| By Mark Ford, co-founder, Palm Beach Research Group When I “decided” to get rich, I didn’t know the first thing about creating wealth. I was an editor. I wanted to be a novelist. I’d never taken a course in finance or economics. Plus, I was broke. But I had a great advantage. I was working for a human wealth machine – a man who, at 43, had already created three hugely profitable businesses. He adopted me as a surrogate nephew/son and taught me everything he knew about making money. I retired 12 years later with a net worth well in excess of $10 million. After two years, I went to work as a business consultant at Agora, one of the largest and most successful consumer newsletter publishers in the world. Agora’s founder, Bill Bonner, allowed me to learn more by giving me carte blanche to test, refine, and sometimes rethink what I’d learned from my first mentor. As a result, my wealth has multiplied many times over. At 50, I “retired” for the second time, gave up my “get-rich” goal, and replaced it with another. I was going to be a published writer. In the next 10 years, I wrote and published a dozen books and thousands of essays, most of which were about what I knew: entrepreneurship, marketing, management, and wealth-building. And although it was no longer a priority, my net worth grew. At 60, I meant to retire again, but got talked into going to work for someone who worked for someone who worked for me. (Don’t ask.) As co-founder of Palm Beach Research Group, I still write about wealth-building… But I’m older now and have more experience. | Recommended Link | | Top CEO: “If the Internet was the appetizer, [this tech] is the main course.” Source: ITU Pictures It’s the most disruptive technology of the decade… Top tech CEOs expect it to create more wealth than the Internet. Robin Li, CEO of Baidu (one of the 10 largest internet companies in the world) says: “If the internet was the appetizer, then [this technology] is the main course.” Amazon’s Jeff Bezos says “We are now solving problems with [this tech] that were in the realm of science fiction… It is a golden age.” But here’s the most exciting part for you… Investors in this space already had the chance to see an incredible 737% gain in just 5 weeks. For a short time, you can get in with as little as $257. | | | -- | I’d like to think that my observations and advice are somehow better now. At the very least, I’ve been able to go wider and deeper in terms of thinking about wealth, how it’s created, how it’s invested, and how it’s lost. Why am I telling you all this? Maybe because I’d like you to think that when it comes to the subject of building wealth, I have some insights that might be useful to you. For example, I’ve come to believe that many commonly accepted “facts” about wealth-building are, in fact, fallacies. Take these six as examples: “Risk and reward are inversely correlated. If you want to acquire great wealth, you have to be willing to take great risk.” “Wealthy people are stingy for a reason. Pinching pennies is a necessary part of building wealth.” “The most important factor in building wealth is ROI – the rate of return you get on your investments. Therefore, when investing in stocks and bonds, look for high ROIs.” “A well-balanced investment portfolio is comprised primarily (80–90%) of stocks and bonds, with the rest (10–20%) in cash or cash equivalents.” “The surest way to acquire enough money to retire on is to buy the most expensive house you can afford and gradually pay off the mortgage.” “Asset allocation is the single most important factor in building wealth.” If any or all of these statements sound true to you, then I may be able to help you. I may be able to show you not just why I think they’re false, but also how believing them can keep you from acquiring the wealth you want. I realize this is beginning to sound awfully pompous. So allow me to back up a bit and admit that I’m hardly the first or only person who went from broke to rich and then wrote about it. When it comes to the sort of advice I’m trying to give, you have dozens – even hundreds – of people to go to, some of whom are much richer than I am. | Recommended Link | | Cannabis Insiders LOVE This Chart – You Should, Too You’re looking at the one and only chart you need to know to become a pot stock millionaire in the coming weeks. It’s not a chart of any particular pot stock. It has nothing to do with the growth rate of the cannabis industry… the CBD market… or anything like that, either. Instead, this chart shows the result of a very specific shift set to take place in the coming weeks… A shift that will unleash an estimated $340 billion of once locked-up capital… more money than is in the entire crypto market… straight into the pot stocks of America. And, by making one simple move now – before that happens… You could turn a grubstake into $100,000… $500,000… or even $1,000,000 or more. You could become a pot stock millionaire in the coming weeks. | | | -- | The point is, I don’t think I have the truth. But I have a truth: the way I went from broke to rich. And to be fair to you, that’s all I should write about because that’s all I really know about. I do occasionally read books about entrepreneurship, investing, and so on… And when I read something that strikes me as true, I write about it. But I do try to stay aware of the difference between what seems to be true and what I know to be true. What I know to be true is not quite science, but it’s as close to science as I can get: It’s based on things I’ve done or seen repeatedly in different situations. When I see a pattern confirmed time and time again, I begin to