There are a million ways to make a million dollars and get rich, and this is how Bill Gates did it.
In the realm of rich people, Bill Gates needs little introduction.
Forbes first listed Gates as a billionaire in 1987. He was the richest person in the world, according to Forbes, from 1995 through 2017 (except in 2008 and from 2010 through 2013).
With that being said, it’s safe to assume the man knows what he’s doing. So without further ado, let’s dive right into Bill Gates” key principles for success and getting rich.
Don’t worry if you don’t feel like reading, you can enjoy the video below or watch it on YouTube:
1
The power of feedback loops
In one of his annual letters, Bill Gates said:
“You can achieve amazing progress if you set a clear goal and find a measure that will drive progress toward that goal—in a feedback loop similar to the one Rosen describes.”
This quote shows how he has used data and measurements to build Microsoft and also to help solve problems around the world through the Bill & Melinda Gates Foundation.
Feedback loops are important for building wealth and personal finances for several reasons.
First of all, you can’t control what you cannot measure.
The first step to knowing your financial health is to keep track of your income, expenses, and investments.
Once you have this information, you can make clear financial goals, like paying off debt, saving for retirement, or getting a certain return on your investments.
The next step is to do something and keep track of what happens, which will close the feedback loop.
- If you are an investor, this could mean keeping track of how well your portfolio is doing about your financial goals.
- If you’re a business owner, it could mean looking at your yearly earnings to change how you run your business.
But feedback loops aren’t just about numbers; they’re also about growing as a person.
Asking teachers, peers, and even employees for feedback can give you ideas you wouldn’t have had otherwise.
Gates is known for constantly looking for criticism as a way to get better and make changes.
He thinks that the only way to figure out how to do something right is to know what you’re doing wrong.
This is also a good way to think about handling money.
For example, if you regularly don’t save enough each month, honest feedback from someone you trust can help you figure out why and what to do about it.
Feedback loops also help people learn to change.
The financial world is always changing because of how the economy is doing, new technologies, and changes in the law.
When you look at your financial data regularly, you can change your strategy as needed to protect your wealth and make more money.
2
The long run
Bill Gates didn’t get to be as big as he is overnight.
From dropping out of Harvard to co-founding Microsoft is a story of perseverance, creativity, and long-term thinking.
Gates has said many times that success overnight is mostly a myth and that real accomplishments take time.
The idea of “being ready for the long haul” is often underestimated but is very important when it comes to personal finances and building wealth.
People often lose sight of the basics of steady, small growth because they want to get rich quickly, whether it’s through the stock market, real estate, or a new business.
Gates’s focus on the long term helps us understand how important it is to be patient when trying to get rich.
Most people don’t get rich all at once. Instead, they save regularly, make smart investments, and make small steps forward over many years or even decades.
Also, having a long-term goal isn’t just about being patient; it’s also about being ready and strong.
Financial markets can be unstable, businesses can go through slow times, and people’s personal lives can throw them curveballs that affect their money.
To be ready for the long haul, you need a complete financial plan that includes emergency funds, a variety of investments, and a smart way to handle your debt.
It means that you shouldn’t put all your eggs in one box and that you should know when to give up.
This idea is also reflected in how Bill Gates does charity work. The Bill & Melinda Gates Foundation works on long-term problems around the world. And when we say problems, we’re referring to getting rid of polio or making school systems better.
They know that big changes take time, steady work, and a clear idea of what needs to happen.
Your journey with money is the same. You may have failures, but if you look at them from a long-term point of view, they become small bumps instead of huge problems.
Last but not least, you have to keep going!
In a world that is concerned with viral trends and quick ways to make money, sticking to well-thought-out financial plans can give you an edge.
When it comes to compound interest, time is one of the most important assets, and the sooner you start thinking long-term, the more your money will grow.
3
Create value to build wealth
Bill Gates often talks about how important it is to create value as a way to make a lot of money.
He didn’t just sell software; he also gave billions of people a way to be more productive, communicate better, and live a better life generally.
In this case, the lesson is clear: creating value often leads to more money.
This idea is very useful when it comes to personal finances and investments.
Many people fall into the trap of chasing money for its own sake. But they often forget the more important factor of worth.
Whether you’re looking for a job, running a business, or making an investment, you shouldn’t just think about how much money you can make, but also how much value you can bring.
It doesn’t have to be as big as Microsoft to be valuable.
It can be as easy as getting skills that are in high demand but hard to find. This makes you an asset to employers because you have skills that are hard to find.
It can also mean finding a gap in the market that you can fill with a unique product or service.
Also, it can mean becoming a smart investor who knows the worth, not just the price, of an asset.
When we talk about worth, we also mean moral and social issues.
Aside from being rich, Bill Gates is known for his generosity. Which again focuses on creating long-term value through health and education projects.
