Creating Wealth: 5 Lessons You Can Learn from the Wealthy to Create Wealth

Creating wealth is not just becoming rich. It’s about living life on your terms. Know how to create wealth by understanding the secret laws of the wealthy.
Creating Wealth: 5 Lessons You Can Learn from the Wealthy to Create Wealth

Do you want to be rich or wealthy? Yes, there’s a difference. This post is about how to create wealth and not just money. It’s about creating value that lets you live life on your terms. Takeaway the lessons of creating wealth that are put in use by the wealthy people. ~ Ed.



It’s a key element for a happy ending. It’s an important means for you to achieve your dreams.

But it’s also incredibly hard to earn. Plus, it disappears faster than it appears. And it enslaves you, snatching away your freedom and peace of mind.

You do want to earn well and lead a comfortable life. But you don’t want to chase money.

Well, you’ve seen people like that. They have money, but no freedom. They have the luxury, but never enjoy its spoils. Their lifestyles have become curses.

They are rich, not wealthy.

You earn a lot of money today. You enjoy it by spending on movies, eating outside, shopping and other experiences. After all, you only live once. It’s fun. For now.

But stop for a moment and think about this: what will you do when your responsibilities increase? Naturally, you’ll work harder. But until how long?

Do you want to end up like the elderly people who work hard even at that age just to make ends meet? Do you want to work like a slave till you die?

We use the terms rich and wealthy interchangeably, thinking both mean the same. But we couldn’t be further from the truth.

The rich have a lot of money. The wealthy have, along with money, the most important currency in the world – time.

Money is a piece of paper, a number in a system. It’s a subset of value. But wealth is value itself. It’s how long you can survive based on what you have.

What does it take to create wealth? Well, at school we learned many. But we never learned about this key aspect of life.

Never mind. We can learn from the wealthy. They don’t shy from sharing their philosophies with us. They lead by example and openly share what helped them amass money, and time. Warren Buffett, Charlie Munger, Sheryl Sandberg, Oprah, Paul Graham and the likes, are wealthy.

They want you to know that you can become wealthy too.


5 Lessons to Learn How to Create Wealth

Being wealthy doesn’t mean becoming a gazillionaire, owning expensive items and five swanky houses. It also means enjoying the freedom to live on your terms rather than slaving away for the rest of your life.

Here are five lessons of creating wealth that you can learn from them right away.

Shift Your Perspective

You might earn a lot of money today. But with your current lifestyle, will you have enough to enjoy freedom in the last thirty years of your life? Worse, what if you lose all your money tomorrow?

Wealth is more than money. It comprises of assets which yield good returns in the long run. Mutual funds, stocks, bonds 401(k)s, gold, rent and real and IPR estate are a few examples.


If you don’t find a way to make money while you sleep, you will work until you die, says Warren Buffett. Wealth is money which you make while you sleep or carry on with your life.

Change your perspective from making money to creating wealth. To make money, you must work hard. To create wealth, you must work smart.

Wealth demands patience, attention, and discipline in the long run. These traits won’t just benefit you financially but in every aspect of life.

Now comes the obvious question – “How should I create wealth?” Read on.

Don’t Invest ‘Spare Change’

Wealth grows with time to offer rewarding returns.

We know this. Then why do we struggle to create wealth? Why do most stories we hear in our circles revolve around failure?

Most people spend money first and invest what’s left. They invest spare change. Or, they invest to avoid taxes, in schemes which offer dismal returns.

Imagine this. You invest five percent of your earnings, which grows four-fold in five years. It’s now worth twenty percent of your earnings. But is twenty percent enough to let you exit the rat race?

Wealthy people follow the opposite route. They invest first and spend what’s left. They prioritize investing a disproportionate amount in carefully chosen schemes.

Warren Buffett formed a habit to spend just ten percent of his earnings and invest the rest. He still lives in the apartment he bought way back in 1958.

Yes, investing first means ‘making sacrifices’ (read, being responsible) in the short run. It means spending less on gadgets and holidays than your Facebook friends.

But it also means financial security in the long run. If you invest 60 percent of your earnings prudently in mutual funds and stocks, you can make 120 percent in six years (at a twelve percent CAGR). If you give up on your Netflix subscription, you can increase your 401(k) investment by $120 a year.

