Brandon Donnelly

Daily insights for city builders, delivered every morning at 6 AM ET. I’m Brandon Donnelly — a Toronto-based real estate developer and founder of Globizen. I’ve been writing here since 2013.

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Tag: wealth creation

  • How to get rich (and why talking about money is okay)

    I’ve written about this before on the blog, but one of my qualms about architecture school was that it was too often taboo to talk about business and money. Why? Talking about and understanding the realities of the world doesn’t have to mean that you’re compromising on good design. Constraints are often good for design innovation. Similarly, I’ve always felt that personal finance should feature more prominently in schools at an early age. It should be considered a basic life skill.

    In any event, I came across this tweet thread last night by Naval Ravikant talking about how to get rich (without getting lucky). It’s from 2018, but the lessons — and there are many — obviously haven’t changed. (For those of you who may not be familiar, Naval was the co-founder of AngelList and was an early stage investor in companies like Uber, Twitter, and Opendoor.)

    When you see a headline like this it’s perfectly normal for your bullshit radar to go off. (In fact, it is one of his points.) But this thread is not bullshit. It’s about building wealth. Owning equity instead of renting out your time. Working hard. Taking a long view. Leveraging your time and skills. Understanding compound interest. Partnering with people of integrity. Being accountable. And becoming the best at what you do because you’re pursuing genuine curiosity (among many other great points).

    Here are a couple of his tweets. But I would encourage you to have a full read.

  • The five rules of wealth creation

    Jamaican-Canadian billionaire, Michael Lee-Chin, was in ROB Magazine last week talking about how he grew up, how he got into the investment industry, and how he thinks about wealth creation.

    I met Michael once back in 2009 thanks to an introduction by my father. And at that meeting I remember him explaining the five rules of wealth creation. It’s his formula and he’s been practicing it since 1978.

    Everybody who creates wealth does five things: They own a few high-quality businesses. They make sure they really understand those businesses. They make sure those few businesses are in strong, long-term-growth industries. They use other people’s money to invest in them. And they vow to hold them as long as they remain great businesses.

    That’s consistency. And he’s a pretty consistent guy. The other quote I would like to share from the article is this one here:

    Outside wealth is created when there’s a difference between perception and reality, when there are inefficiencies, and when there’s a lack of equity capital flowing into the country, sector or company.

    This is something that we have talked about before on the blog. The real value creation happens when you believe in and you’re right about something that most people think is wrong.

    As Michael says in the article, you have to be willing to swim upstream, because floating downstream is far too easy and will only get you to the same place as everyone else.

  • Doing stuff vs. owning stuff

    “People get income for doing stuff, and they get income for owning stuff. Increasingly the latter. And the ownership share of income goes to a small slice of households that own almost all the stuff.”

    This is a quote from a recent article by Steve Roth over at Evonomics, where he breaks down the share of US household income that is derived from “labor” vs. “capital.” In other words, how much money do households make from working (trading their time for money) and how much do they make from their existing wealth (that is, owning stuff)?

    If I were to oversimplify how he calculates this (you can read all of the details, here), it is: (Income – Labor Compensation) / Income. Take all of the household income. Subtract the money made from doing stuff. And then divide it by total income to get the percentage made from “unearned property income.” There are gray areas and others things to consider, but that’s the gist of it.

    What he discovers and argues is that basically 50% of household income comes from simply being wealthy and owning stuff. He also reminds us that approximately 60% of US wealth is… “earned the old-fashioned away: it’s inherited.”

  • Downtown Toronto in numbers

    Last week I tweeted out a Tweetstorm with some of the key facts from this City of Toronto study on the downtown core. Here are two of those tweets:

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    While I realize that reading city reports is probably not everyone’s idea of fun, it is a good one if you want to understand the massive change that is taking place in Toronto right now and also the importance of the downtown core for this region.

    To put things into perspective, consider that the downtown core (including King West, King East, and the Portlands) is estimated to be responsible for 51% of the entire wealth generated in this city. And yet its physical area is easily less than 10% of the entire city (which is about 630 square kilometers).

    That’s fascinating to me.