As a financial advisor, I’m often asked if I’ve noticed or identified common characteristics that make someone more likely to be wealthy. Over the years, I had the opportunity to work with a number of wealthy individuals and couples. What I’ve noticed is that most wealthy people share a few core characteristics: passion for their work and ownership of something that rises in value over time and is scalable in some way.
A Passion for Their Work
Of the wealthy people I’ve worked with, only a handful expressed a primary goal of becoming wealthy — and I would not classify many of them as happy. Instead, most of the wealthy people I know found themselves doing something professionally that they really enjoyed. They were so phenomenally good at it that it never seemed like work to them. If you’ve ever been heavily involved in a fun project and then looked up and realized several hours had gone by, that’s the professional experience of most wealthy people I have met, except every day of their life tends to be that way.
It’s not unusual to talk to successful entrepreneurs and find out that they never took a vacation during the first few years after starting a business. It was not because they hated vacations. They were just so busy and completely immersed in doing something they were passionate about that they never really thought about stopping to travel or take time off.
Most wealthy people put themselves in a position of ownership. Whether that’s ownership of a business, real estate or maybe ownership of publicly traded companies, they all tend to be owners of something that has the potential to increase in value. Being the owner of something doesn’t guarantee that it will be successful, but in most successful ventures, much of the financial success flows to the owner.
Most wealthy people also do something that is “scalable.” Most doctors make a pretty good income, but very few of them become billionaires. No matter how good a doctor is, there are only so many hours in the day to see patients or perform surgeries. At some point, the doctor’s income reaches an upper limit due to time constraints. This is true of many above-average income service professions.
Contrast that with an author who has written a successful novel. An author may spend a large amount of time writing the novel, but once the work is finished, it doesn’t take any more time for the author if the book sells 1,000 copies or 10 million copies. If more people buy the book, the author makes a larger amount of income without more labor on his or her part. It takes the same amount of time to write the book whether it’s successful or not, but there’s no upper limit to how much money the book can make. The book is “scalable.”
Someone can also make a business more scalable by hiring more employees. There may be a limit to how much money you can make as a solo entrepreneur, but if you can employ others, you can do more business and increase your ability to earn money.
While you may never start your own business, understanding the qualities that characterize the wealthy can be beneficial when you invest. Seek to invest in companies that embody those characteristics: a passion for their work, ownership and scalable endeavors. Informed investment choices can deliver financial growth and independence for you and your family.
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