I Studied Young Millionaires: This Is What Makes Them Rich

What we can learn from them for our wealth accumulation

Why are some people stupid rich and chill at the beach all day while most of us have to work our asses off?

A few days ago I saw a video of a young “career guru” who calls himself a “high-performer”.

He works in investment banking and states that he works for more than 40 hours a week. It’s more like 60, and he only gets 5 to 6 hours of sleep. As a “high-performer”, that’s all he can get.

However, he feels like he is very well compensated for this with a monthly salary of $10,000.

Meanwhile, equally aged Youtubers, Internet entrepreneurs, or even Onlyfans creators publish videos in which they reveal their earnings of millions a year.

And I am pretty sure they don’t work that hard.

What do they know that the “high performing” career guru does not?

Working Hard Vs. Working Smart

How do you manage to earn ten times the salary of an investment banker who is working 60 hours a week, while traveling the world and spending a lot of time on the beach and in restaurants, like some of these guys?

I don’t believe they work 10 times harder. I also don’t believe that they are 10 times more intelligent.

The big advantage that allows them to earn these incredible incomes is leverage.

An employee can still work as hard as he wants. He exchanges his working time for money, without any leverage. One unit of time for one unit of money.

Since time is limited, his income is also usually limited and not infinitely scalable.

The truly rich, however, manage to decouple their income from their working hours by finding some form of leverage that allows them to scale their income almost indefinitely.

I noticed with all the young millionaires I looked at that most of them have a lot of leverage on their side.

In the following part, I will describe the three types of leverage according to Naval Ravikant.

The Forms Of Leverage

There are three main forms of leverage that work as real wealth accelerators.

Labor:

Having people who work for you is probably the oldest form of leverage that entrepreneurs have used forever.

Let’s say you own a business. You pay someone to do a task that will make you $1000. However, your employee is only paid $500 for getting it done.

Basically free money, right?

On the other hand, as an employee, you are the entrepreneur’s leverage. You basically make your boss rich.

Money:

Another form of leverage is capital. Think about investments.

Every dollar invested should make you more money in the future.

Over time, this lever becomes more powerful due to the compound interest effect. At a young age, however, it only becomes significant if you have a very high income.

Products With No Marginal Cost Of Replication:

The Internet has made another form of leverage available to us.

This is the form of leverage that allows successful bloggers, writers, and YouTubers to make a lot of money online. Nowadays, the internet allows us to reach a lot of people, which makes it easy to market products without any additional cost of reproduction.

Once an ebook or a blog article is written or a Youtube video is recorded, these products can be consumed by millions of people without any additional cost to the producer.

You only have to record a video once. It doesn’t matter if 10 or 10 million people watch it afterward.

An online following combined with products without any marginal cost of replication is incredibly powerful.

A Lot Of Leverage = Getting Rich Young

Generally speaking, the more leverage you have, the richer you can become.

For example, if you work a 9–5 job and invest part of your income in the stock market, you have a little leverage because your money is working for you. Not bad at all.

However, your income is limited and the stock market won’t yield much more than 8% a year, so that’s probably not enough to get rich young like the people I’ve studied.

These guys usually have a huge internet audience, which allows them to sell products without a marginal cost of replication. In addition, they have freelancers or permanent employees who also serve as leverage. They invest the money they earn in crypto, stocks, real estate, or their business. So their money also acts as leverage.

A lot of leverage enables making a lot of money, I guess.

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