Money Making Mythology and 12 Sharp Refutations

If you have a net worth of less than 20 million dollars and under the age of 40 and have are driven to succeed, YOU COULD EASILY benefit from the following advice in this article. Trouble is, the people around you ACTUALLY BELIEVE THESE 12 MONEY-MAKING MYTHS, including your own FRIENDS and FAMILY, and those that do know otherwise don’t take massive action! But not you, you’re sharp, ambitious and determined, aren’t you? You’re willing to cut through the B.S., to get your slice of the financial pie, and that’s exactly what we’re serving today just for YOU. So grab yourself a damn notebook. Write these myths down and write the TRUE alternatives below the headline.

ESKETIT!

Myth #1: Professional Careers Are The Most Effective Way To Build Wealth

Careers are only good for generating your initial income when you have no assets, provided the career is lucrative and does not take too much time to train for. Careers, generally, have a very low ROI (return on investment: how much percent of the investment do you earn per year), (particularly doctors and lawyers) when you consider the years of education and fees for education. You lose valuable years that could have made salary and gaining job experience, and instead, you spend those years spending money instead. A more effective method of building wealth is through businesses. Particularly, highly scalable, ambitious, agile, high margin businesses. A career is limited by the amount of hours in a day and the amount of days in a year, whereas the demand for goods or services is only limited by the amount of people who cannot afford it or do not want it. 

It is very helpful to stop thinking in terms of 

Income = $/hr * hrs

But rather,

Income = $/ product * products sold

Some may argue that careers are safer because they create quicker money from thin air. This is true, but in the long term, if your goal is wealth creation (20 million), there is a very small chance that you will be able to hit your goal. If your career cannot be turned into a business that you can grow, you put yourself in a very risky position if your goal is indeed wealth creation.

Myth #2: A High Paying Career Will Save You From Poverty

A high paying career will help you in your initial wealth creation, but it is not the be-all-and-end-all of wealth creation. I personally know a doctor who has a negative net worth (from car loans, student loans, and negative equity on housing) and landscapers that have a multimillion dollar net worth. The difference between the two can be attributed to two factors: financial discipline and good investment strategies.

Myth #3: You Need A College Education To Make Wealth

If you don’t need a career and jump straight into business, then you don’t need college. Although I personally attend a college, I do it for reasons other than wealth creation and learning because you can accomplish those goals for cheaper!

College is not optimal for wealth creation. Not only in college do you sacrifice 4 years of potential salary and job experience, but you spend between $20,000 if you are smart and $200,000 if you are fiscally retarded + interest to achieve a degree that will land you a job that would pay you a crippling salary. 

College is not optimal for learning. The internet has so much free information (God bless Khan Academy)! If there is some information that is not free, you can cheaply obtain it from a book on Amazon and if you must, purchase a $200 course (which is still 100x less than a university degree).

What college is good for however is learning and practicing social skills, meeting like-minded people, engaging in hedonistic pleasure, learning the culture of a particular group of people, exploring new sports and foods and learning to be independent!

Myth #4: Prestige Is Associated With Pay

University professors, teachers, soldiers, scientists, politicians, government workers, authors, philosophers, most singers and artists, all have much prestige and respect but no wealth. Unless you commercialize your fame or create and invention that only you can create for at least 10 years, then there is no wealth in these careers. It is important to understand that prestige and wealth are not synonym. 

Myth #5: You Need A Brilliant Idea To Become Wealthy

Rob Croak, the CEO of Silly Bandz, made 15 million dollars off of selling freaking animal shaped rubber bands. This proves that you can sell the dumbest things and still become a multimillionaire, provided the execution of the business is appropriate. In fact, the execution of an idea is far more important than the idea itself. However, the inventor of the fidget spinner, Catherine Hettinger, created a toy far more popular than silly bands. She did not profit anything off of the fidget spinners because her patent expired earlier that year. Therefore, poorly marketed/executed great original idea for a product or service will simply get stolen.

Myth #6: In Order To Collect Wealth From Society, You Must Distribute Benefit

Ever heard of day-traders? All they do is buy and sell stocks (or cryptocurrencies or foreign currencies or anything that fluctuates in price). They buy when a price is low (maybe for an hour or a couple of minutes or seconds) and sell when the price is just a tad bit higher. They can make a mad income without contributing anything back to society. It’s a legitimate means of making a living! (Well they do have some benefit to society, they provide liquidity to markets). Similarly, you could be a drug dealer, fast food chain owner, pornographer, video-game maker and harm society in general and still make mad money! You do not have to contribute anything of benefit back to society in order to make a living for yourself. I’d imagine you would (and should) feel pretty useless (but important for your family nonetheless).

Myth #7: On-Job Skills Pay Bills

Skills pay the bills. We know this already. However, your ability to negotiate, sell, and market yourself plays a far bigger role in your career than you might realize, and especially your salary. The reality is that we subconsciously judge the fat person as lazy no matter how much we might try to go through “unbiasing training”. How you look, how you interact with people, and how you dress all impact people’s perception of you. If they perceive you to be of high value, bingo, you are high value. If it all came down to skills, people in India would be making more than you because they probably work harder than you. The only reason why they don’t is because no one in India is willing to pay Indians American wages and Americans don’t want them to come to America. Your salary does not depend on your skill as much as much as it depends on the perception of the value of your skills and other external conditions. Therefore work to get yourself an unfair advantage: dress well, get a good haircut, work out, learn social grace, engage in B.S. small talk, and shake the right hands. 

Myth #8: Actual Value Is The Same As Perceived Value

Whose services are more valuable and commendable? A doctor’s or Kylie Jenner’s? Who has contributed more to society? Kylie has collected more value for her contribution to society, but we often give the doctor’s service more prestige and ‘value’. Why?