The main thing to learn from this is that value comes in many forms.
Your net worth is just one way to measure the value you’ve added to the world. Your services to society and ethics are also important.
According to Bill Gates, creating value as a way to get rich is a basic shift in mindset.
It moves the question from “How can I make more money?” to “What can I do to make things better?” or “How can I solve more problems?”
By taking care of these, money will come to you on its own.
In simple words, the size and number of problems you solve determines how much money you make.
The bigger and more complicated the problem, the more value it creates and, in turn, the more money it makes.
4
The power of compound interest
We know we’ve mentioned this many times before, but we’ll keep doing it until everyone fully understands it.
According to Bill Gates:
“Most people overestimate what they can accomplish in one year and underestimate what they can do in ten years.”
When most people hear the term “compound interest,” they think of savings accounts or stock portfolios.
However, Bill Gates’ view goes beyond simple measure of riches.
The idea behind the concept is that small changes can add up to big ones over time, whether it’s in technology, social change, or personal growth.
Compound interest is not just an idea in finance; it is a basic law of growth that applies everywhere. Even a small good change that happens over a long period can lead to big changes.
Compound interest holds true for your skills, your connections, and even your money.
For example:
- If you invest $10,000 and get a 7% return every year, you don’t just get back 7% of the original amount.
- You get 7% of the new amount, which includes the 7% you got last year.
- You’d have more than $76,000 after 30 years if you didn’t add any more money.
Now, imagine if you did that not just with money, but also with your skills or what you give to society.
On the other hand, if you have debt, rising interest can work against you. In the same way that gains add up, so do losses or debts.
To apply the idea of compound interest to your life, you don’t have to make big changes. Instead, you can make small, steady gains.
Invest wisely, build skills slowly, and make small, good decisions, and then give them time to grow.
When you understand and use compound interest, you can change your financial life in a big way.
As with many types of exponential growth, the short-term wins may not seem like much. When in fact, they are the building blocks of life.
5
Embrace failure as a learning opportunity
Bill Gates, despite his monumental success, has never shied away from talking about his failures.
He’s often quoted saying, “It’s fine to celebrate success, but it is more important to heed the lessons of failure.”
Gates didn’t get rich quickly. He had setbacks, like when his first business, Traf-O-Data, which was supposed to process and analyze data from traffic tapes, failed.
Failure is often seen as embarrassing and something to be avoided at all costs in our success-oriented culture. But Gates sees failure as a useful lesson and an important step on the way to success.
When it comes to getting rich, Bill Gates says that loss creates the kind of feedback loop that is necessary for improvement.
By figuring out what went wrong, you can avoid making the same mistakes in the future. This will increase your chances of success in future projects.
This way of dealing with failure doesn’t just work in business. It also works in personal income.
People are often afraid to spend because they don’t want to lose money. Even though the fear makes sense, it’s also limited.
Your money won’t grow if you don’t take smart chances. Gates says that the key to making money is to learn from your mistakes.
Did a business deal go bad? Look into what happened.
You may not have invested in enough different things, or you may have acted on a “hot tip” without doing enough study.
Regardless of the reason, failure gives you the information you need to re-evaluate and refocus. And, if necessary, start over with a new plan that gives you a better chance of success.
So, the next time you have money problems or other problems in life, don’t let the fear of failing stop you.
Instead, see it as a moving stone that will help you get where you want to go in life, including making money.
After all, as Gates says, “Your most unhappy customers are your greatest source of learning.”
6
Think long-term. Plan short-term
Bill Gates’ approach to life and work is a great example of how to think about the long term and plan for the short term at the same time.
Sustainable success is often defined by how well these two points of view work together.
But the secret is not just to find a good balance between the two, but also to know how each one works well with the other.
Your north star is to think long-term, or to have a “big horizon,” as you put it.
Your actions, decisions, and goals are all based on your final goal.
This is where you let your mind run wild and dream big about the kind of life you want. Picture the legacy you want to leave or the social change you want to bring about.
However, a big goal can be overwhelming or seem impossible to reach if it is not broken down into achievable steps.
This is where planning for the short run comes in.
The jobs you have to do right now, the things you have to do every day, and the goals you set every three months are all steps toward that big picture.
Planning for the short term keeps you grounded.
It makes sure that even though your head is in the clouds, your feet are firmly on the ground. The way they’re linked is like a feedback loop.
Your long-term plans are based on your long-term goals, and as you carry out your short-term plans, you learn things that can help you change or improve your long-term goals.
This makes you flexible and quick to change. You’re always learning, making changes, and, maybe most importantly, doing.
For example, let’s say that your long-term goal is to become a famous author who changes the lives of millions of people.
Short-term steps could include writing every day, reading a lot to improve your writing, and making connections with companies and other writers.
