financial secrets. That is why I was pleasantly surprised to find Donald Trump to be so open about his wealth and willing to share his keys to financial success.
In her book Buffettology, Mary Buffett writes:
“F. Scott Fitzgerald wrote that the very rich are different from you and me. He was right. But they are different in the strangest of ways, the oddest being the code of silence that they demand of family and friends. While married to Peter (Warren Buffett’s son), I was instructed more than once not to speak to anyone outside the family about Warren and his investment operations. Writing this book simply would have been out of the question.”
After her divorce from Peter, Mary Buffett broke the code of silence and went on to explain in detail how Warren Buffett does it, spilling Buffett’s secrets. It is a great book and well-written. And it does explain Warren Buffett’s secrets. It’s Warren Buffett’s how-to book, even though he did not authorize it. However, it is how Warren Buffett does it. It does not mean you or I or even Donald Trump can do it the same way. Nor we would necessarily want to.
You need to find the style and method that is best suited for you. While it is important to learn from people like Warren and Donald, it is also important to find your own secret formula.
Dreams vs. Goals
Many people have dreams. Rich people have goals. So the question is, what is the difference between dreams and goals?
Several years ago, I attended a church service at the New Birth Church in Atlanta, Georgia. Giving the sermon that day was not Bishop Eddie Long. Instead, the sermon was delivered by Archbishop Vernon Ashe. The sermon had a powerful lesson on the power of process and goals.
Archbishop Ashe said, “Every goal has a process.” As he spoke I began to realize why so many people who have dreams fail to have their dreams come true. The reason is most people have dreams but do not focus on the process necessary to achieve their dreams. For example, many people want to lose weight. But what gets in their way of achieving their goal is the process of change in diet and exercise. So instead of achieving their goal, their dream of a healthier, more attractive body remains a dream.
The other day, I drove up to my gym in my Bentley convertible. A young woman walked out and said, “That’s the car of my dreams.”
Thanking her for the compliment, I asked, “How do you plan on making your dream come true?”
Her reply was, “I don’t know. I guess I’ll just keep dreaming.”
And this is what Archbishop Ashe was talking about. His point was the process is as important as the goal…so any goal without a process is just a dream.
Many people, especially people with money problems, think that more money will solve their money problems. Instead of setting a goal, finding their own process—their own secret formula—and becoming a rich person…they buy lottery tickets, hope for a raise, get into debt keeping up with the Jones who are also deeply in debt trying to look rich, all the while dreaming of someday becoming a rich person. The Archbishop’s lesson was that the difference between dreams and goals was the process…and in many ways, the process is more important than the dream or the goal.
What if You Lost It All?
Years ago, when a reporter asked Henry Ford what he would do if he lost his billion dollar fortune, he replied, “I’d have it back in less than five years.” One of important aspects of finding your own formula, your own process, is that when you reach your goal, it will be the process of gaining knowledge that will make you rich. As my rich dad often said, “Money does not make you rich. Knowledge makes you rich.” And knowledge is derived from a process.
As you know, Donald and I have had our own financial challenges. We know those challenges have made us smarter and richer. Financial challenges, the wins and the losses are all part of the process of becoming rich. For Donald and me, our process or learning was via entrepreneurship and real estate. Warren Buffett’s process was by buying companies. Mohammad Ali’s was via boxing. So this book is not about you getting rich quick. This book is about you finding your own process to become rich. It is about the process that makes your dreams come true.
Donald’s View
The Shrinking Middle Class
When Robert and I were talking about the shrinking middle class, it made me aware that some things can be explained. It’s like an hourglass with the middle class the pinched part, or like someone with a very small waistline.
What happens when you flip the hourglass? Either way you flip it, you have the poor feeding the rich or the rich feeding the poor. It’s either one or the other. I don’t like that visual because it reminds me of the Old World and aristocratic ways that America revolted against. Are we headed back that way? Were the colonists just a bunch of misguided idealists to begin with?
I’ve been reading some newspapers while enjoying some travel time, but there were some stories in The Wall Street Journal that got me to thinking about risk. Just yesterday we heard about three climbers dying on their way down from Mt. Everest, evidently from exhaustion, after they had reached their goal. Today we have an article about the great racehorse, Barbaro, and his terrible injury, and we have the tragedy in the Volvo Ocean Race, where a young Dutchman was washed overboard from a yacht. Then, the crew of another yacht had to abandon ship in an incredible storm, and they were rescued by the yacht that had lost one of its crew. These are all experienced yachtsmen, and their seamanship was not in question. And with Barbaro, tens of thousands of people went to see horse-racing history being made and instead saw the horse break down during the race, an unbelievable tragedy that no one is likely to forget. Fans had reason to believe they would see a Triple Crown winner—a horse winning the Kentucky Derby, the Preakness and the Belmont Stakes—for the first time since 1978. The Wall Street Journal writer said the grief of the crowd was equal to their initial hope and expectation.
Expectations can lead to surprising outcomes. There is often a fine line between victory and defeat, and it makes me become philosophical in thinking about it. Sometimes the best-laid plans can just blow up in our faces due to uncontrollable events, such as weather conditions or an injury or maybe too much confidence (if there is such a thing). Philosophy is one way to try to comprehend the inexplicable things and events we all encounter at some point in our lives.
I’ve mentioned before that it’s important for us to remain intact, otherwise we become a target. A small leak can sink a ship, or a huge wave can destroy it equally well, as the yachtsmen from the Volvo race can attest to. Either way, imbalance can create situations that can keep our equilibrium reeling and out of control.
Our country has been a superpower for a short amount of time, if you look at the history of the world. The biggest risk we have now is not being prepared for the future. As we have seen, there are no guarantees, but being ready sure beats being taken by surprise. During WWI, the battle of Gallipoli, no one expected a quarter of a million soldiers to be killed or for the combined British, Australian, New Zealand and French operations to be defeated and repelled by the Turks. It came as a big surprise to them—because they didn’t know what they were getting into.
There are no guarantees, but being ready sure beats being taken by surprise.
