Uncovering The Path to Wealth: The Hard Truth




Uncovering The Path to Wealth:

The Hard Truth



By Rami Tannir


Copyright 2016 Rami Tannir


Shakespir Edition




This book is sold with the understanding that I am not engaged in rendering legal, financial, or other professional advice. I am not a financial advisor, or a professional, and I do not presume to be so. The information in this book is based on personal experience and knowledge I have acquired throughout my life. Anything mentioned in this book might, and will not, apply to everyone. Please consult a professional if any advice is needed. I specifically disclaim any liability that is incurred from the use or application of the contents of this book.



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Table of Contents

1. The Economy is a spring 4

2. The Infamous Exponential Curve 6

3. Active vs. Passive Income 8

  • 4. What You Can Do Today To Start Earning Passive Income 9*

5. Real Estate, Real Value, Real Money 13

6. Short-Term Loans and Real Estate 16

  • 7. How To Distinguish Quality Real Estate from the Rotten Ones 18*

8. What Determines Price? 21

9. Invest in What You Believe in 23

  • 10. Do All the Things You Love, But Master a Few 25*

11. Patience is Key 27

12. Be a Pessimist (Sometimes) 28

13. DO NOT Fake It Till You Make It 29

14. Be Social. Build Connections 31

15. Stay Happy 32

[* 16. Be Wise With Your ‘’Big’’ Purchases 33*]

17. Do NOT Be Stingy 35

18. Summary 36


1. The Economy is a spring


Money isn’t loyal. Each piece of paper money has been passed around from owner to owner hundreds of times. Keeping track of your money and attracting money to you is what being rich is all about. It sounds simple, but is actually much harder to implement; especially when people take on the idea of growing rich with a defeated mindset.


It is a very financially tough time. We hear that every day, but is it true? Even if it is, should that stop you from aiming to achieve financial success? In contrast to what people believe, economic slumps are the perfect time to set yourself up for financial success. The economy is a spring with a platform attached on top of it; the further you compress it, the more potential it stores. All this hidden potential is invisible to the naked eye, but will allow you to sore high once it finally expands. All you have to do is jump on the compressed spring before you miss the chance.


Did you know that every single person on this planet could become ‘’rich’’ and financially free for the rest of his/her life? The amount of money in the world is more than enough to satisfy all the people’s needs and a lot of their desires. The question is, do you actually want to become rich? Are you willing to change the way you live and your mentality towards life in order to unlock your full potential? A lot of people say they want to be rich, but they do not believe it deep down in their hearts. That is what separates the rich from the poor. Achieving success, whatever that might be for you, is all in the mentality you adopt in order to tackle any problem that faces you. Opportunity will not come knocking on your door. You have to look for it and knock on its door. If it doesn’t answer, knock the door down.


Working smart is more important than working hard. Working hard without keeping track of what your goal is reminds me of high school students trying to write an English essay the night before it is due. They’re disoriented, tired, and will probably spend more time trying to glue together a sloppy mess than a student who spent fifteen minutes a day working on it for a couple of weeks. Combining hard work with efficiency is the best combination you could ever adopt.

2. The Infamous Exponential Curve


As mentioned earlier, becoming rich is achievable by everyone. Wouldn’t you like to go on that world tour with your family, buy that dream car which would require years of saving up to afford, or purchase that mansion in the hills? It sounds just like what you want, right? Well, I have good and bad news. The good news is that you might have all of that and even more if you work smart and are persistent enough. The bad news is that it will definitely not happen overnight. Everyone starts small and eventually starts growing bigger and bigger. It might be a slow process at first, but once you spend enough time working hard, you will be amazed with how well you did. That is exactly why the younger you start being financially smart, the more of a head start you will have. This concept can clearly be portrayed with the infamous exponential curve (Figure 1).

Figure 1 Exponential curve

As you can see, the start is a bit slow. Spending a lot of time and effort working yields very little results. As time goes on, and as more time is spent, the amount of money you earn starts increasing exponentially until you reach the point where minimal amounts of work yield huge paydays. Even if we refer to our high school Algebra for a minute, we notice how the slope of the curve is zero at the very start (no amount of time spent will get you paid) and comes very close to being infinite as time progresses (you get paid a whole lot of money for very little work). This phenomenon is what the compounding effect is all about. The more money you have, the more money you will make. Simple!


Our goal here is to get as close to the right side of the curve as possible. Getting a solid paycheck every month for doing little to no work is a pretty outrageous concept, but is very realistic once you understand a few concepts related to setting up multiple sources of income and using passive income to multiply the salary you receive every month from working a nine to five job. Knowing what path to follow, having the mental and social skills to decide what should be done, keeping your emotional strength throughout the process, and knowing what to spend money on in everyday life is the rest of the recipe for success. All of this will be discussed, and more, in the rest of this book so stay tuned!

3. Active vs. Passive Income


In order to grow rich, you need to have huge amounts of cash coming your way. This cash could be a reward for your hard work that you put in every day at your job, or it could be a royalty for a book that you wrote and got published a few years ago. These two different examples portray the difference between active and passive income. Active income is income that is achieved based on how much work is achieved in a certain period of time, and this income is discontinued after that period of time is over. On the other hand, passive income is a source of income that keeps on rewarding you for work you only did once, in a discrete period of time, in your lifetime.


