The funniest thing
I've noticed about rich people is how little their income has to do with their
wealth. Mike Tyson earned $300 million during his career and went broke. An
orphaned, unmarried administrative assistant died with millions in the bank. A
lot of rich people aren't exceptionally talented at what they do. They just
have quirks and habits that let them think differently about money than the
rest of us.
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Here are three I've
noticed.
They are (mostly
pleasant) sociopaths
I'm convinced that nearly every rich person has the
characteristics of a sociopath. Not in a cruel, soulless way. But sociopaths
can disregard emotional events that cause normal people to worry and panic.
Great investors can do that, too. They can watch stocks fall 50 percent and
shrug their shoulders or see 10 million people lose their jobs and remain
unshakably calm. In her book Confessions of a Sociopath,
M.E. Thomas writes:
Sharks see in
black-and-white. Scientists have suggested that contrast against background may
be more helpful than color for predators in detecting potential prey, helping
them to focus on crucial spatial relationships rather than extraneous details.
I'm color-blind in a way that makes mass hysteria seem particularly striking in
contrast to normal, expected behavior. My lack of empathy means I don't get
caught up in other people's panic. It gives me a unique perspective. And in the
financial world, being able to think opposite the pack is all you need.
Napoleon's definition
of a military genius was "The man who can do the average thing when all
those around him are going crazy." Rich people are similar. They remain
normal when everyone else can't.
They care about time
periods most can't comprehend
There are four ways
to invest:
1.
Unsuccessfully
2.
Long-term (varying degrees of success)
3.
Short term, successful due to luck
4.
Short term, successful due to manipulation/fraud
5.
That's the complete list. Nos. 3 and 4 eventually become No. 1.
Long-term investing
is the only sane choice. But it's unnatural. We're hardwired to grab immediate
gains and avoid immediate threats. That's why we eat donuts and watch CNBC.
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Carl
Richards made a great sketch :
As Carl notes, studies show that we have the same emotional
connection to ourselves 30 years in the future as we do an unknown third-party
today. Rich people have the rare ability to bridge that emotional gap. They are
allergic to the short run. "If you look carefully," Bill Bonner
writes in his book Family Fortunes,
"almost all Old Money secrets can be traced to a single source: a
longer-term outlook."
In August 1929, John
Raskob wrote an article called "Everyone Ought to Be Rich." All you
had to do was buy stocks and hold them for a long time, he wrote. Two months
later, the market crashed. It fell 88 percent over the next four years. To this
day, people cite Raskob's article as a sign of irrational hype. But was it?
Anyone who bought stocks the day it hit the stands increased their wealth
six-fold over the next 30 years, adjusted for inflation. Missing this is why
everyone ought to be rich, but few are.
They don't give a damn
what you think of them
Dilbert creator Scott
Adams once wrote: "One of the best pieces of advice I've ever heard goes
something like this: If you want success, figure out the price, then pay it. It
sounds trivial and obvious, but if you unpack the idea it has extraordinary
power."
The price of being
rich is really simple: You must live below your means.
But living below your
means is hard. Most people want to be rich to impress other people. They do
this by spending money, which is the surest way to have less of it.
The reason so many
Americans are in dire financial shape is because their aspirations, desires,
and wants have grown faster than their incomes. That's why the size of the
median home has increased by 30 percent over the last 25 years while the median
income has barely budged. For every $1 raise most people receive, their desires
grow by perhaps $1.10. This is the express lane to disappointment.
Rich people avoid this trap. They care less about what others
think of them than ordinary people do. They don't give a damn, actually. They
can get a raise without buying a new car or have a great year in the market and
not blow it on a new watch. A lot of them are after control over their time,
which comes from having a wide gap between what they can afford to buy and what
they actually buy. They are more impressed with retiring early than $90
T-shirts or $20 cocktails. It's classicMillionaire Next Door stuff.
Having the emotional
backbone to drive an uglier car than you can afford, live in a smaller house
you can afford, eat out less often than you can afford, and wear cheaper
clothes than you can afford is rare. In my experience, less than 10 percent of
people can do it in a meaningful way. It's the cost of being rich, and most
people have no desire to pay the price.
"A miser grows rich by
seeming poor," poet William Shenstone wrote. "An extravagant man
grows poor by seeming rich." I don't think it's any more complicated than
that.
Another take
But, we should take another look on the wealthy people. There are some that really care. Whether for tax benefits, because of
personal tragedy or just from having a heart of gold, many millionaires give away money. Some have given away nearly everything they own, while others
manage to give while still maintaining their personal wealth. Either way, it's
fascinating when millionaires give away their money, and the rest of us imagine what we would do if we were in the same position.
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Significance
Millionaires who give away money have the power to change hundreds of lives or make a significant impact in a community. While small donations certainly add up and also make an important difference, when a millionaire gives away money, there is usually an immediate result. The donated money can have long-term effects, such as sending students to college, providing homes and food for the less fortunate, or giving someone in unfortunate circumstances a "leg up." In many cases, those who have benefited from the money go on to become successful and in turn donate their time or money, continuing the work set in motion by the millionaire.
Types
Millionaires who give away money do it for a variety of reasons or a combination of reasons. These donations may be made for tax relief purposes. In this way, wealthy individuals can have a more direct say in how their money is used, and it also benefits a nonprofit organization. Some millionaires give money away because they have been affected in a personal way by a disease or situation. For example, a millionaire with a family member diagnosed with breast cancer is likely to give away money to help with cancer research or that helps breast cancer victims afford treatment. Some millionaires give money to those in less fortunate circumstances because they believe it is the right thing to do. They recognize that they have been fortunate and have the ability to help others.
Effects
When a millionaire gives, the donation tends to snowball. Not only are others encouraged to give more, the purchasing power of the organization or recipient increases, which makes all of the donated dollars go further. In addition, retailers and suppliers like to get in on the act when a well-known millionaire donates, and stores or manufacturers will often donate products and services to go along with a millionaire's donation. A wealthy donor may also provide the seed money for a fund-raising event, paying for advertising, space rental and other costs associated with a fundraiser, making every dollar stretch even more.
Considerations
Before a millionaire gives away money, he will often investigate the organization he intends to donate to and carefully consider how the money will be used. Like everyone else, he wants to be sure that the money will be used for its intended purpose and that it will be spent carefully. The amount of tax saved through donation is also a popular consideration, as is who will actually benefit from the money.
Misconceptions
While the rare few millionaires who give away nearly everything they have should be recognized for their generous nature, there is a common misconception that those who maintain their wealth don't give as much. By maintaining their wealth, millionaires who give only a portion of their income are able to continue to give year after year and often in greater and greater amounts. Over a lifetime, a millionaire who holds on to his wealth is likely to give far more than a millionaire who gave everything he had.
Contact me!
You can contact me and request financial assistance! I am willing to help and provide with free money no strings attached, Also, I promise that I will read every request thoroughly and decide to donate those in need. This is a true "millionaire giving money away" story.
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