consider it to be a fact – not a universal truth, but fact enough for me to recommend it. Here are some of these facts: Fact No. 1: The intelligent wealth-builder takes advantage of safe bets and avoids risky ones. He does this as an employee, a business owner, and an investor. He understands that smart financial decisions are cautious decisions. When he must take risk, he does so with some sort of loss limit in place. He never loses more than he’s comfortable losing. Fact No. 2: Spending money prudently is an economic virtue, but being stingy – i.e., paying less than market value for goods or services simply because you can – is a flaw. The rich man who undertips does so not because he has learned the value of money, but because he’s simply a cheap bastard. It’s as simple as that. Fact No. 3: The most important factor in wealth-building is not ROI. Instead, it’s the accumulation of net investible wealth: the amount of money you’re able to devote to investing after you’ve paid for all your regular expenses – your car, home, debts, and loans. Plus, individual investors chasing yield typically get ROIs that are less than half those of market averages. This is why the intelligent wealth-builder devotes the lion’s share of his wealth-building time to increasing his income and setting realistic goals for his stock and bond portfolios. By realistic, I mean market averages, plus or minus 10%. Fact No. 4: The typical portfolio of stocks, bonds, and cash – however allocated – is an inadequate approach to building and safeguarding wealth. The intelligent wealth-builder will also include other assets, such as income-producing real estate, tangible assets, alternative fixed-income investments, and direct investments in cash-generating private businesses. Fact No. 5: Buying a more expensive home every time you get a big raise is a great way to ensure that you will never get rich. What you want to do is find the least expensive house you can love and keep. The longer you keep it, the more income you’ll have to invest in the sorts of assets that will eventually make you rich. Fact No. 6: Asset allocation is indeed very important, but it’s only one-third of a larger strategy that truly is most important. I’m talking about risk management. Risk management has three parts: asset allocation, position-sizing, and loss limitation. The intelligent investor pays equal attention to all three. | Recommended Link | | Millionaire Trader Reveals “5 Minutes A Day” Retirement Blueprint Jeff Clark, the self-made multimillionaire, has helped people from all walks of life retire wealthy for the past 36 years… His plan is designed to get your retirement on the fast track with his unique strategy. What’s more… it’s a piece of cake. “With my strategy, you can take advantage of it with as little as a few minutes a day.” – Jeff Clark Do you know what it really takes to become a successful trader? | | | -- | Four More Facts Okay, those are six facts that dispel the common fallacies. Got a few minutes more? Here are four more facts – some of which are very basic, but often ignored… Bonus Fact No. 1: The biggest mistake retirees make is giving up their active income. Yes, I know that’s exactly what you hope to do. But to keep your wealth for a lifetime, you need multiple streams of passive income. Your goal should be to build each stream of income to a level where you can live on that and that alone. Bonus Fact No. 2: The “miracle of compound interest” applies not just to money, but also to skill and knowledge. If you want to get rich and stay rich, you need to invest as much of your spare time as possible acquiring financially valuable skills and learning about your business. As a general rule, buying makes you poorer, whereas selling makes you richer. If you want to develop a wealth-builder’s mindset, develop the habit of asking yourself every time you buy or sell anything: Is this making me richer or poorer? Bonus Fact No. 3: Every type of financial asset has its own unique characteristics in terms of growth potential, income potential, and risk. Expecting more growth or less risk than “normal” from any investment is a bad idea. And that’s why 90% of ordinary investors have results that are far poorer than market averages. Bonus Fact No. 4: There are two ways that investments can build wealth. One is by the generation of income. The other is through appreciation – an increase in the value of the underlying asset. Certain asset classes are inherently structured to increase in value… some to preserve value… and others to do both. Investments that provide both income and appreciation are generally superior to investments that provide only one or the other. But in developing an overall strategy of wealth-building, the prudent investor will incorporate all three types of investments. Now, you may find some of these facts instantly sensible. Others you may disagree with, be confused by, or see as unimportant. But please don’t just read them and dismiss them. Give yourself a bit of time to think about them. For me, they’re useful and important because they’ve worked for me and for people I mentored – over and over again. Which means, of course, that they might work for you, too. Regards, Mark Ford
Co-Founder, Palm Beach Research Group Chaka’s Note: Mark is still currently writing… but for a small, private blog. It includes articles on wealth-building and entrepreneurship, as well as personal entries. He’ll also continue to talk about his own personal investment portfolio. If you’d like to keep in touch with Mark, you’re welcome to visit his website here.
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