Meditations #1: On Building wealth and the things I have learned along the way.

Meditations is a series of insights from my personal life that I think can benefit people’s lives by providing them with some perspective. All the information written here is not to be considered financial advice. Life is opinion, act accordingly!

Main points and the rules/values this mindset is based on:

– The purpose of investing is to build wealth and achieve financial freedom using direct knowledge and efficient planning. Remember, having lots of money is not an objective. Money is merely a tool for creating freedom and opening doors that can lead to new life-changing experiences.

Therefore, the process of building wealth takes time and it is best achieved using compound methods.

Having multiple sources of income is also crucial and can secure some stability. Investing therefore is most efficient when you are also earning compound interest (passive income), and that can only be achieved successfully when you have a long-term mindset.

Always focus on buying assets, not liabilities.

Example of assets: Bitcoin, real estate, land, gold, bonds, stocks, etc

Example of liabilities: Cars, expensive clothes, overpriced material goods, etc

Don’t get trapped in consumerism. Only buy things that have a proven utility and can add value to your life. There is no limit to the things you can buy and the price you can pay for them. Therefore, live below your means and focus on efficiency.

– In many cases having a salary is the main source of income, so the process of building wealth starts here. An important note is to not focus on how much other people are earning and to understand that building wealth should be a thing sought by everyone and can lead to a better society, benefiting the entire world because it leads to innovation while raising the standard of living overall. Don’t share your financial advice unless you are asked to and focus on the process and the things you should be doing, you have lots to learn and a long way to go. Don’t compare, it is pointless.

Don’t give in to greed, ego and manipulation, that is a weak man’s game and will only undermine your credibility and prevent you from achieving your goals. Status is a zero-end tribal game and does not lead anywhere. It’s not under your control and it is a waste of time. Social status is not a thing that should be sought because it is temporary and having the praise of others could sometimes work against you.

Also, it can be taken away from you in a blink of an eye. As a side note, try your best at being a good person and don’t lie to other people and especially yourself. Always try to add value to other people’s lives and be around them in times of need. Remember, if you help other people get what they want, you will get what you want, if not motivated by compassion this can lead to positive results from a ”selfish” viewpoint as well.

Always practice gratefulness and ask yourself is this really that important to me? You will find most of the time the answer is no. Be humble and content. Be the man philosophy wants you to be, and always think before you speak. Remember we have two ears and one mouth for a reason.

Budgeting(just an example):

– The rule goes like this: Always allocate 10-15% of what you are earning into an asset that yields the most efficient return based on the research you have done and your risk tolerance. You can add more but never less than 10%. Any abstraction from the rule is an excuse.

– Also, 5% goes into an emergency fund so you are not forced to sell your assets in case of an unfortunate event. Note that the emergency fund is a fixed value and should amount and cover at least 3 months of expenses. So, the emergency fund should amount to 3 monthly salaries. The 5% fund allocation stops when you have completed this target. Under no circumstances, the emergency fund should be touched to finance unaffordable vacations or other things. This plan is to be followed without making any excuse. If you can’t afford it, do not do it or buy it.

– So, now you are left with 80% of your income that you can spend however you like. That is the reward for following this plan. These numbers can be increased in time based on income and efficiency.

– This plan is effective immediately and all your previous “investments” are considered “cost of learning” and should not be looked upon as bad decisions or bad investments.

Shinmen Takezo

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  1. Brilliant article @ShinmenTakezo ! I share a lot of the values you mention above. It also reminds me of The Minimalists and Dave Ramsey. For the ones that don’t know them and resonate with @ShinmenTakezo ‘s article maybe you could check them out. I will be looking forward to your next article! I also like the style! GG

  2. Good article Shinmen, I resonate very much with following statement “Always try to add value to other people’s lives and be around them in times of need. Remember, if you help other people get what they want, you will get what you want, if not motivated by compassion this can lead to positive results from a ”selfish” viewpoint as well.” My wife is due to start a new job, which is the first step out of 3 to get to her dream job. Because she suffer from “imposter’s syndrome” right now, the only advice I could give her it was “when you get into the next job, give to receive”. What does this mean? Do your best to add as much value as you can for the organization and, besides the benefits you receive from a prosperous company, what you learn during this journey will stay with you forever.