What’s The Key To Building Great Wealth?

We all would like to know the key to building great wealth. Here at Buy Like Buffett, we discuss different strategies that you can use for making money. My bias is often towards making money by investing which is why I often follow the strategies of the great Warren Buffett. The truth is that there is more than one path to building wealth. The key is to find the path that is meant for you. The one that fits into your passion and goals.

Do you have a love for investing in stocks, bonds, mutual funds, exchange traded funds, and other assets? If so, then the stock market is the best place for you. You will stay interested, active, and engaged in your buy and sell decisions. You can make money by trading stocks or being a buy and hold investor.

Maybe the Internet is more your cup of tea. You may be interested in working from home and making money using the Internet. There are absolutely millions of ways that you can make money using the Internet. You can blog, write ebooks, do consulting, and sell products. The list is endless of ways that you can make money using the Internet. Find the one that best fits you.

You may be sick and tired of your day job and want to start working for yourself.  Starting a business is a big risk but it also offers big rewards as well. Entrepreneurs are risk takers who see the potential that starting their own business has. You could start a LLC, corporation, partnership, or a sole proprietorship in a matter of days. Check with a legal advisor so that you know which entity works best for you.

So, I guess you could say that the key to building great wealth is to do the following:

  1. Find your niche. Everybody has something that they are good at. You have to find that area and build on that. Once you find it, the learning just begins. You have to keep gaining knowledge so that you can become a better investor, entrepreneur, or Internet mogul.
  2. Be passionate about whatever it is that you do. You can’t fake enthusiasm. If you hate what you are doing (even if it is making money for you), what’s the point?
  3. Work hard. There is still no substitute for hard work. Whether they admit it or not; every successful person worked very hard in the early stages of building their enterprise.
  4. Be persistent. Never give up on your goals. People often quit too early when they are right on the doorstep of success. (Imagine if Warren Buffett had quit when he made the mistake of buying a failing textile business). This blog would be call Buy Like _______ instead of Buy Like Buffett.
  5. Give back. Once you have made it and reached your goals, you should take the time to help someone else. You can mentor someone else so that they achieve similar success. The great thing about money is that you can donate it to help improve the lives of other people. You want to leave a legacy so that future generations can profit from your hard work.

The good news is that this is not an either or proposition. You can combine a number of different strategies. My goal is to replicate Buffett’s investment returns, run a successful investment advisory business, and create a passive income stream from my blog and online projects.

Well enough about me, what are your goals?

Comments

  1. Agreed on combining strategies. When it comes to investing I am mostly long-term and buy & hold, but I also like the idea of having a business which you are actively involved in and can be passionate about. Why not combine and mix and match, to find the strategies that work best for you?

  2. avatar krantcents says:

    I agree with everything you have said! I would move #2 Be Passionate to #1 though. If you love what you do, it is not work and you will acquire whatever skills necessary. If you love what you do, you will do it well and you don’t spending time doing it. As you can see, I feel everything revolves around having passion for what you do.

    • avatar Mark says:

      So, passion over niche? I just didn’t want someone to believe that if they are passionate about an area that is unpopular, that someone will be lining up to pay them for it.

  3. The Buy & Hold one is tough for me — I’m able to do it to a point, but at what return, do you sell? I had a stock make a 120% return, doubling my money — I sold it, and bought 2 different stocks. Well, that stock is now at 140% return, but I still doubt it can go any higher, and will likely correct itself.

    Buy and hold works, but theres always that limit.

    • avatar Mark says:

      I believe in setting a sell price for every stock that I buy. If it reaches that price in a few weeks or a few months, it doesn’t matter to me. Once I feel it is overvalued I am out. I can always get back in later.

  4. @twentysomethingmoney I think it makes more sense with broader investments. Then again… what would have been wrong with buying Berkshire Hathaway at a good price and holding until now? I think it depends on the scope. Sectors rise and fall, but in the long run, the overall economy marches forward. Just depends on what price you get in at.

  5. avatar YNWA says:

    Without doubt, BE PASSIONATE in what you do is No 1.
    I’m a Unit Trust Consultant, very often I’ve seen my fellow colleagues who are not passionate enough in their job slowly fade out from the industry.

  6. avatar Jim says:

    The key to great wealth is to have a passion for something. A passion that must override everything else in your life and one that is profitable. Warren B had a fantastic passion fo reading financial statements; getting through 20 a day back in the 60s and 70s. There is even a story of him stepping over his son whp had fallen down and hurt himself because he was too eager to get to his study to read another annual report. Do any of us have that sort of passion? I don’t – which is probably why I’ll never be a WB. I can read financial statements better than most (I help companies put them together for a living – hence understand them from the inside out). I have degrees in finance and accounting and have invested in and analused lots of stocks over the years. I spend my time living and breathing commerce. But because I like to come home, do my own thing, spend time with my kids and wife and like to think of myself as slightly balanced, I will never be WB. I am happy wiht that. I make a good living doing what I do and leave the investing up to others.

  7. I agree, Mark, as the basics go, you’re right on. Passion is free, but stocks in the market obviously aren’t. My concern about the 401K market is what happens when Baby Boomers hit that special age where they have to take out 6% of their 401K dollars on an annual basis. You and I are the same in that we have blogging income, make investments, and provide people with a service. We’ve been unveiling many different trends that are unfolding in global (America, too) economy that will either destroy people’s portfolios or make them a huge success. When the dollar’s value tanks, paper stocks won’t be ‘worth’ as much compared to commodities. What’s your take on that situation?

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