Did the title grab your attention?
If you are reading this article then it obviously did. Though the average person may be inundated with such headlines while perusing the web, they still find some excuse to read, or at least scroll through the embedded article.
The reason is simple: the desire to become wealthy is extremely powerful. People want money – and lots of it. And preferably, they want to possess it as quickly as possible and by exerting as little effort as possible. Articles with headlines such as this one are appealing because they offer a glimmer of hope to people who believe they are learning some “tricks” or “secret strategies” for wealth creation.
So what is the secret to getting rich?
The secret is…….there is no secret.
The goal of this article is to convince you to stop giving money to the con artists, schemers, and so-called “financial gurus” that promise untold riches once you master their “secret wealth building knowledge.”
The Secret Strategies of The Rich Exposed! Learn The Truth For Only $49.99!
While it may be obvious there is no magic formula for getting rich, it is a well known fact that people want to believe there is indeed a secret. This is because they don’t wish to put in the effort that it takes to create wealth and, instead, want a step-by-step plan they can follow that will result in success with 100% accuracy.
Predictably, they are susceptible to the plethora of get rich quick schemes that litter the market place. Marketers know that people crave so called “wealth building secrets” and are willing to fork over their hard earned cash to acquire them. So, they spend some time to create a ebook, podcast or seminar, that promises to teach them how to get rich – and people do not hesitate to relinquish their money to acquire these products.
The only critical element that is required most of the time is a carefully crafted and executed sales pitch (which can be easily outsourced to a competent copywriter). The product itself may provide little or no value. At the very basic level, all that is needed is simply the skill of convincing people to give you money.
Interestingly, the first three letters of the word convince spell CON.
Here is something to consider: is a product that can make you a vault full of money only worth $49.99? I would actually be more convinced the product was genuine – and actually worked – if the price was $499,999. If the financial guru purports that his “get rich plan” is so valuable, why would he charge so little?
Maybe the guru has been so wealthy, successful and “blessed” that he feels he’s reached the point of self-transcendence – and his calling now is to give back to the poor, huddled masses, a modestly priced step by step plan to replicate his success.
Give me a break……..
The average person probably won’t make back the $49.99 he paid for the product, let alone become wealthy. The truth is the product is priced at $49.99 for a simple reason: the guru wants to sell a product that appeals to the masses. His goal is to make money on volume, create a brand, and cultivate a cult-like personality that results in unwavering loyalty from gullible, credulous people who don’t know any better.
Never fall for these marketers – there is no magic formula for getting rich. The only people who are getting rich are the ones selling these “how to get rich quick” schemes. An interesting idea emerges from this observation; if you wish to become rich you should consider trying the following:
- Immediately stop wasting money on wealth building products and services offered by financial gurus.
- Study the financial gurus and copy their marketing techniques
- Identify as a millionaire and, by extension, a financial guru.
- Create your own “get rich” product.
- Use your newly-acquired knowledge of marketing and psychology to sell your product .
- Build a brand (and ultimately a cult of personality) and product line to get people coming back in droves to purchase your products.
The Invisible Graveyard of Entrepreneurs
One of the most enduring motifs in the wealth building industry is the concept that rich people possess certain traits that enable them to build wealth. The financial gurus of such books conduct “research” by shadowing and scrutinizing wealthy individuals, seeing what makes them different than the common folk who live paycheck to paycheck and can’t ever seem to get ahead, while their affluent counterparts look like they can conjure up money simply by thinking about it.
Once they’ve done their “research” they package their findings in a self-help book, course or seminar and promote it using tried and tested marketing tactics to attract a wide audience, desperate for the “secrets of millionaires.” They even showcase the testimonials of their students who have followed their “blueprint for success” and supposedly made millions.
Some of the key traits of wealthy people that are examined include hard work, persistence, courage, patience, risk taking, self-discipline, diligence, frugality and resourcefulness.
One can reasonably conclude that since rich people are risk takers one can become rich by taking greater risk. Or, that hard work and persistence results in great wealth.
The first thing to realize is that hard work and risk taking are subjective. Exactly how do we measure if someone is engaged in a sufficient level of risk or is putting in enough hours into their entrepreneurial venture? What criteria would be used to ascertain the degree of correlation between variables such as hours worked and an individual’s net worth?
The answer is there is no such objective measure – just like there is no secret to building wealth.
Of course, this is convenient to the guru.
One of his disciples may ask, “why am I not successful in my wealth building endeavors? I’ve put in tons of hours, created fool-proof marketing campaigns and hired the best people to work for me?” The guru can simply reply, “well, you just haven’t worked hard enough and failed to take any bold risks, so double your efforts! Luckily, I’m putting together a new seminar, were for a reasonable price, you can learn some new tricks that I’m sure will get you to where you want to be!”
The second thing to realize is that the conclusions of such products are committing a couple of logical fallacies: affirming the consequent and survivorship bias.
