Building wealth
concept · updated
The mechanics of accumulation, kept deliberately boring. This is the how; how much is enough is the why and the when to stop.
The three levers
From the wealth notes:
- Multiple streams of income — negotiate your salary (use tactical empathy / Never Split the Difference), and build your own business.
- Side hustles that pay after you stop — avoid trading hours for money; prefer things that keep paying (equity, products, audience).
- A diversified portfolio.
The first million is the hardest. Getting to $100k is genuinely hard; $100k→ $500k is hard; $500k→$1M gets easier; past $1M it compounds on its own (wealth notes).
Invest like it’s boring
- Index funds, mostly, with occasional individual stocks — an “index+” posture (Jason Zweig, The Knowledge Project).
- The default position is to do nothing. The fewer you trade, the fewer errors you make. When a drop happens, ignore it (JL Collins, The Simple Path to Wealth).
- Temperament beats IQ (Warren Buffett). Buying cheap when others panic takes two things most people lack together: cash and courage (Benjamin Graham).
- Guard against confirmation bias — actively seek someone rational who disagrees with you, not just credentialed voices who agree.
- Accumulating and drawing down are different games. Ignoring a drop works while you’re still adding; once you’re withdrawing, a bad early stretch compounds against you — sequence of returns risk. A 30% drawdown can unwind a decade of saving in 18 months if you’re selling into it. This is the main reason retiring very early demands precision — see when to retire early.
Keep finance personal
Align financial decisions with your objectives, not the herd’s. Know what you’re worth per hour, understand what you invest in and why (don’t do it because everyone else does), and put a one-week delay on purchases — if you still want it after a week, maybe (money notes).