Simple Formula For Building WEALTH

I recently read Scott Galloway's best-selling book, The Algebra of Wealth. This book has a simple formula for building wealth, which is focus plus stoicism times diversification times time. Now, here's the thing. Three of those things are multiplied together. So, if any single one is zero, your wealth is zero. It doesn't matter how hard you work. Doesn't matter how much you earn. And after reading the book, I realized most of us have at least one zero in our formula and don't even know it. So, let me show you how to fix that and share with you the rules wealthy people follow. Rule one, learn how the money game works. Rich people have plenty of cash, but they almost never spend it. Instead, they borrow. And once you see how it works, you'll understand why. Say you have $10 million in stocks. Should the government tax that? Most people would say no, because you haven't sold it. It's not real money yet. The market could crash tomorrow and it's gone. Okay, fair enough. We can't tax it because it hasn't been sold yet. But then you want to buy a $2 million house. So, you go to a bank and say, "Lend me the money and here's my $10 million in stock as a guarantee. " And the bank says, "Sure, here's your loan. " So, wait a second. You can use your stocks as money when you're borrowing, but it's not money when it's time to pay taxes? Exactly. That's the game. The loan isn't taxable. It's debt, not income. This [snorts] is how the wealthy play the game. Instead of selling their assets and paying taxes, they borrow against them. The assets keep growing, they get the cash they need, and the taxman gets nothing. Now, think about you. You earn a salary. The taxman takes his share before the money even hits your account. You don't get a say in it. Income is for workers. Debt against assets is for owners. You can't do this with small assets, but now you know how the game is played. Build the assets first and then you can play the same game. Rule two, use your biggest weapon. You might be poor in terms of money, but you are rich in one of the most important currencies, time. Say your friend starts investing at 20. At 30, he stops completely. You start at 30 with the same amount, but you invest until you are 60. So, you invest three times longer and three times more money. You still end up with less money than your friend. Not because he was smarter, simply because he started earlier. Money invested early compounds. Skills built early compound. Everything compounds when you have time. The only thing that doesn't is waiting. Rule three, pick the wave, not the surfboard. You can be the hardest working person in a dying industry and lose. You can be average in a growing industry and still win. A mediocre employee who joined tech in 2010 built more wealth than a brilliant employee who joined a newspaper the same year. Same effort, same hours, different waves. One industry was exploding, the other was dying. It didn't matter how hard the journalist worked then. So, ask yourself, what industry are you in? Is that wave rising or falling? If you're on the wrong wave, no amount of paddling will save you. Pick the wave first, then worry about the surfboard. Rule four, don't follow your passion. You've heard this a thousand times, follow your passion. Do what you love and you'll never work a day in your life. Here's what they don't tell you. That advice usually comes from people who got rich doing something boring. Software, logistics, finance. Then they romanticize it afterward. Most people under 26 don't even know what their passion is. Instead, follow your talent. Talent is what you do easily that others find hard. Master it. Get paid well. Then enjoy your passions on weekends. Steve Jobs loved calligraphy and meditation. But he didn't start a calligraphy business. He went into computers. He followed his talent, not his passion. When you put your focus into your talent, you'll become a master of it. That's when you'll find your passion. Get the order right. Rule five. Focus your time, diversify your money. Your time should be focused. Pick one thing. Go deep. Specialize. On the other hand, your money should be

diversified. Put it in different assets. Never bet everything on a single investment. One bad bet shouldn't wipe you out. But here's the problem. Most people do the exact opposite. They scatter their time and focus across the job, a side hustle, a YouTube channel, a crypto project, and a drop shipping store. Five things, none done well. Then they take all their money and put it in one stock. Time scattered, money concentrated. That's the recipe for staying broke. Flip it. Focus your time on one thing until you're world-class. Diversify your money across assets so no single failure destroys you. That's the recipe for wealth. Rule six. Don't day trade. Slot machines have better odds than your trading app. That's not a joke. Almost everyone who day trades loses money over time. You've probably tried it yourself. Made some trades, maybe even won a bit. That little win is the trap. That's how gambling works. One in four people who day trade have gambling problems and most don't even know it. Professional traders have Bloomberg terminals, expert teams, and math PhDs running algorithms. Their entire job is to take money from people like you. That's who you're up against. If you're doing it, stop. Put that money in index funds. Forget it exists for 20 