How the Rich Live….
How do the rich live? We see them on television playing polo and living the high
life. What are they willing to endure to live that life? Who are these people? Why do they
skip the drudgery and pain of financial struggle that most seem to endure? They pay less
in taxes and earn more with seemly no effort. What are their secrets?
A better question is not “What do they know?”, but “What do they do?”. I work
with wealthy people. As a corporate manager I have for some time. My boss is worth 20
million dollars. His boss is worth 120 million dollars. How do I change my fortune to be
more like them? Well, my sense of fear has to go. These men have very little sense of
fear. This is a base observation. You can NEVER grow rich fearing loss or risk. People
become rich by being risk takers. Unfortunately this is the same personality that becomes
addicted to gambling. Rich BUSINESSMEN are gamblers and risk takers. This
personality is a critical piece of your persona if you expect to grow rich. Unfortunately
lots of schooling and high-paying jobs put you at the opposite end of the spectrum.
Executives make their living by being educated, cultured and working for security. While
these men do quite well, they will almost certainly never become wealthy. Their whole
lifestyle is contrary to the risk-taking mentality. One of the first characteristics of wealthy
people is they have a healthy attitude concerning risk.
The other issue that the poor don’t seem to understand is the value of assets and
liabilities. Many young people will say “I don’t want to borrow money for college”, but
will go out and spend $30,000 on a new car. A college education can pay you everyday
of your working life. What asset can you buy that pays in this manner? Perhaps an equity
or liabilities portfolio, but that doesn’t pay every two weeks. The poor do not take
advantage of small improvements to better the overall effectiveness of their financial
situation. Constant optimization leads to an elite status. Below are some examples of
circumstances the poor tend to think are optimal: