Seven simple rules I've learned from The Art of War on building wealth

Wealth is a tricky concept. On the one hand, wealth provides us with a sense of security. If we are in trouble, or if we want to retire, having wealth can help give us peace of mind. On the other hand, wealth is also the source of great insecurity. Everyone wants wealth, so everyone competes for wealth.

In other words, having wealth brings us security; building wealth, on the other hand, is the source of our main troubles in life.

Given how complex and competitive building wealth is, how do we navigate it? What principles can we apply from Sun Tzu on building wealth?

After studying Sun Tzu for over twenty years, I've come to realize there are seven key rules that can be applied to building wealth. These rules are

1. Treat wealth as a means, not an end.
2. Ensure you are protected before taking action.
3. Move into unoccupied areas where you can dominate.
4. Prioritize other people's resources over your own whenever possible.
5. Pay a premium for good information.
6. Prefer quick, secure, yet modest gains over long, risky, but huge gains.
7. Conceal your moves.

Let's look at each rule in greater detail.

Rule 1: Treat wealth as a means - not an end. 
For Sun Tzu, wealth, in and of itself, has no inherent value. Rather, it is a means to cultivating a sense of peace and security (an). As such, how much wealth you should have depends on what it takes for you to feel at peace and secure. The less you require in order to have a sense of an, the less wealth you need to acquire.

This is why understanding your purpose is key, since it provides you clarity in determining what will allow you to cultivate an in your life. 

Rule 2: Ensure you're protected before acting.
All wealth-building endeavors involve risk. The key is making sure you are protected in both time and money in case a particular endeavor fails. For Sun Tzu, this is critical. As he tells us, "The skilled warriors of the past first focused on not allowing [the enemy] to win, waiting for the enemy to allow [them] to win." In other words, protect yourself first, then try to win.

When it comes to building wealth, the principle is the same. Before taking on any endeavor for gaining money, always make sure that failure would not leave you in a worse position than you were before. Never over-invest money you don't have. Never borrow money unless you have a solid strategy for how you will be able to pay it back, regardless of whether the venture is successful or not.

Rule 3: Move into unoccupied areas in which you can dominate. 
The secret to building wealth is controlling "grounds" (Di) - that is, fields, markets, idea-spaces, projects, departments, etc. - where you can easily dominate. For Sun Tzu, you never want to compete for a ground that is already dominated by some other competitor. As he tells us, "The skilled warrior sends soldiers, but does not send them to soldiers."

In trying to build wealth, focus on areas where you can easily dominate. Look at your strengths - your skills, your personal traits, your knowledge, your resources. What can you dominate in? In which areas do you have proven skills? Once you dominate one area, you can now move onto a bigger area to dominate.

The key is never to find yourself competing for a market, job position, industry, etc. that some other person has dominated first. Wealth, for Sun Tzu, is built through the gradual control of these "grounds" - not through competing for one big ground.

Rule 4: Prioritize other people's resources over your own whenever possible. 
For Sun Tzu, acquiring or using your own resources (money, time, equipment, effort, etc.) to build or secure wealth is not as valuable as using someone else's. As he writes, "One unit of the enemy's food is worth twenty units of our food. One picul of [the enemy's] fodder is worth twenty picul of our own."

Before you think about risking your own money or equipment or time to build wealth, try first asking whether there is a way for you to use someone else's. Is there a way to get something for free or at a huge discount by getting it used? Is there a connection or friend that may be able to help? Is it more cost-effective to rent equipment? Is there a way to let insurance cover a portion or all of the risk? What can I steal from the Internet or history to help me?

Don't always assume you have to do it yourself. Other people's resources - if you have access to them - are also part of your wealth.

Rule 5: Pay a premium for good information.
For Sun Tzu, the general or ruler should always be willing to pay a premium for access to reliable intelligence. As he writes, "One refusing to pay a hundred pieces of gold and thus does not know the enemy's situation is the height of inhumanity." 

You must prioritize information and learning in every wealth-building endeavor. It pays to know as much as you can not only protect against the risk, but be prepared to jump on opportunities that arise.  

Rule 6: Prefer quick, secure, yet modest gains over long, risky, but huge gains.
For Sun Tzu, the biggest calamity in war is fighting a long, drawn-out war, regardless of the potential benefits. A long, drawn-out war sucks resources, costs lives, and opens a nation up to being attacked by neighboring countries. In life, this same principle applies. What you are after is a quick victory, one that doesn’t cost you much in time, effort, or money, but that can give you decent profits.

For example, if you have to choose between job #1, which pay a lot, but comes with insane work hours and huge responsibilities and lots of restrictions in terms of decision making, and job #2, which pays less than than job #1, but offers you a lot more time and space to make decisions, job #2 would be the better choice. Though it’s less money, job #2 offers greater freedom and more time.

Likewise, if you have to choose between client #1, who is willing to pay a substantial amount of money, but who comes with a lot of headaches and requires a lot of attention, and client #2, who pays less than client#1, but who is very easy to manage and requires little attention, then client #2 would be the better choice. Client #2 offers more time and freedom to acquire more clients like him. 

Rule 7: Conceal your moves. 
For Sun Tzu, concealment (cang) is the heart of security. You are best protected when you are the most concealed.

As you are building your wealth, it is important never reveal exactly what you are doing. Doing so will only undermine your positioning. Rather, conceal your intentions and moves. Don't share your plans. Take small steps and occupy areas that are unoccupied (see Rule 3).

As you gradually start to dominate in different fields or markets or project areas, you'll start to gradually build influence, and gradually the wealth will come.