21 Lessons on Building Wealth
Money, Entrepreneurship, and Living the Life You Want
I recently rediscovered Noah’s YouTube channel and binge-watched all his newest videos. Some of the lessons he’s teaching seemed valuable for a twenty-year-old like me, so I condensed his tips into one article I could share with you! If you don’t know who I’m talking about, he’s the founder and Chief Sumo of AppSumo.com.
1. Plant seeds for your 30 y/o self
…or however old you’ll be in 10 years (I’m 20). As the saying goes, you’re sitting in the shade today because someone decided to plant a tree a decade ago. Be that someone for yourself now so you can sit in the shade later. What are the actions you can take and investments you can make this year that may be difficult but will pay off in a decade? (Hint: the best investment is yourself)
Do the things now that your future self will thank you for a decade from now.
2. Active Pursuits > Passive Pursuits
There are two types of investments you can make or seeds you can plant
- Investments in yourself (Active Pursuits) – you have the most control e.g. starting your own business/brand or investing in learning experiences, books, courses, etc.
- Traditional investments (Passive Pursuits) – you have very little control because you’re reliant on the market e.g. stocks, index funds, crypto, real estate, etc.
It’s better to invest in yourself and your ideas because they’re in your control. You decide when to turn the dial up or down. When it’s your own business, you choose how hard to work and the results that come with that. If you invest in the stock market or real estate, you’re at the mercy of the stock, crypto, or real estate market.
3. You can get rich on the job
Most of the “make money advice” on the internet advises people to quit their jobs, become entrepreneurs, and hustle until they make millions. However, this is hardly the only way to get rich.
It’s a myth that you can’t make good money as an employee. Noah spent some time working for Facebook in his early years, and if he hadn’t been fired from the company I believe he would’ve been worth $100 million today.
That said, not everyone will latch onto the next startup rocket ship. Luckily, there are a couple of ways to go about this.
- Like Noah’s stepdad, you could find a decent-paying job, earn some strategic promotions, live frugally, and invest in the stock market. By doing this for a decade or two, you’ll likely build up enough money to retire early on if you choose to. If you work up to a ~$100k/yr salary and don’t blow it all, that adds up quickly. this path isn’t flashy, but it is relatively predictable.
- Or like Noah, you could look for up-and-coming startups to work for that could take off. This path is hard to predict but can be extremely profitable if you pick the right rocket ship to board.
Not everyone wants to or should be an entrepreneur. That is OK. You can get rich on the job and many people have.
4. It takes a decade (at least)
Like anything worthwhile, building wealth takes time. Lasting success doesn’t happen overnight. Noah says we can expect for it to take 10+ years to achieve financial independence. That’s why it makes sense to play the long game and do what you enjoy. If you put your head down and work diligently at something for ten years, good things are bound to happen. Commit to what you’re doing for at least a decade.
5. Rule of 100
It can be hard to play the long game when just starting out. So in any new venture, just commit to the first 100: publish 100 blog posts, get your first 100 customers, upload 100 YouTube videos, or work toward the first 100 of whatever you’re after. I’m currently working toward completing the Rule of 100 on this blog.
Accept that the first 100 will be bad. When you’re doing something for the first time, you will be bad at it. That’s OK, use the rule of 100 as an opportunity to get all the gunk out. Ed Sheeran compares songwriting to water through an old dirty faucet. When you first turn the faucet on, initially gross brown stuff will flow out, but once all the muck clears, that’s when the clean water starts to flow. Push out the dirt to get to the good stuff.
6. Live Frugally
This isn’t groundbreaking advice, but that doesn’t mean it’s invalid. Live like a college student even once you’re out of college. Cut your expenses as low as you can for as long as you can. Swallow your pride and live with your parents if they’ll let you, sleep on someone’s couch, or get tons of roommates.
When we’re young, it’s socially acceptable to live broke. By taking advantage of that norm, we can just save and invest all that money instead of inflating our lifestyles. In one of his videos, Noah mentioned he’s been wearing the same clothes since high school because he never wanted to spend money on new clothes.
Plus, when you live cheaply, you can pursue interests that may not be immediately lucrative because you’re not supporting an expensive lifestyle. This allows you to play the long game. It all comes back to point #1: how can we make sacrifices at 20 to set our 30 y/o self up well?
7. Do one thing
Almost all the world’s wealthiest people made the bulk of their money from just one thing: Bill Gates and Microsoft, Tobi Lutke and Shopify, Jeff Bezos and Amazon. The list goes on, but the lesson is that we don’t need to start a hundred different ventures to make money. In fact, adding more things to your plate is counterproductive.