From the definition above, active income is the money you receive in exchange for a service you provide (i.e. full-time job or a part time job for example). The only way to increase the active income you receive is to work harder every day. Getting two part time jobs in addition to your 9 to 5 might seem like a great idea to grow rich, but the only outcome you will achieve is growing irritated and eventually burning out and quitting the part time jobs.


Passive income, on the other hand, is income that you keep on receiving for a long period of time for work that you only did once. You could use your spare time to start a YouTube channel. You could invest your spare money in shares. You could go and take a loan from the bank to purchase real estate and rent that out for money. As you can see, passive income is much more attractive and much easier to achieve. Passive income is a great way to double or triple your active income, if done correctly. Your passive income might even grow so large that it trumps your active income and you decide to retire early. Another great thing about passive income is the great feeling you get when you know that every second of your existence, you are earning money no matter what you are doing. You could be on the beach, tanning, reading this book, and be receiving money from your passive income sources. Even when you sleep, you are earning cash. Doesn’t that sound like a great way to live?

4. What You Can Do Today To Start Earning Passive Income


I like to categorize the major sources of passive income into nine categories, and they are as follows:


The “C” stands for Creativity. Being able to solve a problem by inventing something and being able to market that solution to get people to buy it will earn you big bucks. The trick for achieving this source of income is to solve a common problem. The more people your invention appeals to, the greater your paycheck.


The “A” stands for Art. Being an artist and sharing one of your masterpieces with the world will earn you various amounts of money depending on your popularity and the quality of your work. If you are a painter, you might not be as famous as Leonardo Da Vinci. That should not be a deterrent to start because by releasing quality, consistent work every time, you will slowly grow in popularity and have your painting sold for tons of cash when the right art enthusiast comes knocking on your door. Art does not stop at music or drawing, it also includes writing. Being an author of a best selling book will definitely reward you well when those royalties come around. Just make sure that your art is not purely motivated by money. If it is, there are several other routes you could take to make passive income which are much faster and easier.


The “S” stands for Sales Agent, online sales agent that is. You could use your popularity to convince people to buy something online because you recommend it on one of your blogs or social media sites. All they have to do is buy the advertised product through the link you provide and there you go, some cash goes straight to your bank account.


The “H” stands for Helping Hand. It is not necessary that you start your own venture to receive continuous money, or royalties, for it. Any physical or intellectual assistance you provide someone starting a project in exchange for royalties is a great way to earn passive income. This is a type of income where the only thing you have to do is help someone else with what you are great at and not have to worry about any of the risks or headaches associated with the project. If you are an illustrator, offer book writers to make their illustrations for them in exchange for a certain amount of money every time a book is sold. If you know someone who is trying to invent something but has a missing puzzle piece that you own, offer him/her your help for a share of the royalties.


The “M” stands for Membership Websites. All of us have joined one of those membership websites at some point in our lives. I remember spending a lot of money as a kid on gaming websites that required a membership fee to access their product. This is a great way to obtain passive income once your site attracts a fair amount of traffic, but you will have to suffer some losses during your first years of operation due to low traffic and might even risk going out of business if your site popularity never grows.


The “O” stands for being an Owner. Opening your own business is a very common way of making passive income. Whether it is buying in bulk from abroad and selling the items locally or opening your own restaurant, building a business from scratch provides you with a wide variety of choices to pick from. While having your own business provides you some form of prestige; it can be very risky, as you might already know. Not a lot of new businesses make it through their first three years of operation. On the other hand, you could get rich really quickly if you are able to attain wide popularity locally. Also, in order for your business to be a passive source of income, you have to keep the effort and money put into the business at a minimum. If not, this passive source of income will quickly turn into an active source of income and force you to quit your job in order to keep up with the day-to-day problems. Also, you don’t want to keep investing in a losing project. Know how to cut your losses and when to call it quits.


The “N” stands for the good old Net. Building a website and attracting traffic to your website could potentially earn you a lot of money if you benefit from ads on your website. Having your own website is fairly easy and anyone is able to do it. Pick a topic you love and start blogging about it. You could even invite some friends to join you and build a website with different articles for different topics which will attract a larger audience and thus make your paycheck even bigger.


The “I” stands for investing. Investing is the perfect way to earn money with the least effort possible. Very little time needs to be spent following up with your investments and the process of investing money is not tedious. This type of passive income requires financial capability as well as a good feel for the different markets. Often, your gut feelings as well as predictions using historical facts and figures play an important role in deciding what to spend your money on. Investing can be very risky if you seek big rewards, but it can also be done in a very conservative way. Some of the major types of investing are: metals, shares, and real estate. Investing in Gold or Silver has been used for a very long time. Usually, these metals will hold their value if not increase in value over time. This is one of the less risky investments that could be made. Another type of investment is buying stocks or shares in a company and becoming a part owner. Investing in shares can be motivated by speculation that the share prices will increase and be sold in the future to generate a profit. Some companies even pay dividends depending on how much profit was made. Investing in shares is a great way to make money, but it can also be a great way to lose money. You need to be able to read the market and buy a share that you believe is more valuable than what its market price portrays. There are different levels of risk associated with different share categories that suit a wide range of preferences. A good way to experience what it is like to trade stocks without risking any money is through paper trading. This option is offered by several websites where you can participate in a simulation with virtual money and real time prices to learn all about trading. The third major type of investment is purchasing Real Estate and renting it out. The great thing about this type of investment is that you can take a bank loan that is payable over a long period over time and use the rent to cover the mortgage cost along with other expenses. You might even have some money left as profit if you pay attention to the math. Because this is such a great way to start making money for beginners and because almost everyone could do it, I will elaborate on this type of investment in the next section.


