We are easily mislead by people who can benefit by creating false comparisons. Wealth disparity is such a situation.
When most people look at Bill Gates or Jeff Bezos or Elon Musk, they think of all the problems that would go away and all the things they could buy if they had vast sums at their command. The reality is you don’t need $200 billion to do those. The reality is you don’t need $2 billion.
They know how hard they have worked to build their own wealth and they assume the wealthy did not do that. If you have built up some personal assets and $200,000 of invested wealth, you cannot easily accept that Jeff Bezos did what you did and got a million times as much for his trouble.
His method was different and you need to know what it requires.
Every business needs some seed capital. The money is not what will create the great wealth. Entrepreneurship is what does that.
You could easily start a small business with $200,000. Many giant businesses started with far less. If you decide to become an entrepreneur what values and skills will you add so that it grows to a vast sum.
You have to want to. Doing it requires giving up things you might like. Time with family being one.
You have to be willing to put up with adversity. Even if you are right, there will be near insurmountable problems. For some insight into that, take a look at the book about Nike, “Shoe Dog” by Phil Knight.
You cannot be greedy. Bring in external capital and skills early. 10% of something good is better than 100% of something struggling.
You cannot have a limit. If you go into business with the idea that $10 million is enough, you will never make a billion. The skills to make a billion are different. Beyond rare skills.
Almost all the money controlled by the very wealthy does not provide living standards. Most people see more money as better living. The wealthy could not begin to spend their money on living costs. The new Bezos yacht will cost $500 million. Proportionally that is like someone worth $2 million, spending $5,000. Not even the round off. Even with that expenditure, plus several very costly homes, Bezos’ personal assets are a tiny fraction of his net worth. Tiny. The rest of his wealth is in businesses, some very innovative, that provide employment and experiment with unproven ideas. Who else would do it. Certainly not the government or poor people.
Amateurs count their money in terms of what it will do for them. Most high net worth entrepreneurs count their money advantages in terms of what else it will allow them to do.
Once you start to see money as the raw material for business growth, you will make larger sums. Sam Bronfman once commented, back when $100 million was a lot of money, “Turning nothing into $10 million is difficult and hard work. Turning $100 million into $110 million is inevitable.”
If you see money as income for personal spending, you will never have much of it.
Equity growth is where the real money lives and you cannot spend it on living costs.
I help people have more retirement income and larger, more liquid estates.
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