years. Your future self will thank you. Rule seven. Forget work-life balance. You're grinding. No vacations, no balance. Your friends are partying while you're working on weekends. Good. Work-life balance in your 20s is a fantasy. Chase it and you'll be mediocre at both work and life. Forget balance. Figure out which phase you're in. In your 20s and 30s, you're building. Work dominates. You're paying rent on future freedom. You lay the foundation now. In your 40s and 50s, you're harvesting. You slow down. You enjoy what you built. The foundation pays you back. Most overnight successes took 15 to 20 years of invisible grinding. You just didn't see the building phase. Here's the trade-off. The people with balance at 25 won't have options at 45. The people who grind at 25 get to choose at 45. It's okay to be unbalanced right now. It's temporary. It's strategic. Rule eight, build when times are hard. When the economy crashes and everyone panics, that's the best time to build wealth. Microsoft and Apple were founded during the 1975 recession. Airbnb, Uber, Slack, WhatsApp, all founded right after 2008. Hard times give you two advantages. First, assets go on sale. Stocks, real estate, everything is discounted. The people who buy during fear become rich during recovery. Second, you're forced to grow. No easy money, no shortcuts. Everyone waits for the right time to invest, to build, to take risks. The right time is when everyone else is running away. Easy times make you soft. Hard times make you sharp. If things are hard right now, don't wait for it to get easier. By the time it does, everyone else will be back. The window will be closed. Rule nine, treat your 20s like a workshop. Your 20s are supposed to be messy. Different jobs, different approaches, different failures. You're not supposed to have it figured out. You're supposed to be collecting data on what works for you. Think of it like this. Your 20s are the workshop. Experiment, try things, break things, learn what fits. Your 30s are for mastery. Pick your thing, get genuinely good at it. Your 40s and 50s are for harvesting. Reap what you built. The problem is we compare ourselves to people at different phases. You see a successful 40-year-old and feel behind. But you're not comparing fairly. They've had 20 more years in the game. It's okay to not have it figured out. You're in workshop mode. Just don't stay there forever. Rule 10, know when to Never give up. That's what they tell you. But all successful people have quit something. The skill isn't refusing to quit, it's knowing when to walk away. You picked a career. You've been at it for years. It's not working. But you've invested so much time. So you stay. Or you started a business. It's barely surviving, but quitting feels like admitting you were wrong.

So you stay. The person who made that decision had less information than you have now. Circumstances change. Markets change. You change. The author had a company that failed slowly over 10 years. Kept hoping. Kept investing. Lost 70% of his net worth. Another company failed in 6 months. He saw it wasn't working. Shut it down. Moved on. Same person. Different decisions. Very different outcomes. When something fails fast, you move on. When it fails slowly, it drains you for years. Don't quit because it's hard. It's supposed to be hard. But don't waste years on something that's not working. A step back from the wrong path is a step forward. Rule 11. Stop doing everything yourself. Every hour you spend on a $15 task is an hour stolen from a $500 opportunity. Before every task, ask yourself, could someone else do this as well or better than me? If yes, do some simple math. What would it cost to pay someone? And what could you earn with that freed up time? If the second number is more than the first, delegate. Every time. Say your time is worth $50 an hour. You hire someone for $15 an hour to do a task you hate. You just made $35 an hour by not doing it yourself. Most people think they can't afford to hire. But the truth is, you can't afford to keep doing everything yourself. And delegation isn't just hiring employees. It's the kid down the street mowing your lawn, a virtual assistant handling your emails, software automating your bookkeeping, paying for grocery delivery so you get 2 hours back. This week, find one task someone else could do. Delegate it. Buy back your time. Rule 12, get to a city, go to the office. Everyone's selling you the dream. Work from Bali, laptop on the beach, freedom. But the best jobs are in cities. The biggest opportunities people who can change your career are in cities. But living in a city isn't enough. You have to show up in person. 40% of executives believe remote employees are less likely to be promoted. You could deliver the same work as the guy in the office. Same quality, same hours, and watch him get promoted while you stay stuck. He's in the room when it matters. Your face in a Zoom square. Out of sight, out of mind, out of a job. Your coworkers grab lunch with the boss. You're not there. They build trust, you don't. A project opens up, they get it, you don't even hear about it. If you're early in your career, remote work isn't freedom. It's a trap that looks like a perk. Get to a city, get to the office. Rule 13, set goals you'll actually hit. You decide to save $500 a month. The first few weeks go well. Then something comes up. You miss the target. You feel behind, and instead of adjusting, you stop saving altogether. Big savings goals feel inspiring, but falling short feels terrible. That shame usually makes things worse than having no target at all. So, try this instead. Set your savings goal at 70% of what feels right. Hit it, feel good, then increase. Small wins build momentum. Momentum builds habits. Habits build wealth. Rule 14, keep investing simple. You've tried to learn about investing, stocks, bonds, ETFs, mutual funds, P/E ratios. Feels like another language. So, you do nothing. It's way simpler than you think. One, open an account with a legitimate broker. Two, put money into low-cost index funds. Three, keep adding every month. Four, don't touch it for 20 years. That's it. That's the whole thing. 