The “Y” stands for becoming a You Tuber. Starting a You Tube channel has never been easier. All you need is a camera (you can even use your smartphone’s camera if you’re starting out) and a computer. It takes effort to put out quality videos for your audience, but these videos will earn you money if you make use of ads on your page. You will not be making any real money unless you accumulate a large audience and release quality videos on a regular basis. A new trend that has gained popularity in recent years is vlogging. Vloggers take a camera around with them and capture the different activities they do everyday. This might seem like an easy way to make money if you don’t mind the attention, the lack of privacy, and you have a very interesting life which people will want to spend time watching. You Tube is not the only way to generate income through social media. Advertising using Vines, Instagram, or Facebook can also earn you substantial amounts of money if you have a large enough fan base. Being a social media star will also earn you a ton of experiences and privileges such as flying all over the world and performing live shows.

5. Real Estate, Real Value, Real Money


Investing in Real Estate could make you very wealthy over time. The beautiful thing about real estate investing is that you could purchase assets with a fraction of what they cost. You could then rent out the property and earn enough money to pay off the mortgage, any other costs associated with the property, and keep a nice profit for yourself. This is a very common example where you could use the bank’s money to make money for yourself.


There are three ways you could make money using real estate. The first of which is flipping property. The second of which is buying property using a short-term loan and renting it out. Finally, you could take a long-term loan from the bank in order to purchase the property and then rent the property out.


The first method which is very common in some areas in the world is house flipping. Buying a house cheap and selling it for a higher price could earn you a good amount of money. It is very difficult, if not impossible, to directly flip a property for good amounts of cash though. To really make money you have to pick a property (let’s use a house as an example) with small defects that lower the price of the house. For example, the paint on the house could be worn off or the plumbing in the house could be a bit old. Being able to point out these points to the seller and making him/her lower the price considerably for them is a skill you have to master. After purchasing the property, you could fix these issues yourself or have a professional fix them for you, which will increase the value of the house. Spending some money on decorative elements could also go a long way in selling the house faster and for a higher price. For example, buy a few flowers and plant them in the garden. Purchase some cool furniture that doesn’t cost much but make the house much more cozy and beautiful. You could also buy some ‘‘cheap’‘ paintings, which look expensive, and hang them in the rooms to add a sense of luxury. Most importantly, make sure the house is clean before any potential buyer comes to view the property. The problem with this type of method is that it is not passive income at all. It is very hands on and once you start having enough cash to flip a few properties at a time, it can get very cumbersome and you might even have to hire someone to keep track of the progress of each property.


The second method of producing income using real estate is buying property using a short-term loan and renting it out. Asking your bank for a short-term loan (let’s say over 4-8 years) is a great way to make a considerable passive income in the short term and give you financial freedom to use your money in whichever way you choose after the time period is over. Watch out though, because using this method means you will have to back up your property with money from your other sources of income. Taking a short-term loan from the bank means the mortgage payments every year will be large. The rent will not cover the mortgage payments. You will even have to pay for the other expenses associated with the property yourself. Let’s take an example. You buy a condo for $200,000. You only pay a down payment of $50,000 and let the bank pay the rest. You rent the condo out for $20,000 a year. Let’s assume you took a loan over five years from the bank and you have to pay them back $35,000 a year. You also have other expenses and taxes that will set you back another $10,000 a year. The only positive cash flow you are receiving every year, for those five years, is the rent (i.e. $20,000). The negative cash flow you are paying every year is the mortgage payment in addition to the other costs (i.e. $45,000). Therefore, you actually have to invest $25,000 a year in addition to your initial investment of $50,000. After the five years are over, the total payments you made add up to $175,000. Assuming the price of the property remains the same, you just made $25,000 over 5 years using passive income. An increase in the price of the property over the five-year time period could also provide you with a nice profit. This profit might not seem like a lot, but scaling this concept up by purchasing several properties with even bigger price tags and higher rents is a solid way to produce passive income. In addition, you are free to do whatever you want with the $200,000 you have after the five-year time period, as opposed to taking a long-term loan and having some of your money frozen up in one project for a very long time. Now, here’s the secret to using this method to build substantial wealth over your lifetime. Once one of your loans is fully paid off, you could sell the property for its full price and use that as down payments for several other properties. This concept allows you to grow your wealth exponentially and can become very rewarding in the long-run. Make sure you could pay off the yearly costs before buying a ridiculous amount of properties that will add up to huge yearly mortgage and ‘‘other expenses’‘ payments. Refer to Section 6 for a more in depth look at this type of investing.


