Discover the equation to wealth: create valuable, scalable solutions to real problems, build systems around them, and use them to gain financial freedom and control over your time.
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At the time this article is being written, the estimated net worth of:
- Elon Musk: ~$690 billion (United States — Tesla, SpaceX)
- Larry Page: ~$292 billion (United States — Google)
- Jeff Bezos: ~$278 billion (United States — Amazon
- Sergey Brin: ~$269 billion (United States — Google)
- Michael Dell: ~$229 billion (United States — Dell Technologies
- Mark Zuckerberg: ~$191 billion (United States — Meta)
- Jensen Huang: ~$174 billion (United States — Semiconductors/Nvidia)
- Larry Ellison: ~$168 billion (United States — Oracle)
- Bernard Arnault & family: ~$146 billion (France — LVMH / Luxury Goods)
- Warren Buffett: ~$140–$149 billion (United States — Berkshire Hathaway)
Source: Forbes
You, on the other hand, may be studying for a degree because you hope it will eventually lead to a well-paying job. You may have little or no savings, with student debt hanging over your head.
Or you may be working a job you obtained because of the degree you studied for at university. You may not have much in savings. Your living expenses may seem ridiculously high, and you may feel that you are not being paid enough.
Being rich can seem like a distant dream.
You look at millionaires and billionaires, especially those who became wealthy at a young age, and wonder how they did it.
You may tell yourself:
- They got lucky.
- They were born into wealthy families.
- They cheated their way to their money.
- They must be evil.
- They are smarter than you.
- You are just unlucky.
The dreams you once had of buying a mansion, owning your favorite sports car, or traveling around the world may begin to seem elusive. You may eventually conclude that the game is rigged.
But, you are wrong. There is an equation behind wealth and a science behind the way money works.
The journey is not easy. It is filled with challenges, setbacks, uncertainty, and ideas that may challenge what society and the education system have taught you.
Many people will give up before reaching the end. But for those who persevere, the potential reward can be significant. Not only the possibility of building greater wealth, but also the financial freedom they may gain.
Much of what you believe about money is often shaped by your upbringing and environment, and some of those beliefs can prevent you from building wealth.
- Is it something you work for, earn, or inherit?
- Is it the root of all evil?
- Are you constantly chasing more of it?
If you grew up in a family that struggled financially, you may have developed the belief that becoming wealthy is out of reach. Or you may have gone in the opposite direction, deciding to make as much money as possible so you would never experience those struggles again.
The fact that schools often teach us little about managing or building wealth only adds to the problem. If you want to change your financial future, you may first need to change the way you think about money.
Are Wealthy People Really Corrupt?
Hollywood often portrays rich people as greedy, manipulative, corrupt, or dishonest. But that is not always true.
According to a Wealth-X report, about 68% of ultra-wealthy people, with a net worth of $30 million or more, were self-made.
The examples often cited include:
- Warren Buffett
- Howard Schultz
- Oprah Winfrey
- Jeff Bezos
- Elon Musk
- Sara Blakely
The point is not that every wealthy person became successful without assistance, privilege, or favorable circumstances. Rather, the broader lesson is that significant wealth can be created rather than inherited.
The Traditional Equation of Money
Many people are taught a simple traditional equation:
Money = Salary from a Job
But the equation you have been using is wrong.
From a young age, our flawed education system focuses on preparing you to get a job and earn a salary. But what if your goal is to build more wealth in a relatively short period?
If that is your goal, relying only on a salary is unlikely to get you there. Why? Because everyone has one resource that is more valuable than money: Time.
And once time is gone, you can never get it back.
Consider someone earning $20 an hour and working 40 hours a week. Before taxes and other expenses, they would earn about $41,600 a year. At that rate, it would take roughly 24 years to earn $1 million in gross wages.
But earning $1 million is not the same as having $1 million in the bank. Taxes, housing, food, transportation, and other living expenses would take away a large portion of that income. Inflation would also reduce the purchasing power of that $1 million over time.
