Saving,income or Investing – which is best for getting rich?

The purpose of this post is explaining the three ways to get rich: savings, income and investing and answer the question ‘which one is the golden ticket?’ By the end of this post you will have a better answer so you can enrich your life and those around you.

Investing, saving or income which will make you wealthy?

  • Conventional wisdom talks a lot about growing rich slowly using a combination of savings and income, however, there is a cost, that is life quality and time.
  • It is interesting to note that people who make real money do it in a relatively short period of time and do not sacrifice a lot in terms of lifestyle.
Wealth can be achieved with savings, income or investing. However, it is more about understanding capitalism and the rules of the game, good or bad.

Further, contrary to the conception of the wiz kid becoming and over night gazillionaire, most do it in their 50s after a lifetime of experience, then they start making money. So if you are not there yet, do not worry. And if you are over 50, do not worry. It takes a lifetime of modest, just getting by to pay the bills and income to get you serious about making money.   In my opinion, it takes a lifetime for people not to be afraid to try to be an entrepreneur. Lets look at the three ways to accumulate money.

Money is easy to spend but hard to accumulate

Saving as a strategy to get rich

A penny saved is a penny earned. This will work, but it takes denial and time. It also depends on your income and lifestyle expectations. I sometimes think I could have lived on potatoes and socked away penny and invested the Stock Market and I would be a millionaire now. However, I am glad I did not. Why? I will never get those years back in my life and I am glad I lived and experienced life, even if it cost me something. I am glad I did not cheap out on some dark apartment that has some stinky carpet, or put off a vacation, even if it was on a shoe string.

  • People who spend money on intangible goods tend to develop entrepreneurism or at least are statistically greater risk takers. Nothing against saving as a strategy, but it just does not fit my style. I would rather focus on the income side of the equation.

So stuff that money for a rainy day and pay yourself first. However,  I think there are better ways to get rich.

I believe that if you want to make money you have to spend money. I have paid many people for one on one consulting about specific skills I needed to acquire and usually I got back many fold my investment. Stingy people might not do this. Money is meant to be spent. If you need to save read this: How to save and what to do if you are poor.

A note about credit – I do not have any debt by the way (except leverage on some investments). I believe in spending but not debt. I learned this when I worked in finance at UPS. It grow from zero to and international company with no debt. I think a modest mortgage is OK.

Income strategy for getting rich

Not a bad way to accumulate capital. However, there is a trade-off here of day-to-day time. Similar to savings there is a cost. In savings it is denial, in income it is giving up time with your family and hobbies.

I noticed when I was burning the midnight oil at the office I was becoming a boring person. My time allocated to self-development was limited and it began to show. I was becoming an old dried out businessman and gained some weight. I believe in paying the bills but corporate America sucks. The question is time or money.

You can be a careerist and with luck, climb the ranks and become like David Wallace in the TV show The Office. I have known many guys like this and I was somewhat on my way to be like this. You marry your career and it will reward you with a lifestyle which some would consider opulent. The price is high as you give up being a regular guy and your often your dreams for the trade-off of being a corporate warrior.

In 1985 I was in the Chase Manhattan Bank corporate training program. Instead I quit and hitch hiked around Europe. I sometimes wonder what if I just stayed on that career path. I know the answer. I would have had a boring life.

  • Both saving and earning an income as a wealth stragegy have the potential to make you boring, and dry up your creativity. This is the danger of pursing this strategy. Sometimes it is necessary, but creativity and spice in your life is the most important factor in achieving your dreams including getting wealthy.

 Investing – the road to wealth

My choice for being free financially is to get rich by investing. Investing is a very broad terms that needs to be qualified. What is investing?. There are two types of investing.

  1. passive investing
  2. active investing

Passive investing is putting your disposable income in a mutual fund or buying a few stocks. This is most likely unleveraged and more a buy and hold strategy. However, the key term here is passive. It means you do not have an active role in management and your fate is left to someone with less intelligence than you.

Acting investing is when you lead and drive your investment strategy. You might own your own business and deploy your own capital. Or you might actively trade stocks and options with a strategy and even leverage. The key point is you are driving and managing your capital. I believe this is why the rich have money.

Now capital comes in two forms also:

  1. Financial capital -this could include physical assets such as plant and equipment or land or it could be liquid capital like cash or near cash instruments. I have lumped physical capital in with liquid capital as it is really only a matter of liquidity. Both can be converted into something with a tangible value.
  2. Intellectual capital – This could be a talent or an idea. It could be the ability to write, create, perform, even music. This is more intangible and harder to value. Everyone has talent, by the way.

I think either one will work, but the key thing is you have to be an owner of the process. You have to be the one leading the charge. The main thing is invest your money or intellect in developing an idea. If you do this than you will serve humanity as you will bring something to market that other people desire.  Examine the richest people in the world or your country state or city. I bet most of them took the investing entrepreneurship route.

If you do not have an idea find something you like and try to replicate something that someone else has done but with your own style. I think between saving, income and investing, investing is by the far the most fun, best for personal development and profitable.

[poll id=”15″]


Cost of living calculator tool

The purpose of this post it to give you the a tool that will give you specific price  information and data on different cities of the world. All over the web you find recycled “cost of living” comparisons. You find lists of cities. However, the problem is these list do not show any usable detail.  Everyone’s budget is different. I want to know for me, the specifics prices on items compared to one country or city to another.

Example of some price comparisons from

If you want to travel and sample the world from the comfort of your easy chair, the tool I recommend  to explore is the below cost of living comparison tool. It is based on user-generated input of actual real world prices. There is not way that every entry is 100% perfect but I find it useful.

Go here  to try it-> cost of living comparisons tool

I think a Polish Google employee working in Ireland made it. It has the signature of an IT geek. Nothing flashy but useful.

You can compare the price of dresses at H&M or Nike or the price of milk or bread.

A personal quest for lifestyle

What inspired me to find something like this is not only my interest in inflation, prices and economics, but something on a personal level. I am moving to the USA from Europe.

