Looking at much of the wealth-creation and motivational literature you'd be led to believe that riches come your way because you…

·set goals
·foster a positive attitude, or
·cultivate a winning mentality.

In doing this – so the literature goes – riches will be attracted to you by the magnet of your wealth-creation genius.

You could be forgiven for thinking that the whole effort happens inside your head. But this doesn't accord with what the wealthy actually say and do. It's a big mistake to see wealth-creation as something separate from businesses and markets.

Don't lose sight of the fact that wealth is generated because someone somewhere bought something supplied by a producer at an agreed price.

The fact of the matter is: with a few exceptional circumstances (such as inheriting a fortune or winning the lottery) you can't (legally) create wealth other than through the workings of the market.

If you're a property investor, your wealth over the long-run will reflect the increase in prices created as a result of the population's demand for housing interacting with the limited supply of land. Interest rates are part of the package too, as they shape the demand for owner-occupied housing relative to rental accommodation, and borrowers' appetite for debt.

These factors determine by how much housing prices grow and how rental returns will behave. In other words, how a residential property investment will perform.

The same applies for other types of investments: their capital growth and the cash they generate will be the result of supply and demand pushing prices around as part of the working of a market.

Your ability to identify the pick of the investment opportunities from this dynamic, combined with your ability to deploy capital, manage cash flows and choose the best property manager will be what determines your property wealth.

Basic economics, markets, managing capital – it doesn't sound too exciting. Isn't wealth-creation more glamorous than the mundane workings of businesses?

Look at the self-made people on the Business Review Weekly and Forbes rich lists – they're businesspeople and investors.

If you read interviews with these people, they very rarely (if at all) talk about goals, attitudes or mentality – winning or otherwise.

More likely, they'll talk about how they're positioning their business in the market, where prices are headed, what their competitors are doing, deals and acquisitions in the pipeline, technological changes impacting on their industry, and so on. This is the day-to-day stuff which fills the minds of the wealthy.

They may well have a winning mentality and a positive attitude, but these sit behind concerns about industry and competitor moves, cost pressures, price gyrations and so on. The wealthy are immersed in the detail of the workings of their business and industry at large.

The wealth-creation literature is right when it says that you should think like a millionaire. But the rub is that your typical millionaire is probably thinking about how price changes are affecting the bottom-line of their business, or how to counteract a business rivals' latest marketing effort.

It's the detail and content to which the winning mentality or positive attitude is applied and how capital is deployed or a business is organised which determine whether wealth is created, and in what quantity.

A positive mental attitude has to be coupled with a detailed understanding of business and industry workings. Industry titans such as Donald Trump, Frank Lowy and US property billionaire Sam Zell are immersed in the detail of their business.

So … think like a tycoon or a magnate: get across the brief of what's going on in your industry, become an expert in your chosen market. Then use and develop your competencies to capitalise on this knowledge.

That's the foundation of what brings riches your way. Goals and positive attitudes are important and necessary, but it's the understanding of business and investment – and the decisions and actions which flow from that – which turn a winning mentality into cold hard cash.

Michael Carman is the Managing Director of property investment information provider Wealth Enhance. You can find out more about how Donald Trump thinks in the Wealth Enhance special report Three Wealth Creation Lessons from Donald Trump at http://www.wealth-enhance.com.au/products.cfm?item=124920

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