So, becoming a millionaire through a $20-an-hour job alone would be extremely difficult, especially at a young age. You would likely need to save aggressively, invest, increase your income, or develop additional sources of wealth.
In other words, you are exchanging a large portion of your most valuable resource, time, for money. So how do some self-made millionaires and billionaires become wealthy at relatively young ages?
The answer is that they often use a different approach to creating wealth. They understand money in a way that many people are never taught.
The Equation to Wealth - True Perspective
Pay close attention to this idea: Stop chasing money.
In a capitalist economy, the basic rule is that you are generally paid in proportion to the perceived value you provide and the number of people who perceive that value. Those people make up the market.
The market consists of consumers: your friends, family, neighbors, community, country, and ultimately people willing to exchange money for something they value.
Consider professional football. Why are they paid in millions? Because there is a football market. People value the sport enough to spend money on tickets, merchandise, broadcasting, subscriptions, sponsorships, and other products and services associated with it.
Working Harder does not Mean Earning More Money
This is an uncomfortable idea, but it is true that working harder does not automatically mean earning more money.
A cleaner may sweat and exhaust himself every day while earning considerably less than an accountant sitting behind a desk. Why? Because the market generally perceives the economic value of their work differently.
Cleaning is an easy chore to perform. An accountant, on the other hand, may spend years studying financial systems, accounting rules, taxation, and other specialized subjects.
An experienced accountant might also save a client thousands of dollars through effective tax planning or financial management. Therefore, the market may be willing to pay the accountant considerably more.
How Can You Increase Your Perceived Value?
The answer begins with a simple principle:
Solve Problems
If you want to make money, solve problems.
Much of the money flowing through an economy can be traced back to this basic idea:
If you solve a problem, people are willing to pay for the solution.
The bigger and more valuable the problem, the greater the potential reward.
If you solve a problem worth millions of dollars, your solution could potentially generate millions. If you solve a problem worth billions, the potential value can be much greater.
Consider Amazon. It solves numerous problems for consumers, including the hassle of visiting physical stores, finding products, and waiting weeks for delivery. It also offers competitive prices and convenient home delivery.
Jeff Bezos helped build solutions to problems on an enormous scale, and the market rewarded that value.
Instead of asking, “How can I make money?”, start asking, “What problems can I solve?” Then ask whether you can turn your solution into a business.
You don’t have to compete with Amazon, Facebook, or Google to become wealthy. Start small. Start with a problem.
Pay attention to the people around you and detect their pain points.
Ask yourself:
- What do people dislike?
- What do they wish existed?
- What frustrates them?
- What do they find inconvenient?
- Is there a problem I can solve?
- More importantly, is it a problem people are willing to pay to solve?
That last question is crucial.
Not every problem is worth solving from a business perspective. The key is finding a problem that affects enough people and has a solution they are willing to pay for.
Find a Problem Worth Solving and Make the Solution Scalable
Finding a problem is only part of the equation. The next step is to find a scalable solution. Your solution needs to be capable of reaching a large number of people without your costs or workload increasing at the same rate.
Take the example of a restaurant.
A restaurant can be a profitable business, but its growth is naturally constrained by factors such as its physical location, seating capacity, opening hours, local population, and foot traffic.
A franchise, however, is more scalable because the same business model can be replicated across multiple locations.
Software can be even more scalable.
Once software has been built, it can potentially be distributed online to a huge number of users without requiring a corresponding increase in physical production or shipping costs.
That is one reason digital products and software can have enormous scalability.
Finding infinite scale with a traditional job, however, is extremely difficult.
Is your income dependent on your time?
There is another important question to ask:
Does your solution require your personal time every time it generates money?
Imagine you become a yoga teacher and charge $100 per hour. That sounds attractive. You may have simply created another job disguised as a business.
There are only so many lessons you can physically teach in a day. Your income therefore remains tied directly to your available time. Now imagine creating an online yoga course.
You create the lessons once, and students can access them around the clock. The course could potentially serve many students without requiring you to personally teach each lesson.
That is a much more scalable model.
The distinction is important:
A business that depends entirely on your personal time has a built-in ceiling. A scalable business can potentially grow without requiring the same proportional increase in your time.
