3 Simple Rules Behind Explosive Wealth Creation

After years of trials and errors and subsequently encountered a series of well-calculated jackpots, I came to the realization that explosive wealth creation boils down to three simple rules.

But before we spell out these three rules, let’s ask ourselves this question:

What is explosive wealth creation anyway?

As most of us already known, racing in the rat race and saving for retirement can hardly get people financially independent (excluding execs in organizations that have certain market influence.)

To break free, it calls for a new way of thinking. Explosive wealth creation is a process of multiplying someone’s net worth in a nonlinear fashion within a reasonably short period of time (usually account for a small fraction of someone’s life span so that the individual has enough time to truly enjoy life with family and friends with the new founded fortune).

Here, I am mostly talking about passive investing and not entrepreneurship, though both do share a lot in common, the latter has its own unique favor when it comes to explosive wealth creation, keep digging around for details.

For now, let’s get back to the 3 simple rules:

1. Always stay close to the market you are about to enter, and be the first group of people to catch the upcoming wave.

Remember, we are not trying to land the bottom of the market, but develop the killer instinct through practice to figure out the explosive growth pattern. That is, to get into the market and take the 1st mover advantage before the overall market uptake happens.

2. We got to have staying power (time, money, or asset of any form that can be borrowed against to generate working capital), even if there is another financial tsunami or recession that may last for 3 to 5 years, we can still afford to average down the market.

As Warren Buffett preached, be greedy when people are fearful. But the only thing is, we gotta have enough staying power to be greedy. So, always reserve a portion of your assets (and borrowing power) as your buffers for the rainy days. That’s when the big opportunity knocks.

3. When the market is rosy and bullish, gradually average out your market position. When the bearish market becomes obvious and people are crying blood on the street, aggressively average in and bargain hard.

Everything in our universe has its own cycle. The good news is that for those who are prepared, the life changing wealth creation opportunity is within our reach, and they may even occur multiple times during our life. Being able to understand the market dynamics, that is, its very own cycle, is the necessary survival skill to buy low and sell high in any kind of businesses.

Talk is cheap and being able to digest, understand, and put this knowledge into practice is the key. Keep asking more questions to find out how to put all the pieces together.

   

You may also be interested in the following:

  1. Borrow Your Way To Richness
  2. The Hidden Message Behind Low Hanging Fruit