Afaque, what would you recommend for creating a huge wealth?
Two days back, I came across this question from one of my friend.
Wait, I’m not going to give you a single one-line boring answer “start investing in the stocks”.
We are limited by our own thoughts, so let’s look at some broader opportunities.
How to create Huge Wealth?
When it comes to being rich & wealthy, why not let’s have a look at the top 5-10 richest people on this planet?
I’m raising this question because if they can achieve the top, why not we can learn something from them and achieve at least financial freedom or early retirement, you name it.
Can you find some common patterns in these top 5-10 ultra-rich people?
Obviously, they are human. I’m joking!
Any other guess?
They are somehow associated with great businesses!
And I believe money can be made by associating with business, it’s not just limited to being an investor or an owner.
There are many ways to make money. But whoever associates with a business makes money! Have you ever observed this?
Let me share with you the three ways to make money from businesses. (It’s my own thought. Don’t blame me if somebody tells you 4 or 6 ways.)
Method No. 1: Work for Business
Yes, this is the way most people make money associating with a business. They are hired, get a job, and work for businesses for most of their life. People from blue-collar jobs to a CXO, somehow all these people work for businesses. Their income varies according to what work/job they are doing while associated with. Some people get paid in millions, top managers. You know right!
Example: Apple Inc. CEO Tim Cook received $770.5 million in 2021 alone.
Method No. 2: Own Business
The second most common way to make money from businesses is to be an owner. Yes, investors in the stock market also make money this way, promoters, family business owners or even a small shopkeeper make money by being an owner. Again, it depends upon how much you own & what is the size of the business you own. Your net worth determines by what your business earn or what is the value of your business (if listed on the stock exchange).
Example: Warren Buffett became one of the richest person by being an owner of various businesses. His company Berkshire Hathaway is expected to collect over $5 billion in dividend income annually. Needless to mention capital appreciation of its stocks.
Method No. 3: Build Business
This is the way you can make huge money in the shortest time. You can think of an idea that is going to change the world in a significant way and build a business around it. Entrepreneurs & startup founders make money building businesses. Their networth determine not by what they earn but by the market value of their business.
Example: Elon Musk being the richest person on this planet made his fortune building PayPal, Tesla, SpaceX & other businesses.
Elon Musk added $121 billion to his fortune in 2021 alone which is more than what Buffett made in 90 years. This is the ultimate advantage of building a business rather than owning it.
There are many ways to make money, but people make money from businesses for centuries.
I hope this will help you which way you want to go to create huge wealth.
If you want to make money with Method No. 2 i.e. investing in businesses, feel free to connect for further discussion.
Now, you have understood how to make money from the business but I feel there are some questions that need to be clarified. Hopefully, it will be covered in future posts. Don’t forget to follow me on twitter Insiderpedia where we share investing & finance content regularly.