If you have read my website, I do not have or need a job. I have a dual US and EU citizenship so I can living in many countries legally in Europe and North America and even South America as some countries are EU members.

Since I grew up in a large family and have Skype, therefore proximity to my parent’s family is not as important, as we all see each other some who.  So the issue is where is the optimal place to live based on lifestyle and prices and weather.

I am looking for a place where I can get the a bang for my buck and still enjoy a high quality of life. It is not just what you earn, but what things cost. I need somewhere I can work from home and allow my family to get some fresh air.

With a global economy, consumer goods can be obtains anywhere with an Internet connection so if you are talking about Europe and the USA it is all the same in the basics. Besides, I am not hyper consumptive, I am more into reading books and classical music.

Why people compare cities – People want to know for job and income comparisons or just to know for a fantasy.  Income not just price is a factor and the ratio between the two. Also real estate investors like to look at property ratios. My favorite part of this site is real estate comparison. It has important ratios like price to rent and price to income ratios.

  • If you were really had extra capital on hand you could in theory do something with this property data.
  • Most people use it for fun or when they consider relocation.
  • You can use it when you are considering a vacation and renting an apartment for a month and living on local food.

Let me know what you think of this tool and some of the conclusions you have from it. Do any of the prices surpise you?



What if I am poor – Why not to worry about poverty

What if you are poor? The purpose of this post is to put things in perspective and ideas. I am all for making money. I often say I am an unrepentant capitalist. However, that is not what life is about. If you ever worry about money and poverty, remember, money comes and goes, but time only goes.

(to God) – It may sound like I’m complaining, but I’m not… Oh, dear Lord. You made many many poor people. I realize, of course, it’s no shame to be poor… but it’s no great honor either. So what would be so terrible… if I had a small fortune?

One of my favorite musicals is Fiddler on the Roof. The above quote summarizes how a lot of people feel. Especially in the USA where a lot of people have expectations about wealth and lifestyle.

When I have less money I buy things at local markets or make it myself. Here is a farmer's market for cheese where I live in Kraków..

Where are some reasons why it is not bad to be poor

  • There is a power in being powerless. Think about it. A Jesuit Priest in College who lived and worked in Latin America, told me this and I have thought about it. I think he was into Liberation theology such as Gustavo Gutierrez. It is a little radical but here is an interview about remembering the poor.
  • Being poor is relative – Me, living in both Eastern Europe and the US for a large part of my life can honestly say, the poor in the USA are like the super rich in other countries. For example, when I was at the US Embassy in Warsaw going an immigrant visa for my wife, I saw these Ukrainian farmers there who just won the green card lottery for the USA. They looked like Ma and Pa Kettle, with very basic farmers clothes, they were in their 50s at least. Lady at the embassy (via a translator) asked them in Ukrainian if they spoke English.  They said no. She asked them is they had an education. They said no. She asked if they had any job or assets. They said no. Even with the crisis in the USA, in my mind there is a 0.00% chance they will have any economic troubles in the USA. I know it for a fact. I live in Eastern Europe and I know how people are and how rich and easy the USA is even in the poorest areas compared to Ukraine for example. The USA still is the land of dreams, if you are humble and not greedy.
  • Being poor just means you do different things, like focus on your family and read books, learn languages, learn to play musical instruments, study art and drawing or take walks, bike instead of joining the gym or having a car. People really do spend the day in a cafe reading a book.  This is what people in Eastern Europe do, there is no flood of iPods here but also very few people go to psychologists or take antidepressants, in fact almost no-one. Life is like it was 100 years ago, but no one is starving.  In my observation life has a sweeter quality than when I live in the USA among cars and gadgets and other distractions. I am not saying the USA is bad at all, I am moving there as I want to buy a house, I just observing that being poor is no shame and certainly less boring than being rich.
  • Being poor is cool. Movies to music videos portray the poor or at least the common man as nobel and the rich guy as fat and greedy.  Now in reality this is not always the case at all. However, I know many rich people who have lost touch. I know many poor people who have no pretenses and you just feel comfortable abound. They accept you. ‘God loves the common man, than is why he made so many of them’- Abe Lincoln.
  • Small homes and apartments promote family closeness, literally and figuratively. People here in general live in 500 sq/ft living quarters for a whole family. Families are closer here, large spaces and homes are fun but are not always optimal for family relationships, especially teenagers.
  • Contrary to popular belief, rich guys do not get girls. The guys that I know with high-powered careers and jobs never got a fraction of the girls my friends did that had whatever jobs or no jobs. And when a rich guy gets married he often has a high maintenance wife. I can not tell you how many bullets I dodged when I live in Beacon Hill Boston, girls who judged guys by their title or position in society, even subconsciously, please.  I am so happy I am married to a simple farm girl with no expectations about money or wealth and loves me for richer or poorer. ‘I have wealth in my friends ‘ – Shakespeare.
  • Jesus said ‘blessed are the poor’. How can you argue with this?

Let me know what your thoughts are about money? I have a similar post here which is a little more detailed on being poor.  What is your relationship with money?  I like making money, I have a blog about money, but it is a tool not an end. When we stand before our Divine master we will be asked ‘what you do with the money he lent you’?


What if You are Poor?

What to do if you are poor, unemployed, or have financial problems?

I believe that every problem has a solution. I do not believe in the no-win scenario. If you are poor and have financial problems, remember that the only difference between you and some rich and famous people is the attitude. To free yourself from poverty, you need to start with the right mental position. That is, you can do anything you put your mind to. Do not be afraid to live your dream. I know many people talk big like this, but it is true.

Poor is relative. If you think you are poor, just think about how other people in the past lived in utter poverty.

I realize there’s no shame in being poor, but it’s no great honor either – Fiddler on the Roof

There is nothing wrong with being poor – Start with the idea that there is nothing wrong with being poor. You need to believe this. The whole idea of freeing yourself from poverty is not about getting money. It is about changing your attitude. Again you have to believe that you can achieve anything you want in your life in any circumstance you were born into.

