Secrets to Getting Rich - The Daily Reckoning
The Daily Reckoning by Bill Bonner
On This Day - 22 September 2014
Secrets to Getting Rich A  A  A

Delray Beach, Florida

We got back from Argentina on Saturday, after giving a speech to a group, but we learned more than we taught.

The Argentines have seen it all. They know both markets and politics follow cycles. Good follows bad...followed by good again.

"We've had a rough time," said one analyst. "Because the government has been so stupid. But people now know it has been stupid. They'll be a change in a year, and it will almost surely be for the better."

"The trouble with the US," continued our friend, "is that stocks are already priced for good things. The Fed has to manage its withdraw from money-printing, flawlessly. Profits have to go higher. Inflation and interest rates have to stay at record lows. The economy doesn't have to get a lot better, but it can't give us any big surprises on the downside. And none of the geopolitical or other threats - like the Ebola virus - can get much worse.

"I'd rather invest in a market that is already priced for disaster, and be pleasantly surprised when it works out better than expected. Going into a market that is priced for perfection is always a mistake."

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Meanwhile, the Dow was up to a new record on Friday, albeit on a small gain. Gold was unchanged.

So, let us begin a short series on "How to Get Rich."

And, first, you have to learn to love being poor.

You may think I'm joking. I'm not. I'm just exaggerating a little. The point is you can't be afraid of poverty. Because if you are going to get rich you're going to have to take chances. You may start a business, for example. Or make an investment. Typically, you make money by going 'all in' on an investment or business forces. It's much similar to a military campaign. When you go on the attack, you concentrate your forces - your time and your assets - on a narrow front, where you have an advantage over your opponent. Making money is competitive too. And you give yourself an edge by concentrating your attentions on s smallish area where you might make a breakthrough. Later on, to protect what you have earned, you'll take the opposite approach; you'll disperse and diversify your assets. We'll talk about that in a minute. But right now, we're talking about making money, not protecting it.

The risk in concentrating the attack on a limited front is that it might not work out. You might lose the battle. Then what? Then, you're in a helluva mess. Financially, if your concentrated efforts don't work out, you could find yourself very, very poor. You might work for years on a business start-up, for example, only to have it go broke. Or, you might put all your money into an investment that you are sure will pay off --- eventually. And then, it never does! If that is a risk you can't take, you're not likely to get rich. You're better off sticking with the tried and true - a good job, a good career, a decent income. Get a good education. Say the right things. Try not to stand out in any way. Be a good parent, a good citizen, a good person. Live a good life...and enjoy it.

Getting rich requires a more original approach. You have to take chances. And you can't be afraid of how it might turn out.

I was fortunate. I didn't have any money when I was young. And I found that I enjoyed poverty. In fact, when I finally came into some money later in life, I almost regretted it. Some of my biggest pleasures and greatest sources of satisfaction were lost to I'll explain.

But first, let's talk about poverty itself. What's really so bad about it? It is certainly true that the 'best things in life are free' - to a point.

There are three things in life that really matter: what you do, where you do it, and whom you do it with. Money is involved in these things, but not necessarily in the way you think.

When you are rich you can do a lot of things that look like fun. But from my experience...and the experience of the other rich people I know...these things are often not so much fun after all.

One friend made a fortune in automobiles. He figured out how to sell them. Then, when he had perfected his business model, he took it on the road. He created mega dealerships all over the country. Then, still in his 50s, he sold out. He had a fortune.

But what to do?

"I took up big game hunting," he told me. "I went on trips all over the world. Mongolia. Africa. South America. I went places where tourists never go. And I killed so many animals I had to buy a warehouse to store the trophies. But you know what. It was all BS. Trying to fill the time. Trying to pretend that it is important whether you kill the animal or not. It was exciting and fun for a while, but I got sick of it. I wanted to get back into the auto business. That's what I really liked doing. That's where the real adventure is."

Building a fortune is more fun than having one.

More to come...

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

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