The third method of producing income using real estate is buying property using a long-term loan and renting it out. You could ask your bank for a long-term loan (let’s say 25-30 years) and rent out the property in the mean time. Taking a long-term loan from the bank means the mortgage payments every year will be smaller than the ones for the second method. The rent will usually cover the mortgage payments as well as the other expenses associated with the property. Let’s take an example. You buy a condo for $200,000. You only pay a down payment of $50,000 and let the bank pay the rest. You rent the condo out for $20,000 a year. Let’s assume you took a loan over thirty years from the bank and you have to pay them back $7,000 a year. You also have other expenses and taxes that will set you back another $10,000 a year. The only positive cash flow you are receiving every year, for those five years, is the rent (i.e. $20,000). The negative cash flow you are paying every year is the mortgage payment in addition to the other costs (i.e. $17,000). Therefore, you actually receive $3,000 a year from your property for thirty years. In addition, you can sell the property after thirty years to receive even more money. Owning several properties using this method allows you to receive a good profit every year. This profit could then be invested back into other properties and the circle goes on. You will even reach a point where the properties you own could purchase new properties by themselves with no additional funds necessary. If we refer back to our example, owning seventeen properties will earn you $51,000 yearly. This means your existing properties are able to pay for a down payment for a new property and start providing you with extra yearly income. You could achieve huge fortunes using this method. This is just theoretical though, and there are drawbacks and limitations in real life. Most banks will only allow you to take a few loans until you have proven yourself worthy of more loans. In addition, taking on huge liabilities is risky and very stressful, especially when this is going to be a part of your life for a very long time (because of the long-term loan).

[]6. Short-Term Loans and Real Estate


Purchasing real estate using short-term loans from the bank will allow you to grow very wealthy if done correctly. Figure 2 portrays an example of what could be done in 8 to 9 years using short-term loans. The first step is to purchase a property and pay it off for the next 4 years using rent and additional funds from your personal account. The next step is to sell the property after the mortgage is fully paid off and use that money as down payments to several other properties. In this example, three down payments are made using the money from the first property. Four years later, the same thing could be done again. It’s all about paying off the mortgage quickly, selling the property, and using that money as down payments to more properties.


There are several points I need to point out. This type of investing is very risky because you will have big payments to make every year including the mortgage and other expenses. Make sure your secure income from other sources (such as your job) will cover these payments fully in case you could not find a tenant. Even that would be risky because you are counting on keeping your job for the duration of the loan. Therefore, keep this in mind when you invest this way and always consider the worst-case scenario. Also, Figure 2 shows how one property is used to purchase three after four years and then six after another four years. The number of properties you should purchase and will depend on your ability to pay off the mortgage. If you have other sources of income that are earning you tons of money every year, you could buy four properties (as an example) instead of three after the first four years have passed. On the other hand, if you feel like owning three properties would be too risky, you might prefer using the money from the sale of the first property to purchase only two new properties. It’s all about your ability to pay off the mortgage and what you feel comfortable with. You could split the money you receive from the sale of the first property into as many down payments as possible, but can you keep up with the mortgage payments?


The aspect I love most about this type of real estate purchasing is that you could take as much money as you want from selling the property after the loan is paid off and use that money for whatever you like. You could take half the money and invest it in shares and still have money for another down payment. In addition, you could mix short-term and long-term loans from the bank to have a diverse portfolio of high risk and lower risk real estate investments.


Figure 2 Short-Term Loan Multiplying Effect


7. How To Distinguish Quality Real Estate from the Rotten Ones


There are several factors to keep in mind when buying real estate. These include property area, plot layout, price per square foot, location, view, operational and maintenance costs, potential re-sale value, rent value, and availability of potential tenants. The area of the property has to be as large as possible. When it comes to selling the property in the future, bigger is better. The layout of the property has to make sense and utilize the available area as wisely as possible. A general rule to follow is the greater the rooms in a house, the higher the price. Also, the price per square foot of the property has to be lower than the average in the neighborhood for it to be a good deal. Obviously, the location of your property and the view that it offers make a big difference when it comes to the price of a unit. Let’s take an example of two condos that are identical in size, but one of which has an ocean view while the other has a city view. The condo with the ocean view is going to have a higher price due to the view that the ocean facing condo offers. In addition, the costs such as operational and maintenance cost have to be as low as possible and the rent or re-sale value have to be as high as possible. Don’t forget, we want to make money off of our investment. Another factor that not a lot of people might consider is the availability of tenants. You don’t want to buy the property and have it sit out for months before someone comes and rents it. Study the market and figure out the rent and the availability of tenants in that area before buying the property.


There are a few tools to help you distinguish which investment is best for you, including Net Present Value, Rate of Return, and Payback Period. First, let’s define cash flows. Cash Flows are any positive or negative amounts of money that you will spend in a certain period of time. Getting the rent form your tenant is considered a positive cash flow because you are receiving money. On the other hand, the service charges, the mortgage payments, and maintenance costs are negative cash flows. Every year, the positive and negative cash flows can be added up to obtain the net cash flow for that year. Figure 3 portrays a typical cash flow diagram for a property bought with a short-term loan. The cash flow at the beginning (i.e. CF0) is negative because a down payment has to be made to purchase the property. The cash flow for the next three years will be negative because the positive cash flow (i.e. the rent) will not be able to offset the negative cash flows (i.e. the mortgage payments, taxes, and expenses). The negative cash flows will have to be paid for using your personal money. The cash flow for the fourth year (i.e. CF4) will be positive if you decide to sell the property.

