No. 6: Rich people invest in themselves

Posted Dec 4th 2008 2:30PM by Daniel Solin
Filed under: Getting Started, Rich in America, Personal Finance

This post is part of a series where personal finance expert Dan Solin looks at money secrets that help the rich stay rich. See the first five secrets.

I give a lot of talks to groups of investors. I like to ask this question:

How many of you made most of your money investing in the stock market?

Very few hands go up.

I get the same result when I ask: How many of you know someone who made most of his or her money investing in the stock market?

Let's drop to the bottom line:

Rich people invest in themselves.

Poor people invest in "things" that give them instant gratification, like plasma screen TVs and flashy cars.

I don't mean to be glib. Rich people can afford education and great health care. Poor people often can't. A great education and good health positions rich people to get richer.

Rich people risk their capital to start and grow businesses. When these businesses succeed, they plow the profits back into their ventures because they believe in themselves and in what they are doing.

It's not easy for poor people -- or even for people of moderate means -- to emulate these habits of rich people.

But being frugal and believing and investing in yourself is a good start.

Dan Solin is the author of The Smartest Investment Book You'll Ever Read (Perigee Books, 2006) and The Smartest 401(k) Book You'll Ever Read (Perigee Books, 2008).

Tags: education, secrets of the rich

Print this

Reader Comments (Page 1 of 1)

12-04-2008 @ 2:53PM

beanspants said...

(self made) rich people buy stupid crap too, it's just that they invest in themselves FIRST. Then they buy stupid crap SECOND.

Examples of this would be:
staying out of legal trouble
focus on health
going to college
networking
getting a good job
auto deposits for 401k
going to grad school
advanced education or networking
having a family/baby
.......
buy crap

For regular and poor folks, those are flipped around to a large degree.
Regular:
going to college
getting a good job
auto deposits for 401k
buy crap
having baby
focus on health
advance education or networking

Poor:
getting a job
having a family/baby
buy crap

These subtle differences define if you will have lots of money (if you are interested in doing so) and not having much (but being interested in living the lifestyle of the wealthy).

12-04-2008 @ 3:29PM

Joe said...

WOW! That's brain surgery. What a moron, rich people get other rich people to do things for them, the whole damned country is immoral. how the heck are poor people supposed to pay themselves first. ANd he wrote a book?

12-05-2008 @ 7:35AM

flee said...

In Michigan with so little economic opportunity seems the survivors and well offs have this in common. Both spouses work for gov't, schools, and colleges or non profit businesses. All public supported entities seem to continue to prosper while all the rest get poorer paying the tax toll. Benefits of security, vacation, savings, health care, promotion all above private sector. Whats wrong with this? Were winding ourselves in a continuous downward spiral with no solutions. Were headed south with sensibilities of left. Once this spiral occurs seems to be no turning back, just more easy solutions to problems. Politicians unwilling to lead and inform public of hard choices, just more sympathy.

12-19-2008 @ 1:37AM

GaGa said...

Beanspants and Joe: I TOTALLY AGREE WITH YOU!! I could not have said it better. I am so glad to know that I am not the only one bothered by "his idea and/or solution".