Money and Wealth

Is it wrong to pursue money? Is it wrong to seek wealth? I am surprised sometimes by the different types of people who have money and wealth. Some of the wealthiest individuals in the world – Bill Gates, Warren Buffet – earned their wealth. While there is a long list of people who did not earn wealth, some got it in a legitimate manner like those who inherited wealth. Still there are those got wealth from illegal and wrong manners – thieves, drug deals, dictators, war lords…

I guess it all goes to show that money and wealth are independent of right or wrong. Money is not an ethical issue, but there are often a lot of ethical issues associated with wealth.

Ayn Rand, the author of The Fountainhead and Atlas Shrugged, who is also credited with her own philosophy – Objectivism, defined money as a merely a tool.

“Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.” ~Ayn Rand

Too many are willing to commit a large number of wrongs and even atrocities in the pursuit of money. Too many people have lost their lives and legitimate and hard-earned property at the hand of someone who was willing to cast aside right and ethics.

Deserving It

For me, I’d rather deserve wealth. I am not wealthy by any stretch of the imagination although I am better off than a large number of people. When I do make money, I prefer to earn it by my hard and smart work. I appreciate it more.

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Wealth by Stuart E. Lucas

Stuart E. Lucas is really good point of contact for everything to do with wealth. He is a fourth generation heir to the Carnation fortune from the company that his great-grand-father, E. A. Stuart founded. Additionally, Lucas has been a professional wealth manager for the past 25-years. So drawing from the perspective of having and managing his own wealth and from the perspective of helping others manage their wealth, Lucas wrote the book, Wealth: Grow It, Protect It, Spend It, And Share It.

In this 356-page book, you will learn about t eight principles of strategic wealth management and viewing wealth as an industry with pitfalls that can be avoided.

From Publishers Weekly

Wealth: those who have it want to keep it, but what’s the best way to ensure it doesn’t run dry? Lucas is ideally suited to answer the question. A Harvard Business School graduate who’s worked at wealth management firms, and a fourth-generation heir of E.A. Stuart, the founder of the Carnation Company, Lucas counsels readers who have, or are planning to have, at least a few hundred thousand dollars in the bank. His book teaches them to manage their wealth so it grows, or is at least maintained, for as long as they want, whether that’s one lifetime or several generations. Lucas focuses principally on investing decisions, spending decisions (like whether to engage in philanthropy) and emotional issues. He provides a good balance of in-depth financial guidance and tips on negotiating financial decisions in the family. Though the subject is dry, Lucas keeps the book interesting by using examples taken from his own family’s experience with fortune, a tactic that lends both credibility and intimacy to his advice. With its frequent plunges into the minutiae of investment options, this book is definitely not light reading. It is, however, a helpful guidebook for those faced with the task of growing, protecting, spending and sharing a large amount of cash. (Mar.)

From Newsweek

Newsweek, March 20, 2006 issue - Wealth: Grow It, Protect It, Spend It, and Share It by Stuart E. Lucas Congratulations! You’ve just come into some cash. But what to do next? With $1 trillion per year expected to pass from one generation of Americans to another over the next decade, it’s a question more people than ever are facing. Writing from the perspective of one who has managed wealth for clients, as well as received it (he’s an heir of Carnation Foods’ founder), Lucas shows step by step how to set investment goals that match your needs and values, pick the right advisers, manage taxes and avoid the pitfalls that shrink fortunes and fracture relationships.
~John David Sparks

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Special Report Series: the Philosophy of Making Money

This is the final entry that I am going to write for series on the philosophy of making money.  For all the other articles, please see: 6 Myths of Making Money – Special Report: the Philosophy of Making Money, 7 Points and 2 Categories of the Philosophy of Making Money, and The 7 Steps of How to Make More Money.

There is a simple formula to follow that is the most powerful formula for creating wealth.

The best formula for making money and creating wealth:

Creating Wealth = Discovering Scarcity + Solving Scarcity

Scarcity

To understand scarcity is not difficult for it’s not a complicated subject, but rather a very common and understood subject.  The difficulty is that most people don’t know how to use scarcity to create wealth.  Scarcity is concept that there are unlimited wants and needs, but there are limited resources to meet those wants and needs.

Example

There is a lot of discussion of different car manufacturer trying to create a “cheap” car to sell in India.  In India, there are a lot of people who want and need a car, but cannot afford most new car prices.  The scarcity is the lack of cheap cars for people to buy.  Solving the scarcity are what car manufacturers are trying to do by creating a “cheap” car.

How to Use

Scarcity creates opportunity.  When you discover scarcity in the economy, you have found an opportunity to make money and create wealth.  All you need to do is follow that opportunity and solve the problem of scarcity.  I suppose that’s a lot easier said than done, but it really can be that simple.  The only difficulty is finding the solution for scarcity – solving scarcity.  That takes creativity or, better yet, innovation.

Innovation in India

The innovation in the example of “cheap” cars for India is how to create a car that:

1. Consumers will buy.
2. Consumers can afford.
3. Manufacturers can still make money (profit).

To read more about this, click here.

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State of Mind

Psychology plays a role in making money and creating wealth.  Wealth is a state of mind is the concept that I first read about in Robert Allen’s Creating Wealth, published in 1983.

Nine years after receiving his MBA from Brigham Young University, Robert wrote the book that outlined the system he used to create a wealth “nest egg.”  Robert was one of the first to publish books on the no down payment methods for real estate and other high leverage real estate strategies.

While most of these techniques are high risk and some are outdated, the one thought that I remember from the book is that creating wealth is a state of mind.  Robert used the thought to outline that even if all of his personal wealth and income where gone, he would still be able to buy properties and create new wealth, because his knowledge, attitude, and belief.

Knowledge

The focus of knowledge is the core information you need to know.

1. The fundamentals of business, finance, marketing, accounting, and the like are all the starting piece of knowledge.
2. Industry specific knowledge is also important, whether you are in real estate, Internet business, retailing, etc. 
3. Personal knowledge like socializing and networking with friends, co-workers, associates, and partners.

You can have too much information, but you cannot know too much.

Attitude

A positive attitude is critical to any success.  A negative attitude can be the straw that breaks the camels back, while a positive attitude can be the force that propels you to soar to new heights.

Belief

Belief is directly influenced and related with your attitude.  Belief calms nerves and builds confidence.

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