My own journey to wealth was long and arduous. When I was 29 years old, I set a goal for myself to retire early at the age of 45. It took me four years more than the stated objective and when I did stop work I was very fearful that I had committed an irreversible mistake. I had left a good career and relocated from the big city into an economic backwater. There were no jobs in my expertise in the area I moved to, so changing my mind about the whole enterprise would be like switching destinations at sea in a leaky boat.
I became wealthy by doing essentially two things – going back to school and getting a career started in a field that was much in demand, and then by developing an incredibly cheap, monastic lifestyle, foregoing the luxuries most people in developed economies take for granted. At first, the difference between my low living expenses and my higher than average salary from a new career was faithfully invested at every opportunity in low risk, hence low return, run-of-the-mill investments. Eventually I developed a modest level of investing skill. On average, I figure that I made about 10 to 12% returns before taxes, each year.
That average is better than what you can expect from most professional money advisors or mutual funds. With each passing year and growing leverage, one begins to learn about investing safely, much like one learns to drive a car, taking only acceptable risks and not driving off a cliff in Monaco on a hair-pin turn.
I see ads everywhere for people to buy products or books relating how you can make money hand-over-fist virtually overnight. They’re selling a get-rich-quick premise, stating boldly that if you buy their product, it’s virtually guaranteed that you can become rich beyond your wildest dreams. Buy our software, it’ll pick winning stocks for you like magic. Buy my advice-letter, I made 1,013% in one year, and so can you. What these people are flogging is a dream – a money-for-nothing scheme that only requires you step out of the paradigm long enough to see yourself in fabulous wealth, all available if you’d only believe it could happen to you.. Really, if you buy into these dreams, what you want is something for nothing, and it’s probably because you believe people with money got wealthy through the use of a scheme. You believe in the underlying dishonesty of the plan and intend to do well by it, leaving all those other suckers in the dust as you speed away from the exchange with a suitcase full of money.
In How I Became a Millionaire I talk about my journey in a biographical way because what got me to my goals, I feel, were my values. I learned about life from misguided parents and friends with incorrect values and had to make many adjustments in my thinking as a young adult before I began to succeed. There is no money for nothing, I’m sorry, just hard work. Get up at six, make a brick, sell a brick, net ten cents profit, repeat. Accumulate and invest. I am pushing the novel idea that wealth comes when you decide to give more than you get when it comes to a transaction, that value-added brings satisfaction from the counter-parties and therefore a satisfied employer or customer. I am selling the idea that there is no quick scheme, no magic stock picking formula, only honesty, self-denial, willpower and character.
Self-denial is a big part of the discussion because even if you make a million dollars per year, there are numerous ways to spend it. The majority of professional athletes who earn huge salaries at a young age retire in their mid-thirties virtually broke because they never learned to manage their money. Self-denial has to happen then, regardless of how much you make! Whether you’re making a hundred thousand a year and really want that Porsche or you make 35,000 a year and really want that new Honda – it’s all the same regardless of who you are; you must deny yourself what you want and limit your purchases to what you need. If you’re making 35,000 per year and you really want a Porsche, well, you’ve got problems. Maybe you should be reading Dr. Phil!
In order to accomplish self-denial and still feel good about yourself as a human being, you need to learn to become cynical, because every commercial on TV, every magazine advertisement, every billboard that you see will be working to undermine your goals. You wish to retire at 50 or younger, but if they have their way with your psyche, you’ll be working until you’re 90. Advertisers have the objective of getting you to substitute what you NEED for what you WANT. Once they have you wanting a product, it’s a sure bet that you’ll become a customer. That subversion of your needs for your wants is counter-productive to your goal of achieving wealth enough to retire early so you’ll have to learn how to identify their techniques. Some of them, the dirty scoundrels, will even use your sexuality against you; they’ve hired expert psychologists to get deep into your brain.
How do they do it? Some of it’s very subtle, and in my view, reprehensible behavior. Product placement in movies and TV shows is everywhere nowadays, but what if an entire segment of a business program were devoted to plugging a product, what would you say to that? Would you believe that a hi-tech smart-phone manufacturer would purchase a segment of a business reporting program to plug their product in what appears to be legitimate news reporting? They showed line-ups of people fighting to pay 500 dollars for a smart-phone, jostling each other to become the first to have one, which creates a line-up mentality for the weak minded. I can guarantee that none of those people lined up in front of a store at midnight and struggling to own a smart-phone have control over their finances. If this is you, I apologize, go back to my comment about Dr. Phil.
If truth be told, most people who wish to be rich need a psychoanalyst rather than good stock picking software, or how-to book, because really, becoming independently wealthy is more about changing how you think than any other single factor. I wrote the book as a guide for young people who are struggling in life due to a set of misguided principles handed to them by parents and peers. I know the story well, I was one. The goal to become well-off should have, as a foundation, the need to be self-actualized above all else. The need to define what purpose your life was meant to serve must come before setting any financial goals. It will give you the rationale for all your future suffering, self-denial and blows to the ego when those closest to you question your behavior. Since you’ll have given yourself the supreme objective for the meaning of your life, you won’t feel the need to justify yourself to others.
Only weak people feel such a need. Let them be the ones buying the mountains of consumer goods that keep them from retiring from the rat-race and getting on with what they really want to do with their lives. The sad fact is that most people don’t have a self-fulfillment objective. And without a clear goal in life, how will you know if you’ve reached it? If your objective is to impress people with what you can buy or how much money you’ve accumulated, you can succeed at that, but unfortunately only morons will be impressed by you! You need a supreme objective that is above all that, and divine in its purpose which gives your life and others in it some meaning and joy. When you have such a self-actualization aim, it gives you the strength you need to live a live of deprivation and hard work that gets you to your goals in happiness.
The money you accumulate will help you do what it is you really want to do with your time on Earth, and merely working towards that objective will make you satisfied and fulfilled. Your Gross National Happiness will sky-rocket no matter at what stage you are in the project, whether you’re in school starting your new career or retired and doing volunteer work for the needy. You’ll even be content when denying yourself something, knowing that you’ll get to your goals sooner. Other people may be impressed with you and your accomplishments but in the end, their opinion amounts to little. In the final analysis, only you have to feel satisfied with what you’ve done with your time, which is truly the only resource you’ve been given to trade for the things you want out of life.