Getting Rich With A Good Plan Is Almost Automatic
February 2, 2009 by Vagabond Investors
Years ago I met an old friend of mine. We had studied entrepreneurship and finance together. He asked me to join him to eat lunch that week and I agreed.
Over lunch, he asked me what I was doing. I told him I was an entrepreneur, investor and a coach to many people who wanted to become financially independent. His eyes widened and he wanted to know more immediately. He asked a lot of questions about financial independence and investing.
I told him my formula and what I had found out it really took to become financially free. I thought my friend would be excited to hear that. Instead, he was disappointed.
“What?” he said. “If it were so simple, why don’t more people do it?”
“I don’t know” I replied. “I’ve thought about the same thing.”
“I don’t believe you. Such a simple formula will not take you there. It has to be more complex. There has to be more risk. It can’t be that easy!” he said raising his voice. I could hear the irritation in his voice.
“I never said it’s too easy. I just said it’s that simple.”
“You’re lying” he said. “I’m getting out of here.” So he did and I was left alone eating Thai food.
I think my friend failed to understand that we don’t need to be deco-millionaires to be financially independent. We don’t even want the million dollars. We want what we think only those millions can buy. The truth is, most of our deepest dreams don’t cost that much.
As to the formula I told him, investing is not what most people think it is. Most people want a hot tip or a quick fix. They think that investing is complex and risky. Most people actually prefer complex to simple. They seem to think that if a formula is not complex and difficult, it can’t be a good formula.
To me, investing is not a magic formula. Investing is a plan. Investing is a simple, often boring and almost mechanical system of getting rich. Personally, I hate risk. To me risk is a four-letter word. There’s always some risk but it doesn’t have to be risky. I believe that when it comes to investing, simple is better than complex. Just look at the financial mess on the market today which was caused by systems so complex that even the brightest minds on the planet didn’t understand them. Human judgment is far more limited than we think. We’ve met the enemy, and he is us.
I like to keep it simple. If the formula is complex, it’s not worth following. Keeping it simple is always better. I realize why it’s so hard for most people to follow a simple plan. The reason is that it is boring. People want excitement and amusement. I want it too, but I find my adrenaline thrills somewhere else. I prefer simple, uncomplicated plans of getting rich. Because the world is changing all the time, my plan is constantly under revision but it remains simple.
A formula that has been a winning formula for wealth for at least 200 years is this: build businesses and have your businesses buy your real estate and paper assets. That’s it.
For most people, the real goal is to find a sense of financial freedom. They want freedom from the day-to-day grind of working for money. All they have to do is find a formula that will make them rich and follow it. When they’re found it, all it takes is discipline. When it comes to money, discipline is often a rare commodity.
As with my friend, you have to ask yourself how badly do you want it? Are you willing to keep an open mind and accept that investing does not have to be risky and complex? Are you willing to increase your financial IQ so that you can become financially independent? Are you willing to be honest with where you’re starting from and give it some time? Are you willing to pay the price?
My friend obviously didn’t. He thought it’s easier to work for the rest of his life. To me, that was too high a price. I have always chosen to pay the price to financial independence. That price is not always measured in money, but in deep feelings and courage to move on.
That is why keeping it simple is such a powerful idea. You will find the strategies and tools that we use on this website. In my opinion, the very best of them are the simplest ones.
Jaakko
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4 Responses to “Getting Rich With A Good Plan Is Almost Automatic”
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can you open your plan for us Jaakko? can we see it?
Yeah that sounds reeeeeaaalllyyy simple: build businesses and buy assets with it. What business? Which assets? It DOES matter if the investments are good or not. It’s not that easy. That plan doesn’t protect you from market crashes either. I lost a ton of money last year!
Habboli he never said it would be easy. All he said is that the formula is simple. I think you’re being too cynical. I think you could read his other posts more carefully before you judge.
About simplicity and complexity. I LOVE the idea that investing can be simple! Simple things work better in life. I recommend the book “Simpleology” to everybody. It has helped me with my business and wifh my finances.
Thanks Matias and Jaakko!!!
Is it necessary to be an entrepreneur? I and my husband invest a portion of our income in the stock market every month. We are both employees. We don’t have a high income but we pay ourselves first. We think that is enough.