Chapter One
Lesson 1: THE RICH DON’T WORK FOR MONEY
Robert touches on how he and his friend Mike really want to learn about money. Mike’s dad seems to have a lot of business ventures and agrees to help Robert and Mike out. He offers them jobs working at one of his grocery stores for ten cents per hour for three hours every Saturday. Remember they are only nine years old. They spend time dusting cans and re-shelving them. By week four Robert is ready to quit. Mike’s dad anticipated Robert either wanting to quit or wanting a raise, which sets off the lessons that Mike’s dad shares.
“You’d best change your point of view. Stop blaming me and thinking I’m the problem. If you think I’m the problem, then you have to change me. If you realize that you’re the problem, then you can change yourself, learn something, and grow wiser. Most people want everyone else in the world to change but themselves. Let me tell you, it’s easier to change yourself than everyone else.”
More money will not solve your problems. He goes on to say the real problem is between Robert’s ears and that he’ll need to learn to fix that. I found this interesting in reference to the FI community, or retirement planning for example. Those communities have the mindset of, “I’ll hit some number and then be happy with more options.” So do these communities have it wrong? If someone is unhappy now will they absolutely be unhappy when they hit their number?
Mike’s dad goes on to say that things one really needs to master are fear and greed. Going back to the quote of more money will not solve your problems, it later comes to light he is really getting at most people let their emotions control their decision making. For example, it’s often the short-term fear of not being able to pay bills that drives decision making and in turn totally neglects the long-term view.
“Just know that it’s fear that keeps most people working at a a job: the fear of not paying their bills, the fear of being fired, the fear of not having enough money, and the fear of starting over. That’s the price of studying to learn a profession or trade, and then working for money. Most people become a slave to money – and then get angry at their boss.”
The segment about becoming a slave to money made me think of Jacob Lund Fisker’s book Early Retirement Extreme. He harps on choosing to be a generalist over a specialist. His reasoning is that a specialist gets pegged into a position, and becomes more and more dependent on that role because they know nothing else. They need their role to survive, but never learn how supplement their life through other ways (handy skills to lower expenses for example) or how to have their money work for them, which is what Mike’s dad touches on many times. In an age of fast changes Fisker argues, from a risk management perspective, that it may be more prudent to diversify your skills so that a changing economy doesn’t affect your well being as much, ie learn diverse skills including learning how to get your money to work for you.
Mike’s dad is not saying that you shouldn’t work a normal job necessarily. He’s saying that all too often people let their emotions dictate what they do: “For example if the fear of not having enough money arises, instead of immediately running out to get a job, they instead might ask themselves this question: ‘Will a job be the best solution to this fear over the long run?’ In my opinion the answer is no. A job is really a short-term solution to a long-term problem.”
I’m ironically sitting here unemployed from a traditional job and asking myself this very question now.
My main takeaways from this chapter are the following:
- Learn to control fear and greed
- Think with your head, not with your emotions
- Think about the long-term vision, don’t neglect it. There’s more to life than the short-term.