As I've shared before, when I passed the California Bar Exam some 27 years ago, my mother in her infinite wisdom gave me a hand drawn sketch of a Hobo with a cigar and tattered clothes. The drawing has a caption that asks the poignant question; "If you're so smart why aren't you rich?" I don't know why she chose to give me the drawing, but I have kept it since then as one of my prized possessions, and it is now the title of a book I am working on.
It is a fact of life that the choices we make in life will determine if and why we are not rich. Some of the factors are outside our control, like having invested in the wrong stock such as Goldman Sachs, but most of them are within our control, like never having invested in anything and thinking that making a lot of money will make you rich. In the end simply making a lot of money, but not making the money work for you, will not make you rich. The money can make you comfortable which is also a good thing as long as your Katrina doesn't wipe you out.
I recently was asked to speak to a group of young people. In general I don't like to speak to young people any more, especially teenagers, because they think they already know everything. In fact the only thing they know a lot about is a lot of nothing. They don't know, for example, that being rich or wealthy is measured by how long you can live without having to work. So if you have investments, like rentals that produce income by bringing you in enough money to live on forever, you are probably rich, or at least wealthy.
If you spent all of your money on one big house and a big car that requires you to work and spend all of your earnings to meet the mortgage, taxes and insurance, you have a monthly liability. You need income producing assets.
I took this occasion to pose two questions to these young people and required them to write the answers down and call it a plan for their lives. The question was, "Write down five reasons you are not rich?" The second question was, "What do you need to do to become rich?" Each of the youngsters wrote as one of their reasons, they had no education. On the other side they wrote that they needed to get an education, a good grade point average and, most interestingly, was what they needed from family.
I thought of the Bible verses that remind us that we live in houses we did not build, eat food we did not plant or tend, and drink water from wells we did not dig. If we simply had the skill to build and businesses that built houses for others, and had farms where we grow food or trucking companies that transport or stores that supplied water to others, then we have the makings of being rich.
I like to observe people who are rich and see how they did it. That's smarter for teenagers than listening to other teenagers. There's a couple by the name of Kinsey in Los Angeles. The Kinsey's, when they got married, both worked, but decided to live on only one salary. They saved and invested Mrs. Kinsey's salary. They got rich by sacrificing and delaying the pleasures they could have enjoyed by spending both of their salaries as soon as they made it.
I've read Maria Shriver's little book called, Ten Things I Wish I'd Known Before I Went Out into the Real World, for lessons about life and how to anticipate and deal with life's disappointments. I've also read Donald Trump's book, The Art Of The Deal, to learn that you never buy the most expensive address you can find, but you buy the cheapest address and turn it into the expensive one. And of course, I devoured Robert Kiyosaki's book, Rich Dad Poor Dad, to learn how the rich get rich and the poor stay poor.
My only regret is that I hadn't read some of these books and learned some of these lessons later in life than I could have. But I'm still okay because better late than never. So now that you've been informed, the question for you to answer is, "If you're so smart why aren't you rich?"