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*(I copied this from the 1989 book "Classics: An Investor's Anthology.", published by the CFA Institude.)*
THERE ARE ONLY THREE WAYS TO GET RICH
THEM THAT'S GOT GETS
STAYING RICH IS FAR MORE IMPORTANT THAN GETTING RICH
Fred J. Young
Fred Young was a key member of the Trust Department of the Harris Bank and continues to inform and entertain with talks and a book having the encouraging title, How to Get Rich and Stay Rich. Here are some excerpts.
THERE ARE ONLY THREE WAYS TO GET RICH
1. Inherit it. If you can see that you are going to inherit it, then you have it made. You can skip to the part of this book about staying rich. Someone else has already made the sacrifice of spending less than they earned to create this wealth for you. You should be grateful. You didn't have anything to do about it; your ancestry is completely beyond your control. You are fortunate indeed.
2. Marry it. This is an area in which you do have some control.
This is something you can work on, but you have to get started on it before you get involved with some poor person. This can be quite a project, and I have seen both men and women work this approach to wealth quite effectively. I see nothing wrong with it. I grew up in an area and at a time when most people, boys and girls, firmly believed that the Good Lord made someone especially for them. Growing up for these young people was largely a search for their "intended." Well, if your intended, when you find him or her, happens to have a lot of money, you should graciously accept the situation. Don't fight it.
3. If you are not going to inherit it, and you have already blown the chance for wealth through marriage, then you have only one chance left to get rich. You spend less than you earn and invest the difference in something that you think will increase in value and make you rich.
What should you invest in? Most rich people I know got rich from
investments in one or more of the following:
1. Real estate
2. Own their own business
3. Common stocks
4. Savings accounts (thanks to the magic of compound interest rates)
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Good Luck
Any time you have a choice between good luck and good judgment, you should take good luck. Good luck, by definition, denotes success.
Good judgment can still go wrong.
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Courage
A very important ingredient of successful stock investing is courage.
The courage to buy when others are selling; the courage to buy when stocks are hitting new lows; the courage to buy when the economy looks bad; courage to buy at the bottom. If you look back over the years, You will note that the times when the gloom was the thickest invariably turned out to have been the best times to buy stocks.
But most people like to buy when everything is rosy and stocks are hitting new highs. That takes no courage. There is a great tendency to think that stocks will continue doing whatever it is they have been doing. If they have been going up, they will continue going up forever, think the masses. If they are hitting new lows, they will continue hitting new lows forever. Maybe they will continue declining a while longer after you buy them, but you are not likely to be able to know when the bottom has been reached. So your best bet is to pick a level you are willing to pay and proceed with part of your investment funds. If they go lower, you can buy more at even better prices. If they turn and go up, then you will make a profit on what you have.
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THEM THAT'S GOT GETS
This is a term I heard my father use over and over when I was a kid growing up in East Tennessee. I thought he originated it, but I learned later that this was not the case at all. Jesus Christ used this term, 2,000 years ago. Matthew 25:29 says, "For unto everyone that hath shall be given." Everytime I read this I think to myself how right He was.
Yet I find it presumptuous of me to be emphasizing that Christ was right. It reminds me of the well known story of British Field Marshall Montgomery who gained fame with his success in North Africa in World War II. The story goes that at one time he was addressing his troops and said, "Now as Christ said in the Sermon on the Mountain,... and I might add that He was right." That is the way I feel when I find myself pointing out that Christ was right when He said, "For unto everyone that hath shall be given."
Your first $1,000 is hard to get. If you put it in the bank and let it draw interest, your second $1,000 will be a little bit easier to get, but not very much easier. Your first $10,000 is hard to get. The second $10,000 is a little easier. Your first $100,000 is hard to get, your second $100,000 a lot easier. Your first $1,000,000 is very hard to get. Your second $1,000,000 is a snap.
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STAYING RICH IS FAR MORE IMPORTANT THAN GETTING RICH
Once you have made yourself rich, for gosh sakes don't lose it. The inconvenience of going from rich to poor is greater than most people can tolerate. That is the reason they tend to destroy themselves. It is an unusual person who can gracefully make the transition from riches to poverty or even from being rich to modest circumstances....
How do you stay rich once you get rich? Don't hesitate to seek professional help. Staying rich usually requires an entirely different approach from that of getting rich. Lots of people know how to make money, but are not gifted at all in the art of preserving it. Frequently, the risk that was involved in making you rich is the same risk that can make you poor again.
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