Ramblings on Building Generational Wealth

Notes I’ve copied over from my personal Notion, a primer on building generational wealth that actually lasts.

Wealth Pathway

The goal is to be this long-term:

and not this short-term:

• Wealth is not the same as getting rich.
• True wealth is first and foremost sustainable.
• The market is absolute, possessing riches while not having the capability to manage said riches will lead to the market taking everything back, very quickly.

💡 Wealth building comes in 2 stages

1. Wealth Building

• In this stage (currently) high-risk plays are correct, in the absence of wealth chasing it comes first.
• Building the account and portfolio is to pursue the goal of true freedom.
• Recognize that the circumstances of origin can keep the reasoning very grounded.
• Avoid impatience in chasing wealth, missing a meal is fine but impatience will kill.
• Do not chase X amount of money in X timeframe, only in the pursuit of a rational goal pathway.

2. Wealth preservation

• when the goal is achieved (whatever financial goals were made originally) it’s important to shift focus to preservation mode.
• Do not let greed overtake reason.
• Do not degen to skyrocket and accelerate the growth of wealth faster than it can go.
• If initial goals were reached, attempting to fly farther than planned will lead to being too close to the sun and burning.
• Be aware of the difference between degenerate gambling and risk management.

The First Million Needs a Big Bet

The pathway to the first million is reasonably straightforward

Establish a capital base.

• This requires a job with a good income.
• Build up a decent capital base for starters (IE 100k).

Make a reasonable yet asymmetric directional bet in the market.

• Identify opportunities for greed from areas of fear.
• This can be a macro bet or an individual position.
• Certainty in making money is always forerunning certainty of losing money.

Set the correct stops, assess the stakes and risk manage accordingly.

• Do not blow up or ever risk blowing up your entire account.
• Do not ever be in a position to lose everything.
• CT is a degenerate gambling den, do not fall for the fallacies.
• How other people make it will not be your own.

When in a winning position, ride it all the way up.

• assuming the risks were well defined, you have the capacity to let winning positions ride as you have limited the risk.

Generational Wealth Requires a Different Mindset

• The pressure to “catch up” with peers that have already made it can be debilitating to rational decision-making.
• Recall that the way others make it will more than often not be your own.
• Realize that the majority of long-term wealth will not accelerate forever, after a threshold all players switch to preservation mode, and you WILL have time to catch up.
• On the road to getting rich the most important mindset is to have patience and not fall off the track, do not die out and get wiped.
• Focus on the high probability of making money with inverse risk.
• Make sure the standpoint is always focalized on protecting the capital base vs getting the highest upside possible — this is fantasy.
• Motions can have you feel the fantasy of being rich without actually being rich.
• Always focus on the present and how much capital you have over how much capital you want or wish yourself to have.
• Do not fall for the fallacies that you can take the obtuse risk to focus on the upside, there is a difference between being an intelligent bull vs a dumbass bull.

The Wealth S Curve

• There exists a threshold where wealth accumulation dramatically accelerates.
• This limit exists only when foundational pieces are in place.
• This section will be updated when I get close to this spot.
• Do not chase fast wealth for the vanity of wealth — have a goal in mind and the S curve will present itself.

💡 Given the chart below, suppose one portfolio is the black line and another the green line, which would you rather be?

• The gap in brown represents the wisdom of why chasing fast wealth that isn’t sustainable isn’t worth it — rushing to get wealthy is not the path to getting there

Focus on the foundation and the money will come, when the money comes ensure you are ready to correctly capitalize

• Patterns not potential.