Beware of the Top 3 Modern Myths of Wealth

Roger Hamilton

Roger Hamilton

Editor’s Note: Great article here by Roger Hamilton from Wealth Dynamics about the top 3 modern myths of wealth to be aware of.

If you’re looking to work smarter instead of harder in your business, learning always starts with unlearning – what ‘truths’ are you living by which are no longer ‘truths’? Here’s my Top 3 Modern Myths of Wealth about what we need to unlearn to grow our financial success today:

MYTH #1: Wealth Comes from Passive Income

MYTH – You can get wealthy by going into debt to buy assets that will give you passive income so you no longer have to work for a living.

TRUTH – You’ve just dug a hole, not a river! All income needs to be managed, which means you need to know how to manage a team and experts who can manage your portfolio of assets.

Yes, building assets that create cash flow is a critical part of building your wealth. But many people have been burned by stretching their resources to buy property or other assets in the hope that they will yield ongoing passive income, only to see the value of their assets drop, their cash flow go negative, and their credit ratings ruined. Why didn’t this happen to all the wealthiest people? The wealthiest people know all their assets—whether properties or business—need to be managed well. There’s nothing passive about it.

It might look like the apple farmer has “passive income” because his apple trees keep giving him apples, but it still takes time and expertise to nurture those trees. It’s the same with your assets: Choose assets with great care and factor in the true cost of choosing, managing, and selling your assets in your return.

Replace the myth of passive income with the reality of portfolio income, where each of your assets is part of a portfolio managed by a team. Monitor and maintain your portfolio and the return it is giving you.

MYTH #2: Wealth Comes from Multiple Streams of Income

MYTH: The more income streams you can start, the wealthier you will become.

TRUTH: Starting many streams at the same time is like trying to push many balls up a hill at the same time: You may get started, but you end up losing your focus and your time. Success comes from growing teams, not streams: multiple teams of income.

This myth is perhaps the most destructive when you’re starting out – but it’s dangerous at every level or wealth. If everyone around you is unclear what your main focus is—what your position is and where you stand on the field—you will constantly chase the ball instead of having it kicked to you.

What people learn as they step up the wealth ladder is that money doesn’t make money; people make money. Invest in the right people before investing in the assets they will manage or you will be the one doing all the juggling, and it will only be a matter of time before you start dropping the ball.

MYTH #3: Wealth Comes from your Exit Strategy

MYTH: Wealth comes when you sell out: Plan an exit strategy where you can work hard now and earn the money later.

TRUTH: Keep working, because you love what you do. Don’t strive to bake a pie so you can sell it; own the bakery so you can bake as many pies as you want, sell some, and keep the rest.

I have met too many people who are holding out for an exit that will make it all worth it. They don’t enjoy what they are doing. They have simply talked themselves into grinning and bearing it “until I make X dollars or until I sell the company for X amount.

Sure, we hear stories of people cashing out with big returns from their businesses or assets, but rarely do these stories involve people not passionate about what they were doing.

Replace the myth of an exit strategy (leaving the game) with a success strategy (staying in the game). The wealthiest people in the world are still doing what they are doing because it doesn’t feel like hard work following your genius and doing what you love. As you move up to the wealth ladder, any exit strategies are not for you; they are for your project partners and investors.

These 3 myths are part of the 5 myths I share in my new book, the Millionaire Master Plan (coming out soon!). Taken together, the five myths are an old-paradigm, mechanical way of thinking about wealth, separating us all into paths where we’re trying to do it all on our own.

The truths are a more natural way in which building assets is replaced by growing flow, where we are all connected to each other and the market. In flow, everything is connected, and your role in nurturing, enhancing, and expanding the flow around you is more important that trying to work out how to make the money and exit the game.

Still skeptical these are 3 myths? Pick up any “Richest People” list and ask yourself for each successful wealth creator on it:

1. Are they passive in their income or are they still showing up each day, playing the game?
2. Are they trying to create multiple streams or do they have multiple teams creating the streams?
3. Are they following an exit strategy or a success strategy?

Your time is your greatest asset. Invest it wisely in the one thing that counts – nurturing a success strategy where what you are doing you would still do, even if you weren’t getting paid for it.

As billionaire investor, Warren Buffett said in a speech to a group of students:

“I may have more money than you, but money doesn’t make the difference. If there is any difference between you and me, it may simply be that I get up and have a chance to do what I love to do, every day. If you learn anything from me, this is the best advice I can give you.

Keep making magic!

What is your experience of these 3 myths?

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