Monday, August 3, 2009

How To Really Get Rich

Many people are told that if they save money, cut up their credit cards, get out of debt, and buy diversified stocks, and put money into their home they will get rich. But this is not true. They might be more secure. However, does Bill Gates follow this plan? Does Warren Buffett? Donald Trump?
The truth is if you want to get rich, you need to be on the other side of things.
If you are selling stock through an IPO, you have a much better chance to make money that can really make you rich.
If you are going to get ich buying stocks like Buffett, then you also need to tsell stocks like Buffett.
Warren Buffet first bought a controlling interest in a private equity company after putting thousands down, borrowing 100 thousand or so to buy the shares, and then using the equity in the company to take this million dollar business public and make tens of millions, which he used to invest into other businesses, and he used the success to gather more investment capital, which he leveraged to make billions, then tens of billions then hundreds of billions for his company, and now he is one of the world's richest men.
Bill gates bought an idea from someone, put it into a business system, took his company public, sold shares to the public, and used that cash to expand his business like crazy and also became one of the worlds richest men.
Donald Trump became very rich by borrowing money from banks to buy up hotels and houses and commercial real estate, ran several companies, used the equity he created to borrow more.

The rich print their own money by using leverage to create equity that pays for the leverage, returns their initial capital, and leaves them with plenty to spare to repeat the process.
If you want to know how to get rich, you need to understand how you can take those risks, and how you can get rich off your ideas.