It’s amazing how kids pick up investment concepts these days. I was with my eldest son last night and we talked about investment techniques. I asked him point blank – why do you want to get rich. And who are the people you admire the most in this world?
His answer startled me. He said he admires Michael Jordan for his work ethics, and focus to the task of winning. And he said his reason why he wanted to get rich is so he can have the freedom to do what he wants and be liberated.
I re-oriented him by saying your goal should be to “be wealthy’.
Wealthy in the sense that it does not only entail money but also wealth of friends, contented family members and last is material things to make you happy.
And so I told him my 4 rule of thumb to pathway to getting wealthier and be liberated from work are as follows –
1. Buy Assets.
2. Invest and minimize spending.
3. Live below your means.
4. Be the master of money, not its slave.
I warned him that there are plenty of rich people who are stingy and not even willing to spend a dime on charitable act. I said avoid these people. They are the fair weather friends.
I encouraged him to be generous in the process of accumulating wealth. And as a concrete example I told him how my own life is also patterned after these 4 principles. I share there are ‘obligations’ too when one becomes wealthy. That means you are expected to have influence. Expected to donate generously. Expected to contribute to politicians etc. Expect also that people will come after your friendship for your wealth.
The biggest caveat of all is how to differentiate people who are your genuine friends from those who are fair weather ones.
In the end of our 1 on 1, I thought he came away being pressured to start the habit of thinking rich and managing wealth wisely. Read “The Richest Man in Babylon’ as a starting point was our parting action point.