Wealth Wisdom: Essential Book Recommendations~3

Before I understood investing and read the two books mentioned earlier, I used to think that investing had a formula — just do a few things right, and you can make money. But the more I read, the more I realized that it’s not like that at all. Almost every successful investor has their own independent set of operating methods that are nearly impossible for ordinary people to replicate. These individuals succeed because they have found their own abilities, made good use of them, and entered into niche markets with little competition. For example, Howard Marks made his first fortune by buying junk bonds, a strategy that ordinary people simply wouldn’t have access to.

If you want to beat the market with your investment portfolio, you must be different from others, absolutely not the same as everyone else’s portfolio. Or you must be a stock-picking genius, selecting a few good stocks and timing your entry and exit points correctly. Even if you succeed, how much of it is due to technical factors, how much is due to psychological factors, and how much is due to luck? I don’t know. Can everyone replicate this approach? If Messi wrote a book on how to play football and Curry wrote a book on how to shoot three-pointers, would reading their books teach you how to shoot and score? This question was answered for me when I read the following book.

“the little book common sense investing” by John Bogle, the father of index funds in the United States and the founder of Vanguard Group, one of the world’s largest fund management companies. Forbes magazine named him one of the four investment giants of the 20th century, and TIME magazine listed him as one of the world’s 100 most influential people. Alongside Buffett, Benjamin Graham, Soros, and others, he was selected by The New York Times as one of the top ten fund managers in the world.

The book he wrote about investing in index funds is truly of high quality. It explains a simple truth: it is fundamentally impossible to beat the market in the long run. No fund can escape the iron rule of mean reversion. To maximize market returns, you must reduce the costs of buying and holding funds. What ordinary people need to do is buy funds with low operating costs and little or no commissions, especially low-cost index funds, and then hold them for as long as possible.

Reading this book made me realize that beating the market means earning more than others. The idea of making quick money through investments doesn’t really exist, or at least you have no control over making quick money. I prefer to control my investments and earnings, rather than relying on luck or others’ decisions. That’s why the path to quick riches doesn’t suit me. After reading this book, I chose to invest in index funds using the dollar-cost averaging method, and I’ve stuck with it ever since. Coupled with my expertise in real estate investment in Australia, the returns have been enough for me to retire.

If you’ve read all the books mentioned above and put their principles into practice, congratulations on earning your first $100,000 in life. However, further increasing your income through active means can be slow. Investing, on the other hand, requires not just luck but also a considerable amount of time and patience. If you want to earn more and faster, you need to enter the second stage of wealth building. This stage involves transitioning from side hustles to entrepreneurship, eventually reaching a net worth of $100,000 to $1 million. This indicates that you’re on the path to wealth and entrepreneurship. These books are best suited for you at this stage.

The title of this book, “The Millionaire Fastlane,” might sound like clickbait, but once you start reading it, you’ll realize the concepts are incredibly practical. There are slow lanes and fast lanes to wealth. People in the slow lane work 9 to 5, trading time for money, then save and invest in funds for long-term growth, relying on compound interest to achieve financial freedom by retirement at age 60.

On the fast lane, things are different. Most people in this lane don’t take vacations early on; they work tirelessly towards their dreams. They shift from being consumers to producers, rapidly accumulating wealth through entrepreneurship and business operations, enabling them to retire and establish brands and products by their thirties or forties. They profit by influencing and adding value to others’ lives. Most individuals on the fast lane start with personal entrepreneurship, including internet writers, real estate investors, and inventors. The commonality among them is that they have their own businesses.

The author analyzes how to break into industry barriers, increase control, establish post-tax income even while sleeping, and achieve time freedom. This book is a must-read for those looking to change their lives and start their own businesses.

“Over-subscribed” is a very practical business book that teaches you how to create products that customers are lining up to buy. It’s especially suitable for media personnel, freelancers, and professionals. This book is highly practical. I’ve only read half of it, but I immediately recommended it to a friend who is starting a business in the media industry. Once he started reading, he couldn’t put it down. After reading it twice in a few days, he told me that he had decided to halt the plans he had already started and reorganize his business.

The most useful aspect of this book is how to build and promote products in the internet age, attract customers into the sales funnel, and convert them step by step through practical marketing methods that lead to continuous sales. I’ve applied many of the methods and concepts from this book to my own media business, and they have also been highly beneficial for physical businesses.

The title of the book, “The 4-Hour Workweek,” suggests its goal of helping you operate your own business with just four hours of work per week. While many people focus on making money in the early stages of entrepreneurship and are inclined to invest all their resources and focus solely on their business, they often fail to consider the next steps.

If you want to take your wealth to the next level and enter the third stage of wealth, then this book is a must-read. The author writes in the book that busyness is just a form of laziness, indicating a lack of thinking and action without proper selection. It may seem busy, but usually, it leads to low efficiency. Through several practical and effective methods, this book will help you improve your work efficiency.

