Get Rich Quick, or Not so Fast?
December 17, 2010In my blog, Danger Spots When Getting Rich Quick!, I talked about a few ways to STAY wealthy when people become millionaires overnight. While becoming a millionaire overnight sounds really exciting and fun and maybe even a little glamorous, it’s not how most of the millionaires I have met during my career have become wealthy. OK, so if that’s not how they got there, what have they done?
The funny part, at least to me, about the process of “getting rich quick” is that it’s not very quick. It’s a long slow process, and could be considered “boring.” Especially if what is being created is “real wealth,” not “show wealth.” I can explain “show wealth” best when thinking about one person I know fairly well. He drives a very flashy car, wears a watch that costs as much as a 3 year old Honda Accord, and is always dressed like the cover of a GQ magazine. You look at him and think “Wow, that’s a successful guy.” I’ve met with him and his wife, and while they have all the outward appearances of success and wealth, they are living paycheck to paycheck – it’s just that their paycheck is much larger than most. They like to show their success to others, it’s important to them socially, but they could not walk away from their careers now and live the rest of their life on the wealth that they have built. In fact, should they both retire today, they could live for less than a year on their accumulated assets.
Contrast that with one of my neighbors. He drives a 15 year old car, lives in the same house that he and his wife bought 20+ years ago, has a 9-5 job that pays significantly less than a six-figure income, his wife is a teacher, and they could retire today and comfortably live their lifestyle for the next 40-50 years on their investment accounts. They have built real wealth. Slowly. They both contribute 10% (plus company match) to their retirement plans and have invested in a “moderate” investment portfolio. They have very sound financial habits. They spend less than they make, put a little bit of money from each paycheck into a savings account for emergencies, shop for bargains on large purchases, and they are generally aware of their financial situation. Their story has none of the sizzle the overnight millionaire story had, in fact, if their story became a Hollywood movie it would be one of the most boring movies ever filmed. The good news is that their story is very sustainable, and can be easily duplicated by anyone who has the desire to do it.
Getting rich slowly isn’t very glamorous, but it has a very high rate of success when tried. The odds of becoming an overnight millionaire? Not very high at all. The odds of becoming a millionaire the old-fashioned and boring way? Fairly high with time and discipline.