I think to understand wealth you have to understand value and how to create it, but either way you only have one time to do it - scary hey!

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what creates value in your life....

Value is having the time to do the things you value in life. What you value in life is something you need to decide. For me it is something that I experience and that stays with me.  Something like spending time with your family, going on an adventure, making new friends or experiencing something new.

It is something that I do because I want to do it, and because it makes me more than I used to be. Just sit back and think of someone old you know, telling you stories and picture how you go "wow, that's so amazing" and at times you feel like that person has done so much, I want to do so much. That's because they have had more experiences, points of value in their lives. Things that make them who they are and things that don't go away.

So the issue lies in the fact that often the things you want to do cost money (a thing) and generally what people do is they their trade time for money.  

I believe a person who trades their all their time for money with always have no wealth in life. You are giving up the most precious thing you own for something, and anything other that time that creates value in your life is you losing something.  

The issue is that, the marketing geniuses of the past have sold people on the concept that "things" are associated with a happier better life. WTF, and like Adam we ate that apple - nom nom.  

Little side story: Want to make friends?  People say you make friends so easily, it's not that easy for me.  One day I was having a hard time with an ex-girlfriend (thankfully ex) and I was bleak. So I was chatting to Erns and he said to me "Just live life and enjoy yourself, people are drawn to happy people." Erns, such a legend, summed it up perfectly!   So as simple as that, just be happy and have fun.  We all want to have fun, if we are having fun, people want some of that.  The marketing people jumped on that boat years ago, notice how you don't see sad unhappy people drinking a coke or driving their Mercedes in an advert?

Issue is sometimes you attract "negative people" which is another issue altogether, maybe get to that another day...

So what I am saying is spend your money in a way that buys you time, and adds value to your life.

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why are things not wealth....

In life if something is easy, it is generally not worth much.  If I work, I earn money and with my money I can buy things. Like a shirt or coffee or a car.  So your time, became a thing, a shirt a coffee or a car. You gave a piece of your life for that.  What do you get?  A shirt, you probably have many, but you do need a few so you don't get arrested. That shirt will fade or just get holes from age and eventually you'll get rid of it. So you gave up your time, and now you have nothing.  With the coffee you get a moment of satisfaction that's gone and forgotten minutes or hours later.

I am not saying let's all run around naked in the jungle, and eat whatever we find! We do need some things to live, but you need to understand the cost of those things.  That said being Scrooge McDuck, is also as bad.  This is something I fight with myself about, because I know what I am giving up to do something now.  You need to experience things now. Like being unhappy now is also losing time you'll never get back.

You have likely heard this before: "Don't study something that will earn you money, study something that will you enjoy." Same for a job, do a job that makes you happy not a job that pays you more.  

The world is a constant battleground where you are fighting for fulfillment, but selling time to the highest bidder.  It is crazy, if not crazy, sounds like an addiction.   

Now instead of buying a thing, compare this to using the money to go on a holiday (camping, visit family).  Here you have given up time and used that to give yourself time that is valuable. Think of taking a friend for lunch, learning a new skill with someone (painting or photography), here you are adding something to your life, there is value in the relationship, the experience and at the same time you are making someone else's life better.

The problem

So we are stuck in this situation were to gain valuable time in the future you will need to give up something now, but giving something up and not experiencing something now is giving up the time you have now.

This is where finance comes in.  If you understand some basic finance you can create financial wealth, which means in the future more time for you to spend on what adds value to you.

True wealth for me is money that takes no time.  

The reason that is wealth, is for one, you don't give up something precious for money, and 2 that money can then limit the time you need to spend earning money in the future, and you can spend more time adding value to your life.

Nirvana in wealth is when you get money for doing something that adds value in your life. When asked if I could be anyone, first person: David Attenborough.  Why David? Well he spends his time exploring the world, meeting people, seeing beautiful places, people and animals which for him adds huge value, and he gets paid!

