Always think about this one sentence: If you are smart, why are you not rich?
There are multiple concepts that billionaires know and on those concepts, they execute too well. Unfortunately, normal people do not know them, or cannot execute well.
Let us talk about them anyway while I also admit, that I cannot execute that well, or I do not really have the talent. I am trying and improving each day, and I am certainly getting better very quickly.
The problem is usually two-fold. Not only one may not know about these concepts, and intricacies, and that one may really not have a system in place to execute even if they know about them. Last but not the least, many people know about them, and also execute very well, but then don’t forget about scale, time, survival, and pyramidal structure behind everything.
Promise for tomorrow: The first thing to realize is that money is a promise for tomorrow. Here is how to think about it. Let us imagine that there are two people in a village. One of them grows wheat, and the other hunts in the jungle, and brings home some meat.
In the evening, they both sit and cook together. They enjoy the meat, and the bread. The life continues like this forever. Now imagine what happens when a third person joins them. Let us for now assume that the third person is someone who is smarter than both of them.
The smart guy does not know how to grow wheat, nor does he know how to hunt, but he still wants food, so he talks to both of them, and tells them that he knows ways to increase the produce, and in return if they both be willing to share a fraction of whatever they produce.
They both think: “Sure, if your ideas let me produce more, I can give you something”. Here is what the smart person does. He tells the person who grows wheat, that he should protect the crop with a scarecrow, and to the one who hunts, he tells to put a trap, so that he can trap the animals and he can easily hunt down more.
Great! soon enough, their produce goes up, and they are willing to share something. Now three of them are running their daily operations, and producing more. The problem is, that giving those ideas was a day’s job, that increased the total production, but actually growing wheat is hard work, and so is hunting in the jungle.
Soon they both realize that the person sitting and only thinking is doing nothing, so why should he continue to get the bread and the meat? They both speak up to him, but guess what? He is smart, so he says - if I tell you one more idea, can you share bread and meat with me for longer? And they both commit and agree.
He gives two more bright ideas and continues to generate more and more value. Since he is smart, he realizes that they are both going to ask for more ideas tomorrow. So now in his down time, he starts thinking more and more, and keeps ideas ready. In fact he is now working as much as they both are. He observes their pain points, and comes up with solutions one after the other.
Every now and then he gives them ideas, and continues to get his share. What will happen over long term is that he would have earned his share only by the power of thinking. This is amazing, because body has limitations, but the mind does not.
Now let us just expand this village, and say there are 50 people, who do various tasks, and they all share various things. The smartest person only thinks and gives them all ideas to improve produce. They all share things with him. Soon enough, he would become the richest person in the village. He would be a natural leader to all of them.
At some point in time, someone will realize that there are some people who are actually not doing the job, and that everyone does not need everything, so they will create an interchangeable value in the society. Let us call that currency. Be aware at the moment, that we have certainly defined something that sounds like money, but currency is not money. Currency is only an indicator of money. Currency only makes something interchangeable.
One day, what will happen is that the person who goes to hunt will not find a prey, and the one who grows wheat may not grow enough crop. They will all have to give each other a promise for tomorrow, that when they have grown the crop, and gotten more produce, they will share it then.
Some day, someone will not be able to fulfill his promise, and therefore it would be hard for everyone to trust them. While there exist acts of God, and various other uncertainties in life, human motivation to work is a big uncertainty.
It is then, people will say - Can you please make me a promise in writing, that if you cannot grow enough wheat, then you would give up a piece of your land? As a society everyone will agree to it, and one day someone will have to give up their land or their other possessions.
At some point running this system for a long time, the most transferable thing will stand as promise for tomorrow. A thing that can not get destroyed, that can live longer, and now fuse both - currency and promise for tomorrow. Call that money.
Money is only a promise for tomorrow. You get money equivalent to the value you have added to the society. The more value you add, the bigger and taller promises the society makes. Good thing is that these promises for tomorrow can be converted into immediate value and tangible goods.