For example, both my brother and father, who have seen more extremes of rich and poor than I, both said they were just having happy when they were poor. Being poor has a certain cool factor all to itself. It is fun to be just a normal person and fly beneath the Radar.

God loves common people, that is why he made so many of the – Abraham Lincoln.

Change your mind – change your destiny – I remember reading a book, I can not remember the name of it about a woman who lives a nice life in both Hawaii and London. People often said to her; we can not achieve this; we are not you. Her reply was, I was just a secretary, and I changed my thinking.

The problem is reading things like this get you all fired up and ready to get rich, but it does not lead you to how to get rich. It only motivated you. My advice is to be patient. Use your imagination and dream for a few years if you need to. Relax about the whole process and be a beach bum if you need to. Ideas will open up when you are doing what relaxes you.

People make money when they are older – Another idea you need to realize is that most people do not start making real money until they are in their 50s. This is a statistic. Some people latter. So if you are 40 and not rich, do not worry, it is par for the course. Most people do not start making money until latter because it takes a lifetime to figure out what life is about.

Know the why, what and how of lifting yourself from poverty

For too long, we have been dreaming a dream from which we are now waking up: the dream that if we improve the socio-economic situation of people, everything will be okay, people will become happy. The truth is that as the struggle for survival has subsided, the question has emerged: survival for what? Evermore, people today have the means to live, but no meaning of living for. – Viktor E. Frankl, “The Unheard Cry for Meaning”

If you want to know how to get rich – read my posts on it on this blog. But more important – before the how or what is the why.

People think the problem with money and life is what. What can you do? What is the idea? Some people also think the how is a problem. That is how to set something up or accomplish your goal. This, I all wrong. There is only one question or problem. That is why.

Start with the idea of active indifference towards wealth  – If you know the why in life the how is easy. If you know why in your life, I think things fall into place easier. I have a pretty good why I have my family to take care of. But taking a step deeper, I believe this:

We should not prefer health to sickness, riches to poverty, honor to dishonor, long life to a short life. The same holds for all other things …. everything you do should be to add to God’s greater glory. – Ignatius of Loyola’s First principle and foundation.

It does not matter if we are rich or poor, it is all for the greater Glory of God and in doing so save our soul. How can you argue with this? If you want to change your life, start with finding you why. Be radical in your thinking.

It does not matter if people think poorly of me, or I live a life of dishonor. If you are actively indifferent, then this gives you freedom. There is a power in being powerless. Once you are powerless and free and free from any social fears or self-doubt because you are indifferent towards these things, you are more able to do your life’s work.

The above is the idea of active indifference.

My story perspective on wealth.

I am not the world’s most significant investor, nor am I the richest person. However, I have done well. What is well? My last real job was seven years ago at age 40. There is a good chance I will never have to work again in my life, and I will live my dream of living both in Europe and the USA and maximizing time with my family. This, to me, is wealth. Here is how I recommend you make money.

You might say that it is easy for me to say since I am a stock trading entrepreneur guy. But remember, I do not live in the USA. I lived in Poland and was living in a 190 square foot apartment and washing my clothes the sink. My wife’s family had eight people sleeping in one bedroom. My relatives in Ukraine still do not have running water. Wealth is relative. So if you feel bad, your family has to live in a 500 square foot apartment. My take on this is a good size. Do not feel sorry for yourself if you are poor. I think many Americans are spoiled.

Look I have horrible back pain as I use to work on the loading docks and can not even lift my own daughter. I have bleeding in my brain stem and dizzy and in pain. But what does that matter? I am not going to feel (too) sorry for myself. I am just going to know that every challenge I have in my life, I offer up to God and say ‘thy will be done’.

If you are healthy, you should be moving mountains. Just find the why in your life first.

What if you have you? Why who do you find you what?

I say, ask God to guide you and be patient. Start to meditate on what you really loved when you were a kid or now before you had to make a living. As yourself, if God could give you any superpower to be anything you wanted, a rock star or an investor, or anything, what would you be?

The answer will be different for everyone. This is the way the world works when we are all doing our own thing on this earth, the full benefits (Adam Smith).

The ‘How’ of freeing yourself from Poor

After this ‘why’ and ‘what’, the ‘how’ part is easy. Learn everything you can by reading books and on the Internet. Then, I pay people consulting fees as it accelerates the learning curve. Find someone in the area that you want to focus on and pay them. Gradually here and there. Until you know the process and are all set up. I pay for the people. Do not be cheap. Research things on the Internet until you are at a point you can go no further and find someone trustworthy to coach you on the how.

If you are poor and want to know how to make money, take some of the things I write here to heart. If you have any questions, write to me.


Economics of government grants

Do government economic grants help?

I live in Poland which is a new EU member. There are many EU grants that are available to Poles wanting to start a new business. Further, the government pays people to ‘promote economic growth’ in one region or another. I want to use this example to explain why government grants may give people warm fuzzies about stimulating economic growth, but in reality, is unfair and hurts the economy. This applies to US policy also. The US has many people and organizations involved in trying to promote economic development. Is that good? Let’s look at the example of Europe first and you can draw your conclusions about the USA.

Poland joined the EU in 2004. Since its economy has prospered from open markets, that is the free moment of labor and capital. However, it also receives a lot of EU money for various economic stimulus programs. Everyone here likes the feel of Poland getting large grants. It is basically a cash transfer from Germany.

Money transfers for political reasons

I personally do not have a problem with this money transfer for political reasons. That is Germany never paid a penny of reparations for WWII even though it destroyed the entire country. I think this is the least they can do. And I think the new Germany is generous and is a positive democratic force in Europe. Therefore, if the EU wants to transfer money to Poland for a while, I am not opposed politically, as I live in Poland. There was great political injustice done in Europe.

