If I Started From Scratch Again, I’d Do This

This is 16-year-old me, waving goodbye to school forever. Allow me to explain. Throughout my time at school, I never really felt like I fitted in. When I was curious about something, I was told to keep quiet, put my head down, and get on with my work. But I found this impossible as I’m naturally very hyperactive, which led to me always being in trouble. So, when one of my teachers sat me down and said, “Let’s be honest, Mark, you’re not going anywhere, so here are your options: you either continue to study, but it’ll be a waste of everyone’s time, or you can leave and try and get a job”. It was one of the best days of my life as I was only focused on one thing: leaving. So, I waved goodbye to the school with no qualifications or money under my belt, and when I became a millionaire in my early 20s, I was happy that I proved my teachers wrong.

But even though I succeeded, I had very little direction and had to work out a lot of things by myself. That’s why I’m writing this article, because I wish I had something like this when I was starting out. If you follow all the steps I’m about to share, I don’t see how you won’t be miles ahead of everyone else. Actually, I pretty much guarantee you will be if you follow all of these steps.

Step 1: Create an Investment Budget

The 3 Ws: Wasters, Worriers, and Winners

A lot of people put this as one of the last steps, but that’s the main reason most people don’t make it. They treat investing as an afterthought, rather than a priority.

I believe there are three types of people in the world: wasters, worriers, and winners, otherwise known as the 3Ws.

• Wasters go through life spending everything they earn. They say things like, “Money doesn’t make you happy”. However, at the same time, they are spending all of theirs trying to improve their lives.
• Worriers hoard their money like a squirrel saving its acorns for winter. They say things like, “Money doesn’t grow on trees”. The sad thing is, even though these people have a lot of money, they often deprive themselves of the little pleasures in life in order to save a few extra dollars. They’re so focused on using budgets to keep their expenses down that they miss the far bigger picture.
• Winners are the complete opposite of both of these people. They understand that money can make them happy and that it does grow on trees if they invest correctly. They earn money not to spend it, but to invest, all while not depriving themselves of the things that they enjoy.

Changing Your View of Money

To become a winner, you need to change the way you think about money. Instead of seeing it as a tool to get the things you want, start viewing it as a tool to get more money. The only other way to make money is by trading your time, and personally, I’d rather use my money than trade my literal years on this earth.

Here’s something to consider: if you work for a whole year and saved up $10,000, but you spent it all on upgrades for your car, you’d have to save that money all over again, costing you another year. However, if you invested it correctly, you could use that $10,000 to make $100,000. Then you could purchase the upgrades you want with some of the profits and still have an extra $90,000 that you can reinvest.

Step 2: Increase Your Value

The Story of Cooper and Dwayne

Let me tell you the story of Cooper and Dwayne. They both lived in California and decided to take up surfing as a new hobby. Cooper searched for the biggest waves every day. He didn’t bother with the smaller ones; some days, if he couldn’t find any waves big enough, he just went home. On the other hand, Dwayne went out every day and rode as many waves as he could. Whether big or small, he simply enjoyed the process of surfing and improving his skills.

One day, Cooper and Dwayne were out at sea when a huge wave started to build on the horizon. Cooper thought to himself, “This was exactly what he had been waiting for, a wave that was finally big enough for him”. On the other hand, Dwayne was just excited to put his skills to the test and thought of it like any other wave. They both began paddling. Dwayne expertly popped up onto his feet and rode inside the barrel of the wave. He looked back expecting to see Cooper behind him, but he wasn’t there. Cooper had fallen off almost as soon as the wave had arrived. All he could do was watch as Dwayne rode it all the way to the shore.

Practice vs. Waiting for “The Big One”

In Cooper’s mind, Dwayne had just got lucky, but the truth was, Dwayne had put in all the practice and learned something from every wave he’d ever caught. This is how most people approach getting rich. They spend too long searching for the one thing that will make them a ton of money, all while ignoring the day-to-day things they can be doing to increase their value.

Huge waves do come every now and again. I’ve benefited from the dot-com bubble in the late 90s, the housing bubble in the 2000s, and the recent crypto boom. However, I wouldn’t have been able to take advantage of them if I hadn’t increased my value by investing back into myself.

When you start thinking this way, you stop seeing every online course or YouTube video as the one thing that will make you rich, and instead, just a little wave to conquer and add to your skill set.

Investing in Skills

So where should you focus your time? Well, if you notice there’s a clear gap in the market for a certain skill, such as a plumber (it really is a nightmare finding a good plumber nowadays, but anyway, that aside), if you decide to go down this path, it might make sense to spend $1,000 to get a qualification and then start making upwards of $5,000 a month. Over the course of a year, that would be a 60x return on your investment.