Figure 3 Cash Flow Diagram


The NPV (i.e. Net Present Value) is a measure of the profitability of the cash flows that occur over the lifetime of the investment compared to the interest rate in the market. A positive NPV indicates that your investment is worth investing in, while a negative NPV is a bad sign. You will find plenty of websites online that will calculate the NPV of your investment for you. All you have to do is provide the calculator with the required information, such as the cash flows and the time period of the investment. If you would like to calculate the NPV manually, Table 1 summarizes the procedure. The net cash flow per year is found by summing up all the revenues obtained that year (any money you gained from the investment) and subtracting the costs for that year (any money you spent related to your investment). The discounted cash flow per year is the value of the Cash Flow if we were to take it back to year 0. It can be calculated as follows:


CF’ is the discounted cash flow for a certain year, CF is the net cash flow for that year, R is the interest rate, and n is the year of the cash flow. The NPV is the sum of the discounted cash flows. Personally, I do not use the NPV when purchasing a property. I rely more on the payback period and the rate of return. Note: If mortgage payments paid monthly, the time period that should be used to estimate the NPV more accurately should be in months, not years.

Table 1 NPV Calculation Table

Another tool you could use to quantify the profitability of your investment is the rate of return. The rate of return measures the yearly percentage you will get back from your investment. For example, if you purchase a condo for $100,000 and rent it out for $10,000 yearly, then your rate of return will be 10%. It can simply be found by dividing the net yearly cash flow by the initial investment and multiplying that by 100 %. Usually, rates of return above 6 to 8% are considered good investments.


The final tool you could use is the payback period. The payback period indicates how many years are required to get back your initial investment. The payback period is found by dividing the initial investment by the net yearly cash flow. For example, an investment of $100,000 and a net yearly cash flow of $5,000 means your payback period is 20 years. That is, you will need 20 years to get back your initial investment and start making profit. You should always aim to minimize the payback period because any time before the payback period is achieved, you have not made any money (overall) through your investment.


The three tools we have just discussed can be used to choose between different investment opportunities available to you. The investment opportunity with the highest NPV, highest rate of return, and shortest payback period is the one that should be chosen, mathematically speaking.

8. What Determines Price?


In order to become successful at investing, you need to understand the reason behind price fluctuations of an asset. This applies to any investment, including real estate, stocks, and anything else you could think of. The price of an item comes down to the Demand for it and Supply of it. Figure 4 portrays the typical demand and supply curves of an asset. The demand curve is sloping downward, which indicates that a lower price increases the quantity demanded for the asset. On the other hand, the supply curve is sloping upwards. This indicates that a decrease in price causes the firms who are creating the asset to decrease the quantity supplied of the asset due to lower profitability. The intersection of the Demand and Supply curves indicates the equilibrium price and quantity. Therefore, this intersection determines the market price of an asset.


Figure 4 Demand-Supply Curves



What we are interested in is how the price of an asset changes in the market. Specifically, we want to look at how the demand for an asset increases or decreases its market value. Figure 5 portrays how an increase in Demand for an asset increases the market price for it. The Demand curve shifts to the right, increasing the market price and equilibrium quantity. A decrease in demand for an asset would have the opposite effect on the market value and equilibrium quantity, as shown in Figure 6. Therefore, whenever we purchase an asset in the hopes of an increase in its value in the future, all we need is an increase in the demand for the asset. Predicting what will have an increased demand in the future will make you a nice amount of money if your prediction is correct.

Figure 5 Demand-Supply Curves with an Increase in Demand


Figure 6 Demand-Supply Curves with a Decrease in Demand


Sometimes, the Supply curve is very steep, if not vertical. This is due to the fact that some assets are not being created anymore. An example of this would be a classic car. In that case, the price is purely determined by the demand for the asset. This implies larger fluctuations in the price of the asset, which means more money can be made if you are able to buy the asset at low demand and sell it once the demand increases.

9. Invest in What You Believe in


A lot of times, we get influenced by other people or by the gold plating of an investment opportunity, only to find out we just invested in a rusted piece of iron coated with gold. Don’t let the appearance of an investment opportunity fool you. Only trust numbers, because numbers don’t lie. Make sure the rate of return, re-sale value, and other financial indicators tell you that it is a positive investment for your future.


We often get confused between the value of something and the price you pay for it. We often assume the value of something is its price because the market has decided so. That is very wrong. Every time we purchase something, we have to assess what the real value is. This doesn’t only apply to real estate, businesses, or shares; it also applies to items we purchase for pleasure such as jewelry and clothing. Ladies, when you go to buy yourself a new set of jewelry, don’t buy something that is overpriced and will not hold its value over time. For example, don’t buy a gold necklace that can only be re-sold with half its price due to the jeweler charging you tons for the design and minimizing the actual mass of gold in the necklace. This also applies to other items we buy regularly such as clothes. Don’t go and buy designer clothes if you are purely buying it for the branding and not the piece itself. Ask yourself: if this were an item I did not know the brand of, would I buy it?


When it comes to determining the real value of an item, it should be left to a lot of research and our gut feeling. Let’s imagine you are about to purchase a condo that is under construction in a high-end neighborhood. It is under construction so you will not be able to rent it out. You are purely depending on an increase in the price of the condo once the construction is complete to make money. You find out what the average price per square foot is in that area through online research and you figure out the price per square foot for that condo is lower than market price. Then, you question yourself: Is this a smart investment to make? Well, the only answer you should follow is what your gut feeling tells you. Do you feel like the price of the condo will increase once construction is complete? Are you impressed by the layout of the building and the views the condo offers? If you were a potential buyer in the future, would you want to spend more money to purchase this condo? If you are convinced you will make money on such a project, you should probably go for it. It might be risky and you might even lose money on such a project, but trusting your gut instinct on certain occasions will earn you big bucks.