The fallacy of affirming the consequent is as follows:
If p then q
As noted above, the narrative is that rich people are risk takers, so if one works hard and takes risks, wealth will follow. But risk taking was only observed as a character trait among the rich – in no way does it assert that risk taking is the only sufficient condition for the accumulation of wealth.
The fallacy in this particular context can be explained this way:
A person who is rich is a risk taker.
John Smith is a risk taker.
Therefore, John Smith is rich.
It does not logically follow that people who take risks are rich – only that such a trait may be common for rich people.
The fallacy of survivorship bias is the logical error made when one concentrates on samples that made it passed a certain predefined selection process while overlooking those samples that did not (because they are not visible or hard to quantify).
Author Nassim Taleb examines these fallacies in Fooled by Randomness in the context of another book, The Millionaire Next Door by Thomas J. Stanley and William D. Danko.
The researchers who study rich and successful people find they share a penchant for risk taking. Taleb makes the point that they completely overlook the poor and unsuccessful people who also share the same trait, thereby distorting the odds as to how easily certain character traits can enable an individual to get rich.
What one can conclude from this is the following: risk taking leads to poverty and failure and occasionally wealth and success – and not the other way around.
The fervent followers of financial gurus, however, only see the solitary success story presented to them as proof and extrapolate it to convince themselves that they too will be a success.
The wealthy and successful entrepreneurs, investors, actors, and athletes are well known and constantly praised by popular culture, media and academia. The vast graveyard of the ones that failed is invisible and forever lost in the mists of time.
An Idiot Is Bound to Win – If Enough Idiots Try Enough Times
An old piece of advice in the game of poker is that once you sit down at a table, your job is to find the idiot (the reason being that most of your winnings will be derived from bad players). If you can’t find the idiot, then you are the idiot.
However, idiots can still win.
Poker is one of those games where it is possible for an amateur to play against a professional – and sometimes beat him. This is not possible in games like chess or any kind of professional sport where skill is the dominant variable.
Skill is also the dominant variable in poker – but only in the long run. In the short run bad players can win against expert players.
The answer is that in the short run bad players have an ally on their side: luck. In the short run no amount of skill and experience can beat dumb luck.
Poker is a game based on incomplete information; you don’t know what cards your opponents are holding. The only way to win is to make mathematical decisions that put the odds in your favour. When played correctly, you can expect to win hands and lose hands, but your winning hands will earn you more money than your losing hands, making you a profitable player in the long run.
A bad player can experience a rush of winning hands – but only in the short run. His bad decisions will be offset by a stream of good luck – and he will delude himself into thinking he is a skillful player.
This is precisely why an amateur poker player can end up winning a major poker tournament. It is a one time event, and given the number of entrants and the amount of tournaments playing worldwide at any moment, even a very bad player can win. The so called “spectacular win” was mainly due to luck, with some element of skill.
Such a fortunate set up will most likely never occur again in the lifetime of such foolish players – they will fade into obscurity while the professional grinders will earn a consistent income and continue to be revered by the poker community. Luck gives but it also takes.
If this “winning” player were to attempt to reinvest all his winnings in more poker tournaments he will most likely end up losing everything; his bad decisions at the poker table will catch up to him and inflict harsh financial punishments.
So what does this have to do with trying to become rich?
Given that we already know there are a large number of entrepreneurs, stock traders, real estate investors, and others who have failed to become rich by working hard, being persistent and taking risks, it is more likely that those who succeeded were simply lucky – much like the naive poker player who won a major poker tournament and mistakenly attributed it all to skill.
We often wonder why certain people who genuinely seem stupid, uneducated, and socially despicable are able to attain great wealth. The truth is Lady Luck plays a big part in deciding who becomes wealthy – and she does not discriminate.
Why do bad things happen to good people? Well, why not?
Why do good things happen to bad people? Well, why not?
Are The Planets And Stars Aligned Properly?
Everything must be in place and aligned a certain way for success to ultimately occur. It is a combination of external factors (for which a person has no control) and internal factors (for which a person has at least some control).
A tremendous amount of variables come into consideration when the goal is to become wealthy: skill, talent, work ethic, confidence, stress management, intelligence, social connections, economic conditions, political climate, etc. The coalescence of all these factors sometimes produces just the right brew for a person to reap great financial rewards.
Wealth coaches can impart their “formulas for success” to point people in the right direction, but execution is just as, if not more so, important. What if they are teaching a person who has no knowledge of the proper way to promote and build a brand for his product? What is he has underdeveloped people skills? What if he’s a poor negotiator? What if he goes up too easily and self sabotages his plans because he is afraid to fail? What if he’s someone who is just not very bright?
Good timing and the overall environment a person is operating in is also critical for success. A wealth building plan that involves flipping houses can be extremely lucrative when one begins buying property during the last few months of a recession and selling near the peak of an economic expansion. But employing the same strategy around the time the housing market peaks could result in financial disaster.
