At 60, I meant to retire again, but got talked into going to work for someone who worked for someone who worked for me. (Don’t ask.) As co-founder of Palm Beach Research Group, I still write about wealth-building … but I’m older now and have more experience.
I’d like to think that my observations and advice are somehow better now. At the very least, I’ve been able to go wider and deeper in terms of thinking about wealth: how it’s created, how it’s invested, and how it’s lost.
Why am I telling you all this?
Maybe because I’d like you to think that when it comes to the subject of building wealth. I have some insights that might be useful to you.
For example, I’ve come to believe that many commonly accepted “facts” about wealth-building are, in fact, fallacies.
Take these six as examples:
- “Risk and reward are inversely correlated. If you want to acquire great wealth, you have to be willing to take great risk.”
- “Wealthy people are stingy for a reason. Pinching pennies is a necessary part of building wealth.”
- “The most important factor in building wealth is ROI — the rate of return you get on your investments. When investing in stocks and bonds therefore, look for high ROIs.”
- “A well-balanced investment portfolio is comprised primarily (80% to 90%) of stocks and bonds, with the rest (10% to 20%) in cash or cash equivalents.”
- “The surest way to acquire enough money to retire is to buy the most expensive house you can afford and gradually pay off the mortgage.”
- “Asset allocation is the single most important factor in building wealth.”
If any or all of these statements sound true to you, then I may be able to help you. I may be able to show you not just why I think they’re false, but also how believing them can keep you from acquiring the wealth you want.
I realize this is beginning to sound awfully pompous. So allow me to back up a bit and admit that I’m hardly the first or only person who went from broke to rich and then wrote about it. When it comes to the sort of advice I’m trying to give, you have dozens — even hundreds — of people to go to, some of whom are much richer than I am.
The point is, I don’t think I have the truth. But I have a truth: the way I went from broke to rich.
And to be fair to you, that’s all I should write about because that’s all I really know about.
I do occasionally read books about entrepreneurship, investing, and so on … and when I read something that strikes me as true, I write about it. But I do try to stay aware of the difference between what seems to be true and what I know to be true.
What I know to be true is not quite science, but it’s as close to science as I can get. It’s based on things I’ve done or seen repeatedly in different situations. When I see a pattern confirmed time and time again, I begin to consider it to be a fact — not a universal truth — but fact enough for me to recommend it.
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