Growing up in small-town East Tennessee, it was well understood that you had to become a doctor or a lawyer if you wanted to be rich. Those were the only two paths to wealth.
But this way of thinking stretches far beyond the Appalachian foothills. Pick a random person on the street and ask them how to become wealthy and their answer will likely be some variation of earning a high salary at a job.
Most people live their whole lives believing this, eventually adopting a defeatist attitude towards wealth. “I’m not a doctor so I’ll never be wealthy,” they tell themselves.
Had I not been introduced to Robert Kiyosaki’s book Rich Dad Poor Dad in my mid-20s, I likely would have developed this attitude myself.
But after hearing that purple book recommended literally dozens of times, I picked up a copy and learned that the rich don’t get rich merely by earning higher salaries. They get rich by owning things that make them more money.
This mindset shift was transformational, completely altering the trajectory of my life. I changed my focus from climbing the corporate ladder to becoming a collector of assets.
And I was reminded of this recently when I saw a quote from Sam Altman, co-founder of OpenAI, making the rounds on the interwebs.
It’s from his 2019 essay titled How To Be Successful. The whole thing is worth a read, but here’s the relevant quote (emphasis mine):
You get rich by owning things
The biggest economic misunderstanding of my childhood was that people got rich from high salaries. Though there are some exceptions—entertainers for example —almost no one in the history of the Forbes [billionaires] list has gotten there with a salary.
You get truly rich by owning things that increase rapidly in value.
This can be a piece of a business, real estate, natural resource, intellectual property, or other similar things. But somehow or other, you need to own equity in something, instead of just selling your time. Time only scales linearly.
It’s one of the most basic rules of wealth-building, yet most people will never even be exposed to the concept. And even when exposed to it, it’s incredibly difficult to break free from the model that everyone (including the so-called financial “experts”) say is correct.
The idea of climbing the career ladder and blindly handing your hard-earned dollars to Wall Street is deeply engrained in society as normal. To do anything different feels very risky.
But hoping that next year’s raise or that promotion that’s just around the corner will be the catalyst that propels you to wealth is an enormous fallacy, and an even more risky belief.
Now don’t get me wrong, a high salary isn’t a bad thing. But it won’t lead to lasting wealth unless a significant portion of it is used to acquire appreciating assets.
To borrow a phrase from Rich Dad Poor Dad…are you only working for money, or are you making your money work for you?