I don’t think that most people really understand the true benefit of being wealthy. Of course, there’s a lot of societal judgment and stereotyping about being rich and the wealthy.
There’s one thing that makes a huge difference in your life, when you have money. I know, because I’ve been skint, and I’ve been rich. A lot of people say that money doesn’t make you happy. I say, bollocks. I’ve been skint, and I’ve been rich. There’s no doubt that having money, all other things equal has made me happier, has made me more fulfilled, has made me more productive, has made me more useful to society.
I’m not saying that money in and of itself is a root to happiness. I think we all know that’s not the case. But, if we do an accurate split test, all things being equal more money or less money, I would challenge that even the most hippie, or even the most anti-capitalist people would have to agree, that their life would be more fulfilling with money.
But some of the benefits that people who want to be more wealthy, are things such as, you can have experiences. A lot of people say, “well, money isn’t about material items. It’s about experiences.” And of course, I would agree with that to some degree. I would also say that many material items can give you great experiences. Nice cars or nice record players, if you love vinyl like I do. A really nice camera, if you’re a videography. All these material items can actually give you great emotional benefit. Material can be experiential and even spiritual, if you go for a well-made Patek Phillipe or something.
But actually, it’s not the main thing. I believe, that is the benefit of having wealth and money. It is this: when people are skint, they make very bad emotional business and strategic decisions, because they’re desperate. People get emotionally volatile when they don’t have money. They have massive fear around paying the bills. They have huge guilt. They have this doomsday scenario that everything is going to cave in.
If you imagine yourself in that position, where you’re feeling so oppressed with all the debt that you’ve got. You feel like, what am I going to do for the end of the month to pay the mortgage and put food on the table. If you put yourself in that position, where you may be feeling actually quite desperate, what are you going to be susceptible to? You’re going to be susceptible to schemes, to scams, not doing joint-ventures and deals properly. Maybe, selling stuff that isn’t really a great product or service behind it, because you’re desperate to put some money in the bank.
There’s nothing wrong with selling your way out of a hole. But a lack of money creates more emotional volatility. And you will therefore, chase schemes and scams. You will spread yourself really thin. You will probably try and look at every shiny penny opportunity out there with no real directional focus. Desperation is quite unattractive to potential partners, employers, et cetera. You’ll make bad strategic decisions. You’ll be too emotional.
When you have layers of wealth, layers of capital behind you, you have more emotional balance. You can therefore, make strategic decisions, not emotional ones. You can make long-term decisions, not short-term decisions. For example, for 4 years, I’d said no to all ads on my podcast, because I didn’t need the money. And I had a lot of opportunities to run ads for really good money with maybe, companies that, either weren’t aligned, or products that weren’t relevant.
I remember hearing a podcast. And this is a podcast I really enjoy. It’s a business podcast.The guy was running ads for mattresses on it. It just really made me doubt a lot of credibility about him. Why does he need to run ads on mattresses, if he’s supposedly really successful businessman and entrepreneur. And that might not being the case. It was just what I thought. I’ve always been proud, and I suppose on brand that I’ve never had to run an ad, because I need the money. Therefore, I’ve made a good strategic, and not an emotional decision.
I’m actually looking at doing a sort of partnership or a collaboration, and therefore, run some small ads on my podcast. Blinkist is a company that’s approached me. And they do 15-minute versions of all good books. For me, that’s a great service. I can actually decide to align with a brand, and run some ads, and have a commercial element, because it’s the right thing to do, and not because I need the money. And had I not turned down other ones before, I might not have the space to have those guys in.
When the recession kicks in, if and when it does. Well, it will. It’s just when. When business gets hard for companies, and they struggle, and prices drop, if you have cash, you can go and buy a load of assets. If you have no cash, you’ll miss out on depressed asset prices, i.e., bargains.
And then when there’s a recession, and you don’t have cash, you’re going to have to make some really tough, emotional decisions of letting go staff, or reducing marketing spend, or maybe not spending the money on the brand, and the advertising, and the outsourcers, and the VAs that you have. That would be emotionally volatile decision. Because if you had the cash to burn through, you’ll probably keep those assets in place.
The greatest benefit that most people don’t know
It’s so important:
- Save cash
- Hoard capital
- Don’t overspend
- Make sure that you have enough assets, cash, savings and protection so that you can make smart non-volatile, non-emotional decisions
I’ve been told, I’ve seen from credible sources that when we have an emotional reaction to something, we trigger this flooding of chemicals in our body. And it lasts about 90 seconds. And in those 90 seconds, that’s often when we make volatile, rash emotional decisions that we probably wouldn’t make, when that 90 seconds had subsided.
I reckon a lot of people are messing up their finances in those 90 seconds. Being pitching and going, “Oh yeah, I’ll go for it even though it looks a bit too good to be true.” Or, on the other side of reacting emotionally to decisions and people, and stepping out, or reacting, fighting, getting aggressive, writing that email, things, you probably wouldn’t have written, if you had taken a few minutes out.
Capital, wealth, riches, they help you make long-term decisions, not short-term ones. They help you make the right choices of the new business models, and the new assets, and how many streams to juggle, and how many plates to spin.
If you don’t need the money, you’re not going to take on a new stream, or a new strategy unless it’s right. And you’re going to take the time to do the due diligence, and do the research, and make sure the head of terms and the contracts are good, because you don’t need the money! You’re not going to sell yourself out. You’re not going to sell yourself short. You’re not going to get a job that is not worth what you’re worth being paid for, just because you need the money. And that I believe, is the greatest gift, the greatest virtue, and the greatest benefit of being wealthy.
If more people committed to wealth, instead of disowning it, or assuming that all people who are rich screw people over, and actually, learn about money. Just as you might learn about personal development, business, or whatever subject you’re interested in, if you commit to being a lifelong student of money, everyone on the planet is going to make better emotional and financial decisions, and more long-term than the short-term. If you imagine Prime Ministers or Presidents, if they have had a 20 or 30-year term, they can make some long-term decisions that might be for the benefit of the country. Because most of them know they may have a 2-year or a 4-year, maybe a best term, they have to make short-term decisions, which benefit their self-interest in the moment, and don’t benefit the long-term interest of the country. And that’s the greatest benefit of wealth, is the major long-term strategies that you can play.
Mark and I have a 50-year plan for Progressive, one of our companies. It’s been relatively generic at the moment. But at least we’re thinking that long-term, because we don’t need to have to think about putting money in the bank today.
My personal vision is to help as many people on the planet become more financially educated, become more wealthy, to learn more, do more, have more, and give more, especially underprivileged people, younger entrepreneurs who maybe haven’t had some of the chances yet that older kids like us have had.
I think that there are so many people that could do much better. But they’re making flippant emotional rash short-term skinny, scamming, opportuney, naïve, delusional decisions, because they’re desperate for money. And the irony, is, many of those people who are desperate for money hate people who’ve got money. We need to kind of clear up the paradox.