09 May The 3 Wealth-Building Myths Sabotaging Your Road To Riches
We all live by certain beliefs and belief systems ingrained in us either from childhood, from school, or even from the first “success gurus” we’ve crossed paths with.
As entrepreneurs, there’s no other belief system we hold onto more strongly than those that relate to wealth and wealth-building.
But what if you suddenly find out the most basic, yet the most widely-held wealth-building “principles” are actually false concepts or myths?
Below are 3 of the most common wealth-building “principles” you’ll usually hear from “gurus” and “success coaches” that are actually just myths. In fact, far from helping you build long-term wealth, these false concepts actually sabotage your success efforts and hurt you and your business more in the long run.
Myth #1: In order to build wealth quickly, you need “passive income”.
This is perhaps the most common misconception on wealth-building even so called “gurus” are guilty of and the exact trap that I fell into in the beginning.
While it is true that acquiring income-producing assets can generate cashflow, there’s nothing even remotely passive about doing this – if you’re really going to do it the right way. Moreover, going into debt just to buy properties in the hope of generating ongoing “passive income” – a trap most “success coaches” recommend – is just that – a trap. I’ve seen a lot of investors who buy into this myth, stretching the limits of their resources to buy properties they hope will generate continuous cashflow, only to watch in horror while their acquired assets depreciate in value, their cashflow turn negative and their debts balloon.
Mythbuster #1: Don’t build “passive income”, build an ACTIVE TEAM.
If you want to walk the path of owning income-generating assets, what you actually need to do is not just concentrate your efforts on the properties you’re looking to buy, but also spend time and effort building a team that will manage your properties for you. This team will be responsible for helping you choose investment properties properly, manage them in terms of tenancy or rehab work, whatever the case may be, and helping you decide when it’s time to cash out and sell the property. In essence, what you’re building is a portfolio of assets being actively managed for you by a team.
This entails active involvement – there’s nothing passive about it.
Besides, do you really think all those billionaire investors just sit around day in and day out enjoying their “passive income”? Or do they get out of bed every morning meeting with their management teams and getting up to speed with their assets?
Myth #2: In order to build wealth fast, you need “multiple streams of income”.
The idea behind this common “guru” advice is seemingly logical – the more streams of income you start and maintain, the faster you’ll build your wealth and the wealthier you end up. Sounds reasonable enough, right?
This is perhaps the most misleading concept you can ever buy into.
Whether you’re just starting out or you’ve been playing the game long enough, what you need to understand is money does not make money – people make money. Instead of focusing your attention on the streams of income you’re looking to build, you need to spend time and effort in building the teams of people that will look into the streams of income for you. Otherwise you end up as the singular person trying to push several balls up a mountain.
Mythbuster #2: Don’t build “multiple streams of income”, build MULTIPLE TEAMS OF INCOME.
This plays right into Mythbuster #1 above. When you build good teams to handle things for you, you free up yourself to do the things in your business you’re actually good at and you love doing. This translates to better productivity, less stress and more sustainable income.
There’s no sense in working yourself to death trying to tend to multiple streams of income when you end up too tired and stressed out to even enjoy whatever profits you make – that is, if you even end up making anything at all. Don’t strive to be the juggler. Find others who can do the juggling for you. Own the circus.
Remember, if you’re building a business where nothing gets done unless you start it or do it yourself, you DON’T have a business – just a glorified job.
Myth #3: In order to be wealthy, you need to plan your “exit strategy” early.
Many “gurus” recommend building a profitable business you can either sell entirely later or set up for IPO (Initial Public Offering). While we’ve seen a lot of wealthy businessmen instantly transform into billionaires going this route, it is far too rare that we see them just slip into anonymity so they can simply enjoy their wealth. The idea to “play with the goal of cashing in your chips later” may work well for gamblers, but it’s never the case when it comes to good business.
In fact, it’s the other way around.
Don’t build a business you plan to sell later to become wealthy, BUILD A BUSINESS YOU LOVE, so you can play longer, enjoy it more and build more wealth.
This should be your mindset.
Mythbuster #3: Don’t plan an “exit strategy”, have a SUCCESS STRATEGY.
The key here is to love what you do, which plays right into Mythbuster #2 above, wherein you build good teams to free up yourself to focus on the parts of your business you’re good at and you love.
A lot of investors fall into the trap of trying to build a profitable business thinking that once they get everything up and running, they can simply sell it and enjoy the proceeds. The problem with this mindset is you’re setting yourself up for a lot of work stress. You’re stuck with the idea of either reaching an X amount of income, or being able to sell the business for X amount before cashing out. And most of the time, this requires things to be done a certain way, which may not sit well with people you’re working with, and so you end up doing most of the grunt work. This becomes counter-productive in the long run, because you end up alienating the people you work with and you get to keep most of the stress. The result: productivity goes down and your “goal” becomes that much more elusive.
Whereas, if you build a business with Mythbuster #2 and Mythbuster #3 above, you and your teams will have an easier time working and managing the business, you’ll end up enhancing and strengthening your relationship with your partners and investors, you’ll create win-win situations with everybody involved in your business, you end up enjoying doing what you do, and so you end up engaging in your business longer resulting to being able to build more and more wealth.
Keeping a close watch that you don’t fall victim to these 3 myths will ensure that you’re not flushing your business efforts down the toilet.
Remember that if you work on learning to love and enjoy what you do, you end up not working at all – you end up doing something you’ll continue doing even if you’re not getting paid to do it. The wealth part comes naturally, and you’ll be surprised how quickly it will pile up.
That’s the success strategy that never fails to yield positive results.