Get rich quick schemes are as old as the hills. They offer you the chance to make big money with very little effort. It usually requires you to part with your money in order to unlock the secret to becoming a rich as the person promoting the product. Today, the person selling the magic beans can be found on YouTube. They like to prove their wealth by having a load of sports car in their drive (which the lease for the day). Ever notice how these “rich” kids still live at home with their parents and day trade from a desk in their bedroom? These people aren’t making money off day trading. They are making money off selling you courses that you will fail at. It has always been the same. To become wealthy takes decades, so there is no point in fooling yourself otherwise.
If you have ambitions to be wealthy (and subsequently financially independent), you won’t be successful by spending your money to give the appearance that you are wealthy. The person who will achieve their goal of financial independence will save their money and make it grow over time.
Cars are the easiest way to show your wealth, people notice it and you can get an expensive car on PCP easy enough. So say you spent €130,000 on a new Range Rover; you are giving up a lot to own that car. You could easily spend €30,000 on a very good car and invest the €100,000 difference. If you got a return of 5% per annum, at the end of 20 years, you’d have €219,770 after paying CGT at 33%.
Buy expensive things when they are a small percentage of your overall wealth, not when they are a big percentage.
If I had €1 and it doubled every day, after a week I’d have €96, after 2 weeks I’d have €12,288, after 3 weeks I’d have €1,572,864 and after 4 weeks I’d have €201,326,592. Unfortunately compounding doesn’t work like that, we don’t make 100% return on our investments in a short period of time.
But we can grow our wealth over time by investing in quality assets that will grow over time. Don’t be looking for the next unicorn and invest in quality, established assets that will make you money in the long run.
The retirees I work with who have the biggest retirement funds all worked for themselves (that may change in the future with the the prominence of the US multi nationals and share options in Ireland). People generate their own income and have control over what to do with it. They can reinvest it back into their own company to make it grow. All the while, they are growing the value of an asset they can sell in the future. It is not uncommon to speak to retiring clients who have sold their business for millions of euro. For most, they built these businesses up over decades. As well as creating an asset for the future, it was also a source of income for them for decades.
In today’s world, everyone wants to get wealthy instantly but it only works that way for 1%. For the other 99% of successful people, it takes decades to achieve. But we live long lives, so there is no rush.
If you have any questions, drop me an email at firstname.lastname@example.org