be an investor, not a borrower

be an investor, not a borrower

If you want to become wealthy and reach the top, you must take either one or both of these elevators: stocks (I recommend mutual funds, not single stocks!) and real estate. These two asset classes are the elevators that’ll take you up. Along with that, you need to make sure that you don’t get tempted to get in the elevator that’ll take you down, namely, debt (especially the bad and costly kind). The only exception is mortgage — you can take one out to buy a home if you like, but you must have a solid and aggressive plan to pay it off as soon as possible. 

As you learn more about finances, you’ll start to realize that the money game is quite simple and straightforward. The system is designed in such a way that if you don’t own one of these assets — stocks or real estate — you’re not moving “up” and building wealth. This is how the rich get richer over time.  

On the flip side, when you accrue debt via high-interest credit cards, student loans, payday loans, or borrow money to buy or invest in things that go down in value over time, you take the “bad” elevator that takes you down. This is how people become broke and desperate. 
At the end of the day, you are in charge of your finances and which elevator you choose to ride in. But if there’s one thing you must always keep in mind, it’s this: Smart investors get rich, and ignorant borrowers stay poor.

PS: If you enjoyed this essay, I encourage you to read or listen to my book Daily Wealth (The Daily Learner, Book 1). This short book is an attempt to distill the life-changing ideas from the best books on finances, money management, and investing in clear and concise daily meditations. I can confidently say that your money game will reach a new higher level in record time if you put the principles mentioned in this book into practice.  

You can order Daily Wealth here: