stevens - rich is a religion; breaking the timeless code to wealth (2008)

Eisner Founding Partner Eisner LLP “In Rich Is a Religion, Mark Stevens shows us in a compelling way how money and life intersect, and that true wealth and personal contentment are one

Rich Is a Religion

Breaking the Timeless

Code to Wealth

Mark Stevens

John Wiley & Sons, Inc.

Additional Praise for

Rich Is a Religion

“Mark Stevens has done it again He has a wonderful ability to

shed new light on much examined topics In Rich Is a Religion,

he is insightful and inspiring in his treatment of creating and

protecting wealth.”

— Richard A Eisner

Founding Partner Eisner LLP

“In Rich Is a Religion, Mark Stevens shows us in a compelling

way how money and life intersect, and that true wealth and

personal contentment are one in the same.”

— Randal Selkirk

Managing Director Mapleridge Capital Corporation

Rich Is a Religion

Rich Is a Religion

Breaking the Timeless

Code to Wealth

Mark Stevens

John Wiley & Sons, Inc.

Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

1 Wealth—United States 2 Rich people—United States 3

Investments—United States 4 Wealth 5 Rich people 6 Investments I Title.

HC110.W4S74 2008

332.02400973—dc22

2008019684 Printed in the United States of America.

10 9 8 7 6 5 4 3 2 1

To my father, who taught me to challenge every single thing in the world and to ask “Why?”

Contents

Acknowledgments ix

First, A Foundation and a Firewall 1

Chapter 6 The Atheists of the Religion of the Rich 87

Appendix: The Unconventional Wisdom of the Religion

of the Rich: A Collection of Blogs 153

Acknowledgments

To the deli owners and the clothing merchants and

the magazine prescription hawkers and the oblivious Whitneys and the hotel managers and the factory foremen and the vast array of entrepreneurs who used my

cheap labor in my formative years but wound up teaching me

more than my more patrician peers learned at Harvard Business

School About money About how you really make it and grow

it and build a steel wall around it

Thanks guys The tuition check is in the mail

Rich Is a Religion

First, A Foundation and a Firewall

In life, we often think and talk about how we spend our

days In our personal fi nancial endeavors, we discuss how

we spend our money Surprisingly, the two are related and have a powerful effect on each other, in ways that you

may not now identify

In this book, you are invited to see the connection and

to act on it so that you can achieve fi nancial independence

and security while also achieving peace of mind

Think of it this way: If you “spend” your days, you

sim-ply let them begin, end, and expire without reveling in the

ultimate joy, the supreme gift, that life is—or, at least, that it

can and should be The goal of life should be not to “spend”

your days, but instead to maximize the pleasure, exhilaration,

joy of discovery, love, and achievement that are inherent in

every day of your life

Correspondingly, if you simply “spend” your money, your

life is a metaphorical trip to the mall Yes, it may feel good

to lavish yourself and your loved ones with costly material

possessions—and no doubt feeling good is a lovely and essential

part of the joyride of life—but before you allocate your money

to anything, you need to think about it, really think about why

and how you are spending your money Rich Is a Religion will

show you how to do so, by helping you understand:

What money is and what it is not

How you can invest what you earn in assets that will

increase your wealth

The key steps you must take and the discipline you must

practice to protect what you have, and what you will

have, as your assets grow

How to make money while you sleep

The people you should go to when you have fi nancial

questions, concerns, or challenges

Why it is important to reject the dangerous habits and

myopia of the atheists of the religion of the rich

Why the most important money you have is the money

that no one sees

Why you should stop trying to keep up with the Joneses

and instead focus on keeping up with the Buffetts

***

Before we begin this journey, I would like you to

under-stand what I mean by the “religion of the rich.” You can

think of this religion, this timeless code, as a prism that—

First, A Foundation and a Firewall

3

if you are willing to put aside your current thinking—can

serve as a medium for transitioning to a dramatically

dif-ferent view of how real money is created and preserved by

those who have it and keep it for life Not all rich people

are born rich, or get lucky, or any of the other clichés that

you may have heard Instead, many have acquired wealth

through following a philosophy, a belief system, a different

way of seeing the world and leveraging its opportunities In

this book, I will discuss this ideology and provide

enlighten-ing and exceptional explanations on how you can become a

member of this congregation

As we move through a journey of discovery together,

Rich Is a Religion will illuminate this fi nancial perspective;

reveal how and why the philosophy, the methodology, and

the action steps associated with it work; and provide insights

into the dynamics of getting and staying rich that make the

difference between doing well fi nancially and living a wealthy

life In addition, this book will reveal how the wealthy use

money as an instrument of independence, confi dence, stability,

and timeless value instead of simply indulging in the temporal

rewards of luxury

People who say money doesn’t matter are deceiving

them-selves People who say money is everything may never know

why they feel unfulfi lled In Rich Is a Religion I will reveal to

you how to earn more money than you ever thought possible,

how to expand your horizons, and how to build a fi nancial

foundation and install a fi rewall to protect it

And most of all, I will show you how to channel your

money in order to maximize the gift of life

The Top 15 Reasons Why You Need This Book

1 You know you don’t have enough money

2 You don’t know where your money goes

3 You don’t invest money correctly

4 You don’t know how much is enough to invest

5 You don’t have enough money to retire

6 You don’t know how to go about gaining wealth or

adding to the wealth you have

7 You don’t trust your broker

8 You don’t understand his or her advice

9 All you do is work

10 You don’t understand money

11 Your life is unfulfi lling

12 You think you know what you can do to change that

13 You don’t think you can afford to do so

14 You feel insecure about your fi nancial picture

15 You wonder why others with similar incomes have so

much more than you

Chapter 1

The Epiphany

It was a convection-oven July day in Manhattan, the kind

of sizzler when the sidewalks are like beds of smoldering coals, sending blasts of heat all the way to your brain

Even the offi ce towers were nearly steamy inside, as if the

massive commercial air-conditioning systems were unable to

compete with the solar barrage And then another fi re, of

sorts, ignited around me

I was working with former Treasury Secretary Bill Simon

Born in Paterson, New Jersey, in 1927, the son of an

insur-ance executive, Simon attended Lafayette College in Easton,

Pennsylvania He launched his career with Union Securities

in 1952 and served as a vice president of Weeden & Co

before moving on to even greater success on Wall Street,

cul-minating in his appointment as senior partner in charge of

the government and municipal bond departments at Salomon

Brothers Then came the capstone of his career: President

Richard Nixon appointed Simon as the 63rd Secretary of the

Treasury in May 1974 Simon was reappointed by President

Gerald Ford and served until 1977 His years of experience in

Washington, D.C., changed both Simon’s view of himself and

his stature in the world

At fi rst, it was a shock to his system

“When I took a seat at my fi rst cabinet meeting, I thought

I was a pretty damn well accomplished fellow,” Simon recalls

“And then I’m suddenly sitting there surrounded by men of

such vast knowledge of global politics and economics––Henry

Kissinger, George Schultz, Eliot Richardson––that I felt small

and inconsequential by comparison

“At the end of my fi rst week of service, I realized how

truly naive I was I asked Nixon’s secretary, Rose Mary

Woods, if I could see the President before heading home

for the weekend, and she made room in his schedule When

I entered the Oval Offi ce to bid good-bye, Nixon snapped

me right into place: ‘Home for the weekend! Bill, you are

Secretary of the Treasury of the United States of America

You don’t go home for the weekend You are home!’”

After his years with the Treasury Simon cofounded, with

Raymond Chambers, CPA, a leveraged buyout (LBO) fi rm

called Wesray Corporation Among Simon’s home runs was

an investment in Gibson Greetings in the early 1980s, which

quickly grew from $330,000 to $66 million

Throughout Simon’s life, he had the Midas touch

Throughout his life he was a member of a select

group of people who use money as an instrument

of independence, confi dence, and enduring value,

instead of merely indulging in the temporal rewards

of luxury and lavish goods

The Epiphany

7

On that boiling July day when we were locked in his

Manhattan offi ce, brainstorming a new business strategy,

the man who had virtually invented the LBO business and

become one of the richest men in America, took a call from

his daughter, who was on her way to the Simon summer

home in Southampton, Long Island

The conversation began with predictable pleasantries

between father and daughter Suddenly, in a surprising turn of

events, the discourse rushed headlong into a screaming match

Mr Secretary, a brilliant thinker who dressed impeccably in a

1950s Brooks Brothers’ vision of quiet capitalism and who, in

an odd juxtaposition of habits, dined daily on cream cheese

and jelly sandwiches, had just discovered that his offspring was

taking a taxi from Manhattan to Southampton rather than

choosing the far cheaper option of a Hampton jitney Simon

exploded, charging his daughter with “fi scal irresponsibility

of scandalous proportions.” It was as if she had charged every

single item in Bergdorf Goodman’s department store on his

American Express card and then tossed in a new Bentley

Continental Flying Spur to transport all the goodies home

How can we explain this volcanic response to the expense

of a cab fare from one of the wealthiest men in America?

How can we understand how a mogul can become livid over

the news that a loved one would spend an extra $200 on

transportation?

Further, this outraged response came from the same man

who would bequeath his entire fortune of $350 million to

charity (including AIDS hospices and low-income education

groups) two years before his death on June 3, 2000 How was

the once–middle-class Simon able to perceive and connect with

the timeless code of wealth,

to have his own independent

view of the value of money

and how it is to be used?

The answer is both

complex and simple: He

joined the religion of the

rich Simon’s actions at the

nexus of money and life

pro-vide us with exceptional and

enlightening insights into

what makes the members of

this religion tick, and how

they preserve their wealth

Those who subscribe to

the orthodoxy of this

reli-gion are not simply any rich

people This group doesn’t

include lottery winners or dream-come-true geeks who start

a social networking website and get bought out by Google

before they graduate from MIT No, I am referring to a class of

fi nancially independent people (most of whom live happily in

complete obscurity) who manage to build and preserve wealth

without the theatrics or the stroke of luck so often associated

with this achievement In fact, they often accomplish their goal

of wealth quietly, deliberately, and even mystically

***

What do I mean by the religion of the rich? Am I

refer-ring to people who worship money? Or are they simply

peo-ple who abide by a certain belief system?

I am referring to a class

of fi nancially ent people (most of whom live happily in complete obscurity) who manage to build and pre- serve wealth without the theatrics or the stroke of luck so often associated with this achievement

independ-In fact, they often plish their goal of wealth quietly, deliberately, and even mystically

accom-The Epiphany

9

Before we can answer this, let’s step back and put this

into perspective In the process, we will discover a better

way to grow and manage money and to live a fulfi lling

life Money matters a great deal, but ultimately it’s your

life that matters most The religion of the rich always gives

equal importance to both money and life The vast

major-ity of people think about money in only two ways: making

it and spending it In this narrow and myopic view, money

is like sand moving through an hourglass: In it comes, out

it goes It does not have intrinsic value Its only worth is

measured by what it can purchase at the time in the

moment now!

This means that money is not really the substance upon

which wealth, of any size or scope, is based It is simply a

form of currency, or of barter, as were the beads, cloth, and

hatchets used by Dutch settlers to buy Manhattan Island

from the Shinnecock Indians, or the spices used as

trad-ing commodities by the early explorers and traders, such as

Marco Polo and Magellan

You may think, at fi rst blush, that this all-too-common

perception, this traditional way of viewing money, is correct

After all, it is only money—dollars and cents, hard cold cash

But before you put a lock and key on this belief, let me ask

you, is a prayer just a string of words?

Technically, yes Consider any prayer you have uttered

during your life Can you recognize this one?

“The is shepherd my Lord want

not I shall ”

Is this a prayer or just a string of words? Let’s look at the

same words in a different order:

“The Lord is my shepherd, I shall not want.”

Now, is it just a string of words or part of something

powerful and profound? Something to build a life’s

philoso-phy on, and to provide a source of courage in a time of fear?

Clearly, the latter is true And the same is true with money

If you see money solely as stuff that enables you to acquire

other stuff, it will never amount to a value greater than the

sum of its parts Nor will it ever amass to a sum greater than

the sum you earn on your job or by running your own

busi-ness Simply put, if you continue to view money as

merely dollars and cents, you will always be locked

into the earn-it, spend-it, build-nothing-of-great-value

treadmill. Only if you view money as far more than simple

fodder for consumption will it acquire exponential value

To gain this perspective,

you must treat the

accu-mulation, spending, saving,

and investment of money

as a form of religion

Now, don’t worry: I

am not talking about some

kind of holy wisdom or

seeking to lay gospel upon you By the religion of the rich,

I do not mean worshipping a god or engaging in prayer or

holy rituals Instead, I am referring to a view of money that

vests it with far more substance than a simple trading

com-modity It is a way of thinking about money that has

greater connectivity to what most of us place at the

top of life’s hierarchy of values: family, friends, fulfi

ll-ment, enrichll-ment, and independence.

This is the underpinning of the philosophy of the

reli-gion of the rich To become a member, you must look at

You must treat the accumulation, spending, saving, and investment

of money as a form of

religion

The Epiphany

11

money from a fresh perspective and see it in an entirely

dif-ferent light As you do, you will begin to understand and

accept a set of more powerful core values, an orthodoxy, a

means of thinking and behaving in a way that actually

facili-tates the accumulation and preservation of wealth and the

fulfi llment of life

***

Voltaire said, “When it comes to money, everybody is of

the same religion.” But that is not true Yes, everyone earns

money Everyone spends it But in between these goalposts

of earning and spending is the place where wealth is created,

or where it is not This is also the place where a way of

liv-ing, a full and wealthy life, is established, or it is not

The big difference lies in the great expanse of gray area

that lies between spending and earning Here we fi nd two

basic categories of people:

1 The vast majority who have absolutely no philosophy

about how to manage their money

2 A distinct and immensely important minority who are

the members of the religion of the rich

It is the latter we must learn from It is the latter who

turn simple currency into the currency of rich, full, and

independent lives It is the latter who progress far beyond

the confi nes of a paycheck-to-paycheck existence It is the

latter who are the masters of their own fate

The religion of the rich is a state of mind Interestingly,

much of its philosophy springs from the eddies of the

great religions, Puritanism and Baptist in particular, but it

is not focused on traditional religious orthodoxy It is not

about heaven and hell It is not about prayer It is not about

morality

It is, fi rst and foremost, about recognizing that there

is something about money that is uniquely valuable to

your life (beyond the number of zeroes in your bank

account) if it is managed—that is, accumulated and

protected—appropriately, with discipline and dignity

and a sense of fi duciary responsibility

Some people are born to the religion—not through the

accident of birth or level of wealth, but through a way of

thinking that comes naturally to them, such as intellectual

curiosity or a strong appreciation for and sense of family

Others can convert to the religion They see its wisdom, they

learn from their mistakes or the failings of others, and they come

to understand what money is and what it is not They shed the

behavior that would prevent them from leading truly wealthy

lives and proceed to achieve this goal by joining the religion

It is up to you And only you You can join at any time

that you have the vision and the discipline to do so

***

The great seventeenth-century philosopher John Locke

wrote that man is born with a mind like a blank slate: a tabula

rasa How and what he comes to think is imposed on him

by parents, teachers, and others: what is seen or heard, what

is taught, what is read All these infl uences shape the person

and his assumptions about the right way to manage (or fail to

manage) money

Although Locke never would have thought it at the time,

his idea has powerful implications for the religion of the rich

The Epiphany

13

As an adult, your mind

is no longer a blank slate

Your mind is composed of

the various ideas and

opin-ions imposed upon you by

others—and in the case of

your fi nances, by the fi nancial

media and fi nancial

advis-ers The religion of the rich

challenges you to rethink all

of your assumptions about

how to build a life of wealth, regardless of the value of (or

lack of it) in your net worth statement In other words, it

breaks down the overly complex hieroglyphics of popularized

wealth-building strategies that have infl uenced you over time

and provides you with new methods to achieve, protect, and

enjoy wealth

A case in point: All of the standard personal fi nancial

plans available, and there are thousands of them, are based on

counting On numbers On calculating yields and percentages

They are forms of simple math glorifi ed by brand names

given to them by fi nancial services companies

The profound difference between these cookie-cutter

plans and the religion of the rich is that the latter is based

on thinking before counting Thinking beyond and apart from

numbers to such intangibles as:

The limitations as well as the possibilities afforded by

money

The life values that are truly dear to you and that enable

you to sleep contentedly at night

•

•

The religion of the rich challenges you to rethink all of your assumptions about how to build a life of wealth, regard- less of the value (or lack

of it) in your net worth statement

The role of personal pride in your life and from what

source that pride is derived

What you will do with your wealth, now or when you

acquire it, to ensure that you are fi nancially independent

for life

Thinking through these

issues enables you to wipe

away the words and

con-cepts that have been written

on your blank slate and to

rethink your personal fi

nan-cial strategy—all with a focus

on the timeless concepts

em-bedded in the religion of the

rich

At the bedrock of this religion is the understanding that

the conventional wisdom on wealth creation and protection

is off-base, narrow-minded,

wrong, and, most important,

useless for all who want to

join the ranks of the rich

You will have to recognize

that without a true

philoso-phy to guide your personal

fi nancial life, you will

con-tinue along the standard path, which is formulaic, based on

mathematical projections that are often erroneous, and

designed to serve a salesman’s drive to enrich himself at the

expense of the client at your expense

•

•

The profound difference between these cookie- cutter plans and the religion of the rich is that the latter

is based on thinking

before counting

The art of living easy as

to money is to pitch your scale of living one degree below your means

—Sir Henry Taylor

The Epiphany

15

Think of it this way: Millions of otherwise intelligent

men and women have allowed themselves to enter the

august stages of their lives without suffi cient wealth to retire

Even if they want to continue working forever, there is a

major difference between wanting to and having to And the

major reason they have to is because they have never been

taught to think of rich as a religion Instead, they think of

it as numbers, charts, and projections This is superfi cial and

misleading The numbers on a mutual fund’s performance

graphic can provide a mathematical snapshot of how a

bas-ket of stocks and/or bonds have performed in a given time

frame, but so what? They can’t predict a single thing about

the future And, more important, they cannot change

behav-ior They cannot motivate

people to truly change the

way they view money They

cannot reveal the powerful

truths that lie beneath the

charts The religion of the

rich can and will change

the way you handle and

think about money More

importantly, it will

facili-tate the accumulation and

preservation of wealth

***

In order to perceive the timeless code to wealth and begin

embracing the religion of the rich, there are eight tenets that

The religion of the rich can and will change the way you handle and think about money

More importantly, it will facilitate the accumula- tion and preservation of wealth

will be revealed and discussed throughout this book The

Eight Tenets of the Religion of the Rich are:

1 Money is not simply currency; it is the currency of life

2 Wealth is a private matter

3 Always live below your means

4 You can always live very well but being highly leveraged

is never living well

5 The most important money you have is the money no

one sees

6 Rich people are those who can write out a check when

they or their loved ones need the money

7 Buying depreciable assets is spending; acquiring

appreci-able assets is investing

8 The most rewarding achievement in life is to be content

Chapter 2

The Vision

When I was a high school freshman, I had a Wonder

Years moment One evening our neighbor (we

called him Slim) burst into my family’s ment in Queens, New York, to announce that he had just sold

apart-his dry-cleaning business for slightly more than $1 million

He was a gangly, redheaded, gentle man, who from all

out-ward appearances was no match for my father He lacked my

dad’s charm, intelligence, verve, ability to light up a room, and

the strength of character that would intimidate almost

anyone

Suffocating under a tsunami of delinquent bills, my dad

listened to the astounding news that his “lame” friend Slim

had just landed more than $1 million in one day And this

was in 1961, when Queens’s middle-class toilers regarded a

million bucks as a Forbes-list fortune

Although my dad tried to look thrilled for Slim, I could

see in his eyes that he was asking himself “Why Slim and not

me? How could Slim be a millionaire while I’m broke? I’m

three times the man he is Or am I?”

My father was a vice president of sales for a plastics

com-pany He had a classic corporate offi ce, an English

secre-tary, a Carte Blanche credit card, and Italian wool suits from

Bloomingdale’s He worked long hours and charmed people

around the world into buying plastic inserts for photo albums

All of this razzle-dazzle made him feel like quite the hotshot

What my dad didn’t realize was that Slim was a member

of the religion of the rich Seen through the lens of my dad’s

myopic vision, Slim couldn’t be rich, because he went to work

in washed-out khakis and always had ring-around-the-collar

sweat stains on his Sears’ short-sleeved white shirts Slim’s

dry-cleaning stores were ramshackle establishments in the

slummiest neighborhoods of Brooklyn and the Bronx But,

while Dad worked and spent, worked and spent, Slim instead:

Built a business of his own

Reinvested chunks of his profi ts in the business over the

years

Spent his money judiciously and cautiously

Always lived below his means

Never had a dime of debt

Always had an exit strategy

Throughout Slim’s adult life, he always planned for his

payoff day Now it was here

On that day, I discovered a key piece of the

life-and-fi nance puzzle My 40-year-old dad was waging a constant

battle with debt, and soon would fall victim to a fatal heart

attack because of it And while my dad wondered why Slim

The Vision

19

was a millionaire and he was a debtor, Slim was not only

cashing a big check, he was also opening a door to a new

life he had also planned for years: living out the rest of his

years on a gentleman’s farm he bought for cash in upstate

New York

On that day, I had a vision and saw the power of the

religion of the rich It came to me in sharp relief when I

woke in the middle of the night—which was very unusual

for me—and caught a glimpse of my father He was

stand-ing on the terrace of our sixth-fl oor apartment, smokstand-ing a

Camel and looking out over the parking lot below, as if for

the fi rst time the truth and reality of his life were colliding,

and he was searching for answers He was an intelligent

man and a creative person,

but because he had always

counted money and spent it

without giving it a moment’s

thought, he had nothing to

draw on No basis for

intel-ligent fi nancial actions No

starting point and—given

the stress his reckless ways

had placed on his health—

no time to make a plan In a

sense, he was trapped in a

vacuum

This example is intended to illustrate one of the

great powers of the religion of the rich: It is a

philoso-phy that leads to a set of action steps that help you

break the timeless code to wealth It comes from within

but because he had always counted money and spent it without giving it a moment’s thought, he had nothing

to draw on No basis for intelligent fi nancial actions.

and radiates outward to affect how you live It is never too late

to adopt In fact, it is essential to start now As you begin to

live this philosophy, its impact is organic You can accumulate,

retain, and enjoy more true wealth than you likely believed

possible at any time, and every time, in your life

The key to the religion lies in breaking The Timeless Code

to Living a Wealthy Life Think of it as a Rosetta Stone that

translates the overly complex hieroglyphics of popularized

wealth-building strategies and reveals the enduring inner

truths

Let’s get started

***

All too often money management is viewed as a process

This is similar to saying that architecture is a set of instructions

This view is shallow and superfi cial, and omits the art, science,

imagination, and use of the sixth sense that makes both

in-spired architecture and money management magnifi cent,

pro-ducing results that are greater than the sum of their parts

Let’s look at money management through our Rich Is a

Religion prism

Typically, fi nancial services fi rms advise us to engage in

an asset allocation process that provides for diversifi cation

among a variety of stocks and bonds, thus creating greater

opportunity and minimizing risk While this objective may

be theoretically valid, it can reduce the major facets of our

lives to a rigid mathematical formula This commonly

prac-ticed way of allocating investments should not be the

cor-nerstone of our thinking or of our behavior Just one facet of

it—and the elite fi rms and their advisers make that clear

The Vision

21

The religion of the rich holds that the way we look at

life, the way we live it, the way we assign a human value

to money—regardless of the sum we have now or seek to

accumulate in the future—must come fi rst If it does not,

we are building bridges to nowhere if we are building

bridges at all

As seen in the example of my father, much of traditional

money management is conducted in a vacuum, without any

attempt to connect the means to the ends Nowhere in life

does this disconnected thinking lead to satisfying results, yet

it is blindly accepted in the realm of fi nance In every other

endeavor, this behavior is rejected as thinking in reverse, or

working toward a goal before you have fully envisioned the

goal

In order to illustrate this point, think of the process of

choosing a profession If I were to ask you to name the best

career for a young person to pursue, you would not

imme-diately come up with a random profession that you believe

is fi nancially lucrative Instead, you would ask me questions

that enable you to visualize the talents, capabilities, and

inter-ests of this individual You may ask:

What does the individual want to do?

What interests them?

What aptitudes have they demonstrated?

