I often write on Quora.com, where I am the most viewed writer on financial matters, with over 491.5 million views in recent years.
In the answers below I focused on the following topics and issues:
- A company wants to buy my site for $1.6 million dollars. I’m currently making $8k to $11k per month with it. Should I take the deal?
- Does happiness increase when income doubles?
- Do you think crypto is dead after the FTX collapse?
- What are the signs before you actually make it big in your life?
- How do “hard working” wealthy people work harder than “hard working” non-wealthy people?
- How can I make sure that my family’s wealth lasts for generations?
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Source for all answers – Adam Fayed’s Quora page.
What are the signs before you actually make it big in your life?
There are some commonalities.
Some signs come up again and again.
One particular sign seems counterintuitive because most people get emotional about this.
What is that sign? It is getting criticized, sometimes heavily.
Amongst almost every single successful person in the world, this is one commonality which is constant.
I have seen it amongst public figures like businessmen of leading firms, sports and entertainment stars and leaders.
I have even seen it for people who have made it big in niche industry, the only difference being that the criticism is less because fewer people know them even if they are making big bucks.
The biggest reasons for this are jealously and envy, but also the fact that some people are unforgiving – public figures make mistakes like we all do, but they are more public.
Younger people tend to get more affected by things like this, but falsely believe that social media means that old truisms like “their is no such thing as bad publicity” no longer apply.
People who have been around the block a bit ignore it, or even encourage it. Businessmen like this make outrageous statements to get free (positive and negative) publicity:
Trump did the same, most likely saying things he didn’t believe to beat opponents with bigger war chests.
Even if he didn’t, cynical operators have worked out that any publicity is usually good, and a sign you have made it on some level.
Look at even those who don’t intentional cause controversy. The big banks get finned every single year. Google “HSBC fines 2000–2022”. Nobody cares.
Beyond that, the biggest sign you have made it big in your life is if you are achieving your version of success.
Many people feel pressure from society, friends and family to pursue certain things. Some feel pressure to gain financial success, others feel the opposite as they think it sounds too materialistic.
Others feel pressure to get married and have many kids, and some (like some environmentalists) might feel the opposite.
Ultimately, if you achieve what you want to achieve, that is usually a good sign, as opposed to achieving other people’s versions of success.
How do “hard working” wealthy people work harder than “hard working” non-wealthy people?
Some people have a misconception that wealthy people always work harder.
Now on some level it might be true. If you just compare a big sample of self-made wealthy people, the average probably works harder than the mean person in society.
That is because general society includes people who are unemployed, retired, a few lazy people and many who just want to work the “normal” 35-45 hours a week.
Therefore, if a wealthy person works say 46 hours a week, they are already inside the top 30% of hardworking people in most countries.
Yet as you rightly say, many non wealthy people work hard. Some work just as hard, or harder, as the average wealthy person.
The reason is simple. We all only have so many hours in a day. Imagine there is a person who sweeps the streets and is one of these people who only needs four hours of sleep a day, and is blessed with right energy levels.
Therefore, he works 17-18 hours a day to earn more money. Most hardworking wealthy people can’t compete with that, or can match it at most.
Wealthy people aren’t wealthy due to hard work alone.
Self-made wealth comes from:
- Hard, smart and focused work over long periods of time. Working hard on one project, quitting and then working hard on another project, isn’t the same thing as consistently working hard at one thing. When I was young, I was relatively good at tennis. That ended once playing badminton messed up my swing! The same thing can happen in life. This picture online also made me laugh, but I have seen real life examples of this:
- Leverage. More specifically:
- Leveraging money. Money sitting in the bank won’t do as well as that which is invested properly.
- Money. Not all debt is bad debt, and even if you don’t use debt, compounded investing returns make a huge difference long-term.
- Other people. If you work, you have 24 hours in a day. A maximum of 20 after sleep, and 16-18 for most people. If you hire people informally or formally, you can have hundreds of hours.
3. Of course, you need to be careful with leverage and debt too which brings me onto the next point. Taking calculated risks but knowing how to control them, is also important.