Don’t be afraid of investing in something no one else believes in. Usually, this is the perfect scenario for you to make money because when demand for your investment is low, the price is low. When the demand for your investment suddenly increases in the future, you can make your initial hunch pay off big time because the price will shoot up.


Many roads lead to the same thing. There is no fixed set of rules to follow to become rich. Everyone is different, so a different path is required for every person. Just because someone else believes he/she has discovered a golden investment opportunity does not mean you should ditch all what you have worked on and invest in their ideas.

10. Do All the Things You Love, But Master a Few


You can either master a few crafts and perfect them, or you can be average at a ton of crafts. You cannot get rich off something unless you provide a skillset no one, or only a few others in the world, possess. Being able to play twenty instruments is cool, but it will not make you any real money unless you are a world-class artist at one of those instruments. Similarly, being able to play tennis, basketball, football and several other sports might keep you fit, but if you are planning to go pro and get some real cash coming in, you will have to specialize in one sport only. You can keep doing other activities you love as hobbies in a recreational fashion, but don’t expect to make big bucks anytime soon off of them. Often, very ambitious people try to juggle too many money-creating activities and realize the amount of time spent on most of these activities could be spent at a part-time job with a much higher return for your investment (your time). Don’t forget, time is the most valuable asset you own. Time is your only possession that once you spend you will never get back. Invest you time wisely.


Personally, I have tried a lot of things, from trying to become a professional video gamer to becoming a pro violinist and not a lot of these ambitions paid off. Do I look back at them and regret the time wasted? No. I love learning new skills and getting exposed to different challenges, but I know when to stop thinking of those activities as ways to obtain passive income, and started treating them as hobbies. Spend more time finding what you love and then stick to it if you have natural talent that could grow into something great with practice and perfection. Do you have something that you are naturally talented at already in mind? If sleep, procrastinating, and eating are on your list, then I hear ya! Seriously though, everyone has a hidden talent. If you don’t know what it is yet, go find out what it is by trying loads of new activities that appeal to you and figure out what you are naturally talented at.


To help you organize your life and paint a clear picture of what your goal is, list what you want in life and what you will do to achieve it. Make a list of the passive income sources you want to try and stick it on the wall beside your bed. Having a hard copy of the list will clear your mind, decrease stress, and allow you to become more creative and productive. Keep your goals realistic. Nobody has everything in life; so don’t bet on being the first to do so.

11. Patience is Key


As with anything great in life, it takes time. Writing a quality novel takes time. Opening a successful business takes time. Gaining popularity on You Tube takes time. Becoming rich takes time! Whenever you find a get rich quick scheme while browsing the net or on TV, don’t be fooled by sweet talk. Find out what their concept is about, what are the drawbacks; is it too good to be true? If there were a way to become a millionaire overnight, everyone would become a millionaire. There wouldn’t even be a need for me to write this book because everyone would be too busy travelling in their private jets and sailing in their yachts to read a book about setting yourself up for success. It is called growing wealthy, because you start earning wealth, as you grow older. This shouldn’t discourage you, because if becoming rich were easy, it would be boring. It is the struggle to get there that is memorable. Also, instead of giving up because you don’t have the patience, start now and get a head start ahead of your peers!


It is important to set realistic goals for yourself. Overloading yourself with over-optimistic goals will only result in failure, and that is not a feeling you want to experience. Setting modest short-term goals will allow you to keep achieving your short-term goals consistently. This provides you with a positive mindset, which is essential for ambitious people to have. In addition, achieving more than what you have planned for will make you feel so good about yourself and will motivate you even further. Don’t confuse short-term goals with long-term goals, though. Long-term goals are supposed to be very optimistic, if not impossible. Having unrealistic long-term goals will push you every single day of your life and will make sure you are successful, even though you did not get there. For example, many people dream of having a private jet. If you have that as a long-term goal and you work to afford a private jet, it is so much more probable that you will never fly Economy again, even though you might not actually be able to buy a private jet in the future.


12. Be a Pessimist (Sometimes)


Imagine you are thirsty and you find a cup of water filled up half way. An optimist sees the cup as half filled. A pessimist sees the cup as half empty. A real pessimist questions whether the water is even clean. Sometimes, extreme pessimism is required to avoid a financial catastrophe. Expect the unexpected, whether it be good or bad. Make sure the math adds up and that the returns are worth the investment you are about to make. Re-do your calculations again and again with different scenarios in mind to make sure you are not risking losing it all. There’s always a limit to how much you should invest. Do not try to overload yourself in the search of wealth.


If something actually does go bad, chill. It is not the end of the world. Learn from your mistakes and invest whatever you have lest in a smarter way. Remember, always plan for the future and take the worst-case scenario as a possible option. That is the only way you can avoid risking everything and putting yourself in a lot of trouble.


Even though you should plan for the future, do not obsess over it. You should allow everything to fall into place and provide you with a pleasant surprise every once in a while.