Remember above I said do what you love not what's going to earn you the most money. David cashed in, he was basically asked to be the CEO of the BBC and said "NO" my place is in front of the camera, because that's what fulfilled him.

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Some thing you need to understand when you begin to create financial wealth

Concepts are simple but in practice I can only give you the tools, but I can't give you the answer.  My favourite thing to tell my classes is that "at best finance is a good guess, and every answer you get is just an estimate and is likely wrong."  They don't like it much.  To be honest basically a lot of people don't understand why knowing the answer is wrong, is fundamental in life, or why uncertainty is fundamentally a part of life.

Second issue is wealth is a philosophy and a lifestyle.  Unless you develop the next big website, company or create a special piece of art (by art I mean all art, like music, writing etc) wealth takes time. 

People in the world today want in a different way.  I was taught if I want something I had to work, save up and then I could buy it.  Also another benefit of my upbringing, I had to work for things. So the things I wanted took time. Today people want and they want now, I mean imagine the concept of saving for 3 years and buying an iPhone 5, by the time you get it there is firstly an iPhone 7 and nobody wants the 5.  (This is basically how marketers get you now, they know you want it now, so they say "why not buy now and pay it off over the next few years" - story for another day).    

I also sometimes get frustrated with time.  I have been investing since mid 2009, and I was running with a hedge fund manager, honestly an amazingly smart person, Grant, and I was whining about how I needed more funds, more leverage etc, and he just turns to me and is like (i am not 100% sure what he said exactly but basically was) "Why are you being so impatient, it will come with time". I knew at the moment I was being a brat who wanted what they wanted, right now.

I once was approached by a bunch of students to chat about shares.  So I went, and we chatted about investing in a few companies and I added my two cents here and there. However I knew one share that I was going to recommend to them. So I told them about it and explained why I thought it can't go wrong.   A few months later (like 8 months) I ask one of the students (Ross) how it went, knowing the share had done really well. He said they had lost on some and done well on others but were struggling overall and had net lost cash. He mentioned he bought some of the share I recommended and then had sold it like 5 months later because it hadn't really moved. So I asked, "Did you read the announcement that is was being bought out by a private equity company and you would have made a decent premium?", to which he said "No". So they made nothing on a share that made 38% in a year, and the JSE was pretty much flat that year.  This is exactly what I mean, sometime things take time and if you are right you need to know you are right and stick to your calls, don't start wanting, now.  (This is a lesson you learn from investing for a few years.)

Debt can be your friend or your worst enemy, but I love debt, because I believe I understand it.  Debt is an instrument created by the finance gods, and should ONLY be used solely in conjunction with assets.  Debt can devastate smart people.  My wife is a candidate attorney and she says most bankruptcy cases are against these smart, educated, "rich" people. So if debt is used to buy non-financial things is steals value, and will deplete your wealth. Debt not used properly is basically selling your future time today! 

Understand your options, and understand that you don't understand everything.  I have seen very smart people lose money.  Realize that no matter how smart you are, how much you think you know you are going to eat some humble pie creating financial wealth.  

Most important lesson, celebrate your failures and realize that you just got an opportunity to learn something and you only paid a small amount, and that something might save you millions one day! Things are not wealth, wealth is in time and experiences.

One of my friends Giovanni, who happens to be one of the most generous and loving people I know. He makes you feel like family, and will give you his best things if you asked. As an example he went on a fishing trip to Mozambique, and if you have been there you will know there is massive poverty.  He used his new fancy fishing equipment for the trip (if I remember correctly he didn't catch much), but he gave all his new fishing stuff to the people there so they could fish to survive when he left.  He was never the most successful investor (although his wife basically touched a share and it was gold), but would always say when he lost money, "you have to pay school fees".

Between him and Kyle, another portfolio manager I know, I have never met two people who value things less, but have much.  Kyle is also a person who would literally (and he did) pay for someone university fees and expect nothing in return. 

Lessons on creating wealth are not learnt in lectures, and there are things you can learn from books but if you really want to create wealth you need to read and speak to people.