Money certainly can’t buy happiness. I don’t care how much money you have, true happiness, real happiness, does not come from material things.
But, I sure do believe that happiness is easier to find in wealth than in poverty.
After studying hundreds of this planet’s millionaires, I’ve come to the conclusion that they all have at least one main thing in common.
And that’s the secret I’ll be sharing in this post. Read on to learn how you too can replicate their success.
Table of Contents
The Secret
Look, I’ll be straight with you in saying that knowing this secret WILL NOT make you rich.
It’s all about putting the process into practice over and over again.
I won’t beat around the bush and lead you on for hours before finally revealing that you need to pay a ridiculous amount of money to learn how to be rich.
So here it is, the one thing that all millionaires have in common is:
They found a way to make money while they sleep.
Sounds simple right? Unfortunately, it’s a little harder to actually put into practice. But it is possible… for anyone!
Let me clarify what this actually means.
Basically, we are asleep for an average of 7 hours every single day, we also eat for an average of 1 hour every day, and we use the bathroom for another 2 hours every day. That’s 3,650 hours every year. Over a working life of 40 years, that’s 146,000 hours of potential earnings, gone.
Let’s assume you’re making the average Australian wage of $40 an hour. That’s $5,840,000 that you’re missing out on over your working life. Yep, $5.84 million!
Plus entire weekends that you don’t work, plus the other 14 hours in the day, of which you probably only work 10 on average.
Between your 20th birthday and retirement at around 65, you are missing out on upwards of $6 million. That’s a lot of money to sacrifice if you want to be rich.
The secret to becoming wealthy then is to find a way NOT to miss out on these earnings.
When you only trade your time for money, you can never be rich, simply because you don’t have enough time to trade. Humans need to sleep, eat and excrete. It’s just the truth.
This is where passive income is crucial. It’s money that you’re making, regardless of what you’re doing. For instance, if you wrote and published a book, that book could sell at any time during the day regardless of if you were also working for a wage, sailing on a yacht, or sitting on the toilet.
When you combine passive income with an annual salary, you begin to see insane capital growth. This is the key to becoming rich and it’s the one thing that all millionaires have in common with each other.
How You Can Make Money While You Sleep
Now that you know the secret to getting rich, it’s time to learn how to actually unlock this thing called passive income.
The “write a book” example is a great way to earn passive income. But, I know most of you can’t be bothered to write a book.
And why would you when you can create a passive income stream for yourself in less than 10 minutes?
Sorry, what?
Yep. You can make money while you sleep through just 10 minutes of effort today.
This is what I consider to be the easiest, and honestly, the most effective way to earn money regardless of what you’re doing.
It’s called investing and if you’re a regular reader of my blog, you’d know all about it by now. If you’re not a regular reader, well, you bloody well should be!
What is Investing?
Investing is essentially when you pump some of your money into a certain asset, with the idea that the asset will provide returns that help your initial amount of money grow larger.
In a nutshell, investing comes in two main forms: investing in shares through the stock market, or investing in real estate.
To earn passive income, investing is the easiest, most affordable, and most rewarding option.
Let me show you how it works with stock market investing:
- You take the $500 that’s currently sitting in your bank account, earning 1% interest per year.
- You purchase 50 shares in an ASX 200 ETF at $10 per share + brokerage.
- By the end of the year, the shares are now worth $11.50 each.
- Your initial $500 is now worth $575. You made $75 by doing literally nothing!
- You were also paid a dividend in June and again in December. Giving you an extra 5 shares over the year.
- These extra shares mean you now have 55 shares at $11.50. Which is equal to $632.50
- Your initial $500 has now made you an extra $132.50 over the past 12 months, while you did absolutely whatever the hell you wanted to do!
To put this into perspective, your bank account would have turned the $500 into $501 over the same amount of time.
Would you rather an extra $1 or an extra $132.50 for the EXACT same amount of effort?
The power of investing though is really clear when you consider the compounding of dividends overtime…
What is Compounding?
Compounding is the phenomenon where interest is added on top of interest over time. This means you have a principle (initial) amount that earns interest, and then the interest is added to that principle, where the new amount can earn interest again, and so on.
