How I got rich (and 6 ways you can as well)

Updated to Business on January 23, 2023.

Before you get the wrong impression, this post isn’t about being rich – it’s about creating wealth so you can have a great life and do great work. Maybe you want to build a school in Nepal (like I did with my youngest daughter), go back to school, travel more, or simply get out of debt. That’s what I’m talking about.

If you’re okay with my argument, read on – you might be surprised by my advice.

Rich is good

I remember years ago hearing Mark Victor Hansen, co-author of the mega-successful Chicken Soup for the Soul series, somewhat sarcastically saying, “The best way to help the poor is to not be one of them.” There’s some truth to that.

For nine years, I led a small not-for-profit that gave teenagers a wilderness/leadership training experience. I am one of about 1,100 companies, along with singer Jack Johnson, outdoor apparel company Patagonia, and retail outlet Mountain Equipment Co-op, that donate 1% of our gross earnings (see 1% for the planet), to environment causes. I also lend money to about three dozen entrepreneurs in third world countries through KIVA. I need money to do that.

Having wealth also means you can travel, invest in education, enjoy better health, even spend more time with your kids.

Sound good? Here are six ways I continue to create wealth and you can as well.

#1 Get your head in the game

In a weird twist of psyche, a large percent of good folks have a deep-seated resistance to wealth. Maybe they equate wealth with Kardashian-like distress and unhappiness, or their parents mentored them to live frugally, scraping out a modest living. “When we recognize the wealth archetype in our own attitudes and behaviour,” says Charles Richards, author, The Psychology of Wealth, “we can use this understanding to consciously steer our course rather than allow it to unconsciously drive or sabotage us.”

“What’s in your head determines what’s in your wallet.” Darren Hardy, Publisher, SUCCESS magazine

If you are committed to – once and for all – resolving money issues, you need to get your head in the game. You need to want it. And I don’t mean, “Gosh, that would be nice.” – I mean, “Damn it, I deserve that!”

Here’s a valuable exercise that might make your head spin. Once a day, for a week, imagine enjoying more money. That’s it – simply imagine enjoying having more money and what you would do with it. Would you treat yourself to new clothes, take your kids on a mini-vacation, fix the furnace, or enjoy a dinner out? Whatever the treat, enjoy it.

This is a law of nature: train your sub-conscious to want and accept money and you will attract more money.

#2 Get a goal

Goals work. They work for athletes, sales people, playing tiddlywinks, and they work for creating wealth. But, (surprise) more income is the wrong goal.

I know professional speakers, like me, who earn $8,000 a talk (that’s $133/minute, thank you very much) and are broke. Chasing more income is a fools game.

When I turned 56 I made a series of goals (you can read about my 1460 goals here) for my marriage, children, travel, adventures (Everest anyone?), work, and net wealth.

Net wealth is simply all your disposable assets, less debt. That’s what you can take to the bank and that’s what you have to live off. Of course you might have a pension or government security (like CPP, in Canada), but net wealth should trump all of those.

I use a simple spreadsheet to track that number. On one side are disposable assets (homes, real estate investments, financial investments, vehicles, and cash). On the other side: mortgages, lines of credit, current credit card debt, etc. I update this chart every three months. It keeps me honest.


#3 Spend less

A dollar saved is the same as $1.42 in the bank. What!?!? (read more about crazy math in my post “Why $100,000 a year won’t make you rich”) When you spend money, it’s after-tax money. In other words, you have already paid tax on that money. So, to enjoy your $3.50 Caffè Americano you had to earn $5.00, before taxes. Ouch!

The crazy math is: $cost / (1-marginal tax rate). Let’s assume you have a 30% marginal tax rate (the amount of tax you pay on any additional income you earn). For my muffin example, the math is: $3.50 / (1 – 0.30) = $3.50/0.7 = $5.00. That means, skipping the muffin effectively puts $5.00 in your bank account (and a lot less gluten in your arteries).

Next time you pull out your wallet for dry cleaning, a $34 bottle of Crown Royal, or tub of Haagen Dazs Pralines and Cream, ask yourself what you had to earn for that little pleasure. I’m all for enjoying life – I like building wealth even better.

#4 Ask for what you deserve

I’ve always found when I ask for what I deserve, I get…(wait for it)…sometimes nothing. But, I DO get more than if I never asked at all. Need a raise? Want your consulting client to pay for travel? Three years since you increased your fees?

Time to ask.

When I’m on the phone with an event planner I know they have gone to some trouble to search me out. That’s not the time to chicken out and offer a deal. Unless I know they can’t afford my fees, I state my fee and wait.

Sometimes I have to bend a bit, but the net result is I’m always ahead. Ask for what you want – more often then not you’ll get it.

#5 Think little wins, not lottery wins

The statistics are horrible. Just eight months after the balloons and streamers the average lottery winner is no happier. Worse still, lottery winners go bankrupt at twice the national average every year.

Real wealth growth is boringly slow.

“Someone is sitting in the shade today because someone planted a tree a long time ago.” Warren Buffett

Last month I cancelled extra channels on our TV package. It’s been a heated debate in our house. I don’t watch TV, my wife enjoys sports and shows like The Voice and, truth be told, Bachelor. In pre-tax dollars those shows were costing us $857 annually. I could fly her to L.A., including hotel and meals, for that. Now, I just dress up and sing for her (she wants her channels back).

Month by month, $50 extra on your bill is no big deal – it’s a huge over time. A little purge now and again pays big dividends.

#6 Leverage dollars

The math is simple, use other people’s money and you get rich faster. It works like this:

You find a 1950’s special on a great street. The house need a bit of TLC, but the neighbourhood is good and it’s close to a bus route. The cost is $275,000, you scrape together the $68,750 (25% deposit) from savings and love money and buy it. You place some ads, screen tenants, and rent it for $900. Your mortgage cost $694, so you net a bit every month for insurance and maintenance.

“…while much maligned…debt, when used wisely, has been, and can be, a good thing.” Charles Richards, author, The Psychology of Wealth

Over 10 years, you have a few repairs, go though a few tenants, and the property is up in value by $100,000. Sure, you had to fix the washing machine, and cut the lawn, but you just earned an annual return of 9.4%, plus you can write off expenses against your other income and borrow against equity. That’s the power of leverage.

Want more money? It’s there waiting for you.

The question is: what are you willing to do to get it?