13. DO NOT Fake It Till You Make It


I strongly disagree with the saying ‘’fake it till you make it’’. Don’t try to fool yourself or fool others into thinking you’re something you’re not. It’s almost an impossible task to fool others into thinking you are much wealthier than you actually are anyway, so save your effort. Your designer clothes and spending big might earn you some attention. On the other hand, once people figure out the truth, losing the attention you once had can be very painful to your ego. It’s okay to pamper yourself once in a while, but don’t lose track of where you are and where you want to be. Don’t get me wrong, having self-esteem is a must, and having a taste of your goals will provide you with so much drive and motivation. Don’t let it get to your head though. Keep hustling!


I have come to learn a very important lesson in my life. It is so much better to impress others with achievements and success rather than with appearances and materialistic things. People have a misconception that what you drive and the house you live in decide who you are as a person, and that is way off the truth. Don’t make money your only goal. Instead, focus on adding value to this world and achieving great things. Setting goals that you want to achieve, not for the money, but for yourself is the best way to become wealthy. Being passionate about what you do and wanting to impress others with what you have achieved will provide you with its rewards in the long run. If you are a novice author, don’t put money as your objective. Your objective is to write the best book you could write. Even if nobody buys your first book, keep your head down and write another one. Even if the second one only sells a few copies and you start to get demotivated, write an even better one. Make the book that you are going to finish next your only objective. Make sure it is the best thing that can come out of you. One day, you will get your break and you will start getting noticed by the big publishers and start earning your reward. Even if you are only concerned with making money, it’s okay. But you have to understand that you will never make money unless you provide something others are willing to spend their own money on. Think of that. Strangers will not give you money because you wrote a sloppy book in the hopes of gaining money. They will buy your book only if it provides them with something they need. After picking a source of passive income that you would like to pursue for money, focus on perfecting the product or service you are providing instead of thinking about the money.

14. Be Social. Build Connections


Believe it or not, we need friends and family to survive. Our mental health depends on our relationship with people who are close to us. Isolating yourself from the world in search of wealth will never work because you will have to come out at some point or another to start implementing your ideas. Social skills and connections aren’t only important on a personal level, but also on a professional level. Being friends with social media superstar will definitely help boost your sales if you ever decide to start a business. Having the contact of that book publisher will definitely be helpful once you start thinking of sharing your knowledge with the world. My point is, the more connections you have, the more chance you have to succeed in whatever challenge you take on.


Not only is being social important to build important connections with people, but also surrounding yourself with good people that push you to become a better version of yourself is essential. Humans are designed to be competitors. Once we find someone with something we don’t have, we automatically start thinking how we can obtain it too. Having that extra push by surrounding yourself with quality people will guarantee you achieve your full potential.


Having friendly relationships with other people keeps you emotionally content and keeps you focused. Some friends are also there just to support you whenever you need them. Having a few friends who are willing to buy your book no matter how mediocre it is guarantees you will become a selling author on the first day you release your debut book. Isn’t that great!


The take-home message here is, don’t lose your friends and the ones you love in search for wealth because you will only end up being miserable for the rest of your life.

15. Stay Happy


Never forget to stay happy. At the end of the day, it is the experience that will provide the most satisfaction when you look back at it all. Do not be miserable for years in the search of wealth since it is not money that makes us happy. Money is only a solution for some problems in our life, but some of the major problems we face come from within and are a result of the type of person we are. Being rich definitely provides privileges other people might not have, but being able to share those beautiful moments of success with the people you love and living a long, healthy life is so much more important than money itself.


Often, we spend our lives with our heads down working hard in search of happiness. It is often too late when we realize that all we had to do was look up, live the moment, and enjoy the people around us. All of us want nice things. Personally, I love fast cars. But having one Ferrari, or ten Ferraris will not make a difference if I wake up one day with no friends, no health, and no motivation. What is the point in buying a supercar if you have no one to show it off to? It’s not like the speed limit on the highway is going to change depending on what car you drive.


Remember, the difference between people who go on to do great things and the people who would love to get a taste of their dreams is their mentality. Having a strong mentality and a positive outlook for life will set you up for success. A defeated mentality will only drag you away from your goals and ambitions. The only way to score in basketball is to keep your head high, keep your eyes on the rim, and to never get discouraged if you missed your previous shot.

16. Be Wise With Your ‘’Big’’ Purchases


Many people eventually buy their own homes at some point in life. This is considered the biggest purchase the average person will ever make in his/her lifetime. Therefore, it is important that you purchase a property with a value equal to or greater than the actual price. A property to live in is not the only big purchase you will make though. You will most probably need to buy a car, if not several cars, over the span of your lifetime. In addition, when you start having enough money to start splurging on luxury items such as luxury watches, you should always purchase items in a smart way.


You just got a new job abroad and you will need to buy a new car to travel to work everyday. Should you buy a new or used car? Should you spend money on an expensive car or should you buy the cheapest vehicle you could get your hands on? There is no right or wrong answer. The most correct answer to these questions will depend on several factors such as re-sale value of the car in the future, maintenance costs, and operational costs.


