“The way to become rich is to put all your eggs in one basket and then watch that basket.”
– Andrew Carnegie
I love real estate.
Unfortunately, it will not make you a billionaire.
Maybe you don’t want to be a billionaire, and that’s fine!
But chances are, if you’re reading this, you at least have a desire to grow your wealth.
If that’s the case, this blog is for you.
When you look at the wealthiest people in the world – Bezos, Musk, Buffett – they did not get wealthy through real estate.
Now, don’t get me wrong, you can absolutely use real estate to grow wealth.
A few billionaires have done that.
But even then, they dipped into real estate through a business.
Today, I’ll get into the ways you can generate massive wealth.
How do people do it through a business?
What are the steps you can take to emulate them?
Let’s jump in!
1. Real Estate Is a Slow Game
Real estate is a slow game.
It’s not producing a lot of cash flow right now.
But there are still many positives.
Real estate helps you depreciate.
A lot of real estate investors I know don’t pay a lot of taxes because they’re partnered with the government.
The government incentivizes a lot of real estate ventures.
It’s an industry that provides housing for people.
On the other hand, though, it’s not a huge catalyst to grow wealth.
Investing in real estate is a very long-term approach.
I do know people who have generated tens of millions of dollars in net worth by doing real estate.
However, they are not the norm.
2. The Richest People Built Businesses First
Real estate typically moves in 10-to-20-year cycles.
When people invest in real estate, they do so as a growth opportunity and a preservation of capital.
How do they actually grow their wealth?
Most of the time they do it through a business.
What businesses?
How are people doing this?
Why are they doing it?
If you look at other billionaires, you see they have businesses that have done well.
Think of Mark Zukerberg and Meta.
He and people like him develop a business over time.
After they do this, they can leverage other people’s money.
They created enough value to grow their own wealth.
It allowed them to have money to invest in things like real estate and other assets.
If I were to start over again, I would start a business first.
Something that has the potential to have returns of up to a million.
That’s the way to do it, because the downside is pretty low.
You only have to worry about your attempt maybe not going quite how you wanted it to.
You won’t lose much money.
This is how people become truly wealthy.
Then, you get the chance to become generous with that wealth.
Many billionaires have taken the Giving Pledge, where they commit to donating half or more of their wealth.
These billionaires are usually self-made and dedicate their wealth to impact-driven philanthropy.1
I have a similar goal to give away much of my wealth.
If you want to achieve the same level of generosity, you need to grow a company that provides value.
Look at Jeff Bezos.
He didn’t flip houses.
He built Amazon, which is a service that impacts a lot of our lives.
3. The Billionaire Blueprint – What to Do Instead
This is the blueprint that people use to become a billionaire.
First, they get a business.
Howard Schultz, the founder of Starbucks, bought a one location for his business.
Then, he did the second step, where he found a way to scale it up.
We recently bought an e-commerce business with high cash flow.
We’re looking to scale it up.
But unlike us, a lot of people didn’t start in real estate.
Grant Cardone is known for real estate, but he started by building businesses.
He raised capital and then he scaled into real estate.
Real estate is great if you have money or if you use other people’s money.
If you haven’t invested in it yet, try generating money elsewhere.
That can be a very valuable strategy to grow your personal wealth.
Also be sure to use other proven strategies such as living within means and re-investing your investment income.2
Now I want to hear from you!
Are you growing a business?
What are the steps you’re taking?
Let us know in the comments.
Before you leave, make sure to check out our special report about inflation investing. It shares the best choices to invest during an inflationary environment.
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Disclaimer: I am not your investment advisor. This is for educational purposes only. I am not giving specific advice on what you can do. I am simply giving my opinions.
Works Cited
1. Jana Sadeh, M. Tonin and Michael Vlassopoulos. “Why Give Away your Wealth? An Analysis of the Billionaires’ View∗.” (2014). https://doi.org/10.7551/mitpress/10802.003.0007.
2. I. Beutler. “What Makes Wealth Grow? A Wealth Sensitive Financial Statement Analysis.” AARN: Economic Anthropology (Topic) (2014).
