You should model your investment approach after Elon Musk, the businessman, but not Elon Musk the crypto commentator.
Elon Musk, the businessman, has built a fortune through founding and running companies that anticipated up-and-coming trends: first with digital wallet and money transfer company PayPal and then with electrical vehicle company Tesla.
Through cash-flowing businesses like PayPal and Tesla that have appreciated over time due to their intrinsic value (providing a practical, real-world product or service), Elon Musk has built an empire that has put him at the top or near the top of the wealthiest people in the world every year.
Model your investment approach after Musk’s business prowess in pursuing cash-flowing enterprises that appreciate over time.
Don’t model your investment approach after his crypto advice, where he seems to be playing less advocate and more puppet master.
Crypto investors like meme stock investors have a penchant for risk and will latch onto anything and everything if there’s buzz on social media. Elon Musk is very well aware of this and seems to be playing with the crypto markets just because he can.
With simple tweets or comments in online or cable interviews, Musk is able to move crypto prices unlike anyone else.
The cost of bitcoin, dogecoin, or any other cryptocurrency Musk sees fit to mess with can rise and fall by double-digit percentages in a matter of just a day.
What is different from a crypto or meme stock investment that is different from something like PayPal or Tesla?
For one, crypto has no intrinsic value. No cryptocurrency, including the most popular of these – bitcoin – is widely accepted anywhere as a medium of transfer. Crypto does not cash flow, and it’s not tangible.
The wealthiest investors don’t speculate.
That’s why none of the top 50 wealthiest people in the world are listed as stock or crypto speculators. All of them, without fail, are involved in cash-flowing assets that appreciate over time, like real estate and various businesses.
Here’s how you can model the wealthiest:
It all starts with the mindset. The investment mindset of the wealthiest is vastly different from the average retail investor. That mindset translates to the assets they favor, which are also in contrast to what retail investors pursue.
- Eliminate the news. The wealthiest ignore all the buzz and noise going around on the cable news, the internet, and social media about hot investments. They ignore the news and look at the numbers, data, metrics, and trends that never lie.
- Lose the lottery ticket mindset. The wealthiest don’t speculate. They stick to tried and true assets and will venture into new segments if the data and trends support branching out.
- Focus on Generation Wealth. The wealthiest are investing with an eye beyond their own lifetimes. They are looking to leave a legacy that will last for generations. That’s why they avoid shiny investments with no guarantee of sticking around. The wealthiest gravitate towards real assets and income-producing businesses with sticking power.
- Partner with experts. The wealthiest have as one of their overriding investment objectives to generate multiple streams of income. They know that there is not enough time in the day to create multiple streams of income – especially diversified streams that span multiple asset classes, segments, and geographic locations – that build wealth 24-7. That’s why the wealthiest will invest passively by partnering with experts and leveraging their expertise in their respective fields and geographic markets to accomplish their goals.
- Try new boundaries. The wealthiest aren’t afraid to branch out. They aren’t willing to follow the herd, which historically has never fared well when hard times hit. They are contrarian investors who think two steps ahead of everyone else. They invest in planning for recessions. What are assets that are recession and inflation-proof? Those are the types of questions the wealthiest ask themselves, and that’s why they are regularly led back to real assets and productive businesses for their portfolio allocations.
Investments: A Summary
- Invest in real companies. Invest in companies whose value is tied to something they produce or the service they offer. Don’t invest in worthless or unprofitable companies or assets just because everyone else is doing it.
- Invest in real assets. Real assets are immune from herd mentality. The herd can’t move the needle on the prices of real assets like they can on stock prices because real assets are illiquid. They can’t be bought and sold with the click of a phone screen like with stocks. Besides being shielded from market volatility, real assets also appreciate over time.
- Start side ventures and new ventures. Break from the crowd and take a chance on something the rest of the investing public is ignoring. Creating multiple streams of income will be the surest route to displacing your current labor-based income. Only when your passive income sources meet your current expenses can you walk away from your day job.
- Invest for cash flow. Cash flow is necessary for compounding wealth through reinvestment in current and additional assets. It’s through this compounding power that generational wealth is created and maintained.
To be wealthy, model your investment strategy after the most affluent of investors by changing your mindset and reallocating your basket of investment assets.