Whatever money you make, you better reinvest it right back in yourself.

Growing up, I wasn’t poor — I was a mostly-white kid in a fairly affluent neighborhood. Billions of people had it harder than me!

Still, I saw firsthand was financial insecurity was. My dad’s construction business tanked during the economic collapse in 2006, and our family went bankrupt. We lost the cars, got kicked out of our house, and owed tens of thousands of dollars in unpaid taxes. My dad had to leave the country to find work. I had to ask my friend if I could sleep on his couch for the last 2 weeks of high school because we were moving very far away.

I’ve since made money a high priority in my life. I never want to experience that kind of financial disaster again, and never want my family to, either. So I’ve spent thousands of dollars and untold hours on courses, coaching, books, and learning about money.

And the truth is, rich people acquire assets — things that make them money over time — while poor people just get liabilities, junk that won’t make them any money.

The more junk you buy, the less freedom you’ll have. As Neil Patel once wrote, “It’s absurd that we would prioritize the hottest new device, the cool car, or trendy toy over owning that which makes us feel the most engaged and most alive.”

Rich people don’t play by the same set of rules as everyone else. I’ve been trying to model this behavior for years. I have a whole chapter in my book about acting differently than everyone else, because “everyone else” is usually some form of broke, unhappy, or stuck in an empty life.

Rich people read things, do things, say things, avoid things, and spend their money on things very differently than everyone else. Rich people are usually far more financially literate than their poor counterparts; they understand money, and how to make money work for them.

Rich people buy luxuries from the money their money made them; poor people buy luxuries from the sweat of their brow and hard labor.

If you want to be rich, start spending your money on assets — things that make you money over time.

The Best Assets You Can Buy For Cheap

Here are some of my favorite assets that have paid me enormous dividends:

• Online courses/classes in your field
• Personal coaching (fitness, financial, therapeutic, spiritual, etc.)
• Books in your field
• Healthy food
• Better sleeping “equipment” (basically, anything that helps you sleep deeper and longer)

The Worst Liabilities to Avoid

Here are some of the silliest things to spend your hard-earned cash on:

• Unnecessary tech gadgets (honestly, no one needs an Apple watch)
• A flashy car that mainly makes you “look good”
• Image-based vanity (flashy clothes and accessories)

Look, spend your money on what you want. Lots of tech things are awesome (except Apple watches, Apple’s silliest and most unnecessary product ever), and if you’re rich it’s great to have all these things.

But you should buy these liabilities with money you’ve made from your money, not your actual money yourself.

That might be a little confusing, so let me explain:

Make Your Money Work For You.

“Savings without a mission is garbage. Your money needs to work for you, not lie around you.” -Dave Ramsey

Most people will only ever work for money. They don’t know how to make money work for them.

In the great parable The Richest Man in Babylon, George S. Clason explains that every “gold coin” (or dollar) is like a worker. That worker has the ability to magically produce more workers, if you know how. One worker/dollar could potentially develop hundreds of more “workers” for you.

Basically, every dollar is like a little seed that can grow and sprout more dollars. This is the essence of having “money work for you.”

This picture really struck me. That meant for every fast food meal I bought, I was giving away 4 or 5 little “workers” that could never make money for me again. Same for buying coffee and other doodads.

Furthermore, even if I put my money “safe in the bank,” I was actually wasting my money’s potential. Ramit Sethi wisely points out in I Will Teach You To Be Rich:

“Because of inflation, you’re actually losing money every day your money is sitting in a bank account.”

What! That was a shocker. Prices were increasing by 2% each year but my job was only giving me a 1% raise each year? I’m losing money!

Every dollar I wasn’t “planting” was a waste of a seed that might eventually blossom into a massive money tree. Why would I throw away my seeds?

I became reluctant to throw away my seeds and instead learn how to plant them to reap the benefits.

This is the entire premise of passive income and investing. Most people will never know the glee of waking up in the morning to discover they’ve made hundreds or thousands of dollars from passive income while they were sleeping.

In this sense, the man who earns $2,000/month entirely from passive income is more enviable than the man who makes $10,000/month in job income.

The first man still has all his time left to build more passive income. The second man, while earning more job income, must spend most of his days working for it. He is limited by the physical boundaries of his energy and by time itself. When he stops working, the money stops coming in.

Said Robert Kiyosaki:

“The rich get richer by continually reinvesting asset profits back into assets.”

Most people don’t know how to make money work for them. But if you want to build massive wealth, you need to plant your dollars.

**(For those who are confused about what “passive income” is, here are some examples: capital gains, dividends, residual income from business, affiliate links, rental income from real estate, intellectual property, and royalties. I’d recommend checking out Pat Flynn at Smart Passive Income for more).

Rich People Are Rich Largely Because They’re More Literate in More Areas than Others

In the United States, and the world, there is strong systemic oppression against many people groups, mostly minorities, that makes progress incredibly harder for some to succeed than others.

It’s not fair. It’s a broken system that needs to be fixed, something we all must play a part in.

But in the meantime, you can’t sit still and wait for things to become fair and equal. You need to keep investing in yourself, learning and growing and becoming more literate in more and more areas.

In America, it’s not that hard for someone to make $10 a day.

It’s more difficult to make $100 a day.

But it’s really difficult to make $1,000 a day.

Each tier requires upgraded knowledge. What got you here won’t get you there, as they say. If you want more, you must become more. The fastest way to become more is to master new areas.

“Every new skill you acquire doubles the odds of your success,” wrote Scott Adams, best-selling author. If you want a 3% raise at your job, you might be able to get it. But if you want a 300% raise, you’re going to have to retool your entire mindset altogether.

There’s a lot you don’t know.

But there’s far more that you don’t even know you don’t know.

That’s where the riches lie, waiting for you to discover them.

The way to increase your knowledge is to read more, learn more about other areas. Rich people are rich largely because they see things we don’t, and understand the system in ways most people don’t.

So while we’re all fighting for an equal system where everyone gets a fair shake, we must learn on our own in the meantime. The more you know, the more mastery you’ve have, and the more you’ll learn what you don’t know.

That’s where the riches lie in wait.

In Conclusion

“You can’t build a castle if all you have is carpenters.” -Samurai Champloo

You can’t build up a million dollars if you only know how to make $100 a day. You need more — more skills and more knowledge to build something bigger.

Ever since I started investing in myself and buying assets with my money, my income has never been higher.

Last month, I made more money than I’ve ever made in a single month. I’m learning new skills — advertising, sales, web design, relationship-building with key influencers — and reinvesting as of my money as I can in these areas. As a result, I’m seeing growth rates that are higher than ever.

You better reinvest as much of your money as you can into yourself. It’s like planting a money tree — just keep watering it. As much as you can.

Buy things that makes your money grow.

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