How will this potent habit help you?

The Law of Compounding

Albert Einstein called compound interest the eighth wonder of the world. This example by Darren Hardy explains why:

Imagine you get a penny which doubles itself every day for the next thirty-one days. In five days, the doubling penny is worth a mere sixteen cents. In ten days, it’s worth five dollars. And, in twenty days, it’s a little over five thousand dollars. But at the end of thirty-one days, the doubling penny is worth a whopping $10,737,000!

The law of compounding is why many wealthy people live exotic lifestyles. It’s not money that sustains them, but wealth which compounded over long periods of time.

Invest first, and place your faith in the law of compounding to build disproportionate wealth. You may not make a billion dollars. But with time, you definitely can make the scale tip in your favor.

Yes, it will take long. Depending on how much you invest, it could take up to twenty years. But your resilience will result in the mind-blowing rewards. Warren Buffett, currently worth billions of dollars, made 90 percent of his wealth after the age of fifty.

The next logical question is: Where should I invest so that I create wealth and don’t lose money?

Circle of Competence

Most people fail to create wealth – in fact, they lose money – because they invest in what they don’t understand.

Millions of people invest on ‘tips’ which promise to double their money within six months. No wonder Ponzi schemes continue being popular despite being infamous for over 100 years.

But it doesn’t mean you’ve got to fall prey also. Use Warren Buffett’s Circle of Competence to make better decisions for yourself, not just for wealth but life also.

It’s simple. Each of us has built useful knowledge about certain aspects through experience or study. Most people understand some aspects, while others need a specialty to evaluate.

When you decide to invest, just ask yourself two quick questions:

  1. Is this business model simple?
  2. Do I understand it?

Let’s consider a restaurant for example. You rent or buy space, spend money to renovate it and then hire employees to seat, serve, cook, and clean.

Then it’s a matter of getting patrons and setting the right prices to generate a profit. That basic knowledge, along with some understanding of accounting, would enable you to evaluate and invest in any number of restaurants. It’s not all that complicated.

Improve Your Potential

Chasing money helps in the short run. To earn more, you work harder in the same area, regardless of whether you enjoy it or not.

But what happens if you lose your money? If you’re laid off, you encounter unfortunate circumstances, or your profession becomes obsolete? Can you pull yourself through those tough days?

Earning money is extremely important, but so is improving your potential to earn. Examine your trajectory along with your current circumstances. A good trajectory may not increase your earnings instantly. But it will increase your earning potential significantly over time.

When you increase your potential, you develop the ability to create wealth. You can achieve financial security regardless of your life state. So invest in lifelong learning and sharpening of your skills.

Read, learn new skills, meet better people and try new experiences. And throughout, keep learning.

Summing Up

In Hindu mythology, Goddess Lakshmi signifies wealth. When you chase her, she stays aloof. But when you make yourself worthy, she approaches you. Goddess Lakshmi stays with entities which create value.

This is a common trait in all wealthy people. They don’t chase money, but value. They rely on systems which give them access to the most powerful currency – time. And they invest that time to create more value and in the process, create more wealth.

Wealth doesn’t mean making millions or billions in money and possessions. It means having ‘enough’ to do what you truly want.

Enough, experts explain, is when your wealth is worth fifty times your annual expenses. At that time, you’ve achieved financial freedom, and are en route to experience a happy life.

Imagine not thinking twice about what your family wants.

Imagine watching your wealth grow while you sleep.

And, imagine retiring early to see the sights around the world and live a peaceful life when your peers continue slogging their butts off.

Yes, it’s tough in the beginning. It requires discipline, persistence, and the resilience to break away from the herd. But the results, in the long run, outweigh the responsible ‘sacrifices’ you make in the short run.

Change your mindset. It’s never too late to begin. Start today. Shed your fears about not having money for emergencies. You need far less in emergencies than you imagine.

Also, when you create wealth, even the emergencies become less expensive because you have more.

I’ve implemented these lessons of creating wealth since the last five years. I’ve witnessed results remarkable enough to convince me of their potential. I’ll continue doing so for years to come. You can do the same.

