So as a Financial Adviser I never thought I would be putting out information about how to get rich quick because….it’s not what I do. Ordinarily, if you come to me for advice I am going to give you a plan which incorporates tried and tested, risk adjusted strategies which have been proven to make you wealthy slowly. But today, we are venturing a little out of our comfort zone.
Getting rich quick is not easy, and it’s definitely not likely, but some lucky people do manage to achieve success. In fact, there are over 2,600 billionaires in the world and roughly 55% of them are self-made. So today I want to run you through what I see are the key strategies to getting rich quickly.
Now bear in mind, I am NOT recommending you attempt any of these strategies. All of these strategies are either highly risky or very hard to achieve so my advice as always is to focus on the fundamentals of wealth. If you want to throw a few more colourful strategies around the core of your financial plan then do so with limited exposure.
So without any further ado, let’s jump in.
Private equity
One way to achieve impressive wealth quickly is to get involved with a rapidly expanding business. Simply being an employee of the expanding business is not going to be enough to do it. You need to have a piece of the pie.
If you can invest in a private company, which is on it’s way to becoming a publicly listed company, there is potential for a massive gain. You see, due to investment barriers and liquidity issues, private companies tend not to trade on the same valuations as a publicly listed company. So by buying into such a company whilst it is still private, there is the potential for a massive spike in the value of your shareholding when/if the company lists.
Or, even if the company doesn’t list, a private company which is rapidly expanding will likely be a takeover target for a larger company (likely an already listed company). The takeover bid is normally set at a very healthy premium to the current valuation of the company which equals a fat pay cheque for you.
The downside of private equity is that it is very hard to come across a good company and invest prior to their initial public offering or takeover. Generally, you have to either work for the company or know someone in the inner circle to get access to this kind of investment.
There are some private equity funds out there which will allow you to invest in a pool of private assets but its’s unlikely this secondhand exposure will get you filthy rich quickly. You really need to be on the front line, making the investment yourself prior to the company outsourcing a capital raising from a private equity fund manager.
But if you do manage to come across an opportunity for private equity, and your due diligence tells you it’s a good company, then an offer to buy into the business should be taken seriously as it could potentially lead you on your way to quick financial success.
Highly speculative investments
When it comes to investing, there are many different levels of risk you can take in your investments. My preference is to take a diversified approach to investing in solid companies with good earnings. But unfortunately, that is not going to get you rich quick.
If you want to get rich quick from your investments you need to ramp up the risk settings and go highly speculative. I’m talking about investing in companies with a very small market cap and probably no current earnings. You need to find the weed that turns into a rose.
Now there are plenty of small companies that you can buy direct on the Australian Securities Exchange (ASX). In fact, there are over 1,200 companies listed on the ASX with a market cap of less than $100 million. The hard part is picking a winner.
Most of these companies will fail and you will likely lose a good portion, if not all, of your capital. But every now and then you come across an Afterpay (APT).
APT listed on the 4th May 2016 for $1 per share. At the time the company had a market cap of $125 million. So, if you put $10,000 into the initial public offering (IPO) you would have received 10,000 shares.
Those same shares that were trading at $1 per share are now worth approximately $97. You turned your initial $10,000 investment into close to $1 million dollars ($970,000 to be more exact) in a space of less than 5 years.
If you done the same with CSL, and invested $10,000 into their IPO back in 1994, then that $10,000 today would be worth approximately $4 million and, to top it off, you would be getting yearly dividends as a little bonus.
Don’t take this the wrong way, this is not me telling you to invest in APT or CSL, this is just two examples of how getting in early on a listed company can equal big rewards. You would also have to have some serious gonads to hold your stock for that extended period of time and not take profits.
Just be very weary that a highly speculative small company is more likely to lose your money than turn it into riches. There is an element of luck involved here and personally I don’t play in this space because, as I said before, my preference is to invest in good businesses with good earnings that are likely to grow over time.
Become a household name
Building your personal name and identity into one that is recognised by millions of people, like a “Kim Kardashian”, is your personal ticket to print money.
Again, this is very difficult to do and you normally need a highly sought after career to help you reach that kind of fame. For example, movie stars, sportsmen, singers, etc. all these professions have a platform which can create fame.
Once you have a large public following, the money comes easy. You become a marketing tool for big companies and they will pay you millions of dollars to support their product or service. All you need to do is be an ambassador for their brand and viola, in rolls the cash.
Remaining relevant in the publics eye is another thing. I am sure if you just pushed rubbish all day every day to make a quick buck then you would lose the admiration of the people that follow you. But if you are smart about it, and only support products and services that you truly believe in, then it is a really easy way to earn lots of money fast.
Or you could also use your fame to promote your own product or service. Have a look at Connor McGregor, shortly after he finished his UFC career he started his own whiskey company which has reportedly done over $1 billion dollars in sales.
Now very few people will get to this level of fame and subsequently be in a position to use their fame to generate sales, but if you do mange to do it then you will get rich quick.
Invent something
Finally, the last way to get rich quick is to invent something – be the next Bill Gates or Steve Jobs.
When it comes to inventing something, you need an idea which is going to be useful to people and fill a gap in their lives. This is much easier said than done. If you manage to come up with the idea, then translating that idea into riches is relatively simple.
To monetise the idea you need to turn that idea into a business. You can do this yourself, and start building out a team which will work with you to get your good or service into the hands of the consumer, or you can sell the idea.
Turning the idea into a business, has the potential to make you more money but will take longer and comes with execution risk. However, if you can start earning a profit from your invention then you could later sell a business rather than an idea which is going to be much more valuable.
Final thoughts
As you can see, all of these strategies to get rich quick are either very difficult or there is an element of luck involved. That is why I will continue to promote the get rich slow schemes. However, it is nice to dream and you should never close yourself off to possibilities in life, no matter how remote your chances may be.
