I have spent a good portion of the last 2 months watching the stock market. In general, the market has done well. There are even a few stocks that have made a significant comeback (Nokia and Research in Motion, makers of Blackberry), doubling their worth in a matter of weeks. Watching this happen makes me want to sell everything that I have, dump it into the stock market, then pull out in a few weeks when all stocks have doubled, and make gobs of money! However, that’s a really, REALLY bad idea. First of all, the stock market is largely unpredictable in the short term (anything short of about 7 years). There have been multiple years in a row where the stock market average goes nowhere but down. Secondly, those individual stocks that doubled could just as easily go bankrupt and be worth a fraction of a penny each. This could happen overnight, and I’d have some serious explaining to do to my wife 
So stocks are not reliable get-rich-quick vehicles. If someone does get rich quick off of stocks, they are actually just lucky (perhaps well-informed, but still lucky). The thing that actually frustrates me about stocks, even though they have been described as “the best” long-term investment, is that they historically only return an average of 10% a year (when taking dozens of years into account at a time, actual 10 year results will vary), and that would take 7.2 years for your money to double. Now, if you can invest early in your life, then this 7.2 year doubling will work tremendously in your advantage. The truth is, for me at least, I barely had two nickels to rub together for most of my twenties, so the doubling that has happened over the past 7.2 years had netted me approximately two more nickels. So I’ve been wondering how exactly I can make myself rich, since the stock market seems to be the slow but steady way, is there a shortcut? I think there might be. And it isn’t guessing the right numbers on ping pong balls on a Saturday night.
My Plan for Getting Rich
Spend Less. I know that this is a no brainer, but something so often overlooked is the effect of taxes on our income. If I can cut my grocery bill this week down from $200 to $100, I’ve saved $100, right? That would be like getting a $100 raise this week, right? Well, not exactly. Because about 40% of my income goes to Federal, State, Local taxes, a $100 raise would only put about $60 more cash in my pocket. So saving $100 this week is actually more equivalent to getting a $167 raise. Not only will spending less help me to save more money, but if I can cultivate a mentality of frugality, then $100 will seem like a lot more money to me anyway, because the amount of money I need to cover my needs will be lower. It’s all-around the #1 way to get rich faster. Of course, this is easier said that done. What are the practical ways to spend less? Couponing? It helps, but what I’m talking about here are more these things:
Buying the least amount of house you need. Sure, houses are supposed to appreciate in value, and it has been said before to buy the most house that you can afford. However, with larger houses come larger property taxes, larger heating bills, more time mowing, more time cleaning, more stuff needed to fill it, etc.
Fix things instead of buying new. An example of this is an ugly brass chandelier that we had in our dining room. I kept my eyes peeled for a cool new light fixture for a while, and found some nice ones for $100 – $250 during my search. Just when I was about to buy a new one, my wife suggested I just buy some metallic spray paint and overhaul our existing one. She found a lot of people recommended a particular metallic spray paint (Rustoleum Oiled Bronze Primer+Paint), that looked nice and worked well. So a few bucks later and a couple rounds of spray paint, and our chandelier actually looked amazing (and modern).
Pack Lunches. Everybody has little expenses in their lives that would probably go away with a little more planning. Instead of dropping $5/day on lunches, which is a pretty frugal lunch by going-out standards, and replacing it with a $1.50 packed lunch, those $3.50 a day can start to add up. Of course, the $3.50 savings itself isn’t going to net me a million bucks anytime soon, a culmination of these types of ‘microsavings’ could end up being significant.
