13 December 2019
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How do you become Richie Rich?

Peter Switzer
19 September 2019

Last Friday I participated in a podcast debate for The Australian newspaper about Baby Boomers living the life of Riley because of their ‘lucky’ ownership of property compared to the much younger demographic called Millennials. It came at the right time for me as I’m talking a lot nowadays about how people make themselves rich.

Well how do you become richer? This is a question I posed to a group of business owners I was asked to talk to because of my new book Join the Rich Club.

There are many roads to riches, so let me list a few that a normal person should consider and I think the key word is “normal”.

You see, normal or average Aussies will probably end up with an OK level of wealth when they retire. They’ll probably get to own a home, though that’s becoming harder for younger generations, especially if they want to live close to a capital city CBD or near a beach.

Their super will be a nice nest egg — for anyone who stays in a pretty good job for 40 years or so, there should be over a million dollars waiting for them.

However, if normal people end up with a normal super payout, its actual purchasing power will, in all likelihood, only give you a nice, normal retirement lifestyle.

I often sit with our financial advisers at client meetings in order to get to know our clients better. And I always like to see if our advisers are meeting our clients’ expectations.

One part of the presentation to our clients is to show them what their super and other wealth will look like when they’re 90 years of age! Interestingly, one guy said: “I won’t make 90 but Jenny will, however what will she do with all that money?”

Thinking about how we’re all getting older and how I see really active 80-year old nowadays, I said to this client: “If Jenny makes 90, and she is mentally active, having money means she can call for a limo to pick her up and take her to the movies and see her home. She could pay for a chaperone to travel overseas with her and so on, if she has money.”

My client said: “You’re right. I’ve never thought about it that way.”

Getting richer gives you more choices so what I said to my business audience was: “If you want better than normal businesses, profits and riches, you better work on becoming abnormal!”

To do that, you should do ‘stuff’, such as reading about great business builders like Sir Richard Branson, get a business coach and/or a mentor, find a great accountant who ensures you legally cut your tax bill as well as seeing how tax deductions can help you see opportunities.

To an employee, I’d say “look at those who build wealth through investments. What do they know that others don’t and how did they get to know it?”

They might have had a parent or a mentor who showed them ‘stuff’ that normal people don’t have access to. They might have admired the rich of the world like the Oracle of Omaha, Warren Buffett, and learnt to invest wisely and like a professional.

Like Buffett, they might have read themselves to riches because money legends do leave clues but you have to be out there looking. By reading, you get insights that might help you get moving along that road to riches.

For example, while a financial plan from an adviser isn’t tax deductible, ongoing advice is. Anyone in the top tax bracket effectively could cut an advice bill in half, thanks to the taxman.

One guy at the conference asked me how he could become great at business. I said he was on the way because he was present at the conference and was asking that question. I told him to initially become a sponge and go to everyone who could help him for nothing. But then he had to become abnormal and pay to get the competitive advantage, which will eventually make him even more abnormal and I bet, abnormally successful and rich!

If success and getting richer sounds like you, draw up a plan for You Inc., laying out what you want and then how you’ll make it happen. And if you can’t do this by yourself, then pay someone to make it happen.

If you don’t want to do that, try reading a book like Join the Rich Club. Now that sounds abnormal!

PS: I know I’ve talked about my book a lot lately but my own personal experience has been that I need to be constantly reminded about my commitment to change. Blokes can be like that!

If you liked this article you'll love the Switzer Report, our newsletter and website for trustees of self-managed super funds. Click here for a FREE trial and to hear more of Peter’s expert commentary and advice.

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