We have all heard the story of the “hare and the tortoise” when we were young. But somehow, many of us seem to have forgotten the lesson taught by the story as we grew older. In a world where the rich are placed on a pedestal and worshiped, the “gods” are those people that made it rich quick and with a bang. Larry Page and Sergey Brin, Chad Hurley and Steve Chen, David Beckham, Tiger Woods, Oprah Winfrey – these are the people that fascinate us. OC, the simple life – these are the TV shows that hold our attention. We dream that someday we will be rich and famous too.
There is nothing wrong, or for that matter new, with this dream. For generations, people have dreamt of becoming rich. But it seems to me that in the more recent times, this dream has somehow caught on a tone of urgency. We not only want to be rich, we want to be rich *now*. We don’t want to wait for our boat to come in – we just want to get there right away. In a world where everything moves at the speed of light, it seems like we have come to expect our dreams to become reality fast too.
Take for instance the example of a friend’s younger brother who recently graduated with an undergrad degree. He got a job right out of college and it pays him a fortune. Being a bachelor who shares an apartment and stays close to work, he could easily manage to splurge on parties and manage to save a fair amount at the same time. Considering that he is in his early 20’s, if his career grows at a reasonable rate and he maintains a consistent savings plan, he could easily be a multi-millionaire by the time he retires. But he does not see it that way. He looks at the folks who made their millions in the dot com boom and feels that he has already missed the boat. To him, the only way to make money is to make it fast and with a bang.
Last year, when he was in his senior year of undergraduate study, he was assaulted by severe doubts of whether he did the right thing by majoring in computer science. He was fascinated by the real estate boom and was convinced that that is where the money is. For a while his folks were seriously worried that he may throw the three years he spent on the engineering degree to pursue a real estate certification. Fortunately, he stuck it out and completed his undergrad. But with the real estate bust, he is again disheartened and fretting about missing “yet another” boom. He is already looking to see what the next wave it going to be. He wants to make his millions by 30 and retire to a life of traveling the world and driving expensive cars.
He is an extremely smart person. And I have no doubts that he has the potential to make it big. But if every smart person were to become a millionaire before 30, we would have a lot more stories to tell than we do now. In addition to being smart and talented, success requires a pinch of luck and a dash of timing. I wonder if in his quest for instant success, he is neglecting the more time tested way to riches – the slow and steady way. While the stories of the slow-and-steady millionaires may not be as fascinating as the stories of the got-rich-quick whizzes, the slow-and-steady approach has a much better probability of eventual success.
The attitudes and expectations of my friend’s brother is a bit disturbing to me, because I can understand and to a large extent relate to the way he feels. I look around me at the peers who joined start-ups that went public and who made a nice cushion of money. I know a few seniors who rode the dot com boom. And a colleague from an old job that day-traded his way into retirement at 32. And a friend who sold his home in California at just the right time, and owns a house now in Texas free and clear. It makes me wonder if I am doing the right thing. If I should look at other options than the regular 9-to-5 job (that is really more of a 8-to-8 job) and find my own ways to quick riches.
But when you look closely, for every friend that I can think of who can afford to retire in their 30’s, I can think of a hundred others that cannot. The common strand in many of the success stories is that, these people were going about their daily lives as usual, and the right opportunity came knocking. Seems to me that the best approach to riches would be to take the slow-and-steady approach, while keeping an eye open for an opportunity to make it rich quick. That way, if the stars align just right and you are the story that people talk about, great! If not, at least you have a Plan B already in place to make you rich eventually.
The nice thing about plan B, the slow and steady plan, is that it is tried and tested for centuries and as shown in the book Millionaire Next Door it works. In addition, there is a clear cut step-by-step manual to take you where you want to be. As long as you are persistent and follow the directions in the manual, you will get there. And instructions usually read something like this:
- Live below your means.
- Stay out of debt.
- Invest wisely.
- Avoid the temptation to keep up with the Joneses.
- Rinse and Repeat.
Now for something that can give you a guaranteed results (bar the unexpected curve balls that life may throw your way), those instructions aren’t all that hard to follow, are they?
In this fast paced world, the slow-and-steady approach to riches may be extremely uninteresting and seem out of fashion, but considering that it can make promises that no other approach can make, I doubt it will ever really lack a following. Count me in.