The economics of a government grant

However, economically speaking a governmental grant is nothing more than taking money from a productive person via the tax system. It is taxing you and then having some bureaucratic on some commission with some title or Ph.D. This government bureaucrat looks at the money and reallocates your productive energies to someone else. It is penalizing a productive person and rewarding a less productive person.

The whole idea of the enlightenment was that people acting on enlightened self-interest has wisdom greater than any government engineering of politics or economics. If you disagree read my free Wealth of Nations in pdf.

I know a guy who is getting EU money as an economic grant. I would not call him a master of capitalism. He is someone who knows how to fill out forms and make nice looking business plans. However, the viability of his ideas is questionable. Some government worker with some title will review his plan to see if he gets my money. Is this fair? It is like a bailout.

I know another guy who is horrible with filling out forms and jumping through bureaucratic hoops. He does not know how to play the political game of handshakes and chicken Kyiv dinners with the right people. He has his own business and it employs people and his enterprise thrives. This guy would never apply for grant money.

In fact, the people who I know who got grant money in the EU are the same profile of people who do well in academia, that is good with making things look good on paper. People good at shaking hands and making connections. While the people who really know how to run a business from the ground up would never get the money or even apply.

This is just my observation. What do you think?

Every entrepreneur I know starts their business from their proverbial basement and did it with their own courage and intellect. Why should some ribbon-cutting handshaking bureaucrat on a board or commission tax him and give it to another person who does not have the creativity to raise capital himself.

I think there are exceptions to this such as people with disabilities for example. In cases like this, it could be understandable. However, I am not talking about that. I am talking about government programs that tax money from one person, have a middleman bureaucrat with self-interest to keep his job and who is getting paid with your tax dollars. Therefore, my conclusion has redistributed the money in the form of a grant is economically less than optimal.  I think the government public sector is the new private sector.


Fiat money – Eliminate

Why fiat money is so wrong

Fiat money is not honest money. It is a paper currency backed by nothing. That in itself is fine. I have no problem with fiat money, electronic currency or any other medium of exchange. Just remember, money is a cipher. The problem is the government monopoly on money causes business cycles and economic pain. The easiest way to control issue is to eliminate fiat money, that is the Fed’s power.

  • Fiat money is creating money out of thin air and distorting the capital structure, creating business cycles, driving up debt and increasing inequality manifest by the Gini coefficient.

In 1971 Nixon took the world off the International Gold Standard. This Nixon shock eliminated the Brenton Woods pegging of the dollar to 1/35 the value of a troy ounce of gold.  Nixon was not one of our greatest presidents. Specie-backed representative money becomes the norm.

However, the real chaos started in 1913 with the creation of the Fed and a monopoly on legal tender.  Read what the government has done with our money: US fiat money.

Federal reserve system alternatives to control fiat money abuse

Money is a medium of exchange. In economics the market for money is the most important market there is, because disequilibrium in the money market cause business cycles, otherwise known as recessions, depressions, panics, and crises. The solution is easy, find an alternative to the US Federal Reserve bank.

In this post, I give two ideas.

I like listening to guys like Alan Greenspan and Ben Bernanke on TV. They sincerely try. They are ethical in actions and calm in demeanor and use such nice flowery economic vocabulary. I would trust those guys if I knew them personally or with a business dealing. However, to micromanage and fine-tune the economy of the United States, no way. Not a chance. It is foolish to be lulled into a sense of security with their charm.

Do you think eliminating the Federal Reserve system and replacing it with real non-fiat money is radical?

Think again. The problem with having a Federal Reserve and a government monopoly on money is:

  • Historically the Federal Reserve has missed every impending crisis and in fact, made it worse, recent examples are fueling the Internet stock bubble or the Crisis of 2007. Historically the Federal Reserve caused the Great Depression and prevented the recovery.
  • The Chairman of the Federal Reserve bank, as well-intentioned and educated as he does not have the ability to predict the demand for money. In fact, predicting the weather two years in advance would be easier as there are less exogenous variables. Believe me, I am a smart guy and I could not even predict money flows. It is hard enough to predict the price of one stock, let alone aggregate macroeconomic indicators. He is no one special, just an academic with an opinion, but responsible for all our economic lives.
  • Money supply policy usually has a long lag factor, so actions by the Fed today might not be seen for two years and this will exacerbate business cycles. It does not work even if you could predict it.

If I did not convince you to do your own research on the history of business cycles or use your own judgment about the economy now. Abolish the Federal Reserve system and we all will return the US to prosperity. The easiest way to eliminate the Fed is a return to hard currency. It worked for thousands of years. With hard currency, you do not have hyperinflation. Countries go on Fiat money when they run out of options like the US issued greenbacks during the civil war. It is not something that should be the accepted norm.

Beautiful gold coins

Eliminate fiat money – Return to the gold standard – Federal Reserve alternative I

Fiat money is paper money backed by air. Or in the US the ‘full faith and credit of the US government’. There is no commodity backing the currency. The dollars value is based on what people think it is worth, rather than intrinsic value. Normally I have not a problem with this as every commodity or thing in the world has subjective value, based on supply and demand.

The supply of gold increases pretty steadily about 2% a year which matches the 150-year historic growth rate of the USA. Therefore, coincidentally this seems like a match. Even if the rate was different it would not matter actually.  Further, in times of panics, money is backed by gold and fear is less.

The problem is when the government can increase the supply of fiat money at will instead of normal market forces, it is open to abuse and miscalculation. Again just think of history from the inflation of the 1970s to the crisis of today. The Fed’s quantitative easing will destroy the value of the dollar.

Free money – Allowing competing currencies – Federal Reserve alternative II

Why is free money, that is competing currencies, a good idea? Right now it is illegal to use anything but dollars in the USA for financial transactions. This is the US government monopoly on money. But if other issuers could issue money, backed by commodities such as gold and silver, such as in the free money era in the USA in the 19th century, you will have a self-regulated money supply. This means fewer business cycles and steady growth.

The crisis would end as prices would adjust. If there was something called free money, banks could issue currencies backed by gold or silver, markets, not the Federal Reserve would control the supply and demand for money.

