The Wealth Mindset

Disregard superstimuli, accumulate capital.

— Warren Buffet, probably

Money is this mysterious and elusive force that governs most people’s lives. It doesn’t have to, though. Here’s a glimpse into the fake framework that those evil, evil capitalists use to practice the super secret art of moneybending.

Let’s get into it.

The Mindset

Money is inherited, and that’s what keeps those evil capitalists rich over generations, right? Not quite. See, it’s not just their money that gets inherited. Depending on the environment you grow up in, you don’t just inherit genes and money from your family — you also inherit their habits, customs, opinions and mental maps.

For wealthy people, money is not the sword of Damocles dangling above them, but just a tool used like any other tool – money is just an abstraction of wealth, and used as such.

If you want to create wealth, it will help to understand what it is. Wealth is not the same thing as money. Wealth is as old as human history. Far older, in fact; ants have wealth. Money is a comparatively recent invention.

Wealth is the fundamental thing. Wealth is stuff we want: food, clothes, houses, cars, gadgets, travel to interesting places, and so on. You can have wealth without having money. If you had a magic machine that could on command make you a car or cook you dinner or do your laundry, or do anything else you wanted, you wouldn't need money. Whereas if you were in the middle of Antarctica, where there is nothing to buy, it wouldn't matter how much money you had.

Wealth is what you want, not money. But if wealth is the important thing, why does everyone talk about making money? It is a kind of shorthand: money is a way of moving wealth, and in practice they are usually interchangeable. But they are not the same thing, and unless you plan to get rich by counterfeiting, talking about making money can make it harder to understand how to make money.

Paul Graham

The Practical Stuff

Let’s start mapping things out to understand our current situation, then make plans based on that. Businesses do this by measuring cash flow.

Cash flow refers to the net amount of cash and cash equivalents being transferred in and out of a company. Cash received represents inflows, while money spent represents outflows. A company’s ability to create value for shareholders is fundamentally determined by its ability to generate positive cash flows...


At its most basic, we can map out our cash flow as a simple table:

Inflow Outflow
Job ($3000) Food ($200)
Data ($150)
Rent ($800)
Candles ($3600)
Utility ($150)
Sum ($3000) Sum ($4900)

Exercise: Cash Flow Mapping. Set a timer for five minutes to think of solutions on how this person could improve their situation. Then, spend another five minutes and roughly map out your own current cash flow.

Now, this would be the point where any casual would tell you to minimize your expenses, maximize your income, and invest. I am such a casual. But let’s put another step first, so that aforementioned advice becomes actually fruitful.

This only covers cash so far. To become actually wealthy, we need to expand this to wealth. For that, we need to unravel the money abstraction just a little bit: Enter stage left, transactions.

A job is a transaction of our time (and our knowledge, health, pride, and sense of childlike wonder and appreciation for the beauty of life itself) for money. Eating is the transaction of time and food for more time. Buying stuff is the transaction of time and money for stuff. You get the idea.

When working with wealth, we’re often doing transactions that don’t involve money. That doesn’t make them valueless, just difficult to pin a price tag on.

Exercise: Wealth Flow Mapping. Map out your monthly wealth flow. Each line in the table represents a transaction this time. You won’t be able to properly quantify most of these, so don’t. Just write them down. Don’t spend more than 10 minutes on this.

For example, your wealth flow might look like this:

Transaction Income Cost
Eating Time Food
Job Money Time
Exercise Health Time, pain
Drinking with friends Networking Health, alcohol
...and so on

The aim is to see every action you take as a wealth transaction. Investing is the process of transacting with the aim of increasing wealth. On the flip side, consumption is the process of transacting without that aim — most of the time, it ends up decreasing wealth.

Wealthy people invest first and foremost, then consume some.

Poor people consume as much as possible, then invest when absolutely necessary.

Exercise: Cash Flow Reframing. Set another timer for 5 minutes and revisit the sample cash flow table from before. Under the wealth transaction framework, are you able to come up with different solutions to their situation?


Now that we have an understanding of how those evil, evil capitalists think, let’s start making moves ourselves. To make a ton of money, we have to generate a ton of wealth, which we then transact for money. To get money, we have to produce wealth for other people. To do that, we have to invest. The big question is: invest into what?

Looks like a difficult question. It isn’t, though. If you just start investing randomly but consistently, rather than living a life focused on consumption, you’ll already do better than 95% of people.

To get above that, you'll need exponential growth. You need to invest into your ability to invest. Invest some time into reducing time wasted. Invest some money into doing your job better. Invest into books that teach you the basics of negotiations and sales. Invest some time and money into getting professional clothes and photos to increase your chances of getting a better paying job. Invest the surplus money from that job into coaches. Use those skills to —

— well, concrete advice is difficult, because your current situation looks different from mine. Here’s the rough plan that I’m personally currently following:

  1. Get a job to cover expenses
  2. Invest surplus time and my little surplus capital into maximizing my job income
  3. Invest surplus time and my increased surplus capital into networking and related wealth
  4. Use network to generate opportunities for investments
  5. Invest into generated opportunities to generate more wealth
  6. Go to 3

A few investments will almost always get you a good return though. If you aren't sure where to start, try one of these:

  • Negotiation skills
  • Sales and marketing skills
  • Professional clothing
  • Professional pictures
  • Social skills
  • Communication skills

Exercise: Setting Goals. Now that you know your wealth flow and how investing works, you can now start investing in yourself. Define SMART goals for decreasing your consumption and increasing your investments. Remember, monetary transactions aren't the only kind — a transaction can include time, trust, reputation, knowledge, or other forms of wealth.

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