All the necessary conditions for building wealth must occur simultaneously – and many times a person will only have one chance to take advantage of such a favorable set up. This is why success is sometimes difficult to replicate. Scenarios change and you can never have all the parameters tweaked exactly the same way each time.
The amateur poker player who managed to win a major poker tournament will likely not replicate his success – the planets and stars won’t align that way again for a long time.
Some points to remember:
- The human brain is hard wired to recognize patterns. Humans think in structures, formulas, narratives, plans, and the like.
- People, in general, underestimate the role luck plays in success.
- Most of life is failure – with occasional sprinkles of success. Any success is the result of a great many factors that, in addition to luck, comprise talent, hard work, timing, perseverance, endurance, intelligence, social connections, etc.
- Success is taking a good chunk of the above factors and positioning yourself to increase the odds in your favour.
Reading books and attending seminars on wealth building is what people do in order to escape reality and envision themselves as members of the bourgeois class. For a short period of time they experience a rush of dopamine and imagine themselves living a life of luxury and complete freedom.
They swiftly pull out a notebook and devise a plan to make this dream a reality. They feel the excitement pulsating through their body – and genuinely believe they will succeed.
In due time, however, the initial euphoria begins to wear off and they begin second guessing themselves – especially when the enormity of the undertaking begins to unfold in front of their eyes. Their energy subsides and they saunter back to the couch to commence another Netflix marathon.
Others do take the time to implement their plans – but quit when they figure out things are not exactly going according to plan.
Sometime in the near future they discover a new product that promises untold riches and success. They are transfixed – and must learn what this financial guru knows. All those other products were scams – but this one will turn out to be a winner!
The financial gurus understand psychology very well. They create products and services that appeal to the fantasy of the ordinary person rising to the ranks of the wealthy. They are charismatic orators and know how to massage the ego of people desperate to make truckloads of money to escape the drudgery of their soul-sucking 9-5 jobs. They know how to exploit the irrationality in people in order to convince them their product is the key missing ingredient that will bring them wealth.
A good example of this is the book The Secret by Rhonda Byrne. Who doesn’t want to know the secret to getting rich? Who doesn’t want to know the secret to getting what you want and being part of a special group of insiders who think they know some magic formula for attracting wealth, love, health and everything in between? This is pure consumer marketing psychology at work.
The harsh truths are kept hidden – and rightfully so; most of the time the truth hurts, and people wish to avoid getting hurt. Maximizing pleasure and minimizing pain is what is on everyone’s mind. Why sell a harsh truth when you can sell a huge money-making lie?
The Truth is a niche market and the Lie is a mass market. It is far easier to appeal to a person’s stupidity and vices than it is to their intelligence and virtues.
And so it goes, on an on…………
On the other hand, indulging in fantasies can be useful; they shield the cold, calculating and optimizing part of our brain from harsh truths. Perhaps this is a good thing – we as humans need to persist, even when the odds are stacked against us. Human progress would stagnate if people acted completely rationally all the time and only took on tasks that yielded 100% success (or close).
It seems we ultimately need some level of delusion in order to stay sane and and overcome hardship.
Would so many people become entrepreneurs if they examined and logically worked through how low their chances are for success (not to mention the negative toll on health, psychological well-being, net worth, family life, leisure time, etc)? Would they venture out into the market if they understood how much the role of luck played in their eventual success or failure? Most likely not. They irrationally convince themselves that they – and only they – are in control of their destiny. Each one believes that they will be among the tiny minority that achieves great success an wealth.
Some points to remember:
- There are an an infinite number of ways to become wealthy. Forget about learning any so-called”secrets” and obsessing over certain “steps” and “formulas” that you think you must master to succeed. Forget that you don’t possess all the “required” personality traits. Get out of the mindset that you need to know certain things in order to be successful. Only a handful of traits and circumstances will suffice – luck will handle the rest.
- Spend more time doing things rather than reading about things.
- Since most of life is failure, learn to fail fast and move on. Learn to accept feedback from people and the environment; abandon bad ideas quickly and handle bad experiences with resolute stoicism.
- You are not a special snowflake and the world doesn’t owe you anything – so don’t act like it. Keep your expectations low in the beginning. If you’re expectations are low the reward for when you succeed will be that much greater. Having high expectations and constantly failing (which you will) will quickly demoralize you and make the journey a miserable one. Have fun and enjoy the journey and one day you might wake up to an unexpected, pleasant surprise.
- Don’t abandon your family and friends. If you don’t become rich they will still be by your side. If you sacrifice everyone and everything – and fail in your plan – you’ll have an empty life.
The world can be a brutal and cold place. Life is hard……..but accepting that fact and laughing about it may be even harder. Internalize this and nothing can harm you. Maybe that’s the big secret that few people know.