I personally prefer free money, rather than a gold standard. However, a return to the gold standard is a step in the right direction. Ron Paul at times might seem eccentric but he does understand economics. Ron Paul on fiat money, eliminate it.

Fiat in Latin means let it be done

Do not let it be done to you or the USA. Do not let the Fed just do whatever it wants. The US needs to implement something other than the Federal Reserve system is with the end of the government monopoly of money the US government must be more responsible in financial spending. The debt cannot be inflated by quantitative easing or printing money. This means returning the USA to freedom and prosperity. Finding a viable alternative to the Federal Reserve and eliminating fiat money is a practical and philological issue. Do you trust the government to manage your money or you?


Who is the richest person in the world

The richest man in the world

Update: Jeffrey Preston Bezo – if he is not technically he has the most potential and buying power.

At this moment the world’ s wealthiest person is Carlo Slim Helu. Who? Yes, that is right a Mexican billionaire tops Bill Gates and Warren Buffet in terms of financial abundance.

I was always,  a poor boy in a rich town, a poor boy in a rich boy’s school, a poor boy in a rich man’s club at Princeton.  I have never been able to forgive the rich for being rich, and it has colored my entire life and works. – F. Scott Fitzgerald.

  1. Carlo Slim Helu –  country Mexico – amount: $60 billion. His big increase came from the shares of America Movil (oil). He made his money in the telecommunication business. He is of Lebanese background and of course like most rich men a philanthropist. He is a Maronite Catholic and this is a key motivation in his life. He has six kids and married only once.  The only criticism people lay against him is he amassed this wealth in poor countries. But he did a lot for the countries also.
  2. Bill Gates – country USA  –  amount $53 billion – This guys was on the top of this list of the richest man for chest 14 of the past 15 years. He needs no introduction. The man donated 90% of his money to charity. His kids will only get one million a piece. I respect also the fact he is married to the same women.  Not some who has let this gilded fortune corrupt his ideals.
  3. Warren Buffett –  country USA – amount $47 billion-  He is the king of value investing.  He also runs Berkshire Hathaway. The man is the king of frugal. I admire the fact that he is loaded he does not live an opulent, plush lifestyle. He likes to play bridge on the Internet.
  4. Mukesh Ambani – country India –  amount $29 billion – devout Hindu and husband runs Reliance industries. At 53 he is a young man.
  5. Lakshmi Mittal – country India – amount-  $28.7 billion – More controversial than Mukesh but a big donor to the Olympics and other organizations.

The next five on the list are:

  1. Lawrence Ellison – country United States – amount $28.0 – Founder of Oracle- a bit of an eccentric, lives by the code of a zen warrior.
  2. Bernard Arnault – country France – amount $27.5 – luxury brands Prince, including Louis Vuitton, Dior, and Fendi.
  3. Eike Batista – country Brazil – amount $27.0 Mining magnate. He is superstitious and particularly fond of the number 63.
  4. Amancio Ortega – country Spain – amount  $74 Fashion businessman.
  5. Karl Albrecht – country Germany – amount $23.5 – the Discount supermarket’s in Europe.

The simple version of this list is published in Forbes magazine every year. It is interesting to note that many of these wealthy guys come from poor countries. It goes to show you, you can get rich no matter where you are from. In fact, often in developing countries there is more opportunity.

Think about why so many people left England and German, advanced developed countries and sought their fortunes in a wild frontier nation in the 19th century called America.

When asked why he came to the new world, such a wild place, Hernán Cortés replie:

We came to serve God and King and to get rich.

If I were the wealthiest person in the world?

I have wealth in my friends – William Shakespeare

I would live a frugal life and also:

  • Keep my values and faith.
  • Donate to charity and help the poor, as the more that is given, the more will be expected.
  • Continue my intellectual pursuits, aside from business and making money, for example, study languages and continue to work on my language learning entrepreneurial endeavors. Why? I just like it.
  • Have my home in Krakow, Poland but also a vacation home in Hawaii. Oh I would love to live in Hawaii, it is dream.
  • Have one company that is really focused on innovative or good for the world, that would do something like feed the world or save the environment via alternative energy or something to that affect global happiness and prosperity.

Basically I would live as I do today with some slight modifications and comforts, but mostly dedicate my life and prosperity to others. I believe money is energy. If you are given this from above you should be humble and use it as a tool for good.

What would you do if were the wealthiest person in the world?


Time or money – is wealth or life important?

In the movie Wall Street 2 – money never sleeps Gordon Gecko tells how when he was young he believed that money was the most important thing. With a lifetime of experience, he regrets to say, he now knows there is something more important. That is time. Time is the only real thing of value. I could not agree more.

Can anyone argue with this? Lifestyle for money trade-off?

I work at home and get to be with my family 100% of the time day and night. I think few folks have that luxury. I am not as rich as I could be or as I want to be. However, I do have time with my family. I have time to live my life.

I would rather sit on a pumpkin and have it all to myself than be crowded on a velvet cushion. – Henry David Thoreau

In my opinion, the best life is to have the time to do the things you love. I am not the richest guy in the world but I do not need a job. I stopped working at about age 40. How did I get this way?

Americans, while occasionally willing to be serfs, have always been obstinate about being peasantry.– F. Scott Fitzgerald, The Great Gatsby

Income, wealth and time

  • I worked hard for a long timeWorking long hours for someone else is often necessary but not optimal. I made good money but not enough to set me free. I sacrificed a lot of time for a modest amount of money. I realized careers are good, but the long path to success. Corporate America sucks.
  • I invested in a clever way and learned how to invest – Learning to invest was one of the best investments of my time I made. That is, I learned how to make money in the stock market – I gave up little time to learn. I read books and tested my own systems. I pretty much avoided the last stock market crash. With my investment returns, I built a war-chest to allow me the time to figure out the next strategy in my life. It is also fun.
  • I took the time to think out conceptually what is going on in the world of money and how individuals earned wealth. –  Why the rich have money and time. Workers can get paid by one of four ways:
  1. Selling intellectual goods.
  2. Performing Intellectual services
  3. Selling physical good
  4. Performing Physical services

Determine where you are in the pyramid and how you can move to a higher point where time and money are more efficient and pleasurable.