Any person who is a billionaire added enough value to the society. That is why society threw promises at him. It is because enough value could not be used up by the person (consumption was lower than the total promises), the money as a promise for tomorrow sits in their bank.
Value for society: Now that we have talked about the promise for tomorrow, and that we talked about the value for society, it is so easy to understand that the larger the value a person adds, the taller the promises. The taller the promises thrown at a person, the richer the person can get. The more he saves out of that wealth, the more he holds on to himself.
Inventor: To be able to add value to society, one should be able to create something with lower efforts. The society as a whole already knows how to produce something with a particular effort. If one can produce the same results with lower efforts, then that person is an inventor, and society rewards him.
Investor: One day, a smart person will realize, that he cannot continue to remain an inventor, so he will become an investor. He will try to cherry pick those people who would give him ideas, and will sell their ideas and will give up some rewards for the ideas. He will similarly lend his money to those people who would have proven success record. For example, a farmer who has a proven record of growing very good crop.
Bottleneck and risk taking: Some people will become somewhat ruthless, and will try to put other people in a situation where they will want to take advantage. Here is how that would work. Imagine that one day a farmer cannot grow wheat, the person with more money will make a deal with him. He will say, I will give you some money so that you can feed yourself, but not only you have to pay me more, but also, if you cannot pay me, you have to give up your land. Since for survival, the farmer may have no option, he would have to make this bet of life. If he succeeds, the rich person will get his capital, plus interest, but if he fails, the rich person will take up his whole land. When he would have made this bet, he would have thought about a way to make more crop out of it in the future. Perhaps he can hire the farmer and tell him what to do.
Long term vs short term: Someone will realize one day, that such bets happen all the time in life. He would realize that some bets are short term, vs some that are long term. He will make long term bets, and will take advantage of time.
Obsession: Some people will be so obsessed with what they do, that they will continue to do it for ever. They will play bets against others, but they will win, because they will be playing for fun, while others may be playing for survival. Those who would be obsessed, will get even richer given more time. Same way, some people will be obsessed about inventing, or investing.
Risk taking: In multiple transactions risk taking will become an option, and it would work out for some, and it would fail for some others.
Talent: Talent will play a big part in success of a person when he/she would take risks. For example, a person providing a value that cannot be destroyed by wind or rains, that can be produced by his own hard and smart work will always shine.
Luck: The things such as act of God, natural calamities, random events in the society, and so many other things will make someone run out of luck sometime. If they come out of the situations, they will survive, if they cannot come out of the situations, they will fail or perish.
Survival: This needs to be thought about in terms of how many people will succeed vs how many will fail. Some people will work so hard and continue to do something for a an amount of time long enough, that they will be the ones who survived, while everyone else will have perish.
Organization: Some people will become so good at the process of survival, that they would make larger teams such as organizations, where everyone will be able to add more value to society collectively than what they could have individually. When this happens, many others will believe in them, and will work for them, thus producing even larger value for the society.
If you want to become a billionaire - identify that one thing that the society needs and wants like crazy, that only you can produce better than others, that you can be obsessed about, so much so that you can make a long term bet betting your everything on that one thing, then if you have enough talent, that makes you survive, so long that even if you run out of luck you produce value for the society by providing it with that one thing, other rich people will invest in you. You would then need and be able to run a large organization to add that one thing to the society. If all this happens, and you succeed, the magnitude with which you would be able to provide the society with that one thing will be very very high. Then society will throw a lot more promises at you. If you cannot consume those many promises single handed, you will be rich.
Ask yourself this when you question yourself - if you are smart, why are you not rich?
Do you know/have all of these: Ideas that add value for society, inventor, and investor mindset, understanding of bottlenecks and risks, long term thinking, obsession about whatever you do, talent and hard work to survive all odds, but yet enormous luck in your favor?
Then sure, keep learning more, keep building things, and give it enough time. Perhaps one day, you will be rich.
Stay blessed and stay inspired!
