My No. 1 secret to getting rich

To Get Rich Investing in Stocks, Do This | by John Pa | The Ascent

My No. 1 secret to getting rich
Photo by Alexander Mils on Unsplash

The key to getting rich isn’t about money, really. It’s about how you think about money.

And the problem isn’t that you don’t think enough about it, but that you think too much about money.

This is especially true for those who want to grow their money in the stock market. Making money in the stock market isn’t easy, and if you focus on your money there, you’re almost guaranteed to lose your money.

Yet, in the long run, the market goes up. Those who invest in a S&P 500 index fund, and hold it for years, are almost guaranteed to make money.

Yes, if you have the right mindset about your money, you will make money in the market.

You may not get billionaire rich, Warren Buffett. But there are plenty of normal people who grow their wealth in the market. And they are getting richer year by year, decade by decade.

You might be tempted to call it luck or whatever. But it’s not. It’s something else. It’s a secret that most investors know but don’t really talk about. It’s this.

Don’t focus on your money.

I know. It sounds ridiculous saying that you don’t get rich by focusing on your money. But it’s true.

You see, the secret to growing your wealth investing requires you to understand that to make money with money, you have to be willing to lose your money.

If you remember that, you won’t just grow your money; it will make you wealthy.

But changing our mindset about money isn’t that simple.

Stop Counting Your Money

“Focus on money,” looks the person who checks their account balances often. It’s when someone loves going into their banking app to make sure their money is still there, safe and sound.

“Focusing on money” is prizing and holding tight to the value of money one has at the current time.

That might be you. And there’s nothing wrong with compulsively checking your account values every ten minutes. But if you want to grow your money by investing in the market, that won’t fly.

Investing your money in the market isn’t the same as accumulating it. It isn’t income; it’s not your salary; it’s not a savings account, or a CD, or a bond. It’s not steady. You can’t control the market. And knowing that will help you count your money less.

But it’s hard to do that. And there’s a reason for it.

It’s called volatility.

Account for Volatility

Volatility is the gyrations of the market. It’s a fancy word for the simple concept that stocks go up, and down. If you’ve invested money in the market, that means your money will go up and down, too.

And if you’re watching your brokerage account, having your mind on your money and your money on your mind, as volatility has its way with your money, a pit bull with a rag doll, it will be incredibly painful for you.

It will feel getting seasick because the stock market is being on a boat in the ocean with forty-foot waves cresting and crashing—nauseating.

And that’s where focusing on your money when it’s invested in the market gets you into trouble. Because when the stock you bought goes down, you’ll be desperate to sell. A banshee- voice inside of your mind will probably scream at you, “Get out, you fool!” (Or at least, that’s what I hear.)

Believe me, I know. I’ve been there many times. I’m there right now (as of Tuesday, September 8th, 2020). The past few days in the market have been hairy. The market is down three days in a row, and it has been volatile — the NASDAQ dropped 10% in that short time. And inside of me, I hear the banshee shrieking and feel the waves crashing. And I’m dying to sell all of my stocks and cash out.

Avert Loss Aversion

Economists have a name for that feeling: it’s called “loss aversion.” It means that we hate losing more than we love winning. And it’s true in sports and all areas of life, but it’s especially true with money.

When your investment is going down, the pain you feel is far more intense than the positive feelings you get when your investment is going up and making you money.

So when the market is tanking, that’s when you’ll do anything to avoid the pain of “losing” more money because all you’re thinking about is…your money.

That’s why you’ve got to stop seeing your money as money and start focusing on your investment.

You do that by remembering why you made this or that investment in the first place. Maybe you had an insight into e-commerce or retail or manufacturing, or whatever. You researched certain companies and read an obsessed person to form a conviction about them before putting your money in.

Or, maybe you didn’t bother with all of that and just invested in an index fund that tracks the S&P 500. Whatever you decided, you need to set your mind on those reasons you invested when you’re getting your boat rocked.