Why do I not just spend my time investing in the stock market?

I do well in the stock market and at this point can say with confidence that I have a system, even with some leverage, I feel pretty confident about. Even in down markets, I feel pretty good about my system. However, I am still learning and I do not know everything. I use this blog to think out loud about a lot of my trading strategies.

That being said, and the fact I really enjoy money and markets, it is not the maximum leverage of my time and money. Although it is very efficient, it is still indirect ownership. If I dedicate my time, intellectual resources and capital to my entrepreneurial activities I think this is more efficient.  I have direct control over the day-to-day operations. It is more an extension of my hobbies rather than a tool to make green stuff.

Money can not buy time. Cash means nothing, guide the next generation not to trade our temporal existence for something base like working for your boss’ bonus. My daughter and I in the park in Krakow on a weekday, yes a weekday.

Time may be relative –  but money definitely is

I am an American and EU citizen.  Although I am a New Englander, I live in Krakow, Poland now. I have heard so many Americans complain during the economic crisis about how hard it is.  They can not stop their careers and are afraid of losing their jobs. Haha. I am sorry I do not believe it. Why? I live in Poland, a post-communist country.

If you are unemployed in America even with a mountain of debt you are most likely richer than the average guy in Poland was a few years ago. Eastern Europe was poor. Not like Americans with  TVs and cars who are complaining.  In Eastern Europe you could not buy food in the shops and no heat in the winter, no paper goods and no running water, and two families living in a two-room 300 square foot apartment just 15 years ago, with no hope of government help.  When I moved here there was over 20% unemployment. Now families live on average about 1,500 dollars a month so it is much better. Money is really a relative thing. The poor person today lives like a king of old. If you are complaining or living in economic fear in the USA, you are a  spoiled American. I am an American and a patriot but I am not a materialist. Wealth is a very relative thing, if you live in the good old USA appreciate what you have, it is a great country in terms of prosperity, even during a crisis.

If you do not believe me watch the movie Wall Street 2 and you will see that people with economic power are so afraid of losing it.

American society is very conscious of money and status but discounts the value of time

Again, I am not criticizing America because I am very proud to be American born and raised, but golly gee we are surely conscious of our neighbor’s wealth. We compare and judge people often on everything. Maybe all cultures do this, but I do not feel it in Europe.  There is so much judgment based on social status.

Alpha children wear grey. They work much harder than we do, because they’re so frightfully clever. I’m awfully glad I’m a Beta, because I don’t work so hard. And then we are much better than the Gammas and Deltas. Gammas are stupid. They all wear green, and Delta children wear khaki. Oh no, I don’t want to play with Delta children. And Epsilons are still worse. They’re too stupid to be able to read or write. Besides they wear black, which is such a beastly color. I’m so glad I’m a Beta.”
– Aldous Huxley, Brave New World

Stop comparing yourself to others and start spending your time in a smart way.

When I was working at a big four accounting firm, working nights and weekends for the client’s ridiculous demands were something respected. It was the way you moved up the ranks. Americans love workers who sacrifice their personal time for the greater good of the company.

I have a better message. Yes work, but work smart so you have more time. Work and plan out your strategy to make money very intelligently. Even if you take one step backward in the rat race, it is better you are studying how to make money than just hoping a paycheck will do it for you.

If a man does not keep pace with his companions, perhaps it is because he hears a different drummer. Let him step to the music which he hears, however measured or far away. – Henry David Thoreau

One point I try to convey to on this blog, is most people are not consciously examining how to make money.  They spend too much time competing with others and keeping pace with others to have the time to decompress from the stress and live an examined live. They want to make money.  They ask how to make 10,000 dollars fast but they do not examine the abstract process of what is going on. If you can do this, you will have all the time in the world or at least more than you have now.

However, in the end, and as a believer in God and someone who wants to spend my time with my family. I also believe Jesus never said blessed are the hardworking or blessed are the rich. Money is not my God. Anything we have here is on loan from us from above including time.

The question about what is more important time or money is obvious for those who think about it. Time is more important than financial capital of course. You can use your time to generate wealth, but just do so in an efficient method and only if it is fun for you and adds to the greater good of your family’s life.


Make money when you have none

People often say it takes money to make money. This is not true. You can be rich no matter what your circumstance in life is. I am not selling some cheesy affiliate marketing products. I will give you a specific way to get rich if you are poor. Most sites give you nothing but inspiration. In this post, my purpose is to give you specific tools you can use, that I personally use to make money. They do not cost a dime. Plus I want to reinforce the basic idea of how money is made by the wealthy.

The basic idea of wealth creation – The first thing you need to realizes is intellectual capital will usually pay more than physical capital or tangible goods. Think of Microsoft or that search engine, what is it called again, that you use every day. What about authors, painters or entertainers. Intellectual goods pay the most.

If you want to get rich on your spare time start to develop intellectual goods.  Read about why the rich have money.

An important point in this selling of intellectual goods is selling your own. Be an owner. In a capitalist system, the only way to make money is to be an owner. Own the process, own stocks, own something but focus your work energy on your product, not someone else’s products. No one will watch out for you in this economy.

Getting set up to make money when you have none – the tools

Too poor to even have the right tools to make money? Stop feeling sorry for yourself. Do you have a beat-up old computer from 10 years ago? The hard drive does not work?  Even if you do not have one, you could buy someone’s piece of junk computer they think is broken for a couple of bucks or most likely they will give it to you.

