish it, so I can’t give a proper evaluation yet.)
I picked out the “Navalminack” because so many people have recommended it as a great resource for learning about wealth building. And wealth building is a topic I’m actively exploring.
Not far into it, the first chapter, came some wisdom:
“Wealth is having assets that earn while you sleep.”
This immediately stood out to me because an earlier book I had read, Rich Dad, Poor Dad, talked about getting rich (and escaping the rat race) is all about owning income-generating assets.
That insight was probably the most significant one I had heard.
It’s such a simple idea: spend my money buying assets that will produce income for me, eventually. Once I stack enough of these together so that the income they produce is greater than the expenses I have, then I’m on the fast lane to riches.
Not that I seek the riches itself.
I want the freedom that comes from having my lifestyle taken care of by my income-generating assets.
Robert Kiyosaki (Rich Dad, Poor Dad author) chose the pathway of real estate. In fact, a lot of people like to buy up real estate assets that they use to generate income.
I’ve never cared much for that world.
The best I can tell, Naval chose some scale-able business ventures. Again, plenty of people choose to build up a business that makes enough money to begin passively investing in other businesses and generating a money-flow from that.
Nothing wrong with either of those choices.
And there are plenty of other avenues that you can choose.
The important thing is the principle of owning income-generating assets.
Now, I’ve chosen trading.
Basically, I want my money working for me. Treating my capital like it’s an employee at a company I own (my trading account) and having it work for me. This mindset is really the best way for me to not get myself emotionally attached to my trade ideas.
Something else of note:
My trading is not actually passive.
That’s all fine, I think, when it comes to the early days of investing in income-generating assets. The first ones take a lot of time, work, & energy. Escaping the rat race is hard, and it takes some hard work to do that.
I’m okay with spending about two hours per week to make this happen.
Technically, that means it’s not passive income.
But is two hours per week all that bad?
Not for me. It’s an easy trade for me to make. And I think most people could make that trade off, even if they were working a full-time job, if they wanted to.
A surprising amount of people say they want to grow wealthy — for instance, they would never turn down a lottery ticket if it was a winner — but they don’t actually want to put in the hard work to make it happen.
Even if a system that works was shown to them.
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All right, I’m not quite sure how I ended up here. As so often happens, I start writing and it just carries me along.
Anyway, I wanted to share the insight I picked up this week from the “Navalminack.” (It looks like you can get a free version on their official website, www.navalmanack.com)
No matter where you are on your journey, building up income-generating assets is a good idea.
— Ricky Ketchum