Why your wealth is a measure of your resourcefulness

The “source” in resourcefulness

Tony Robbins said you never really lack resources. And the real problem is a lack of resourcefulness.

Whenever you feel poor, kindly remind yourself that you don’t need money. You need resourcefulness.

Most millionaires today didn’t have resources at first. But they had resourcefulness and they used it to ultimately gain resources over time.

The source of your wealth is your resourcefulness.

 

The ultimate resource, other than time, is resourcefulness

You can take away all the money from self made billionaires such as Even Spiegel, the CEO of Snap Inc, or Nathan Blecharczyk, founder of Airbnb, and it won’t take them long to get rich again. Why? It’s because they are resourceful. πŸ™‚

There’s actually a reality tv show called Undercover Billionaire. Real billionaires have 90 days to build a $1 million business from scratch.

They’re placed in an unfamiliar city, and are only given $100 and a pickup truck. They can’t use their real names, contacts, influence, or anything else that could give them an unfair advantage. I believe Grant Cardone is featured in season 2. The whole idea is to see if the American dream is still alive. To see if anyone can become successful if they have grit, a strong work ethic, and are determined enough. πŸ’ͺ

A 90 day window sounds difficult. But I think anyone with a modest amount of resourcefulness can build a $1 million business within a year or two.

 

Demonstrating how resourcefulness works

How much does resourcefulness affect success?

Abe and Brian are friends and they each use $400,000 to purchase an investment property. Abe rents his property for $2,000 a month on a one year lease. This represents a 6% annual return on his $400,000 investment. I’m leaving out taxes, repairs, and other expenses for simplicity.

On the other hand Brian decides to get clever and operates his property through Airbnb for short term rentals. He puts a bit more work into the investment, but every month he earns on average $4,000 from his guests. This is a 12% annualized rate of return, twice what Abe is making.

Both invest in real estate with the same starting capital. But you can see how Brian is able to produce more value simply by being more resourceful with his money.

Brian and Abe discuss their investment properties over drinks one evening with their friend Charles. After hearing their stories of being successful landlords, Charles decides to dive into the real estate business as well with his $400,000 of savings. But Charles has the spirit of an entrepreneur and he decides to use a different investment tactic.

Instead of buying just 1 rental property, Charles divides his capital evenly and buys 4 – each using a $100,000 or 25% down payment. He now has $1.6 million worth of real estate. He starts an Airbnb business like Brian, but creates automated systems to track and welcome his guests. Charles sets up smart keypads on all the doors and uses software to generate unique combinations for each guest to control their access to his properties. He also schedules cleaning and maintenance using specialized apps to save time.

And everything is optimized to work on his phone so he can work from anywhere, any time.
After mortgage and other business expenses, Charles earns $10,000 per month.

This means he makes a 30% return on his $400,000 investment.

By leveraging capital, labour, and technology Charles earns more than double Brian’s investment returns, and 5 times Abe’s.

Is Charles’ success due to luck or is he simply more resourceful? πŸ™‚

 

The same concept can be applied to other forms of investments.

Resourcefulness in financial markets

Last year at this time I could generate a 3% annualized return on my portfolio from options income. I could do it comfortably, and consistently, without taking on too much risk.

But today, I could comfortably make 7% return doing the same thing. Through experimentation, learning, and experience, I’ve become a better options seller.

Imagine what someone with 10 years of option trading experience can do. πŸ™‚

Right now I can make about $20,000 a year trading options.

But what if I wanted to make $50,000 or even $100,000 a year with options trading? Is that possible?

Absolutely. πŸ˜€

It’s not a lack of capital that’s holding me back. It’s a lack of resourcefulness.

I have $500,000 of unused credit (loans) from various banks I can use any time I want.
I could easily transfer $500,000 into my brokerage account which will give me enough capital to potentially generate $100,000 of option income every year.

So why don’t I do that?

Being resourceful means having a lot of knowledge to make better decisions.
But right now I’m not knowledgeable enough about options to trade using that much of other people’s money.

With more practice and experience, I’ll have the resourcefulness I need in one way or another to make six figures trading options. πŸ™‚

 

Money flows to those who are resourcefulΒ 

Raising money from others is another example of resourcefulness. Convincing other people to care about what you care about is a form of leverage that has unlimited potential. If you can demonstrate to others that you have what it takes to make their lives better, they will shut up and let you take their money.

Within the venture capital and private equity markets, entrepreneurs and startup companies that are the most resourceful will attract the most funding.

Investment success is less about how big your salary is or your savings rate.

It’s more about how resourceful you can be with capital.

Money likes to multiply. It flows towards people who can multiply it the fastest.
People throw money at Cathie Wood because they believe she can manage money better than they can.

The more resourceful you are with capital, the more capital you will have at your deposal.

 

How to become more resourceful

There are 2 ways to improve your resourcefulness. They are different but related to each other.

The first way is to gain knowledge and experience so you can make more wise decisions.

That’s ultimately why resourceful people are successful.

Whether it’s Wall St. banker Jamie Dimon, or billionaire investor Warren Buffett, the reason they are paid a lot of money is because of their high quality in judgement. Much like being the captain steering the Titanic, a small decision for these guys can have massive consequences and affect many lives.

Making wise decisions comes from understanding the long term consequences of yours and other people’s actions. This can only be learned through lived experiences.

But what if you aren’t particularly knowledgeable yet? Then the second way to increase your resourcefulness is to always be curious.

Having an insatiable desire to learn will drive you forward and encourage you to venture outside of your comfort zone, which is necessary to gain new experiences.

 

You already have all you need to thrive

Making a lot of money isn’t a prerequisite for financial success. But being resourceful is.

Resourcefulness can make it possible to purchase real estate in a high cost of living city, even if you make the minimum wage.

This is because the ultimate form of resourcefulness is human imagination.

If you’re creative enough, and determined enough, you can achieve any goal you set your mind to.

And after you gain the resource that you set out to get, whether it’s a million dollars or financial independence, what you’ll realize is that the most valuable thing you have obtained isn’t the money or resources at all.

Sure. Being rich feels good. But realizing that you have become someone who is abundantly resourceful is a million times more satisfying. πŸ˜‰

 

 

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Random Useless Fact:

 

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