The 3 Things You Can Do Right Now to Grow Your wealth
And put yourself on the path to financial freedom.
Based on statistics, most Americans (61%) are living paycheck to paycheck. Roughly half own no investments. And about a quarter have nothing put away for retirement. Whatever savings they have is kept in cash.
Does this sound like you?
If so, you may want to read on.
As the purhasing power of the dollar has fallen sharply over time, many are losing ground with monetary debasement.
To make maters worse, inflation is now at levels not seen in four decades. Current estimates put it around 8%. Though, for people in the know the real number is much higher since CPI (Consumer Price Index) isn’t a true indicator for inflation since the basket of goods and services can be manipulated and leaves out many of the most important goods and services that are most important to Americans, like food and energy. The real number is likely 2–3 times CPI, which puts the real figure at around 20%.
In short: Americans are losing 20% of their wealth each year and getting poorer.
And considering the unparalled expansion of the base money supply over the last couple years and now most recent geopolitical situation, it’ll likely only get worse for some time.
Therefore, it’s vital for people today to find a way to not only preserve their wealth but grow it.
Here are a few simple ways that I am doing this in 2022.
Put your money to work
Investing.
The name of the game if you want to get ahead and stand a chance of escaping the 9–5 rat race where you trade your time, the scarcest resource in existence, for money.
By investing we are gradually gaining more and more control over how we manage our time in the future.
If you have a huge investment portfolio you are less beholden to an employer to how you choose to spend your time. If you want, you can decide to just not work for a year and spend your time traveling, in a cabin reading, or with your family.
This is freedom.
You get to this place by making your money work for you. This took me until about I was thirty-three years of age to really get but as they say better late than never.
(A couple good books that got me started were the The Richest Man in Babylon and The Simple Path to Wealth. Another that I’m currently reading and would wholeheartedly recommend is The Wealthy Gardener. While by no means exhaustive, all three would be great aides in your understanding on the importance and process for creating wealth.)
Before investing you should have some money put aside in cash for emergency fund purposes so you can weather the storms of life. The general rule of thumb is 3–6 months worth living expenses but I think you need to do what feels right for you. For myself personally, since my job is stable for the next couple years, I don’t feel like I need that much right now and I’m personally optimizing for freeing up as much cash so I can take advantage of bearish market conditions in the year ahead and buy more assets.
One thing that I’ve learned in the past couple years spent watching a lot of investing type of videos is that “bull markets can make you money, but bear markets can make your rich.”
My view is that I want as many dollars as possible invested in assets that are going to grow over a long period of time.
What investment vehicle you choose is a personal decision. Personally, I’ve chosen digital assets, as I am on the younger side, not risk averse, have strong conviction in the space, and recognize that digital assets, chiefly Bitcoin and Ethereum (the two blue chips), are the two best performing assets ever, and represent the greatest asymmetric bet of our lifetime.
Everything is being digitized, and now it’s money. There’s a migration happening in front of our eyes and it’s going to change everything. We already see this happening with PayPal, Venmo, and Cashapp integrating bitcoin to their platforms, and most of the major banks launching digital asset arms so that they can help people invest in the space. It’s still very early but it’s going to be one of the major disruptor to the monetary system in the decade ahead.
If you want to learn more about the fields that are poised to grow the fastest and be the major disruptors look up Cathie Woods and her Ark fund.
This is where I’m placing my bets but each investor needs to place their money in an asset(s) that works for them and is aligned with their values, risk tolerance, and conviction. This assures you hold it long term and can handle the ups and downs.
Go where you’re treated best
Now that you have your money working for you, you need to go where you are treated best.
One thing that I’ve learned over the past couple of years is that the banks are not your friends.
They pay you next to nothing to store your money and then make a bunch of money by lending it out. Discover is paying me .40% on my savings account, which by comparison with the other big banks is pretty good (Chase pays a dismal .01%). 01%!
Phenomenal deal for them. Terrible for you.
