Summary

The article emphasizes that wealth accumulation is rooted in providing value and solving problems, rather than merely chasing money or working hard.

Abstract

The article "What the Rich Know About Money (That the Poor Do Not)" delves into the mindset and strategies that distinguish the wealthy from the poor. It suggests that the pursuit of money is a common goal across all demographics, yet the approach to acquiring it varies greatly. The author argues that traditional advice on education and hard work leading to wealth is often misguided, as wealth is not solely reserved for the educated or the hardworking. Instead, the rich understand the importance of providing value in exchange for money, a concept often overlooked in conventional upbringings and societal institutions. The article highlights that wealth creation involves identifying and solving significant problems that people face, and building scalable businesses that offer high-value solutions, as exemplified by the real estate industry. The author encourages readers to adopt a problem-solving mindset and to leverage the laws of scale and magnitude in their entrepreneurial endeavors to achieve financial success.

Opinions

The author believes that the conventional wisdom of getting an education and working hard does not guarantee wealth, challenging the notion that these are the primary paths to financial success.
It is posited that a scarcity mentality, often developed in childhood, can hinder one's ability to accumulate wealth, whereas an abundance mentality is more conducive to wealth accumulation.
The article criticizes the lack of proper financial education in schools, religious centers, and families, suggesting that the information shared about money is often false or misleading.
The concept of "smart work" is dismissed as a cliché without substance, used by so-called gurus to exploit people.
The author emphasizes that wealth is created by those who give value, asserting that capitalists are recognized for the problems they solve.
The article introduces MJ DeMarco's principles from "Millionaire Fastlane," advocating for businesses that can be scaled and that offer solutions perceived as highly valuable.
The author asserts that the key to wealth is to find a widespread problem, offer a solution, and establish a system to sell that solution, a strategy used by capitalists to amass wealth and influence.

What the Rich Know About Money (That the Poor Do Not)

A vital lesson about money from the school of the rich

People say money can't buy happiness but so does poverty.

And while money cannot buy happiness, money can buy you a lot of things that can make you happy.

Money can buy you a car or house. It is also leverage to travel and visit the choicest places in the world.

Much of what we think about money is shaped by how and where we grew up.

If you grew up in a family where there was never enough money and you had to manage everything, you will likely grow up with a scarcity mentality.

On the other hand, if you come from a wealthy home, you are more likely to be inclined toward an abundance mentality.

Another sad reality is that the institutions that raised most of us, such as the schools, religious centers, families, and other social groups hardly ever have any conversation about how money is accumulated.

If at all they do, most of the ideologies they share about money are false.

I have written this article to ruffle some of those ideologies and help you put your thinking cap on.

The Pursuit of Money

The pursuit of money is a universal trait for everyone, so whether you are a student, a graduate, a corporate professional, or you are running a business, we are all chasing after one thing — money and loads of money.

Many scripts people sell about “how to make money” are far from the truth. Some say to go to school, get a degree, then get a job, work hard, and you will make money.

This system has made people more frustrated than successful ones because wealth and riches are not for the literate — you should know that by now from your own experience. And just as being educated is not equivalent to wealth, hard work too does not always translate to wealth. Look around you, and you will see hardworking people that are dead broke.

Assuming you have been told that wealth comes to those who do smart work. My question is, what exactly does smart work mean?

It means nothing. Just some cliché coined by so-called gurus to sell their trade and rip you off your money.

Stop chasing money

There are things the wealthy practice around money. If you do not know them, you will live the rest of your life chasing money but never having any.

What if there is a proven way to make money and create wealth from scratch that the rich know and hardly tell people outside their circle?

There is one secret about money that we are never taught in college; perhaps even the poor professors do not know it.

Before I share the secret, understand that if you will be wealthy, you must discard certain beliefs about money.

Back to the secret.

There is a vital lesson we learned in high school about money. It is encoded in the definition of money. Perhaps, we were not paying attention, so we missed it.

What is money?

Money, they say is a means of value exchange.

On the surface, money is used to confer value on things and to pay for things.

There is deep wisdom in this definition. If you want the money in the accounts, wallets, and purses of people to come your way, you must be willing to give some value in exchange.

Those who make money are those who give value.

This is the wisdom that the capitalist system is built upon. Think about it for a moment.

What are the capitalists of this world known for?

The problems they solve.

Similarly, if you will build wealth in your lifetime, you need to find a problem that people have, provide a solution, and sell the solution.

It is that simple, you need someone else to complete it for you.

Breaking down the Process

Finding a noteworthy problem to solve might take months or even years, but when you finally lay your hands on something that meets the needs of people, you have found yourself a gold mine.

The other side to this equation is called the law of scale and magnitude.

In his book Millionaire Fastlane, MJ DeMarco opines that not all businesses can give you the kind of money that you need to live the kind of life you desire.

He shared two principles you need to consider when starting a business; the law of scale and the law of magnitude.

The law of scale; never start a business that you cannot scale leveraging on people, systems, processes, and technology. While the law of magnitude says to start a business that people perceive of a high value.

One such business that meets the law of magnitude is real estate. People pay so much to get landed property because it is perceived highly.

If you’re looking to start a business that will give you the kind of life you desire, then you should leverage either the law of magnitude or the law of scale, or both.

Wrapping Up

There you have the one truth the rich know about money, that money comes to those who provide value.

As we wrap this up, be reminded that your utmost goal is to find a problem many people have, proffer a solution to the problem, and create a system to sell the solution.

These three parts of the puzzle are the ancient truth that the capitalists have used to rule this world. If you want to play in their league, the road and the path remain the same.

I hope this helps. If it does, ensure to clap me a thousand times (joking, a few tens would do), leave me a comment (it will encourage me and make me feel not ignored — smiles), and share this with someone you know needs it (they say sharing is caring).