You are yet to go a long way in understanding how personal finance works if you have not heard the name of Naval Ravikant, a much-admired investor commended for his lessons on life and investments.
Unlike many other investors who cannot take their eyes off the market to explain their understanding of how money works to create more money, Ravikant, an Indian-American entrepreneur and also the co-founder, chairman and former CEO of AngelList, who gained fame on the success of his book “The Almanack of Naval Ravikant” talks about wealth, health and philosophy in the same unabated breath.
With a net worth estimated at $60 million, Ravikant is not the 3-piece suited guy that you may anticipate. On the contrary, many people still find it difficult to gauge how this much sociable and neighbourly-looking entrepreneur managed to achieve so much in such a short span with his natural flair for building wealth.
On wealth creation
When prodded to share his views on investing and wealth creation, Ravikant responded by saying how anyone can learn how to create wealth. That money is not wealth and wealth is not entirely money can be understood by the simple realization of how money is spent with time while wealth works on itself even when you are sleeping. You can create wealth by whatever means available to you.
For example, you can create innovative software solutions during vacations, hone a craft and then turn it into a profession or simply create viral content using standard algorithms, thus, prompting more people to come to your site to read it.
If you are looking to create wealth, you must be able to identify what society needs or what you can do to add value to it. Once you know where the buck stops, it is easy to work on the next step to capitalize on that fact or factor and turn the same into a wealth-creating machine.
Learn something specific
We are not blessed with the same kind and level of knowledge. Some of you must have surely learned beyond what your books taught you. The things that we learn by exploring alternative information sources and failing multiple times are very unique and original to us. Moreover, the knowledge we learn throughout our lives is specific, thus, allowing us to be armed with some specific knowledge.
Apart, there is one thing to be educated about while learning about a topic or niche close to our hearts. The fact that we know something beyond what others may have just crammed from books ensures that we stay ahead of our competitors or those still spending their time understanding the subject. Specific knowledge will always keep us in good stead in all situations.
Time is of the essence
You do not have an entire life to make money nor can you spend your entire day at your job. You cannot dream of being wealthy and rich by just relying on your job alone. You may earn money but it will take a lot of time for that money to churn and create wealth for you. Being a professional may help you to earn tons of money but what about the time spent on allocating and investing your earnings in options that can make you wealthy in the long run?
Instead of slogging all your life, why not focus on something that uses the least labour and capital while helping you gain the most? For example, you can work on a content creation business with a minimal marginal cost of replication, thus, allowing you to earn money even when you are not working. Alternatively, you can employ people, own stocks of companies that continue to grow and generate income while you sleep or earn money by investing it in stocks, mutual funds and bonds.
Be authentic and natural
Competition is pervasive. In fact, the idea of running a business makes many people feel constipated, the reason being too many players in the same field. The only way out is to be authentic in your outlook and original in your ideas. Authenticity is the key to long-reigning success. Work on something genuine instead of doing what everyone else is doing. You can easily outperform your rivals as long as you stay true to yourself.
Believe in the compounding effect
All good things need time to become great. Great things do not happen at once. This implies that you must buy stocks of companies that invest with a long-term vision in mind. When starting a business, you must identify and find a strategy that stands the test of time and find people in sync with your ideas and intent to create wealth.
However, do not mistake your strategy for playing a game. Choose to ditch businesses that do not work for you or do not have a long-term perspective. If you are choosing a business to grow and earn you the much-desired wealth, it will do a lot of good if you put your money into a company worth your time.
Entrepreneurship is not easy. Doing business is not easy. The path to success is fraught with unseen roadblocks and never winding paths. The best way out is to step back and consider taking a detour that will not help you view your business differently but also take it way ahead of others.