The Get Rich Quick Scheme
Do a quick search for “get rich quick” and you will find years of reading material at your disposal. At Amazon.com there are more than 1,000 books for sale on the topic. A search on Yahoo will reveal in excess of 46 million pages on the topic. Google it and you will have access to 881,000,000 pages of information dealing with the subject. This vast amount of information on the topic is revealing; it does not just mean that people have access to this information, but that they are looking for it. In the world today there are about 7.6 billion people and counting. Of those there are only about 2,200 billionaires and just over 36 million millionaires. In other words, this is less than one half of one percent of the population. With all that available information, and the huge amount of people looking at it, why is the earth not abounding with more wealthy people? The simple truth is that it just does not work. Granted, there are people who have gotten rich quickly through winning the lottery, by signing a huge contract for a professional sports team, or by creating a startup business that grows by leaps and bounds within the first year. The truth is, this is not going to happen for most people. Here is a look at the percentages of people who have gotten wealthy through these avenues.
Winning millions in a lottery is the dream of many. Unfortunately, there are a couple downfalls to winning the lottery. First of all your chances of winning at all are indeed slim. Every lottery is different, but regardless of which one you purchase a ticket for, your chances or winning are usually somewhere in the neighborhood of 1 in millions. Even if you win, in many cases you will be splitting the winnings with several other winners. Another downfall to winning the lottery is the fact that most people just simply cannot handle the windfall. Lottery winners are more likely to declare bankruptcy within three to five years than the average American. And not only that, but many winners struggle with suicide, depression and divorce (source).
So although it is possible to get rich quick, it is indeed a very rare occasion. For regular Joes like most of us, we should concentrate our efforts on getting out of debt and obtaining financial freedom with the realization that it will probably be a long term endeavor. When you think about it, just about anything in life that is worth its salt, usually is that thing which takes a long time to obtain.
If It’s Worth Having; It’s Worth the Wait
If you have ever read many blogs or articles on investing, one thing common to all of them is the idea that when you invest, you should invest for the longterm. Do not invest your money expecting to be rich within the first year.
“Buying and holding shares of great companies is the best way to predictably generate wealth over the long term.” says The Motley Fool.
According to Investor Place, “More often than not, the more you trade, the worse you end up doing.”
“If you aren’t willing to own a stock for 10 years, don’t even think about owning it for ten minutes.” Warren Buffet
While I agree with these statements based on my own experiences, I will not focus on these ideas in this post. I want to put more thought into another idea that is the heart of building wealth: work and the time involved. When we work, not only are we building our wealth through income, we are also gaining a little bit of that virtue called patience each day as we slowly increase our worth through labor. Following are a few stories, quips, and advice that I believe will accurately show the value of hard work.
In my personal opinion, and experience, we as humans will always value and appreciate what we have if we have had to wait for it as opposed to having it simply dropped into our laps. How often do we see toys and games discarded the day after Christmas, never to be played with again? When we have had to spend time, work, and money on something, we tend to appreciate it more. There is something about working for something that causes us to place more value on it. Growing up I received many games and toys for birthdays and Christmases. Honestly, I cannot remember any of them.
One thing I can remember from my childhood was my first lawnmower. I was about nine or ten years old at the time; my brother was a couple years older. We had decided we wanted to spend our summer making money by mowing lawns. We had two problems though: we had no mower, and no money to buy one. Seeing our predicament, our dad offered to loan us the money with the understanding that the first $80 we made would go to him (the price of the mower). Even though we would have probably wanted to spend our first “paycheck” on candy or toys, we dutifully put those things off and used the first 8 lawns to pay back the loan. Even though we had to wait to be able to use any of the lawn mowing money to buy what we wanted, the feeling of accomplishment and satisfaction we got from buying our own mower was way more than any feeling the candy and toys could have given us had my dad just given us the mower. That little green mower with the Briggs & Stratton engine will always hold a place in my heart. Do not ask me to describe any of the toys I got as gifts; I have no idea.
This type of gratification does not come just from working and saving up for something, it can also come from instances where you make something yourself, as opposed to buying something ready-made. In an article on psychologytoday.com there is an article that talks about what some psychologists call the IKEA effect. In it the author discusses research by Mike Norton et. al. that states that “the act of building something, putting your own blood and sweat into a physical object, seems to imbue it with additional value above and beyond its inherent quality.” He goes on to say that in experiments where people put something together on their own (i.e. IKEA furniture) or made something themselves such as origami figures, they tended to put a much higher value on their items than did people who simply saw the finished project. He finishes the article by saying “saving yourself the labor could just cost you some happiness”.
A few years ago a friend approached me with a problem he was struggling with. His son, who was 5 years old, was about to start kindergarten. My friend had recently bought a new house in a fairly well off neighborhood. On the first day of school, all the other children showed up to school wearing expensive name brand shoes. His son came home that afternoon and told his dad that he wanted shoes like the other boys had. Now, my friend had grown up bring closer to poor than rich. He knew what it was like to eat beans and rice; he had spent summers without shoes. He had experienced a life where two sets of clothes (one for play, and one for school) was plenty. Even though he had done well for himself, he could still remember doing without as a child, and he was leery of spending exorbitant amounts of money for a child’s shoes. It was not that he was unable to afford them, but he would have felt guilty about it. He wanted to do it for his son, but he could not bring himself to do it. He asked me my opinion, and here is the advice I gave him, and it is the same advice I would give to anybody with the same question.
This is a great opportunity to teach the boy a valuable lesson. Take him to the shoe store and pick out two pairs of shoes: one inexpensive pair, and one expensive brand name shoe. Tell him he has a choice of which pair to get. If he picks the cheaper pair, he gets them for free. Dad pays for them at no cost to the boy. However, if he wants to get the expensive pair, he must work for them. If he decides he definitely wants the expensive shoes, then take him home and give him a plastic bag. Then father and son go outside and walk down the street picking up trash. When the bag is full he can put it in the dumpster, and now the job is done. He has paid for his own shoes with a little bit of sweat and elbow grease. Not only has the boy learned a valuable lesson about the value of a dollar, and a little bit about what it means to work, but father and son also get to spend some quality time away from the television and cell phones. Not to mention the fact that their city is a little bit cleaner. The lesson, though, can be extended. When the boy has outgrown the shoes, he can give them to another boy who needs shoes but cannot afford them.
When it comes to waiting and working for happiness, money is no different. You will always appreciate the money that you have had to work for as opposed to that which was handed to you. There have been times in my life where I was in debt, and was getting behind on my bills and payments. During these times I have had friends who were well off, or had acquired a fairly large sum of money. Maybe they had inherited it, maybe they had gotten a bonus at work, or maybe they had found something of great value in their attic and had sold it for a fairly large sum. I would think during these situations about how nice it would be if I could be given a large amount of money in this manner. It never happened. I would also secretly hope that one of my friends would notice my “poverty” and give me a little bit of their gains. They never did. These situations were some of the best things that ever happened (or did not happen) to me. When I finally saw that the world was not going to serve up money to me on a golden platter, I realized that if I was ever going to get my finances in order that I would have to do it myself. Even though it has taken me some time to get out of debt, the feeling I have now is much more invigorating than if I had just been given the money.
Proverbs 10:4-5Wealth gotten by vanity shall be diminished: but he that gathereth by labour shall increase. Hope deferred maketh the heart sick: but when the desire cometh, it is a tree of life.