“Need to save a fortune before you can invest?” If you think so, you couldn't be more wrong! The truth is: you don't need your own money at all! Sound unbelievable? How can you buy assets without money? Today, we're going to reveal the wealth code of the rich, which will definitely subvert your understanding.
Think about how much you learned about investing and wealth management in school? For most people, it's probably a blank slate. Even graduates from prestigious universities can fall into financial trouble because they don't understand wealth management. Robert Kiyosaki pointed out in "Rich Dad Poor Dad" that school education is almost completely lacking in the area of money.
Why is this? Because the original design of schools was not to cultivate entrepreneurs and investors, but to supply qualified labor to an industrialized society. The goal of the education system is to make you an excellent employee, not a shrewd investor. So, don't expect school to teach you how to get rich through financial management and investment; it will only make you a more stable "cog" in the machine.
The First Lesson of Rich People Getting Rich: Borrowing Eggs to Hatch Chickens
The one thing the rich understand best is how to "make money without money." They don't invest with their own money, but cleverly use other people's funds to create wealth for themselves. The most core secret weapon is OPM (Other People's Money)!
For example, real estate tycoon Trump, when building his real estate empire, didn't use much of his own money, but completed most of his projects through bank loans, financing, and partners' funds. In other words, even if you have limited funds now, as long as you have good investment opportunities and can obtain funds from others, you can start your investment journey!
Trump Tower: A Textbook Case of Leveraging Other People's Money
Trump Tower, the landmark building on Fifth Avenue in New York, is a classic case of Trump accumulating huge wealth using OPM.
At that time, Trump saw a prime piece of land on Fifth Avenue in New York and wanted to build a skyscraper here to symbolize his brand. But he didn't have enough money in hand to develop this project, and even lacked experience in developing such a large-scale project.
But he was not someone who would settle for the status quo, believing that this was a once-in-a-lifetime opportunity. As long as he could get the money, everything would be fine!
- Lock in the purchase right and buy time: Trump first locked in the contract with very little money through negotiations, obtained the purchase right for the land, and delayed the transfer time until he obtained a bank loan before completing the transaction. In this way, a large amount of capital investment was avoided in the early stage.
- Negotiate with multiple parties to secure bank loans: In order to obtain huge loans, Trump established contacts with multiple banks, demonstrated the value of the land, and emphasized its potential as collateral for loans.
- Phase loans to reduce bank risk: Trump did not ask the bank to issue huge loans at one time, but divided the project into different stages, and the bank provided loans in batches at each stage, reducing the bank's risk.
- Settle expenses later and transfer risk: Trump negotiated with the building contractors and suppliers, letting them start work first, and all expenses would be settled after the project was completed.
- Take advantage of the city's revitalization plan: Seize the opportunity of the New York City government's urban revitalization plan, persuade the government to grant tax reduction policies, further reduce capital investment and operating costs, and increase the project's profit margin.
- Brand effect to increase confidence: Trump constantly emphasized that this was not just a real estate project, but a symbol of a global brand, persuading the bank to believe that he could succeed.
- Dad's guarantee to enhance strength: His father, Fred Trump, as a real estate developer in New York, provided a guarantee for the project, enhancing the bank's confidence.
Eventually, the bank was persuaded by Trump and supported his project. In 1983, the 58-story skyscraper was completed and became a landmark in New York City. It attracted high-end brands such as Gucci to settle in and became a symbol of residence and shopping for the wealthy class.
Trump Tower not only brought huge economic benefits and fame to Trump, but also laid the foundation for him to become a New York real estate tycoon, paving the way for his future business expansion. And all of this, he didn't spend much of his own money!
The Essence of OPM: Good Projects + Financing Ability
Through Trump's case, we can see that the key to building wealth is not how much money you have, but whether you know how to use other people's money. Find high-quality investment projects and convert these funds into long-term income.
Of course, we don't have to think about doing such a big project at the beginning. You can start small. For example, you found a house worth $400,000, but you don't have enough money to pay the down payment. You can look for partners, investors, or solve the funding problem through private loans, seller loans, and other methods.
The key is that you must be able to clearly present this as a highly potential investment opportunity and provide a reasonable return plan, so that you can attract investors.
What kind of project is considered a "good investment opportunity"? Simply put, it is a project that can bring sufficient returns and the risks are within your controllable range.
| Indicator | Importance |
|---|---|
| Return | The return should be much higher than the cost of investment, covering project costs, capital return costs, and profit margins. |
| Risk Control | Reserve enough buffer to deal with possible cost errors. |
Remember, investing is a numbers game, and the accounts between revenue and cost must be carefully calculated!
Opportunities Are Always There, It Depends on Whether You Can Seize Them
The rich understand that as long as the project is good enough, funds will naturally chase after it. There are trillions of dollars flowing in the market, and the key is whether you have a way to get a part of it for your own use. The stock market, bond market, real estate market... capital markets are all chasing good investment opportunities.
You don't need to have money, but you need to find opportunities, because money will find opportunities itself. As long as you can provide a return for other people's money, you can attract other people's funds, start your investment journey, and continuously accumulate wealth, and ultimately achieve financial freedom!
So, stop being bound by the traditional concept of "you can't invest without money." Start learning the rich's financial thinking now, use OPM, and start your wealth growth path!