If you can’t think of anything to do, don’t waste time waiting for waves. Instead, you can spend time mastering universal skills like public speaking, negotiating, and content creation. These skills will all come in handy no matter what path you decide to follow in the future, as they are all transferable and can be used in multiple areas.

I’m not saying all education is good. I believe far too many people are going to university for degrees that aren’t even worth the paper they’re written on. However, if you view every skill as an investment and get some kind of return on it, then it’s worthwhile learning. If it was me, I would repeat this step as many times as possible until I’ve reached my maximum earning potential.

Step 3: Open Investing Accounts

Ease of Investing

If you want to avoid being a worrier, then once you’ve increased your earning potential, you’re going to need somewhere to invest your money, so it’s time to open some accounts.

It’s a good idea to allocate a portion of your investment budget into the stock market. This isn’t likely to make you rich in the short term, but if you begin early enough, then in later years, it will start to compound. It’s just so much easier than it was back in my day as you can do it all from your phone. There are various different apps. I’ll leave some of those links down below.

Step 4: Build Assets

The Story of John and Alex

This is the real key to building mass wealth. Let me tell you the story of John and Alex, as it perfectly explains this concept.

After John maxed out his earning potential like we covered in step one, he just invested the rest of his money into the stock market each month in the hopes of becoming a millionaire one day. Alex didn’t have the same patience. Although he maxed out his earning potential and invested in stocks, he also focused on building assets.

John vs. Alex

He started by identifying a gap in the market and put his unique skills to use. He created his own brand of craft beer, which he spent a lot of time perfecting. He experimented with different flavors, brewing techniques, and branding strategies. He even invested in creating a website and social media accounts to promote his product. John, on the other hand, was always skeptical of Alex’s business, thinking that it was far too much work with little return. Instead, John just kept investing the same amount into the stock market every month.

A couple of years went on and Alex’s business began to grow. He started getting orders from all over the country, and his craft beer became a household name. John, however, still had many years left before his stock market investments would start paying off.

Creating Your Own Asset

If you think about it, investing in the stock market is just buying a little piece of an asset someone else has created. However, if you can get in on the ground floor by investing your time and money into building your own business, then you’ll probably be able to generate far more money. The moral of the story is to make sure you’re doing both at the same time.

Step 5: Use Debt Strategically

Debt as a Tool

A lot of people aren’t going to like this one, but being in debt isn’t automatically a bad thing. Let me explain.

If you want to buy multiple properties to rent out and generate passive income, you might think you have to save up a massive amount of money, but that’s not necessarily the case. Instead, you can use debt strategically to buy a house that’s in a bad condition.

Real-Life Monopoly

This “worst house in the best street” can be purchased for a lower price. Let’s say $100,000. Then you can spend $50,000 to fix it up and make it worth $200,000. After that, you can refinance it for 75% of its new value, which is $150,000. This way, you can use that $150,000 to buy another property or renovate another “worst house” and repeat the process. Think of it as a real-life game of Monopoly.

Building Credit

But in order to do something like this, you’ll need to have a good credit score. So if I was starting from scratch, I’d make sure to get a credit card as soon as possible and pay it off in full at the end of each and every month in order to build my credit score. This is like a scorecard lenders use to see how reliable you are. I know it seems crazy that you have to use debt to be seen as reliable, but that’s just the way it is.

So instead of thinking that debt is always bad, try to understand how to use it to your advantage.

Step 6: Don’t Spend Earned Money

Spending vs. Investing

When it comes to money, there’s a common misconception that the more money you make, the more money you should spend. However, this couldn’t be further from the truth. In fact, the key to having a consistently great life is to spend only what your investment portfolio yields.

This is normally around 8 to 10%. I’m not saying to actually take the money out of your investments, just to spend that percentage of your earnings.

Portfolio Yield

I know this can sound confusing, so for example, if you have $1 million invested, then you’d be able to spend up to 10% of that value, which is $100,000 per year from your earnings, without having to worry too much. Of course, this does rely on you making a lot, but once you’ve made it to step six, this shouldn’t be too much of an issue.

Think of it this way: every dollar you earn is like a seed that you can plant and watch grow into a money tree. The more seeds you plant, the bigger your portfolio becomes, and the more money it will yield. And just like a tree, if you take care of your portfolio and only take the fruit it yields, it will continue to grow and provide for you in the future.