94% of professional fund managers don't beat a simple index fund over 20 years. Teams of analysts, billions of dollars, doesn't matter. The index still wins. You won't beat it, either. You don't need to. Keep it simple. Index funds, every month, don't touch it. Rule 15, split your money into three buckets. Money comes in, money goes out. Whatever's left gets saved. That's how most people do it. That's why most people stay broke. Try this instead. Three buckets. Bucket one is your day-to-day expenses, rent, food, transportation. This is your largest bucket. Bucket two is your emergency fund, down payment, basically expenses you know are coming. Bucket three is your long-term investments, retirement, your escape hatch. First, figure out the minimum you need

to survive each month. That's bucket one. Everything above it gets split between buckets two and three. Fund bucket one so you don't feel deprived, but always put something in buckets two and three. Even $50 a month. Rule 16, talk about money. Here's something strange. Musicians talk about music all day. Athletes talk about training. Coders talk about code. Nobody thinks it's weird. But money? Suddenly, it's rude, private, taboo. That silence isn't an accident. It benefits the people who already have money. Think about it. Your employer doesn't want you comparing salaries. If you knew your co-worker made more for the same job, you'd ask for a raise. When you don't know what others earn, you can't negotiate. invest in, you can't learn. When nobody shares their mistakes, everyone makes the same ones. This secrecy helps them, not you. Talking about money makes you better at money. You learn what friends earn, how much they save, where they invest. You share mistakes, so others avoid them. Find people who will actually be honest. Compare salaries. Compare rent. Ask questions. Be open about your own numbers. Yeah, it feels uncomfortable at first, but one awkward conversation can save you thousands. Rule 17, fix your money. Your body will thank you. You check your bank account, your chest gets tight. Rent is due. You can't sleep. That's not just stress, that's your body taking damage. Financial anxiety works like high blood pressure, always there, quietly hurting you. You don't feel it happening, but it's real. Kids from low-income households have higher blood pressure than wealthy kids. Same age, same diet. Only difference is the stress at home. And that damage doesn't disappear when you grow up. This is why getting your money right matters. Not for the car, not for status, for your health. Fix your money, your body will thank you. Rule 18, choose your spouse like an investment. Your biggest financial decision is who you marry. Not stocks, not real estate, not your business. Nothing else will influence your financial future more than who you marry. Married people are 77% wealthier than single people. Net worth increases roughly 16% for every year of marriage. While divorce destroys 75% of wealth for both sides. And the greatest predictor of divorce isn't cheating. It's fighting about money. Different values, different spending habits, arguments about bills. That's what kills marriages and wealth. A good spouse isn't just a partner. They keep you accountable. They share your goals. They stop you before you blow money on something stupid. If you're married, talk about money. Not someday. Now. Talk about values, goals, fears, debt. Get it out before resentment builds. If you're dating seriously, pay attention to how they handle money. It's not romantic, but neither is divorce. Choose wisely. This one decision will impact your wealth more than anything else you do. Rule 19, you're luckier than you think. That win you're proud of? How much was skill and how much was luck? Be honest. We take credit for our wins, blame circumstances for our losses. It's human nature. But here's the thing, the biggest predictor of financial success is not work ethic or intelligence. It's where and when you were born. If you're watching this, you probably have internet access, some education, and live in a stable country. Someone with your exact brain born somewhere else has a completely different outcome. That's not capability. That's your luck. The danger comes when you forget this. You make some money, you think you're smart, you get bigger, take more risks, ignore advice. Then reality corrects you hard. The people who build wealth long-term aren't the smartest. They're the ones who stay humble. They know luck put them here, and luck can take it away. Acknowledge luck. Stay careful. Rule 20. It's never as bad as you think. That thing keeping you up at night, failure, embarrassment, everything falling apart?

