How to Become Internet Wealthy, Not Internet Rich
Author: NEIL PATEL
Source: Click here
Over the last few years I’ve seen a trend growing on the Internet, in which people are trying to become Internet rich. These people want to figure out how to make a lot of money, buy fancy things like Lamborghini’s and show the whole world how they are doing by posting pictures of their extravagant life on Facebook.
And maybe if they create a big enough following they’ll get featured on sites that encourage their materialistic lifestyle like Secret Entourage.
Now, there is nothing wrong with this if it makes you happy. But I see two flaws with it… the first is these type of people aren’t looking to create businesses that solve problems, more so they are just trying to do whatever it takes to become rich. Secondly, if they happen to make a lot of money, they tend to blow it on materialistic objects instead of investing it to continually build up their wealth.
If you want to become Internet rich and blow all your money on useless materialistic objects, there isn’t much I can do for you. But if you want to become wealthy, here are some strategies you have to follow:
Solve real problems
It’s very rare that people make a ton of money because they want to become rich. A lot of the people you know that are Internet rich got that way because they sold programs and schemes that promised it would make other people rich.
The successful entrepreneurs out there like Elon Musk, Marc Andreessen, Evan Williams and Mark Zuckerberg aren’t wealthy because they wanted to make a ton of money. Instead they saw a pain the world and solved it and the side effect was that they made billions from it.
The big difference between the people who are Internet wealthy versus rich, is that the wealthy ones solved problems instead of focusing on becoming rich. So if you want to become wealthy, don’t focus on making money first, instead you should figure out a problem you can solve that enough people in the world are facing.
Don’t sell a dream
Similar to solving a problem, you shouldn’t spend your time selling a dream. That’s how many of those Internet millionaires paid for their Lamborghini’s. When you create a real product that solves a real pain, you can then create a brand around your business because people will actually want to buy it.
You don’t just want to be creating a brand around yourself because if something happens to you, your company will be worthless. Instead you want to build a brand around your business by selling a solution to a problem… not a dream.
By building a real business, not only will you make money in the long run, but you’ll also have the option of selling your business for a decent multiple such as 4 times revenue, which is how you can really build up your wealth.
Now if you prefer to live the lifestyle of one of those Internet rich people, by all means go and travel and sell the dream, while buying nice toys to give you credibility, but you’ll have a tough time selling your business because very few people want to buy a company that revolves around 1 individual and a dream that can easily be crushed.
Never stop investing
If you happen to make millions of dollars, you shouldn’t waste your money on fancy cars or homes for you to live in. Sure if you happen to make hundreds of millions, feel free and buy those things but if you have a few million bucks there are better places for you to put your money.
For example you can typically buy a 6 to 8 unit apartment complex for around a million dollars in Southern California. If you put $300,000 down, your monthly payments will be around $4900 a month, which includes property tax. Your rental income each month should be around $7000 on the low end and $8000 on the high end. After paying a property manager, putting some money aside for repairs, and when you account for vacancies you should break even on a monthly basis if not make a $1000 to $2000 a month in profit. Plus after 30 years, you’ll own an apartment complex that would have appreciated and you yourself only put $300,000 into it while the renters paid for the rest of it off for you.
If you happen to take that model of buying at least one new apartment complex each year, you’ll end up a nice portfolio 10 years from now that your kids could live off of, or potentially keep on expanding.
Now you don’t have to follow the real estate model that I use above, but you should consider investing your money instead of spending it on materialistic objects… especially when you haven’t made hundreds of millions of dollars.
Heck, even Elon Musk, who had over a hundred million dollars, took all of his liquid assets and put them into SpaceX and Tesla because he had a hard time finding investors. He even did this when he knew the odds of him succeeding were low… but he really wanted to solve the problems Tesla and SpaceX eventually accomplished. In the end things worked out and now he has more than a few hundred million dollars.
By reinvesting your money, it will start to work for you so you won’t have to work when you are 60 years old. In other words, you’ll be building up your wealth.
The reason this is important is because the good times don’t last forever. It’s very unrealistic for someone to continually make millions of dollars a year for long periods of time. By reinvesting your cash you’ll ensure that you won’t be hunting for a job at McDonalds 10 years from now.
Wealth doesn’t have to be money
I know most of the content above revolves around money, but wealth isn’t just cash. I know a ton of people who only make $75,000 a year who I would consider to be wealthy as they are happy.
According to a research piece done by Princeton University, when individuals increased their income above $75,000 it had no positive affect on their mood or overall happiness. And when individuals spent that money on materialistic objects it hand no effect on their long term happiness, but when they helped others people out it did make them happier.
I know I bashed on Internet rich people who sell get rich schemes and show off fancy pictures of their homes and cars on Facebook, but the sad reality is I was almost one of them. There was a time in my life in which I tried to buy materialistic objects and I used to walk around with an American Express Centurion card… thinking I was the shit, but I quickly learned that it didn’t make me happy.
Luckily I didn’t get into the business of pitching people get rich schemes and selling the dream, as I learned that it is much more rewarding and fruitful to create businesses that solve real problems.
But if you want to go that route in life, by all means do so. I even know some of those people… and although I couldn’t live that life, they are happy living it. Just don’t be foolish by spending all of your money on materialistic objects, considering investing it into other businesses that aren’t too risky. This way when your “Internet rich” money stops coming in, you will hopefully have your investments to fall back on.
And lastly, if you see one of those Internet rich people selling you a get rich scheme, be careful what you get into. Just because someone has a fancy car and home, it doesn’t mean they are rich. Typically people who are loud about their wealth, aren’t too wealthy.
So what do you think about being Internet rich or Internet wealthy?