The lesson here is clear: your big goal should be bold enough to excite you but not so scary that it stops you from taking action.
By keeping your feet on the ground in the present and focused on what you can do today, this week, or this month, you’re paving the way to your long-term goals.
7
The importance of innovation
Gates’ life’s work shows that innovation isn’t just about new technology or startups that flip the status quo.
It’s an approach to life and work that looks at everything as a whole. Think of it this way:
Even if a certain way worked in the past, that doesn’t mean it’s still the best way to do it now.
This is true for everything.
For example: In the past, the best way to secure your future, both professionally and socially, was to go to a good school and get a good job.
Even though it’s clear that things have changed, most people still hold on to this idea because they don’t want to stand out.
However, by being brave enough to question the status quo, you don’t just help yourself or your career. You also help society move forward. Bill Gates teaches us that it’s not just about getting rich; it’s about moving forward as a whole.
Your willingness to find better ways to do things can set an example that inspires others to do the same. And that can cause a ripple effect of positive change that could go further than you ever imagined.
8
Learning is fundamental
Aside from being filthy rich, Bill Gates is well known for his reading habits.
He thinks that a strong desire to learn is one of the most important keys to success and that reading is one of the best ways to meet this need.
But it’s not enough to just read anything. You need to carefully choose books that make you think, broaden your horizons, and give you new ways to solve problems.
So, why does this method of learning work so well? One reason could be that reading gives you more time to think and learn.
In contrast to social media or the news, books generally give a more in-depth look at a topic.
This level of understanding can be the key to real creativity. Why? Because it lets you question the status quo and challenge the status quo, as we said in the last point.
In the big picture, reading is your ticket to a trip that has no real limits.
It’s a call to discover worlds, cultures, philosophies, and sciences you might not have a chance to see otherwise.
Bill Gates called it the way to “download knowledge” straight from the source.
As you work on this project, keep in mind that your goal isn’t just to learn more facts. Instead, you want to expand your thinking and improve your judgment.
By reading and educating yourself regularly, you’re laying the groundwork for upgrading your thinking and decisions.
You’re not just adding years to your life; you’re also adding life to your years, so every moment is a chance to grow and change.
9
Collaboration over competition
When it comes to getting rich, Bill Gates has always said that teamwork is more important than pure competition.
Gates is sure that you need to know you can’t do everything on your own if you want to stay grounded. Even if you have big, long-term goals.
You are part of a bigger ecosystem that includes not only your rivals but also your collaborators, mentors, peers, and other stakeholders.
In a normal situation, people often think of success as a “zero-sum game“. A game in which one person’s gain means another person’s loss.
However, this point of view can be limiting, even if it works sometimes in the short run.
At this point, you may find yourself asking “Why is working together so important?”
First, it lets you use the brains of many people, which speeds up innovation.
When people work together, they find solutions to hard problems faster. This creates an environment where improvement is the rule.
This is very different from a competitive approach, in which resources are used to try to beat each other. This often leads to duplicate efforts and a waste of time and talent.
Second, working with other people improves your social and mental health and gives you a sort of safety net.
In a competitive atmosphere, failures are often seen as bad, which makes people afraid and less willing to take risks.
Third, when people work together, they often find opportunities they didn’t expect.
When you work closely with other people, you learn about different skills, points of view, and ways to solve problems that you might not have thought of before.
Fourth, working together can be a way to check and balance each other.
The involvement of different parties makes sure that everything is taken into account, even things you might not have thought of.
Lastly, working together builds a sense of community, which is important for staying grounded.
When you realize that your success depends on the success of others, you change from having an “I” mindset to having a “we” mentality.
10
The role of luck
Bill Gates is a name synonymous with entrepreneurial brilliance and groundbreaking innovation.
Even so, he admits that luck played a big part in his success.
To put it simply, luck in this situation isn’t just about random chance. It’s also about when and how things line up to make changes possible.
Gates was lucky to be born in a place and time when he could use computers at a young age. He met people who liked software as much as he did, like Paul Allen.
These were lucky things that set the stage for what would happen next. Here’s the thing, though:
The harder you work, the luckier you get.
This is because luck normally speeds up what you’re already doing.
A lot of people like to say that other people’s successes are just due to luck.
Luck does play a part, too. Everybody gets lucky once in a while.
But here’s the real question. Can you use that good luck or not?
Overnight, you could get the best deal of your life, but you could also miss it.
You see, the only thing that separates “lucky” from “wasted talent” is the choice to act when it’s most important.
Before we finish this article, we want to recommend you read another entry in this series: How to Get Rich According to Steve Jobs. It’s a cool side-by-side comparison of two tech giants that helped shape the world we live in today.
This concludes our analysis of Bill Gates’ approach to getting rich. He’s one very interesting individual and there’s a lot to learn from his ways. See you next time!
