The Secret to Becoming a Millionaire
Millionaires have a lot in common. They're typically hardworking and smart. They tend to be independent thinkers and good salesmen. Or at least, they're good at selling themselves...
They also tend to read — a lot. Warren Buffett is said to read for as much as 80% of his day. Bill Gates says he reads 50 books a year.
Steve Siebold, author of How Rich People Think, writes:
Walk into a wealthy person's home and one of the first things you'll see is an extensive library of books they've used to educate themselves on how to become more successful.
But of course, reading isn't the secret to becoming wealthy. If that were the case, every librarian would drive a Lamborghini. No, Buffett didn't become a billionaire just by reading. He also had to act.
A plan without action is a waste of time.
That's the secret every millionaire knows...
What Books Do the Wealthy Read?
Everything. The wealthy read everything from Adam Smith to John Steinbeck. One of Buffett's favorite books that he's talked about throughout his career has been Benjamin Graham's The Intelligent Investor. Meanwhile, Elon Musk has William Golding's Lord of the Flies and Isaac Asimov's Foundation on his favorite book list.
But if you were to pay close attention to the books that the wealthy talk about, there's one that stands out as oddly common: Napoleon Hill's Think and Grow Rich.
This is a book that I've heard a lot about over the years but never actually read until recently. I'd written it off as just another self-motivation guide.
As a literature major in college, I'd normally thumb my nose at such drivel. And I still don't give a lot of credit to self-help or self-motivation books. They're typically incapable of being acted on and make hyperbolic claims based on coincidence, if based on anything at all.
But after seeing Think and Grow Rich on so many millionaires' recommended reading lists over the years, I decided to pick up a copy. And after reading it, I can firmly say, yeah, it's just another self-motivation guide.
However, to the book's credit, it's probably the best self-motivation book ever written. And I can see why it's so popular. But that's all it is: a self-help guide.
Throughout the book, Hill talks about a “secret” used by the world's most powerful people in history, including Dale Carnegie, to gain their massive fortunes. And he says this is the key to becoming rich.
In every chapter of the book, Hill talks about this secret. But he never directly mentions what it actually is.
And the idea of there being a secret method to wealth has been recycled over and over ever since. In 2006, the idea was rehashed into another book simply called The Secret. And again, the secret wasn't clearly explained.
But I'm going to reveal it all to you today. I'm going to tell you the big secret. And the big secret is...
There is no secret.
The secret is that there is no secret.
There's no investment system used or secret society to join required for becoming wealthy. Vision boards and wishful thinking won't do it, either. There's no magic involved.
The secret to doing anything is to do the thing.
Are you disappointed? Sorry — me, too. But did you really think that there was a secret way to become wealthy?
The only way to build your wealth is to simply be earning more than you're spending.
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Millions of dollars are spent every year on books that all tell you the same exact thing — in various ways, of course. But that's all there is to it: Earn more than you spend.
There's no big secret. If you want to gain weight, consume more calories than you burn. If you want more relationships, invite more people into your life than you block out. If you want to build your wealth, earn more than you spend.
Well, it seems like it would be easy. But most people can't seem to do that. Going into debt is even easier.
American households now owe $13.15 trillion in total debt, which is higher than the previous peak during the great recession of 2008. Here’s how much the average Americans owes in debt overall, broken down by age group...
- Under 35: $67,400
- 35–44: $133,100
- 45–54: $134,600
- 55–64: $108,300
- 65–74: $66,000
- 75 and up: $34,500
The secret to building wealth is to earn more than you spend. But how do you do that?
How to Earn More Than You Spend
The first thing you can do right now is pretty obvious: spend less.
And here's where the secret actually becomes actionable: Do it. Stop spending money that you don't need to spend.
But that's only half of the equation. For most people, saving money won't make them wealthy. They need to earn more. So, let's take a look at how you get money...
There are only three possible ways to get money:
- You get it from someone else.
- You earn it from work.
- You profit from an investment.
Some people inherit fortunes. But receiving money through an inheritance or as a direct gift are both rare and not real methods of wealth generation for most people.
Winning the lottery, winning at a casino, and speculation on collectibles can also make you money. But again, all this is rare and a poor way to build wealth over the long term.
The way to become rich is through consistent gains over a long period of time. Wages are consistent, and earning money in this way is the most common form of income for most people. But wages aren't usually enough to make a person wealthy. I mean, give yourself a break — you're only one person. If you want to be rich, you'll need to invest.
The secret to becoming wealthy is capital investment.
And the secret to getting started is to do it.
The secret to successful fishing begins with tossing your line in the water. The secret to successful farming begins with planting seeds. The secret to becoming wealthy through capital investment is to invest.
You can become rich.
But I can't do it for you.
You'll have to do it yourself.
Contributing Editor, Park Avenue Digest
As an editor at Energy and Capital, Luke’s analysis and market research reach hundreds of thousands of investors every day. Luke is also a contributing editor of Angel Publishing’s Bubble and Bust Report newsletter. There, he helps investors in leveraging the future supply-demand imbalance that he believes could be key to a cyclical upswing in the hard asset markets.
P.S. If you are looking for a book on investing that isn't just a self-help guide, I highly recommend reading Charles's "Hitting Wallstreet's 'FAT PITCH': Secrets from a 35 Year Stock Market Insider" which is now available on Amazon.