Once you find something that works, stick with it for a long time. Make that your “one thing” and it will probably pay off more than if you tried to do everything.
8. Rich people aren’t smarter than you
The wealthiest people Noah knows aren’t rocket scientists. The difference between them and average people is that they’re willing to put in more time and suffer for longer than the average bear.
9. You can get rich doing boring stuff
In the words of Zig Ziglar, you can get anything if you want if you just help enough people get what they want. Many rich people made their money doing unglamorous work. The world’s richest self-made woman made her money from her roofing-supply business. That doesn’t exactly scream flashy, but people need roofs and she supplies that need.
It’s not all about fancy tech startups. Find a need. Fill that need. Reap the rewards.
10. Solve your own problems
The best companies are started by founders who are just trying to solve their own problems. Solving your own problem has two upsides:
- You know the pain points of the customer because you are the customer and
- Even if the business goes nowhere and helps no one else, at least you solved your own problem.
11. Monetize your interests
This tip is similar to the previous one, but do what you would do if it made no money. When you work on what you’re already interested in, you’ll probably get good at it and do it for a long time–both of which are some basic principles in making money. Ironically, by getting good at what you would do even if it made you no money, you’ll probably increase your probability of getting rich.
12. Wealthy people don’t talk
There are plenty of gurus online that will sell you a course on how to get rich, but the wealthiest people aren’t selling courses or showing off their possessions on social media. They’re spending time working on whatever it is that’s making them rich. They’re quiet because they likely don’t want people copying them and they don’t want to get robbed.
13. Network = Net worth
Who you know can multiply your opportunities and resources. The larger your network of interesting people, the easier it will be for you to find employees, employers, clients, and anyone else you may need.
14. Geography matters (but not as much as it used to)
Unfortunately, where you live can still determine who you will and will not meet. However, especially now that COVID has normalized remote communication, it’s never been easier to connect with people who live nowhere near you. Moving close to a hub of people you want to be like (Austin, NYC, San Francisco, etc.) will increase the likelihood of you connecting with the people you want to be like, but the internet still makes it possible to meet cool people wherever you are.
15. Surround yourself with stretch people
The people you surround yourself with can force you to grow. Hang around smart, interesting, hard-working people and it will rub off on you. Do the opposite, and the opposite will happen.
16. Wealthy > Rich
Rich is Kobe Bryant. Wealthy is the guy who owns the Lakers. Rich people may have huge earning potential, but wealthy people make their money work for them.
Wealthy people build companies and invest in assets that can run and make money even when they’re not actively working on it. We’re aiming to build wealth, not just get rich because you can continue to build wealth even while not working.
17. The most important skills
According to Noah, the three most important skills to make money are sales, marketing, and connecting. If you can get people to buy your product and connect with people, those are key to running a business.
18. Invest to stay rich, not get rich
Wealthy people invest to stay rich, not get rich. Unless your 24/7 focus is investing, you probably won’t make lots of money from it. People like to point to Warren Buffett as someone who got rich investing but let’s not forget investing was his job and his singular obsession for a whole lifetime. He lived in financial statements.
For most people, investing in the market should be a way to slowly build wealth over time, not the primary vehicle to make money.
19. Consistency with Iteration
One of the most important principles to get wealthy is to keep going and keep getting better. Noah’s own YouTube channel is a prime example. When I first discovered his YouTube channel a year ago, his videos weren’t the best quality. They looked like they were shot on a webcam, the thumbnails weren’t eye-catching, and there was little to no editing done. When you look at this channel now, the videos are amazing. The quality of content is dramatically better than what it was just a year ago. He kept posting and with each post, improved from the last one. Now, his channel is taking off.
20. The goal isn’t to stop working
The goal of financial independence isn’t to get rich enough to stop working, but instead to be able to work on whatever you want however you want whenever you want with whomever you want. Being able to do what you want is perhaps a more satisfying goal than just being able to retire young. Apparently, people who retire early are actually 37% more likely to die young than those who don’t.
Take breaks? Sure. Go on vacation? Absolutely! But retire early? Sounds boring. Find work that you like so much that you actually want to work in your free time. You’ll make more money, have more fun, and probably be much more fulfilled.
21. You don’t need permission
You can do whatever you want with your life (within the limits of the law). Seriously, move to a new city, start the business you’ve been dreaming of, or ask that guy/girl out. The world is your oyster and all that jazz. Don’t hold yourself back waiting for permission that isn’t coming from a regulatory force that doesn’t exist. Just go do.