The “secrets” to obtaining dominance, wealth, and success have long piqued the interest of humans. When we’re under pressure to cope with things that we don’t feel like we can control, we’re more likely to believe in conspiracies, superstitions, and other forms of secrecy.
Science magazine claims that in such trying circumstances, people are more likely to engage in illusory pattern perception, i.e., to invent causal relationships and correlations when there are none. This is done subconsciously in an attempt to justify the outcome and affirm oneself.
Somehow, having a lot of money makes you think a select few are controlling the world and setting the agenda. Unfortunately, wealthy people are frequently bombarded with demands to share their strategies so that others might achieve similar levels of success.
Americans Who Have Succeeded in Business
Due to the sheer number of people who have gone from poverty to riches in the United States, the study of investment success has a wealth of material to draw upon. Men and women who have achieved extraordinary achievement in every generation and century since the country’s establishment are often immigrants or first-generation Americans with no formal schooling.
- The son of a preacher, John Hancock got his start in the business world working for his uncle’s trade enterprise before he became famous as a signer on the Declaration of Independence. When he passed away in 1793, his wealth was comparable to 1/714% of the US GDP, or almost $79 billion in today’s dollars.
- At age 11, Cornelius Vanderbilt dropped out of school to help his father launch a ferry business between Staten Island and Manhattan, New York. He amassed a fortune from the steamship and railroad industries that would have been worth around $157 billion in 2013 dollars when he passed away in 1877.
- John D. Rockefeller’s father was a traveling salesman with a sketchy reputation and a tendency to be away from his son’s life. When Rockefeller was just 16 years old, he got a job as an assistant bookkeeper and used the money he borrowed to start a fruit company with a partner. He has a reported net worth of about $663 billion (in 2007 dollars), making him the wealthiest American of all time.
Biographies detailing the lives of the likes of Ross Perot, Sam Walton, Bill Gates, and Warren Buffett, all of whom have topped lists of the wealthiest Americans in the previous fifty years, are commonplace.
Nothing in their biographies suggests involvement with any kind of secret society, any kind of remarkable ability or quality beyond intellect and a strong work ethic, or any kind of instructor or advisor who would have imparted sensitive information about savings or investments.
The Superrich’s Secrets
How can successful people in this area of life share the same characteristics if there are no secrets to generating wealth? In a world where retail, software development, and investment are all quite different, what characteristics do employees need to succeed in each? Is it possible that these shared characteristics really are the key to their success? Here are a few characteristics that can be found in all affluent people:
According to a rumor, Bill Gates once declared, “Television is not real life.” People in the real world have to really get up from the coffee shop and go to their places of employment. Most individuals don’t succeed financially because they squander time and effort on wishful thinking and quick fixes instead of working hard toward their goals. Although it’s theoretically conceivable to come into the money by winning the lottery or discovering a long-lost, forgotten relative, the chances of actually doing so are astronomically small.
The status quo would be maintained if nothing was done. Wealth creators take initiative to improve their situations by developing their skills, acquiring experience, and taking on new challenges.
Habits of spending and saving are formed at a young age and stay with a person for the rest of their lives. If you want to be financially secure one day, you must learn to rein in your spending and save regularly.
Texas oilman H.L. Hunt, who was said to be the world’s wealthiest person in the late 1950s, drove himself to work in a six-year-old Plymouth and ate lunch out of a brown paper bag up until the day he died. Warren Buffett, widely regarded as the best stock investor of all time and a mainstay on any list of the world’s richest people, still resides in the same home he purchased for $31,500 back in 1958. If you want to be successful with your investments, you should keep a living standard that lags behind the rise in your income (for instance, buying a new automobile every five years instead of every three years).
Whether or whether we have disposable income left over to put toward savings and investments depends on the decisions we make every day. As a result of their inability to differentiate between necessities and wants, most Americans would prefer to spend than save. Those who are serious about building their wealth put off pleasures for the time being in order to free up more money for future investments. It’s learning to live on less than you make so you can give back and have money to invest, as Dave Ramsey, well-known stock market consultant and author, put it. Until you accomplish this, you have no chance of succeeding.
- Acquiring Knowledge
John Johnson, a psychologist, claims that poker is a great analogy for life. Both in poker and in life, we are up against a variety of random elements. How we handle them relies on the norms we’ve learned and our experiences, both personal and others.
In the world of investing, you have to make a series of decisions with unpredictable outcomes. Any investment decision has the possibility of whole or partial loss of principal, of a lower rate of return than anticipated, or of a lower rate of return than would have been obtained via a different investment strategy. Successful investors must master the art of knowing when to hold their cards and when to fold them, a lesson that might come at a high price.
Hungarian emigrant and multinational hedge fund magnate George Soros, who is worth an estimated $22 billion, attributes his success to the fact that he knows when he’s wrong. Recognizing my flaws has been the key to my survival.
- Determination to keep going
An investor’s route to financial success is more likely to be punctuated by a series of ups and downs, the magnitude of which cannot be predicted in advance. It’s likely to be a roller coaster of euphoric highs and crushing lows, testing the mettle of even the most dedicated individuals as they strive to realize their dreams.
There are no guarantees in the investment industry, and this uncertainty is a major reason why so many people become disheartened and give up. Ross Perot once said, “Most people give up just when they’re about to reach success.” They gave up on a one-yard line. They throw in the towel with a minute left and a score in reach.
Some people, like the ones we read about and aspire to be like, accept defeat with a newfound will to succeed. This group of financiers takes a close look at the catastrophes and draws wisdom from them so they can face the next challenge with more confidence.
Peter Lynch, portfolio manager of the Fidelity Magellan Fund, who beat the S&P 500 Index benchmark 11 out of 13 years with an average annual return of 29%, said, “In this business, if you’re good, you’re right 6 out of 10 times.” This means that you should be prepared to experience stock market declines and portfolio losses. It’s impossible for you to be right 9 times out of 10.
The opportunity to become financially secure is open to anybody who is prepared to put in the time and effort necessary. The first step toward financial stability is reducing your expenditure and investing the savings, regardless of your age or salary. And do it again and again and again, every week, every month, every year.