Establishing a business automation system, streamlining operational steps, and gradually achieving the goal of automatic operation for your small business. The resulting income is close to passive income because you spend less time, freeing up time to improve yourself again, find the next opportunity, and start a new business. If you have read these books and have completed multiple entrepreneurial ventures, congratulations, your net worth has reached $1 million, and you are now entering the third stage of wealth. In the realm of B quadrant business owners, earn more wealth through scaling entrepreneurial projects. In the third stage, from $1 million to $10 million, you need to do three things: first, improve leadership; second, scale the business; and third, expand your perspective to grasp economic and political trends. In terms of leadership, “The 48 Laws of Power” is undoubtedly the first choice, with the 11th law leaving the deepest impression on me.

Learn to make others rely on you. If people in your team rely on you when they do things, you naturally gain control and influence over them, as well as leadership. If everything depends on you, the efficiency of the company will seriously decline. On the other hand, if there is an irreplaceable member in your team, sooner or later the business will suffer losses. Therefore, it is necessary to maintain a balance between dependence and independence on you, the bigger the relationship, the better. You have already started to operate your own business, but you are always not seeing any improvement, let alone expanding the scale of operations. So, this book? It must be helpful to you.

You have opened a coffee shop and are very good at making delicious coffee. However, the coffee making process is entirely manual, and the skill is not something everyone can learn. There is no way to achieve uniform standards. KFC’s success is because it has achieved standardization. Within the scope of the whole world, through standardization and simple processes, people who have not finished high school can also operate stores and produce food with consistent taste, greatly reducing the operating costs of stores and reducing the difficulty of expansion.

The book also mentions a proven growth system that every small business can use. It emphasizes the importance of acquiring the most accurate customers, rather than relying on paying advertising fees or maintaining a huge sales team. If you are facing bottlenecks in your business operations, you will definitely be inspired to break through them. The highest task of running a business is to have control and insight into the economic landscape and direction, making it easier to succeed by following the trend.

Ray Dalio’s book “The Changing World Order” is indeed a great read. Whether an individual can succeed is not only related to their own efforts but also to the external environment. Dalio studied the economic history of the past 500 years and found that the rise and fall of economies follow almost identical patterns. They all go through a cycle of rise, peak, decline, and finally being replaced by another economy. Along with this cycle, the world’s reserve currency, wealth distribution, economic laws, and the logic of making money all undergo significant changes. To thrive and make money in today’s chaotic world, one must clearly understand their environment and current trends, adjust their strategies in a timely manner, and go with the flow. If you have accomplished what these three books suggest, congratulations, your personal net worth has exceeded $10 million.

I’m currently at the end of the second stage of wealth and the beginning of the third stage. I’m working on scaling my business. My practical experience in the field of wealth should already surpass that of many others. I’m sharing this in the hope of helping more people. After summarizing and sorting through my experiences, there are several key points that must be noted in the pursuit of wealth.

First, don’t skip stages. There are indeed many good books we should read, but I’ve found that after reading many, they can all be classified within the framework of these three wealth stages. Each book strengthens a certain step within the framework. Read books that correspond to your current wealth stage and don’t skip ahead. If you’re in the first stage of wealth, spending your time focusing on the economic and political landscape and reading books on leadership and influence is a waste of time. These skills, even if you understand them, are of no use if you can’t convert them into income. It’s just a way to entertain yourself, with little impact on your current life or short-term future benefits. If you’re highly motivated to learn knowledge beyond your wealth level but don’t see any returns, you may very well abandon the entire wealth plan.

The most challenging part of the three stages of wealth is the first step: from having no wealth consciousness to having wealth consciousness, completing the transformation from 0 to 1. If your parents have wealth consciousness, you’ve already completed this transformation since childhood. However, if your parents emphasized studying and working hard, you might not complete the awakening to wealth even by the age of 40 because you’re not aware of it. Another scenario is even if you realize the importance of wealth, you’re so overwhelmed by life that you haven’t improved efficiency through learning, saved time, and completed the transformation through investment and entrepreneurship.

In the first stage of wealth, people are in a stage of exploration and trial and error because they lack direction and specific goals. This step is usually the most time-consuming, or in other words, it’s challenging to earn your first $100,000. But once you do, you have a clear direction and increased confidence. Then, it’s just a process of learning, improving execution, and repeating the process of improvement and execution, and your earning speed will increase geometrically.

Many people choose to retire after completing the second stage of wealth, which is understandable because they have earned enough money to retire. Only the most potential, determined, and lucky individuals can complete the third stage of wealth, but at least everyone has the opportunity.

There are two directions to obtain wealth: active income, which is the three stages of wealth, and passive income obtained through investment. Investment runs through the entire process of wealth and does not have fundamentally different aspects in different wealth stages. Whether we work hard, start businesses, or learn about investing, our ultimate goal is to live a better life. Some people think that wealth is the goal of life, while others think that family is the goal of life. If you want both, remember to marry a wife who doesn’t love shopping. If you’ve read this far, don’t forget to subscribe to the channel, and please give it a like. Thank you, and see you next time.

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Wealth Wisdom: Essential Book Recommendations~3