The best way to explain compounding is through an example:
- Let’s say you start with $500.
- Your investment returns a dividend yield of 5% per year.
- After year 1, your $500 is worth $500 + 5% of $500 = $525
- After year 2, your $500 is worth $500 + 5% of 500 + 5% of 525 = $551.25
Looking closer we can see that in year 1, you made $25 in interest (or dividends). In year 2, you made $26.25 in interest (or dividends). So the interest that you earned in year 1, earned you another $1.25 in year 2.
Think of it like a snowball. As time goes on, the snowball collects more and more snow, which then collects more and more snow, growing bigger and bigger as it continues to roll.
So, here’s what you’re probably thinking:
“That all makes sense. I know what passive income is and I know that all millionaires use it. I know that investing is a form of passive income and I know that investing works really well when I let it compound over time. But, I still don’t see how an extra few dollars every year will make me rich. Please explain…”
How Will This Make Me Rich?
The way to apply this secret and make some serious coinage is to do the following:
Invest right now
There is no better time to start than now. As the age-old saying goes:
“The best time to plant a tree was yesterday. The second best time is today.”
We can’t go back in time, but we can take action today, so do that!
Add to your investment every month
This is the way to truly become wealthy. If you’re adding to your investment every month, you’ll be seeing capital gains through share price growth + compounding dividends + compounding deposits!
Let’s say you’re 18 and you have $5,000 saved up. You invest that $5,000 into a stock that is returning an average 12% per year.
Let’s also assume you have a part-time job that pays you $1,000 every month ($250 each week). With this income, you decide to add $500 to your investment each month and use the other $500 for fun.
By the time you are 50 (yes, I know it’s a while to wait), that $5,000 will have grown to $2.5 million. Yep, $2.5 MILLION! That’s an entire house right there, no mortgage required.
$200 thousand of that is from your deposits and initial $5,000, but $2.3 million of that is interest only! You earned $2.3 million by doing absolutely nothing. I mean yes the $500 each month may take you 5 minutes on a Monday morning, but for $2.3 million, I think it’s worth it.
Let’s say you finish school, go to Uni and then get a job paying you $7,000 each month ($84,000 each year). You’re now 24 and bump up the monthly deposit to $2,000 each month.
Your investment would now be worth $5.6 million by the time you turn 50! $5 million of which is compounded interest only. You did nothing for that $5 million, but you now have it.
This is just one example as well. You could have multiple investments, plus your annual income every year, plus the book you’re going to write, plus the investment property that you rent out. The opportunities are endless.
Now I know 32 years is a while to wait, and for many this is the investing turn-off. But let me tell you something…
The majority of the world’s richest people earned over 80% of their net worth after the age of 75.
Investing and true wealth is a marathon, not a sprint. You have to be in it for the long-run in order to see results.
Imagine waking up next to your beautiful wife (or husband), kids downstairs, and having the peace of mind that no matter what, you can provide for them. That’s what long-term investing can give you.
What’s Next and How Do I Start?
I hope by this point you’re super keen to get started. Like I said, making money while you sleep is the one proven way to riches. So, don’t miss this opportunity… or you’ll be hating yourself in 20 years, I promise!
For an in-depth guide to investing in Australia + a step-by-step breakdown of exactly how to start from scratch, check out this Uncle Nathan Post:
Uncle Nathan – The Ultimate Step-by-Step Beginner’s Guide to Investing
If you have even the slightest interest in getting rich, I’d suggest you read this post right now to get started on your journey of making money by doing nothing…
There you have it folks, the secret to being rich. I hope you found this insightful and educational.
When I first learnt this at 16 I was mesmerised. Absolutely astonished that people were getting even richer while they literally did whatever the hell they wanted to do. Safe to say I became obsessed with learning exactly how to do it.
The main things I learnt is that this won’t happen overnight, starting early is the best thing you can do, and to make sure you stick with it for the long-term.
If you have ANY questions at all, any feedback or concerns, please please please leave a comment down below or send me an email through the contact page.
See you next time,
Uncle N.
The information on this page is for informational and educational purposes ONLY. It does not take into account your personal financial needs, objectives or situation. For specific financial advice, speak to a registered financial advisor.