If you do all of those things, your chances of becoming wealthy is higher than merely working hard in isolation.
Doing all the above + getting a slice of luck, can be the key.
Do you think crypto is dead after the FTX collapse?
I think crypto is already dead in some key ways.
More on that later.
Of course, your question is whether crypto will literally survive. Let’s wait and see.
I don’t think digital currencies are dead because governments are getting involved as well.
Whether private crypto survives is another matter. Only time will tell.
Some would say that we are in the early innings here, because it has only been since the smart contracts were invented a few years ago that crypto has become relevant.
In much the same way that the internet wasn’t that useful until fast broadband wifi and the iPhone + other smart phones became popular from 2010 onwards, some would say we are in the same stage with crypto.
Many people wrote off the internet, and technology, in the 2000–2008 period, after the collapse of the Nasdaq.
I personally think crypto is already dead in some key ways.
Namely, advocates of it have argued that it is:
- A currency which could replace the USD
- A hedge against inflation
- A hedge against a falling stock market – an uncorrelated asset
- A hedge against just about everything!
- Digital gold
Even when the price was going crazy, it wasn’t any of these things. It was being used as a speculation, which could go up or down by huge amounts.
The fact that exchanges are in trouble isn’t the issue here. Nor is regulation in of itself. Banks are highly regulated but there is nothing to stop a run on banks if too many people want out.
I doubt regulation in isolation will solve these issues, and even if crypto survives, I suspect it will be “winner take all”, where government digital currencies and a few private ones survive and take most of the market share.
Does happiness increase when income doubles?
Happiness does increase with extra income, but it evens out at a certain level, no matter how much you measure happiness.
Different studied show contrasting results. Most either show declining marginal utility, meaning happiness does go up as people earn more, but the extra gains are minimal the higher up the income scale you go
Others show that happiness can go down at a certain level, because many of those people sacrifice time with their family, and compare themselves to other people in their neighborhood who are even richer.
According to such research, it is better to be earning 100k in a place where most people earn 70k, rather than make 500k where the average income is $1m.
The commonalities I have observed are:
- If you are happy when you are poor, you will likely be very happy rich. If you are unhappy poor, you will be just as unhappy rich
- There is declining marginal utility above a certain level, but using extra resources to improve your health, spend time with your family and help charities can really help people’s mindset.
- If you compare yourself to others and feel envy, it isn’t a recipe for happiness, regardless of your income level.
- If your income doubles, but your wealth and therefore security doesn’t improve as you just spend the extra income, you don’t feel happier. Think about most of your friends at college compared to now. Most aren’t much more happy, but one reason is they are not more secure in many cases. The extra income has just came and went.
Most of all though, money gives people choices. It is what you do with those choices which impacts your happiness.
A company wants to buy my site for $1.6 million dollars. I’m currently making $8k to $11k per month with it. Should I take the deal?
I don’t know what the multiples are like in your industry.
Regardless, let’s assume you are making $120,000 a year from the business in profits, they are offering you 12x–13x yearly profits.
That appears like a good deal on the surface. You can also reinvest that $1.6m elsewhere.
What is more, you have to consider how big the company that wants to buy you is. They could have the ability to replicate your idea, and take you on directly.
That is one reason many technology companies sell out to the big boys, such as Google.
Conversely, if you have a robust business model which isn’t easy to replicate and growing profits and revenues, I would consider holding onto the company.
How can I make sure that my family’s wealth lasts for generations?
There is no foolproof way of achieving this, otherwise everybody who has tried would have succeeded.
The best ways are:
- Have as much in the pot as possible to ensure there is a conservative buffer
- Put in place a structure, like a trust, which ensures that overspending, divorce and much else can’t erode all the capital. In other words, the beneficiaries won’t have full control over the money. That is one reason European royal families are some of the few who have kept wealth. There are structures in place.
- Make sure that there is diversification of revenue sources. If you just leave all the money in a family business any random event, like a lockdown, can affect that wealth.
- Make sure the next generation’s educated on finances, and good advisors and influences are on hand.
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Adam is an internationally recognised author on financial matters, with over 694.5 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.