From Spending To Investing

Why do you want to get rich?  For most, it's about having the money to blow it all on things that have limited or no potential for being anything more than a temporary amusement.  As a result, most people will work regular low-paying 9-to-5 jobs, save up for a certain period of time, and then spend it all in on some "thing" that gives them some short-term joy.  They may have bills to pay, creditors calling and a child at home, but by god they have that "thing" that makes them feel like they've done something with their time.  What you must realize, my minions, is that this is exactly what the rich and powerful of the world want you to do.  It keeps the real money in their hands, and it gives them willing consumers who will continue to waste their money on materialistic possessions they don't need.

The answer is investing.  There are many different methods, but the philosophy remains the same across the board: rather than spending money on things that will show up as an expense on your accounts, put your cash into something that will make you more of it.  When successful investing strategies are put into action, your money works for you instead of you working for your money - which places you in a position to really get rich.  Don't think that working any kind of employee position will get you enough currency to live comfortably, if you expect to get wealthy you need to make some intelligent investments.

Get past the social programming

The problem with spending excessively is that it's so deeply ingrained in the minds of lower and middle class people as the only thing to do with money.  We are constantly showered with images of actors, musicians and tycoons indulging in the finest things life has to offer, so in order to recover a sense of self worth most people will spend what small amounts of money they have on things they see those people with.  I've known "men" who worked for $12 an hour, still lived at home with their mothers and were constantly asking for loans who always seemed to have brand new $100+ shoes, Gucci sunglasses, an imitation Rolex and a car with 22 inch rims on it.  Although in reality they were weak excuses for men, the fact that they were going broke so they could feel like their favorite rappers (and it gave leeway for lying to potential one night stands) was enough reason to sacrifice real freedom.  It should also be noted that many celebrities have spent their fortunes into the ground to keep up their lavish lifestyle image (Mike Tyson and MC Hammer come to mind) even as their incomes were sizable.

Another disgraceful thought process that is being spread by authors such as David Bach, who wrote "Automatic Millionaire," is to save until you are in your 50s or 60s while still maintaining your low-wage job.  Any self-respecting evil genius should automatically be disgusted by a strategy like this that promotes clinging to the safe and predictable and wasting your time at a menial job which will deny you the room you need to maneuver.  Having a couple million dollars - which is what you will have if you adhere to this - with the current rate of inflation is not enough to do anything except live exactly how you did before, sans your job.  What's worse, you'll be too old to really make moves, which gives you the worst of both worlds.

Saving is a key to financial success, but saving large amounts of money (not this "save 10% of your paycheck" bullshit) is the only way to go.  Don't listen to quacks like David Bach that are making a fortune by not following the very advice they're spewing.

Work for yourself

So you're probably asking yourself, "OK, so now that all my shitty concepts of money have been lit on fire and stomped out, what would you suggest?"  The most obvious choice for smart investment is to start a business.  With the advent of the internet, this can be accomplished much easier than before - either by creating an internet-based business, which takes relatively light investment to get off the ground, or by using the vast library of information to your advantage.  Whether you choose to start it on the net or in your home city, putting your money in a business means you put yourself in position to create wealth for yourself without limits, rather than working your meaningless hamster wheel of a job and hoping for a $1/hour promotion every year.

So think about it: how can you make money with a business?  Think about it, swish it around in your skull, and when you have arrived at your best idea, plan it.  There are many resources on the internet which can help you, just go to your favorite search engine and research the keyword "business plan."  You can either create one with whoever you're looking to work with (or it might just be you) or you can hire a professional to make it for you.  If you lack any kind of experience, I would recommend at least getting the advice of a professional, if not just flat hiring them.

Contrary to public belief, you don't need to have all the money yourself to start the business.  Here are some methods for getting your idea off the ground:

1.  Angel investors

These are people that have large amounts of capital who are willing to throw some of it at good ideas in hopes of turning a profit.  This group can consist of family and friends.  Usually, these people will ask for a stake of your company or expect a certain profit margin on the loan after a specified period of time.  If you're brand spanking new to the world of business and you don't have any great connections to bring in large amounts of capital, this is the place to start.

For more information on angel investors, click here for Wikipedia's official definition and some excellent external links at the bottom.

2.  Venture capital firms

For the big ideas that need capital in the multiple millions, venture capital firms can be a good choice.  These are companies that consist of the collective wealth of several individuals who, like angel investors, are looking to put their money somewhere to make them a profit.  Major tech companies with innovative technologies in their arsenal such as Google use VC firms to fund their expansions, but for smaller companies it can be a hit or miss strategy.  I personally know a man who owned a wireless internet company, but then lost it due to contract stipulations with the VC firm that had helped get it off the ground.  He lost everything because he signed a contract when he needed the money, so don't let desperation make you give your company away to people who will not care if you go homeless.

For more on venture capital firms, click here to go to Wikipedia's definition, which includes an external link to a presentation on the subject.

3.  Good old fashioned bank loans

If you or a someone you know and trust has a decent credit score, you can go to a bank with an outline for a business and get a loan.  They won't ask for any share of your company, but they will expect you to pay them back with interest.  You simply have to ask yourself if you think this is a good method, since it demands that you start making money very quickly.  People with a share in your company will expect a profit to be turned in good time, but they won't come and take your house if you run into speed bumps along the way.

Buy other people's income streams

Once you have a business going, or if you have a good amount of money to your name as it is, it's time to start gobbling up other people's cash flow like a hungry African hippo.

Competitors will only stay competitors as long as they are taking money from your pocket, so find ways to sink them.  Use whatever tactics you can concoct to make people come to you instead - highlight their weaknesses, mock or make their products/services seem socially unacceptable compared to yours, use the press to smear the owner - and bring them to their knees.  Ensure that your brand is established as the trusted company in the market, and as your competitors begin to crumble, offer to buy them at a sizable discount.  If they're smart, they'll allow the takeover to happen, which expands your business tremendously, and if they choose to be stubborn and crumble instead, your compeition no longer exists - expanding your business tremendously anyway.

It's a cutthroat way of doing business, but that exact strategy is what builds empires.  For those who are afraid of using such tactics, I would suggest not going into business simply because someday you will run into a CEO who is more than willing to dismantle you.  At that point, you will be caught off guard and inevitably end up with the short end of the stick.  Such thoughts of weakness sting my inner genius, but kicking a puppy usually soothes my pain.

Arrive at the finer things in life

Assuming you have followed my advice, and done plenty of your own improvising according to your situation, you should have a hefty bank account.  At this point, you can now afford to buy some nice things because you have income streams which can recover losses for you very quickly.  You are no longer simply buying things for image, you're buying them as a result of your hard, evil genius plans becoming reality.  There's no harm in buying a $100,000 car when you make that much every day, or a $30 million jet when you have 15 times that amount in equity.  Go ahead, purchase a private island and take your first steps towards really taking over the world.  While you're at it, set aside a plot of land dedicated to peasant jousting so you can watch the poor fools impale each other for your entertainment.  You've earned it.