Of course this list could go on, and there are entire blogs and books dedicated to frugality. The point is, there is an art to depriving yourself a little without having to really suffer anything. Buying something seems to be the quick fix when there is a more creative way to accomplish the same goal with less money. Invest in Yourself. I have held a variety of jobs in my life. My first job paid an hourly minimum wage while I dried off cars at a carwash after school. My current job pays quite a bit more than minimum wage. What happened in between? Education, experience, opportunity, and networking. The education actually played the smallest part of these four. I have a bachelors of science in web development, and I am currently a web developer, but I’m not sure my employer even knows that I have this degree. I’m willing to bet that they don’t even care, as long as I know what I am doing and am contributing to the team, which is something that I have learned from experience. Over the past decade or so I have spent my free time learning new skills. Even this morning, before writing this blog post, I spent an hour working through a book that teaches me another programming language (yeah Rails), one that will prove highly valuable to my current position and allow me to be even more of a help to my coworkers. Experience doesn’t have to come from an employer (the whole “how do I gain experience if everyone only hires people with experience?” issue doesn’t have to be that big of a deal). Fortunately, most people love a volunteer. Make money flipping burgers if you need to, but spend your free time (and make more free time by eliminating TV) volunteering to gain experience. You can also gain experience by hiring yourself to do made-up projects. For example, my early web design portfolio was for clients that didn’t even exist. I didn’t lie about this, but nobody ever asked. I just showed potential clients a bunch of designs, and they like them. It didn’t really matter that the “Columbus Landscaping Company” wasn’t real, I made a pretty nice web site for this fictitious company and I could do the same for my real clients. Now, getting myself in front of clients and potential employers is another tricky part. That’s where opportunity and networking come in. I’ve spent thousands of dollars to go to conferences and training events across the country. Each and every one of these experiences has left me better off professionally. Some of them accelerated my learning and provided me with highly marketable skills. Some of them were just great networking opportunities. The funny thing is, you have no idea how positively an event like these will affect you until you get out there and go. A quick example: I ran into a colleague at a conference in San Francisco and let him know that I was available for extra work, and would love the chance to work with him on a project. A few months later he called me up and wondered if I could help out with a particular client. I helped out, even though it required taking on extra work in the evenings. That clients was happy, and more projects ended up coming from it. Because I ended up developing a good relationship with this client (and with the blessing of my colleague that introduced us), I now receive offers from them directly to do work, and our most recent project was for the Democratic National Convention and Google (some pretty big clients). My point here being, I don’t think I was luckier than most other people, but I seized a couple of opportunities by going to the conference, having the desire to strike up conversation with strangers instead of retreating to my iPhone screen during breaks, saying yes to a project when I didn’t have the time, even though the project itself didn’t really seem that glamorous. I’m getting off track here, but the point is to invest in yourself as a way to gain more income. By adding to my skillset and putting myself out there, I have acquired the knowledge, gained the experience, and built the right relationships that have put me in my current position, which nets me an income greater than my first minimum wage job. Add this to the frugality mentioned above, and I now am able to spend less than I make, and am slowly saving money for future needs. Always be Exploring. This is going to look different to different people. For me, as a designer/developer, I see potential breakout success in building digital products. I haven’t achieved this yet, but I’m talking about the kind of story where a developer makes an application in their spare time, it gains traction, and eventually they sell it to a larger company for millions of dollars. I have listened to many interviews where this was the case. Now, granted these are edge cases, and the odds are against me here, so I don’t have unrealistic hopes that this will happen. However, I also happen to enjoy the work involved in building digital products, so why not spend my free time doing this instead of watching more TV or playing video games? Whether you are a programmer, a photographer, a woodworker, a writer, a mechanic, or fitness fanatic, there is probably a way that you can explore breakout success in your field. Think of the fitness fanatic that uploads short workout videos to YouTube that they make in their basement, gain some followers, and then make a successful recurring income off of DVD sales? What about the writer that regularly writes blog posts and interacts with other bloggers, only to be interviewed on the local morning show, and eventually makes it to Good Morning America and has authored a few books? There is probably a way to achieve breakout success for each one of us, the key is to enjoy the journey, and if one day the breakout success happens, then all the merrier.
The Conclusion of the Matter
If you’ve made it this far, you may be asking yourself, “Why is this guy so obsessed about making more money?” Well, I’m not really obsessed about it. It is something that I strive to do, and I need to keep all of this within the framework that money does not equal happiness. I once heard a friend say “I want to make a bunch of money so I can give a bunch away.” I thought that was a noble goal. I’m not going to lie and say that I want to give away 75% of everything I make, but I would like to have the opportunity to provide my children with the college experience that they desire, especially if they’ve worked hard to get the grades to put them in a top-notch university. I’d like to have the money to take my family out on vacation, eventually paying for my children’s families to come along with us. These are simply things I’d like to be able to do, even though I realize that true happiness comes even without these things. So, I feel that I can write this post now because I am not yet a millionaire. I may never be one. However, if one day I do become one, and people want to know how I did it, it is probably because of something written in this post. If it isn’t, well then I have another post I can write