⁃ This essay contains a set of principles I’ve developed after a decade of entrepreneurship.
⁃ I’ve had private conversations where I’ve enumerated these key points.
⁃ It is now posted for public benefit.
Let’s begin.
Sources of wealth are not created equal.
Some sources are temporary or ephemeral, while some are permanent. Ephemeral sources are here today, gone tomorrow. A prime example is what we term hustles e.g selling black market fuel, real estate agent, connector in a market place, etc. Now, not all ephemeral hustles are the same. Political connections can give you a source of wealth for a time. And this source generates greater wealth than the guy selling black market fuel.
To build long term sources of wealth, you need to play a long game. The best known long games are to Build a career and/or build a business. The most common way most folks become wealthy is to leverage one source of wealth into another. In this way, ephemeral sources of wealth could be valuable if you have a long term plan. E.g take your loot from selling black market and go open a store selling Engine Oils.
A great source of pain and most Grace to Grass stories is when people try to build long term wealth on ephemeral sources. You quickly realize it’s sinking sands. Wealth builds on itself so the foundation must be solid. In Building wealth on ephemeral sources, you quickly realize you have to work harder just to maintain your current level.
From personal experience and my extensive studies, The key characteristics of long-term wealth are:
1. You have Long term secrets or advantages. e.g. Can you outwork others? Do you have solid business/trade secrets that will take years to be uncovered by the competition?
2. Are there durable barriers to entry? If your business or career can be done successfully by any determined person, beware, you have no long term advantages. This is why Medicine will always be better than Law and why MTN is a better business than Netflix.
Of course, my knowledge is limited so I’ll add to this list as time goes on. Nevertheless, this is a good pointer and will point most determined people in the right direction on where to find durable sources of long term wealth.
In concluding, this essay shows why I’ve often been strongly against Crypto as a source of livelihood. It’s a non-durable source of wealth except you’re building the software that powers Web3 .
Addendum:
A common thing for most people is to do an ephemeral business, take the winnings and go build a better business. Dangote’s was like this: Import cement—>Build a Factory—> Export Cement. For a person who has no natural advantages like family wealth, this is the best course of action.