How can we recommend a career without knowing

these answers? We can’t!

I learned this fi rsthand Before I was born, my father

decided that I would go to Johns Hopkins Medical School

and become a physician Like many parents, my dad’s view of

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success included a respected profession, such as medicine or

law In order to “make it,” or get rich, they believed I would

have to study, work hard, enroll in a highly selective college,

and then—and only then—would I be able to work in one

of those esteemed professional fi elds Therefore, when I was

10 years old, I began writing practice essays in preparation

for undergraduate college admissions The hole-in-a-wall

bedroom I shared with my sister had also been transformed

into a mini-laboratory, complete with chemistry and biology

sets, ant farms, and a copy of Gray’s Anatomy that my father

had bought for me Every day I was working on

experi-ments, reading about the human body, creating gases,

dissect-ing frogs—all as a part of the early traindissect-ing of Mark, M.D

My dad was engaging me in a process that he believed

would culminate in my spending my life in the practice of

medicine Think of this as intellectual asset allocation: My

father was assigning my brain, my life’s work, to an end goal

that he believed was right for me

The problem is, I never had any desire to be a doctor, or

to cure people, or to go to medical school It was a zillion

miles away from the creative and entrepreneurial life I

wanted to live If I followed my father’s dream, I would have

allocated tremendous amounts of my assets—my time, my

intellect, and my energy—to something that would have no

meaningful reward for me

You can’t plan your career until you know what you

want to do, nor can you rectify your own fi nancial failings

or miraculously invent a fi scal/lifestyle philosophy by

micro-managing your child’s evolution (as I later realized my dad

was trying to do) Similarly, you can’t engage in a personal

The Vision

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fi nancial process until you know what you want from your

own life And by this I mean going well beyond the

boiler-plate evaluations that fi nancial salespeople conduct to

cre-ate the appearance of personalized advice In order to fully

understand what your fi nancial goal is, you will have to ask

yourself tougher and more substantive questions than: How

many children do I want? Will they attend state or private

schools? What year will I retire? or How much money will I

need to retire on?

Instead, you will need to examine what kind of life you

want to live You must ask yourself questions such as: Do

I want a life that is focused primarily on commerce,

fam-ily interaction, artistic pursuits, or scientifi c discovery?

Do I want to be single, get married, or remain married?

Do I want to be part of an entourage or live in solitude?

How much money must I earn in order to create and

maintain wealth? Can I do so, through either my

profes-sion or asset allocation plan?

There are no right or wrong answers to these questions

All of the answers to these questions are excellent choices,

but remember that you must answer the questions based on

the type of life that you want to live You must ask yourself

which answers are truly your own Which answers will lead

to fulfi llment? And which will simply satisfy agendas imposed

upon you by others––parents, friends, or society at large?

I spoke with a brilliant mathematician, who now earns

millions of dollars a year creating equations for quant-based

hedge funds that make their money developing algorithms

they can apply to trading in the fi nancial markets Only three

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years ago, this same man was a struggling academic who

per-formed the life’s work he was expected to do, based on an

aptitude for high school math and a family that encouraged a

life in education Although he was a whiz at math and

num-bers, he hardly gave a second thought to money and the effect

that wealth, of any amount, would have on his life holistically

Until he made the transition from academia to the fi nancial

world, he fi rmly believed that his entire life would be devoted

to theoretical inquiries And then his perspective changed

M athematician : I literally woke up one morning, my laptop

by my pillow, looked around my bedroom, and thought

I would like to begin earning money I wanted to stay in

the math world I simply wanted to get rich in the process

M ark S tevens : Do your peers in academia think you have

sold out?

M athematician : Not at all They have no desire to earn

more than a professor’s salary If they got rich, they

wouldn’t know what to do with the money Any time

they would devote to hunting for a home, securing a

mortgage, shopping for clothes, would deprive them of

what they love best and want to do with the greatest

passion: create and solve math problems That I came to

want more struck me, and I acted on it At this stage in

my life, to me, more is more To them, less is more.”

Each to his own, but we have to know what our own

goal is before we can reach it We must think before we

count, turning what now passes in many cases for personal

fi nancial management on its ear Only when we do so, can

we begin to acquire great wealth and fi nancial security