As I am on my personal journey to pass millionaire status into billion status, I find that it’s very smart to lean on the expertise of people who share a similar background as I do, but who are where I want to be. One of those persons, for me, is Jamaican-Canadian billionaire and philanthropist, Michael Lee-Chin. He often talks about the 5 principles for wealth creation of how to become a billionaire. These are the same 5 principles I have adapted and modeled over the years that have helped me tremendously. I want to share them with you because you already know that we are on this wealth journey together.
So what are these 5 principles of wealth creation? Alright, let’s get into it.
According to Michael Lee-Chin, one of the best ways to create wealth is to own a few high-quality businesses. Wealthy people own businesses. News flash, your 9-5 alone will not make you wealthy. It’s important however to look for business ventures that have a proven track record of success and are likely to continue growing in the future. You can also opt to invest in high-quality businesses, which means investing in companies that have strong management teams, a competitive advantage, and a long-term growth strategy.
Another important principle of wealth creation is understanding what you own. It’s not only important to own a business, you have to know what you own. Any business that you are considering to start or invest in must first be properly researched. Doing your due diligence is key. Understanding what you own also means staying informed about the business, its industry, and the overall economy. This is the only way you will be able to navigate the business and figure out quickly what’s working and what’s not working, so you can stay on top of the strategies you implement. This principle will keep you focused on the path to success.
Michael Lee-Chin also believes in investing in strong long-term growth industries. In other words, evaluate the type of industry you are interested in doing business in. Tap into industries that are likely to continue growing over the long term, regardless of economic conditions. Examples of strong long-term growth industries include healthcare, technology, renewable energy, and real estate.
This next principle is one of my personal favorites, using other people’s money prudently. This means using debt and leverage to invest in high-quality businesses that are likely to generate strong returns. The key word here though is prudent. You have to carefully leverage other people’s money so that you can achieve the desired results expected. It is also important not to take on too much debt in doing this, as it can lead to financial problems later on. Good debt can easily turn into bad debt if not managed properly. Once you’ve exercised the previous principles mentioned, using other people’s money to invest is best.
Finally, Michael Lee-Chin believes in holding on to your business for the long term. Remember we are building generational wealth. The kind of wealth that will last. Invest in businesses that have the potential to generate strong returns over a long period of time. Holding on to your business for the long term means not getting distracted by short-term fluctuations in the market and instead focusing on the long-term potential of your investments.
If you want to create wealth for the long term, owning high-quality businesses, understanding what you own, investing in strong long-term growth industries, using other people’s money prudently, and holding on to your business for the long term, are all effective strategies for achieving financial success. By following these principles, you can create wealth and achieve your financial goals over the long term.
Does this article resonate with you? Do you practice any of these principles? I want to hear from you. Leave me a comment and let me know your thoughts.
