If you put your mind to something, nothing is impossible, like the idea of being rich. To become rich, you have to do what rich people do. What do rich people do anyways? In the book Think and Grow Rich: A Black Choice, the authors found that successful people focus on areas they excel and polish them further. When you do what you love to do, money becomes a byproduct of your passion.
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How do rich people think?
Most rich people have individual thinking. They get inspired and fascinated while maintaining their vision and not deviating from it. For instance, the recent frenzy of ChatGPT got many investors to use the chatbot for stock recommendations. Surprisingly, high-net-worth individuals or hedge fund managers didn’t use ChatGPT. They look at the business strategy and past earnings to build their understanding of a company’s future growth prospects.
Rich people spend more time observing, reading, and building their thinking. They don’t shy away from taking calculated risks where they see an opportunity. Your prediction may not always be correct. And when you see your expectation from the company fading, don’t shy away from exiting. Warren Buffett stayed by Wells Fargo through its lawsuits but exited it in 2022 when the bet that made him bullish on the bank changed.
But that doesn’t mean you should copy Buffett’s portfolio. Get inspired by the thought process and build your thinking.
Two growth stocks to get you thinking and growing rich
If you want to get rich, consider investing in two types of growth stocks: opportunistic buys and revolutionary stocks. Buffett is an opportunistic buyer who invests in established or mid-cap companies. Elon Musk invests in companies that dare to change the future.
Gold stocks
Barrick Gold (TSX:ABX) is at a point where it is a once-in-a-decade opportunity to maximize your returns. Even though Buffett is not a fan of gold, he agrees with its power as a safe haven. Gold has an intrinsic value and is accepted worldwide as a medium of exchange. With the U.S. debt ballooning, a fear of a 1970s-like slowdown looms. Technology evolves with time, but human behaviour remains the same. When in crisis, people rush towards safe havens. That is when gold stocks outperform growth stocks.
Barrick Gold stock is a great way to get exposure to gold prices. As a mining company, it has a significant gold inventory. And it is the inventory value that causes stock price fluctuation. The stock jumped 75% in two months after the 2020 pandemic dip and over 100% in two years after the 2008 Financial crisis. The stock tends to drop along with the market in the early days of the crisis, but gold never seems to disappoint.
Barrick Gold stock dipped 16% in May, as gold corrected. But it is better to hold the stock now, because it would be too late to buy when the rally begins. A rally is the time to sell the stock and become rich.
Future growth stock
Another strategy to ponder upon is a revolutionary technology that can change the way people do things. The need of the hour is green energy that is cost efficient and easily accessible. If cars, ships, trucks, planes, and batteries could be powered by water, it would resolve issues like carbon emissions, energy independence, and cheap logistics.
Ballard Power Systems (TSX:BLDP) has a working technology called hydrogen fuel cells that power commercial vehicles like trucks, marine, mining trucks, and stationary power applications. It is receiving orders from industry players, but these orders could be delayed or cancelled or face execution roadblocks. The stock is trading at its 52-week low, as economic weakness tends to put experimental projects on a back burner.
Hydrogen fuel cells are expensive, but research is ongoing to make them cost effective. It needs government subsidies, which could dry up in a recession. But Ballard Power has an $863 million cash reserve to fund its capital spending, research, and operations. When the economy revives, there might hopefully be a ready-to-use, cost-efficient hydrogen fuel cell.
