Financial Reflections

You’re smart.  Chances are you’re pretty darn good looking to.  But odds are you aren’t rich.  We all know some half-wit who’s rolling in dough right?  So why aren’t you?

If you’re so smart, why aren’t you rich?  That question was posed my “Mr. ToughMoneyLove” (quite likely not his real name) over at his blog the other day as a “Money Mystery.”  Well, in hopes to answer that question, and because I love a challenge, I’ll venture a stab at clearing that mystery up.

Here are some possible reasons you’re not rich:

• You didn’t go to college – fact is, most millionaires went to college.  Even a superstar like Bill Gates spent a year in college, and that was at Harvard which is presumably like 4 years at most colleges.  You need skills to pay the bills.  Scott Adams, creator of Dilbert, suggests one needs to get skills well above average at two or three things to succeed.  He claims to be above average at drawing and humor.  Enough people agree with him to keep his comic going.  I’d also suggest the MBA he earned has made him a rather skilled marketer as well.
• You don’t save your money – Big screen TVs are nice.  Real nice.  But it’s awful hard to build that nest egg when you keep giving your money to the Costco electronics department.  Many people who’ve accumulated wealth have done it through stocks, real estate or other investments.  From startup stock options to the old compounded interest over time trick, rich people save and invest.
• You don’t own a business – Many millionaires own successful businesses.  Often nothing glamorous, but they learn to make more than they spend and build a business that’s worth a lot. Lots of people who accumulate wealth own a business, according to the books The Millionaire Mind and The Millionaire Next Door.
• You’re in debt – consumer debt and huge mortgages with escalating interest rates have led the US and much of the world into banking turmoil.  It’s no good owning a business or saving and investing wisely if you’re burying you nest egg in debt.

OK, does one of these things stand out to you?  Maybe, maybe not.  But I’ll bet that describes a lot of folks who wonder why their ship hasn’t come in.  Want more proof?  Here’s a guy who started small, but worked his way up with rental property (and some serious frugal behavior) and ended up with some serious cash.  May we all be as smart as he is.