Here's some perspective. When seniors were asked about their biggest regret, the most common answer wasn't, "I failed too much. " It was, "I worried too much about things that didn't matter. " You'll barely remember your present crisis in 5 years. Churchill says, "Success is moving from failure to failure without losing enthusiasm. " You will fail at things, but it won't be as bad as you fear. When you succeed, it won't feel as good as you imagine. Here's a filter that helps. Ask yourself, "Can I actually do something about this? " If yes, do it. If no, it's not a problem. It's just a situation. You can't fix it. You can only accept it. Two steps for things outside your control. One, recognize you can't change it. Two, focus on what you can control. That's it. Stop fighting gravity. Save your energy for what you can actually move. Rule 21. Stop thinking about your doubters. Your family questions your choices, friends think you're crazy, maybe an ex said you'd never make it. And now they live in your head. You replay conversations, rehearse comebacks, fantasize about proving them wrong. And while you're doing all of that, you're not building anything. They're not losing sleep over you, but you're losing sleep over them. If your enemies knew how much you worry, they would dance with joy. So, stop giving them that. Whatever they said, take what's useful, throw the rest away, and get back to work. The best revenge isn't proving them wrong. It's not thinking about them at all. Rule 22, live a better life. That's the best revenge. So, you've let go of the doubters. Good. But maybe there's still a voice saying, "I'll show them. " Be careful. That's a different trap. If you're building wealth to prove someone wrong, they're still controlling your decisions. You're still thinking about them. A billionaire CEO told the author seven words that ended years of grudge. The best revenge is living a better life. Not proving them wrong, just building life so good that their opinions become irrelevant. The doubters either come around or they fade away. Doesn't matter. You're not paying attention anymore. Rule 23, remember you will die. There's an ancient practice called memento mori, which means remember that you will die. Sounds dark, but it's one of the most useful tools you'll ever learn. A lot of things are stressing you right now, and you're thinking you're totally stuck. Now, imagine you're 85 years old, looking back at this moment. Truth is, you won't even remember most of your present stress. The crisis that feels huge right now, the risk you're scared to take, the person who's mad at you, none of them will matter. That's the power of this practice. Death puts everything in perspective. It shows you what actually matters and what just feels urgent. So, before any big decision, ask yourself, "Would I regret not doing this when I'm on my deathbed? " If yes, do it now. Rule 24. Measure spending in time, not money. The author bought a private jet, not for luxury, but for the extra time he calculated. If he had to take the usual commercial flights for the next 10 years, layovers, delays, security lines, they'd take his time. Owning a jet would save roughly 13 days per year with his family. Over 10 years, that's four extra months with his sons while they were young. Owning the private jet would cost $1. 2 million per year. That's 12 million in 10 years. So, the choice was simple. $12 million in the bank or four extra months with his kids. Easy decision. You probably can't buy a jet, neither can I, but the lesson is the same. Stop measuring spending in dollars, start measuring in time. A $50 dinner with your father that turns into a real memory might be the best investment you'll ever make. Rule 25. The money won't make you happy, but have it anyway. You have a number in your head. Maybe it's $10,000 a month, maybe it's a million in the bank. You'll hit it someday, and you'll still feel empty because money solves money problems. It doesn't solve meaning problems. Going from $2,000 to $4,000 a month is life-changing. Going from $20,000 to $40,000

you barely feel it. The bigger the number gets, the less it matters. So, build wealth, but not for the number. Build it for what it lets you do. The freedom, the options, the security for people you love. Your spouse, your kids, your parents, your friends. That's what it's all for. Don't get so lost in building that you forget why you're building. The author says it best. Money is the ink of your pen, not the story. What the story is about, that's up to you. Now, if you noticed, most of the rules we covered today weren't just about numbers or strategies. They were about psychology. How you think, what you fear, the tricks your brain plays on you. At the end of the day, building wealth is 95% behavior, and only 5% knowledge. If you want to go deeper into that, check out my summary of The Psychology of Money. It's on your screen right now. I'll see you there. Thanks for watching.