So instead of keeping your money in regular banks where they pay you next to nothing go where they pay you higher levels of interest for lending your money out.
Unbank yourself.
This is what has led me to almost completely divest from the traditional, or legacy financial system, and move all of my wealth into the digital asset space and to crypto lending platforms.
I’ve decided to use Celsius, a company that you can store and lend your digital assets with and earn a yield. You can also borrow against the assets that you own. This is what the rich do. I appreciate Celsius for their transparency and good treatment of their customers. They give 80% of what they make from lending back to the community, which is how they are able to pay the higher interest levels. For instance, for US dollars I keep with them (stored in USDC stablecoin), they are currently paying 7.5%, though it’s been over 10% at times. This is in comparison to the .40% I was making with Discover, which is over a 20x improvement.
I also store a portion of Bitcoin and all my Ethereum there, making 5% on each. I am paid out in the asset I am lending, thus helping me accumulate even more of my choice assets. With Bitcoin and Ethereum, which stand to see significant price appreciation in the future, this will compound and my wealth will snowball as time goes on.
If digital assets aren’t your thing you can buy other assets like gold or just keep your US dollars with them earning 7.5%, which does a much job at fighting inflation than the half a percent and less than the traditional banks are giving. And don’t take my word for it, you can listen to this interview with Alex Mashinsky, CEO of Celsius, to hear his vision for his company. It’s what persuaded me to store and lend a portion of my precious bitcoin with them. I think it’s important to always do your own research and trust your intuition.
I get paid out every Monday on the three assets I keep with them and this has made Monday, which most people dread, my favorite day of the week. There’s nothing like waking up to a see that you’ve made money while asleep. As Warren Buffet said, “If you don’t find a way to make money while you sleep, you will work until you die.”
Automate your investing by dollar cost averaging
Now that you have your money working for you in some way and have found a place for your wealth that treats you best, you can take it a step further and automate your buying of the asset(s) you have most conviction in and dollar cost average, or DCA.
For me I am currently working to accumulate as much bitcoin as I can so I can meet the goal I set for myself this year.
I use Swan, a company based completely around bitcoin. I’ve got it set up to draw from my savings account and buy a fixed amount of BTC each week. They store it for me and when I’m ready I can make the transfer to my wallet of choice. It’s all invisible to me and I don’t even have to think about it.
DCA is a respected investing strategy. Instead of waiting for a market correction and certain price you buy a fixed amount every day, week, or month (at various prices) and over time the price averages out. This has become my new strategy during these uncertain market conditions where there is extreme fear in the market. I only wish I started it earlier. Additionally, I always keep enough cash on the sidelines to take advantage of large market corrections where I can buy a lot for a discount.
If you don’t have a plan for how you will deploy your stored capital, you should consider developing one.
Closing words
Many of us work hard for our money. We also spend the scarcest resource that exists in the process: our time.
What is left is our stored monetary energy from which to live a good life.
When governments around the world can print unlimited amounts of fiat money and dilute the value of those currencies, this is covert theft and a betrayal of trust with the people that have worked hard to earn those currencies. It’s no secret that most of the currencies that ever existed have failed. While I don’t think the US dollar is going away any time soon, it’s lost about 75% of its purchasing power since 1913 when the Federal Reserve was created. We are also experiencing times of high inflation where keeping your wealth in cash is suboptimal idea since you will lose 1/5 of your wealth each year.
In short: you need a find a way to protect and grow your wealth so inflation doesn’t eat it away and leave you poor.
To recap here are a few ways you can do this:
Take the money you earn in dollars (which are fast depreciating) and put them to work by buying assets that are will grow in value over time. This can be Tesla, gold, or bitcoin.
You can also lend out those assets and make a return. Go where you’re treated best.
Lastly, automate your investing so it becomes automatic and you are consistently accumulating your choice assets.
By doing these three things, I see that each week my wealth is appreciating incrementally. Over time, as the assets appreciate in value, this will compound and grow exponentially.
Like a gardener, you have to plant seeds each week and be patient.
Thank you for reading.
