I’ve posted Podcast #105 to the “RobCasts” section of the site. It’s called You Can Get Rich Slow While Also Getting Rich Quick.
You should certainly be wary of Get Rich Quick pitches. But the reality is that some opportunities tend to help you become rich slowly while others require years of effort and then provide a quick financial payoff. An excessive wariness of anything that “sounds too good” can hurt you. The real trick is to combine Get Rich Slow investments with Get Rich Quick investments in the right proportion.
Update: There have been two developments in the story reported on in yesterday’s blog entry.
I sent the e-mails to Bill Schultheis (author of The New Coffeehouse Investor) and J.D. Roth (publisher of the Get Rich Slowly blog) described in the blog entry. Both Bill and J.D. responded.
J.D. said that he has not banned me from posting at his blog. He said that he has never banned anyone. I am still not able to get my comments to appear on the thread relating to Bill’s guest blog entry. J.D. is out of town and away from his computer (he read my e-mails through use of his phone), so he has not yet been able to address the technical problem (J.D. had a site upgrade last week — my guess is that the problem relates to that). But he has indicated that he will get things fixed up in a few days.
Bill sent me an e-mail objecting to me quoting him as saying extremely positive things about my site without his permission. He did not claim that the quote I used was inaccurate. I responded with a long e-mail that aims to bring to the surface the underlying issues that gave rise to what I believe can fairly be characterized as an exceedingly odd complaint. I will post the text of that e-mail in a later blog entry. I told Bill that I am happy to give him space at the blog to comment on anything that I have said that he views as being either inaccurate or unfair or unkind. I also said that I am happy to quote the precise words that he used to express his objection to my use of the quote from him but only if he gives me permission to do so. I said in the earlier blog entry that I will provide the texts of Bill’s e-mails in our ongoing (I hope!) correspondence only if he gives me permission to do so.
Evidence Based Investing says
Bill sent me an e-mail objecting to me quoting him as saying extremely positive things about my site without his permission. He did not claim that the quote I used was inaccurate. I responded with a long e-mail that aims to bring to the surface the underlying issues that gave rise to what I believe can fairly be characterized as an exceedingly odd complaint.
On a number of occasions you have recognized the need to obtain permission before using other peoples words.
Here is an example. http://arichlife.passionsaving.com/2006/05/24/my-response-to-jonathan-clements-e-mail-on-firecalc/
I would like to set forth the text of your response as well (in part in fairness to Sholar and his supporters since to some extent you are defending the FIRECalc tool from my criticisms of it), but I of course will not do so unless you give me permission to do so
Why do you now regard Bill’s complaint that you have used his words without permission as “exceedingly odd”
Rob says
It’s exceedingly odd because the words that I quoted reflect so well on him, Evidence.
Bill advocates Passive Investing. I bill myself as the world’s leading critic of Passive Investing. He is saying that my site is a great resource. Does that not suggest that he is a open-minded and generous-spirited kind of guy?
If I was quoting him as saying something nasty or dumb, I could see the concern. He might say “well, I would have been more careful in what I was saying if I thought that someone was going to go public with it, but I was just engaging in an informal e-mail discussion, and so I wasn’t being too careful about what I said.”
In this case, he is being quoted as having said something that makes him look like a stand-up guy. Am I supposed to feel bad for letting people know that Bill is a stand-up guy?
What the heck is the concern here? Nothing that goes on in discussions of Passive Investing should surprise me at this point. But I am more than a little dumbfounded re this one. it is certainly not the worst development that I have seen. But I think it would be fair to say that it is one of the oddest.
Holy moly!
Rob
Evidence Based Investing says
Am I supposed to feel bad for letting people know that Bill is a stand-up guy?
No, you are supposed to get his permission before using his words from a private email in your public blog.
You know this, as your comment to Jonathan Clements indicates.
Dave Shafer says
Rob, really enjoyed listening. I am currently rewriting the chapter of my e-book on risk and you have really got me thinking about risk and why so many people have such a hard time with it. Kiyosaki does strike a nerve for people. But what he advocates is really using leverage which is what all people need to do if they want to get rich. It also explains why people have the bulk of their net worth in the home they live in [even now]. Not that I am advocating using leverage for owning stocks, but using leverage by starting a business or developing an idea or even investing in real estate is demonstrated to be the only way people really get wealthy [some people do get wealthy using leverage in stocks or futures, etc.]. Developing a financial base is something I do and have blogged on. Once set it does open up opportunities to get rich quickly.
Rob says
You know this, as your comment to Jonathan Clements indicates.
It’s certainly fair to say that that is my usual practice, Evidence.
Rob
Rob says
Developing a financial base is something I do and have blogged on. Once set it does open up opportunities to get rich quickly.
Thanks for stopping by and for offering your thoughts, Dave.
Yes, there’s a sense in which moves that protect you from risk (setting up a base) can have the payoff usually associated with risk because they open up opportunities to take on risk effectively.
And moves that seem risky can diminish risk in a long-term sense because you can move the money brought in as a payoff for taking on risk to a larger future base on the thinking that, once you get to a certain level of accumulated assets, your need to take on risk to achieve your goals is diminished.
The thing with risk is not to see it as good or bad but to strive to combine the right amounts of risk-taking with the right amounts of safety consciousness. I hope to have opportunities to explore these sorts of questions in more depth in days to come.
Rob
Dave Shafer says
“The thing with risk is not to see it as good or bad but to strive to combine the right amounts of risk-taking with the right amounts of safety consciousness. I hope to have opportunities to explore these sorts of questions in more depth in days to come.”
I believe you correctly understand that risk is always there, so the point is to manage it in a way that you can emotionally deal with it.
Risk to academicians is merely variance. When they say something is more risky it only means it has the potential for larger movements [both up and down]. I believe this is another case of academics [and the larger financial planner community] getting it wrong. Risk is as much an emotional entity as a mathematical entity. For example, the risk of getting hurt or dying swimming in the ocean. For me, a strong swimmer who practices swimming much, I don’t believe there is much risk in swimming in the ocean. For someone else, who isn’t such a strong swimming they might feel it is risky behavior. The mathematical formula would tell us that there is very little difference in the absolute risk between us. Most adults that die swimming do so because of medical happenings like heart attacks or strokes!
Hence the importance of having a financial base. If you felt assured that you have your minimum living expenses covered, then you are in a much better emotional place to accurately assess and take risk.
This of course turns common financial planning on its head, because they think you can take more risk as a youngster because you have a large time to make up for mistakes or drawdowns. The truth is that early mistakes put people into defensive postures for a long time because those mistakes usually means losing most of what they have.
The right time to take risks is once you have established enough financial security to not “lose everything.” So the get rich slow approach is best done early when you have dependents and you are still feeling your way through life. While the get rich fast approach is best accomplished later in life once you have established effective financial habits and have the emotional security of a financial base.
I think investing in index equity funds is fine, but should not be done throughout the life cycle. There are times that will be too risky, while other times not risky enough!
I know this adds some complexity, and you hope to keep it as simple as possible, but I think the average person can wrap their heads around it.
Rob says
That post contains about four great insights, Dave.
Fantastic stuff!
Rob