WEALTH: SIMPLE, BUT NOT EASY

WEALTH: SIMPLE, BUT NOT EASY

The basics of accumulating vast amounts of wealth are simple, but not easy. You simply have to shut out the world and focus on the essence of compounding, which is often called the eighth wonder of the world. It takes independence of mind and incredible hard work to become comfortable, buying good businesses, that you believe in, at a discount to intrinsic value over a long period of time. It takes amazing patience, because nobody really knows in advance the ‘perfect’ timing of any purchase. But if you finally have built up the confidence in a particular business, after painstaking due diligence, and if you have truly done your homework, then you are ready to buy and buy more at any price, especially if it goes lower. You are investing, based on your conviction.This also means, that you take the volatility of markets in stride. The unpredictable bigger picture does not concern you as much. Your primary concern is the viability and the potential of your business over the longer term. If you are worried about the possible madness of crowds, which may affect global markets from time to time, which could temporarily shrink your Net Worth by half, then maybe you should not be investing in the first place.

Alas, life remains a struggle. The vast majority of companies in existence today, are destined to disappear in the long term due to a variety of reasons. Therefore, it’s unwise to put all your eggs in one basket. Spreading your investments and mitigating risk, will be especially challenging in the beginning, but those attempts have to be made. Before you may hit the jackpot, there will be times, when you wonder if you’ll make it. But that is precisely how you’ll become a great investor. ‘Stuff happens’ (Rumsfeld) all the time. As long as you manage to survive, you can move on. Another chance, another opportunity! But a ‘killer instinct’ you can’t do without. Right!

All it takes to start a fortune is: Save and Invest. This is powerful information, but how many actually do it? It requires constant discipline. Do you realize the future value of whatever is being spent today? How much future wealth is missed out that way? It’s huge! It would make you instantly FRUGAL. That’s how great fortunes are made. You don’t actually have to be smart at all. Extravagant speculators may hit the headlines, making and losing fortunes, but history does not judge them kindly.

Maybe you are hungry and motivated enough to start your own business. Many entrepreneurs had no choice. Failure was not an option. With drive, determination and ambition, any temporary setbacks can be overcome. It’s the greatest adventure of all time, if you feel it’s in your blood.

RICK SCHMULL

August 9th, 2014

WESTCLIFF-On-SEA, Essex, U.K.

=