The actual value of a product is not the same as perceived value. Take Supreme for example. It’s a $5 dollar white shirt. Put a logo on it. Now it’s worth 20x that amount, at $100. What changed? Perception. And get this: recent neuroscience has shown that despite two products being the same physically, when consumers consumed two products, their brains showed more pleasure when they consumed the higher value good rather than the lower value good. Crazy as this is, we shouldn’t be surprised. Our physiological responses to our environment depend on our perception of the environment. If we see a real bear, we get nervous, and rightfully so. However, if we watch a movie with a bear coming straight at us, we might get nervous, even though we know that the movie isn’t real.

So how can YOU use this in a product? Buy cheap crap, tell people it’s expensive and rare to justify a higher price, and sell it. Take a 5 cent metal can, tell people it’s a can of air, sell the can of air as a prank gift at a dollar store for $2. Instant profit! Or do what Kylie did. Take $5 make up, become really famous, and sell it for $30 and become an (almost) billionaire. There isn’t a real need to provide actual value to society, just the perception of it.

Myth #9: Most Markets Are Saturated

“I can’t make x product because the market is oversaturated” says the man who can’t compete. The reality is that no market is oversaturated to the point that you can’t make money off of it. The catch is, you have to outcompete some businesses and steal some of the sales in that industry. Generally people are averse to switching products, but don’t let that discourage you, because new customers are entering your market all the time!

Kylie Jenner entered the saturated make-up market with her product. What did she do? She associated that $30 make-up kit with her beauty, and suddenly that kit was worth more than $30 to most people. That causes people to trade their money for that kit. Many of her followers are young girls who are now entering their ‘higher spending’ age. She stole SO MUCH MONEY in sales from other businesses in her industry! So what should YOU do with YOUR products? Differentiate your products in some way and compete with the weakest in your industry! 

Myth #10: Profiting Off Of The Labor Of Others Is Unethical

If you are a starving man and I pay you $50 purchase the rights of an article you will write for me, then I turn around and sell the rights to that same article for $500 to a giant business, I have done nothing much and nothing wrong. For sure, I took advantage of the information asymmetry; the small guy doesn’t know the true value of his skills and the big business doesn’t know that the small guy exists. What I have done, is something called service arbitrage. I have moved outsourced cheap services to a customer that is willing to pay a higher price for it. 

Is it mean? Probably.

But every single industry does this. If they didn’t, they wouldn’t hire you. Think about this. You are the owner of a marketing agency. You make $500,000 annually by freelancing. You can hire another guy to do the same work that will make you another $500,000, but you pay him $400,000. You just made $100,000 in profit. If he made you the same amount that you were paying him, would you still hire him? Nope. There’s no benefit and therefore only just a headache. 

So does that mean in every single career, you will necessarily get paid less than what you are worth? Yes. So what should you do to be paid as much as you are worth? Freelance. However there is a sort of insecurity that is associated with it. And even then, the person who hires you for that task will value receiving your services more than you value producing your services. Hence you get hired. 

If you want to start a business that can run on its own, you must learn to profit off of the labor of others.

Myth #11: Starting A Business Is Risky

Businesses are necessary if your goal is wealth creation. To attempt to create wealth without a business puts your goal at severe risk. Indeed, it’s risky not to start a business.

But 90% of startups fail within a year. Therefore expect your first business venture to fail but intend for it to succeed. Take necessary measures to ensure you don’t lose too much from a business. Remember, you get to choose how much  you are willing to risk for your venture. Pick a business model that is assymetrical in its benefits, particularly, pick a business model that decreases the harms of failure and increases the benefits of success. The following are methods that can make your business more assymetrical.

1. Take orders if you can or maintain a very small inventory. This way, you will only incur a cost AFTER you make some revenue. This eliminates much risk; you don’t have to make a loss in unused inventory.
2. Use an online store. An online store has MASSIVE upside (can expand very rapidly and very cheaply) and little downside (low cost to maintain). Compare this to the classic geographically constrained, expensive, brick and mortar store.
3. Outsource. E-packet shipping from China means you have to pay NO TARIFFS on single Chinese consumer imports that are less than $400. Their prices are much much lower than American manufacturers.
4. Use your own FREE social media to promote your products or ask others to share (affiliate market) your own products and paying them with COMMISSION. Compare this to the risk incurred when you pay a flat out rate for well-targeted advertising which may or may not be profitable.
5. Pick a product you can replicate or scale. Such products are information products, dropshipping websites, and many-2-many business models. Independent services cannot be scaled as well even though they can yield good income.

Myth #12: You Should Start Investing Early In Life To Take Advantage of Compounding

The reality is that you should start investing early if you do choose to invest in stocks, crypto, or real estate. 

However, you should only invest if you can not start a business that has a growth rate of >10% per year (which anyone can)! Business can offer quicker scalar growth that can substantially outpace the compounding growth rate that is traditionally associated with traditional investments in other companies, crypto, and real estate. 

Although it is true that business profits scale with sales and customers, not necessarily capital input, capital input can impact your customer acquisition (marketing and sales) and your product quality, which increase your profits. If your money out is greater than 110% the money in (which is likely) then focus on expanding your business and start investing in stocks when your business growth slows below 10%! 

At the same time, it is important to buffer your assets and risk by diversifying your investments. Just be weary to put your money where it can grow quickest and safest!

Hopefully, with these 12 myths finally debunked, you now have a better understanding of the principles of wealth creation. I invite you to use these principles (and the wealth that you earn with them) in an ethical manner, but that choice is up to you.