5 misunderstood ways to wealth creation

What's the best way to build wealth from nothing?

Not born to a trust fund? Not banking on that magical lottery win to gain financial freedom?

Me neither. There are at least five ways to create wealth from scratch. But they're often misunderstood.

Combine them though, and you have a way to build wealth that's not just a roll of the dice:

5 ways to build wealth from nothing

1) Get a job

Some people call having a job being “just over broke”. Of course, this may vary by the industry you're in and the type of business you work for.

But as the COVID-19 pandemic has shown us, most jobs are only as stable as the company signing your payslips.

And as our everyday experience of working life has always shown us, most jobs are only as stable and fulfilling as the manager you work for allows.

At Fantastic Services, we've seen a huge increase in franchise applications during the pandemic years because more and more people want to take their destiny into their own hands.

If you're lucky enough to be in law, banking, or part of some high-flying tech company, getting a job might be a way to build wealth. For the rest of us, it usually means handing control over a large portion of our lives and financial freedom to someone else.

2) Don’t build a start-up

I've built seven start-ups in my lifetime. Fantastic Services is a raving success, yes. But five of the others failed. I made it out of the last one by the skin of my teeth.

That's a high rate of failure. And if I did it all again, I'm not sure I'd be able to do it differently. I like to tinker as I make products.

The net result of this is that even in my successful business, some of our franchisees have made substantially more than I have in the past decade. Some have then used that money to invest in property or crypto and made huge gains on top.

The start-up dream is to build fast. Then exit. But to build fast you need to give away equity and, thus, control.

Some of our competitors did this in their early days in the fight for market share. They didn't build up their service. They didn't understand what the service industry was really about. They raised money fast and they exited.

I've no doubt they did so while pocketing substantial sums. Yet that's nothing compared with what a decade of running Fantastic Services has given us.

The media tells us every day that the heroes of the business world are those who raise money for their new start-up. Then, usually, exit. But are they? Who is really creating value here?

All in all, the dream of building a start-up fast (then exiting) is often little more than a glamorous trap that is easy to fall into if you don't think about the high failure rate.

3) Buy an existing business

If you're thinking about buying an existing business, you need to ask yourself one question:

Before the transaction happens, how can you be sure exactly what it is that makes this business successful?

What's holding this ship together? What keeps it floating so high in the water?

The worst answer for you if you've just bought it would be the founders themselves. Now they're leaving. And you, coming from zero knowledge of that company and what drives its success, now have to fill that void.

The usual result is a business that quickly perishes.

4) Invest in a franchise

A franchise needs no further explanation. A franchise contains everything you need to make a successful business. A franchise is the best training ground for becoming an entrepreneur. Without the same risks.

Some argue that investing in a franchise is somehow a lesser wealth creation journey to travel than risking it all building a start-up.

But what all the media hype around start-ups glosses over is the fact that building one is a high-risk route that often fails.

As a franchisee, you have constant support. Not to mention all of the expertise of the founders and the team they've built to call on. Buying an existing business, eat your heart out.

5) Become an entrepreneur

Becoming an entrepreneur successfully is often about being able to identify and solve a problem.

My twenty years in business have taught me that the high number of failures comes from a failure to do that or from some combination of lack of drive or persistence.

Being an entrepreneur means spending longer hours at work than even the toughest job demands. It calls for incredible drive and endurance. A determination to stand up eight times when you've already been knocked down seven.

It's also risky. But there is one way to avoid the risks of being an entrepreneur while also getting support when you get knocked down – not to mention a huge array of other benefits.

In fact, we've already covered it here. The best way to entrepreneurship is via franchising.

Do you agree? What would you say is the best way to wealth creation? Which did you choose?

Comment below. Let's get the conversation started!