Money is not evil. Nor is it the end goal. It’s the means to an end, which is a happy life. It’s a means to break away from the rat race and living life on your terms.

Living on your own terms – that’s the true definition of success.

Over to you –

What money lessons have you learned, and imbibe without fail? Do share them in the comments. I would love to hear from you.


Disclaimer: Though the views expressed are of the author’s own, this article has been checked for its authenticity of information and resource links provided for a better and deeper understanding of the subject matter. However, you're suggested to make your diligent research and consult subject experts to decide what is best for you. If you spot any factual errors, spelling, or grammatical mistakes in the article, please report at [email protected]. Thanks.

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  1. This is a great write-up. The wonder of compound interest cannot be over emphasized. I think it is amazing of how it works.

    Also, the issue of investing spare money only sums up why people are poor, and why others are not. Most poor people only invest what is left of whatever they’ve spent, most buy on impulse, others live to impress. The “financially rich” invest and spend the little left, this gives them more to spend later, and of course after investing.

    Note: I said financially rich above because I believe there are different types of wealth.

    And finally, our mindset just needs to improve as regards finance.

    Thanks for this!

    1. You’re so right Bisco. There are different types of wealth, and we need to change our mindsets about finance. If we can let money work for us instead of being controlled by it, we can earn other types of wealth too.

  2. Hey Vishal,

    It’s very true that if you want wealth, then you must attract it. What better way to do this than to become valuable yourself. This will give “money” the reason to approach you which relates to the Hindu mythology of the Goddess Lakshmi.

    Thanks Vishal for the share! Have a great weekend!

    1. Spot on Sherman. Investing in self is the best thing one can do to become truly wealthy.

      Glad you liked the post.

  3. Hi Vishal, Excellent points here that truly anyone can follow. You’re right, changing our attitudes towards money is so important. We think we need more to live on than we do. I liked the Warren Buffett point that we should invest first and then we can spend what’s left over instead of the reverse.

    When ever I worked for a company I would max out on the investment plans first and then my paycheck would be what was left over. That way I never missed the money.

    I also liked what you wrote about making money while you sleep. What could be easier than that, right?

    I hope many people take your excellent advice and increase their wealth, Vishal.

    1. Hi Carolyn.

      Thank you for this insightful comment and sharing your personal best-practices. The more we learn to max out investment plans first and spend what’s left, the better equipped we are to achieve stability later. But as you rightly said, it’s inversely applied since we look for instant gratification.

      Making money while sleeping is indeed one of the best things we can do for ourselves. And it’s not as difficult as people think. All it takes is a tiny shift in perspective.

  4. Hey Vishal,

    I have never had any thought of something to spare my wealth for the future but I agree with your point to shift the perspectives.

    People really need to understand the concept of handling the money. Investing in the right place is the key.

    Maybe I can save something.

    Thanks for enlightening this.
    Enjoy your day.

    1. Hi Ravi.

      For a peaceful life, don’t ‘maybe save’. Invest wisely, If you save money and put it in an FD, you’re actually losing money (the calculation is scary). So focus on making your money work for you. That’s the only way to ensure that your family can enjoy the freedom you wish for it.

  5. Hello Vishal,
    To be honest i think i fail miserably at every point you mentioned. I always spend more than i have, i never save and never done any investment. This post is a eye opener to me, you actually made valid points here. And, i think i should actually start managing my finances wisely and start focusing more on wealth rather than money. And, my fav part was that godess Laxmi one. ☺
    Thanks for this useful Post.

    1. Hi Harsh.

      We’ve all failed at these points because our parents rarely, if ever, talked to us about money and wealth. Not to worry. The wealthy share their wisdom freely, and make us aware of what we can do to achieve financial freedom. So all we have to do is emulate them. We have time on our side – a long life lies ahead 🙂

      I loved the part about Goddess Lakshmi the most too.


  6. True- money doesnt mean you are wealthy…. I got good advice from my granddad – not to rent – preferably – how to save – little by little – in short: the value of money – I learnt early. Interesting read:-)

    1. Thanks Eli. It’s great to hear that you learned a lot of good things from your granddad, this being one of the most important lessons to imbibe in life.

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