Doing this helps anchor your mind and keeps you from selling and jumping ship when storms hit.

And if you’re still panicking, write down your thoughts. That’s right, write. Writing is one of the most powerful ways to affect your thinking. It doesn’t just form your thoughts; it also reforms how you think.

It transforms your mind from thinking about money to focusing on your investments.

And when you’re freaking out about your hard-earned cash vanishing into smoke while the market is burning down, one of the best things you can do is slow down, get out a pen and notepad or your phone and start writing down your feelings. Really.

Because when you’re invested in the market, money isn’t the most important thing; it’s your belief in what that money can do.

The Rich Invest

That understanding is a big reason the rich stay rich: they don’t see their money just as money, they see it as a tool. It’s not something they horde or consume or spend — no. They know that money can be used to make more money. They invest.

They know that their investments aren’t just money. They’re little pieces of ownership in a company. And assuming they choose well, they’ll own powerful engines of commerce, innovation, and progress.

Buying a stock makes you an owner.

And that mindset helps you get richer by helping you become a better investor. Because investing better is less about money and more about seeing the opportunities of owning companies that will grow your wealth. And to do that, you need to be willing to expose your money to risk.

I knew a man who loved his money so much that he kept his money in cash, at home, in a safe, Pablo Escobar style. He refused to invest it at all. He could only see his money as money. He didn’t want to take any risks. He couldn’t stand losing a dollar. He didn’t believe his money could do anything else but keep its money-ness.

People who do that fail to understand money’s potential and realize what wealthy people know, which is this:

When you expose your money to risks, there are rewards.

See, when you believe that taking risks has its rewards, that’s when you will start thinking the wealthy, and you’ll start to build your own wealth.

Of course, they need to be calculated, smart risks. But assuming that, risk-taking is about being willing to let go of your money and cease to hold it so tightly so it can generate greater value with that money. When you release your money, that’s when you give yourself the real opportunity to make more of it — much more. That’s how you make money with your money. That’s investing.

And that sounds good until you start seeing losses.

Hold On Through the Losses

Risk means you can have losses. Or at least “paper” losses. That’s when your investment is losing money, but you haven’t sold it yet. So that loss isn’t an “actualized” loss; it’s just on paper. But when you sell that losing stock, that’s when you turn your paper loss into a real loss.

To avoid that, one of the best things you can do is hold on to your investment. When you hold on, you put your emotions on hold. Doing that gives your investments the time they need to recover. And more than that, they will turn into rewards.

Many people forget that one of the most significant factors in making money in the market is this — time.


I’m not saying that if you start investing you’ll become a Warren Buffett. But holding on gives your investments the time they need to grow so that you will grow wealthier. I mean, look at how long it took Buffett to become as wealthy as he did. It took him three decades to become a millionaire, five decades to become a billionaire, and eight decades to become a gazillionaire.

That’s what holding on does. It gives your investments the opportunity to compound over the years, yielding growth you never imagined could happen, and turning losses into gains.

My Losing/Gaining Story

A year and a half ago, I invested in Shopify. Right after I did, the market dove down a skydiver jumping a plane, and my account value went down by a good chunk of change.

It hurt—badly. And I wanted to sell.

Then I had to remember that I believed in e-commerce and the leading role I thought Shopify was playing and would continue to play. Every day.

After weeks, and months, the tide started to change and the price started to go up until the stock recovered to the amount I originally bought it at. Then, it started to soar and soar and soar.

Now, my Shopify shares are up 375%.

Source: Me

Closing Thoughts

Let me be clear, just because you put your money in a stock doesn’t mean it will always go up.

I’ve had some real losers that never recovered. I’ve had others that went up and up, then down, then up and up.

Remember, there’s volatility. That never changes in the market.

Some of your best convictions can be completely wrong. No one is immune to wrongness. I’m not. There are no guarantees in this game.

But some of them will be right. And if you stop thinking about your money and start giving your investments the time they need to grow, you will see how right you can be.

And if you do, you’ll be rewarded.


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