The re-sale value of any car depends on how much the vehicle depreciates every year. A depreciation of 50% of the purchase price can be expected for vehicles over 3 years. After that steep slide, the depreciation rate starts slowing down. This should make the answer to my previous questions obvious. Buying a used car will save you from paying all that depreciation that is pretty steep the first three years of ownership. That definitely not always true though! Purchasing smart involves being able to think long-term even though the short-term math looks so much more attractive. You might get lucky and buy a used car dirt-cheap that has very little mechanical problems. On the other hand, you might buy a car thinking it is much cheaper than a new car of the same model, but end up doubling your investment over the next few years just trying to keep that pile of junk going. In addition, warranty, insurance, and service charges could be discounted when buying a new car. Even though it is hard to predict the exact numbers, try to keep all the costs of the vehicle over its lifetime in mind.


The second question I asked earlier seems to be pretty simple to answer. Buying a cheap car is so much better than buying an expensive car because you will have to lose less money due to depreciation, pay less money for maintenance cost, and make a smaller payment when purchasing the vehicle in the first place. This is not the case when you start dealing with certain supercars and hypercars. Not all vehicles are depreciating assets. Sometimes, you buy a car which is highly desirable and limited in production and then you sell it a few years later at the same price you bought it for, if not more. Betting on a certain asset to retain its value (or even increase its value) over time is very risky, but sometimes you have to trust your gut feeling and take a calculated risk. This usually applies for exclusive, therefore expensive, car. Spending more money on something in the short-run to save money in the long-run seems counter-intuitive, but it works sometimes. Therefore, if you are just starting off on your investing journey, it is definitely not worth spending a ton of money on an asset that might not provide you with positive net cash flow over its lifetime. This strategy should only be utilized when you become an experienced investor with a surplus of money to spend. Also, you shouldn’t mind showing off that limited production Ferrari!


When you start having that extra bit of cash to spend on luxury items, be smart with it. Don’t get swayed by branding and fading trends, purchase items with intrinsic value that are sure to hold their value over their lifetime of use.

17. Do NOT Be Stingy


Economize in your life where you are not spending money on useless stuff but DO NOT be stingy. Live your life. Pack your own lunch to work instead of ordering out. Turn off the lights when you are not in the room. Avoid using the washer/ dryer during peak hours. On the other hand, don’t try to cut down on costs that positively affect your life. Saving fuel by turning off the air conditioning in your car will not make you rich, but it will definitely make the car ride much longer for everyone in it. Saving a few hundred dollars on such costs over your lifetime is definitely an infinitesimally small increment compared to the amount of money you should aim to accumulate over your lifetime.


Being stingy to the point where it interferes with your needs (whether it be social, physical, or emotional) is the same as skipping the gym membership in the hopes of becoming rich and having your own personal gym in twenty years. It just does not make sense!

[] 18. Summary


Don’t wait for tomorrow to start following your ambitions. Start right now. You will be surprised with what you achieve if you put your full effort into it. Even if it is economically tough, find the way to set yourself up for success once the market regains its momentum.


Start using passive income to multiply your salary. Real Estate is a great way to start making passive income if you have some money saved up. Always invest in what you believe in, not what the advertisements tell you. Listen to your gut feeling before investing your hard earned money in anything and make sure all the numbers add up. Even if you invest in real estate, shares, or in your own business, keep trying to create new channels of passive income. Use your knowledge to write a book. Start a YouTube channel. Just do something that you love and are passionate about and perfect it so you can start earning money from it. If you have several hobbies, don’t try to perfect every single one of them. Choose the ones you are best at and try to become the best in the world at them. To help you focus on your goals and decrease stress, keep a list of your goals and a list of what passive sources of income (or active) you are using to get there.


A lot of the process of becoming wealthy comes down to your mentality. Be patient. Growing wealthy is a long-term process and will not happen overnight. Always stay humble, build social connections, and be happy. Live your life. Don’t make money the center of your world. It is definitely nice to have more money, but it wont matter if you live your life poorly.


Be wise with your everyday purchases and your big purchases. Look for quality and functionality instead of looking solely on the name of the brand. It’s okay to spend money every once in a while on something you really want. That will even motivate you to become wealthy so you can afford this stuff all the time. On the other hand, don’t make it a habit and keep your spending within reason. Don’t go and buy designer shoes that cost you a month’s salary. Save up your money, invest it in the right way, and you could buy any designer shoes you want once you become wealthy and are able to.


Don’t forget, the biggest investment you could make is in yourself. Read. Go out. Experience new things. The only way to move forward is to become a better version of you each and every day.



If you have reached this point, I would like to thank you for downloading my first ebook and sharing my thoughts with me. I hope you enjoyed the time you spent reading it. If you did, please share it with your friends and give this book a review. My business email is [email protected] in case you would like to send me personal feedback regarding the book.


Yours Sincerely,

Rami Tannir


Uncovering The Path to Wealth: The Hard Truth

It is not often that we come across an opportunity as valuable as this one. This book is intended for the dreamers, the people who have huge ambitions of being successful but have not followed the correct steps to achieve their dreams. We will look at how the economy acts as a spring, the infamous exponential curve, and how you can start accumulating wealth. In addition, various economic and business concepts will be utilized to build a solid basis upon which investment choices should be made. The mental and emotional aspects required for growing rich will also be discussed.

  • Author: Rami Tannir
  • Published: 2016-11-18 16:50:15
  • Words: 10416
Uncovering The Path to Wealth: The Hard Truth Uncovering The Path to Wealth: The Hard Truth