How to Be Rich is very easy to read. Written as a series of essays for Playboymagazine, it feels like a casual conversation with a very rich friend.
“Although there are no sure-fire formulas for achieving success in business,” Getty says, “there are some fundamental rules to the game, which, if followed, tip the odds of success very much in the businessman’s favor.”
Those rules include:
- The best way to make a fortune is to own your own business.
- The central aim of every business is to produce more and better goods (or more and better services) to more people at a lower cost.
- A sense of thrift is essential for success in business.
- Legitimate opportunities for expansion should not be overlooked.
- The business owner must run his own business. He cannot expect employees to run it for him.
- The business owner must be constantly alert for new ways to improve his products and services and increase his production and sales.
- Nothing builds confidence and volume faster than a reputation for standing behind one’s product.
- The book is loaded with practical advice for business owners and employees who want to share in the profits of their businesses.
"Equally remarkable…is the native money of Yap… These pieces of money are disks of aragonite, a stone in appearance, like large crystals of quartz. …We had information of one piece…being nine feet four inches in diameter and weighed four and one half tons. These extraordinary stones are set up in front of the owner’s house, his importance and wealth being betokened by the number of “dollars” he can set up.”
J. R. LeHunte, “Report of HMS
Espiegle,” October 10, 1883
Would You Take Investment Advice From Bernie Madoff? What if he told you to invest in ETFs?
Imagine you walk into the office of your brand new investment advisor. He opens the door and you recognize a familiar face. Mr. Bernie Madoff is standing before you and asks you to take a seat. You are immediately on edge, you know this guy stole millions of dollars from his former clients and anything he says must be a lie, how could you ever trust him with your money?
But what if what he recommends you do is exactly what you are currently doing? Something you believe is the smartest thing you can do with your money?
A recent WSJ article quoted Madoff as saying:
“The best chance for the average investor is to put money in an index fund.”
Wait a second, that’s what I do! Has Madoff ‘seen the light’ and feels the need to repent for his sins? Or is this just his newest ploy? He went on to say:
“The biggest danger is when advisers have incentives to steer investors one way or another to get a bigger paycheck, which can happen.”
Interesting advice considering the source but Madoff is right. The financial industry suffers severely from the Principal–agent problem. This occurs when the Agent has the incentive to act in his own best interest, instead of the best interests of the principle he is supposedly representing.
Significant research shows that Index Funds are probably the best products for most investors. Ironically their combination of broad diversification, low turnover and low fees, which make them so appealing for typical investors, make them extremely unappealing to advisors who are often paid high commissions on more exotic products.
I never thought I would say this but I think Madoff might be onto something…
"I think most people don’t realize that everybody comes to the C.E.O. with problems. Most people don’t come to tell me good news. The people I rely on or view as high-potential folks are people who come with a problem but also bring ideas for the solution. It may not be the right solution. We may do something entirely different, but they’ve been thoughtful about it.
Earlier in my career, when I went to my C.E.O.’s, I walked in and said, “Here’s the problem and I have two ideas for what we can do.” I never walked in without trying to be thoughtful, and at least two steps ahead. If people are looking to advance their career, they may want to be more thoughtful about bringing some ideas for solving a problem, and not just presenting a problem.”
Brent Saunders - CEO of Bausch & Lamb.
How to be happy: Remind yourself that you want to be happy.