  • Step 1 Free computer and OS that works better than anything on the market – Download  Puppylinux – This OS will work if your hard drive is broken and your computer is 10 years old. It’s about 100mb and loads into your RAM. You only need a CD-R for about 30 cents.  This means it will work faster and better than your neighbor who just dropped $2,000 on a new Mac or Sony computer.  If your running it from a CD it is about 100% safe from any attack or virus. I do all my online banking and stock trading from this OS as on a CD I know its secure. It will be faster and more stable.  I am a geek I know what I am talking about. Yes, it will be faster than any computer you can buy on the market.  If your computer is only 7 years old get peppermint.  It will fast but feel real nice and GUI like Windows 7.5. No Internet? Do most work offline and just connect to free hot spots.
  • Step 2 Free software –  Check out all the free software you can get.  Instead of dropping $700 dollars on Photoshop, just get GIMP. You can be a professional and use GIMP, I do. Get Open office or other  MS Office clones, I like Abiword and Gnumeric instead of open office because it loads faster.  All the tools you need are open source and free. I do my work with these tools. I can afford to pay, but I do not as I am frugal and think these products are actually more efficient and productive than Windblows (just joking the new version is not bad, but everything costs). And yes I am sure you could get none legal copies of everything, but when you play by the rules, I think you have a better feeling about yourself and more energy to do good.
  • Step 3 Free Website tools for making money – I run all my websites off of WordPress, it’s free to download.  You can run a site like the Wall Street Journal off of this software. There is almost nothing better in the world for having a website.  It is pretty well SEO-ed right out of the box. I use an SEO theme and a couple of plugins. If you do not have 4 bucks to pay for your server, get a blogger account.  But if you can pay for your own server its about 40 bucks a year and should pay for itself fast.  But why don’t you have your own website?

You do not feel like you have the gift for computers? I get up very early and learn. I take the time to learn and there is not much to learn really at a basic level. Everything you need to know about techy stuff you can find online on YouTube. Fill the void you have. Information is what separates the rich from the poor, not talent.

So now for no or little money, you have a computer, the tools, and a website.  You can create and market your intellectual capital.

How to make money if you have no intellectual capital?

Brainpower – Everyone has a brain and can use it. What if you lack confidence in yourself or brainpower like the scarecrow in the Wizard of Oz? Do 100 hours of image streaming by Win Wenger. You can find his website I am sure. It’s free of course. This will increase your brainpower no matter what you think of your relative intelligence. Maybe it is a little hype, but you know what, it will increase your confidence and in my opinion is the best thing there is to increase brainpower.

Website – Why do you not have your own website? I mean it, what is your excuse? Better than renting space for a shop and hoping a few customers walk through the door, have a website that gets 10,000 new people a day every day.  I have one of those.  The first thing I would do is start blogging about something you love. It takes years, but so what. Then make money with some ads like from that search engine company, you know the big one that starts with G. It is ethical and honest. Your goal should be about $1000 dollars a month. Write from your heart and do not read too much about how to make money online. The best websites are those from writers who write because they love it, not to make cash. Be ethical and do not break any rules.

Your project – Next start your project.  Your project should not be spammy or affiliate type marketing. It should take years to create. It should be an extension of you. If you have no time, do it at work at the office. Do it for a few minutes in the morning before people come in. Be patient. I personally know web millionaires. They basically did something they love and I would not say they are the sharpest tools in the shed. You do not have to make money online at all. You could do anything, however, the market place is only growing on the web and the cost efficiencies speak for themselves when it comes to marketing your product.

Specific examples of turning what you love into income – I love languages so I write language learning software. My friend Erik loves Amish, so he writes books on the Amish. I have another friend who makes maps and another comic.  I have another friend who just blogs about his life and he has paid for his house in cash. You can search for him he has a website called the ’45-year-old millionaire’. He even has articles on how to make money when you are disabled like he was for ten years. He was laying on his back disability, but still is on his way to riches. I also love investing especially in the stock market, so was thinking of doing something with that. It would be rich to invest return data to back up my ideas, or I would write something general.  It does not matter. If it is something you like chances are someone else out there does too.

Doubts about making money– What if you think it is too hard or too competitive? Never take counsel of your fears. You have something unique to offer the world.  If you do not think so get religion. Realize that God created you and only you for a unique purpose. That is not what religion is about, but on the other hand, God does really make us all unique. Do not know it in your brain, know it in your heart. Do not be afraid to express your spirit.

The above ideas are just some ways to make money, on or offline.  There are many ways to achieve your dream, but read my lips again: do not be afraid to live your dream. I promise you, if you are willing to work hard on your own project, and not just at your day job, you will not have to worry about money. It may take a long time, but if it takes time, let it take time.


How to get rich

Why people get rich and how to obtain wealth

The purpose of this post is to give an answer to the question of how to get rich. I want to give you two metaphors that will give you another perspective on how to obtain wealth other than the recycled clichés of being frugal, invest wisely or use your subconscious mind to achieve riches. These all may be true but they are not radical enough in their explanation to give you a clear understanding of how to get rich. It is my thesis that people take the wrong approach to how to earn and accumulate money. If you understand the process, your efforts will be applied more efficiently.

Economic assumption of perfect information and profits

Economics assumes perfect information. This is one assumption that is somewhat wrong in classical economics. The fact that information is imperfect explains why people give rich and others do not.

Metaphor 1 to explain the relationship between wealth and information

I live in Krakow, Poland and there were people living here for over 50,000 years. Every year I hear about some valuable find. For example, a store of gold or jewels were hidden in building walls from WWII.  Or something of value buried from fleeing citizens, or some ancient priceless artifact discovered from the bronze age. In this city, we are living on 50,000 years of buried treasures. The problem is we have imperfect information and do not know where this treasure is.

Imagine that you find a map of your city, that was created with special technology that identifies anything old or of monetary value. It would create a treasure map of all things of value yet undiscovered or buried in your city. That is other people’s lost or hidden objects or things of historical value.  If you had this information you would be rich.