Automation matters too
Scalability is not only about the product. Automation, systems, and processes also play important roles. A properly designed system can help a business operate like a well-functioning machine.
If there is something within your business that someone else can perform better or more efficiently, consider outsourcing it or hiring an employee. Doing so makes financial sense.
Trying to do everything yourself can become a serious limitation. You may believe you are the best person for every task, but there is likely someone who can perform certain tasks better than you.
Your job is to focus on creating and improving the solution while building systems that allow the business to operate effectively. Once you have found a solution, you also need to make sure that solution can reach everyone within your target market.
This is not about ego. It is not even necessarily about what you are passionate about. The market does not automatically care about your passions. The market cares about whether you can solve a problem people actually have.
Once you have a profitable business with appropriate systems and processes in place, you can move to the next stage. You can reap what you have sown.
The Reward
At this stage, there are two broad paths you might take. You can continue operating the business, or you can sell it.
Selling the Business
If another company or buyer purchases your business, the transaction is generally referred to as an acquisition from the buyer’s perspective.
Someone else acquires the business and the solution you spent years building around it.
There are famous examples of this:
- Instagram was acquired by Facebook for approximately $1 billion.
- PayPal was sold to eBay for approximately $1.5 billion, with Elon Musk receiving a substantial amount from the transaction.
There are countless other acquisitions and liquidity events happening across the world. This is one way the effort invested in building a company can eventually come to fruition financially.
Or You Can Keep the Business
Selling is not the only option. You might decide to continue running the company for several reasons.
- Perhaps you love the company you built and want to continue working on it.
- Perhaps you believe you can add more value to the company and eventually sell it for more than it is currently worth.
- Perhaps the business has become sufficiently automated that it can operate largely in the background without requiring much of your personal involvement.
- Or perhaps it is a combination of all three.
Either way, the fundamental process remains the same:
You solved a problem that the market wanted solved, and the market rewarded you for solving it.
Your Money or Your Life?
For many people, it was never really about the money. Money is ultimately a piece of paper or a number on a screen. Its practical value depends on our collective belief that it has value.
From the beginning, perhaps this was never really about money. Paying off your debt. Buying your dream car. Traveling around the world. Never having to worry about your financial situation again.
These things are not necessarily the final destination. What you may actually be looking for is freedom.
The destination is a feeling, the ability to do what you want, when you want, without constantly worrying about whether you can afford it.
Imagine no longer having to ask:
- Can I afford this?
- Have I used all my holidays for the year?
- How am I going to pay the rent?
- Will I be able to live off my pension?
- What dreams will I have to sacrifice because I cannot afford to pursue them?
That freedom is what makes financial independence so attractive.
Time is the resource you can never recover
The most important lesson is therefore not necessarily about money itself. It is about the one resource every person possesses but can never reclaim:
Time.
Ask yourself:
- Is giving up a large portion of your life to a job you do not like worth it?
- Is your life going to consist of working, coming home, watching television, sleeping, waking up, and repeating the same cycle until retirement?
- How many hours of your life are slipping away because of that pattern?
Of course, there is nothing inherently wrong with having a job. You may be perfectly satisfied with your career. You may have responsibilities that mean you have no practical alternative at the moment.
But for the people have a strong desire to reach a point where they never have to worry about money again, the message is simple:
Stop chasing money. Chase problems. Find solutions to those problems.
This is the proposed equation through which money is created.
If your ultimate goal is liberty and the ability to stop worrying about money, then solving meaningful problems could become the struggle you choose to pursue.
The Equation to Wealth Summarized
It can be summarized as:
Problem > Solution > Value > Scalability > Business > Wealth > Freedom
- Start by identifying a problem
- Determine whether it is a problem that people genuinely want solved
- Create a solution
- Make that solution valuable
- Find a way to make it scalable
- Build a business around it
- Create systems and processes that allow the business to grow
- Then, depending on your goals, either continue operating the business or eventually sell it
The underlying principle remains:
Solve valuable problems at scale, and the market can reward you for the value you create.
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