Here is your weekly dose of financial wisdom.
To be rich, seek wealth, not money or status.
Wealth is having assets earning while you sleep.
Money is how we transfer time and wealth.
Status is your place in the social hierarchy.
Time and Money
You won’t get rich renting our your time. Instead, you must own equity—a piece of a business—to gain your financial freedom. How? Either invest in or build companies.
“You will get rich by giving society what it wants but does not yet know how to get. At scale.” — Naval Ravikant
Taxes and transaction fees are the largest costs in the world of investing. Yet, few talk about them. In most cases, I suspect the reason is that their net return is mediocre.
The solution I propose is to make as few transactions as possible and invest through tax-efficient accounts where you benefit from tax deductions. Every country has their own (e.g. Roth IRA in USA or PEA in France) so you need to do your own research.
That is, the art of managing priorities.
Categorize your expenses and give your money a specific task before you get it.
Prepare for unexpected events by creating an emergency fund and being reasonably flexible with your budget.
Accumulate cashflow by paying yourself first. This eventually breaks the paycheck to paycheck cycle.
This week I started browsing The Almanack of Naval Ravikant, a free book that brilliantly synthesizes Naval’s wisdom. Check it out!
To clear thinking,