CONTEXT
Morgan Housel wrote one of the best books I read last year, The Psychology of Money.
I jotted down the best things I learned in a one-page “cheat sheet.” (I do this for every book I read, so I don’t forget the good stuff.)
And my scribbled takeaways from this one were so good, I had to share them.
5 timeless principles to grow long-term wealth:
THE 5 TIPS
- Longevity matters more than skill.
If Warren Buffett only invested from age 30 - 60 (while maintaining his 22% annual rate of return), his net worth would be $11.9 million.
That’s 99.9% LESS than his current $107 billion.
Literally 99.9% of his fortune compounded AFTER his 65th birthday. 🤯
(Fun fact: Warren’s actually not the “best” investor in the world. That’s Jim Simons. His average rate of return was 66%. (3x Warren’s!) But Jim didn’t find his stride until his 50s. If he had that 66% return for the same 70 years as Warren, he would be worth $64 quintillion dollars. WHAT.)
- Use your money to buy free time.
The most successful business people know exactly which skills they are the best in the world at. In other words, their “zone of genius.”
And they delegate everything else. Everything.
(Some of them are earning $2,500 per SECOND. So if they can pay someone to do a task for less than that, they will.)
Time will benefit your life in a way that very few luxury goods can compete with.
- Getting rich and staying rich are completely opposite skills.
You know those people who spend money just to show off how much they have? That’s the fastest way to have LESS money. 😅
To get rich, you have to invest like an optimist (and take risks).
To STAY rich, you have to save like a pessimist (and stay humble).
Compounding only works if you give your assets years to grow (instead of putting those assets in a supercar).
- Think of market volatility like a cost of doing business.
When the market’s down, many people feel like they’re doing something wrong. That’s why they are tempted to pull out their investments (at a loss).
The best investors think of volatility as a constant. They expect it to go down at some point. So when it does, they’re not reactive to it.
This mindset will keep you in the market long enough for it to work in your favor.
- Ignore what everyone else is doing.
Don’t take financial cues from people who are playing a different game.
They might invest in NFTs or Web3 or AI because they have a higher tolerance for risk. That doesn’t mean you have to.
One of the most powerful ways to raise your net worth isn’t about income. It’s about humility and self-awareness.
Decide which game you’re playing and ignore the rest.
Much love,
Jade
P.S. Applications are now open for the November Cohort of Archimedes. I just added a ton of member reviews and FAQs to JoinArchimedes.com November-January is actually the best time of year to grow your brand online.
P.P.S. If you’re new to The Quiet Rich, hello! Learn the 7 things that the quietly rich don’t do in this LinkedIn post. 💰 🎉
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