Getting rich is not complicated.
It’s actually the simplest formula in the world.
It comes back to that old phrase – follow the money.
Because what does it mean when people use the word “rich”?
It generally translates to “having a lot of money”.
Therefore, you just need to understand where money comes from, and where it goes.
Once you understand that, getting rich has nothing to do with how hard you work, or what job you have.
It’s simply about positioning yourself so money flows to you.
That’s a lot easier than you would expect.
Let’s start with where money comes from.
It comes from the government.
Governments have created all the money in the world, and they do it by printing.
Governments are always printing money (yes, always).
The interesting thing is – money printing by the government is very often done under the guise of “helping” the poor.
And often much of it does go to the poor.
But it always ends up in the hands of the rich.
Why is that?
Quite simple, actually.
Think about it – governments print money so they can give the poor benefits, welfare payments, stim checks, state housing, healthcare etc.
They will also buy supplies like food, sanitary products, and medication and give them to those in need, for free.
Sounds great, right?
But take some time to actually think about where that money is coming from, and most importantly, where it’s going.
Your welfare payment of $500 comes from the government.
What do you do with it?
You spend it at the supermarket, the gas station and the pharmacy.
In other words, that money immediately goes straight to businesses (owned by rich people)
When the government builds housing for the poor, where do they buy the materials, furnishings, labour?
From businesses that make furniture, steel, timber (owned by rich people).
The money always flows back into the hands of businesses.
Think about your regular paycheck:
You spend it on stuff from Amazon, Netflix, the gas station, Spark for your internet bill, Vodafone for your phone bill, a new laptop from Harvey Norman, a pair of shoes from Timberland.
Your money always flows straight back to businesses (owned by rich people).
Even putting your paycheck in a savings account means your money ends up back in the hands of a bank – the biggest business of all, owned by the richest people of all!
No matter where you spend your money, it always flows back into the hands of businesses (which are owned by the rich).
So if money always flows back into the hands of businesses…
Doesn’t it make sense that business owners get rich and stay rich?
And labourers and workers end up poor and stay poor?
Remember what I said at the top of the article.
To become rich, you don’t need a fancy job or to work 100 hours a week.
You simply need to put yourself in the position where money flows to you.
Now that we know money always flows back into the hands of business owners, the obvious position to put yourself in is – a business owner!
If you own a business, no matter how much money is printed and spent in the world, it will always end up flowing to you.
Luckily for you, there is a very easy way to become a business owner.
Whenever you buy stock in a company, you become an owner of that company.
The stock market allows you to become an owner of the best businesses in the world with a single swipe of your phone.
Instead of spending your paycheck on iPhones, Big Macs and Jordans, you can buy a piece of ownership in Apple, Mcdonalds and Nike.
Instead of swiping your Mastercard ten times per day buying meaningless stuff, you could buy shares in Mastercard and now every time someone swipes their card, some of the money flows to you.
Suddenly your paycheck isn’t just buying stuff that makes the rich richer.
It’s buying you ownership in businesses so everybody else’s paychecks are now flowing to you.
It’s turning you into the rich, and making you richer.
How Can I Start Buying Stocks?
The easiest way to start buying stocks is to start putting a little money each into an index fund.
Rather than just buying one business, an index fund gives you ownership in a collection of businesses.
For example, if you buy an S&P 500 Index Fund, you will get a small piece of ownership in each of America’s biggest companies such as Coca Cola, Visa, Paypal, Tesla, Microsoft, Nike and so on.
If you buy an NZX50 Index Fund, you will get a small piece of ownership in each of New Zealand’s biggest companes such as The Warehouse, Westpac, Fletcher Building, Spark, Auckland Airport and so on.
Of course, you could also become a business owner the hard way – by spending many years and thousands of hours of your life building a profitable company of your own.
However, if you’re like me, you prefer to do it on easy mode – just buy a part of someone else’s company, and let someone smarter than me do the hard work.
That’s what buying stock is.
Buying an index fund of stocks is a very simple, low-cost, low-risk way of becoming a business owner, and changing your position in the financial world.
Instead of money constantly flowing away from you, money will now start flowing towards you.
Over time, as long as you continue building your level of ownership in businesses, it will be very hard for you not to get rich, and stay rich.
If you would like a step-by-step guide on buying your first index fund, you can check out my free guide here!