The five “truths” for retiring early and wealthy
Editor’s note: When it comes to wealth-building advice, you want someone who has “been there and done that.” That person is Gabriel Meza.
Coming from a third world country and a poor but well educated background, Gabriel amassed a net worth of a few million in just 20 years. He’s an entrepreneur, a former successful CFO in Silicon Valley, and the founder of BeachWealth, Inc.
In today’s essay, Gabriel shares the five truths of creating wealth and introduces his plan for retiring early. If you want to retire wealthy, read on…
By Tonino Paolo, founder, The Truly Independent Investor:
I’ve been working about creating wealth for a dozen years. Before then, I wasn’t writing about it. I was doing it, but for others :).
My income is still increasing since I stopped “working for a paycheck” But that’s the thing about getting wealth – when you get wealth, it is easier to get wealthier.
It’s not fair, but it’s a fact.
When I decided to make money and self-fund my retirement at age 43, I didn’t know the first thing about the subject. I was a CFO for a great software consulting company “MindSource”, and I owned a nice bar. I wanted to be retired and focus on passive income to survive. But, I was not only coming out of Bankruptcy (chapter 13) but also broke.
I retired 5 years later with a net worth of a few million dollars.
In today’s essay, I want to tell you the most important things I’ve learned about building wealth. I won’t tell them in detail, not because I want to sell you anything, that is not what I do, but not to bore you… but I’ll tell you the principles.
Don’t Believe These So-Called “Facts”.
Let’s begin with some of the lies about creating wealth. At one time or another in my wealth-building career, I foolishly believed in the following so-called “facts”:
Wealthy people are stingy for a reason. The secret to becoming wealthy is to be cheap and save.
The stock market is the most efficient way to invest. You can’t become wealthy unless you understand and master the stock market.
Geopolitics determines investment outcomes. You can’t become wealthy unless you understand politics and economics.
The general public is always wrong about economic and financial trends. The fastest way to acquire wealth is to invest as a contrarian (i.e. against market sentiment).
Do any of these “truths” sound familiar? Have you been following any gurus who advocate these “facts”?
I don’t read all the popular books on wealth-building, because I feel comfortable with the system I’ve developed myself, through my own experience. I don’t follow the advice of others, I believe in work and having a clear path to success and lofty but achievable goals.
But that’s not to say that "this" system is the only system that works. Nor do I want to argue that it is the right system for you. What I will instead is share my experience – and let you decide whether it can help you in either; creating wealth, or setting up your goals and/or plans:
Truth No. 1
You’ll never get rich unless you understand some fundamentals about saving, spending, and investing. Live within your means and don’t waste money in you.
Truth No. 2
Market investing is all by itself an inadequate strategy for building wealth. It won’t get you rich or make you wealthy, however much you wish it would.
Truth No. 3
The single most important factor in wealth-building is the size of your investment capital. Investment capital is what you can save each month after you’ve taken care of your lifestyle expenses.
Actually, that’s the second-most important factor in building wealth. The No. 1 strategy is acquiring equity in a startup business. There are many ways to do this. The most commonly talked-about ways are downright foolish. But there are smart ways to do this, even if you are a novice to business. This is by far the most risk/reward strategy out there.
Truth No. 4
Investing in buy & hold or buy & flip real estate is unique – it stands halfway between active income and passive income. Next to entrepreneurship, it provides the highest return you can get from any financial endeavor.
Truth No. 5
To keep your wealth for a lifetime, you need two or more streams of passive income. Your goal should be to build each stream of income to a level at which you can live on that and that alone.
Do these statements make sense to you? If so, how are you doing?
Best of luck,
Gabriel Meza – President – BeachWealth, Inc.