What does this have to do with why you are not rich? Everything. I believe most people do not know how to get rich because they do not have the information on how. This seems to be common sense but it is not. If people understood this point they would spend their time pursuing specific information on how to obtain wealth rather than working so hard for someone else or blaming their intelligence or environment.

Quest for information

The reason you or anyone is not rich comes down to you do not have perfect information. Let us assume that you have an average level of intelligence and circumstance. There is nothing that separates you from the super-rich other than information.

Think about this. If you in your current situation knew that the price of some stock option in the future you would be rich.

So now imagine instead of a treasure map, you had perfect information in the stock market or about the next Facebook or idea that could be brought to market or the next currency to make a radical swing. The effect would be the same. The idea is you would be incredible wealthy very fast. You would be a millionaire by year-end.

So the problem again is the market does not give anyone perfect information. This is why some people are rich and others are poor. Some obtained the information and others did not. In a sense, you have to be a monetary detective of information, but not just any knowledge, it has to be specific.

What about intelligence and money?

There was a study by a Harvard professor I believe that compared millionaire and IQ. The result was the average millionaire had an IQ around the norm. I have meet many rich people with mediocre intelligence. Maybe super-smart people focus on other things besides money. I think intelligence is a component of finding information fast but not the only. Being smart does not mean riches. What does lead to riches is information, the right information.

Being smart can help you gather this information quicker. In fact, intelligence can almost be defined by how fast you can achieve an objective, that is why they have time IQ tests. However, chess genius Gary Kasparov points out many players of lesser classic IQ, learn the game through determination. He asked can this not be defined as a form of intelligence if it gets you to do your goal?

What about your circumstance and money?

I live in Eastern Europe where people have and had nothing and some people get rich on their own. They just figure out how.

So my point is if you are poor, it is not your circumstance of life or the fact you do not have intelligence. It is that you have not stumbled upon or though your own creativity discovered how to get rich.

The most efficient way to riches

Let us start with how not to get rich. Here are two ways not to get rich.

  • Peddlers of riches –  There are many systems on the web that claim it will lead you to riches. These are an extension of the self-help books of the 1980s on the money. People sell these systems, but the reality is few of the people who are owners of this knowledge are really rich. They rather are making a modest income selling their system. The advice in these books is all too general and get your fired up but not enough specific information to be in the upper 1% of income earners. Or they claim to have a secret system of investing, but really like the Wade Cooks of the world, do not hold water when put to statistical testing. Or the people who really did make money rarely reveal their exact system. Reading countless books like these might be a start but you need specific information. You can not stop with just books that inspire you.  Or you can not simply a turn-key system. You need to take step two and compare and contrast what people are doing and what has been successful.
  • Working for corporate America – If you are a Chrysler – GM man from the 1970s maybe this is a way to have a nice life. But for most people working having a day job is only to pay the bills. However, being a careerist it is not a very efficient way to accumulate wealth and it gets boring after a while, but it pays the bills. So I am not knocking having a job at all. It is just that to become the only way to accumulate capital in a capitalistic economy is to be an owner of a process.

My personal philosophy to get rich

I believe intake no prisoners. I believe if you want to achieve your dreams in your life start studying how. Money is not the answer to life. I am a person of faith, and therefore, money, honor, what people think of me,   health, a long life or a short life, it means nothing. We are here for a greater purpose. So my point is not to say money is important, it is not. It is simple if you want to have some here is how to obtain it:

  • I have outlined an understanding of the way the world works in my post why the rich have money. I actually based this on my study of European history and my personal experiences growing up around moneyed folks.  If you want to be successful this is a good place to start. Understand on a high level what is going on.
  • Once you have your chosen line of success, study it like a science or at least like a chess player and with the passion of an obsessed chess player.

Metaphor 2 approach your pursuit of money like a chess player

This is how chess players do it. The study strategies that work, obsessively, based on probabilities and lines, then take calculated risks. Most modern chess programs which masters work from calculating lines of probability.
Gary Kasparov the chess great said something to the effect if you want to be a champion you need to be a strategist. Brilliant tactics razzle and dazzle but the strategy is what makes champions. Therefore focus on general strategies that have worked, either it is trading stocks or investing in real estate or selling intellectual goods or services. Whatever you like. Develop a quest for specific knowledge that will lead you to your goal.

Develop a good strategy in the area you want to pursue your income (hopefully an area you really are interested in). The strategy should be based on facts. If you want to get rich in from the stock market, for example, see what works for others.  I like to invest largely based on quantitative investing methods because these are not fade. These are methods that have a long-term history and backtesting for success. They are empirical.  This is one example. It is not a system that I am selling or recommending. I just point people in the direction that quantitative methods of investing have achieved results better than any general book about achieving wealth. Make your strategy your study, based on the leverage of other people’s knowledge.

Example of a rich strategist plumber

My landlord on Beacon Hill in Boston was a plumber who owned over 100 units on the district with is one of the most expensive real estate areas in the USA. People who live there are known as the Brahmans of Boston, he was a plumber who followed a system. He did not know all the tricks of real estate, he said he simply knew the market was cyclical and every down turn he picked up some units. He did this for 40 years and he is beyond wealthy. It was his strategy that made him rich. It was a system he leaned from someone else.

What am I doing to achieve wealth and what are the take aways?

  • Leverage your time by studying other people’s systems on how to make money. This will help you over come to the fundamental problem of imperfect information efficiently discussed at the beginning of the post. If you study other people’s systems, it will help you to start constructing a map for uncovering hidden treasure that is at your arms reach.
  • I think selling intellectual goods or services as they have the highest margins. This is a hint to eventually replace your day job, but it takes time. This is actually talked about in my other posts.
  • Study the science of making money hard and relentlessly in specific strategic terms, like a chess player studies his game.  Gary Kasparov wrote a book ‘How life imitates chess’. It is a good book to give you some inspiration along these lines if needed.

Me personally what am I doing? I am writing software and creating other intellectual goods and also investing semi systematically.  I am not super-rich, but I do not have a day job. I unplugged from the matrix about seven years ago and doing fine.