Build your value and sell your time.
The people on this path are lawyers, artists, escorts, surgeons, hair-stylists, therapists, and so on. Also assorted shysters – televangelists, cult leaders and the shadier politicians among us. There’s a growing mountain of professions and skills sets via which people prosper. The idea that the “greatest investment is in yourself” applies to this bunch of enterprising individuals.
Start a business and grow it or sell it.
You know the superstars – Bill Gates, Jack Ma, Jeff Bezos, Richard Branson. Every community has its own. We typically think of these as classic entrepreneurs. They shine a light and inspire the rest of us.
Every royal family and the fabulously talented Paris Hilton are in this group. They may not shine much light and mainly inspire envy. Inheriting serious wealth is becoming more common. $20tn (that’s 2 with 13 zeros) will pass to Millennials by 2020.
Leverage your cash and savings. Use your money to maximum advantage. Use it to grow more. It’s the only one of the four that can work for ALL OF US! The other paths depend to some degree on opportunity, talent, good fortune or a gullible population.
Gullible populations are led to believe that the one true way to invest is the stock market. This is the definition of gullibility. Also standing on shaky ground are people who trust investment professionals to tell them what to invest in and then pay for the advice. In the words of Warren Buffet (an investment sage), investment pros owe their wealth more to their sales skills than any investment skills they might possess.
Those words shine a light (Warren is a lighthouse) on what keeps most of the world’s financial experts in cufflinks. They charge for their services whether or not their investors make or lose money. Even if they don’t lose you money per se, you still end up losing – because you’ll be paying fees. And as soon as you do, your capital drops in value. And as soon as that happens you need to make even more to catch up to where you started.
Consider this: if you lose 30% on an investment or related fees, you need to make 44% returns on what you have left just to get back to the start point. The start point!
Which is why Warren Buffet’s first rule of investment is “Don’t lose money” and his second rule is “See rule #1”. How sage is that?
Investment fees diminish you as well as your national economy. They take wealth out of the system and wealth out of your pockets. And every stock market investment has costs of one type or another. Yet few actively managed funds beat the market and there are very few individuals in the entire world who can beat a stock index consistently. So consider the alternatives, because regardless of other paths to wealth, investing is a safety net – another leg on your economic stool.
The alternative is to join the ranks of the gullible.