The 1st Million
Today, I stumbled upon an intriguing phrase online: “Earning $100 to $150 is luck, earning $10 billion to $15 billion is inevitable.” This saying exists in various forms, but the core idea remains clear: the initial accumulation of capital is incredibly challenging, while the subsequent expansion of that capital is comparatively easier.
The Challenge of Capital Accumulation
Before you make your first million, you can't leverage capital to generate more capital. This means you can't recruit talent using capital to increase your company's value or directly invest capital to accumulate more. When building your initial fortune, your returns are primarily the result of the time you invest, which is inherently a lengthy and gradual process.
“When considering the problem of the first pot of gold, the fundamental issue is how to increase the fixed return slope under the premise of linear returns.”
Strategies to Increase Returns
So, when thinking about your first pot of gold, the key is to figure out how to boost the fixed return slope within the framework of linear returns. First, eliminate jobs with low single-unit returns. If you spend 10-30 years saving up money, the cost of trial and error is too high, and the time delta too small. Besides considering the single-unit return, you need to choose professions where sudden increases in return are possible. For instance, as a real estate agent, you might suddenly boost your income by selling a house. This type of effort can lead to relatively higher expected returns.
Optimal Strategy Selection
Therefore, choosing a profession with high single-unit returns and the potential for sudden increases is the basic formula for earning your first pot of gold. Outside of technical jobs (research and development, biotech, engineering, etc.), the most likely and suitable fields seem to be service industries. This is because the second requirement's fulfillment might be the highest.