The Almighty Equation of Wealth

Having money & knowing how to build wealth is different.

If you are a legit hustler and take time to build businesses, the lessons you pick are priceless.

You understand business and money so in-depth that someone who inherits it would not understand you.

Take this equation for Instance:

Wealth = Cashflow => Save => Grow Funds

It took me 6 YEARS to figure that equation out. 6 years.

And I know, for sure, it will make me a lot of money in the next 6 years, and you too if you finally get it.

Look at it again below:

Wealth = Cashflow => Save => Grow Funds

This is how to build wealth.

No matter how many motivational or finance books you read, that diagram shows how to build wealth in real life.

This means Increasing your cash flow to increase your savings, so you can increase how much you can invest and double.

Here is the rule: Whatever happens to ONE PART happens to the rest.

That is, if you 2X cashflow, then everything else must 2X

2xCashflow => 2xSave => 2xGrow Funds

If one part suffers, the rest suffers.

This means that if you save every month for SOMETHING and your cash flow drops, your savings also start to drop because you will dip your hands into it for emergencies.

(This is why you always spend your savings)

Also, if you 2x cash flow and 2x savings, your “Grow Funds” game could be more active. (Also, note that Inflation eats up the savings)

The rule is:

• Find (X) what you want to invest in.
• Turn on your cash flow.
• Save that cash flow till you can afford to invest in X.

Rinse and repeat.

What you do with this formula is up to you

Just read it slowly.

Internalize.

Then apply.

‘’Rich people buy assets, poor people buy liabilities.’’

Assets are things that put money in your bank accounts, and Liabilities are things that take money out of them.

This statement looked true on paper for years – but I did not know how to apply it in real life.

Here I was, a broke young man. How on earth can I afford to buy assets?

Then, one day, it clicked!

I figured out how I could buy assets from scratch…With just that formula.

‘’To afford to buy assets first, you must set up as much cash flow as possible. The more cashflow you set up – the more trickles you can collect, and the more this happens, the more what you collect gets big enough to buy assets.’’

Let me break this down.

If my cash flow is 150,000 a month.

And I save 66.67% of that money (forget about the math; stay with me)

It means I’ll save 100,000 a month (and spend 50,000)

This means that I will save only 1.2 million a year for any investment I want to pursue.

But if my monthly cashflow is 1 Million, and saving the exact percentage of 66.67%

Instead of 100k, I will now save 666,700 (and spend over 300k a month)

In a year, I’d have saved 8 Million.

The point is that your FOCUS should be on generating CASH-FLOW ideas. Ideas that send you money DAILY.

What kind of ideas do that?

They are called LIHO ideas –

LIHO stands for Low investment, High Output businesses.

These businesses take very little but can make a lot of money back.

For me, years ago, my LIHO idea was created in under 20 days – but it made me millions within 18 months ( a year plus).

But how can you come up with your LIHO idea?

An example of a LIHO Business is something I call ‘’Digital Real Estate.’’

Will share more about this in the future.