The No. 1 Secret of the Super-Wealthy

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Posted March 6, 2023

The rich buy assets. The poor only have expenses. The middle class buy liabilities they think are assets. The poor and the middle class work for money. The rich have money work for them.” — Robert Kiyosaki


Dear Outsider,

My New Year's resolution is always the same…

Read more books.

So I started off this year by reading a book I’d only heard good things about…

Robert Kiyosaki’s Rich Dad Poor Dad.

And what he revealed in the book blew me away.

It wasn’t that any of the information was new, per se.

But he lays it out in a digestible way and explains everything in simple terms.

He even gives away the No. 1 moneymaking trick of the super-wealthy.

Spoiler alert, but I’m going to give away that trick right now.

He writes, “The rich buy assets. The poor only have expenses. The middle class buy liabilities they think are assets. The poor and the middle class work for money. The rich have money work for them.”

If this is new information to you, great.

For most of us, we’ve always heard that it takes money to make money and are never quite sure what that entails.

But what Kiyosaki is saying isn’t that you need a lot of money to make a lot of money.

You just need to put your money in the right place to make it work for you.

Now, what does this mean, exactly?

The way I understand it is that the wealthy only spend their money on things that will consistently pay them back.

So, no, this doesn’t mean buying a fancy car that depreciates in value.

It doesn’t mean buying a Rolex, even though many people will say it’s an appreciating asset.

In reality, it’s an object that you must sell in order to make a profit.

But there’s no guarantee you’re going to sell it for the price you want.

That’s not to say objects don’t bring us other forms of happiness or can't make us money on the side.

But the object itself isn't generating consistent revenue.

Do you see what I’m getting at?

It’s why it’s incorrect to say an object you purchase is an “investment.

That classic car or expensive watch isn't generating any cash by collecting dust in the closet or garage.

The point of an investment isn't to turn around and sell for a profit, which to me is more akin to speculating or gambling.

Investing is about setting yourself up for long-term, consistent growth by putting your money to work.

It’s also why Kiyosaki says the middle class get trapped in the rat race — because they purchase objects that they think are assets, when in reality they’re liabilities.

That includes real estate, at least in the way most people buy houses.

They tend to overpay, take out a mortgage they can’t afford, and get trapped in the rat race by having to work for money to pay it off.

Working for money, then, is the issue.

Again, you want to make your money work for you.

Sounds simple, right?

But how do we do that?

What are the wealthy buying to generate consistent income?

Well, one of the only strategies is to buy dividend-paying stocks.

In theory, it’s one of the easiest ways to make money in the market.

When you buy a dividend-paying stock, you’re basically saying, “OK, company X, I’ll purchase some of your shares, and in return you’re going to pay me a fixed percentage of your company’s earnings.”

All you do is buy the stock and wait for the dividend payment to hit your account.

It’s as simple as that.

Now, most dividend stocks pay shareholders quarterly, but there are others that pay monthly.

The goal with stocks, then, is to build up enough shares in enough companies to get paid every single month of the year — and not rely on some single stock or material "asset" to increase in value, which may never happen.

No working for money required.

Now, you’ve got to do your research, and you'll have to ride the ups and downs of the market.

But if you dollar-cost average, you’ll be glad to see the market correct to the downside because it means you’re lowering your cost basis.

You don’t have to care about volatility because all you want to do is make income and reinvest it, letting compound interest grow your wealth.

That’s the key to making your money work for you.

Now, sometimes you want to speculate. I get it.

But in order to do that, you’ve got to have a macro view of the current market environment.

And right now, as I’ve been writing about these last few weeks, the trend is 100% artificial intelligence.

Check this out...

Earnings season is in full swing, and companies like C3ai (NYSE: AI) are soaring.

The company recently posted an earnings beat and shot up 30% on the news.

ai

The thing is AI stocks are just getting started.

It’s the tech shift we’ve all been waiting for.

The big one that will bring down the corrupt tech monopoly once and for all.

How do we know?

Well, Google CEO Sundar Pichai just sounded the alarm.

He called a “Code Red” meeting with the company’s top execs.

He even begged Google’s retired co-founders, Larry Page and Sergey Brin, for help.

All because the revolutionary ChatGPT is quickly taking market share away from Google.

It racked up over a million users in just five days...

And it could dethrone Google as the world’s No. 1 search engine after more than two decades of dominance.

The evidence is piling up...

The New York Times wrote:

For Google, this was akin to pulling the fire alarm. Some fear the company may be approaching... the arrival of an enormous technological change that could upend the business.

Paul Buchheit, one of the creators of Gmail, tweeted:

Google may only be a year or two away from total disruption. AI will eliminate the Search Engine Result Page, which is where they make most of their money.

But it’s not just Google.

Amazon, Apple, and Meta are shaking in their boots.

This disruptive innovation has the ENTIRE tech world on edge.

But here’s the thing...

In order to integrate this technology, they need one critical piece of hardware built by one tiny company.

We've made available an urgent investor presentation on the matter just for you.

Have a great week.

Stay frosty,

Alexander Boulden
Editor, Outsider Club

After Alexander’s passion for economics and investing drew him to one of the largest financial publishers in the world, where he rubbed elbows with former Chicago Board Options Exchange floor traders, Wall Street hedge fund managers, and International Monetary Fund analysts, he decided to take up the pen and guide others through this new age of investing. Check out his editor's page here.

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