What then, are the best ways to maximize wealth?
- Preparation: In every field, in industry or academia, preparation is what separates the masters from the journeyman. You must choose a general area of interest, and then educate yourself - through studies and practical experience - so that when an opportunity presents itself - you are ready to capitalize on it. If you are interested in real-estate foreclosures, then you must read all about it, study your local area, find a mentor, and try your hand at a few cases. All the while, you must be learning every trick of the trade, and building your skills to the point where you can successfully turn around a property with a profit. The same holds true for any form of wealth building skill - starting a resume writing business, real-estate rentals, currency trading, subscription sites and so forth.
- High Velocity of Money: Most of the areas of serious wealth building require some amount of investment of your money. A real-estate foreclosure may require you to put up a few thousand dollars of your own cash, before the bank lends you the rest. It is best to learn to turn that property around quickly, such that your initial investment returns to you as soon as possible. This way the money is available for your next venture. This is called having a high velocity of money. Alternatively, if you put up say $40,000 down-payment on a house that you rent out at $1000 per month, of which you net only $200/month after mortgages and maintenance - you are looking at a long wait time before you recover your original $40,000 (over 16 years). This is not a smart way to maximize your wealth, though it could be a good income generating technique.
- Letting Profits Run: The trend is your friend is a well-known stock market adage, and this is true in most businesses. When you have found a good opportunity and the market is aligning with your point of view, it is best to let the story play itself out. Sure, you don't want to fall in love with your investment - you simply wish to make money; but the best profits fall to those who are able to hold on to the investment through ups and downs until the upside is exhausted. Getting out within 20% of the top is an achievable goal.
- Sticking with What Works Best: Seems obvious, but the human psyche is quite devious.
If you follow the above four simple principles for maximizing wealth, you will find your net-worth and income soaring quite rapidly. At each stage, seek to maximize the service you are providing to the world - and the world will return exactly what you offer.