a little-too-late advice on building wealth

Everyone on the web is full of advice, and I am no exception. Once in a while you come across advice that makes a lot of sense but it’s just a little too late to help you now. Here are a few good pieces of advice that are probably too late for 80% of the people who read them on building wealth. Remember that building wealth isn’t just about money – it’s about building an abundant, wealthy life. Health, happiness and money are components of wealth, and each supports the others.

1. At a very young age, make sure your parents or grandparents or mentors teach you everything you need to know about money while you are a teenager. Don’t go into debt. Spend less than you earn until you are able to earn more than you spend. Invest early and often. Pay yourself first. Stay away from the lattes. Pay cash. Buy and hold. Buy low, sell high. These are all great lessons, no matter what your age, but it helps to learn them when you’re 15 a lot more than learning them when you’re 55.

2. Before you get married, make sure you and your spouse are 100% open about goals from career to family to children to retirement to religion to the dream location of your home. Agreeing on these points is not required. Making sure you don’t violently disagree is. If you never mention that you’d like to have 7 kids and settle down on the family farm, and your wife is planning on becoming a jet-setting investment banker, you may be able to find a compromise – but if you can’t, it’s better to find out before you get married. Divorce is a lot more expensive than breaking up over coffee. Being (and having) a good spouse is critical to building wealth.

3. Don’t waste your time in college. If you are passionate about studying Japanese cinema theory, by all means study it. I would highly recommend considering backing it up with a practical fall-back course of study – just in case the Institute of Japanese Cinema Theorists doesn’t have an opening available when you graduate. If that happens, it’s nice to be able to take a job in finance at least until you build up the savings. And go to a public school.

4. Don’t get fat or start smoking or get into drugs or get STDs. Stay healthy. Being sick will cost you money. Being fat, or smoking, or taking drugs or getting STDs are good ways to get sick. The older you get, the harder it will be to bounce back from ill health. Stay healthy when you are younger. If you are sick, you can still achieve your goals, but if you can avoid getting sick – and you can’t, always – it is EASIER to achieve them.

5. Network from day one. Make (and keep) good friends. When I was an exchange student in high school, I made a lot of friends in my German high school. We exchanged snail mail addresses and wrote with decreasing frequency for the next few years. Putting pen to paper was difficult with the demands of school, social lives and family, so failing to keep touch was understandable. But nowadays, with a simple exchange of a Facebook id or an email you can instantaneously create a network. No stamps, no envelopes, no delays – you can flick everyone a message once every few months just to stay in touch. This practice creates a lot of “life spam” but it’s still a good way to keep your network in place and growing. I am convinced that networking is one of the cornerstones of building your career, and consequently of building your wealth.

6. Stay away from the idiot box, but particularly avoid becoming a serial watcher. I have no evidence to back this up, but I feel stupider when I watch sitcoms than when I watch movies. It doesn’t matter if we’re comparing Seinfeld vs. “Everything is Illuminated” or The Family Guy versus “Rush Hour 3″, somehow I feel my time was better spent watching a movie. The reason why is that it’s over. Seinfeld can take up 30 minutes of your life every day of the week for – apparently – the rest of human history. Rush Hour 3 is over after 90 minutes (and not a minute too soon).

7. Don’t be stupid. Get the book learnin’! Develop the street smarts! Just because you finished college doesn’t make you allergic to literature or textbooks or learning in general. Somebody who doesn’t constantly keep learning is somebody getting stupider by the minute, and it doesn’t take a genius to know that getting stupider does not increase your chances at becoming wealthy. See point 6 for more information.

8. Take risks. Fear is the mind-killer. If you train yourself to be conservative, you are training yourself to lose. When are you going to take risks? Your next life? My family and friends probably don’t think much of me as a risk-taker, but I have taken a few huge risks in my life – dropping out of PhD school to get my MBA instead, living in Russia, moving to New York on a whim. Already in my early middle age I regret more the opportunities I didn’t pursue than regret the ones I took that didn’t work out. I have done well, but who knows? One of those risks I didn’t take might have been the path to an even wealthier current me.

9. Try not to waste your time on hate. Without being too specific about it, I have spent a lot of time raging and ranting about various things – people I hated, politicians I hated, wars I hate(d), things about modern society I hated, things about the sorry state of the world I hated, the ways people acted I hated and even movies I hated. Hate is a strong word. I hate cancer. I don’t really hate sour cream. Hate is a strong emotion that will burn you up long before it burns up the target of your hatred. I hate war, for example, but more hate will not mean less war. Hate takes time away from concentrating on your goals. Hate takes time away from hopes and dreams. I hate hate. Oops.

10. Spend money on experiences, not things. I used to play Tecmo Football with my friends in college. I loved it. We had a good time. I have thought from time to time how fun it would be to play Tecmo again, but then I realize the game was actually really bad. I just liked hanging with my friends. I bought a beautiful black car right out of college and I also went on a week-long roadtrip up the East Coast with three of my fraternity brothers right before I bought the new car in my brother’s old Escort. I still tell stories about that trip. I can barely remember what the new car looked like. Things you buy fade. Memories of things you did will endure. If you took a flight in coach or in business class, you are more likely to remember the destination than the journey there. Don’t waste money on stuff.

11. Journal. I try to write down at least one or two lines in my electronic journal (OK, an Excel spreadsheet) every day. My entry may be as boring as “Cold today. Snowed a bit in the morning. Little Buddy said ‘snow!’ for the first time.” The end. Right now, it seems pointless. When I go back and read similar entries from 12 years ago (when I started keeping a journal) it can be amazing. I wish I had started 20 years before I did.

12. Learn to sleep. If you set good sleeping patterns in your youth, you will be more successful in life. You will have more energy and you will be happier, which will aid in achieving a wealthy lifestyle. I have mentioned before that I read a book and completly misused its teachings on meditation to learn how to sleep. You want to know the short list: (a) don’t do anything but sleep and, ahem, “sleep” in your bedroom (b) go to bed when you are tired (c) wake up at the same time every day, including weekends and (d) learn how to breathe. Do it and you will be rested, relaxed and ready for riches…and alliteration.

13. Make written goals for your life. They can change over time. Not having goals makes life harder – to borrow a terrific concept from a book I’ve never read, a purpose-driven life should be your aspiration. The purpose does not need to be lofty. Mine is pretty simple. But if you write it down, it will simplify decision-making (does this move me closer or further from my goals). You may take the wrong exit off the highway of life sometimes, but knowing that you are headed to Denver makes it easier to decide whether to head east or west.

That’s the lucky 13. Even if you are out of college or already married or never started a journal, don’t spend time wishing you had done these things; figure out what you can do now and get started today.

(photo credit by littledan77)