Club Exclusive

The easiest path to riches is to be born into it or steal it. Since we can’t choose our parents, the only other fast-track to wealth would be stealing. I hope Bernie Madoff, a modern day Jesse James, will cause you to rethink that option. Besides, if you don’t have a thief’s mentality, the money will haunt you.

It was a good ride

Two other paths to riches are either winning the lottery or working your way to wealth. The lottery sounds enticing, but the odds of being struck by lightning is more probable than picking a winning number. With my luck I’d win the lottery, and then be struck dead by lightning.

Short of becoming a career politician, that leaves only one practical approach; one has to earn money, save as much as possible, and invest wisely in a productive activity.

Smith, a very wealthy Texan spoke during a radio interview. He said, “For the first ten years of my marriage you wouldn’t live as my wife and I did. For the following years you couldn’t live as we did.”

The interviewer asked, “What do you mean by that Mr. Smith?”

Smith answered, “We lived in a cheap apartment, had no conveniences, no furniture, and we worked twelve hour days. I didn’t own a pair of shoes without holes worn in the bottom.”

“So how did you get ahead?”

“We invested in my business and plowed back the profits.”

“But now you’re very well off?”

The business grew and we continued to live frugally. Most people wouldn’t live the way we lived for ten years.”

“What was the point?” the interviewer asked.

Smith answered, “Do you remember what I said at the start?”

“I’m not sure I understand?”

“Well,” Smith drawled, “I said that during the first ten years of my marriage that you wouldn’t live as my wife and I did. During the next ten years you couldn’t live the way we lived!”

I went into business for myself for several reasons. One was that I do not work well with others.  When I operated my business, I made a couple of friends who were also business owners; they struggled to make a living. Earl was a struggling independent jeweler with his place sandwiched between larger stores in the shopping center; he operated a 600 square-foot store and watch repair service in Belleair Bluffs. Earl rapidly approached sixty years old, and his “hole-in-the-wall” operation catered mainly to an older local crowd. Like many merchants, he was finding it more difficult to operate with competition from the big chain stores. I was visiting my friend one day, when the discussion turned in a novel direction.

Earl said, “You know Mike, you and belong to a very exclusive club!”

“Oh, and what club is that?”

Earl continued, “Well, if you work for the government or a company like Eckerd’s or MacDonald’s, you’ve got to be paid minimum wage. On the other hand, if you operate a small business like you and me, you’re exempt from the law. The government doesn’t care if you fail to make 50 cents an hour! But if you make 50 cents, you’d better pay taxes on it!”

“That’s how it is for me,” I said. “At the start I killed myself working long hours seven days a week to make very little. Now I have both part-time workers and a full-time employee. My full-time guy takes home more than I do. In the end, I would do it again, because I’m my own man and I don’t answer to a single boss. I deal with people straightforwardly; customers either love me or hate me for my forthrightness.”

“When reports of wealthy businessmen emerge in the press,” Earl said, “they neglect an important part of the story.”

“What’s that Earl?”

“Millionaires accumulate their wealth at a dollar an hour!”

Earl smiled at me. I knew what he meant about the long hours and low pay. The secret, I thought, was hanging onto the money that cried out to be spent. Self-discipline, frugality, and saving made the difference, but most people cannot get beyond immediate gratification.